[Federal Register Volume 71, Number 208 (Friday, October 27, 2006)]
[Rules and Regulations]
[Pages 62923-62940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17690]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 418

RIN 0960-AG11


Medicare Part B Income-Related Monthly Adjustment Amount

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: We are adding to our regulations a new subpart, Medicare Part 
B Income-Related Monthly Adjustment Amount, to contain the rules we 
will follow for Medicare Part B income-related monthly adjustment 
amount determinations. The monthly adjustment amount represents the 
amount of decrease in the Medicare Part B premium subsidy, i.e. the 
amount of the Federal Government's contribution to the Federal 
Supplementary Medical Insurance (SMI) Trust Fund. This new subpart 
implements section 811 of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (the Medicare Modernization Act or MMA) 
and contains the rules for determining when, based on income, a monthly 
adjustment amount will be added to a Medicare Part B beneficiary's 
standard monthly premium. These final rules describe: What the new 
subpart is about; what information we will use to determine whether you 
will pay an income-related monthly adjustment amount and the amount of 
the adjustment when applicable; when we will consider a major life-
changing event that results in a significant reduction in your modified 
adjusted gross income; and how you can appeal our determination about 
your income-related monthly adjustment amount.

DATES: These final rules are effective December 26, 2006.

FOR FURTHER INFORMATION CONTACT: Craig Streett, Team Leader, Office of 
Income Security Programs, Social Security Administration, 252 Altmeyer 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 410-965-
9793 or TTY 1-800-966-5609, for information about this Federal Register 
document. For information on eligibility or filing for benefits, call 
our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or 
visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

Statutory Provisions

    Section 811 of the MMA (Pub. L. 108-173), which was enacted into 
law on December 8, 2003, added subsection (i) to section 1839 of the 
Social Security Act (the Act), and established a Medicare Part B 
premium subsidy reduction (referred to in these final rules as ``the 
income-related monthly adjustment amount'') effective January 1, 2007, 
which will be added to the standard monthly Medicare Part B premium 
amount for certain beneficiaries. Section 1839(i) of the Act was 
subsequently amended by section 5111 of the Deficit Reduction Act of 
2005, Public Law 109-171. The Centers for Medicare & Medicaid Services 
(CMS), in the Department of Health and Human Services (HHS), has 
overall responsibility for determining the annual Medicare Part B 
standard monthly premium amounts and premium increases for late 
enrollment or reenrollment. CMS regulations at 42 CFR part 408 describe 
the rules that CMS uses to determine those amounts. As explained in 
these final rules, we are responsible only for making initial 
determinations and reconsidered determinations about income-related 
monthly adjustment amounts. Any subsequent levels of appeal will be 
provided by HHS under its regulations at 42 CFR part 405.
    Section 702(a)(5) of the Act allows us to make the rules and 
regulations necessary or appropriate to carry out the functions of SSA. 
Other provisions in section 811 of the MMA provide us with additional 
specific authorization to make rules and regulations to determine the 
income-related monthly adjustment amount. For example, sections 
1839(i)(4)(B) and (i)(4)(C)(ii)(II) of the Act authorize us to 
promulgate regulations necessary for our determinations about income-
related monthly adjustment amounts. Section 1839 of the Act requires 
the Secretary of HHS to determine annually the Medicare Part B standard 
monthly premium amount. Section 1839 of the Act also authorizes the 
Secretary of HHS to establish a premium increase for late enrollment 
and for reenrollment under certain circumstances and provides for a 
limitation on increases in the Medicare Part B standard monthly premium 
for some beneficiaries.
    The new section 1839(i) requires us to determine the income-related 
monthly adjustment amount for Medicare beneficiaries with modified 
adjusted gross income above an established threshold. The income-
related monthly adjustment amount is added to the Medicare Part B 
standard monthly premium and any applicable premium increase for late 
enrollment or reenrollment. The MMA provides that in 2007 the modified 
adjusted gross income threshold is $80,000 for individuals who file 
their Federal income taxes with a filing status of single, married 
filing separately, head of household, or qualifying widow(er) with 
dependent child and $160,000 for married individuals who file a joint 
tax return. Section 811(c)(1) of the MMA enacted a new section 
6103(1)(20) of the Internal Revenue Code authorizing the Internal 
Revenue Service (IRS) to provide certain income information to us to 
use in determining the income-related monthly adjustment amount. The 
MMA requires that the threshold amount be adjusted yearly based on the 
Consumer Price Index.
    Section 811(b)(1)(C) of the MMA also amended section 1839(f) of the 
Act, so that the limitation on increases in the Medicare Part B 
standard monthly premium for some beneficiaries will not apply to 
beneficiaries who are

[[Page 62924]]

responsible for an income-related monthly adjustment amount.

Background

    Medicare Part B is a voluntary program which provides medical 
insurance coverage for medical and health services such as physician 
services, diagnostic services, and medical supplies. Medicare Part B 
beneficiaries are responsible for deductibles, co-insurance and monthly 
premiums towards the cost of covered services. CMS promulgates rules 
and regulations concerning the Medicare program.
    The Medicare Part B standard monthly premium is set by CMS so that 
it covers approximately 25 percent of the Medicare Part B program 
costs. Certain beneficiaries may also pay an increased premium for late 
enrollment in Medicare Part B or for reenrollment after a period 
without coverage. Approximately 75 percent of the full cost of Medicare 
Part B is subsidized by the Federal Government by contributions to the 
Federal Supplementary Medical Insurance Trust Fund. In addition, for 
certain beneficiaries whose premiums are deducted from other payable 
Social Security (or railroad retirement) benefit amounts that they 
receive, the yearly adjustment to the premium amount cannot be raised 
more than the amount of the cost-of-living adjustment for those other 
benefits.
    Starting in January 2007, the Medicare Part B premium subsidy will 
be reduced for an estimated 4 to 5 percent of the approximately 40 
million Medicare Part B beneficiaries. Beneficiaries who had modified 
adjusted gross income above the threshold level set in the MMA in the 
tax year 2 years prior to the year for which we make a determination 
about whether they must pay an income-related monthly adjustment amount 
(the effective year) will receive a reduced Federal subsidy of their 
Medicare Part B premium. The reduction of the Federal premium subsidy 
will result in beneficiaries with modified adjusted gross income above 
the threshold paying more of the cost of their Medicare Part B benefits 
through an income-related monthly adjustment amount that will be added 
to the Medicare Part B standard monthly premium plus any applicable 
premium increase for late enrollment or reenrollment.

How This Will Affect You

    Your modified adjusted gross income is your adjusted gross income, 
as defined at 26 U.S.C. 62 and in related regulations, plus certain 
other forms of income that may be excluded from adjusted gross income 
for the purpose of determining the amount of Federal income tax that 
you must pay. The MMA as amended by the Deficit Reduction Act provides 
that the payment of the full amount of the income-related monthly 
adjustment amount will be phased in starting in 2007 and will be 
completed in 2009. If you must pay an income-related monthly adjustment 
amount, you will not be eligible for the limitation on Medicare Part B 
standard monthly premium increase beyond the amount of your Social 
Security (or tier 1 railroad retirement) cost-of-living adjustments, as 
described in 42 CFR 408.20.
    If you are a Medicare beneficiary prior to January 1, 2007 and you 
will be required to pay an income-related monthly adjustment amount in 
2007, we will notify you by sending you a letter at the end of 2006 
about the additional amount of your premium and any related changes in 
the amount of your Social Security monthly benefits or other payments 
(railroad retirement or Civil Service annuity payments) from which your 
premiums will be withheld. If you enroll in Medicare Part B after 
January 1, 2007, your initial Medicare Part B premium may not include 
an income-related monthly adjustment amount. If we subsequently 
determine that you must pay an income-related monthly adjustment amount 
for your Medicare Part B coverage, you will be notified shortly after 
you enroll in Medicare Part B, and you will be responsible for your 
income-related monthly adjustment amount for all months after December 
2006 for which you were enrolled in and entitled to Medicare Part B. If 
you are a Medicare beneficiary during 2007 or after, we will notify you 
prior to the start of each year if you must pay an income-related 
monthly adjustment amount in that year.

How We Determine Your Income-Related Monthly Adjustment Amount

    The amount of your modified adjusted gross income will determine if 
you are to pay an income-related monthly adjustment. Section 1839(i)(2) 
of the Act establishes the threshold for modified adjusted gross income 
used to determine if you are to pay an income-related monthly 
adjustment amount. In 2007, the modified adjusted gross income 
threshold amount is $80,000 for individuals who file their Federal 
income tax return with a filing status of single, married filing 
separately, head of household, or qualifying widow(er) with dependent 
child, and $160,000 for individuals who file a joint income tax return 
with their spouse.
    Section 1839(i)(4) of the Act requires us to request information 
about your modified adjusted gross income from IRS in the Department of 
the Treasury and to use this information to determine if you must pay 
an income-related monthly adjustment amount. We will specify the tax 
year involved in our information request. We will request that IRS send 
us Federal income tax return information about your modified adjusted 
gross income for the tax year which is 2 years before the effective 
year. If modified adjusted gross income information is not available 
from IRS for the tax year 2 years before the effective year of our 
determination, IRS will send us your modified adjusted gross income 
information for the tax year 3 years before the effective year if it 
exceeds the threshold. We will use information for the tax year 3 years 
prior to determine whether you must pay an income-related monthly 
adjustment amount only until we obtain information for the tax year 2 
years prior. When we use such information to make a determination, we 
will make retroactive corrections that will apply to all months that 
you paid an incorrect income-related monthly adjustment amount.
    If we use information from IRS for the tax year 3 years before the 
effective year of our determination, you may request that we use 
information that you provide for the tax year 2 years before that year. 
In some cases, you may pay a higher premium based on your 2-year 
information. However, providing that information to us rather than 
having us receive information from IRS at a later date will help you 
avoid an extensive retroactive correction. In order for us to make an 
initial determination based on such a request, you must provide your 
retained copy of your Federal income tax return for that year, a copy 
that you request from IRS, or an IRS transcript of your return. If you 
provide your retained copy, we will also verify this information with 
IRS.
    If we receive information from IRS about your modified adjusted 
gross income for a tax year for which you did not file a tax return 
that shows that you had income that year that exceeded the established 
threshold, we will make a determination about your income-related 
monthly adjustment amount for that year. We will apply the highest 
applicable percentage adjustment based on that information, as required 
by statute. If IRS provides information to us that indicates a change 
in your modified adjusted gross income for a prior tax year, we will 
use this information to establish corrections for the appropriate

[[Page 62925]]

effective years regardless of when we receive such information. We are 
consulting with IRS to develop processes for the transmission of 
modified adjusted gross income information for situations involving 
those who do not file income tax returns and for changes in information 
that IRS provides.

The Sliding Scale Formula and How It Applies to You

    Section 1839(i)(3) prescribes a sliding scale formula that CMS will 
use to establish annually four income-related monthly adjustment 
amounts beginning in 2007. The calculation of the income-related 
monthly adjustment amount reduces a beneficiary's Medicare Part B 
premium subsidy using specified percentages. The amount of this premium 
subsidy reduction is the income-related monthly adjustment amount. To 
determine each income-related monthly adjustment amount, CMS will use 
the unsubsidized Medicare Part B premium (approximately four times the 
Medicare Part B standard monthly premium) and multiply it by a 
specified percentage. The percentage used in the calculation changes as 
the amount of modified adjusted gross income increases the income-
related monthly adjustment amount.
    We will use your modified adjusted gross income and your Federal 
income tax filing status (e.g., single, married filing jointly, married 
filing separately) to determine whether you must pay an income-related 
monthly adjustment amount, and if so, what your income-related monthly 
adjustment amount will be. Section 1839(i)(3)(C) provides the modified 
adjusted gross income ranges. The range amounts for individuals who are 
married filing jointly are double the range amounts for single income 
tax filers. IRS recognizes three additional filing statuses: head of 
household, qualifying widow(er) and married filing separately. If you 
file as a head of household or as a qualifying widow(er), we will apply 
the modified adjusted gross income range applicable to individuals who 
file their Federal income tax return with a filing status of single. 
Section 1839(i)(3)(C)(iii) provides a different rule for determining 
the income-related monthly adjustment amount for individuals who file 
their Federal income tax return with a filing status of married filing 
separately and who lived with their spouse at any time during the year. 
For these individuals, we subtract the threshold amount as described in 
section 1839(i)(2)(A) established for single income tax filers for that 
calendar year from the modified adjusted gross income ranges for 
individuals with a tax filing status of single. For 2007, this results 
in the following two ranges for married filing separately: (1) $80,000 
to less than or equal to $120,000 and (2) More than $120,000. 
Individuals affected by section 1839(i)(3)(C)(iii) will pay either the 
third or fourth range of income-related monthly adjustment amount as 
described in section 1839(i)(3)(C)(i) as modified by 1839(i)(3)(B).
    Starting in 2007 for calendar year 2008, and annually thereafter 
for each following calendar year, CMS will publish the annual modified 
adjusted gross income ranges and income-related monthly adjustment 
amounts that are associated with each range. We will use this published 
information to determine which amount applies to you based on your tax 
filing status in the tax year we are using to determine your income-
related monthly adjustment amount.
    If you filed an amended tax return for the tax year we used to make 
a determination of your income-related monthly adjustment amount, you 
may request that we use your amended tax return for that year. You must 
provide us with proof that you filed an amended tax return with IRS, 
including your retained copy of the amended tax return and a letter 
from IRS verifying receipt of the return or an IRS transcript of your 
amended tax return. If you believe that IRS provided incorrect modified 
adjusted gross income information and we used that information to 
determine your income-related monthly adjustment amount, you may 
request that we make a new income-related monthly adjustment amount 
determination. You must provide proof of the error in the IRS data and 
evidence of your actual modified adjusted gross income, such as a copy 
of the return that you obtain from IRS. When we use information from 
your amended or corrected Federal income tax return to make a 
determination, we will make retroactive adjustments that will apply to 
all months that you paid an incorrect income-related monthly adjustment 
amount.

Phase-In and Inflation Adjustment of the Income-Related Monthly 
Adjustment Amount

    Section 1839(i)(3)(B) requires the amount of the full income-
related monthly adjustment to be phased in over a 3-year period 
beginning in 2007. The effect is that from 2007 through 2009 the amount 
of the income-related monthly adjustment amount will increase, because 
the subsidy will decrease. The percentage will change each year so that 
the income-related monthly adjustment amount will gradually increase, 
until the full amount is phased in starting in 2009. In 2007, you will 
pay 33 percent of the income-related monthly adjustment amount, and in 
2008, you will pay 67 percent of the income-related monthly adjustment 
amount. In 2009, you will pay the full income-related monthly 
adjustment amount for your tax filing status and modified adjusted 
gross income.
    Beginning in 2008, section 1839(i)(5) of the Act requires an annual 
inflation adjustment for the threshold amount and the amounts used in 
the modified adjusted gross income ranges. The adjustment will be based 
on the percentage increase in the Consumer Price Index for all urban 
consumers and rounding the result to the nearest $1,000. CMS will 
calculate and publish these amounts annually.

Changes in Your Modified Adjusted Gross Income

    Section 1839(i)(4)(C) of the Act requires us to establish 
procedures in consultation with the Secretary of the Treasury for 
determining your modified adjusted gross income for a tax year more 
recent than the information ordinarily provided by IRS. The statute 
states that we will grant your request to use a more recent tax year to 
determine your income-related monthly adjustment amount only when:
     You experience a major life-changing event;
     That major life-changing event results in a significant 
reduction in your modified adjusted gross income;
     You request that we use a more recent tax year's modified 
adjusted gross income; and
     You provide evidence of the event and the reduction in 
your modified adjusted gross income.
    These final rules describe the standards that you must meet in 
order for us to use a more recent tax year's modified adjusted gross 
income to determine whether you must pay an income-related monthly 
adjustment amount and what your income-related monthly adjustment 
amount will be. In these final rules we define qualifying major life-
changing events and what is a significant reduction in your modified 
adjusted gross income. We also specify the evidence we will require of 
major life-changing events and the resulting reduction in your modified 
adjusted gross income.
    Section 1839(i)(4)(C)(ii)(II) specifies that major life-changing 
events include marriage, divorce, and death of a spouse. Under that 
section, we have discretion to include in regulations additional major 
life-changing events

[[Page 62926]]

that would allow us to grant your request that we use information from 
a more recent tax year to determine your income-related monthly 
adjustment amount. In these rules we establish the following categories 
of qualifying major life-changing events:
     Death of a spouse;
     Marriage;
     Marriage ended by divorce or annulment;
     Partial or full work stoppage;
     Loss of income from income-producing property when the 
loss is not at your direction, for example, loss of income from real 
property due to a natural disaster in a Presidentially or 
Gubernatorially-declared disaster area, or due to arson, or destruction 
of livestock or crops; and
     Reduction or loss of income from an insured pension plan 
due to termination or reorganization of the pension plan, or a 
scheduled cessation of your pension benefits.
    We have included these additional categories of major life-changing 
events because we recognize that these events may cause a significant 
reduction in your modified adjusted gross income. We will include 
losses in pension income from an insured pension plan that occur due to 
events outside of your control, such as underfunding that results in a 
termination of the plan, but not due to your choices about funding an 
employee-directed pension plan. The statute authorizes us to define as 
major life-changing events circumstances that affect your income, not 
circumstances that affect only your expenses.
    We define a significant reduction in your modified adjusted gross 
income as any change that results in a reduction or elimination of your 
income-related monthly adjustment amount. Therefore, a significant 
reduction in your modified adjusted gross income is any change that 
lowers your income below the threshold amount or lowers the modified 
adjusted gross income range in which your income falls. Section 
1839(i)(4)(C)(ii) provides that we may grant your request to use a more 
recent tax year's modified adjusted gross income to determine your 
income-related monthly adjustment amount only if you provide us with a 
copy of a filed Federal income tax return or equivalent document. These 
final rules define the evidence that we will consider to be equivalent 
to a copy of a filed Federal income tax return.
    When we make an income-related monthly adjustment amount 
determination based on your request due to a qualifying major life-
changing event, the determination will generally be effective on 
January 1 of the calendar year for which we make the determination. If 
you enrolled in Medicare Part B after January 1 of the year for which 
we make an income-related monthly adjustment amount determination based 
on your request due to a major life-changing event, the determination 
will be effective the month of your Medicare Part B enrollment.
    When we make an income-related monthly adjustment amount 
determination following a major life-changing event using your more 
recent tax year's modified adjusted gross income, we will continue 
trying to get IRS data for that tax year. When we receive modified 
adjusted gross income information from IRS for that tax year, we will 
use the information from IRS to determine the correct income-related 
monthly adjustment amount for the year or years for which we used 
information that you provided, and we will make retroactive 
adjustments, if necessary. Retroactive adjustments will apply to all 
months for which you paid an incorrect income-related monthly 
adjustment amount.

If You Disagree With Our Determination of Your Income-Related Monthly 
Adjustment Amount

    We will decide whether you must pay an income-related monthly 
adjustment, and the amount of any adjustment, based on information we 
receive from IRS or you. We will send you a notice of our initial 
determination of your income-related monthly adjustment amount and the 
basis for our determination. The notice will explain that, if you 
disagree with our determination, you may request that we reconsider it 
within 60 days after the date you receive notice of our initial 
determination. The notice will also explain that you may request a new 
initial determination, rather than a reconsideration, if you believe 
the information we used in our initial determination was correct, but 
you want us to use different information about your modified adjusted 
gross income.
    For purposes of this subpart, in making initial determinations and 
reconsiderations, we will use the rules for the administrative review 
process that we use for determinations of your rights regarding 
nonmedical issues under title II of the Act. However, in order to 
expedite the processing of requests for reconsideration under these 
final rules, we have also provided in these rules that we may accept 
requests for reconsideration that are filed by electronic or other 
means that we determine to be appropriate, other than a request in 
writing, as our title II regulations provide. If you are dissatisfied 
with our reconsidered determination, you may request further review, 
including a hearing before an administrative law judge (ALJ) from the 
Office of Medicare Hearings and Appeals (OMHA) at HHS, review by the 
Medicare Appeals Council (MAC), and judicial review, consistent with 
the CMS regulations at 42 CFR part 405. As part of your request for an 
ALJ hearing or MAC review, you will be required to provide your consent 
for us to release your relevant tax return information to OMHA or the 
MAC for the purposes of adjudicating any appeal of the amount of an 
income-related adjustment to the Part B premium subsidy and for any 
judicial review of that appeal.
    We are establishing a new procedure, a request for a new initial 
determination, that you may use when you do not dispute the accuracy of 
the determination we made based on the modified adjusted gross income 
information provided by IRS, but you want us to use different 
information. You may provide evidence of your modified adjusted gross 
income for a more recent tax year than the information provided by IRS 
when you have had a major life-changing event that significantly 
reduces your income or when IRS has provided modified adjusted gross 
income information from 3 years prior to the premium effective year and 
you supply your retained copy of your Federal income tax return for the 
tax year 2 years prior. You may also request that we make a new initial 
determination when you have amended your Federal income tax return or 
when you can furnish proof that IRS has provided incorrect information 
about your modified adjusted gross income for the year that we used to 
determine your income-related monthly adjustment amount.
    We are establishing this alternative procedure in view of the 
nature of the information that we are required by the MMA to use in 
making determinations regarding the income-related monthly adjustment 
amount. We anticipate that the use of this new procedure will allow us 
to make timely adjustments when you have updated information about your 
modified adjusted gross income, or when you can prove the IRS 
information we used is incorrect. This process does not affect your 
right to appeal an initial determination that we make about your 
income-related monthly adjustment amount, but allows you to choose an 
alternative of requesting that we use other information to make a new 
initial determination.

[[Page 62927]]

Explanation of Subpart B

    We are adding a new subpart B, Medicare Part B Income-Related 
Monthly Adjustment Amount, to part 418 of chapter III of title 20 of 
the Code of Federal Regulations. Subpart B contains the rules that we 
will use to determine when you will be required to pay an income-
related monthly adjustment amount in addition to your Medicare Part B 
standard monthly premium plus any applicable premium increase for late 
enrollment or reenrollment. Following is a description of each section 
for subpart B.

Introduction, General Provisions, and Definitions

     Section 418.1001 describes what subpart B is about, lists 
the groups of sections in the subpart, and the subject of each group.
     Section 418.1005 explains that the purpose of the income-
related monthly adjustment amount is to reduce the premium subsidy of 
the Medicare Part B program, i.e., the amount of the Federal 
Government's contribution to the Federal Supplementary Medical 
Insurance Trust Fund for certain beneficiaries. It also explains how 
the income-related monthly adjustment amount will be administered.
     Section 418.1010 contains definitions of terms used 
throughout this subpart.

Determination of the Income-Related Monthly Adjustment Amount

     Section 418.1101 explains what the income-related monthly 
adjustment amount is and when it is applied.
     Section 418.1105 defines the modified adjusted gross 
income threshold and what the modified adjusted gross income threshold 
amounts will be in the year 2007. It also describes how threshold 
amounts will change in later years.
     Section 418.1110 describes the effective date of our 
initial determination about the income-related monthly adjustment 
amount.
     Section 418.1115 defines modified adjusted gross income 
ranges and explains how we will use them and your tax filing status to 
determine the amount of your income-related monthly adjustment amount 
when applicable, and what effect Federal income tax filing status has 
on the ranges.
     Section 418.1120 explains how we will determine your 
income-related monthly adjustment amount.
     Section 418.1125 explains how the income-related monthly 
adjustment amount will affect your total Medicare Part B premium.
     Section 418.1130 explains how we will phase in the full 
applicable income-related monthly adjustment amounts.
     Section 418.1135 describes what modified adjusted gross 
income information we will use to determine your income-related monthly 
adjustment amount.
     Section 418.1140 describes what will happen if the 
modified adjusted gross income that we later receive from IRS is 
different from the information that we previously used to make a 
determination of your income-related monthly adjustment amount.
     Section 418.1145 describes how we will determine the 
income-related monthly adjustment amount if IRS does not provide your 
modified adjusted gross income information.
     Section 418.1150 describes when we will use a copy of your 
amended Federal income tax return filed with IRS to determine the 
income-related monthly adjustment amount and what proof is necessary to 
show that you filed a tax return with IRS.

Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
Income

     Section 418.1201 explains when we will use modified 
adjusted gross income information for a more recent tax year to 
determine your income-related monthly adjustment amount.
     Section 418.1205 describes what is considered a major 
life-changing event that would justify using information from a more 
recent tax year.
     Section 418.1210 explains what is not considered a major 
life-changing event that would justify using information from a more 
recent tax year.
     Section 418.1215 explains what is a significant reduction 
in your income for the purpose of these rules.
     Section 418.1220 explains what is not a significant 
reduction in your income for the purpose of these rules.
     Section 418.1225 explains which more recent tax years we 
may use to determine whether you must pay an income-related monthly 
adjustment amount and the amount of that adjustment.
     Section 418.1230 explains the effective date of our 
income-related monthly adjustment amount determination based on your 
request to use a more recent tax year.
     Section 418.1235 explains when we will stop using your 
modified adjusted gross income from a more recent tax year for income-
related monthly adjustment amount determinations.
     Section 418.1240 explains what you should do if your 
modified adjusted gross income for the more recent tax year changes.
     Section 418.1245 explains what will happen if you notify 
us of a change in your modified adjusted gross income for the more 
recent tax year.
     Section 418.1250 explains what evidence you will need to 
support your request for us to use a more recent tax year to determine 
your income-related monthly adjustment amount.
     Section 418.1255 describes what evidence of a major life-
changing event you will need to provide to support your request to use 
a more recent tax year.
     Section 418.1260 describes the types of evidence of a 
major life-changing event that we will not accept.
     Section 418.1265 describes what evidence of a significant 
reduction in your modified adjusted gross income you will need to 
provide to support your request to use a more recent tax year.
     Section 418.1270 explains what evidence we will not accept 
of a significant reduction in your modified adjusted gross income.

Determinations and the Administrative Review Process

     Section 418.1301 explains what is an initial determination 
regarding your income-related monthly adjustment, and provides examples 
of determinations that are initial determinations for purposes of these 
rules.
     Section 418.1305 explains that administrative actions that 
are not initial determinations are not subject to the administrative 
review process.
     Section 418.1310 explains when you may request that we 
make a new initial determination.
     Section 418.1315 explains how we will notify you when we 
make an initial determination, and what information the notice will 
contain.
     Section 418.1320 explains the effect of the initial 
determination.
     Section 418.1325 explains when you may request a 
reconsideration.
     Section 418.1330 explains what will happen if you request 
a reconsideration because you believe that IRS information we used to 
make an initial determination about your income-related monthly 
adjustment amount is incorrect.
     Section 418.1335 explains what to do if you believe our 
initial determination is based on incorrect modified adjusted gross 
income information.
     Section 418.1340 tells you the rules for the 
administrative review process.
     Section 418.1345 tells you the rules we will use to decide 
if reopening a

[[Page 62928]]

prior initial or reconsidered determination made by us is appropriate.
     Section 418.1350 explains that the HHS rules will apply 
for review of a reconsidered determination or ALJ decision.
     Section 418.1355 explains that the rules for reopening a 
prior decision made by an ALJ of the OMHA or by the MAC will follow the 
HHS rules governing reopening.

Public Comments

    On March 3, 2006, we published proposed rules in the Federal 
Register at 71 FR 10926 and provided a 60-day period for interested 
persons to comment. We received comments from three organizations and 
four individuals. We have condensed, summarized or paraphrased the 
comments in the following discussion to facilitate comprehension of the 
issues. We have tried to present all views accurately and address 
carefully all of the issues raised by the commenters that are within 
the scope of the proposed rules.
    In our proposed rules, we invited but received no comments on the 
issue of individuals for whom the IRS cannot supply income tax return 
information. The statute requires that we issue regulations that 
``provide for the treatment of the premium adjustment with respect to 
such individual[s]'' when we have information that such individuals 
have income that exceeds the threshold. Consistent with the 
requirements of Sec.  1839(i)(4)(B)(iii) of the Act, we have added 
Sec.  418.1135(f) to these rules to clarify that if, after a premium 
effective year, we receive information from IRS that such an individual 
had modified adjusted gross income above the applicable threshold, we 
will apply the highest income-related adjustment percentage to such 
individual as required by the statute. When we receive such 
information, we will retroactively correct Medicare premiums for any 
affected effective year(s), as required by statute.

Introduction, General Provisions and Definitions

    Comment: Four commenters expressed concerns over the concept that 
some higher income Medicare beneficiaries should receive a reduction in 
the Federal subsidy of their Medicare Part B premiums.
    Response: The provision to reduce the amount of the subsidy based 
on your income levels was specifically legislated by Congress. Our 
responsibility is to implement section 811 of the MMA through these 
regulations in a manner consistent with the requirements of this law.
    Comment: One commenter found the proposed rules confusing.
    Response: We have reorganized the rules and changed some of the 
captions and wording of the regulation text in order to improve the 
clarity of the regulation.
    We changed the order of Sec. Sec.  418.1110 through 418.1120 by 
moving the section about the effective date of our initial 
determination so that it precedes the section that describes how we 
make our initial determination of your income-related monthly 
adjustment amount. This change provides a more logical progression of 
concepts related to income-related monthly adjustment amount 
determinations.
    We renumbered the sections related to a determination using a more 
recent tax year's modified adjusted gross income because we created two 
new sections (Sec. Sec.  418.1215 and 418.1220) to clarify what is a 
significant reduction in modified adjusted gross income. In the 
proposed regulation, the definition of a significant reduction in 
modified adjusted gross income was in Sec.  418.1201(b). We have left 
that definition intact, but added further clarification in the new 
sections.
    Comment: Several commenters raised concerns about confusion that 
may arise regarding the administrative review process.
    Response: We agree with the comments and have added Sec. Sec.  
418.1340 and 418.1345 which clarify that we will apply our rules for 
administrative review by SSA and reopening of our determinations. 
Sections 418.1350 and 418.1355 clarify that HHS will apply its rules 
for administrative review and reopenings by ALJs from OMHA and by the 
MAC.
    Comment: One commenter suggested that we define what we mean by 
``significant reduction'' in income resulting from a major life-
changing event. It was also requested that we add more information to 
the final rules about what evidence of life-changing events we will 
require, and how we will establish a causal link between the major 
life-changing event and the significant reduction in income.
    Response: We agree with this suggestion and have added new sections 
to the regulations that explain what does and does not constitute a 
significant reduction in income resulting from a major life-changing 
event. Section 418.1215 defines a significant reduction in modified 
adjusted gross income, and Sec.  418.1220 explains that we will not 
consider a reduction in income to be significant if it does not affect 
the amount of income-related monthly adjustment you must pay.
    Section 418.1250 states that we will ask for evidence of the major 
life-changing event and how that event significantly reduced your 
modified adjusted gross income. We have also added explanations of what 
major life-changing event evidence we will not accept and what modified 
adjusted gross income information we will not accept. Section 418.1260 
describes the types of evidence of major life-changing events that we 
will not accept, and Sec.  418.1270 describes the types of modified 
adjusted gross income evidence we will not accept.
    In Sec.  418.1265(b) we expanded our description of the evidence 
that we will accept of reductions in your modified adjusted gross 
income. The revision clarifies that we will accept a copy of your filed 
Federal income tax return for a more recent taxable year. If you have 
amended your tax return for the more recent taxable year, you should 
provide a copy of the amended tax return. Finally, if you filed a tax 
return for the more recent taxable year, but have proof from IRS of a 
correction of your tax return information, you should provide evidence 
of the correction.
    Comment: One commenter expressed concerns about privacy issues 
surrounding the modified adjusted gross income data that we will obtain 
from IRS.
    Response: Section 811 of the MMA created a new provision of the 
Internal Revenue Code that authorizes IRS to disclose modified adjusted 
gross income information to us for the specific purpose of determining 
income-related monthly adjustments to Medicare Part B premiums. We have 
worked with the IRS under existing protocols and within the 
specifications of section 811 and other legislation to limit the 
information that IRS discloses to us and the information that we will 
supply to IRS for this purpose. The data exchange will be conducted in 
accordance with the provisions of section 1106 of the Act (42 U.S.C. 
1306), the Privacy Act (5 U.S.C. 552a), and section 6103 of the 
Internal Revenue Code (26 U.S.C. 6103) to ensure safeguarding of any 
personally identifiable information that is exchanged. We added a 
statement in Sec.  418.1350 to clarify that we will not disclose 
information that we have about your tax information for the purpose of 
a hearing with an ALJ, MAC review, or judicial review unless you 
authorize us to do so, and the IRS confirms that the authorization 
meets all legal requirements.

[[Page 62929]]

    Comment: One commenter said that the regulations should address 
beneficiary education activities to inform the public about their 
appeal rights and how the different agencies involved will coordinate 
those activities.
    Response: After careful consideration, we decided that including 
education plans in the final regulations would not be appropriate. We 
are working on the best methods to provide initial and continuing 
information to the public that explains their appeal rights and other 
information that the public may need and are coordinating our efforts 
with CMS. We will include information in notifications that we will 
send to affected beneficiaries and through other vehicles, such as Fact 
Sheets and Web page information published by both agencies.
    Comment: One commenter addressed concerns about the timing of 
notifications to beneficiaries about income-related monthly adjustments 
to Medicare Part B premiums, suggesting that such notices be issued by 
October 31. The commenter also encouraged us to provide detailed 
information in those notifications.
    Response: As we explained earlier in this preamble, generally we 
will use 2-year old modified adjusted gross income information from IRS 
to determine whether you are required to pay an income-related monthly 
adjustment amount. Section 811 of the MMA gives IRS until October 15 to 
provide us with 2-year old tax data to use in determining your 
adjustment amount for the next year. If we do not receive the 
information by October 15, the law allows us to use 3-year old data. 
Because we must wait until after October 15 to obtain the required 
information, it is not possible for us to process the data from IRS and 
issue notices by the suggested date.
    We will send notices that will explain the basis of our decision 
and what you should do if you disagree with our decision or have better 
information than we do (such as a copy of a filed 2-year old tax return 
when we used 3-year old information to set a premium adjustment). The 
notices will provide information about which year's income tax return 
information we used to make our determination, and what information IRS 
gave us about your tax filing status and modified adjusted gross income 
for that year. The notices will also explain what you may do if there 
has been a major life-changing event(s) resulting in a significant 
reduction in income since the year we used to set your Medicare Part B 
premium.
    Comment: One commenter urged us to publish the annual, updated 
modified adjusted gross income ranges at the same time as the Medicare 
Part B premium changes and for CMS to include projected amounts for a 
5- to 10-year period in its Annual Trustees Report.
    Response: We do not determine the annual modified adjusted gross 
income ranges, nor do we determine the standard Medicare Part B 
premium. CMS will determine the ranges annually as it does the standard 
Medicare Part B premium. We will include this information on our Web 
site http://www.socialsecurity.gov as it becomes available to us. We 
have shared with CMS the suggestion to include projected modified 
adjusted gross income ranges in CMS's Annual Trustees Report.

Determination of the Income-Related Monthly Adjustment Amount

    Comment: Two commenters expressed concern about using information 
from IRS for a past period. One of those comments focused on the use of 
IRS information from more than 2 years before the year for which the 
Medicare Part B premiums will be effective. That commenter expressed 
hope that IRS would be able to provide appropriate electronic 
information about beneficiaries' modified adjusted gross income from 
the tax year 2 years before the premium year well in advance of October 
15 each year. The other comment expressed a generalized concern about 
the coordination of data transfers between Federal agencies.
    Response: Based on our discussions with IRS, we expect that the 
overwhelming majority of income tax returns from the tax year 2 years 
before the premium year will be processed and in electronic format by 
October 15 of each year. Although many taxpayers request filing 
extensions, almost all file a tax return by October 15. The language of 
the statute dictates the October 15 date and provides an exception for 
the temporary use of 3-year old data when 2-year old information is not 
available. We are working with IRS to minimize the temporary use of 
older data, and to ensure accurate data exchanges.

Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
Income

    Comment: Two commenters addressed the possibility of job loss or 
retirement affecting income in the past year while we use 2- or 3-year-
old information from IRS.
    Response: Reduction of work or work stoppage can be a major life-
changing event for purposes of determining the income-related monthly 
adjustment amount. If you experience a significant reduction of income 
because of work reduction or stoppage, the final rules provide that you 
may request that we use information that you provide about your income 
for a more recent tax year to determine your income-related monthly 
adjustment amount. If you report a major life-changing event that 
significantly reduces your income, we will use that information to 
determine if an income-related monthly adjustment amount is applicable. 
When we determine that you have paid too much for your Medicare Part B 
premium, we will follow current processing procedures to refund excess 
amounts of Medicare Part B premiums that have been paid. If a Medicare 
beneficiary pays premiums through another Federal agency, we will 
convey the information that the agency needs to refund excess Medicare 
Part B premiums that have been paid.
    Comment: One commenter thought that the impairment-related work 
expenses deduction from income for the disabled in other Social 
Security programs should be extended to the income-related monthly 
adjustments to Medicare Part B premiums.
    Response: We have not adopted the comment. The statute clearly 
defines the method for determining whether an income-related monthly 
adjustment is applicable and the amount of such adjustment. The MMA 
requires us to use only the modified adjusted gross income as defined 
in section 1839(i)(4) of the Act and does not provide any authority for 
us to consider an individual's expenses or net income.
    Comment: One commenter suggested that the list of significant life-
changing events should be flexible. Another commenter suggested that 
the list of significant life-changing events should be expanded to 
include decreases in dividend income and requested clarification on 
whether interest income from financial securities (such as stocks and 
bonds) is considered the same as dividend income. The latter commenter 
also expressed concerns about the burden of documenting life-changing 
events, such as divorce that occurred several years earlier.
    Response: We have given careful consideration to these comments but 
decided not to expand the list of significant life-changing events to 
include decreases in dividend income and loss of income from financial 
securities. The current list of significant life-changing events 
includes major events that have a direct and potentially permanent 
effect on an individual's income. Reductions in income that are

[[Page 62930]]

unrelated to major life-changing events are not contemplated in the 
statute. Decreases in dividend income and loss of income from financial 
securities are not ``events'' but rather fluctuations in the financial 
markets and should not be considered as part of the list of events with 
a potentially permanent effect on income. Similarly, making the list 
more flexible would run counter to the statutory requirement that major 
life-changing events be ``specified in regulations.''
    When you have experienced a significant life-changing event, we 
will provide assistance to you when documentation is needed as we 
routinely do for Social Security claimants and beneficiaries. To the 
extent possible, when you need a document such as a divorce decree and 
do not know how to obtain it, we will provide the appropriate address 
and associated information so that you can secure it. Further, it is 
unlikely that a divorce that occurred several years ago will have 
caused a significant reduction in income in a more recent tax year.

Determinations and the Administrative Review Process

    Comment: One commenter expressed concern about the process that we 
will use to make corrections of amounts of Part B premiums charged 
after we have decided that use of a more recent taxable year is 
appropriate when there has been a significant reduction in income 
because of a major life-changing event.
    Response: The commenter asked about the process for making premium 
adjustments. When a beneficiary reports a major life-changing event and 
new information about his income in a more recent tax year that we use 
to make a new initial determination of the income-related monthly 
adjustment amount, we will follow current processing procedures to 
refund excess Medicare Part B premiums that have been paid. If a 
Medicare beneficiary pays premiums through another Federal agency, we 
will convey the information that agency needs to process an appropriate 
correction for the beneficiary.
    Comment: One commenter asked for clarification of what is not 
subject to appeal, and when our rules and HHS rules will apply. The 
commenter also expressed concerns about the complexity of the 
administrative review process which spans two Federal agencies.
    Response: We are responsible for reconsiderations of initial 
determinations made by us. Reconsiderations are the first step in the 
appeal process, and our rules are used for reconsiderations. When an 
individual is dissatisfied with our reconsideration determination, he 
may request a hearing before an ALJ. Section 931 of the MMA transferred 
responsibility for the functions of the ALJs responsible for hearing 
cases under title XVIII of the Act to HHS. HHS established regulations 
for Medicare appeals in 42 CFR part 405. Hearings related to income-
related monthly adjustment amounts are hearings under title XVIII and 
are the responsibility of HHS. We have clarified this information in 
the regulations. Our regulations also explain what is and is not an 
initial determination for purposes of administrative review.
    We agree with the concern that the commenter expressed about the 
complexity of the administrative review process for these cases. We 
have simplified our process for requesting a reconsidered determination 
of our decision about an income-related monthly adjustment amount. If 
you want us to reconsider our determination about your income-related 
monthly Medicare Part B premium adjustment, you will be able to request 
a reconsideration without requesting it in writing.
    Comment: A commenter suggested that we should give beneficiaries 
more than 60 days after receipt of the notice of our initial 
determination to seek a reconsideration or a new determination because 
of likely confusion in the initial year or two of implementation.
    Response: Our experience in administering the title II program has 
been that a 60-day period to file an appeal is reasonable. If you 
request your reconsideration later, we will follow our current rules in 
20 CFR 404.911 to evaluate whether you have a good reason for us to 
extend the 60-day period, such as illness or a death in your immediate 
family.
    A request for a new initial determination is not an appeal and is 
not tied to the 60-day period to file an appeal. A major life-changing 
event such as death of a spouse or divorce can happen any time during a 
year and may result in a significant reduction in income for that year 
or a subsequent year. If you have experienced a significant reduction 
in income because of a major life-changing event, you may request a new 
determination at any time during the year that the significant 
reduction in income has occurred. Further, if that reduction follows a 
major life-changing event in the last 3 months of the year, you may 
report the event and request a new initial determination within the 
first 3 months of the next year and we will determine if premiums 
should be adjusted for the preceding year.
    In the proposed rule, we established a 60-day time limit for 
requesting a new initial determination based on a beneficiary 
correction of IRS information that we used to make an initial 
determination about the income-related monthly adjustment amount. After 
considering this comment, we eliminated the requirement that a 
beneficiary make a request for a new initial determination within 60 
days following receipt of our notice of an income-related monthly 
adjustment amount when he believes that the IRS information we used is 
incorrect. Section 418.1310(a)(3) of the final rule states that an 
individual who believes that the IRS information we used in making an 
initial determination of the income-related monthly adjustment amount 
is incorrect may request a new initial determination at any time after 
he receives a notice from us about the determination.

Other Changes

    In response to these comments and our further review of the 
structure and format of the proposed rule, we have restructured these 
regulations slightly. In this final rule, we have moved some sections 
and added new sections. We provide explanations below of the changes 
that were not explained under the ``Public Comments'' section of the 
preamble. These changes are consistent with the policies outlined in 
the proposed regulations and are intended to clarify and further 
explain the procedures that we will apply to compute the amount of any 
income-related monthly adjustment to the Medicare Part B premium.
    In Sec.  418.1010(a), we have added definitions for the Medicare 
Appeals Council (MAC), the Office of Medicare Hearings and Appeals 
(OMHA), and the Department of Health and Human Services (HHS). We added 
a definition of the term ``Tax Year'' to Sec.  418.1010(b). In Sec.  
418.1205(c), we clarified that a marriage may end either through 
divorce or annulment.
    We also added sections clarifying that we will apply our rules for 
the reconsideration of initial determinations that we have made, and 
HHS rules will apply for administrative review by the OMHA and the MAC. 
We have added language clarifying the process we will follow when a 
beneficiary who filed a Federal income tax return as Married Filing 
Separately informs us that the spouses lived apart throughout the year. 
In a new paragraph (e) in Sec.  418.1140, we explain that if you 
request that we review your income-related premium

[[Page 62931]]

adjustment for this reason, we will require you to attest that you 
lived apart from your spouse throughout the tax year we are using to 
set your premium, and to provide address information for your spouse 
and yourself for that year.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final rules meet the criteria for an 
``economically significant'' regulatory action under Executive Order 
12866, as amended by Executive Order 13258. Thus, they were reviewed by 
OMB. We have also determined that these final rules meet the plain 
language requirement of Executive Order 12866, as amended by Executive 
Order 13258. In addition, these are major rules under the Congressional 
Review Act in 5 U.S.C. 801-808.
    These final rules provide the implementing rules for the income-
related premium calculation enacted as part of MMA. The legislative 
provision is expected to result in an overall savings to the Medicare 
Part B account in the SMI Trust Fund of roughly $7.7 billion over the 
period of fiscal years 2007-2011. The changes in this final rule from 
the notice of proposed rulemaking (NPRM) are not expected to affect the 
cost/savings projections for this rule. The following chart shows the 
estimated total savings in millions for each program year.

------------------------------------------------------------------------
                                                                Total
                        Fiscal year                            savings
------------------------------------------------------------------------
2007.......................................................         $490
2008.......................................................        1,180
2009.......................................................        1,860
2010.......................................................        2,060
2011.......................................................        2,150
                                                            ------------
    Total 2007-2011........................................        7,740
------------------------------------------------------------------------

    In addition, the process of determining the additional premiums 
will result in an increase in administrative expenses incurred by us in 
the amount of $200 million over that same 5-year period.

Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in the following table 
(Table 1) we have prepared an accounting statement showing the 
classification of the expenditures associated with the provisions of 
these final rules. This table provides our best estimate of the 
increase in premium payments as a result of the changes to the Part B 
program presented in these final rules. All expenditures are classified 
as transfers to the SMI Trust Fund.

   Table 1.--Accounting Statement: Classification of Estimated Savings
                              [In millions]
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $1,370.
From Whom to Whom?........................  Certain High-Income Medicare
                                             Part B Beneficiaries to the
                                             Medicare SMI Trust Fund.
------------------------------------------------------------------------

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities as they 
affect individuals only. Therefore, a regulatory flexibility analysis 
as provided in the Regulatory Flexibility Act, as amended, is not 
required for these final rules.

Paperwork Reduction Act

    These final rules contain information collection requirements that 
require Office of Management and Budget clearance under the Paperwork 
Reduction Act of 1995 (PRA). As per PRA stipulations, we have submitted 
a clearance request to OMB for approval. Upon approval from OMB, we 
will publish a Federal Register notice indicating the OMB number and 
expiration date.
    We published an NPRM on March 3, 2006 at 71 FR 10926. In the NPRM, 
we solicited comments under the PRA on the burden estimate; the need 
for the information; its practical utility; ways to enhance its 
quality, utility, and clarity; and on ways to minimize the burden on 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    Of the multiple comments the public submitted on these rules, only 
one pertained to the issues listed above. Specifically, one commenter 
expressed concerns about the burden of documenting life-changing 
events. However, the MMA states that when beneficiaries request that we 
use their income information about a more recent tax year, the 
reduction in modified adjusted gross income must be caused by a 
verifiable life-changing event. Therefore, we must ask Medicare 
beneficiaries to provide proof of the event.
    One section containing a public reporting requirement, Sec.  
418.1140(e), is included in these final rules but was not included in 
the NPRM. This section states that spouses who have been living in 
separate homes for the past year must provide written certification, or 
attestation, that they have been living separately. This requirement 
was included here and not in the NPRM because at the time we published 
the NPRM, we were still investigating ways that we could confirm this 
living arrangement from agency data. However, this section will not 
impact the public burden reported in the NPRM, since the only 
additional requirement for respondents is to certify that their address 
is separate from their spouse's, and certifications are not generally 
covered by the PRA as per OMB rules in 5 CFR 1320.3(h)(1).

(Catalog of Federal Domestic Assistance Program Nos. 93.773, 
Medicare--Hospital Insurance and 93.774, Medicare--Supplementary 
Medical Insurance Program)

List of Subjects in 20 CFR Part 418

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI), Medicare subsidies.

    Dated: October 13, 2006.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are adding a new subpart B 
to part 418 of chapter III of title 20 of the Code of Federal 
Regulations as follows:

PART 418--[AMENDED]

Subpart B--Medicare Part B Income-Related Monthly Adjustment Amount 
Introduction, General Provisions, and Definitions
Sec.
418.1001 What is this subpart about?
418.1005 Purpose and administration.
418.1010 Definitions.

Determination of the Income-Related Monthly Adjustment Amount

418.1101 What is the income-related monthly adjustment amount?
418.1105 What is the threshold?
418.1110 What is the effective date of our initial determination 
about your income-related monthly adjustment amount?
418.1115 What are the modified adjusted gross income ranges?
418.1120 How do we determine your income-related monthly adjustment 
amount?
418.1125 How will the income-related monthly adjustment amount 
affect your total Medicare Part B premium?
418.1130 How will we phase in the income-related monthly adjustment 
amount?

[[Page 62932]]

418.1135 What modified adjusted gross income information will we use 
to determine your income-related monthly adjustment amount?
418.1140 What will happen if the modified adjusted gross income 
information from IRS is different from the modified adjusted gross 
income information we used to determine your income-related monthly 
adjustment amount?
418.1145 How do we determine your income-related monthly adjustment 
amount if IRS does not provide information about your modified 
adjusted gross income?
418.1150 When will we use your amended tax return filed with IRS?

Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
Income

418.1201 When will we determine your income-related monthly 
adjustment amount based on the modified adjusted gross income 
information that you provide for a more recent tax year?
418.1205 What is a major life-changing event?
418.1210 What is not a major life-changing event?
418.1215 What is a significant reduction in your income?
418.1220 What is not a significant reduction in your income?
418.1225 Which more recent tax year will we use?
418.1230 What is the effective date of an income-related monthly 
adjustment amount initial determination that is based on a more 
recent tax year?
418.1235 When will we stop using your more recent tax year's 
modified adjusted gross income to determine your income-related 
monthly adjustment amount?
418.1240 Should you notify us if the information you gave us about 
your modified adjusted gross income for the more recent tax year 
changes?
418.1245 What will happen if you notify us that your modified 
adjusted gross income for the more recent tax year changes?
418.1250 What evidence will you need to support your request that we 
use a more recent tax year?
418.1255 What kind of major life-changing event evidence will you 
need to support your request for us to use a more recent tax year?
418.1260 What major life-changing event evidence will we not accept?
418.1265 What kind of significant modified adjusted gross income 
reduction evidence will you need to support your request?
418.1270 What modified adjusted gross income evidence will we not 
accept?

Determinations and the Administrative Review Process

418.1301 What is an initial determination regarding your income-
related monthly adjustment amount?
418.1305 What is not an initial determination regarding your income-
related monthly adjustment amount?
418.1310 When may you request that we make a new initial 
determination?
418.1315 How will we notify you and what information will we provide 
about our initial determination?
418.1320 What is the effect of an initial determination?
418.1325 When may you request a reconsideration?
418.1330 Can you request a reconsideration when you believe the IRS 
information we used is incorrect?
418.1335 What should you do if our initial determination is based on 
modified adjusted gross income information you believe to be 
incorrect?
418.1340 What are the rules for our administrative review process?
418.1345 Is reopening of an initial or reconsidered determination 
made by us ever appropriate?
418.1350 What are the rules for review of a reconsidered 
determination or administrative law judge decision?
418.1355 What are the rules for reopening a decision by an 
administrative law judge of the Office of Medicare Hearings and 
Appeals (OMHA) or by the Medicare Appeals Council (MAC)?

Subpart B--Medicare Part B Income-Related Monthly Adjustment Amount

    Authority: Secs. 702(a)(5) and 1839(i) of the Social Security 
Act (42 U.S.C. 902(a)(5) and 1395r(i)).

Introduction, General Provisions, and Definitions


Sec.  418.1001  What is this subpart about?

    This subpart relates to section 1839(i) of the Social Security Act 
(the Act), as added by section 811 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Pub. L. 108-173). Section 
1839(i) establishes an income-related monthly adjustment to the 
Medicare Part B premium. Beneficiaries enrolled in Medicare Part B who 
have modified adjusted gross income over a threshold amount established 
in the statute will pay an income-related monthly adjustment amount in 
addition to the Medicare Part B standard monthly premium and any 
applicable premium increases as described in 42 CFR 408.20. The 
regulations in this subpart explain how we decide whether you are 
required to pay an income-related monthly adjustment amount, and if you 
are, the amount of your adjustment. The rules are divided into the 
following groups of sections:
    (a) Sections 418.1001 through 418.1010 contain the introduction, a 
statement of the general purpose of the income-related monthly 
adjustment amount, general provisions that apply to the income-related 
monthly adjustment amount, and definitions of terms that we use in this 
subpart.
    (b) Sections 418.1101 through 418.1150 describe what information 
about your modified adjusted gross income we will use to determine if 
you are required to pay an income-related monthly adjustment amount. In 
these sections, we also describe how the income-related monthly 
adjustment amount will affect your total Medicare Part B premium. These 
sections also explain how the income-related monthly adjustment amount 
will be phased in from calendar year 2007 through calendar year 2009.
    (c) Sections 418.1201 through 418.1270 contain an explanation of 
the standards that you must meet for us to grant your request to use 
modified adjusted gross income information that you provide for a more 
recent tax year rather than the information described in paragraph (b) 
of this section. These sections explain when we may consider such a 
request, and the evidence that you will be required to provide. These 
sections also explain when income-related monthly adjustment amount 
determinations based on information you provide will be effective, and 
how long they will remain in effect. Additionally, these sections 
describe how retroactive adjustments of the income-related monthly 
adjustment amount will be made based on information you provide, 
updated information you provide, and information we later receive from 
the Internal Revenue Service (IRS).
    (d) Sections 418.1301 through 418.1355 contain the rules that we 
will apply when you disagree with our determination regarding your 
income-related monthly adjustment amount. These sections explain your 
appeal rights and the circumstances under which you may request that we 
make a new initial determination of your income-related monthly 
adjustment amount.


Sec.  418.1005  Purpose and administration.

    (a) The purpose of the income-related monthly adjustment amount is 
to reduce the Federal subsidy of the Medicare Part B program for 
beneficiaries with modified adjusted gross income above an established 
threshold. These beneficiaries will pay a greater share of actual 
program costs. Medicare Part B premiums paid by beneficiaries cover 
approximately 25 percent of total Medicare Part B program costs and the 
remaining 75 percent of program costs are subsidized by the Federal 
Government's contributions to the Federal Supplementary Medical 
Insurance Trust Fund. The reduction in the Medicare Part B premium 
subsidy results in an increase in the total

[[Page 62933]]

amount that affected beneficiaries pay for Medicare Part B coverage. A 
beneficiary with modified adjusted gross income above the threshold 
amount will pay:
    (1) The Medicare Part B standard monthly premium; plus
    (2) Any applicable increase in the standard monthly premium for 
late enrollment or reenrollment; plus
    (3) An income-related monthly adjustment amount.
    (b) The Centers for Medicare & Medicaid Services (CMS) in the 
Department of Health and Human Services (HHS) publishes the Medicare 
Part B standard monthly premium each year. CMS also establishes rules 
for entitlement to a nonstandard premium, as well as premium penalties 
for late enrollment or reenrollment (42 CFR 408.20 through 408.27).
    (c) We use information that we get from IRS to determine if 
beneficiaries who are enrolled in Medicare Part B are required to pay 
an income-related monthly adjustment amount. We also change income-
related monthly adjustment amount determinations using information 
provided by a beneficiary under certain circumstances. In addition, we 
notify beneficiaries when the social security benefit amounts they 
receive will change based on our income-related monthly adjustment 
amount determination.


Sec.  418.1010  Definitions.

    (a) Terms relating to the Act and regulations. For the purposes of 
this subpart:
    (1) Administrator means the Administrator of the Centers for 
Medicare & Medicaid Services (CMS) in HHS.
    (2) CMS means the Centers for Medicare & Medicaid Services in HHS.
    (3) Commissioner means the Commissioner of Social Security.
    (4) HHS means the Department of Health and Human Services which 
oversees the Centers for Medicare & Medicaid Services, the Office of 
Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council 
(MAC).
    (5) IRS means the Internal Revenue Service in the Department of the 
Treasury.
    (6) MAC means the Medicare Appeals Council in HHS.
    (7) OMHA means the Office of Medicare Hearings and Appeals in HHS.
    (8) Section means a section of the regulations in this part unless 
the context indicates otherwise.
    (9) The Act means the Social Security Act, as amended.
    (10) Title means a title of the Act.
    (11) We, our, or us means the Social Security Administration (SSA).
    (b) Miscellaneous. For the purposes of this subpart:
    (1) Amended tax return means a Federal income tax return for which 
an amended tax return using the required IRS form(s) has been filed by 
an individual or couple and accepted by IRS.
    (2) Effective year means the calendar year for which we make an 
income-related monthly adjustment amount determination.
    (3) Federal premium subsidy is the portion of the full cost of 
providing Medicare Part B coverage that is paid by the Federal 
Government through transfers into the Federal Supplementary Medical 
Insurance Trust Fund.
    (4) Income-related monthly adjustment amount is an additional 
amount of premium that you will pay for Medicare Part B coverage if you 
have income above the threshold. The amount of your income-related 
monthly adjustment amount is based on your modified adjusted gross 
income.
    (5) Medicare Part B standard monthly premium means the monthly 
Medicare Part B premium amount which is set annually by CMS, according 
to regulations in 42 CFR 408.20 through 408.27.
    (6) Modified adjusted gross income is your adjusted gross income as 
defined by the Internal Revenue Code, plus the following forms of tax-
exempt income:
    (i) Tax-exempt interest income;
    (ii) Income from United States savings bonds used to pay higher 
education tuition and fees;
    (iii) Foreign earned income;
    (iv) Income derived from sources within Guam, American Samoa, or 
the Northern Mariana Islands; and
    (v) Income from sources within Puerto Rico.
    (7) Modified adjusted gross income ranges are the groupings of 
modified adjusted gross income above the threshold. There are four 
ranges for most individuals, based on their tax filing status. There 
are two ranges for those with a tax filing status of married, filing 
separately, who also lived with their spouse for part of the year. The 
dollar amounts of the modified adjusted gross income ranges are 
specified in Sec.  418.1115.
    (8) Non-standard premium means a Medicare Part B premium that some 
beneficiaries pay for Medicare Part B, rather than the standard 
premium. The rules for applying a non-standard premium are in 42 CFR 
408.20(e). The non-standard premium does not apply to beneficiaries who 
must pay an income-related monthly adjustment amount.
    (9) Premium is a payment that an enrolled beneficiary pays for 
Medicare Part B coverage. The rules that CMS uses to annually establish 
the premium amount are found in 42 CFR 408.20 through 408.27.
    (10) Representative means, for the purposes of the initial 
determination and reconsidered determination, an individual as defined 
in Sec.  404.1703 of this chapter, and for purposes of an ALJ hearing 
or review by the MAC, an individual as defined in 42 CFR 405.910.
    (11) Tax filing status means the filing status shown on your 
individual income tax return. It may be single, married filing jointly, 
married filing separately, head of household, or qualifying widow(er) 
with dependent child.
    (12) Tax year means the year for which your Federal income tax 
return has been filed or will be filed with the IRS.
    (13) Threshold means a modified adjusted gross income amount above 
which the beneficiary will have to pay an income-related monthly 
adjustment amount described in paragraph (b)(4) of this section. The 
dollar amount of the threshold is specified in Sec.  418.1105.
    (14) You or your means the person or representative of the person 
who is subject to the income-related monthly adjustment amount.

Determination of the Income-Related Monthly Adjustment Amount


Sec.  418.1101  What is the income-related monthly adjustment amount?

    (a) The income-related monthly adjustment amount is an amount that 
you will pay in addition to the Medicare Part B standard monthly 
premium plus any applicable increase in that premium as described in 42 
CFR 408.22 for your Medicare Part B coverage when your modified 
adjusted gross income is above the threshold described in Sec.  
418.1105.
    (b) Your income-related monthly adjustment amount is based on your 
applicable modified adjusted gross income as described in Sec.  
418.1115 and your tax filing status.
    (c) We will determine your income-related monthly adjustment amount 
using the method described in Sec. Sec.  418.1120 and 418.1130.


Sec.  418.1105  What is the threshold?

    (a) The threshold is a level of modified adjusted gross income 
above which the beneficiary will have to pay the income-related monthly 
adjustment amount.
    (b) In 2007, the modified adjusted gross income threshold is 
$80,000 for

[[Page 62934]]

individuals with a Federal income tax filing status of single, married 
filing separately, head of household, and qualifying widow(er) with 
dependent child. The threshold is $160,000 for individuals with a 
Federal income tax filing status of married filing jointly.
    (c) Starting at the end of calendar year 2007 and each year 
thereafter, the threshold amounts for the following year will be set by 
CMS by increasing the preceding year's threshold amount by the 
percentage increase in the Consumer Price Index rounded to the nearest 
$1,000. CMS will publish the threshold amounts annually in September in 
the Federal Register. Published threshold amounts will be effective 
January 1 of the next calendar year, for the full calendar year.


Sec.  418.1110  What is the effective date of our initial determination 
about your income-related monthly adjustment amount?

    (a) Generally, an income-related monthly adjustment amount will be 
effective for all months that you are enrolled in Medicare Part B 
during the year for which we determine you must pay an income-related 
monthly adjustment amount. We will follow the rules in 42 CFR part 408, 
subpart C, regarding premium collections to withhold your income-
related monthly adjustment amount from a benefit payment or to 
determine if you will be billed directly.
    (b) When we have used modified adjusted gross income information 
from IRS for the tax year 3 years prior to the effective year to 
determine your income-related monthly adjustment amount and modified 
adjusted gross income information for the tax year 2 years prior later 
becomes available from IRS, we will review the new information to 
determine if we should revise our initial determination. If we revise 
our initial determination, the effective date of the new initial 
determination will be January 1 of the effective year, or the first 
month you were enrolled or re-enrolled in Medicare Part B if later than 
January.
    (c) When we use your amended tax return, as described in Sec.  
418.1150, the effective date will be January 1 of the year(s) that is 
affected, or the first month in that year that you were enrolled or 
reenrolled in Medicare Part B if later than January.

    Example: You are enrolled in Medicare Part B throughout 2011. We 
use your 2009 modified adjusted gross income as reported to us by 
IRS to determine your 2011 income-related monthly adjustment amount. 
In 2012 you submit to us a copy of your 2009 amended tax return that 
you filed with IRS. The modified adjusted gross income reported on 
your 2009 amended tax return is significantly less than originally 
reported to IRS. We use the modified adjusted gross income that was 
reported on your 2009 amended tax return to determine your income-
related monthly adjustment amount. That income-related monthly 
adjustment amount is effective January 1, 2011. We will 
retroactively adjust for any differences between the amount paid in 
2011 and the amount that should have been paid based on the amended 
tax return.
    (d) When we use evidence that you provide which proves that the IRS 
modified adjusted gross income information we used is incorrect, as 
described in Sec.  418.1335, the effective date will be January of the 
year(s) that is affected or the first month in that year that you were 
enrolled or reenrolled in Medicare Part B if later than January.
    (e) When we use information from a more recent tax year that you 
provide due to a major life-changing event, as described in Sec.  
418.1201, the effective date is described in Sec.  418.1230.


Sec.  418.1115  What are the modified adjusted gross income ranges?

    (a) The 2007 modified adjusted gross income ranges for each Federal 
tax filing category are listed in paragraphs (b), (c) and (d) of this 
section. We will use your modified adjusted gross income amount 
together with your tax filing status to determine the amount of your 
income-related monthly adjustment.
    (b) In 2007, the modified adjusted gross income ranges for 
individuals with a Federal tax filing status of single, head of 
household, qualifying widow(er) with dependent child, and married 
filing separately when the individual has lived apart from his/her 
spouse for the entire tax year for the year we use to make our income-
related monthly adjustment amount determination are as follows:
    (1) Greater than $80,000 and less than or equal to $100,000;
    (2) Greater than $100,000 and less than or equal to $150,000;
    (3) Greater than $150,000 and less than or equal to $200,000; and
    (4) Greater than $200,000.
    (c) In 2007, the modified adjusted gross income ranges for 
individuals who are married and filed a joint tax return for the tax 
year we use to make the income-related monthly adjustment amount 
determination are as follows: .
    (1) Greater than $160,000 and less than or equal to $200,000;
    (2) Greater than $200,000 and less than or equal to $300,000;
    (3) Greater than $300,000 and less than or equal to $400,000; and
    (4) Greater than $400,000.
    (d) In 2007, the modified adjusted gross income ranges for married 
individuals who file a separate return and have lived with their spouse 
at any time during the tax year we use to make the income-related 
monthly adjustment amount determination are as follows:
    (1) Greater than $80,000 and less than or equal to $120,000; and
    (2) Greater than $120,000.
    (e) CMS will annually revise the modified adjusted gross income 
ranges and publish them in the Federal Register starting in September 
of 2007 for 2008. Each year thereafter, all modified adjusted gross 
income range amounts will be set by CMS by increasing the preceding 
year's modified adjusted gross income range amounts by any percentage 
increase in the Consumer Price Index rounded to the nearest $1,000, and 
CMS will publish the amounts for the following year in September of 
each year.


Sec.  418.1120  How do we determine your income-related monthly 
adjustment amount?

    (a) We will determine your income-related monthly adjustment amount 
using your tax filing status and modified adjusted gross income.
    (b) Tables of applicable percentage. The tables in paragraphs 
(b)(1) through (b)(3) of this section contain the modified adjusted 
gross income ranges for 2007 in the column on the left in each table. 
The middle column in each table shows the percentage of the 
unsubsidized Medicare Part B premium that will be paid by individuals 
with modified adjusted gross income that falls within each of the 
ranges. The column on the right in each table shows the percentage of 
the Medicare Part B premium that will be subsidized by contributions 
from the Federal Government. Based on your tax filing status for the 
tax year we use to make a determination about your income-related 
monthly adjustment amount, we will determine which table is applicable 
to you. We will use your modified adjusted gross income to determine 
which income-related monthly adjustment amount to apply to you. The 
dollar amount of income-related monthly adjustment for each range will 
be set annually as described in paragraph (c) of this section. The 
modified adjusted gross income ranges will be adjusted annually as 
described in Sec.  418.1115(e).
    (1) General table of applicable percentages. If your filing status 
for your Federal income taxes for the tax year we use is single; head 
of household; qualifying widow(er) with dependent child; or married 
filing separately and you lived apart from your spouse for the entire 
tax year, we will use the general

[[Page 62935]]

table of applicable percentages. When your modified adjusted gross 
income for the year we use is in the range listed in the left column in 
the following table, then the Federal Government's Part B premium 
subsidy of 75 percent is reduced to the percentage listed in the right 
column. You will pay an amount based on the percentage listed in the 
center column.

------------------------------------------------------------------------
                                                              Federal
Modified adjusted gross income effective    Beneficiary       premium
                 in 2007                      premium         subsidy
                                             (percent)       (percent)
------------------------------------------------------------------------
More than $80,000 but less than or equal              35              65
 to $100,000............................
More than $100,000 but less than or                   50              50
 equal to $150,000......................
More than $150,000 but less than or                   65              35
 equal to $200,000......................
More than $200,000......................              80              20
------------------------------------------------------------------------

    (2) Table of applicable percentages for joint returns. If your 
Federal tax filing status is married filing jointly for the tax year we 
use and your modified adjusted gross income for that tax year is in the 
range listed in the left column in the following table, then the 
Federal Government's Part B premium subsidy of 75 percent is reduced to 
the percentage listed in the right column. You will pay an amount based 
on the percentage listed in the center column.

------------------------------------------------------------------------
                                                              Federal
Modified adjusted gross income effective    Beneficiary       premium
                 in 2007                      premium         subsidy
                                             (percent)       (percent)
------------------------------------------------------------------------
More than $160,000 but less than or                   35              65
 equal to $200,000......................
More than $200,000 but less than or                   50              50
 equal to $300,000......................
More than $300,000 but less than or                   65              35
 equal to $400,000......................
More than $400,000......................              80              20
------------------------------------------------------------------------

    (3) Table of applicable percentages for married individuals filing 
separate returns. If your Federal tax filing status for the tax year we 
use is married filing separately and you lived with your spouse at some 
time during that tax year, and your modified adjusted gross income is 
in the range listed in the left column in the following table, then the 
Federal Government's Part B premium subsidy of 75 percent is reduced to 
the percentage listed in the right column. You will pay an amount based 
on the percentage listed in the center column.

------------------------------------------------------------------------
                                                              Federal
Modified adjusted gross income effective    Beneficiary       premium
                 in 2007                      premium         subsidy
                                             (percent)       (percent)
------------------------------------------------------------------------
More than $80,000 but less than or equal              65              35
 to $120,000............................
More than $120,000......................              80              20
------------------------------------------------------------------------

    (c) CMS will annually publish in the Federal Register the dollar 
amounts for the income-related monthly adjustment amount described in 
paragraph (b) of this section.


Sec.  418.1125  How will the income-related monthly adjustment amount 
affect your total Medicare Part B premium?

    (a) If you must pay an income-related monthly adjustment amount, 
your total Medicare Part B premium will be the sum of:
    (1) The Medicare Part B standard monthly premium, determined using 
the rules in 42 CFR 408.20; plus
    (2) Any applicable increase in the Medicare Part B standard monthly 
premium as described in 42 CFR 408.22; plus
    (3) Your income-related monthly adjustment amount.
    (b) In 2007 and 2008, your income-related monthly adjustment amount 
you must pay will be adjusted as described in Sec.  418.1130.
    (c) The nonstandard Medicare Part B premium amount described in 42 
CFR 408.20 does not apply to individuals who must pay an income-related 
monthly adjustment amount. Such individuals must pay the full Medicare 
Part B standard monthly premium plus any applicable penalties for late 
enrollment or reenrollment plus the income-related adjustment.


Sec.  418.1130  How will we phase in the income-related monthly 
adjustment amount?

    (a) In 2007 and 2008, we will phase in the full amount of the 
income-related monthly adjustment amount. For the year in the left 
column you will pay the percentage of the income-related monthly 
adjustment amount specified in the right column.

------------------------------------------------------------------------
                                                           Percentage of
                                                            the income-
                                                              related
                          Year                                monthly
                                                            adjustment
                                                            amount that
                                                           you will pay
------------------------------------------------------------------------
2007....................................................              33
2008....................................................              67
------------------------------------------------------------------------

    (b) Phase-in of the subsidy reduction will be complete in 2009.


Sec.  418.1135  What modified adjusted gross income information will we 
use to determine your income-related monthly adjustment amount?

    (a) In general, we will use your modified adjusted gross income 
provided by IRS for the tax year 2 years prior to the effective year of 
the income-related monthly adjustment amount determination. Modified 
adjusted gross income is based on information you provide to IRS when 
you file your Federal income tax return.
    (b) We will use your modified adjusted gross income for the tax 
year 3

[[Page 62936]]

years prior to the effective year of the income-related monthly 
adjustment amount determination when IRS does not provide the 
information specified in paragraph (a) of this section. If IRS can 
provide modified adjusted gross income for the tax year 3 years prior 
to the income-related monthly adjustment amount effective year, we will 
temporarily use that information to determine your income-related 
monthly adjustment amount and make adjustments as described in Sec.  
418.1110(b) to all affected income-related monthly adjustment amounts 
when information for the year specified in paragraph (a) of this 
section is provided by IRS.
    (c) When we have used the information in paragraph (b) of this 
section, you may provide us with evidence of your modified adjusted 
gross income for the year in paragraph (a) of this section. You must 
provide a retained copy of your signed Federal income tax return for 
that year, if available. If you filed a return for that year, but did 
not retain a copy, you must request a transcript or a copy of your 
return from IRS and provide it to us. When we use this evidence, we 
will later confirm this information with IRS records.
    (d) When you meet the conditions specified in Sec.  418.1150 
because you have amended your Federal income tax return, or when you 
believe we have used information provided by IRS which is incorrect, as 
described in Sec.  418.1335, we will use information that you provide 
directly to us regarding your modified adjusted gross income.
    (e) We may use information that you give us about your modified 
adjusted gross income for a more recent tax year than those discussed 
in paragraphs (a) or (b) of this section as described in Sec. Sec.  
418.1201 through 418.1270.
    (f) If you fail to file an income tax return for any year after 
2004 and IRS informs us that you had modified adjusted gross income 
above the threshold applicable 2 years after the tax year when you 
failed to file an income tax return, we will impose the highest income-
related adjustment percentage applicable to your income filing status 
for the effective year. If we later determine that the amount of the 
income-related monthly adjustment amount imposed was inconsistent with 
your modified adjusted gross income, we will correct it. The rules in 
42 CFR 408.40 through 408.92 will apply to the collection of any 
retroactive premiums due.


Sec.  418.1140  What will happen if the modified adjusted gross income 
information from IRS is different from the modified adjusted gross 
income information we used to determine your income-related monthly 
adjustment amount?

    In general, we will use modified adjusted gross income information 
from IRS to determine your income-related monthly adjustment. We will 
make retroactive adjustments to your income-related monthly adjustment 
amount as described in paragraphs (a), (b), and (d) of this section.
    (a) When we have used modified adjusted gross income from the tax 
year 3 years prior to the effective year as described in Sec.  
418.1135(b), and IRS provides modified adjusted gross income 
information from the tax year 2 years prior to the effective year, we 
will use the new information to make an initial determination for the 
effective year. We will make retroactive adjustments back to January 1 
of the effective year, or the first month you were enrolled or 
reenrolled in Medicare Part B if later than January.
    (b) When we have used the modified adjusted gross income 
information that you provided for the tax year 2 years prior to the 
effective year and the modified adjusted gross income information we 
receive from IRS for that same year is different from the information 
you provided, we will use the modified adjusted gross income 
information provided to us by IRS to make a new initial determination. 
We will make retroactive adjustments back to January 1 of the effective 
year, or the first month you were enrolled or reenrolled in Medicare 
Part B if later than January.
    (c) When we have used information from your amended Federal tax 
return that you provide, as explained in Sec.  418.1150, or you provide 
proof that the information IRS provided to us is incorrect as described 
in Sec.  418.1335, we will not make any adjustments to your income-
related monthly adjustment amount for the effective year or years based 
on IRS information we receive later from IRS.
    (d) When we use modified adjusted gross income information that you 
provided due to a qualifying life-changing event and we receive 
different information from IRS, we will use the IRS information to make 
retroactive corrections to all months in the effective year(s) during 
which you were enrolled in Medicare Part B, except when paragraph (c) 
of this section applies.
    (e) When we used the table in Sec.  418.1120(b)(3) to determine 
your income-related monthly adjustment amount, and you lived apart from 
your spouse throughout that year, we will ask you for a signed 
statement or attestation that you lived apart from your spouse 
throughout that year. We will also ask you to provide information about 
the addresses of you and your spouse during that year. If you provide a 
signed statement or attestation that you lived apart from your spouse 
throughout that year, and information about your respective addresses 
that year, we will use the table in Sec.  418.1120(b)(1) to determine 
your income-related monthly adjustment amount.


Sec.  418.1145  How do we determine your income-related monthly 
adjustment amount if IRS does not provide information about your 
modified adjusted gross income?

    In general, if we do not receive any information for you from IRS 
showing that you had modified adjusted gross income above the threshold 
in the tax year we request, we will not make an income-related monthly 
adjustment amount determination.


Sec.  418.1150  When will we use your amended tax return filed with 
IRS?

    You may provide your amended tax return for a tax year we used 
within 3 calendar years following the close of the tax year for which 
you filed the amended tax return. You must provide us with your 
retained copy of your amended U.S. Individual Income Tax Return on the 
required IRS form and a copy of the IRS letter confirming the amended 
tax return was filed or a transcript from IRS if they did not send a 
letter. If you cannot provide your retained copy of the amended tax 
return, you must obtain a copy of the return from IRS. We will then 
make any necessary retroactive corrections as defined in Sec.  
418.1110(c) to your income-related monthly adjustment amount.

Determinations Using a More Recent Tax Year's Modified Adjusted Gross 
Income


Sec.  418.1201  When will we determine your income-related monthly 
adjustment amount based on the modified adjusted gross income 
information that you provide for a more recent tax year?

    We will use a more recent tax year than the years described in 
Sec.  418.1135(a) or (b) to reduce or eliminate your income-related 
monthly adjustment amount when all of the following occur:
    (a) You experience a major life-changing event as defined in Sec.  
418.1205; and
    (b) That major life-changing event results in a significant 
reduction in your modified adjusted gross income for the year which you 
request we use and the

[[Page 62937]]

next year, if applicable. For purposes of this section, a significant 
reduction in your modified adjusted gross income is one that results in 
the decrease or elimination of your income-related monthly adjustment 
amount; and
    (c) You request that we use a more recent tax year's modified 
adjusted gross income; and
    (d) You provide evidence as described in Sec. Sec.  418.1255 and 
418.1265.


Sec.  418.1205  What is a major life-changing event?

    For the purposes of this subpart, we will consider the following to 
be major life-changing events:
    (a) Your spouse dies;
    (b) You marry;
    (c) Your marriage ends through divorce or annulment;
    (d) You or your spouse stop working or reduce the hours you work;
    (e) You or your spouse experience a reduction in your income due to 
a loss of income-producing property, provided that the loss is not at 
your direction (e.g., due to the sale or transfer of the property). 
Examples of the type of property loss include, but are not limited to, 
loss of income from real property within a Presidentially or 
Gubernatorially-declared disaster area, destruction of livestock or 
crops by natural disaster or disease, or loss of income from real 
property due to arson;
    (f) You or your spouse experience a reduction in or loss of income 
from an insured pension plan due to termination or reorganization of 
the pension plan or a scheduled cessation of pension.


Sec.  418.1210  What is not a major life-changing event?

    We will not consider events other than those described in Sec.  
418.1205 to be major life-changing events. Certain types of events are 
not considered major life-changing events for the purposes of this 
subpart, such as:
    (a) Events that affect your expenses, but not your income; or
    (b) Events that result in the loss of dividend income.


Sec.  418.1215  What is a significant reduction in your income?

    For purposes of this subpart, we will consider a reduction in your 
income to be significant if your modified adjusted gross income 
decreases; and
    (a) The decrease reduces the percentage of the income-related 
monthly adjustment amount you must pay according to the Table of 
Applicable Percentages in Sec.  418.1120; or
    (b) The decrease reduces your modified adjusted gross income to an 
amount below the threshold described in Sec.  418.1105 and eliminates 
any income-related monthly adjustment amount you must pay.


Sec.  418.1220  What is not a significant reduction in your income?

    For purposes of this subpart, we will not consider a reduction in 
your income to be significant unless the reduction affects the amount 
of income-related monthly adjustment you must pay.


Sec.  418.1225  Which more recent tax year will we use?

    We will consider evidence of your modified adjusted gross income 
that you provide for a tax year that is more recent than the year 
described in Sec.  418.1135 (a) or (b) when you meet all of the 
requirements described in Sec.  418.1201. We will always ask you for 
your retained copy of your filed Federal income tax return for the more 
recent year you request that we use and will use that information to 
make an initial determination. If you have not filed your Federal 
income tax return for the more recent year you request that we use, you 
must provide us with evidence that is equivalent to a copy of a filed 
Federal income tax return. Evidence that is equivalent to a copy of a 
filed Federal income tax return is defined in Sec.  418.1265(c).


Sec.  418.1230  What is the effective date of an income-related monthly 
adjustment amount initial determination that is based on a more recent 
tax year?

    (a) When you make your request prior to January 1, 2007, our 
initial determination is effective on January 1, 2007.
    (b) Subject to paragraph (c) of this section, when you make your 
request during or after 2007 and your modified adjusted gross income 
for the more recent tax year is significantly reduced as a result of a 
major life-changing event, our initial determination is generally 
effective on January 1 of the year in which you make your request. If 
your first month of enrollment or reenrollment in Medicare Part B is 
after January of the year for which you make your request, our initial 
determination is effective on the first day of your Medicare Part B 
enrollment or reenrollment.
    (c) We will make a determination about your income-related monthly 
adjustment amount for the year preceding the year that you make your 
request in the limited circumstances explained in Sec.  418.1310(a)(4). 
When we make a determination for the preceding year, our initial 
determination is generally effective on January 1 of that year. If your 
first month of enrollment or reenrollment in Medicare Part B is after 
January of that year, our initial determination is effective on the 
first day of your Medicare Part B enrollment or reenrollment.
    (d) When you make your request during or after 2007 and your 
modified adjusted gross income is significantly reduced beginning in 
the year following the year in which you make your request as a result 
of one or more of the events described in Sec.  418.1205(a) through 
(f), our initial determination is effective on January 1 of the next 
year.


Sec.  418.1235  When will we stop using your more recent tax year's 
modified adjusted gross income to determine your income-related monthly 
adjustment amount?

    We will use your more recent tax year's modified adjusted gross 
income to determine your income-related monthly adjustment amount 
effective with the month and year described in Sec.  418.1230 and for 
each year thereafter until one of the following occurs:
    (a) We receive your modified adjusted gross income from IRS for the 
more recent tax year we used or a later tax year;
    (b) Your more recent tax year modified adjusted gross income that 
we used is for a tax year more than 3 years prior to the income-related 
monthly adjustment amount effective year;
    (c) You request we use a more recent tax year based on another 
major life-changing event as described in Sec.  418.1201; or
    (d) You notify us of a change in your modified adjusted gross 
income for the more recent tax year we used as described in Sec.  
418.1240.


Sec.  418.1240  Should you notify us if the information you gave us 
about your modified adjusted gross income for the more recent tax year 
changes?

    If you know that the information you provided to us about the more 
recent tax year that we used has changed, you should tell us so that we 
can determine if your income-related monthly adjustment amount should 
be eliminated or adjusted. We will accept new modified adjusted gross 
income information at any time after your request until the end of the 
calendar year following the more recent tax year(s) that we used. For 
us to make a new initial determination using your new modified adjusted 
gross income information, you must provide evidence as described in 
Sec.  418.1265 to support the reduction or increase in your modified 
adjusted gross income. If you amend your Federal income tax return for 
the more recent tax year we used, we will use the rules in Sec.  
418.1150.

[[Page 62938]]

Sec.  418.1245  What will happen if you notify us that your modified 
adjusted gross income for the more recent tax year changes?

    (a) If you notify us that your modified adjusted gross income for 
the more recent tax year has changed from what is in our records, we 
may make a new initial determination for each effective year involved. 
To make a new initial determination(s) we will take into account:
    (1) The new modified adjusted gross income information for the more 
recent tax year you provide; and
    (2) Any modified adjusted gross income information from IRS, as 
described in Sec.  418.1135, that we have available for each effective 
year; and
    (3) Any modified adjusted gross income information from you, as 
described in Sec.  418.1135, that we have available for each effective 
year.
    (b) For each new initial determination that results in a change in 
your income-related monthly adjustment amount, we will make retroactive 
adjustments that will apply to all enrolled months of the effective 
year.
    (c) We will continue to use a new initial determination described 
in paragraph (a) of this section to determine additional yearly income-
related monthly adjustment amount(s) until an event described in Sec.  
418.1235 occurs.
    (d) We will make a new determination about your income-related 
monthly adjustment amount when we receive modified adjusted gross 
income for the effective year from IRS, as described in Sec.  
418.1140(d).


Sec.  418.1250  What evidence will you need to support your request 
that we use a more recent tax year?

    When you request that we use a more recent tax year to determine 
your income-related monthly adjustment amount, we will ask for evidence 
of the major life-changing event and how the event significantly 
reduced your modified adjusted gross income as described in Sec. Sec.  
418.1255 and 418.1265. Unless we have information in our records that 
raises a doubt about the evidence, additional evidence documenting the 
major life-changing event(s) will not be needed.


Sec.  418.1255  What kind of major life-changing event evidence will 
you need to support your request for us to use a more recent tax year?

    (a) If your spouse died and we do not have evidence of the death in 
our records, we will require proof of death as described in Sec.  
404.720(b) or (c) or Sec.  404.721 of this chapter.
    (b) If you marry and we do not have evidence of the marriage in our 
records, we will require proof of marriage as described in Sec. Sec.  
404.725 through 404.727 of this chapter.
    (c) If your marriage ends and we do not have evidence that the 
marriage has ended in our records, we will require proof that the 
marriage has ended as described in Sec.  404.728(b) or (c) of this 
chapter.
    (d) If you or your spouse stop working or reduce your work hours, 
we will require evidence documenting the change in work activity. 
Examples of acceptable documentation include, but are not limited to, 
documents we can corroborate such as a signed statement from your 
employer, proof of the transfer of your business, or your signed 
statement under penalty of perjury, describing your work separation or 
a reduction in hours.
    (e) If you or your spouse experience a loss of income from income-
producing property we will require evidence documenting the loss. 
Examples of the type of evidence include, but are not limited to, 
insurance claims or an insurance adjuster's statement.
    (f) If you or your spouse experience a reduction in or loss of 
pension income, we will require evidence documenting the reduction or 
loss. Examples include, but are not limited to, a statement from the 
Pension Benefit Guaranty Corporation or your pension fund administrator 
that explains the reduction or termination of your benefits.


Sec.  418.1260  What major life-changing event evidence will we not 
accept?

    (a) We will not accept evidence of death that fails to meet the 
requirements in Sec. Sec.  404.720 through 404.721 of this chapter.
    (b) We will not accept evidence of marriage that fails to meet the 
requirements in Sec. Sec.  404.725 through 404.727 of this chapter.
    (c) We will not accept evidence that your marriage has ended if the 
evidence fails to meet the requirements in Sec.  404.728 of this 
chapter.
    (d) We will not accept documents supporting loss of income from 
income-producing property, or failure of or loss from a defined benefit 
pension plan unless the documents are original documents or copies from 
the original source.
    (e) We will not accept evidence of work reduction or work stoppage 
that cannot be substantiated.


Sec.  418.1265  What kind of significant modified adjusted gross income 
reduction evidence will you need to support your request?

    (a) You must provide evidence that one or more of the major life-
changing events described in Sec.  418.1205 resulted in a significant 
reduction in your modified adjusted gross income for the tax year you 
request we use.
    (b) The preferred evidence is your retained copy of your filed 
Federal income tax return, your retained copy of your amended tax 
return with an IRS letter of receipt of the amended tax return, your 
copy of proof of a correction of the IRS information we used or a copy 
of your return or amended or proof of a correction of tax return 
information that you obtain from IRS for the more recent tax year you 
request we use.
    (c) When a copy of your filed Federal income tax return is not 
available for the more recent tax year in which your modified adjusted 
gross income was significantly reduced, we will accept equivalent 
evidence. Equivalent evidence is the appropriate proof(s) in paragraphs 
(c)(1), (2) and (3) of this section, plus your signed statement under 
penalty of perjury that the information you provide is true and 
correct. When the major life-changing event changes your tax filing 
status, or the income-related monthly adjustment amount determination 
could be affected by your tax filing status, you will also be required 
to sign a statement regarding your intended income tax filing status 
for the tax year you request we use.
    (1) If you experience one or more of the events described in Sec.  
418.1205(a), (b), or (c), you must provide evidence as to how the 
event(s) significantly reduced your modified adjusted gross income. 
Examples of the type of evidence include, but are not limited to, 
evidence of your spouse's modified adjusted gross income and/or your 
modified adjusted gross income for the tax year we use.
    (2) If you experienced one or more of the events described in Sec.  
418.1205(d), (e) or (f), you must provide evidence of how the event(s) 
significantly reduced your modified adjusted gross income, such as a 
statement explaining any modified adjusted gross income changes for the 
tax year we used, and a copy of your filed Federal income tax return 
(if you have filed one).
    (3) If your spouse experiences one or more of the events described 
in Sec.  418.1205(d), (e), or (f), you must provide evidence of the 
resulting significant reduction in your modified adjusted gross income. 
The evidence

[[Page 62939]]

requirements are described in paragraph (c)(2) of this section.
    (d) When we use information described in paragraph (c) of this 
section, we will request that you provide your retained copy of your 
Federal income tax return for the year we used when you file your 
taxes. We will use that information to make timely adjustments to your 
Medicare premium, if necessary. We will later verify the information 
you provide when we receive information about that tax year from IRS, 
as described in Sec.  418.1140(d).


Sec.  418.1270  What modified adjusted gross income evidence will we 
not accept?

    We will not accept a correction or amendment of your income tax 
return without a letter from IRS acknowledging the change. We will also 
not accept illegible or unsigned copies of income tax returns or 
attestations or other statements of income unless they are provided 
under penalty of perjury.

Determinations and the Administrative Review Process


Sec.  418.1301  What is an initial determination regarding your income-
related monthly adjustment amount?

    An initial determination is the determination we make about your 
income-related monthly adjustment amount that is subject to 
administrative review. For the purposes of administering the income-
related monthly adjustment amount, initial determinations include but 
are not limited to determinations about:
    (a) The amount of your income-related monthly adjustment amount 
based on information provided by IRS; and
    (b) Any change in your income-related monthly adjustment amount 
based on one of the circumstances listed in Sec.  418.1310(a)(1) 
through (a)(4).


Sec.  418.1305  What is not an initial determination regarding your 
income-related monthly adjustment amount?

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process as provided by Sec. Sec.  418.1320 through 418.1325 and 
Sec. Sec.  418.1340 through 418.1355, and they are not subject to 
judicial review. These actions include, but are not limited to, our 
dismissal of a request for reconsideration as described in Sec.  
418.1330 and our dismissal of a request for a new initial determination 
as described in Sec.  418.1310(d).


Sec.  418.1310  When may you request that we make a new initial 
determination?

    (a) You may request that we make a new initial determination in the 
following circumstances:
    (1) You provide a copy of your filed Federal income tax return for 
the tax year 2 years prior to the effective year when IRS has provided 
information for the tax year 3 years prior to the effective year. You 
may request a new initial determination beginning with the date you 
receive a notice from us regarding your income-related monthly 
adjustment amount until the end of the effective year, with one 
exception. If you receive the notice during the last 3 months of a 
calendar year, you may request a new initial determination beginning 
with the date you receive the notice until March 31 of the following 
year. We will follow the rules and procedures in Sec. Sec.  418.1110(b) 
and 418.1140(b) to make a new initial determination and any necessary 
retroactive adjustments back to January 1 of the effective year, or the 
first month you were enrolled in Medicare Part B in the effective year 
if later than January.
    (2) You provide a copy of an amended tax return filed with IRS, as 
defined in Sec.  418.1010(b)(1). We will use your amended tax return 
for the same tax year as the year used to determine your income-related 
monthly adjustment amount. You must request the new initial 
determination within the timeframe described in Sec.  418.1150.
    (3) You provide proof that the tax return information about your 
modified adjusted gross income or tax filing status IRS gave us is 
incorrect. We will use proof that you obtain from IRS of a correction 
of your tax return information for the same tax year instead of the 
information that was provided to us by IRS, as explained in Sec.  
418.1335(a). You may request a new initial determination at any time 
after you receive a notice from us regarding your income-related 
monthly adjustment amount if you have such proof. We will use the rules 
and procedures in Sec.  418.1335.
    (4) You have a major life-changing event. You may request a new 
initial determination based on a major life-changing event when you 
meet all the requirements described in Sec.  418.1201. You may make 
such a request at any time during the calendar year in which you 
experience a significant reduction in your modified adjusted gross 
income caused by a major life-changing event. When you have a major 
life-changing event that occurs in the last 3 months of a calendar year 
and your modified adjusted gross income for that year is significantly 
reduced as a result of the event, you may request that we make a new 
initial determination based on your major life-changing event from the 
date of the event until March 31 of the next year. We will follow the 
rules in Sec.  418.1230 when we make a new initial determination based 
on your major life-changing event.
    (b) If a request for a new initial determination based on any of 
the circumstances in paragraph (a) of this section is made after the 
time frame provided for each type of listed circumstance, we will 
review the request under the rules in Sec.  404.911 of this chapter to 
determine if there is good cause for a late request.
    (c) We will notify you of the new initial determination as 
described in Sec.  418.1315.
    (d) We will dismiss your request to make a new initial 
determination if it does not meet one of the circumstances specified in 
paragraphs (a)(1) through (a)(4) of this section. Our dismissal of your 
request for a new initial determination is not an initial determination 
subject to further administrative or judicial review.


Sec.  418.1315  How will we notify you and what information will we 
provide about our initial determination?

    (a) We will mail a written notice of all initial determinations to 
you. The notice of the initial determination will state the important 
facts and give the reasons for our conclusions. Generally, we will not 
send a notice if your income-related monthly adjustment amount stops 
because of your death.
    (b) The written notice that we send will tell you:
    (1) What our initial determination is;
    (2) What modified adjusted gross income information we used to make 
our determination;
    (3) The reason for our determination;
    (4) The effect of the initial determination; and
    (5) Your right to a reconsideration or a new initial determination.


Sec.  418.1320  What is the effect of an initial determination?

    An initial determination is binding unless you request a 
reconsideration within the time period described in Sec. Sec.  404.909 
and 404.911 of this chapter or we revise the initial determination or 
issue a new initial determination.


Sec.  418.1325  When may you request a reconsideration?

    If you are dissatisfied with our initial determination about your 
income-related monthly adjustment amount, you may request that we 
reconsider it. In addition, a person who shows that his or her rights 
may be adversely

[[Page 62940]]

affected by the initial determination may request a reconsideration. We 
may accept requests for reconsideration that are filed by electronic or 
other means that we determine to be appropriate. Subject to the 
provisions of this section and Sec.  418.1330, when you request a 
reconsideration, we will use the rules in Sec. Sec.  404.907 through 
404.922 of this chapter.


Sec.  418.1330  Can you request a reconsideration when you believe that 
the IRS information we used is incorrect?

    If you request a reconsideration solely because you believe that 
the information that IRS gave us is incorrect, we will dismiss your 
request for a reconsideration and notify you to obtain proof of a 
correction from IRS and request a new initial determination (Sec.  
418.1335).
    Our dismissal of your request for reconsideration is not an initial 
determination subject to further administrative or judicial review.


Sec.  418.1335  What should you do if our initial determination is 
based on modified adjusted gross income information you believe to be 
incorrect?

    If you believe that IRS or you provided incorrect modified adjusted 
gross income information to us that we used to determine your income-
related monthly adjustment amount, you can request information from us 
on how to contact IRS regarding the information we used.
    (a) If IRS determines that the information it provided is not 
correct, IRS will provide you with documentation of the error, such as 
a copy of your Federal income tax return. If you would like us to use 
the revised or corrected information to determine your income-related 
monthly adjustment amount, you will need to request that we use that 
information and provide us with the IRS documentation confirming the 
error. We will make any necessary retroactive corrections as described 
in Sec.  418.1110(d) to your income-related monthly adjustment amount.
    (b) If you provided information to us about your modified adjusted 
gross income that we used to determine your income-related monthly 
adjustment amount, and that information is not correct, you may provide 
revised or corrected information. We will use the revised or corrected 
information if it reduces or eliminates your income-related monthly 
adjustment amount. We will make any necessary retroactive corrections 
as described in Sec.  418.1110 to your income-related monthly 
adjustment amount. If you are providing corrected information about a 
more recent tax year's modified adjusted gross income that we used due 
to your major life-changing event, as described in Sec.  418.1240, we 
will use the rules in Sec.  418.1245 to determine how it will affect 
your income-related monthly adjustment amount.


Sec.  418.1340  What are the rules for our administrative review 
process?

    To the extent that they are not inconsistent with the rules in this 
subpart for making initial determinations and reconsidered 
determinations, we will use the same rules for the administrative 
review process that we use for determinations and decisions about your 
rights regarding non-medical issues under title II of the Act, as 
described in subpart J of part 404 of this chapter. We will accept oral 
requests as well as the written requests required in subpart J of part 
404 of this chapter for requesting administrative review of our 
determination. If you are dissatisfied with our reconsidered 
determination, you may request review in accordance with Sec.  418.1350 
for this subpart. A request for a new initial determination, described 
in Sec.  418.1310, is not the same as a request for reconsideration or 
further administrative review.


Sec.  418.1345  Is reopening of an initial or reconsidered 
determination made by us ever appropriate?

    We may reopen an initial or reconsidered determination made by us 
when the conditions for reopening are met as described in Sec.  404.988 
of this chapter. We will use the rules in Sec. Sec.  404.987 through 
404.991a of this chapter when we reopen determinations made by us.


Sec.  418.1350  What are the rules for review of a reconsidered 
determination or an administrative law judge decision?

    You may request a hearing before an OMHA administrative law judge 
consistent with HHS' regulations at 42 CFR part 405. You may seek 
further review of the administrative law judge's decision by requesting 
MAC review and judicial review in accordance with HHS' regulations. For 
the purpose of your request for an administrative law judge hearing or 
MAC review, you will be required to provide your consent for us to 
release your relevant tax return information to OMHA or the MAC for the 
purposes of adjudicating any appeal of the amount of an income-related 
adjustment to the Part B premium subsidy and for any judicial review of 
that appeal.


Sec.  418.1355  What are the rules for reopening a decision by an 
administrative law judge of the Office of Medicare Hearings and Appeals 
(OMHA) or by the Medicare Appeals Council (MAC)?

    The rules in 42 CFR 405.980 through 405.986 govern reopenings of 
decisions by an administrative law judge of the OMHA and decisions by 
the MAC. A decision by an administrative law judge of the OMHA may be 
reopened by the administrative law judge or by the MAC. A decision by 
the MAC may be reopened only by the MAC.

 [FR Doc. E6-17690 Filed 10-26-06; 8:45 am]
BILLING CODE 4191-02-P