[Federal Register Volume 74, Number 185 (Friday, September 25, 2009)]
[Notices]
[Pages 48976-48977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22955]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4141-N]


Medicare Program; Medicare Appeals; Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2010

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustment in the amount in 
controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) 
hearings and judicial review under the Medicare appeals process. The 
adjustment to the AIC threshold amounts will be effective for requests 
for ALJ hearings and judicial review filed on or after January 1, 2010. 
The 2010 AIC threshold amounts are $130 for ALJ hearings and $1,260 for 
judicial review.

DATES: Effective Date: This notice is effective on January 1, 2010.

FOR FURTHER INFORMATION CONTACT: Liz Hosna, (410) 786-4993.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 1869(b)(1)(E) of the Social Security Act (the Act), as 
amended by section 521 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA), established AIC 
threshold amounts for ALJ hearing requests and judicial review at $100 
and $1000, respectively, for Medicare Part A and Part B appeals. 
Section 940 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, amended section 1869(b)(1)(E) of the Act to 
require the AIC threshold amounts for ALJ hearings and judicial review 
to be adjusted annually. The AIC threshold amounts are to be adjusted, 
as of January 2005, by the percentage increase in the medical care 
component of the consumer price index for all urban consumers (U.S. 
city average) for July 2003 to July of the year preceding the year 
involved and rounded to the nearest multiple of $10. Section 940(b)(2) 
of the MMA provided conforming amendments to apply the AIC adjustment 
requirement to Medicare Part C (Medicare Advantage ``MA'') appeals and 
certain health maintenance organization and competitive health plan 
appeals. Health care prepayment plans are also subject to MA appeals 
rules, including the AIC adjustment requirement. Section 101 of the MMA 
provides for the application of the AIC adjustment requirement to 
Medicare Part D appeals.

A. Medicare Part A and Part B Appeals

    The statutory formula for the annual adjustment to the AIC 
threshold amounts for ALJ hearings and judicial review of Medicare Part 
A and Part B appeals, set forth at section 1869(b)(1)(E) of the Act, is 
included in the applicable implementing regulations, 42 CFR part 405, 
subpart I, at Sec.  405.1006(b). The regulations require the Secretary 
of the Department of Health and Human Services (the Secretary) to 
publish changes to the AIC threshold amounts in the Federal Register 
(Sec.  405.1006(b)(2)). In order to be entitled to a hearing before an 
ALJ, a party to a proceeding must meet the AIC requirements at Sec.  
405.1006(b). Similarly, a party must meet the AIC requirements at Sec.  
405.1006(c) at the time judicial review is requested for the court to 
have jurisdiction over the appeal (Sec.  405.1136(a)).

B. Medicare Part C (Medicare Advantage) Appeals

    Section 940(b)(2) of the MMA applies the AIC adjustment requirement 
to Part C (MA) appeals by amending section 1852(g)(5) of the Act. The 
implementing regulations for Medicare Part C appeals are found at 42 
CFR part 422, subpart M. Specifically, Sec.  422.600 and Sec.  422.612 
discuss the AIC threshold amounts for ALJ hearings and judicial review.
    Section 422.600 grants any party to the reconsideration, except the 
MA organization, who is dissatisfied with the reconsideration 
determination, a right to an ALJ hearing as long as the amount 
remaining in controversy after reconsideration meets the threshold 
requirement established annually by the Secretary. Section 422.612 
states that any party, including the MA organization, may request 
judicial review if, in part, the amount in controversy meets the 
threshold requirement established annually by the Secretary.

[[Page 48977]]

C. Health Maintenance Organizations, Competitive Medical Plans, and 
Health Care Prepayment Plans

    Section 1876(c)(5)(B) of the Act states that the annual adjustment 
to the amount in controversy dollar amounts set forth in section 
1869(b)(1)(E) of the Act applies to certain beneficiary appeals within 
the context of health maintenance organizations and competitive medical 
plans. The applicable implementing regulations for Medicare Part C 
appeals are set forth in 42 CFR part 422, subpart M, and as discussed 
above, apply to these appeals. The Medicare Part C appeals rules also 
apply to health care prepayment plan appeals.

D. Medicare Part D (Prescription Drug Plan) Appeals

    The annually adjusted AIC threshold amounts for ALJ hearings and 
judicial review that apply to Medicare Parts A, B, and C appeals also 
apply to Medicare Part D appeals. Section 101 of the MMA added section 
1860D-4(h)(1) of the Act regarding Part D appeals. This statutory 
provision requires a prescription drug plan sponsor to meet the 
requirements set forth in sections 1852(g)(4) and (g)(5) of the Act, in 
a similar manner as MA organizations. As noted above, the annually 
adjusted AIC threshold requirement was added to section 1852(g)(5) of 
the Act by section 940(b)(2)(A) of the MMA. The implementing 
regulations for Medicare Part D appeals can be found at 42 CFR part 
423, subpart M. The regulations impart at Sec.  423.562(c) that, unless 
the Part D appeals rules provide otherwise, the Part C appeals rules 
(including the annually adjusted AIC threshold amount) apply to Part D 
appeals to the extent they are appropriate. More specifically, Sec.  
423.610 and Sec.  423.630 of the Part D appeals rules discuss the AIC 
threshold amounts for ALJ hearings and judicial review. Section 
423.610(a) grants a Part D enrollee, who is dissatisfied with the 
Independent Review Entity (IRE) reconsideration determination, a right 
to an ALJ hearing if the amount remaining in controversy after the IRE 
reconsideration meets the threshold amount established annually by the 
Secretary. Section 423.630(a) allows a Part D enrollee to request 
judicial review of an ALJ's decision if, in part, the AIC meets the 
threshold amount established annually by the Secretary.

II. Annual AIC Adjustments

A. AIC Adjustment Formula and AIC Adjustments

    As previously noted, section 940 of the MMA requires that the AIC 
threshold amounts be adjusted annually, beginning in January of 2005, 
by the percentage increase in the medical care component of the 
consumer price index (CPI) for all urban consumers (U.S. city average) 
for July 2003 to the July of the preceding year involved and rounded to 
the nearest multiple of $10.

B. Calendar Year 2010

    The AIC threshold amount for ALJ hearing requests will rise to $130 
and the AIC threshold amount for judicial review will rise to $1,260 
for the 2010 calendar year. These new amounts are based on the 26.3 
percent increase in the medical care component of the CPI from July of 
2003 to July of 2009. The CPI level was at 297.6 in July of 2003 and 
rose to 375.739 in July of 2009. This change accounted for the 26.3 
percent increase. The AIC threshold amount for ALJ hearing requests 
changes to $126.26 based on the 26.3 percent increase. In accordance 
with section 940 of the MMA, this amount is rounded to the nearest 
multiple of $10. Therefore, the 2010 AIC threshold amount for ALJ 
hearings is $130. The AIC threshold amount for judicial review changes 
to $1,262.56 based on the 26.3 percent increase. This amount was 
rounded to the nearest multiple of $10, resulting in a 2010 AIC 
threshold amount of $1,260.

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In Table 1 below, we list the (CY) 2005 through 2010 threshold 
amounts.

                                                    Table 1--Amount-in-Controversy Threshold Amounts
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                                                              CY 2005         CY 2006         CY 2007         CY 2008         CY 2009         CY 2010
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ALJ Hearing.............................................            $100            $110            $110            $120            $120            $130
Judicial Review.........................................           $1050           $1090           $1130           $1180          $1,220          $1,260
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*CY--Calendar Year.

III. Collection of Information Requirements (If Applicable)

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 35).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program; 
and No. 93.774, Medicare--Supplementary Medical Insurance Program)

    Dated: September 1, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E9-22955 Filed 9-24-09; 8:45 am]
BILLING CODE 4120-01-P