[Federal Register Volume 74, Number 235 (Wednesday, December 9, 2009)]
[Rules and Regulations]
[Pages 65296-65338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28707]
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Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 405
Medicare Program: Changes to the Medicare Claims Appeal Procedures;
Final Rule
Federal Register / Vol. 74 , No. 235 / Wednesday, December 9, 2009 /
Rules and Regulations
[[Page 65296]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 405
[CMS-4064-F]
RIN 0938-AM73
Medicare Program: Changes to the Medicare Claims Appeal
Procedures
AGENCY: Centers for Medicare & Medicaid Services (CMS), DHHS.
ACTION: Final rule.
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SUMMARY: Under the procedures in this final rule, Medicare
beneficiaries and, under certain circumstances, providers and suppliers
of health care services can appeal adverse determinations regarding
claims for benefits under Medicare Part A and Part B pursuant to
sections 1869 and 1879 of the Social Security Act (the Act). Section
521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA) amended section 1869 of the Act to
provide for significant changes to the Medicare claims appeal
procedures. After publication of a proposed rule implementing the
section 521 changes, additional new statutory requirements for the
appeals process were enacted in Title IX of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (MMA). In March 2005,
we published an interim final rule with comment period to implement
these statutory changes. This final rule responds to comments on the
interim final rule regarding changes to these appeal procedures, makes
revisions where warranted, establishes the final implementing
regulations, and explains how the new procedures will be put into
practice.
DATES: Effective Date: These regulations are effective on January 8,
2010.
FOR FURTHER INFORMATION CONTACT:
Arrah Tabe-Bedward, (410) 786-7129 (for issues relating to general
appeal rights).
David Danek, (617) 565-2682 (for issues relating to
redeterminations, reconsiderations, reopenings and expedited access to
judicial review (EAJR) issues).
Katherine L. Hosna, (410) 786-4993 (for general appeal issues).
Peggy McFadden-Elmore, (703) 235-0126 (for issues relating to
Administrative Law Judge (ALJ) hearings).
Theodore Kim, (202) 565-0200 (for issues relating to Medicare
Appeals Council (MAC) review).
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. Overview of Existing Medicare Program
B. Appeals Procedures Under Previous Regulations
C. Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA)
D. Related Provisions of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA)
E. Codification of Regulations
II. Analysis of Appeals Procedures and Responses to Public Comments
A. Overview
B. Appeals
1. Statutory Basis and Scope, Definitions and General Procedures
(Sec. 405.900 Through Sec. 405.904)
2. Parties to an Appeal, Medicaid State Agencies, and
Appointment of Representatives (Sec. 405.906 Through Sec. 405.910)
3. Assignment of Appeal Rights (Sec. 405.912)
4. Initial Determinations (Sec. 405.920 Through Sec. 405.928)
a. Initial Determinations, Notice of Initial Determinations, and
Timeframe for Processing Initial Determinations (Sec. 405.920
Through Sec. 405.922)
b. What Constitutes an Initial Determination and Decisions That
Are Not Considered Initial Determinations (Sec. 405.924 Through
Sec. 405.926)
c. Initial Determinations Subject to the Reopenings Process
(Sec. 405.927) and the Effects of Initial Determinations (Sec.
405.928)
5. Redeterminations (Sec. 405.940 Through Sec. 405.958)
a. Redetermination Requests (Sec. 405.940 Through Sec.
405.946)
b. Conduct and Effect of Redeterminations (Sec. 405.948 Through
Sec. 405.958)
6. Reconsiderations (Sec. 405.960 Through Sec. 405.978)
a. Processing Reconsideration Requests (Sec. 405.960 Through
Sec. 405.964)
b. Evidence Submitted With the Reconsideration Request--Full and
Early Presentation of Evidence (Sec. 405.966)
c. Conduct and Processing of Reconsiderations (Sec. 405.968
Through Sec. 405.978)
7. Reopenings of Initial Determinations, Redeterminations,
Reconsiderations, Hearings and Reviews (Sec. 405.980 Through Sec.
405.986)
a. Reopening Actions (Sec. 405.980)
b. Conduct of Reopenings (Sec. 405.982 through Sec. 405.986)
8. Expedited Access to Judicial Review (Sec. 405.990)
9. ALJ Hearings (Sec. 405.1000 Through Sec. 405.1064)
a. Transfer of the ALJ Function
b. ALJ Hearings--General Rules (Sec. 405.1000 Through Sec.
405.1014)
c. Adjudication Deadlines--ALJ Level (Sec. 405.1016)
d. Submission of Evidence Before the ALJ Hearing (Sec.
405.1018)
e. Time and Place for a Hearing Before an ALJ; Notice of
Hearing; Objections to the Issues (Sec. 405.1020 Through Sec.
405.1024)
f. Disqualification of the ALJ (Sec. 405.1026)
g. Review of Evidence Submitted to the ALJ, Hearing Procedures,
and Issues Before an ALJ (Sec. 405.1028 Through Sec. 405.1032)
h. Remand Authority (Sec. 405.1034)
i. Description of the ALJ Hearing Process and Discovery (Sec.
405.1036 and Sec. 405.1037)
j. Deciding a Case Without an ALJ Hearing, Conferences, the
Administrative Record, and Consolidated Hearings (Sec. 405.1038
Through Sec. 405.1044)
k. Notice and Effect of ALJ's Decision (Sec. 405.1046 Through
Sec. 405.1048)
l. Removal of a Hearing Request From the ALJ to the MAC,
Dismissal of a Request for ALJ Hearing, and the Effect of a
Dismissal (Sec. 405.1050 Through Sec. 405.1054)
m. Applicability of Statutes, Regulations, Medicare Coverage
Policies, CMS Rulings and Other Program Guidance (Sec. 405.1060
Through Sec. 405.1063)
n. ALJ Decisions Involving Statistical Samples (Sec. 405.1064)
10. Review by the Medicare Appeals Council (Sec. 405.1100
Through Sec. 405.1134)
a. MAC Review of an ALJ's Action (Sec. 405.1100 Through Sec.
405.1120)
b. Evidence That May Be Submitted to the MAC and Subpoenas
(Sec. 405.1122)
c. Oral Argument, Cases Remanded by the MAC, the Effect of MAC
Actions, Escalation to Federal District Court, and Extensions of
Time To File Actions in Federal District Court (Sec. 405.1124
Through Sec. 405.1134)
11. Judicial Review (Sec. 405.1136 Through Sec. 405.1140)
III. Provisions of the Final Regulations
IV. Collection of Information Requirements
V. Regulatory Impact Statement
I. Background
A. Overview of Existing Medicare Program
The original Medicare program consists of two parts: Part A and
Part B. Part A, known as the hospital insurance program, covers certain
care provided to inpatients in hospitals, critical access hospitals,
and skilled nursing facilities, as well as hospice care and some home
health care. Part B, the supplementary medical insurance program,
covers certain physician's services, outpatient hospital care, and
other medical services that are not covered under Part A.
In addition to the original Medicare program, beneficiaries may
elect to receive health care coverage under Part C of Medicare, the
Medicare Advantage (MA) program. Under the MA program, an individual is
entitled to those items and services (other than hospice care) for
which benefits are available under Part A and Part B. MA plans may
provide additional health care items and services that are not covered
under the original Medicare program. Beneficiaries can also elect to
receive
[[Page 65297]]
prescription drug coverage under Part D of Medicare, which became
effective January 1, 2006.
Under the original Medicare program, a beneficiary can generally
obtain health services from any institution, agency, or person
qualified to participate in the Medicare program. After providing an
item or service, the provider or supplier (or, in some cases, a
beneficiary) can submit a claim for benefits under the Medicare program
to the appropriate government contractor: A fiscal intermediary (FI)
(for all Part A claims and certain Part B claims); a carrier (for most
claims under Part B); or a Medicare administrative contractor (under
Medicare contracting reform, a contractor that processes all types of
Part A and Part B claims). If the claim is for an item or service that
falls within a Medicare benefit category, is not otherwise excluded by
statute or rule, and is reasonable and necessary for the individual as
set forth in Sec. 1862(a) of the Social Security Act, then the item or
service is covered and the contractor may make payment for the claim.
However, the Medicare program does not cover all health care expenses.
Therefore, if the Medicare contractor determines that the medical care
is not covered under the Medicare program, then it denies the claim.
B. Appeals Procedures Under Previous Regulations
Generally, when a contractor denies a claim, it notifies the
provider or supplier, and the beneficiary of the denial and offers the
opportunity to appeal the denial. The pre-BIPA appeal procedures for
original Medicare are set forth in regulations at 42 CFR part 405,
subparts G and H. Separate procedures for appealing determinations made
under the MA program are set forth at 42 CFR part 422, subpart M. There
is a similar, separate appeals process for the prescription drug
program set forth at subpart M of 42 CFR part 423. In addition, we
published a proposed rule to describe the appeals procedures that would
apply at the ALJ and MAC levels in deciding appeals brought by
individuals who have enrolled in the Medicare Part D prescription drug
benefit program (73 FR 14342, March 17, 2008). After an appellant has
exhausted the administrative appeal procedures offered under the
Medicare program, the Medicare statute provides the opportunity for an
individual who is dissatisfied to seek review in Federal court.
The regulations in part 405 subpart G beginning at Sec. 405.701
describe reconsiderations and appeals under Medicare Part A, prior to
the statutory changes in BIPA and the MMA. As set forth in these
regulations, when a Medicare contractor made a determination for a Part
A claim, the beneficiary or, in some circumstances, the provider, could
appeal the determination. Consistent with sections 1861(u) and 1866(e)
of the Act and Sec. 400.202, the term ``provider'' includes hospitals,
skilled nursing facilities (SNFs), home health agencies (HHAs),
comprehensive outpatient rehabilitation facilities (CORFs), and
hospices, as well as certain clinics, rehabilitation agencies, and
public health agencies. Under this process, if a determination was
appealed, the contractor would reconsider the initial determination. If
the contractor upheld the original determination, a party could request
a hearing before an ALJ, provided that the amount in controversy (AIC)
was at least $100. If a party was dissatisfied with the ALJ's decision,
it could request review by the Departmental Appeals Board (DAB). Under
these regulations, the component within the DAB responsible for
Medicare claim appeals was the MAC. (Although the Medicare appeals
regulations in part 405, subparts G and H, contain some limited
provisions regarding ALJ and MAC proceedings, these proceedings were
generally governed by the Social Security Administration (SSA)
regulations at 20 CFR part 404, subpart J.) MAC decisions generally
constituted the final decision of the Secretary and could be appealed
to a Federal court. With few exceptions, parties had to complete the
lower level of appeal before the appeal could go on to the next level.
Pre-BIPA and pre-MMA appeal procedures for Medicare Part B are set
forth in 42 CFR part 405 subpart H (Sec. 405.801, et. seq.). Under
these regulations, beneficiaries, and suppliers that accepted
assignment for Medicare claims could request review of the contractor's
initial determination that a claim could not be paid, either in full or
in part. (The term ``supplier'' is defined under section 1861(d) of the
Act, as amended by section 901(b) of the MMA, and means a physician or
other practitioner, a facility, or other entity (other than a provider
of services that furnishes items or services) under Medicare.)
Suppliers that did not take assignment and providers, in some
circumstances, had limited appeal rights under these regulations.
As defined in the pre-BIPA and pre-MMA regulation at Sec. 405.815,
if a party to the contractor's review determination was dissatisfied
and the amount in controversy was at least $100, the party was entitled
to request a second level appeal known as a ``carrier hearing''. If the
carrier's hearing officer upheld the denial, a party to the carrier
hearing could request a hearing before an ALJ, provided that the action
met the amount in controversy requirement. (We published a ruling, CMS
Ruling No. 02-1, which implemented the $100 amount in controversy
requirement for Part B ALJ hearings specified in section 521 of BIPA
for initial determinations made on or after October 1, 2002. See 67 FR
62478, 62480 (Oct. 7, 2002). For initial determinations made prior to
October 1, 2002, the amount in controversy threshold was $100 for home
health services and $500 for all other services.) Subsequent aspects of
the appeals process for Part B claims are identical to those described
above for Part A claims.
C. Medicare, Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000 (BIPA)
Section 521 of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) amended
section 1869 of the Act to require revisions to the Medicare fee-for-
service (Part A and Part B) appeals process. Among the major changes
required by the BIPA amendments were--
Establishing a uniform process for handling Medicare Part
A and Part B appeals, including the introduction of a new level of
appeal for Part A claims;
Revising the timeframes for filing a request for Part A
and Part B appeals;
Imposing time limits for ``redetermination'' decisions
made by the contractors;
Establishing a new appeals entity, the qualified
independent contractor (QIC), to conduct ``reconsiderations'' of
contractors' initial determinations (including redeterminations) and
allowing appellants to escalate cases to the next level of appeal (an
ALJ hearing) if reconsiderations are not completed within established
time limits;
Establishing a uniform amount in controversy threshold for
appeals at the ALJ level;
Imposing 90-day time limits for issuing decisions at the
ALJ and MAC levels of appeal and allowing appellants to escalate cases
to the next level of appeal if an ALJ or the MAC does not meet the 90-
day deadline; and
Requiring ``de novo'' review when the MAC reviews an ALJ
decision made after a hearing.
On November 15, 2002, we published in the Federal Register a
comprehensive proposed rule (67 FR 69312) to set forth proposed changes
needed to implement the provisions of section 521 of the BIPA, as well
as other complementary
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changes needed to improve the Medicare claims appeal procedures.
D. Related Provisions of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA)
On December 8, 2003, the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173) was enacted. The
MMA includes a number of provisions that made additional changes to the
Medicare claim appeals process. To the extent the new statutory
language necessitated revisions or additions to our proposed
regulations to ensure conformance to the MMA, we have incorporated the
needed changes into the interim final rule (70 FR 11420, March 8,
2005), the correcting amendments (70 FR 37700, June 30, 2005 and 70 FR
50214, August 26, 2005) and this final rule. Among the major changes
required by MMA are--
Transferring the ALJ function to the Department of Health
and Human Services (Section 931 of the MMA).
Establishing a process for expedited access to judicial
review (Section 932 of the MMA).
Requiring the full and early presentation of evidence
(Section 933(a) of the MMA).
Requiring the review of a patient's medical records in a
QIC reconsideration (Section 933(b) of the MMA).
Establishing content requirements for appeal determination
notices (Section 933(c) of the MMA).
Revising eligibility requirements for QICs (Section 933(d)
of the MMA).
Precluding administrative or judicial review of a
determination by the Secretary of sustained or high levels of payment
errors (Section 934(a) of the MMA).
Creating a separate process for the correction of minor
errors or omissions (Section 937 of the MMA).
Permitting appeals by providers and suppliers when there
is no other party available (Section 939 of the MMA).
Revising appeals timeframes and amounts in controversy
(Section 940 of the MMA).
E. Codification of Regulations
The BIPA provisions and the subsequent revisions made under MMA
make possible a largely uniform set of appeals procedures that can be
applied for both Part A and Part B of Medicare. In the interim final
rule, we established a new subpart I of part 405 that sets forth in one
location the requirements for fee-for-service claims appeals processed
by Medicare carriers, FIs, Medicare administrative contractors, and
QICs. Also included in subpart I are the provisions needed to govern
Medicare claims appeals to ALJs and the MAC. Thus, subpart I will
codify in one location key regulations governing all aspects of
Medicare claim appeals, beginning with the statutory requirements that
apply to initial determinations and proceeding through all four levels
of the administrative appeals process.
II. Analysis of Appeals Procedures and Responses to Public Comments
A. Overview
Discussed below are the comments and clarifications to the March
2005 interim final rule with comment period implementing section 521 of
BIPA and the relevant sections of the MMA. In general, we discuss those
sections of the interim final rule on which we received comments from
the public or which required editorial changes to improve the clarity
and simplicity of the regulations. We include a brief explanation of
each regulatory provision, provide a summary of, and responses to, the
comments received, and describe the changes, if any, to be made in
finalizing the provision in this rulemaking. The changes made in this
final regulation are summarized in the section of this preamble
entitled ``Provisions of the Final Regulations.''
We received 26 timely comments on the 2005 interim final rule with
comment period from individuals, organizations representing providers
and suppliers, beneficiary advocacy groups, law offices, health plans,
and others. The issues most frequently raised by commenters include:
Beneficiary protections; deadlines for filing appeals and timeframes
for decision-making; entities entitled to receive notices; differences
between an assignee and the beneficiary's appointed representative; the
role of the QICs that will perform reconsiderations; evidentiary
requirements; the perceived formality of the ALJ procedures, especially
proceedings where CMS or one of its contractors enters the process, and
the impact on beneficiaries; and whether the nature of an ALJ hearing
has changed, how much deference the ALJ gives to CMS' policies and, in
general, the manner in which the ALJs conduct hearings. These comments
and our responses are discussed below.
B. Appeals
1. Statutory Basis and Scope, Definitions and General Procedures (Sec.
405.900 Through Sec. 405.904)
In Sec. 405.900, we set forth the general statutory authority for
the ensuing provisions and explain that this subpart establishes the
requirements for appeals of initial determinations for benefits under
Part A and Part B of Medicare. Section 405.902 sets forth the
definitions for terms used in subpart I. Section 405.904 provides a
general description of the appeals process for entitlement and claims
appeals. Additional detailed discussion of these provisions is found in
the interim final rule at 70 FR 11427, 11431 through 11432, and 11434
through 11435.
In this final regulation, we are making a technical revision to
Sec. 405.902 to define the term contractor, as applicable to the
provisions in subpart I. We believe the meaning of the term contractor
may have been unclear because, in some instances, we specified the
entities that are included in the term contractor whereas, in other
instances, we did not provide such detail. Thus, we believe a technical
revision to clearly define the term contractor and to ensure that the
term is used consistently throughout Subpart I is appropriate.
Contractor means an entity that contracts with the Federal government
to review and/or adjudicate claims, determinations and/or decisions.
This includes, but is not limited to, fiscal intermediaries, carriers,
Medicare administrative contractors, qualified independent contractors,
and quality improvement organizations (QIOs). Although, based on this
definition, the term contractor includes many entities, the meaning of
the term contractor for a particular provision is derived from the
context. For example, under Sec. 405.920(a), after a claim is filed
with the appropriate contractor in the manner and form described in
part 424 subpart C, the contractor must determine if the items and
services furnished are covered or otherwise reimbursable under title
XVIII of the Act. Only fiscal intermediaries, carriers and Medicare
administrative contractors make such determinations, so the term
contractor means only these three entities in this context. We are also
making technical revisions to several sections noted below, in order to
remove references to specific contractors (such as QICs and QIOs) when
describing the general actions, responsibilities, or authority of
contractors. However, there are instances where we continue to use the
term contractor and also separately include a reference to QICs in the
same provision (for example, Sec. 405.910(i)(2) and Sec.
405.980(a)(4)). In those situations, we are maintaining the separate
reference to the QIC in order to highlight the specific
responsibilities of
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the QIC with respect to reconsiderations.
We received no comments on these sections. Therefore, we are
finalizing Sec. 405.900 and Sec. 405.904 without modification. We are
finalizing Sec. 405.902, Sec. 405.1000, Sec. 405.1010 and Sec.
405.1012 with modifications, as noted.
2. Parties to an Appeal, Medicaid State Agencies, and Appointment of
Representatives (Sec. 405.906 Through Sec. 405.910)
Section 405.906 discusses parties to the appeals process. More
detail is provided on the role of Medicaid State agencies in the
appeals process in section 405.908. Section 405.910 describes appointed
representatives and the process for becoming an appointed
representative. We received several comments with respect to the rights
of Medicaid State agencies to file appeals, and the rights and
responsibilities of representatives. A summary of the comments and our
responses is included below. Additional detailed discussion of these
provisions is found in the interim final rule at 70 FR 11423, 11427
through 11431, 11432, 11434 through 11435, 11441, 11444 through 11445,
and 11468.
Comment: Several commenters asked CMS to broaden the definition of
``party'' at the initial determination level to include Medicaid State
agencies.
Response: As set forth in Sec. 405.906(b)(2), a Medicaid State
agency can be a party to a redetermination, reconsideration, hearing or
MAC review. Section 405.908 explains the process for a Medicaid State
agency to join the appeal as a party. Specifically, in Sec. 405.908,
we allow the State agency to file an appeal with respect to ``a claim
for items or services furnished to a dually eligible beneficiary only
for services for which the Medicaid State agency has made payment, or
for which it may be liable.'' Only after Medicare has issued its
initial determination on a claim for items or services provided to a
dually eligible beneficiary can a determination be made about a State
agency's potential liability for all or part of the associated charges,
and thus, the Medicaid State agency should not be a party to the
initial determination. If the Medicaid program is not financially
responsible for the items or services on a particular claim, it follows
that the State agency would have no interest in the claim and thus,
should not be a party to any appeal of the initial determination.
Accordingly, we believe it is appropriate to offer party status to a
Medicaid State agency only after there has been a determination on the
claim by Medicare, and then only if the State agency makes payment or
may be liable to make payment for the items or services on that claim.
If these requirements are met, the State agency may file a request for
a redetermination and will retain party status through the course of
any subsequent appeals for the particular claim.
Comment: One commenter stated that although the interim final rule
calls for an adjudicator to contact the party and provide a description
of information missing from the appointment of representative form
(Sec. 405.910(d)(1)), there are no provisions explaining how the need
to cure a defective appointment affects the time deadline for filing an
appeal. The commenter recommended amending the rule to indicate that an
appeal filed within time limits remains timely when the only technical
flaw is a defective appointment of representative that can be, and is,
cured.
Response: Under Sec. 405.910(d)(1), if an appeal request is filed
by an individual attempting to represent a party, but the submission
contains a defective appointment of representative (AOR) form, the
adjudicator will give the party notice of the defect. The adjudicator
provides the party and the putative representative with a reasonable
timeframe within which to cure the defect. The adjudicator will not
dismiss an appeal request filed with a defective AOR provided the
defect is cured within the timeframe established by the adjudicator.
Thus, in response to the situation described by the commenter, an
appeal request filed timely will be considered timely if the party
submits a corrected and valid appointment instrument within the
timeframe specified by the adjudicator, even if that period extends
beyond the time limit for filing the appeal.
However, if the adjudicator does not receive a valid appointment
instrument within the timeframe specified by the adjudicator, it may
dismiss the appeal request because the individual requesting the appeal
is not a proper party to the appeal or does not otherwise have a right
to appeal. See Sec. 405.952(b)(1), Sec. 405.972(b)(1), Sec.
405.1052(a)(3) and Sec. 405.1114(b). If the appeal request is
dismissed, the party or the representative may re-file the request. If
the resubmission is untimely, consistent with Sec. 405.942(b), the
representative must include an explanation of the circumstances leading
to the late filing and request that the contractor consider whether
good cause exists to extend the time for filing the appeal.
Comment: One commenter asked that Sec. 405.910(e)(1) be amended to
note that an appointment is valid for one year, except as noted in
Sec. 405.910(e)(3). We were also asked to clarify whether a
representative may be appointed before the issuance of an initial
determination. Finally, a commenter asked when an updated appointment
of representative form (Form CMS-1696) would be available.
Response: Section 405.910(e)(1) states that once the AOR form is
executed, it is valid for one year from the effective date. Section
405.910(e)(2) states that the representative must submit, with each
appeal request, a copy of the valid, effective AOR or other conforming
written instrument in order to request a redetermination or other
appeal on behalf of the party. Thus, a valid, executed AOR will be
honored for the duration of the initial appeal request for which it is
filed, and for any subsequent appeal request with which it is
submitted, provided the initial appeal request is filed within one year
of the effective date of the AOR.
In Sec. 405.910(e)(3), we made an exception for appointments
signed in connection with Medicare Secondary Payer recovery claims,
because liability, no-fault, and worker's compensation claims often
take more than one year to resolve. Where an appointment of
representative is related to these recovery claims, the appointment is
valid from the date that it is signed through the duration of any
subsequent appeal. We believe Sec. 405.910(e) is clear on its face
and, thus, we are not revising this subsection.
In the interim final rule, we stated that, under Sec. 405.910(a),
the appointment of representative provisions apply at the initial
determination level and throughout the appeals process. See 70 FR
11431. Section 405.910(a) states that ``[a]n appointed representative
may act on behalf of an individual or entity in exercising his or her
right to an initial determination or appeal.'' In addition, Sec.
405.910(c)(7) states that the AOR form may ``[b]e filed with the entity
processing the party's initial determination or appeal.'' Finally,
Sec. 405.910(e)(1) states that the effective date of the appointment
is the date that the AOR form or other conforming written instrument
contains the signatures of both the party and appointed representative.
The AOR may be completed prior to the submission of a claim or appeal
request, and a representative may assist with the preparation or
submission of a claim. (However, consistent with Sec. 405.910(i)(1),
notices and other information regarding the initial determination are
only sent to the party
[[Page 65300]]
to the initial determination, except for Medicare secondary payer
claims appeals as discussed in Sec. 405.910(i)(4)). We believe these
provisions convey that a representative may be appointed prior to the
issuance of an initial determination.
Finally, the revised appointment of representative form, Form CMS-
1696, is available online, in both English and Spanish, at http://www.cms.hhs.gov/CMSForms/CMSForms/list.asp#TopOfPage Representatives at
1-800-MEDICARE can also provide information on how to obtain the
appointment of representative form.
Comment: One commenter questioned the authority of CMS to impose a
fee review process when an appointed representative for a beneficiary
wished to charge a fee for services rendered in connection with an
appeal before the Secretary. The commenter contended that beneficiary
representatives should be treated like provider representatives who
have no fee limitations. The commenter stated that the regulations,
specifically, the fee review provisions, decrease the likelihood that a
beneficiary will find an advocate to assist in the appeal. The
commenter also stated that our regulations increase a beneficiary's
need to be represented.
Response: Section 1869(b)(1)(B)(iv) of the Act (captioned,
``Requirements for Representatives of a Beneficiary'') establishes that
the provisions of sections 205(j) and 206 (other than subsection
(a)(4)) of the Act apply to representation of an individual for
Medicare claim appeals in the same manner as they apply to
representation of an individual for Social Security claims. By
incorporating these sections in Sec. 1869(b)(1)(B)(iv) of the Act, the
Congress mandated that, for appeals before the Secretary, appointed
representatives, including attorneys, must obtain approval of fees
before charging a beneficiary. Consistent with these statutory
provisions and the longstanding practice of fee petitions before ALJs,
Sec. 405.910(f)(1) requires that an appointed representative for a
beneficiary, who wishes to charge a fee for services rendered in
connection with an appeal before the Secretary, must obtain approval of
the fee from the Secretary.
As noted in the preamble to the interim final rule (70 FR 11429
through 11430) and at Sec. 405.910(f)(1), we do not consider
proceedings before the ALJ hearing level (that is, initial
determination, redetermination, and reconsideration levels) to be
proceedings ``before the Secretary''. Section 206(a) of the Act
authorizes the Commissioner of Social Security to prescribe rules and
regulations to govern the representation of claimants in proceedings
before the Commissioner. This provision has long been interpreted to
include only proceedings at the ALJ level and beyond. Thus, we have
interpreted appeals before the Secretary of the Department of Health
and Human Services (DHHS or the Department) to include only the ALJ
level and above. Therefore, the fee petition provisions in Sec.
405.910(f) do not apply to administrative proceedings below the ALJ
hearing level. Furthermore, because the clear intent of the fee
petition provision of the statute is to protect the interests of
individual Medicare beneficiaries, we do not interpret them as applying
to non-beneficiary appellants.
The fee petition process described in Sec. 405.910(f) specifically
is designed to protect the interests of Medicare beneficiaries by
ensuring that the fees charged by a representative are reasonable. This
process is not new to these regulations. Rather, it has been a
longstanding requirement in both the Medicare and Social Security
programs for appeals at the ALJ level. See 42 CFR Sec. 405.701(c) and
42 CFR Sec. 405.801(c), incorporating by reference the provisions of
20 CFR part 404, subpart R regarding representation of parties. Thus,
we do not believe this regulation will affect a beneficiary's ability
to obtain assistance with an appeal.
Further, we do not believe the new appeals process increases the
need for a beneficiary to obtain assistance with an appeal. The new
appeals process primarily changes certain procedures with respect to
appeals filed by providers and suppliers, the entities and individuals
who file the vast majority of appeals (for example, the full and early
presentation of evidence requirement, and CMS participation as a party
or participant at the ALJ level). However, most of these changes do not
affect beneficiary initiated appeals. Throughout the process, we have
attempted to minimize the impact of the new appeals procedures on
beneficiaries. Therefore, we do not believe that the new appeals
process increases the need for a beneficiary to obtain assistance with
an appeal. Further, where we have made changes to operational
procedures, we have developed notices and model language for
contractors to provide to parties that explain the new process in
clear, plain language. We believe our newly developed notices and forms
provide clear instructions to parties at each level of the
administrative appeals process. We have also revised Your Medicare
Rights and Protections (CMS Publication No. 10112, available to order
from 1-800-MEDICARE, or available to view on-line at http://www.medicare.gov/Publications/Pubs/pdf/10112.pdf), which explains, in
detail, the various steps in the appeals process. These notices, forms
and instructions will provide beneficiaries and their representatives,
as well as other parties and advocates, with additional information
about the procedures to be followed in the administrative appeals
process.
Comment: Two commenters expressed concern regarding the requirement
that an appointed representative has an affirmative duty to ``[c]omply
with all laws and CMS regulations, CMS Rulings, and instructions''
(Sec. 405.910(g)(1)(v)). One commenter requested the words ``and
instructions'' be struck from the regulation, because an appointed
representative should not be bound to comply with CMS instructions any
more than a beneficiary, a contractor or an administrative law judge
should be. Another commenter stated that it is not uncommon for an
attorney or other representative to challenge the validity of CMS
rulings, policy instructions and other interpretations, and, as such,
it is unreasonable to require a representative to defer to all such
policies to the potential detriment of the provider/appellant.
Response: Section 405.910(g)(1)(v) states that an appointed
representative has an affirmative duty to comply with all laws and CMS
regulations, CMS rulings and instructions. While we appreciate the
commenters' concerns, we disagree with the commenters' interpretation
of this provision. Providers and suppliers submitting claims on behalf
of beneficiaries, and contractors processing claims are, in fact, bound
to follow all laws, regulations, rulings and CMS operating
instructions. QICs, ALJs and the MAC are bound to follow laws,
regulations, rulings, and NCDs, and to afford substantial deference to
CMS operating instructions and other program guidance. See Sec.
405.968(b) and Sec. 405.1062. As arbiters of fact in the
administrative appeals process, QICs, ALJs and the MAC may determine
that an instruction should not apply to the facts of a particular case.
However, QICs, ALJs and the MAC cannot rule on the validity of the
instruction. Similarly, an appointed representative has a duty to
comply with such laws, regulations, rulings and instructions. However,
an appointed representative is not precluded from challenging the
application of that policy or instruction
[[Page 65301]]
during the course of an appeal. Thus, we do not believe a
representative is unfairly burdened by this requirement, and we believe
it is unnecessary to revise Sec. 405.910(g)(1)(v).
Comment: Several commenters asked CMS to reconsider the policy
prohibiting the issuance of MSNs to a beneficiary's appointed
representative. One commenter stated that sending the notice of initial
determination to the appointed representative is necessary to assure
that beneficiaries can be effectively represented in the new appeals
process. Another commenter indicated that quicker access to initial
determination information was needed due to the shorter timeframes for
requesting redeterminations and reconsiderations.
Response: Under Sec. 405.910(i)(1), contractors issue initial
determination notices (that is, Medicare Summary Notices (MSNs) and
Remittance Advice (RAs)) only to the parties to the initial
determination, and not to appointed representatives. As we stated in
the preamble to the interim final rule (70 FR 11434) and in Sec.
405.910, appointed representatives have the same right as parties to
receive information on claims being appealed only after an appeal has
been filed. The information included on MSNs covers the entire range of
health care services and items billed to Medicare within a 90-day
period; similarly, an RA contains comprehensive claims information for
all claims processed for a provider or supplier during a specific
period. Because the scope of an appointment of representation may vary,
an appointed representative may not have authority to receive
information on all such services or items. Accordingly, for privacy and
confidentiality reasons, contractors must provide MSNs and RAs only to
the parties to the initial determination. We believe that a beneficiary
can be effectively represented without contractors directly providing
the MSNs and RAs to appointed representatives because parties can share
their respective notices with their representatives.
We note that our policy with respect to sending the notice of
initial determination to the party and not the party's representative
is consistent with the decision in Connecticut Department of Social
Services v. Leavitt, 428 F.3d 138 (2d Cir. 2005). The court held that
the due process interests of parties are adequately protected by their
own receipt of the initial determination notice, and declined to
require that contractors send these notices to the appointed
representative of a party.
After the initial determination, the contractor, QIC, ALJ and the
MAC will send notice of their action and requests for information or
evidence to the appointed representative because, unlike the MSN and
RA, this information is specific to the claim at issue. We also note
that under Sec. 405.910(i)(4), initial determinations and appeal
notices that involve Medicare Secondary Payer recovery claims are sent
to both the party and the appointed representative. Unlike other
initial determinations, Medicare Secondary Payer recovery claims
notices of initial determinations are limited to include only
information related to the claim at issue.
We believe the current filing timeframes and the quarterly issuance
of MSNs provide adequate time for representatives to obtain claims
information from beneficiaries, providers and suppliers. Currently,
parties have 120 calendar days from the date of an initial
determination to file for a redetermination and 180 calendar days from
the date the party receives the notice of the redetermination to file a
reconsideration. In addition, contractors may extend redetermination
and reconsideration filing timeframes (consistent with Sec. 405.942(b)
and Sec. 405.962(b)) if a party shows good cause for not meeting the
filing timeframe. Coupled with the quarterly issuance of MSNs, we
believe individuals representing beneficiaries have ample time to
obtain relevant information in order to submit an appeal of an initial
determination or redetermination.
Accordingly, we are finalizing sections 405.906 through 405.910
without modification.
3. Assignment of Appeal Rights (Sec. 405.912)
The procedures for assigning appeal rights from a beneficiary to a
provider or supplier are included in Sec. 405.912. We received several
comments on the assignment of appeal rights. A summary of the comments
and our responses is included below. Additional detailed discussion of
this provision is found in the interim final rule at 70 FR 11427
through 11428 and 11430 through 11432.
Comment: We received several comments that requested clarification
of when an appointment of a representative or assignment of appeal
rights was appropriate, given that participating providers and
participating suppliers generally have appeal rights equal to those of
the beneficiary.
Response: A number of the comments reflected continued confusion
between the appointed representative provisions at Sec. 405.910 and
the assignment of appeal rights provisions at Sec. 405.912. Appointing
a representative and assigning appeal rights are two different and
unrelated actions under the new appeals process. Beneficiaries have the
option of either (1) assigning (transferring) their appeal rights to
the provider or supplier that provided the item or service at issue, if
such person or entity is not a party to the initial determination, or
(2) appointing a representative to act on their behalf during the
appeal.
As set forth in Sec. 405.912, an assignment of appeal rights
constitutes a complete transfer of party status and all appeal rights
from a beneficiary to the provider or supplier that (1) provided the
item or service at issue to the beneficiary and (2) does not already
have party status at the initial determination. Thus, with an
assignment of appeal rights, the provider or supplier becomes a party
to the appeal in place of the beneficiary.
In contrast, a party may choose to appoint an individual as its
representative to assist with an appeal. See Sec. 405.902, defining
appointed representative, and Sec. 405.910. For example, a beneficiary
may appoint his provider or supplier as an appointed representative.
Appointing a representative does not transfer a party's appeal rights,
nor does it make the appointed representative a party to the appeal.
Rather, an appointed representative is simply an individual chosen by a
party to act on behalf of the party in exercising his or her appeal
rights.
In an overwhelming majority of appeals, there is no need for a
beneficiary to assign appeal rights to his provider or supplier. For
example, under Sec. 405.906(a)(2) and (a)(3), a supplier who accepts
assignment for items or services furnished to a beneficiary, and a
provider who files a claim for items or services furnished to a
beneficiary, are parties to the initial determination, and thus, may
appeal that initial determination to the same extent as the
beneficiary.
In limited situations, a provider or supplier will not have party
status. For example, if a claim is filed by a non-participating
physician who does not accept assignment on the claim, and the claim is
denied as a statutory exclusion (such as certain cosmetic surgeries
under section 1862(a)(10) of the Act), the physician submitting the
claim would not have a direct right to appeal the initial determination
made by the
[[Page 65302]]
carrier. However, the physician could get party status to file an
appeal by obtaining an assignment of appeal rights from the beneficiary
for this service. The assignment of appeal rights must be completed in
accordance with the procedures set forth in Sec. 405.912.
Comment: A commenter suggested that certain providers, such as
clinical laboratories, be exempt from the provision requiring
beneficiaries to sign an assignment of appeal rights form (Sec.
405.912(c)(2)).
Response: In situations where an assignment of appeal rights is
appropriate, we believe the signature requirement is necessary for the
protection of both the party and the representative, as well as to
assist adjudicators in determining the proper parties to the appeal.
While we acknowledge it may be difficult in some instances for a
provider or supplier to obtain the signature of the beneficiary, the
binding nature of the assignment and the effect of the assignment
(transferring a beneficiary's appeal rights to an assignee and waiving
the right of the provider or supplier to collect payment) make it
essential that both parties sign the agreement. This situation,
however, may not arise frequently because a supplier that is required
to accept assignment on a claim, such as a clinical laboratory, is a
party to the initial determination and, therefore, has direct standing
to file an appeal. Accordingly, it would be inappropriate for a
supplier, who otherwise has party status, to seek assignment of appeal
rights from the beneficiary.
Comment: One commenter stated that the regulations indicate that
when beneficiaries assign their rights to appeal an individual item or
service to a provider or supplier, the provider or supplier must list
all items or services provided on the date of service on the assignment
form. The commenter recommended that a provider or supplier seeking
assignment of appeal rights should have to list only those items or
services for which appeal rights are to be assigned.
Response: Section 405.912(c)(3) requires that an assignment of
appeal rights ``indicate the item or service for which the assignment
of appeal rights is authorized.'' A provider or supplier is not
required to list all items or services provided on the date of service
on the assignment agreement--just those for which appeal rights are to
be assigned. An assignment of appeal rights will only be effective for
the items or services listed on the assignment form.
Accordingly, we are finalizing Sec. 405.912 without modification.
4. Initial Determinations (Sec. 405.920 Through Sec. 405.928)
Sections 405.920 through 405.928 discuss the initial determination
process, including how contractors make initial determinations on
claims and what types of determinations are considered or not
considered initial determinations.
We received several comments with respect to claims submissions and
the processing of initial determinations as set forth in the interim
final rule. A summary of the comments and our responses are included
below. Additional discussion regarding these provisions is found in the
interim final rule at 70 FR 11423 through 11424, 11428, and 11432
through 11436.
a. Initial Determinations, Notice of Initial Determinations, and
Timeframe for Processing Initial Determinations (Sec. 405.920 Through
Sec. 405.922)
Section 405.920 explains the process a contractor must follow in
making an initial determination. Section 405.921 describes the notice
of initial determination, including the content of the notice, and
Sec. 405.922 discusses the timeframe for processing initial
determinations.
Comment: Two commenters recommended that the term ``non-clean
claim'' be defined. Commenters also suggested that if a claim is paid
at the QIC level or higher, such claims should be considered clean, and
that interest should accrue from the date of the original denial in
order to provide incentive to expedite claim determinations and assure
fairness. Two commenters noted that although contractors must issue an
initial determination within 45 days of receipt of a ``non-clean''
claim, the regulations do not provide for any interest payments if the
determination is issued after the 45 day time period.
Response: The term ``clean claim'' is clearly defined in statute at
sections 1816(c)(2)(B)(i) and 1842(c)(2)(B)(i) of the Act as ``a claim
that has no defect or impropriety (including any lack of any required
substantiating documentation) or particular circumstance requiring
special treatment that prevents timely payment from being made on the
claim.'' This definition also is set forth in Sec. 405.902. Claims
that do not meet this definition are considered ``non-clean claims.''
Therefore, we do not believe that we need to define non-clean claim
because the meaning of non-clean claim is sufficiently clear given the
meaning of clean claim set forth in Sec. 405.902.
Claims for services that cannot be adjudicated timely at the
initial determination level because they lack sufficient documentation
and/or require special handling do not come within the definition of
clean claims. Claims initially denied and subsequently paid following a
favorable appeal decision, or revised following a reopening action,
are, by their nature, claims that require special treatment. Often,
during an appeal or reopening action, additional substantiating
documentation is needed to support the coverage and payment decision.
Thus, claims that are adjusted as a result of the effectuation of an
appeal decision, and claims that are revised following a reopening
action do not fall under the definition of ``clean claim'' set forth in
the statute.
Section 1869(a)(2)(A) of the Act, in conjunction with sections
1816(c)(2) and 1842(c)(2) of the Act, establishes that, on all claims
other than clean claims, the initial determination shall be concluded
and a notice of such determination must be mailed to the individual
filing the claim by no later than 45 days after the contractor receives
the claim. Additionally, section 1869(a)(2)(A) of the Act, in
conjunction with sections 1816(c)(2) and 1842(c)(2) of the Act,
requires that interest accrue if clean claims are not processed within
30 calendar days. Thus, reading these provisions together, no interest
accrues on non-clean claims, including claims that are adjusted as the
result of the effectuation of an appeal decision, and claims that are
revised following a reopening action.
Finally, neither the statute nor our regulations provide for
escalation, payment of interest or other remedies when the 45-day
deadline is missed for non-clean claims. Through various tools used to
monitor the performance of our contractors, we attempt to ensure that
claim determinations are both timely and accurate. As we noted in the
interim final rule, providers and suppliers play a vital role in the
contractors' ability to meet their decision-making timeframes. If
providers and suppliers submit clean claims, they can avoid the delays
that are associated with processing non-clean claims. The more accurate
the claim is at initial submission, the greater the ability of the
Medicare contractor to process the claim quickly.
Accordingly, we are finalizing Sec. Sec. 405.920 and 405.921
without modification. We are finalizing Sec. 405.922 with modification
as discussed in section II.B.5.a. of this preamble.
[[Page 65303]]
b. What Constitutes an Initial Determination and Decisions That Are Not
Considered Initial Determinations (Sec. 405.924 Through Sec. 405.926)
In Sec. 405.924, we describe actions that are initial
determinations and are subject to the administrative appeals procedures
in subpart I. In Sec. 405.926, we list examples of determinations that
are not considered initial determinations and are not subject to the
administrative appeals procedures contained in this subpart.
Comment: One commenter questioned the need to maintain the number
of home health visits as a determination that constitutes an initial
determination (Sec. 405.924(b)(7)). The commenter stated that this
particular item is no longer a relevant factor in determining whether
the charges were covered under Medicare Part A or Part B, and suggested
that this item be removed from the list of determinations considered
initial determinations.
Response: We agree with the commenter and have revised Sec.
405.924 to eliminate paragraph (b)(7), which specifically included the
number of home health visits used as an initial determination.
Comment: One commenter stated that under Sec. 405.926(c), issues
regarding the computation of the payment amount of program
reimbursement of general applicability are not considered initial
determinations and, therefore, are not subject to appeal under subpart
I. The commenter questioned whether the payment amount of a specific,
individual claim is considered an initial determination. The commenter
suggested amending Sec. 405.924 and Sec. 405.926 to clarify that
individual determinations with respect to payment amounts are initial
determinations. In addition, the commenter suggested that we revise
Sec. 405.924(c) to state that a provider's notice of non-coverage to
the Medicare beneficiary is not an initial determination. The commenter
noted that while the provider of service may be the first decision
maker regarding Medicare coverage of an item or service, its notice of
non-coverage has not been considered an initial determination subject
to appeal.
Response: Section 405.920 provides that, after a claim is filed, a
contractor must perform certain actions, including determining any
amounts payable. Such a determination constitutes an initial
determination subject to the subpart I appeals process. Similarly,
under Sec. 405.924(b), a payment amount determination with respect to
a particular item or service on a claim is an initial determination
that is appealable under subpart I. In contrast, Sec. 405.926(c)
specifies that ``[a]ny issue regarding the computation of the payment
amount of program reimbursement of general applicability for which CMS
or a carrier has sole responsibility under Part B such as the
establishment of a fee schedule * * *'' is not an initial
determination, and is not subject to administrative appeal under
subpart I. For example, section 1848(i)(1) of the Act expressly
prohibits administrative and judicial review of the components that
comprise the Medicare physician fee schedule. Thus, in situations where
payment amounts are determined in accordance with statutorily mandated
methodologies (such as the physician fee schedule), adjudicators are
required to follow such methodologies when making a finding regarding a
payment amount. Therefore, we believe that the regulations at
Sec. Sec. 405.920, 405.924, and 405.926 clearly provide that the
payment amount of a specific, individual claim is considered an initial
determination and also appropriately convey the distinction between a
direct challenge to the Medicare payment methodology and an appeal that
raises questions regarding a determination of a payment amount for a
particular claim. Therefore, we do not believe it is necessary to
revise Sec. 405.924 or Sec. 405.926 to provide any further
clarification.
We agree with the commenter's statement that a provider's notice of
non-coverage does not constitute an initial determination, because it
is not a determination made by the Medicare program. Instead, it is an
opinion of the provider, and the notices clearly state that they are
conveying the provider's opinion with respect to non-coverage. The
notices also clearly explain the steps required to obtain a
determination by Medicare and how to appeal that determination. Thus,
we do not believe it is necessary to revise Sec. 405.924 or Sec.
405.926 to include a provision explicitly excluding such notices from
the definition of initial determination.
Comment: One commenter requested that we define the phrase
``sustained or high levels of payment errors'' (Sec. 405.926(p)) and
requested that we specify how such determinations will be made. The
commenter also requested that CMS review dismissals on the grounds that
the claim involves a sustained or high error rate. The commenter
suggested that CMS provide clarification of the implications of such a
finding. Finally, the commenter recommended that CMS provide a
mechanism for providers to be removed from this ``sanction''.
Response: In section 1893(f)(3) of the Act, added by section 935 of
the MMA, Congress placed restrictions on the use of extrapolation to
determine overpayment amounts to be recovered from Medicare providers,
suppliers or beneficiaries. In order to calculate an overpayment by
extrapolation, there must be a determination of either: (1) A sustained
or high level of payment error, or (2) a documented educational
intervention that has failed to correct the payment error. In addition,
in section 1874A(h)(2) of the Act, as added by section 934 of the MMA,
Congress required contractors to identify a likelihood of sustained or
high level of payment error under section 1893(f)(3)(A) of the Act
before initiating non-random pre-payment reviews of a provider or
supplier, and in section 1893(f)(3) of the Act, expressly precluded
administrative or judicial review of contractor determinations of
sustained or high levels of payment errors. Accordingly, we included a
conforming provision at Sec. 405.926(p) of the interim final rule
providing that determinations of sustained or high levels of payment
error are not initial determinations that may be appealed under this
subpart. We note, however, that while the determination of whether a
provider or supplier has a sustained or high level of payment error is
not subject to appeal, the initial or revised determinations made on
the underlying claims for items or services would be subject to appeal.
CMS issued operating instructions for determining when a provider
or supplier has a sustained or high level of payment error in June
2005: (http://www.cms.hhs.gov/transmittals/downloads/R114PI.pdf).
Furthermore, we issued a final rule on September 26, 2008 (73 FR 55753)
to address when contractors may terminate the non-random pre-payment
review of claims submitted by a provider or supplier. The commenter's
concerns regarding the practical considerations of determinations of a
provider's or supplier's sustained or high error rates are beyond the
scope of this regulation. With respect to the suggestion that CMS
review dismissals on the grounds that the claim involved a sustained or
high error rate, as noted above, while that determination does not
constitute an initial determination and is not subject to appeal, any
claim denials resulting from the review would constitute initial
determinations that may be appealed. Therefore, we do not anticipate
any denials of claims solely based on this determination. Rather, the
determination of a sustained or high
[[Page 65304]]
error rate will be used as the basis for a contractor undertaking
further review of claims submitted by the provider or supplier.
Finally, we strongly disagree with the commenter's characterization of
the determination of a sustained or high error rate as a sanction. This
determination does not result in an assessment of civil money
penalties, or any other administrative action. Rather, it serves as the
basis for a contractor's review of a provider's or supplier's
subsequent claim submissions.
Comment: Section 405.926(s) states that claim submissions on forms
or formats that are incomplete, invalid, or do not otherwise meet the
requirements for a Medicare claim and, as a result, are rejected or
returned to the provider or supplier, do not constitute initial
determinations. A commenter asked whether this section would preclude
review where a claim is suspended for medical review.
Response: A claim suspended for development by a contractor's
medical review staff is not considered a claim that is invalid or
incomplete as described in Sec. 405.926(s). Thus, Sec. 405.926(s)
would not preclude review where a claim is suspended for medical review
because it does not apply to this situation. Rather, a claim that is
suspended for development is one that appears technically sufficient on
its face, but requires additional information in order to make a
coverage and payment decision. At the time the claim is suspended for
development, an initial determination has not been made, and thus,
appeal rights have not attached to the claim. In addition, the medical
review staff's decision to suspend a claim for development does not
constitute an initial determination that would be subject to appeal.
Generally, once the contractor makes a decision regarding coverage and
payment and issues an initial determination in the form of a MSN or RA,
parties to the initial determination have 120 calendar days to request
a redetermination. However, if a contractor denies coverage and payment
of a claim because the documentation requested during the medical
review of the claim was not submitted within the specified timeframe,
any subsequent submission of the requested documentation to the
contractor, or any timely request for a redetermination of that claim
will be processed under our reopenings policy at Sec. 405.980(a)(2).
If a revised determination is issued following the reopening of the
claim, the revised initial determination carries with it appeal rights
in accordance with Sec. 405.984(a).
Accordingly, we are finalizing Sec. 405.924 with modification as
noted above. We are finalizing Sec. 405.926 without modification.
c. Initial Determinations Subject to the Reopenings Process (Sec.
405.927) and the Effects of Initial Determinations (Sec. 405.928)
Section 405.927 states that minor errors or omissions in an initial
determination must be corrected through the contractor's reopening
process under Sec. 405.980(a)(3). Section 405.928 describes the
effects of an initial determination. We received no comments on these
sections. Accordingly, we are finalizing Sec. 405.927 and Sec.
405.928 without modification.
5. Redeterminations (Sec. 405.940 Through Sec. 405.958)
Sections 405.940 through 405.958 discuss the redetermination
process. We received comments with respect to redetermination decision-
making timeframes and other aspects of the redetermination process. A
brief overview of the relevant regulatory provisions, a summary of the
comments and our responses follow. Additional detailed discussion of
the redetermination process is included in the interim final rule at 70
FR 11423, 11428, 11436 through 11443, and 11458.
a. Redetermination Requests (Sec. 405.940 Through Sec. 405.946)
Section 405.940 establishes the general rule that a person or
entity that may be a party to a redetermination under Sec. 405.906(b)
and that is dissatisfied with an initial determination may request a
redetermination under subpart I. Sections 405.942 and 405.944 then set
forth the requirements concerning the timeframes and procedures for
filing a redetermination request. Section 405.946 describes the
evidence that should be submitted with a redetermination request.
Comment: One commenter asked that we specify when a standardized
redetermination request form will be available.
Response: A standardized Form 20027, revised May 1, 2005, is
available to beneficiaries and other interested parties and can be used
to request a redetermination. Customer service representatives at 1-
800-MEDICARE can provide beneficiaries with information on how they may
obtain standardized appeal forms. In addition, updated appeal forms
will continue to be available on the Internet at http://www.cms.hhs.gov/CMSForms/CMSForms/list.asp#TopOfPage and http://www.medicare.gov/Basics/forms/default.asp. In addition, representatives
at 1-800-MEDICARE can also provide information on how to obtain appeals
forms.
Further, as noted previously, beneficiaries receive information on
the appeals process and instructions for requesting a redetermination
(first level appeal) as part of the MSN. Beneficiaries can use the MSN
to request an appeal by circling the item or service with which they
disagree, explaining why they disagree, signing the MSN, and returning
it, or a copy, to the contractor address specified on the notice.
Comment: One commenter suggested that contractors and QICs send an
acknowledgment letter to all affected parties to an appeal indicating
receipt of the appeal request. Thus, a provider would know if a
beneficiary has already appealed a claim denial. The commenter also
requested that adjudicators assign a reference number to all appeals.
The commenter suggested that the appeal case number not utilize a
beneficiary's HIC number, in order to minimize confusion for provider
appeals involving multiple beneficiaries.
Response: Due to the volume of redetermination and reconsideration
requests, it is not feasible to require contractors or the QICs to send
an acknowledgment letter to all parties for each appeal (although we
note that QICs send acknowledgment letters to appellants indicating
receipt of the request for reconsideration). While having more than one
party file an appeal on a claim may appear to be duplicative, we
believe it may be in the best interest of a party dissatisfied with the
outcome of an initial determination or appeal decision to file an
appeal request and submit relevant evidence with respect to the issues
in the case because of the full and early presentation of evidence
rule. Under this rule, as set forth in Sec. 405.966(a)(2), a provider,
supplier, or beneficiary represented by a provider or supplier that is
a party to the reconsideration must submit all evidence prior to the
issuance of the reconsideration. New evidence submitted at the ALJ
hearing by a provider, supplier, or beneficiary represented by a
provider or supplier will be excluded from consideration unless the ALJ
finds good cause to explain why the evidence was not submitted prior to
the issuance of the reconsideration. See Sec. 405.1018(c) and Sec.
405.1028. Thus, by filing an appeal, a party can make sure that the
evidence it wants considered will not be excluded from consideration.
The
[[Page 65305]]
contractor or QIC will then consolidate timely appeal requests from
multiple parties into one proceeding, as required under Sec.
405.944(c) and Sec. 405.964(c), which will prevent possible disparate
appeal decisions.
Every appeal request at each level of the appeals process receives
a unique control number. This number is included on notices sent to
parties. We acknowledge the commenter's concerns regarding the use of a
beneficiary's HIC number as the appeal control number for ALJ hearings.
In the past, certain ALJ hearings processed by the Social Security
Administration used a beneficiary's HIC number. With the implementation
of the new Medicare Appeals System (MAS) to control and track appeals
at the QIC and ALJ levels, beneficiary HIC numbers are no longer used
for assigning case numbers to an appeal. However, before a new case
number has been assigned to an appeal request, beneficiary HIC numbers
are helpful when making status inquiries with the QIC or an ALJ because
these numbers can be used internally to identify the unique record for
the appeal.
In this final regulation, we are making technical revisions to
several sections that set forth the deadlines and timeframes that apply
to various actions taken by parties, appellants and adjudicators.
Throughout subpart I, we use the words ``day'', ``days'' and ``calendar
days'' when referring to these timeframes and deadlines. Although we
believe parties and potential participants to the appeals process and
adjudicators understand these terms are used interchangeably, and that
``days'' means ``calendar days'' unless otherwise stated, we believe
technical revisions are necessary to ensure that these terms are used
consistently throughout subpart I and to clarify the timeframes and
deadlines set forth in the rule. Further, we believe these revisions
will reduce potential confusion about the specific date by which an
action must be taken by a party or adjudicator.
Therefore, we are revising the following sections to insert the
word ``calendar'' before the word ``day'' or ``days'': Sec. 405.922,
Sec. 405.942(a)(1), Sec. 405.942(b), Sec. 405.946(b), Sec.
405.950(b)(1), Sec. 405.950(b)(2), Sec. 405.950(b)(3), Sec.
405.962(a)(1), Sec. 405.962(a)(2), Sec. 405.962(b), Sec. 405.966(b),
Sec. 405.966(c), Sec. 405.970(a)(2), Sec. 405.970(b)(1), Sec.
405.970(b)(2), Sec. 405.970(b)(3), Sec. 405.970(c), Sec.
405.970(e)(2), Sec. 405.974(b)(1), Sec. 405.974(b)(1)(i), Sec.
405.974(b)(1)(ii), Sec. 405.980(d)(1), Sec. 405.980(d)(2), Sec.
405.980(d)(3), Sec. 405.980(e)(1), Sec. 405.980(e)(2), Sec.
405.980(e)(3), Sec. 405.990(f)(2), Sec. 405.990(f)(4), Sec.
405.990(h)(2), Sec. 405.990(i)(2), Sec. 405.990(j)(1), Sec.
405.1002(a)(1), Sec. 405.1002(a)(3), Sec. 405.1002(a)(4), Sec.
405.1002(b)(2), Sec. 405.1004(a)(1), Sec. 405.1004(a)(3), Sec.
405.1004(a)(4), Sec. 405.1006(e)(1)(ii), Sec. 405.1010(b), Sec.
405.1012(b), Sec. 405.1014(b)(1), Sec. 405.1014(b)(2), Sec.
405.1016(a), Sec. 405.1016(c), Sec. 405.1018(a), Sec. 405.1018(b),
Sec. 405.1020(g)(3)(ii), Sec. 405.1022(a), Sec. 405.1024(a), Sec.
405.1028(a), Sec. 405.1036(f)(5)(iv), Sec. 405.1037(c)(5), Sec.
405.1037(e)(2)(iii), Sec. 405.1042(b)(2), Sec. 405.1044(d), Sec.
405.1046(d), Sec. 405.1052(a)(2)(ii), Sec. 405.1052(a)(2)(iii), Sec.
405.1100(c), Sec. 405.1100(d), Sec. 405.1102(a)(1), Sec.
405.1102(a)(2), Sec. 405.1104(a)(2), Sec. 405.1106(b), Sec.
405.1110(a), Sec. 405.1110(b)(2), Sec. 405.1110(d), Sec. 405.1118,
Sec. 405.1122(e)(4), Sec. 405.1124(b), Sec. 405.1126(d)(1), Sec.
405.1130, Sec. 405.1132(b), Sec. 405.1136(c)(3), Sec.
405.1136(d)(2), Sec. 405.1140(b)(1), Sec. 405.1140(c)(1), Sec.
405.1140(c)(4), Sec. 405.1140(d).
Finally, to further ensure that beneficiaries and others affected
by the rule understand the various time frames and deadlines set forth
in the rule, we note that where the regulations provide for a time
frame and that time frame ends on a Saturday, Sunday, legal holiday, or
any other Federal nonwork day, we apply a rollover period that extends
the time frame within which an act must be done to the first day after
the Saturday, Sunday, legal holiday, or other Federal nonwork day.
Accordingly, we are finalizing sections 405.940 and 405.944 without
modification. We are finalizing sections 405.942 and 405.946 with
modification as discussed in this section.
Per the discussion in this section, we also are finalizing the
following sections to add the word ``calendar'' in front of the word
``day'' or ``days'': Sec. 405.922, Sec. 405.942(a)(1), Sec.
405.942(b), Sec. 405.946(b), Sec. 405.950(b)(1), Sec. 405.950(b)(2),
Sec. 405.950(b)(3), Sec. 405.962(a)(1), Sec. 405.962(a)(2), Sec.
405.962(b), Sec. 405.966(b), Sec. 405.966(c), Sec. 405.970(a)(2),
Sec. 405.970(b)(1), Sec. 405.970(b)(2), Sec. 405.970(b)(3), Sec.
405.970(c), Sec. 405.970(e)(2), Sec. 405.974(b)(1), Sec.
405.974(b)(1)(i), Sec. 405.974(b)(1)(ii), Sec. 405.980(d)(1), Sec.
405.980(d)(2), Sec. 405.980(d)(3), Sec. 405.980(e)(1), Sec.
405.980(e)(2), Sec. 405.980(e)(3), Sec. 405.990(f)(2), Sec.
405.990(f)(4), Sec. 405.990(h)(2), Sec. 405.990(i)(2), Sec.
405.990(j)(1), Sec. 405.1002(a)(1), Sec. 405.1002(a)(3), Sec.
405.1002(a)(4), Sec. 405.1002(b)(2), Sec. 405.1004(a)(1), Sec.
405.1004(a)(3), Sec. 405.1004(a)(4), Sec. 405.1006(e)(1)(ii), Sec.
405.1010(b), Sec. 405.1012(b), Sec. 405.1014(b)(1), Sec.
405.1014(b)(2), Sec. 405.1016(a), Sec. 405.1016(c), Sec.
405.1018(a), Sec. 405.1018(b), Sec. 405.1020(g)(3)(ii), Sec.
405.1022(a), Sec. 405.1024(a), Sec. 405.1028(a), Sec.
405.1036(f)(5)(iv), Sec. 405.1037(c)(5), Sec. 405.1037(e)(2)(iii),
Sec. 405.1042(b)(2), Sec. 405.1044(d), Sec. 405.1046(d), Sec.
405.1052(a)(2)(ii), Sec. 405.1052(a)(2)(iii), Sec. 405.1100(c), Sec.
405.1100(d), Sec. 405.1102(a)(1), Sec. 405.1102(a)(2), Sec.
405.1104(a)(2), Sec. 405.1106(b), Sec. 405.1110(a), Sec.
405.1110(b)(2), Sec. 405.1110(d), Sec. 405.1118, Sec.
405.1122(e)(4), Sec. 405.1124(b), Sec. 405.1126(d)(1), Sec.
405.1130, Sec. 405.1132(b), Sec. 405.1136(c)(3), Sec.
405.1136(d)(2), Sec. 405.1140(b)(1), Sec. 405.1140(c)(1), Sec.
405.1140(c)(4), and Sec. 405.1140(d).
b. Conduct and Effect of Redeterminations (Sec. 405.948 Through Sec.
405.958)
Sections 405.948 and 405.950 describe basic procedures contractors
follow in conducting redeterminations, including the adjudication
timeframes for issuing redetermination notices and exceptions to the
timeframes. Section 405.952 contains provisions relating to the
withdrawal or dismissal of a request for a redetermination. Sections
405.954 and 405.956 address redetermination decisions and notification
rules. Section 405.958 discusses the effect of a redetermination
decision.
Comment: One commenter expressed concern that the rule does not
provide a process for notifying an appellant of new issues being
considered by a contractor during the redetermination. The commenter
recommended that Sec. 405.948 be amended to require contractor
notification of the appellant about new issues, and to provide an
opportunity for the appellant to respond to those issues.
Response: We understand the commenter's concern about ensuring
appellants have an opportunity to respond to new issues raised by
contractors during the redetermination process. Thus, appellants are
strongly encouraged to submit all relevant evidence at the earliest
point possible to support their assertion that the initial
determination is incorrect. This works to enhance the efficiency and
accuracy of the appeals process and enables adjudicators to make more
informed decisions at the first level of the appeals process. Given the
short timeframes for processing redeterminations and the high volume of
requests, it is not feasible to require contractors to send formal
notice of new issues raised during the redetermination process.
[[Page 65306]]
However, during the course of the redetermination, if a contractor
determines that a new issue, distinct from the issues considered at the
initial determination, warrants consideration, and the pertinent
documentation necessary to make a decision on that issue is missing
from the record, it is expected that the contractor will contact the
appropriate entity to obtain the missing information prior to rendering
its decision. In addition, the contractor's redetermination notice will
contain a decision with respect to any new issues, and parties
dissatisfied with the outcome may file a request for reconsideration.
Comment: One commenter objected to the provision that where two or
more parties requested an appeal on the same initial determination, the
contractor's deadline for processing the appeal would be based on the
latest filed request (Sec. 405.950(b)(2)). The commenter argued that
the first appellant was placed at a disadvantage in the decision-making
timeframe. The commenter suggested that we stipulate in this final
regulation that the decision-making timeframe starts with the first
appeal request, extending the decision-making time by no more than 14
days from the original deadline, applicable only if a later party's
appeal request contained new, relevant evidence.
Response: In sections 405.944(c), 405.950(b)(2), 405.964(c) and
405.970(b)(2) of the interim final rule, we require carriers, FIs, and
QICs to consolidate multiple requests for a redetermination, or
multiple requests for a reconsideration, into a single proceeding in
order to avoid duplication and to issue one appeal decision within 60
days of the latest appeal request. This policy allows time for the
adjudicator to carefully review and consider each of the appeal
requests, including any additional evidence submitted with the
requests. Instances when more than one party files a request for an
appeal of the same claim have always been rare, and we do not expect
any change in this regard. Therefore, we do not believe that
consolidating the decision-making timeframe for appeals requested by
multiple parties, such that the decision-making timeframe begins with
the latest filed request, creates an impediment to the efficient
resolution of appeals or places the first appellant at a disadvantage.
To the contrary, we believe that when another party subsequently
requests an appeal before a decision has been made on the original
request, fairness and efficiency is enhanced by combining the two
requests into one case and beginning the decision-making timeframe with
the latest filed request to allow adequate time to review each request
and the evidence submitted before a decision is made. Finally, we do
not believe that extending the decision-making timeframe by no more
than 14 days from the original deadline of the first appeal request
received only if the later party's appeal request contained new,
relevant evidence would allow for careful review and consideration of
the appeals request.
Comment: We received several comments objecting to the extension of
the decision-making timeframes at the redetermination and
reconsideration levels to allow for the submission of new evidence
(Sec. 405.950(b)(3), which incorporates Sec. 405.946(b), for
redeterminations, and Sec. 405.970(b)(3), which incorporates Sec.
405.966(b), for reconsiderations). Although most commenters recognized
the need to ensure contractors have adequate time to review new
evidence, those who objected to this provision believe that the
unlimited and automatic extensions of the statutory decision-making
timeframes by up to 14 days upon submission of new evidence are
contrary to section 1869(a)(3)(C)(ii) of the Act for redeterminations
and section 1869(c)(3)(C)(iv) of the Act for reconsiderations. One
commenter added that the automatic extensions of the decision-making
timeframes contradict the congressional intent behind the establishment
of timeframes for lower-level reviews: To expedite the appeals process
and avoid the huge backlogs that have plagued the system. Another
commenter suggested that only those submissions of evidence initiated
by a party should extend the decision-making timeframe, and that
additional evidence submitted by a party in response to a request from
the Medicare contractor should not result in an extension of the
decision-making timeframe.
Response: As stated in the interim final rule, we continue to
believe allowing extensions of decision-making timeframes under some
circumstances is consistent with the statute. See 70 FR 11439, 11445
through 11446. Since the statute imposes decision-making timeframes
with the assumption that at the time the appeal is filed, all relevant
evidence will be submitted to the adjudicator, we believe extensions
that result from late-submitted evidence are consistent with the
statute. When an appellant submits new information after the appeal is
filed, the adjudicator should not be penalized for an appellant's late
submission of evidence. We also believe that appellants should be
afforded some flexibility to supplement the administrative record if
needed. Thus, the extensions of the decision-making timeframe in Sec.
405.950(b)(3) and Sec. 405.970(b)(3) balance the needs of the party
with the needs of the adjudicator by allowing an appropriate timeframe
within which the adjudicator can carefully consider additional
evidence.
Further, we believe that contractors should be afforded up to an
additional 14 calendar days to issue a redetermination decision when
the contractor requests missing documentation from a party that is
essential to resolving the issues on appeal. We believe the efficiency
and cost-effectiveness of the appeals process is greatly enhanced by
allowing this additional time to ensure an accurate decision is made at
the lowest possible level. The only way to avoid the need for extended
decision-making timeframes would be to preclude the submission of
additional evidence by appellants after they file their redetermination
requests. Although the contractor may extend the deadline when it
receives additional evidence, this policy does not mean that in all
cases we expect a contractor to take the maximum time to issue the
decision.
Similarly, at the reconsideration level, the QIC's adjudication
deadline is extended up to 14 days when a party submits additional
evidence not included with the request for reconsideration. However,
the extension does not apply to a party's timely submission of evidence
in response to a request by a QIC (unless the contractor, in its
redetermination notice, informed the party that (1) the documentation
was missing from the administrative record, and (2) the documentation
must be submitted with the request for reconsideration, and then the
party failed to submit such documentation). See Sec. 405.956(b)(6),
Sec. 405.966(b); 70 FR 11446. As noted above, we believe the
adjudication timeframes presuppose a complete record for the
adjudicator. Where evidence is missing from the record, and the party
is on notice that the evidence must be submitted with the
reconsideration request, we believe the extension of the adjudication
timeframe is both necessary and consistent with the statute.
Finally, we do not expect an extension of up to 14 days will cause
backlogs or significant delays in the appeals process. Rather, we
believe this policy will encourage parties to submit evidence as soon
as practicable. As stated previously, we urge appellants to submit all
necessary documentation with their requests in order to avoid delays.
[[Page 65307]]
Comment: One commenter inquired about the process for handling
redetermination requests from family members when a beneficiary is
deceased. The commenter expressed concern about the ability of a
surviving spouse or relative to provide proof of their status as the
legally authorized representative of the decedent. The commenter
related instances where the surviving family member attempting to
pursue an appeal is unable to produce appropriate documentation to
prove such status because there is no will or there are no assets to
distribute by probate. The commenter stated that appeals should not be
dismissed if requisite documents are not provided by surviving family
members.
Response: We appreciate the concerns of the commenter regarding the
difficulty surviving family members of a deceased beneficiary may have
in securing proof of their authority to file an appeal on behalf of the
decedent. We routinely require documentation of an individual's
authority to file an appeal request on behalf of a party. In part, this
is because the individually identifiable health care information that
may be shared during the appeals process, including information with
respect to a deceased person, cannot be disclosed unless the disclosure
is authorized by law or authorized by the individual. In order to
protect against an unauthorized disclosure, contractors must obtain
documentation of the status of any person attempting to act on behalf
of a deceased beneficiary by filing an appeal. For example, if the
person attempting to file an appeal on behalf of a deceased beneficiary
is authorized under State law to administer the estate, then the
contractor must obtain documentation of the individual's authority
(that is, as the executor or administrator of the estate) or
information regarding the intestate provisions of the relevant State's
probate law. Similarly, contractors determine whether an individual
meets the requirements set forth in 42 CFR part 424, subpart E if the
individual asserts they have assumed a legal obligation to pay for the
services. Contractors are not prohibited from assisting individuals to
obtain any necessary information. However, whether the beneficiary is
living or deceased, absent timely filed evidence that the individual
attempting to file an appeal has authority to do so, contractors must
dismiss the redetermination request. See Sec. 405.952(b)(1).
Comment: We received two comments concerning contractor notices to
beneficiaries on appeal issues. One commenter agreed with our policy in
Sec. 405.956(a)(2) that contractors should issue written notice to
only the appellants when an appeal concerns an overpayment involving
multiple beneficiaries who have no financial liability. However,
another commenter thought our policies with respect to beneficiary
notification could deprive a beneficiary of his or her appeal rights.
The commenter stated that when a fully favorable decision is issued to
a non-beneficiary appellant, the beneficiary does not receive a copy of
the redetermination notice. As a result, the 120 day period to request
a redetermination may expire without the beneficiary knowing of the
existing appeal. The commenter further noted that a decision that is
fully favorable to a provider or supplier may not be fully favorable to
the beneficiary. The commenter questioned whether a beneficiary still
has appeal rights if the redetermination is not favorable for the
beneficiary and what process follows if the evidence submitted by the
beneficiary and provider conflict.
Response: We do not believe a beneficiary would be deprived of any
appeal rights in the scenario described by the commenter. In the case
of a redetermination that is fully favorable (that is, fully reverses a
denial of coverage or payment on the initial determination), parties
will receive a redetermination notice, MSN, or RA, as applicable. See
Sec. 405.956(a)(1); Internet Only Manual (IOM) Pub. 100-4, Ch. 29,
section 310.5. The MSN and RA will reflect any adjustment made to the
claim, including a shift in the financial liability from a provider to
a beneficiary, and will contain information regarding further appeal
rights.
With respect to the commenter's concern about the subsequent appeal
rights of a beneficiary when another party has requested a
redetermination, a beneficiary's right to appeal does not depend on his
or her status as an appellant at previous levels in the appeals
process. Beneficiaries may request a subsequent appeal even if they did
not initiate prior appeals (unless they have formally assigned their
appeal rights to a provider or supplier and have not revoked the
assignment). In the scenario presented by the commenter, if a
redetermination request is timely filed by a second party before the
redetermination decision is issued, the contractor will consolidate the
multiple redetermination requests consistent with Sec. 405.944(c). If
a redetermination request from another party is received by the
contractor after the redetermination decision is issued, the contractor
would treat the redetermination request as misfiled, and would forward
the request to the QIC. See CMS IOM, Publication 100-4, Chapter 29,
Section 320.1.B at (http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf). Finally, in situations where evidence submitted during
an appeal conflicts with other evidence in the administrative record,
the adjudicator, as an arbiter of fact, is responsible for examining
all of the evidence submitted, and making appropriate findings of fact
with respect to such evidence.
In this final regulation, we are making technical revisions to
several sections that describe the nature and effect of the
determinations, decisions, and other actions issued by adjudicators. In
subpart I, we refer to these actions as ``final'', ``final and
binding'' and ``binding''. Although we believe parties to the appeals
process understand the meaning of these terms, we believe technical
revisions are necessary so that these terms are used consistently
throughout subpart I. These revisions will reduce potential confusion
regarding the effect of a determination or decision issued by an
adjudicator.
We believe referring to certain decisions or actions as ``final''
or ``final and binding'' may create confusion as to whether the
adjudicator's action or decision constitutes a final decision of the
Secretary for which judicial review may be sought under section 205(g)
of the Act. As described in Sec. 405.1132 and Sec. 405.1136(a), to
the extent authorized by sections 1869, 1876(c)(5)(B), and 1879(d) of
the Act, judicial review is available to a party to a MAC decision, or
to an appellant who requests escalation to Federal district court if
the MAC does not complete its review of the ALJ's decision (other than
MAC review of an ALJ dismissal) within the applicable adjudication
period. In addition, judicial review is available when a review entity
certifies that a party has met the expedited access to judicial review
(EAJR) requirements, or, under Sec. 405.990(f)(4), when the review
entity fails to make such certification within the applicable timeframe
specified in Sec. 405.990(f)(2). See section 1869(b)(2) of the Act;
Sec. 405.990. Judicial review is also available under Sec.
405.1140(a) when a Federal district court remands a case for further
consideration, the MAC subsequently remands the case to an ALJ, and the
ALJ issues a decision that becomes the final decision of the Secretary.
We are reserving the term ``final'' to describe those actions or
decisions for which judicial review may be immediately sought. Thus, we
believe these technical revisions will ensure that parties will be
[[Page 65308]]
able to understand when judicial review is available.
When we state that an action or decision is ``binding'' on parties,
we mean that the parties are obligated to abide by the adjudicator's
action or decision, unless further recourse to challenge the action or
decision is available, and a party exercises that right (for example,
obtaining a decision at the next level of appeal, or having the
adjudicator reopen and vacate the decision or action). When a party may
take further action on an adjudicator's action or decision, we specify
those actions that may be taken. If a party chooses not to take further
action, or further recourse is unavailable to parties, then the
adjudicator's decision is binding on the parties, and is final in the
sense that no further review of the decision is available.
In summary, when we use the term ``final'' in the regulation text,
we mean those actions or decisions for which judicial review may be
immediately sought. When we use the term ``binding'' in the regulation
text, we mean that the parties are obligated to abide by the
adjudicator's action or decision, unless further recourse to challenge
the action or decision is available, and a party exercises that right.
As such, a final decision of the Secretary is always a binding
decision. However, a binding decision may not be a final decision of
the Secretary for the purposes of exhausting administrative remedies
when seeking judicial review.
We also are making related technical revisions to several sections
that describe the decisions or actions issued by adjudicators. In
several instances we use the term ``final action'' or ``final
decision'' to describe the actions taken or the decisions issued by a
QIC, an ALJ, and the MAC. We believe that the meaning of these terms
may, at times, be confusing since some of these ``final actions'' or
``final decisions'' may not be final as discussed above. We also
believe describing the specific actions that an adjudicator may take,
rather than using a generic phrase, such as final action, adds clarity
and assists parties in understanding both the effect of a specific
action issued by an adjudicator, and when judicial review may be
available. Therefore, where we use the terms ``final action'' or
``final decision'', we are making technical revisions to replace those
terms, as appropriate, with the specific determinations, decisions or
actions that the adjudicator may take. For example, we are revising
Sec. 405.1136(a)(2) to remove the phrase ``final action'' and replace
it with the phrase ``final decision, dismissal order, or remand
order''.
Furthermore, we are making similar technical revisions to Sec.
405.990(b)(1)(i)(A) to replace the term ``final decision'' with the
specific actions that, if taken by an ALJ, will preclude a party from
seeking EAJR in place of an ALJ hearing, and to Sec.
405.990(b)(1)(i)(B) by adding dismissal orders and remand orders to the
description of the actions that, if taken by the MAC, will preclude a
party from seeking EAJR in place of MAC review. We believe that the use
of the word ``decision'' alone in these subsections does not clearly
convey the specific actions of the ALJ or MAC that will preclude a
party from seeking EAJR, and thus we believe it is necessary to clearly
articulate which actions could preclude such a request. Therefore, we
are making the following technical revisions, consistent with the
discussion above:
We are revising the following sections to remove the terms
``final'' and ``final and binding'' and replace them with the term
``binding'': Sec. 405.952(e), Sec. 405.958, Sec. 405.972(e), Sec.
405.974(b)(3), Sec. 405.978, Sec. 405.980(a)(1), Sec. 405.980(a)(5),
Sec. 405.1004(c) and Sec. 405.1052(a)(6).
We are revising Sec. 405.990(b)(1)(i)(A) to remove the phrase
``final decision'' and replace it with the phrase ``decision, dismissal
order, or remand order''.
We are revising Sec. 405.990(b)(1)(i)(B) to add the phrase
``dismissal order, or remand order'' after ``final decision''.
We are revising Sec. 405.990(b)(1)(ii) to remove the term ``final
action'' and replace it with the phrase ``decision or dismissal
order''.
We are revising Sec. 405.990(f)(3) to remove the words ``final
and''.
We are revising Sec. 405.1002(b)(2) and Sec. 405.1112(a) to
remove the phrase ``final action'' with replace it with the phrase
``decision or dismissal order''.
We are revising Sec. 405.1046(c) to remove the word ``final'' and
replace it with the phrase ``binding on the contractor''.
We are revising Sec. 405.1048(a) to remove the phrase ``either
issues a final action'' and replace it with the phrase ``issues a final
decision or remand order''.
We are revising Sec. 405.1100(c) and (d) to remove the phrase
``final action'' and replace it with the phrase ``final decision or
dismissal order''.
We are revising Sec. 405.1104(a)(2) to remove the phrase ``final
action or remand the case to the QIC'', Sec. 405.1104(b)(1) to remove
the phrase ``final action or remand'', Sec. 405.1104(b)(2) to remove
the phrase ``final action or remand order'', and Sec. 405.1104(c) to
remove the phrase ``final action'' and replace them with the phrase
``decision, dismissal order, or remand order''.
We are revising Sec. 405.1104(b)(3) to remove the phrase ``a final
administrative decision for purposes of MAC review'' and replace it
with the phrase ``the decision that is subject to MAC review consistent
with 405.1102(a)''.
We are revising Sec. 405.1106(b) to remove the phrase ``final
action or remand the case to the ALJ'', Sec. 405.1132(b) to remove the
phrase ``final action or remand'', and Sec. 405.1136(a)(2) to remove
the phrase ``final action'' and replace them with the phrase ``final
decision, dismissal order, or remand order''.
We are revising Sec. 405.1110(d) to remove the phrase ``remains
the final action in the case'' and replace it with the phrase ``is
binding on the parties to the ALJ decision.''
We are revising Sec. 405.1126(a) to remove the word ``final''.
We are revising Sec. 405.1130 to add the words ``final and''
before the word ``binding''.
Accordingly, we are finalizing Sec. 405.948, Sec. 405.954, and
Sec. 405.956 without modification. We are finalizing Sec. 405.950
with modification as discussed in section II.B.5.a. of this preamble.
We are finalizing Sec. 405.952, Sec. 405.958, Sec. 405.972, Sec.
405.974, Sec. 405.978, Sec. 405.980, Sec. 405.984, Sec. 405.990,
Sec. 405.1002, Sec. 405.1004, Sec. 405.1046, Sec. 405.1048, Sec.
405.1052, Sec. 405.1100, Sec. 405.1104, Sec. 405.1106, Sec.
405.1110, Sec. 405.1112, Sec. 405.1126, Sec. 405.1130, Sec.
405.1132, and Sec. 405.1136 with modifications, as noted.
6. Reconsiderations (Sec. 405.960 Through Sec. 405.978)
Sections 405.960 through 405.978 address the reconsideration
process. We discuss specific sections and summarize and respond to
comments on the reconsideration process below. Additional detailed
discussion of the reconsideration process is included in the interim
final rule at 70 FR 11423, 11428, 11440, 11441, and 11443 through
11450.
Comment: One commenter suggested that we establish for chain
providers an exception to the standard rule requiring reconsiderations
to be performed by the QIC for the State in which the service was
rendered. In appeals involving providers that have elected a single FI,
the commenter recommended that providers have the option of having
appeals processed by the QIC for the State in which the provider's home
office is located or the State in which the service was rendered.
[[Page 65309]]
Response: In determining the workload distribution for appeals
among the Part A QICs, CMS issued instructions requiring that, for
chain providers that have elected to have their claims processed by a
single FI, any related reconsiderations will be processed by the QIC
with jurisdiction over the State where the FI is located. Since there
are no in-person reconsiderations, we believe it is unnecessary to
adjust the jurisdictions to accommodate home office locations. The one
exception to this general rule applies to claims currently processed by
one of our contractors. Because this contractor processes claims in all
50 States, it would be too burdensome to require one QIC to process all
the reconsiderations for those claims. Thus, we determined it was
necessary to split that workload among the Part A QICs based on the
State in which the service is rendered.
a. Processing Reconsideration Requests (Sec. 405.960 Through Sec.
405.964)
Section 405.960 states that any person or entity that is a party to
a redetermination and is dissatisfied with that determination, may
request a reconsideration of the redetermination by a QIC. Section
405.962 specifies that appellants who wish to file a request for
reconsideration must do so within 180 calendar days of the date on
which the party receives the notice of the redetermination, or within
such additional time as CMS may allow. In Sec. 405.964, we set forth
the place and method for filing requests for reconsideration.
We received no comments on these sections; however, in this
regulation, we are making a technical revision to Sec. 405.962(a).
Section 405.962(a) states that requests for reconsideration of a
contractor's redetermination must be filed within 180 calendar days
from the date the party receives notice of the redetermination, unless
the QIC extends the timeframe upon a showing of good cause for the late
filing consistent with Sec. 405.962(b). We inadvertently omitted a
reference to the different filing timeframe applicable to requests for
QIC reconsideration of a contractor's dismissal of a request for
redetermination under Sec. 405.974(b). In Sec. 405.974(b)(1), we
specify that a party must file the written request for reconsideration
of a contractor's dismissal action with the QIC within 60 days after
receipt of the contractor's notice of dismissal. While the
reconsideration of a dismissal action under Sec. 405.974(b) differs
from the reconsideration of a redetermination under Sec. 405.974(a)
(for example, a QIC's reconsideration of a dismissal action is not
subject to further review under Sec. 405.974(b)(3)), for clarity, we
are amending Sec. 405.962(a) to include the reference to the timeframe
applicable to requests for QIC reconsideration of contractor
dismissals.
Accordingly, we are finalizing Sec. 405.960 and Sec. 405.964
without modification. We are finalizing Sec. 405.962 with modification
as noted above, and as discussed in section II.B.5.a. of this preamble.
b. Evidence Submitted With the Reconsideration Request--Full and Early
Presentation of Evidence (Sec. 405.966)
Section 405.966(a) specifies that a party should present evidence
and allegations of fact or law related to the issue in dispute and
explain why it disagrees with the initial determination when filing a
request for reconsideration. Absent good cause, failure to submit all
evidence, including documentation requested in the notice of
redetermination, prior to the issuance of the notice of reconsideration
precludes subsequent consideration of that evidence. Section 405.966(b)
explains that submissions of evidence that do not accompany the request
for reconsideration extend the QIC's 60-day decision-making timeframe
up to 14 calendar days for each submission. Section 405.966(c)
establishes an exception to the full and early presentation of evidence
requirement, and permits Medicaid State agencies and beneficiaries,
other than those represented by providers or suppliers, to submit
additional new evidence after the reconsideration level without
establishing good cause for the delayed submission.
Comment: We received many comments concerning the provision that
requires a provider or supplier to submit all evidence prior to the QIC
reconsideration decision being rendered, unless there is good cause for
submitting the evidence later. In general, most commenters were in
favor of expediting the appeals process and recognized the value of
early evidence submission. However, some commenters argued that this
provision was too burdensome for providers, suppliers, and
beneficiaries, particularly when they do not have easy access to
supporting documentation that may be required, or may not know until
after the QIC decision that additional evidence may be necessary or
useful. Several commenters requested that CMS include in the
regulations a specific list of items, documents or circumstances that
constitute good cause for late submission of evidence. Some commenters
objected to the limitations completely. One commenter stated that
evidence submission should be allowed at any stage of the appeals
process, as long as the evidence proved relevant and there was no
prejudice to permitting its submission.
Response: The requirement in Sec. 405.966 for the early
presentation of evidence by providers and suppliers is based on the
statutory requirement contained in section 1869(b)(3) of the Act, as
added by section 933(a) of the MMA, which states that a provider or
supplier may not, in any subsequent level of appeal, introduce evidence
that was not presented at the reconsideration conducted by the QIC,
unless there is good cause that precluded the introduction of that
evidence at or before the reconsideration. Section 405.966(c)(2)
extends the full and early presentation of evidence requirement to
beneficiaries represented by providers or suppliers. We recognize that
absent advance notice of what documents are needed to support a claim,
appellants may have difficulty determining what constitutes relevant
evidence for their claim appeals. Thus, Sec. 405.956(b)(6) requires
contractor redetermination notices to identify ``specific missing
documentation.'' We believe this provision helps appellants, since it
should enable appellants to better understand the basis for the
unfavorable redetermination and understand the information missing from
the record. Ultimately, we believe this can result in a better
developed record at the reconsideration level, and will allow the QIC
to make more fully informed reconsideration decisions. We do not
believe that it is either practical or consistent with the statute to
limit the requirement for full and early presentation of evidence by
attempting to distinguish categorically between evidence that is
readily available to the provider, supplier, or beneficiary and that
which is obtained from entities not directly involved in the claim
dispute. Limiting the requirement for full and early presentation of
evidence to objective medical information would be equally problematic.
Given the vast amount of medical services and items that could be
involved in a claim dispute, it would be extremely difficult to draw
clear distinctions among the numerous types of documentation that might
be needed. Nevertheless, where it is not feasible to obtain this
documentation prior to issuance of the reconsideration, as indicated in
Sec. 405.1028, an ALJ will make a determination on whether good cause
[[Page 65310]]
for failure to submit the evidence to the QIC exists. This applies to
all documentation, including any items listed in the notice of
redetermination.
Finally, Sec. 405.966(c) states that the limitation on the
presentation of new evidence does not apply to beneficiary appellants
unless they are represented by a provider or supplier or to Medicaid
State agencies. Therefore, although contractor redetermination notices
will uniformly identify any necessary missing documentation,
beneficiaries, except those represented by providers or suppliers, and
Medicaid State agencies will still be permitted to introduce evidence
after the QIC reconsideration level (although for efficiency reasons,
they would be better served by doing so as soon as possible).
We are finalizing Sec. 405.966 with modification as discussed in
section II.B.5.a. of this preamble.
c. Conduct and Processing of Reconsiderations (Sec. 405.968 Through
Sec. 405.978)
In Sec. 405.968, we describe the manner in which QICs conduct
reconsiderations. In Sec. 405.970, we set forth the timeframes for
issuing reconsideration notices. In Sec. 405.972, we explain the
process by which a QIC may dismiss, or a party may withdraw, a request
for reconsideration. Section 405.974 describes the reconsideration by a
QIC of a contractor's determination and a contractor's dismissal of a
redetermination request. Section 405.976 discusses the notice
requirements for QIC reconsiderations. Finally, Sec. 405.978 explains
the effect of a reconsideration.
Comment: Several commenters opposed the elimination of the Part B
fair hearing. These commenters believe that appellants will be deprived
of an important opportunity to provide adjudicators with clarifications
and additional information not contained in the record, and that
adjudicators will not have an opportunity to personally assess a
beneficiary's physical or mental condition. The commenters suggested
that having an in-person hearing at the second level of appeal would
reduce the number of cases appealed to the ALJ level, thus speeding up
reimbursement to providers and reducing administrative costs. One
commenter requested that QICs be encouraged to contact beneficiaries,
providers and suppliers with questions or to request input to obtain
all relevant evidence.
Response: We continue to believe that providing for an on-the-
record review at the QIC level of appeal, rather than an in-person
hearing, is consistent with both BIPA and the MMA. Although it
certainly could have, the Congress did not provide for hearings by the
QICs. Instead, under section 1869(c)(3)(B)(i) of the Act, Congress
required QICs to ``review'' initial determinations. In contrast, under
section 1869(d)(1) of the Act, the statute specifically provides for a
``hearing'' at the ALJ level. Furthermore, Congress also significantly
reduced the decision-making timeframes at all levels of the appeals
process. As discussed in the interim final rule, the significantly
shortened decision-making timeframes result in appellants receiving a
hearing before an ALJ generally within the same timeframe they would
have received a ``fair hearing'' under the previous Part B appeals
process. See 70 FR 11448. Finally, the regulatory provisions at Sec.
405.968(a)(1) regarding QIC reconsiderations continue to allow QICs to
contact appellants and obtain any necessary information by phone, or
other means.
Comment: One commenter expressed concern that the regulation does
not define ``medical record'', nor does it address specific items and
services that require physician completion of a Certificate of Medical
Necessity (CMN). The commenter suggested that we clarify that the CMN
is a medical record and that Congress established the CMN to enable
physicians to demonstrate medical necessity.
Response: We do not agree with the commenter's suggestion that it
is necessary to define the term ``medical record'' in this regulation.
The purpose of this regulation is to implement the changes made to the
Medicare claims appeals process as required by BIPA and the MMA. The
term ``medical record'' is not a term of art that requires a definition
in this regulation, and neither BIPA nor the MMA attach special
significance to the term with respect to the claims appeals process.
Further, we do not believe it is appropriate to include information
related to the completion of the CMN in this regulation. Policies that
relate to the completion of the CMN are outside of the scope of this
regulation.
Nevertheless, we disagree with the commenter's assertion that
completion of the CMN demonstrates definitively that an item or service
is medically reasonable and necessary for diagnosis or treatment of
illness or injury or to improve the functioning of a malformed body
member under section 1862(a)(1)(A) of the Act. CMS' longstanding policy
has been that even where a CMN has been provided, contractors may
request supporting medical documentation to demonstrate the ``medical
necessity'' of items or services. This policy was affirmed in Gulfcoast
Medical Supply, Inc. v. Sec'y, Health and Human Servs., 468 F.3d 1347
(11th Cir. 2006) and MacKenzie Medical Supply, Inc v. Leavitt 506 F.3d
341 (4th Cir. 2007). In Gulfcoast, the Circuit Court stated that the
Medicare statute ``unambiguously permits carriers and the Secretary to
require suppliers to submit evidence of medical necessity beyond a
CMN.'' In MacKenzie, the Circuit Court found that Congress did not
unambiguously mandate that the CMN is the only document that can be
required of a supplier to show medical necessity.
Comment: We received many comments on Sec. 405.968(b)(2), which
requires QICs to give substantial deference to a local coverage
determination (LCD), local medical review policy (LMRP), and CMS
program guidance, unless the QIC determines, either at a party's
request or at its own discretion that the policy does not apply to the
facts of the particular case in which case the QIC may decline to
follow the policy. Commenters raised many of the same concerns voiced
by commenters to the proposed rule. They believe that CMS exceeded its
statutory authority by specifying that QICs are bound by LCDs and LMRPs
and questioned the propriety of requiring QICs to give deference to
policies that they allege sometimes contradict statutes and
regulations, are against the intent of BIPA, and are not promulgated
through notice and comment rulemaking. These commenters suggested that
deference to these coverage policies should be eliminated to preserve
fairness and due process. They also noted that QICs are required to
have extensive medical, legal, and Medicare program knowledge and so
would be well equipped to make decisions without deferring to these
policies.
Response: We continue to believe that it is both appropriate and
consistent with the statutory intent of BIPA, which added section
1869(c)(3)(B)(ii)(II) of the Act to require QICs to consider LCDs in
making their decisions, to require QICs to give substantial deference
to LCDs and LMRPs and other CMS program guidance in the appeals they
adjudicate if these policies are applicable to a specific case. See
Sec. 405.968(b)(2). As noted in the proposed rule, the use of
consistent review criteria will serve several important purposes,
including the identification of recurrent problems with CMS policies,
fostering consistency in appeal decisions, and potentially reducing
both ALJ appeals volume and the ALJ reversal rate. See 67 FR 69312,
69325 and 69328. In addition,
[[Page 65311]]
as explained in the interim final rule, Federal courts have considered
and applied deference standards in considering the validity of various
Medicare policies and have also recognized that ALJs and the MAC
properly consider issues relating to deference as well. See Abiona v.
Thompson, 237 F.Supp.2d 258 (E.D.N.Y. 2002), and 70 FR 11458.
We note that section 522 of BIPA provides an explicit process for
contesting LCDs. However, we agree with the commenters' assertion that
QICs should be able to evaluate whether a particular coverage policy
applies in a specific appeal. In response to similar comments on the
proposed rule, in the interim final rule, we revised Sec.
405.968(b)(2) to allow QICs to decline to follow an LMRP, LCD or other
CMS program guidance either at the request of a party or at its own
discretion if a QIC determines that the policy does not apply to the
facts of the particular case. However, we also believe that it is
necessary to ensure that the QICs, like other appeals adjudicators,
give the contractors' coverage policies substantial deference if they
are applicable to a particular case. Thus, we require QICs to give
substantial deference to LMRPs, LCDs and other CMS program guidance,
unless the QIC finds that the policy is not applicable in a particular
case. This policy acknowledges the extensive medical expertise and
program knowledge within each QIC, and strikes a balance between the
need to preserve QIC independence and the need to apply consistent
review criteria and to ensure that the established coverage policies
are given appropriate consideration.
Comment: One commenter inquired about the QIC's ability to raise or
develop new issues. The commenter did not understand how a new issue
could develop if the contractor had rendered a redetermination with
respect to the claim. The commenter requested that we modify the
language of Sec. 405.968(b)(5) to be consistent with other regulatory
provisions that reference raising new issues.
Response: A reconsideration is a new and independent review of an
initial determination, and we believe adjudicators at the
reconsideration level should be permitted to raise and develop any
issues that they believe are relevant to the claim(s) in the case at
hand. For example, if a claim was denied initially as not medically
reasonable and necessary because medical records were not submitted to
the carrier as requested, and during the reconsideration, the review of
the medical records accompanying the appeal request shows that the
services would be excluded for a different reason or under a different
statutory authority, the QIC should be permitted to explore the new
issues. Furthermore, we note that the policy with regard to raising new
issues at Sec. 405.968(b)(5) is consistent with the policy with regard
to raising new issues as part of the redetermination in Sec. 405.948.
Accordingly, we are not modifying the language in Sec. 405.968(b)(5).
Comment: A number of commenters asked that the final rule include
more explicit information about the QICs. In particular, commenters
wanted the final rule to identify the minimum qualifications for the
QIC panel members and reviewers, clearly define the role of the QIC
panel in the reconsideration process, and describe the on-going
training that would be made available to the panel members and
reviewers. Several commenters recommended that the regulations list
specific physician or healthcare specialties that would be included on
the QIC panel. Commenters also asked that the final rule spell out the
provisions that would be put in place to ensure the QICs' independence.
One commenter supported some type of sanction for QICs that failed to
issue timely decisions under Sec. 405.970. Finally, a commenter stated
that if the QIC's decision contradicts the treating physician's
judgment, such as determining an item or service is not medically
necessary, despite a physician's certification on a CMN, then the
appeals decision should outline circumstances that would justify this
finding.
Response: As noted in the interim final rule (70 FR 11449), the
requirements for QIC reviewers and the physicians who serve as panel
members are contained in section 933 of the MMA and section 521 of
BIPA. Specifically, section 1869(c), (e)(3), and (g) of the Act contain
provisions regarding the independence of the QICs, qualification
requirements for QICs, the role of the QIC panel, and continuing
education for QICs with respect to Medicare coverage of items and
services. Thus, we do not believe it is appropriate or necessary to
address these issues, or the specific physician or health care
specialties that would be included on the QIC panel, in any further
detail in these regulations. Instead, through the QIC contracting and
evaluation processes, we ensure that the QICs are fully compliant with
these statutory requirements, including the appropriateness of the
members of QIC panels. In fact, we have already taken action to replace
a QIC that was having difficulty meeting the performance standards
imposed by the statute.
In addition, although we are committed to ensuring that QICs are
meeting the statutory decision-making timeframes, we note that Congress
has already provided a remedy for those cases in which a QIC fails to
issue a timely decision. In section 1869(c)(3)(C)(iii) of the Act and
in Sec. 405.970(c), appellants who do not receive a reconsideration
within the applicable decision-making timeframe have the right to
escalate the appeal to an ALJ. Therefore, we do not believe that the
regulations should contain provisions sanctioning QICs for not meeting
the applicable decision-making timeframes.
Finally, in the event a QIC's decision contradicts the treating
physician's medical judgment, such as determining that an item or
service is not medically necessary, we note that Sec. 405.976(b)
requires that the notice of reconsideration include a rationale for the
decision.
In this final regulation, we are also making a technical revision
to Sec. 405.972(b)(3) (discussed below), and further technical
revisions to Sec. 405.972(e) and Sec. 405.1004(c) (see section
II.B.5.b. of this preamble for a discussion of our prior revision). In
Sec. 405.972, we explain the process by which a QIC may dismiss, or a
party may withdraw, a request for reconsideration. We are revising
Sec. 405.972(e) to clarify that when a QIC dismisses a request for
review of a contractor's dismissal action, the dismissal is binding and
not subject to further review. Similarly, we are revising Sec.
405.1004(c) to clarify that an ALJ's dismissal of a request for review
of a QIC's dismissal action is binding and not subject to further
review.
In Sec. 405.974(b)(1) and Sec. 405.1004(a), we offer parties an
opportunity to appeal a dismissal action to the next adjudicative level
and, under Sec. 405.974(b)(3) and Sec. 405.1004(c), the decision of
the adjudicator at that subsequent level with respect to the dismissal
action is binding and not subject to further review. See 70 FR 11444.
We did not, however, intend to permit additional opportunities for
review of dismissals where the request for review of a dismissal is
invalid and thus, subject to dismissal. For example, a contractor
dismisses a request for a redetermination. The party then requests that
the QIC review the dismissal but the party, without having good cause,
does not file this request with the QIC in a timely fashion. In this
scenario, the QIC would dismiss the
[[Page 65312]]
request for reconsideration of the contractor's dismissal and the party
would not be entitled to ALJ review of the QIC's decision.
In allowing review of dismissals at the next adjudicative level, we
balance a party's need for review and the need for administrative
finality. If a party does not file a valid request for review for a
second time, we believe the need for finality in the administrative
process outweighs the need for further review. Thus, a QIC's dismissal
of a request for review of a contractor's dismissal action, and an
ALJ's dismissal of a request for review of a QIC's dismissal are not
subject to further review. However, while a party may not request
further review in the administrative appeals process when an
adjudicator dismisses a request for review of a dismissal, we note that
a party may still request the dismissal be vacated consistent with the
provisions of Sec. 405.952(d), Sec. 405.972(d), Sec. 405.1054, and
Sec. 405.1108(b).
In addition, we are making a technical revision to Sec.
405.972(b)(3). In Sec. 405.972(b)(3), when describing the authority of
the QIC to dismiss an untimely filed request for reconsideration, we
inadvertently omitted the cross-reference to requests for QIC review of
a contractor's dismissal of a redetermination request. The timeframes
for filing such requests, which differ from the timeframes for filing a
request for reconsideration of a contractor's redetermination decision,
are found in Sec. 405.974(b)(1). For clarity, we are amending Sec.
405.972(b)(3) to reference the separate timeframes applicable to
appeals of contractor dismissal actions at the redetermination level.
In summary, we are amending Sec. 405.972(b)(3) to include a
reference to the timeframe for filing a request for QIC review of a
contractor dismissal action, and we are amending Sec. 405.972(e) and
Sec. 405.1004(c) to clarify that a QIC's dismissal of a request for a
reconsideration of a contractor's dismissal of a request for
redetermination, and an ALJ's dismissal of a request for review of a
QIC's dismissal of a request for reconsideration is binding and not
subject to further review.
Accordingly, we are finalizing Sec. Sec. 405.968 and 405.976
without modification. We are finalizing Sec. Sec. 405.970 and 405.974
with modification as discussed in section II.B.5.a. of this preamble.
We are finalizing Sec. Sec. 405.972 and 405.1004 with modifications as
noted above, and Sec. Sec. 405.972, 405.974 and 405.978 with
modification as discussed in section II.B.5.b. of this preamble.
7. Reopenings of Initial Determinations, Redeterminations,
Reconsiderations, Hearings and Reviews (Sec. 405.980 Through Sec.
405.986)
Sections 405.980 through 405.986 set forth the requirements
regarding the reopenings process, including how parties may request
reopenings of determinations and decisions, and how contractors, QICs,
ALJs, and the MAC will conduct reopenings.
We received several comments with respect to the reopening
provisions as set forth in the interim final rule. A summary of the
comments and our responses are included below. Additional detailed
discussion of the reopening process is included in the interim final
rule at 70 FR 11423, 11435, 11447, 11450 through 11453, and 11458.
a. Reopening Actions (Sec. 405.980)
Section 405.980 describes the general rules for reopening initial
determinations, redeterminations, reconsiderations, hearing decisions
and MAC review decisions.
Comment: One commenter recommended that CMS create enforcement
provisions for the ``good cause'' standard when contractors reopen
claims. The commenter believed that contractors often ignore the
guidelines set out in regulations and manuals, and recommended that the
good cause standard be enforced to ensure fairness and finality for
Medicare providers and suppliers.
Response: Contractors are required to follow Federal laws,
regulations and manual instructions in their business operations. As
noted in the interim final rule in response to a similar comment on the
proposed rule (70 FR 11453), our regulations require that contractors
abide by the good cause standard for reopening actions as set forth in
Sec. 405.980(b) and Sec. 405.986. CMS conducts audits and evaluations
of contractor performance in order to assess compliance with Medicare
policies. Thus, the necessary monitoring and enforcement mechanisms are
already in place and we do not believe it is necessary to add
enforcement provisions to these regulations.
Comment: One commenter believed that CMS Change Request 3622 does
not comport with Sec. 405.927 and Sec. 405.980(a)(3) with respect to
the distinction between claim reopenings and appeals of initial
determinations. The commenter stated that the reopening provisions
indicate that adjustments resulting from clerical errors are to be
processed as reopenings. However, CMS instructions in Change Request
3622, implemented July 5, 2005, state that the Medicare Carrier System
(MCS) will deny claims resubmitted with new information (such as
diagnosis codes), requiring the provider or supplier to submit an
appeal.
Response: Since the publication of the interim final rule, we have
issued instructions to carriers to suspend implementation of Change
Request 3622. See http://www.cms.hhs.gov/transmittals/downloads/R104PI.pdf modified by JSM-05385, dated 06-20-2005. CMS is re-
evaluating the duplicate edit policies to determine how best to address
the subsequent re-submission of claims in light of the reopening
policies and will take into consideration the concerns raised by the
commenter.
As noted by the commenter and as discussed in the preamble to the
interim final rule, in accordance with Sec. 405.980(a)(3)(iii),
contractors will process disputes involving resubmitted claims denied
as duplicates through the reopening process. See 70 FR 11451.
Generally, providers and suppliers should avoid resubmitting claims for
previously denied items or services (this does not apply to providers
who submit claim adjustments for returned claims). Unless a claim is
denied as the result of a clerical error, when a denied claim carries
with it appeal rights, providers and suppliers should file appeal
requests to dispute the determination that denies items or services on
the claim. However, if a provider or supplier decides to resubmit a
claim for items or services previously submitted to Medicare, the
appeals rights for those items or services flow from the original claim
submission and not the subsequent claim submission. Resubmissions of
claims for the same items or services do not extend the appeal rights
available to a party. Thus, we have instructed contractors to process
appeal requests for claims denied as duplicates as reopenings, and the
sole issue to be resolved is whether the claim is in fact a duplicate
of a previous submission. All other issues not considered clerical
errors (that is, coverage and payment issues) must be resolved through
an appeal of the first claim. If an appeal is pending on the original
submission of the item or service, then the contractor will not process
the reopening on the resubmitted claim. To do otherwise could result in
duplicate payment for the items or services.
Comment: One commenter expressed concern that a party cannot seek
review of a determination not to grant a request for reopening. See
Sec. 405.926(l),
[[Page 65313]]
Sec. 405.980(a)(5). The commenter argued that not allowing an appeal
in this situation places too much authority in the hands of the persons
making decisions regarding reopenings.
Response: As noted in our response to a similar comment in the
interim final rule, it has been a longstanding principle that failure
to grant a request for reopening is not reviewable. See 70 FR 11453.
The Supreme Court has upheld this concept. See Your Home Visiting Nurse
Services, Inc. v. Shalala, 525 U.S. 449 (1999); Califano v. Sanders,
430 U.S. 99 (1977). This policy does not violate a party's due process
rights, because the administrative appeals process for Medicare claims
already affords ample opportunities for a party to challenge claim
determinations. The reopenings process simply offers, but does not
guarantee, an additional process if a party believes an error on a
claim should be corrected, but the party has exhausted his or her
appeal rights, or the error is one that should not be resolved through
the appeals process. See Sec. 405.927.
In Sec. 405.980(a)(3), we indicate that a contractor must refuse
to process a reopening request when it disagrees that the dispute
involves a clerical error and must ``dismiss'' the reopening request
and advise the party of any appeal rights, provided the timeframe to
request an appeal has not expired. The use of the term ``dismiss'' in
connection with a reopening request does not confer any right to obtain
further review of a decision on a reopening request. See Sec.
405.926(l) and Sec. 405.980(a)(5).
Comment: Several commenters stated that the definition of ``similar
fault'' in Sec. 405.902 is too broad and allows contractors to reopen
almost any claim, for any reason and that it requires providers and
suppliers to maintain supporting billing records for an indefinite time
period, at considerable expense. One commenter cited a difference
between the definition of ``similar fault'' in the interim final rule
compared to the Medicare Claims Processing Manual, Chapter 29, Appeals
of Claims Decisions, section 90.9 Unrestricted Reopenings, and urged
CMS to follow the policy as stated in the claims processing manual.
Response: The definition of ``similar fault'' contained in Sec.
405.902 covers situations in which a contractor identifies an
inappropriate billing that does not rise to the level of fraud. The
definition covers situations where Medicare payment is obtained by an
individual or entity with no legal right to the funds, the contractor
determines that the individual or entity knows or could reasonably be
expected to know that the claims for items or services should not have
been paid, and there is no determination by law enforcement that the
payment was obtained through an act of fraud. The similar fault
provision is appropriately used where fraudulent behavior is suspected,
but law enforcement is not proceeding with recovery on the basis of
fraud.
With respect to the commenter's concern about indefinite storage of
records, we do not believe this regulation will significantly impact
providers and suppliers for several reasons. First, it is a
longstanding policy in the Medicare program that a claim may be
reopened at any time if it was procured by fraud or similar fault.
Thus, this regulation does not impose a new burden on providers or
suppliers. See Sec. 405.750(b)(3)(ii) and Sec. 405.841(c)(1). In
addition, State law and Federal conditions of participation have
longstanding requirements for the retention of records. Finally,
providers and suppliers who submit claims that are in compliance with
Medicare program requirements, and do not accept payment for claims
which they know, or should reasonably be expected to know, they are not
otherwise entitled, will not have claims reopened for fraud or similar
fault. Thus, we believe the fraud or similar fault provisions in this
regulation will not have a significant impact on providers and
suppliers.
In Sec. 405.902 of the interim final rule, we codified the
definition of ``similar fault'' for the purposes of reopening initial
determinations and appeal decisions. This definition supersedes the
definition previously found in our claims processing manual. Based on
our experience with the reopenings process, we determined that the
previous definition of similar fault did not provide adequate guidance
to adjudicators. We believe the new definition more accurately conveys
the meaning of similar fault, and makes clear that the fault must be
``similar'' to fraud.
Comment: One commenter asked for clarification on the types of
errors that could be corrected through reopenings.
Response: It is not possible to delineate in a regulation all of
the types of minor clerical and technical errors that can be addressed
through the reopening process. However, we have issued operating
instructions to contractors that offer examples of issues that are
appropriate to handle as reopenings, and those that should be processed
as appeals. See IOM 100-4 Chapter 34, Reopening and Revision of Claim
Determinations and Decisions (http://www.cms.hhs.gov/manuals/downloads/clm104c34.pdf).
Under Sec. 405.980(a)(3), we state that a clerical error includes
human and mechanical mistakes on the part of the party or the
contractor (that is, mathematical or computational mistakes, inaccurate
data entry, or denials of claims as duplicates). Nevertheless, we
appreciate the difficulty some providers and suppliers may have in
determining whether a claim should be corrected through the reopenings
process or the initial determination should be contested through the
appeals process. We note that consistent with Sec. 405.980(a)(3), if
the contractor determines that an appeal request involves either the
correction of a clerical error, or another matter that should be
handled through the reopenings process, the appeal request will be
treated as a request for a reopening, and the contractor will transfer
the appeal request to the reopenings unit for processing. Similarly, if
the contractor determines that a request for reopening involves an
issue that must be resolved through the appeals process, the reopening
request will be denied, and the contractor will advise the party
accordingly. Although a contractor's refusal to reopen an initial
determination is not subject to appeal, a party may file an appeal
request with the contractor, subject to the filing requirements in
Sec. 405.942 through Sec. 405.946, if they continue to dispute the
initial determination on the items or services at issue. Thus, if it is
unclear whether a particular dispute should be resolved as a reopening
or as an appeal, a party's best recourse may be to file an appeal
request.
In this final regulation, we are making two technical corrections
to the introductory clause of Sec. 405.980(b). First, we are replacing
the word ``its'' with the word ``an''. This correction ensures that
Sec. 405.980(b) is consistent with (1) our longstanding policy as set
forth in the interim final rule which allows certain contractors, other
than the contractor that issued the initial determination, to reopen an
initial determination (see 70 FR 11450), and (2) the definition of
contractor included as a technical revision in this rule. In the
interim final rule, we explained that for the purposes of reopening,
the term ``contractors'' includes ``carriers, intermediaries, and
program safeguard contractors.'' Program safeguard contractors (PSCs)
do not have authority to issue initial determinations (see section 1893
of the Act). Thus, PSCs have not issued, and do not issue, initial
determinations; however, in order to carry out their functions as
authorized under section 1893(b)(1) of the Act (for
[[Page 65314]]
example, to conduct medical, utilization and fraud review of claims),
PSCs must be able to reopen initial determinations made by other
contractors. Including them in this list of ``contractors'' in the
interim final rule that can conduct reopenings was meant to be
consistent with 1893(b)(1) of the Act. Furthermore, the technical
correction discussed above is consistent with our clarification of the
term ``contractor'' set forth in this rule. As clarified in this rule,
the term ``contractor'' would include, among other entities, PSCs.
We note that certain entities that did not exist when the interim
final rule was published (and thus, were not included in the list of
entities considered contractors for the purpose of conducting
reopenings), would be included in the definition of ``contractor'' as
clarified in this rule and may be authorized to reopen initial
determinations made by other contractors. For example, recovery audit
contractors (RACs) (considered contractors as that term is clarified in
this rule) do not issue initial determinations. However, in order to
carry out their functions as authorized by section 1893(h)(1) of the
Act, they must be able to reopen initial determinations made by other
contractors. Under section 1893(h)(1) of the Act, RACs identify
underpayments and overpayments and recoup overpayments. In order to
identify underpayments and overpayments, and prior to initiating
recoupment of an overpayment, RACs must reopen the initial
determinations issued by other contractors. Thus, consistent with their
authority under section 1893 of the Act, RACs would be permitted to
reopen initial determinations under Sec. 405.980. Accordingly,
consistent with our policy as set forth in the interim final rule, we
are replacing the word ``its'' with ``an'' in the introductory clause
of Sec. 405.980(b) to more clearly convey our policy to permit certain
contractors, other than those who issue initial determinations, to
reopen initial determinations when appropriate.
Second, we are removing the words ``and revise'' from the
introductory clause of Sec. 405.980(b). Subsections (c), (d), and (e)
of Sec. 405.980, which are analogous to subsection (b), in that they
discuss reopening timeframes and requirements for determinations and
decisions requested by a party or initiated by a QIC, ALJ, or the MAC,
do not include the words ``and revise'' and we inadvertently included
these words in subsection (b). The provision, as revised, now reflects
our longstanding policy that the timeframes for reopening a
determination or decision are measured by the date of the reopening not
the date of the revision of the determinations or decisions. See 42 CFR
Sec. 405.750(b), Sec. 405.841, Sec. 405.842(a); 67 FR 69327; The
Carriers Manual, Pub. 14-3 (Claims Process Part 3), Chapter XII,
section 12100.4, and The Intermediary Manual, Pub. 13-3 (Claims Process
Part 3), Chapter VIII, section 3799.4. With the revisions described
above, the introductory clause of Sec. 405.980(b) will read as
follows: ``A contractor may reopen an initial determination or
redetermination on its own motion --''
Accordingly, we are finalizing Sec. 405.980 with modifications as
noted above, with modification as discussed in section II.B.5.b. of
this preamble and with modification as discussed in section II.B.5.a.
of this preamble.
b. Conduct of Reopenings (Sec. 405.982 Through Sec. 405.986)
Section 405.982 discusses the provision of notice of a revised
determination or decision. Section 405.984 explains the effect of a
revised determination or decision and Sec. 405.986 sets forth the good
cause standard for reopening a determination or a decision.
Comment: We received several comments concerning the reopening
timeframes. Some commenters requested that CMS establish a response and
decision-making timeframe for contractors to complete or deny reopening
requests from a party. One commenter expressed concern about
uncertainty in the timing of the reopening process. The commenter
explained that while awaiting a contractor's decision on whether to
reopen, the deadline for filing for a redetermination could pass. The
commenter suggested that we require adjudicators to find good cause and
extend the time limit for filing an appeal if a decision regarding a
reopening is not made until after the relevant appeal filing time limit
has passed. One commenter requested that the rule allow for 60 days to
file an appeal after a contractor denies a reopening request.
Response: We appreciate the many suggestions regarding the
processing of reopening requests. With respect to the commenter's
concern about uncertainty in the timing of the reopening process, we
acknowledge that there are no regulatory timeframes that apply to the
processing of the reopening request when a party requests that an
adjudicator reopen a determination. Since reopenings are a
discretionary activity, we believe it is more appropriate to establish
applicable response and decision-making timeframes in our operating
instructions to ensure the agency has adequate flexibility to make
necessary changes in order to respond to shifts in contractor workload.
Current operating instructions to contractors generally require the
resolution of party initiated reopening requests within 60 days of
receipt of the reopening request. See IOM 100-4 Chapter 34 Section 10.7
http://www.cms.hhs.gov/manuals/downloads/clm104c34.pdf. If a party
misses the filing deadline for an appeal while awaiting a decision on a
reopening request, the party may request the adjudicator consider
granting an extension to the filing time limit for good cause
consistent with Sec. 405.942(b). Thus, we are not amending Sec.
405.980 or Sec. 405.982 to include a timeframe for resolving requests
for reopening.
Furthermore, we do not believe it is appropriate to require
adjudicators to find good cause to extend filing time limits if an
adjudicator's decision with respect to a request for reopening is made
after the party's deadline for filing an appeal request has expired.
Rather, we believe a decision as to whether good cause exists for
extending appeals filing time limits should be made on a case by case
basis. Alternatively, a party may consider filing an appeal request (if
appeal rights are available) if there is concern that the timeframe for
filing a subsequent appeal may expire should the reopening request be
denied. If the issue involves a clerical error, consistent with Sec.
405.980(a)(3), the contractor will process the request as a reopening.
We also considered the commenter's suggestion that we allow an
additional 60 days following a denial of a reopening request, to file
an appeal on the item or service at issue. While we understand the
concerns of the commenter regarding the potential effect a denied
reopening request may have on appeal rights, we believe that allowing
additional time to file an appeal as suggested would provide an
inappropriate extension to appeals filing timeframes. Moreover, as we
noted in the interim final rule, when a party is unsure whether a
dispute regarding an item or service is to be handled as a reopening or
an appeal, to ensure that the item or service at issue is reviewed in
some manner by the adjudicator, it may be in the party's best interest
to request an appeal, provided appeal rights are available. See 70 FR
11452. Thus, we are not adopting the commenters' suggestions to extend
appeals filing time limits or require a finding of good cause for late
filing when decisions on reopenings occur after the filing deadline has
passed.
[[Page 65315]]
Comment: One commenter objected to the new regulatory definition of
new and material evidence in Sec. 405.986(a)(1), stating that it is
far more restrictive than prior regulations at 20 CFR Sec. 404.988(b)
and Sec. 404.989.
Response: Prior to the issuance of the interim final rule, the
reopening process for Medicare claims relied on the regulatory
provisions found in 20 CFR Sec. 404.988(b) and Sec. 404.989 that
govern the reopening of Social Security disability claims. See 42 CFR
Sec. 405.750(b) and Sec. 405.841. 20 CFR Sec. 404.988(b) states that
a determination or decision may be reopened within four years of the
date of the notice of initial determination upon a finding of good
cause as defined in 20 CFR Sec. 404.989. In 20 CFR Sec. 404.989, good
cause to reopen a determination or decision may be established if (1)
new and material evidence is furnished; (2) a clerical error in the
computation or recomputation of benefits was made; or (3) the evidence
that was considered in making the determination or decision clearly
shows on its face that an error was made. The term ``new and material
evidence'' was not defined in the regulations used by Social Security,
nor was it defined in the Medicare's regulations. However, operating
instructions used by Medicare carriers and fiscal intermediaries in
processing reopenings have included a definition of new and material
evidence for more that 15 years, and this definition served as the
basis for the definition of new and material evidence included in Sec.
405.986(a)(1). See The Carriers Manual, Pub. 14-3 (Claims Process Part
3), Chapter XII, section 12100.9 and The Intermediary Manual, Pub. 13-3
(Claims Process Part 3), Chapter VIII, section 3799.9. Thus, since we
codified existing operating instructions, we disagree with the
commenter's assertion that our standard for new and material evidence
under Sec. 405.986(a)(1) is far more restrictive than it had been
prior to the interim final rule.
Comment: One commenter asked for clarification of Sec. 405.986(b)
regarding changes in substantive law or interpretative policy not
serving as the basis for reopening a determination. The commenter
believed the current wording could be construed as giving the
contractor the ability to reopen a case based on local coverage
determinations taking effect within one year of the initial
determination or redetermination and lead to contractors reopening
decisions when coverage is no longer extended to a certain treatment.
The commenter stated this could then force providers to repay
contractors for payments made while the treatment was covered under a
local or national coverage decision. The commenter recommended that the
regulation explicitly prohibit the retroactive application of local and
national coverage determinations.
Response: While we appreciate the commenter's concern, we note that
for purposes of making claim payment determinations, contractors apply
the NCD or LCD in place on the day the item or service was provided by
the provider or supplier. Furthermore, NCDs and LCDs include effective
dates that necessarily make their application prospective. The only
exception relates to effectuation of coverage appeals. As explained in
Sec. 405.986(b), in order to effectuate a favorable coverage appeal,
contractors may reopen the specific claim(s) associated with a
challenge to a local or national coverage determination under section
1869(f) of the Act and apply the revised coverage policy, but only to
the specific claims at issue. The revised coverage policy would not
apply retroactively to any other claims.
Accordingly, we are finalizing Sec. 405.982 and Sec. 405.986
without modification. We are finalizing Sec. 405.984 with modification
as discussed in section II.B.5.b. of this preamble.
8. Expedited Access to Judicial Review (Sec. 405.990)
Section 405.990 sets forth a process under which a party may obtain
expedited access to judicial review when a review entity determines
that the MAC does not have the authority to decide a question of law or
regulation relevant to the matters in dispute, and that there is no
material issue of fact in dispute. We received no comments on this
section. However, as discussed in this preamble at section II.B.5.b.
above, we are making technical revisions to Sec. 405.990 in regards to
describing specific determinations, decisions or actions that the
adjudicator may take. We are also making revisions to Sec. 405.990,
per our discussion in section II.B.5.a.
Accordingly, we are finalizing Sec. 405.990 with modification as
discussed in section II.B.5.b. of this preamble and with modification
as discussed in section II.B.5.a. of this preamble.
9. ALJ Hearings (Sec. 405.1000 Through Sec. 405.1064)
Our regulations under Sec. 405.1000 through Sec. 405.1064
describe the procedures for conducting hearings before ALJs. We
received several comments regarding these procedures. A brief overview
of the relevant regulatory provisions, a summary of the comments, and
our responses to those comments are included below. Further discussion
regarding the procedures for appeals at the ALJ level is found in the
interim final rule at 70 FR 11420, 11422, 11445 through 11446, and
11454 through 11466.
a. Transfer of the ALJ Function
Section 931 of the MMA required transfer of the ALJ function for
hearing appeals under title XVIII of the Act (and related provisions of
title XI of the Act) from the Commissioner of SSA to the Secretary of
the Department of Health and Human Services (DHHS or the Department).
The DHHS ALJs are required to be organizationally and functionally
independent from CMS and must report to, and be under the general
supervision of, the Secretary of DHHS. The DHHS and SSA jointly
developed a plan to facilitate the transfer, which was started on July
1, 2005 and completed on October 1, 2005 as required by section
931(b)(1) of the MMA.
Comment: At least one commenter expressed concern about possible
delays in processing appeals resulting from the transfer of the ALJ
function from SSA to DHHS. The commenter asked DHHS to ensure that
during the transition all appeal rights and remedies are available to
parties in a timely fashion.
Response: We appreciate the commenter's concern, and note that the
transfer of the responsibility for the ALJ function from the
Commissioner of SSA to the Secretary of the DHHS was completed October
1, 2005. Staff in the DHHS Office of Medicare Hearings and Appeals
(OMHA), the office responsible for administering ALJ hearings, worked
closely with staff in the SSA Office of Hearings and Appeals to ensure
a smooth transition and worked collaboratively to correct problems, to
protect the rights of parties, and to issue timely decisions.
Comment: One commenter complained about the loss of Medicare-
experienced SSA ALJs who have not relocated to the new DHHS ALJ
offices. The commenter felt strongly that the loss of these ALJs would
adversely impact the parties involved in appeals.
Response: The Administrative Procedure Act (APA) (5 U.S.C. 1104,
and 3105) provides that ALJs be selected using a merit system of
selection administered by the Office of Personnel Management (OPM).
OMHA's ALJs are recruited from OPM's pool of qualified candidates and
are provided with significant training in the relevant Medicare
statutes and regulations. Furthermore, unlike SSA's ALJs, whose
[[Page 65316]]
main responsibility was to adjudicate disability and Medicare cases,
OMHA's ALJs focus exclusively on Medicare appeals. Therefore, we do not
think that parties involved in appeals have been or will be adversely
impacted by this transition.
Comment: We received several comments concerning the training
provided to the ALJs. One commenter expressed concern about the
prospect of having to educate new ALJs about the Medicare regulations
and questioned whether these judges would be able to address the highly
complex and technical issues associated with Medicare claims appeals.
Another commenter asked for more information about how ALJs will be
trained and requested that all training material be made available to
the public. The same commenter wanted DHHS to allow beneficiary and
provider input into ALJ training sessions. Finally, a commenter noted
that his inquiries to DHHS regarding ALJ training had been referred to
the Public Affairs Office of CMS, which concerned the commenter because
DHHS ALJs are required to be independent of CMS.
Response: As stated in the previous response, OMHA's ALJs are
provided with significant and comprehensive training. OMHA
Headquarters, with cooperation and input from its field office Managing
ALJs, conducts a continuous evaluation of the ALJs' training needs. The
training provided to the ALJs includes, but is not limited to, a
comprehensive review of the following: The Medicare FFS, MA, and Part D
programs and appeals processes; the applicable Medicare substantive
authorities, such as CMS regulations, rulings, and program guidance;
and the processes and procedures associated with conducting an
administrative hearing. This comprehensive training provides ALJs with
the knowledge and expertise necessary to address the highly complex and
technical issues associated with Medicare claims appeals.
It is important for the ALJs to remain independent from the parties
that may appear before them, including providers, suppliers and
beneficiaries, and CMS and its contractors. Accordingly, with
consideration of the statutory requirement at section 931 of the MMA
that ALJs be functionally and organizationally independent from CMS,
OMHA evaluates each potential trainer to determine whether the trainer,
or the training itself, would adversely affect the independence or
impartiality of the ALJs, or even present the appearance of a lack of
independence or impartiality. OMHA also would apply this impartiality
standard in determining whether to permit other individuals or
entities, such as beneficiaries and providers, to provide input into an
ALJ training session. Requests for copies of materials provided to ALJs
during training sessions will be handled in accordance with the DHHS
rules regarding requests for information under the Freedom of
Information Act (FOIA). Such requests should be filed with the DHHS
Freedom of Information Officer following the procedures outlined in 45
CFR Part 5.
Finally, we note that at the time of the publication of the interim
final rule on March 8, 2005, OMHA was not in existence. Therefore,
inquiries, such as those noted by the commenter concerning ALJ level
function and received prior to the establishment of OMHA, were
temporarily directed to the CMS Office of External Affairs. Since the
establishment of OMHA, such inquiries have been directed to OMHA.
b. ALJ Hearings--General Rules (Sec. 405.1000 Through Sec. 405.1014)
Section 405.1000 provides an overview of the ALJ hearing process.
Section 405.1002 describes the requirements for obtaining an ALJ
hearing and Sec. 405.1004 describes the process for obtaining ALJ
review of a QIC notice of dismissal. Section 405.1006 sets forth the
amount in controversy requirements for ALJ hearings and judicial
review. Section 405.1008 describes who may request an ALJ hearing and
describes the parties to an ALJ hearing. Section 405.1010 explains the
process by which CMS or its contractors may participate in an ALJ
hearing, and Sec. 405.1012 explains the process by which CMS or its
contractors may choose to become a party to a hearing. Section 405.1014
sets forth the content and filing requirements for ALJ hearing
requests.
Comment: One commenter expressed concern that ALJ hearings were no
longer considered de novo hearings. The commenter stated that the
removal of de novo status for ALJ hearings will hamper efforts to
obtain the optimum amounts of information about each case, and lead to
unfair and unjustified denials of legitimate Medicare claims for
reimbursement.
Response: As stated in the Office of Medicare Hearings and Appeals;
Statement of Organization, Functions, and Delegations of Authority, 70
FR 36386 through 36387, ALJs conduct impartial de novo hearings and
this standard of review has not changed. Although the statute and
implementing regulations place limitations on the submission of
evidence, which impacts the scope of review, this limitation does not
impact the standard of review for ALJ hearings. Rather, consistent with
Sec. 405.1032(a), the ALJ reviews anew all issues brought out in the
initial determination, redetermination, or reconsideration that were
not decided entirely in a party's favor. In addition, if evidence
presented before the hearing causes an ALJ to question a favorable
portion of a determination, the ALJ may consider that issue at the
hearing after providing notice to the parties. See Sec. 405.1032(a).
However, to further clarify that the ALJ conducts a de novo review and
to eliminate any potential confusion, we are making a technical
revision to Sec. 405.1000(d) to state that the ALJ conducts a de novo
review and issues a decision based on the hearing record.
Comment: We received many comments regarding CMS' and its
contractors' participation as a party or as a participant in the
appeals process as set forth in Sec. 405.1010 and Sec. 405.1012.
Several commenters generally objected to CMS or its contractors
participating in ALJ hearings, or becoming a party at the ALJ level of
appeal. One commenter contended that submission of evidence by CMS or
its contractor acting as a party or participant should be prohibited if
CMS or its contractor had the opportunity to submit the evidence at the
time of the redetermination request. Another commenter objected to
submission of position papers and clarifying testimony, stating that
CMS should only be permitted to submit materials which ALJs must adhere
to, or defer to, pursuant to Sec. 405.1060 through Sec. 405.1063
(that is, NCDs, LCDs, program guidance or CMS Rulings). Some of these
commenters felt that CMS participation should be limited only to
instances where the ALJ required information from CMS or its
contractors.
Response: As discussed in detail in the preamble to the interim
final rule in response to similar comments, we continue to believe that
limited expansion of CMS' role in the ALJ hearing process is
appropriate, necessary and consistent with the statute. See 70 FR 11459
through 11460. As previously noted, section 1869(c)(3)(J) of the Act
provides that the QIC will not only prepare the record of the
reconsideration when a hearing before an ALJ is requested, but also
will ``participate in such hearings as required by the Secretary.'' We
continue to believe that this provision indicates a recognition of the
benefit of agency participation in the appeals process.
Based on our experience and the experience of our contractors,
there
[[Page 65317]]
have been many instances in which an ALJ has determined that input from
CMS or a contractor would help resolve a policy issue or clarify
factual issues in a case. Prior to the interim final rule, the
regulations did not provide specific procedures for ALJs to obtain
input from the agency. When ALJs requested position papers, testimony,
or other evidence from CMS or a contractor, the process was cumbersome
because the regulations did not provide specific procedures for
obtaining this input. Thus, consistent with section 1869(c)(3)(J) of
the Act, we afford CMS and its contractors the discretion to appear as
a party in appeals other than appeals involving unrepresented
beneficiaries under Sec. 405.1012. In addition, in Sec. 405.1010, we
provide CMS and its contractors the discretion to participate in a more
limited role at the hearing by providing assistance in resolving
factual or policy issues in a case as a participant in the hearing.
Moreover, the Office of Inspector General (OIG) report, as we noted in
the preamble to the IFC (OEI-04-97-00160 issued in September 1999),
further supports participation by CMS and its contractors in ALJ
hearings. See 70 FR 11459.
We disagree with the comment that submission of evidence by CMS or
its contractors when participating in an ALJ hearing should be
prohibited if CMS or its contractors had the opportunity to submit the
evidence at the time of the redetermination request. CMS and its
contractors are not permitted to participate in the appeals process as
a party or participant prior to the ALJ level, and thus, are unable to
submit new evidence into the administrative record at the
redetermination and reconsideration levels. Therefore, if CMS or its
contractors elect to join an appeal as a participant or a party, they
should be afforded an opportunity to present evidence, and the ALJ
level is the earliest opportunity for this to take place.
We also disagree with the commenter's suggestions that
participation by CMS or its contractor should not include the
submission of position papers or clarifying testimony, and CMS or its
contractor should be restricted to submitting materials to which ALJs
must adhere or defer. We continue to believe that CMS or contractor
participation at a hearing may assist beneficiaries, as well as
adjudicators, in understanding the complex issues raised during claims
appeals, and that such participation will assist ALJs and the MAC in
creating a fully developed record that resolves issues of fact and law.
Participation, as suggested by one commenter, that is limited to the
submission of evidence an adjudicator is already required to follow or
defer to will have limited usefulness because it will not necessarily
take into account the unique factual situations involved in each case
before an ALJ. We expect that additional case development resulting
from the submission of position papers or clarifying testimony from CMS
or its contractors may result in a reduction in the number of cases
remanded from the MAC to the ALJ level for additional development,
yielding faster decisions for parties and administrative cost savings.
Therefore, we believe it is necessary and appropriate for CMS and its
contractors to have an opportunity to participate at the ALJ level, and
that participation should not be restricted to materials to which the
ALJ must adhere or defer.
In addition, we disagree with the comment that CMS or contractor
participation should be limited to instances where the ALJ requires
information from CMS or its contractor. As noted above, we believe that
CMS or contractor participation at a hearing may assist beneficiaries
as well as adjudicators in understanding and resolving complex issues
raised during appeals. Some appeals may raise factual or policy issues
of which the ALJ is not aware, and thus, we believe it is necessary and
appropriate to permit CMS and its contractors to participate in ALJ
hearings (either as participants or as parties) even if the ALJ does
not specifically request information from them.
Thus, for the reasons discussed above, we believe that CMS or
contractor participation in ALJ hearings under Sec. 405.1010 and Sec.
405.1012 is necessary and appropriate and should not be limited only to
instances where the ALJ requires information from CMS or its
contractors. Furthermore, as discussed above, when participating in a
hearing as participants or as parties, CMS and its contractors should
not be restricted to submitting materials to which the ALJ is required
to adhere or defer, and should not be prohibited from submitting
position papers and clarifying testimony.
Comment: One commenter viewed the participation provisions as a
mechanism for CMS to insert itself as an adversary of the Medicare
beneficiary, and objected to the use of Program dollars to fund
adversarial actions against beneficiaries trying to obtain Medicare
covered benefits. Some commenters objected to the provision prohibiting
CMS or its contractors from being called as witnesses if they are
participating in an ALJ hearing. Several commenters felt that this
provision should be eliminated altogether. Several commenters suggested
that if CMS' objective in participating in hearings was to allow for a
more thorough examination of all the issues, that goal was not feasible
if CMS immunized itself from being called as witness. Finally, one
commenter suggested that if the provision regarding participation by
CMS or its contractors is retained, an ALJ should be permitted to draw
an adverse inference if CMS or its contractors refuse cross examination
or withdraw evidence.
Response: We do not believe that participation in a hearing by CMS
or its contractor causes the hearing to become an adversarial
proceeding against a beneficiary. When an unrepresented beneficiary
files a request for hearing, CMS or its contractor may not be a party
to the hearing and may only choose to act as a participant. See Sec.
405.1010, Sec. 405.1012(a). In general, the role of a participant
under Sec. 405.1010 is to provide information that assists the ALJ by
clarifying factual or policy issues in a case. When compared to the
rights CMS and its contractors are afforded as a party under Sec.
405.1012, the scope of a participant's rights under Sec. 405.1010 is
limited. For example, as a participant, CMS and its contractors do not
have the right to call witnesses or cross-examine the witnesses of
parties. See Sec. 405.1010(c). Nor does a participant have a right to
object to the issues described in the ALJ's notice of hearing. See
Sec. 405.1024(a), which applies only to parties. These are cornerstone
elements in an adversarial proceeding. Thus, we believe the non-
adversarial nature of an ALJ hearing is preserved when CMS or its
contractor acts as a participant under Sec. 405.1010.
We also disagree with the commenter's assertion that participation
by CMS or its contractor constitutes an inappropriate use of program
dollars. As noted above, by conferring authority on the Secretary to
determine when the QIC's participation in hearings is appropriate,
Congress recognized the benefit of such participation. See section
1869(c)(3)(J) of the Act. In addition, as discussed above, we believe
that CMS or contractor participation may assist ALJs and the MAC in
creating a fully developed record that resolves issues of fact and law,
which could result in a reduction in the number of cases remanded from
the MAC to the ALJ, thereby yielding faster decisions for parties and
administrative cost savings. Furthermore, participating in a hearing
reflects one of our agency's top mandates as stewards of the Medicare
Trust Fund: ensuring accurate
[[Page 65318]]
payments. Thus, we do not believe participation in an ALJ hearing as a
participant or as a party constitutes an inappropriate use of program
resources.
We also do not agree with the commenters who suggested that we
eliminate the provision in Sec. 405.1010(d) that prohibits calling CMS
or its contractor as a witness when participating in a hearing under
Sec. 405.1010. We believe this prohibition is important in maintaining
the non-adversarial manner for such hearings. As previously noted, a
participant's role under Sec. 405.1010 is significantly limited when
compared to the role of a party under Sec. 405.1012. For example, as a
participant, CMS or its contractor can file position papers or provide
testimony to help further clarify certain factual or policy issues in
the appeal. However, as a participant, CMS or its contractor may not
call witnesses or cross-examine the witnesses of a party, nor may it be
called as a witness during the hearing. See Sec. 405.1010(c) and Sec.
405.1010(d). In contrast, as a party under Sec. 405.1012, CMS or its
contractor may exercise all of the rights available to a party (such
as, calling witnesses, cross-examining witnesses of other parties,
requesting the issuance of subpoenas, objecting to the issues to be
decided at the hearing). The election of party status by CMS or its
contractor also makes the discovery process available to parties under
Sec. 405.1037.
The differences between the role of CMS or its contractor as a
participant under Sec. 405.1010 and as a party under Sec. 405.1012
reflect the distinction under our regulations between a less formal,
non-adversarial style of hearing (when CMS or its contractor
participates as a non-party) and a more formal, adversarial style of
hearing (when CMS or its contractor elects party status). (As further
discussed below, CMS and its contractors have discretion to determine
whether to participate in a hearing and to determine the manner and
extent of participation.) Requiring CMS or its contractor to be called
as a witness when it is a participant in a hearing under Sec. 405.1010
would blur this distinction and would require CMS or its contractor to
take on an adversarial role in the hearing when it has chosen the non-
adversarial role of participant under Sec. 405.1010. Thus, in order to
maintain the non-adversarial nature of the hearing when CMS or its
contractor is a participant under Sec. 405.1010, we believe it is
necessary to preclude calling CMS or its contractor as a witness during
the hearing. We note that the policy prohibiting CMS or its contractor
from being called as a witness when it has chosen to participate as a
non-party in the proceeding under Sec. 405.1010 is consistent with the
Department's Touhy regulations at 45 CFR Part 2, which leaves to agency
discretion the decision of whether to permit agency officials or
certain contractors to testify or produce evidence in proceedings in
which the agency is not a party.
Furthermore, even though CMS and its contractors cannot be called
as witnesses when they participate in a proceeding under Sec.
405.1010, we believe that participation by CMS or its contractors under
Sec. 405.1010 still allows for a more thorough examination of the
issues. As discussed above, when CMS or its contractors participate
under Sec. 405.1010, they may file position papers or provide
testimony to clarify factual or policy issues in a case, thereby
assisting ALJs and the MAC in creating a fully developed record that
resolves issues of fact and law.
Finally, we disagree with commenters who suggested that we permit
ALJs to draw an adverse inference if CMS or its contractors refuse
cross-examination or withdraw evidence when they participate in the
proceeding under Sec. 405.1010. The limited resources and broad
programmatic responsibilities facing CMS and its contractors may not
allow for participation in all hearings. Thus, while an ALJ may request
that CMS or its contractors participate in a hearing or other
proceeding, under Sec. 405.1010(a), an ALJ cannot require CMS or its
contractors to participate in a case. In addition, an ALJ may not
require CMS or its contractor to appear as a witness under Sec.
405.1010(d). Thus, CMS and its contractors have discretion to determine
whether to participate in a hearing and to determine the manner and
extent of participation. If CMS or its contractor, in exercising this
discretion, chooses to participate in the proceeding in the limited,
non-adversarial manner provided in Sec. 405.1010, we do not believe
that it would be reasonable for the ALJ to draw an adverse inference if
CMS or its contractor declines to extend this participation beyond the
limits set forth in Sec. 405.1010 (for example, by refusing cross-
examination). Furthermore, given the discretion provided to CMS and its
contractors to determine whether and how to participate in a
proceeding, we do not think it would be reasonable for the ALJ to draw
an adverse inference if CMS or its contractor chooses to withdraw
evidence. Therefore, we do not believe it is appropriate to amend Sec.
405.1010(f) to permit an ALJ to draw an adverse inference if CMS or its
contractor refuses cross-examination or withdraws evidence.
Comment: We received several comments concerning the submission of
evidence by CMS or its contractors when participating at the ALJ or MAC
levels of the appeals process. These commenters stated that in cases
where CMS or its contractors submit new evidence, there should be an
opportunity for the parties to respond, without having to show good
cause and without delaying the adjudication timeframes.
Response: We disagree with the recommendation that providers and
suppliers should not have to show good cause to submit new evidence at
the ALJ and MAC levels in response to the submission of evidence by CMS
or its contractors, if the agency elects to join the appeal as a party
or participant. As noted earlier in this rule, the MMA amended several
of the appeals provisions contained in BIPA. Section 1869(b)(3) of the
Act, as added by section 933(a) of the MMA, requires that a provider of
services or supplier not introduce evidence in any appeal that was not
presented at the reconsideration conducted by the QIC, unless there is
good cause that precluded the introduction of such evidence at or
before the reconsideration. In our regulations at Sec. 405.1018, we
extended this requirement to beneficiaries represented by providers and
suppliers. However, section 1869(b)(3) of the Act, and the
corresponding regulatory provisions, do not apply to CMS or its
contractors. To the extent participation by CMS or its contractors
raises new issues in the appeal that were not considered during the
earlier levels of appeal, this may provide good cause for the
introduction of new evidence by parties at the ALJ level.
Finally, in light of the statutory requirement for full and early
presentation of evidence, our provision requiring parties to submit
evidence with the request for hearing or within 10 days of receipt of
the notice of hearing (Sec. 405.1018), and the need for the ALJ to
evaluate the good cause justification for submission of new evidence
after the reconsideration as set forth in Sec. 405.1018 and Sec.
405.1028, it is necessary to allow an ALJ additional time to consider
whether the new evidence submitted by the appellant or party may be
considered at the hearing. We believe that Sec. 405.1018(b), which
tolls the ALJ adjudication timeframe when a party submits evidence
after the deadline established in Sec. 405.1018(a), is consistent with
the statute and with Congressional intent. Congress has clearly
indicated that adjudicators must devise procedures compatible with
meeting the statutory deadlines.
[[Page 65319]]
Moreover, we do not believe it appropriate for appellants to avail
themselves of the escalation provisions if the appellant has delayed
the administrative process by submitting evidence after the deadline.
In addition, we believe that by tolling the 90-day adjudication period
as provided in Sec. 405.1018(b) in those instances in which the
appellant is responsible for the delay, we provide an incentive for
appellants to submit all relevant evidence as soon as possible
(preferably with the hearing request), to appear at scheduled hearings,
and otherwise comply with hearing procedures. We believe that tolling
the ALJ adjudication timeframe when a party submits evidence after the
deadline established in Sec. 405.1018(a), balances the party's need to
submit new evidence in certain circumstances, with the need to provide
the ALJ with sufficient time to evaluate the good cause justification
for submitting the new evidence, and to review any such additional
evidence that is to be admitted into the administrative record.
Furthermore, we believe it is reasonable to toll the decision-making
timeframe to allow full and careful consideration of all issues, even
if the evidence being considered is in response to evidence submitted
by CMS or its contractors.
Comment: We received two comments regarding the availability of
attorney's fees when CMS or its contractors participate in an ALJ
hearing. Both commenters argued that if CMS or its contractors
participate as a party it would turn the hearing into an adversarial
proceeding and, under the Equal Access to Justice Act (EAJA), CMS could
be obligated to pay attorney's fees and other costs to prevailing
appellants.
Response: In our response to an identical question raised on the
proposed rule, we indicated that the Department would review its EAJA
provisions to determine what, if any, amendments might be necessary to
reflect the changes implemented in the interim final rule. See 70 FR
11429 through 11430. To date, DHHS has not amended its EAJA regulations
to expressly include administrative appeals under this subpart in the
list of proceedings in 45 CFR part 13, Appendix A that are considered
adversary adjudications, and to which the EAJA rules apply.
In light of the commenter's concern, however, we believe it is
appropriate to clarify when a hearing involving claim determinations
becomes an adversary adjudication for the purposes of making an
application for attorney fees under the Department's EAJA regulations.
Only those ALJ hearings in which CMS elects party status under Sec.
405.1012(a) meet the definition of an adversary adjudication as set
forth in 45 CFR 13.3(a). The Department's EAJA regulations at 45 CFR
13.3(a) state that the EAJA rules apply only to adversary
adjudications. An adversary adjudication is defined as ``an
adjudication required to be under 5 U.S.C. 554, in which the position
of the Department or one of its components is represented by an
attorney or other representative (`the agency's litigating party') who
enters an appearance and participates in the proceeding. * * *'' We
believe appeals where CMS elects party status fall within this
definition.
However, if a non-governmental entity, such as a QIC or other CMS
contractor, decides to become a party to an appeal at either an ALJ
hearing or MAC review, it does not constitute an adversary adjudication
for the purposes of the EAJA, because the Department's position would
not be represented by an attorney employed by DHHS. DHHS has previously
indicated its position with respect to a contractor-party in 45 CFR
part 13, Appendix A, which lists proceedings covered by the
Department's EAJA regulations. In that appendix, a Provider
Reimbursement Review Board proceeding is considered an adversary
adjudication only when DHHS employees appear as counsel for the
intermediary. In the context of a hearing or MAC review, if a QIC or
other CMS contractor decides to become a party, DHHS would not be
represented by its own attorney, and therefore, EAJA would not apply.
Further, we do not believe the Department's EAJA rules cover ALJ
hearings or MAC review in which CMS or one of its contractors chooses
to participate, but does not enter as a party. Our regulations provide
for two completely separate options for CMS or its contractors to
participate in an ALJ hearing or MAC review: as a party or as a
participant. In electing party status, CMS or its contractor enters an
ALJ hearing with all of the rights and responsibilities of other
parties as described in Sec. 405.1012, including the right to call
witnesses, cross-examine witnesses of the appellant or other party, be
subject to cross-examination, and to submit evidence. In contrast, by
simply participating in the appeal as a non-party, the agency or its
contractors have significantly more limited rights as described in
Sec. 405.1010 (that is, the right to submit position papers or to
provide testimony to clarify factual or policy issues in the case).
More importantly, however, a non-party participant does not have the
right to call witnesses or cross-examine the appellant's or other
parties' witnesses, and a non-party participant may not be called as a
witness at the hearing. Thus, as we have stated in the proposed and
interim final rules, the role of CMS or its contractors as a non-party
participant is non-adversarial. See 67 FR 69332; 70 FR 11459 through
11460. Accordingly, we believe an ALJ hearing or MAC review in which
CMS or its contractor is a participant, but not a party, does not fall
within the definition of an adversary adjudication for the purposes of
applying the provisions of the EAJA.
Finally, we note that the Department's EAJA rules state: ``The
Department may reimburse parties for expenses incurred in adversary
adjudications if the party prevails in the proceeding and if the
Department's position in the proceeding was not substantially
justified. * * *'' See 45 CFR 13.1. The mere fact that a party prevails
in the proceeding does not create a presumption that the Department's
position was not substantially justified. Rather, the agency's
litigating party is afforded an opportunity to show that the
Department's position was reasonable in fact and law, thus avoiding an
award of fees and expenses in connection with the proceeding. See 45
CFR 13.5(b).
Accordingly, we are finalizing Sec. 405.1008 without modification.
We are finalizing Sec. 405.1000 with modification as discussed above,
and with modification as discussed in section II.B.1. of this preamble.
We are finalizing Sec. Sec. 405.1002 and 405.1004 with modification as
discussed in section II.B.5.b. of this preamble and with modification
as discussed in section II.B.5.a. of this preamble. We are finalizing
Sec. Sec. 405.1006 and 405.1014 with modification as discussed in
section II.B.5.a. of this preamble. We are finalizing Sec. Sec.
405.1010 and 405.1012 with modification as discussed in section II.B.1.
of this preamble and with modification as discussed in section
II.B.5.a. of this preamble.
c. Adjudication Deadlines--ALJ Level (Sec. 405.1016)
Section 405.1016 sets forth the timeframes for an ALJ to issue
hearing decisions, states that timeframes may be extended as provided
in subpart I, and also includes provisions to toll timeframes under
limited circumstances.
Comment: One commenter objected to the provision that a request for
an ALJ hearing is considered timely filed when it is received by the
entity specified on the QIC's notice of reconsideration. The commenter
noted that the Medicare statute specifies the decisionmaking timeframe
beginning on the date the
[[Page 65320]]
request for a hearing was timely filed. The commenter felt that many
beneficiaries, who had typically filed appeals with the SSA, and may
continue to do so, would not get the benefit of the revised statutory
timeframes.
Response: We agree with the commenter that the decision-making
timeframe begins when a request for hearing is timely filed. However,
in order to be timely filed, a hearing request must contain all the
required information and be filed with the entity specified in the
reconsideration decision within 60 days of receipt of the
reconsideration decision. See Sec. 405.1014(a) and Sec. 405.1014(b).
We believe that directing appellants to only one filing location
reduces confusion and eliminates any potential delay in transmitting
the request. Thus, all reconsideration decision letters issued by QICs
contain the specific OMHA field office address where a request for ALJ
hearing must be filed. Although some beneficiaries may continue to file
hearing requests with the SSA, we do not believe it is appropriate to
recognize SSA field offices as filing locations for ALJ hearing
requests pertaining to claims for benefits under Medicare Part A and
Part B, because the SSA no longer has a role in the processing of these
Medicare appeals. (However, we note that parties may file requests for
ALJ hearings pertaining to Part A and Part B entitlement (see Sec.
405.924(a)) and Part B Income Related Monthly Adjustment Amounts
(IRMAA) directly with OMHA or with SSA offices.) To ensure appeals that
are misfiled with the SSA are promptly forwarded to the correct entity,
CMS and SSA developed Emergency Message EM-05028 (originally issued on
June 23, 2005). This instruction directs SSA staff to immediately
forward misfiled Part A and Part B claims appeals to the appropriate
OMHA field office and to direct any beneficiaries who attempt to file
appeals in-person to send the request to the entity specified in their
reconsideration decision letter. Thus, we believe it is reasonable to
begin the adjudication timeframe on the date an appeal request is
timely filed with the entity specified in the QIC's notice of
reconsideration.
Pursuant to Sec. 405.1014(b)(2), if a request for hearing is
timely filed with an entity other than the entity specified in the
notice of reconsideration, the request is not treated as untimely or
otherwise rejected. Rather, the deadline for deciding the appeal under
Sec. 405.1016 begins on the date the entity specified in the QIC's
reconsideration notice receives the request for hearing. In situations
such as this, where an appellant's actions do not meet regulatory
requirements and cause a delay in the adjudication process, we think it
is both necessary and fair to allow an ALJ the full 90 days afforded by
statute, beginning the date the correct ALJ office receives the
request, to issue a decision. Section 405.1014(b)(2) states that if the
request for hearing is filed with an entity, other than the entity
specified in the QIC's reconsideration, the ALJ hearing office must
notify the appellant of the date of receipt of the request and the
commencement of the 90 day adjudication timeframe.
Comment: We received two comments regarding the decision-making
timeframes when cases are escalated. One commenter agreed with the
provisions in Sec. 405.970(c)(2) and Sec. 405.970(e)(2)(i) which
provide an adjudicator five additional days to complete a decision when
an appellant has requested the case to be escalated to the next level.
Another commenter disagreed with any extension of the decision-making
timeframe in cases involving escalation, and opined that such an
extension was not authorized under the statute.
Response: Section 1869(d)(1)(A) of the Act requires an ALJ to hold
a hearing on the decision of the QIC, and to render a decision on such
hearing within 90 days of the adjudicator's receipt of a request for a
hearing (that is timely filed). Section 1869(c)(3)(C)(ii) of the Act
provides that a party may escalate an appeal to the ALJ if the QIC
fails to mail or provide notice (as applicable) of the decision by the
end of the applicable decision-making timeframe. OMHA's adjudication
timeframe in case of escalation from a QIC is not explicitly stated in
statute. The statute provides only a qualified right for an appellant
to escalate an appeal to the ALJ level if the QIC does not timely issue
a reconsideration determination. As discussed in the interim final
rule, we interpret the 90 day adjudication provision as requiring an
ALJ to decide a case within 90 days only when the QIC has issued a
final action in a case. See 70 FR 11454 through 11456, and 11463.
Therefore, we state that, when an appellant escalates an appeal from
the QIC to the ALJ level, the proceedings before the ALJ will not be
subject to the 90-day limit. Rather, as specified in Sec. 405.1016(c),
the ALJ will have up to 180 days to issue a decision, dismissal order,
or remand order (unless the time period is otherwise extended as
provided in part 405 subpart I). The absence of an actual
reconsideration determination and its attendant administrative
processes imposes a substantial additional burden on OMHA, including
locating and acquiring relevant information from the QIC, performing
additional procedural and jurisdictional reviews, and organizing
evidence in the case file. Setting the adjudication timeframe by
regulation at 180 days for escalated appeals balances the interests of
the appellant in timely resolving the disputed appeal and an ALJ's duty
to collect the evidence and perform the administrative tasks necessary
to fully and fairly adjudicate an appeal that has not been addressed in
a reconsideration determination. We note that the 180 day timeframe
does not preclude OMHA from adjudicating the appeal more expeditiously
if possible.
We are finalizing Sec. 405.1016 with modification as discussed in
section II.B.5.a. of this preamble.
d. Submission of Evidence Before the ALJ Hearing (Sec. 405.1018)
Section 405.1018 states that a provider, supplier or beneficiary
represented by a provider or supplier must submit all written evidence
they wish to have considered at the hearing with the request for
hearing or within 10 days of receiving notice of the hearing. Any
evidence that is not submitted prior to the issuance of the QIC
reconsideration determination must be accompanied by a written
statement explaining why the evidence was not previously submitted to
the QIC or a prior decision-maker. We explain in Sec. 405.1018 and
Sec. 405.1028 the process an ALJ follows in determining whether good
cause exists to allow the new evidence into the administrative record.
Comment: One commenter objected to the provision limiting the
submission of evidence after the QIC level of appeal. The commenter
stated the appellant should not be penalized by having to draft
statements showing good cause for the submission of new evidence at the
ALJ level when many times the later submission is due to circumstances
that are beyond a party's control.
Response: Section 933(a) of the MMA amended section 1869(b) of the
Act to require full and early presentation of evidence by providers and
suppliers. Absent good cause for not presenting the evidence prior to
the issuance of a reconsideration by the QIC, a provider or supplier is
precluded, by statute, from introducing new evidence at the ALJ or MAC
levels. Sections 405.1018(c) and 405.1028 implement the good cause
requirement. These provisions help to ensure expeditious adjudication,
while recognizing that early presentation of evidence is not always
possible. We also note that this requirement does not
[[Page 65321]]
apply to evidence submitted by beneficiaries, unless they are
represented by a provider or supplier. See Sec. 405.966(c) and Sec.
405.1018(d); 70 FR 11446.
We are finalizing Sec. 405.1018 with modification as discussed in
section II.B.5.a. of this preamble.
e. Time and Place for a Hearing Before an ALJ; Notice of Hearing;
Objections to the Issues (Sec. 405.1020 Through Sec. 405.1024)
In Sec. 405.1020, we set forth the requirements for determining
how appearances will be made before the ALJ, for providing notice of a
hearing, for waiving a hearing, for changing the time and place of a
hearing, and for requesting an in-person hearing. In Sec. 405.1022, we
describe the content and processing requirements with respect to the
notice of ALJ hearing sent to the parties and other potential
participants. In Sec. 405.1024, we explain the procedures parties must
follow if they object to the issues described in the ALJ's notice of
hearing.
Comment: We received many comments concerning the types of hearings
available at the ALJ level. Several of the commenters stated that an
appellant should have the right to an in-person hearing before an ALJ.
One commenter opined that the reliance on videoteleconferencing (VTC)
hearings may be premature. Another commenter questioned the adequacy of
hearings by VTC, opining that where credibility and veracity are at
issue, in-person hearings will provide the decision maker with the
chance to observe all parties, and allow the appellant to observe the
reaction of the ALJ to the evidence and tailor presentations
accordingly. The commenter also noted that many Medicare beneficiaries
have visual, hearing, or even cognitive impairments which create
difficulties in viewing VTC screens, hearing telephone conversations or
participating in other than face-to-face hearings. Many of these
commenters also objected to the requirement that an appellant show good
cause before an ALJ will grant an in-person hearing and characterized
the good cause standard as vague.
Response: Section 1869(b)(1)(A) of the Social Security Act as
amended by BIPA provides that any individual dissatisfied with any
initial determination shall be entitled to a reconsideration and to a
hearing to the same extent as is provided in section 205(b) of the Act.
Section 1869(b)(1)(A) of the Act does not specify the manner in which
hearings must be held. Congress, however, instructed the DHHS to
explore the possibility of providing hearings using formats other than
in-person hearings. Specifically, the MMA instructed the DHHS to
consider the feasibility of conducting Medicare hearings ``using tele-
or video-conference technologies.'' See section 931(a)(2)(G) of the
MMA.
At approximately the same time that MMA was enacted, the SSA
finalized regulations that provided for VTC hearings in Medicare and
disability appeals. See 68 FR 5210 (February 3, 2003). Taking into
account SSA's regulations, the Secretary concluded that the expanded
use of VTC and telephone hearings for Medicare appeals is appropriate
for various reasons. First, contrary to the commenters' assertions, and
unlike Social Security disability hearings, where in-person hearings
may be needed in order to evaluate an individual's physical ability
and/or credibility, Medicare hearings are generally less dependent on
the physical presence of the appellant or other witnesses and are,
therefore, better suited to VTC hearings. Second, VTC allows ALJs to
conduct hearings more quickly, which is particularly important in light
of the timeframes mandated by the statute. For parties who might
otherwise waive their right to a hearing and request an on-the-record
decision because of traveling or scheduling difficulties, VTC hearings
can be scheduled locally in a convenient setting where the party has an
opportunity to present his/her case orally. Given these benefits, we
believe VTC is an efficient and effective method of conducting ALJ
hearings. Despite the advantages of VTC, parties have the opportunity
to request an in-person hearing, or an ALJ may determine that an in-
person hearing is more appropriate than a hearing by VTC or telephone
in a particular case. Thus, as explained in the interim final rule, we
determined it is appropriate to permit ALJ hearings to be conducted by
VTC. See 70 FR 11456 through 11457.
Specifically, Sec. 405.1020(b) provides that an ALJ, with the
concurrence of the Managing Field Office ALJ, may determine that an in-
person hearing should be conducted if either (1) VTC technology is not
available, or (2) special or extraordinary circumstances exist. The
preamble to the interim final rule provides guidance for ALJs in
determining whether special or extraordinary circumstances exist, thus
warranting the scheduling of an in-person hearing under Sec.
405.1020(b)(2). See 70 FR 11457. Section 405.1020(i) provides that a
party may file a written objection to a scheduled VTC or telephone
hearing, and request an in-person hearing. An ALJ may grant the
request, with the concurrence of the Managing Field Office ALJ, upon a
finding of good cause. In the preamble to the interim final rule, we
provide guidance as to what may constitute good cause for an ALJ to
grant a request for an in-person hearing. For example, an ALJ could
find good cause to grant a request for an in-person hearing when a
party demonstrates that the case presents complex, challenging or novel
presentation issues that necessitate an in-person hearing. See 70 FR
11457. Similarly, an ALJ may find good cause to schedule an in-person
hearing based on a party's proximity to and ability to go to the local
hearing office. These provisions ensure that appellants or other
parties who believe it is necessary to have an in-person hearing to
effectively present and participate in their cases, including parties
with physical and cognitive impairments, have the option to request an
in-person hearing.
Furthermore, given the volume of hearing requests and short
adjudicative timeframes imposed by BIPA, we believe it is reasonable to
use a good cause standard in determining when it is appropriate for an
ALJ to grant a request for an in-person hearing and reschedule the
hearing for a time and place when the party can appear in person before
the ALJ, as provided in Sec. 405.1020(i)(5). As explained above, and
to avoid the backlogs and delays that historically plagued the hearing
process, we believe it is necessary and appropriate to generally
conduct hearings by VTC or telephone. However, in Sec. 405.1020(i), we
acknowledge that, in some circumstances, it may be appropriate to grant
a request to change the type of hearing scheduled and permit an in-
person hearing. Thus, ALJs will evaluate in-person hearing requests
made under Sec. 405.1020(i) using the good cause standard established
in Sec. 405.1020(i)(5), and when appropriate grant a request for an
in-person hearing.
Finally, we believe our decision not to provide an exhaustive
description of the good cause standard in this regulation benefits
parties by affording an ALJ the flexibility to grant an in-person
hearing based on factors or circumstances that may be relevant, yet
unforeseen at this time.
Comment: Several commenters were concerned about the number of ALJ
offices available for in-person hearings as well as the ALJ office
locations. Some commenters were concerned that the number of office
locations was insufficient, and would impede appellant access to VTC
and/or in-person hearings and cause delays in holding hearings. One
commenter stated
[[Page 65322]]
that a system that relies on VTC and phone hearings and places ALJs in
4 locations around the country does not satisfy the requirements of MMA
section 931(b)(3), which requires appropriate geographic distribution
of offices to ensure timely access to judges. One commenter stated that
since the current ALJ office locations weren't accessible to New York
residents, DHHS should establish an ALJ office in New York City, as
well as an ALJ office in upstate New York. A few commenters recognized
the need to streamline ALJ locations and the ALJ hearing process for
efficiency, but asked that DHHS monitor the process to ensure appellant
access is not hindered. Several of the commenters opined that with only
four ALJ offices, appellants would be forced to use VTC or telephones
to conduct hearings rather than incur the expense, loss of income, and
inconvenience of traveling to distant offices. Another commenter asked
if any provisions would be made to allow travel allowances for
appellants.
Response: In determining the number and location of OMHA's field
offices, the DHHS thoroughly researched and considered, among other
things, the then-current and projected geographic distribution of
Medicare claims appeals heard by SSA and Medicare contractor
jurisdictions. As a result, Arlington, Virginia, Cleveland, Ohio,
Irvine, California, and Miami, Florida were chosen as the four sites
for the OMHA field offices. The ALJs in these field offices hold
hearings by videoteleconference and telephone, and in-person.
Furthermore, VTC hearings are also held at sites other than the ALJ
offices. OMHA makes extensive use of VTC to provide appellants with a
vast nationwide network of access points for hearings close to their
homes. Based on this research and our experience, we believe that the
number and distribution of ALJ offices is sufficient and would not
delay or impede access to in-person or VTC hearings. Thus, we believe
that the number and locations of ALJs throughout the country satisfy
the requirements section 931(b)(3) of the MMA, and we do not believe
that it is necessary at this time to establish ALJ offices in New York
City or in upstate New York.
While many appellants prefer the convenience of a telephone hearing
or videoteleconference hearing, there are instances when an in-person
hearing is appropriate. OMHA closely monitors appellants' access to the
process via internal case tracking systems, appellant feedback during
the scheduling of hearings, and appellant feedback during hearings.
OMHA's tracking numbers and feedback from appellants reflect an
overwhelming preference for telephone hearings. Based on the feedback
and raw data received, OMHA adjusts its internal resources and
processes accordingly.
Furthermore, when, in accordance with the regulations, the ALJ
determines that a hearing will be held in-person, the ALJ will also
consider whether it is most appropriate to travel to a location close
to the party or to have the party travel to one of the OMHA field
offices. In making this determination, the ALJ consults with the party
requesting the hearing. OMHA has developed a travel reimbursement
policy that it mails with every notice of hearing. Pursuant to this
policy, eligible participants are reimbursed for certain expenses
incurred in traveling to and from a field office or a VTC site. Thus,
we do not believe that appellants are forced to use VTC or telephones
to conduct hearings to avoid the expense of in-person hearings. We
believe that this policy satisfies the mandate of section 931(b)(3) of
the MMA to ensure timely access to judges.
Comment: A commenter noted that Sec. 405.1020(c) requires the ALJ
to send a notice of hearing to the contractor that issued the initial
determination. The commenter expressed concern that receiving ALJ
notices of hearing for every case may be cumbersome, and suggests it
may be more efficient to send a notice of hearing to the contractor
that processed the initial determination only when the ALJ requests
that the contractor be a party or participant.
Response: We agree with the concerns raised by the commenter. We
believe sending the notice of hearing to the QIC that processed the
reconsideration provides adequate notice to CMS and its contractors of
the pending ALJ hearing, and thus it is not necessary to also send
notice of the hearing to the contractor that issued the initial
determination. However, we note that, the ALJ would send a notice of
the hearing to the contractor if an ALJ were to request that the
contractor that issued the initial determination participate in, or be
a party to, a hearing. Accordingly, we have revised Sec. 405.1020(c)
to remove the reference to the ``contractor that issued the initial
determination'' from the list of entities that receive notice of the
ALJ hearing.
Comment: We received several comments concerning Sec.
405.1020(i)(4), which stipulates that when a request for in-person
hearing is granted, the party is deemed to have waived the 90 day
timeframe for ALJ decision-making. One commenter noted that Sec.
1869(d)(1)(B) of the Act only provides for a waiver of the time period
upon motion or stipulation of the party, and a request for an in-person
hearing is not a motion or stipulation to waive the 90 day time period.
The same commenter also observed that the regulations do not include a
specific timeframe for making a decision in this situation even though
Congress legislated set timeframes at every level of appeal. Although
all of the commenters agreed that there should be a timeframe attached
to these in-person hearings, they were split when it came to
recommending a particular timeframe. Some commenters believed strongly
that the 90 day timeframe that ordinarily applies to ALJ hearings
should apply to in-person hearings. These commenters opined that the
intent of BIPA, as amended by the MMA, was to give everyone access to
an ALJ hearing within the 90 day timeframe. As such, ALJs should be
held to rendering their decision within the 90 day timeframe for all
hearing formats. One of these commenters suggested that the reduced
number of in-person hearings should enable ALJs to meet the 90 day
decision-making timeframe. In contrast, another commenter recommended
setting a longer, but still defined, timeframe, such as 120 days, as a
reasonable time limit for an in-person hearing. Similarly, another
commenter suggested that in the event of an in-person hearing, the ALJ
should have 90 days from the date of the hearing (as opposed to 90 days
from the date the request for hearing is received) within which to
render the decision.
Response: As discussed previously, in making revisions to the
administrative appeals process in both BIPA and MMA, Congress did not
specify the manner in which ALJ hearings were to be conducted. Thus,
while hearings may be conducted in-person, by VTC or by telephone,
parties do not have the right to a specific type of hearing, and ALJs
are not required to offer an in-person hearing to parties. The Congress
instructed the DHHS to consider the use of teleconference and video-
teleconference technologies for ALJ hearings. See section 931(a)(2)(G)
of the MMA. After carefully considering the feasibility of utilizing
these technologies, the logistical issues in conducting hearings, and
the need to devise procedures compatible with meeting the statutory
deadlines, it became clear that VTC and telephone were appropriate
methods for holding most ALJ hearings. While a hearing may be conducted
in-person, by VTC or by telephone (Sec. 405.1000(b)), under Sec.
405.1020(b), an ALJ will conduct the hearing by VTC if the technology
is
[[Page 65323]]
available, thereby establishing VTC as the default method for
conducting hearings.
We are mindful, however, that some parties may prefer or require an
in-person hearing. Thus, under Sec. 405.1020(b), an ALJ may offer to
conduct an in-person hearing when VTC is not available, or if special
or extraordinary circumstances exist making an in-person hearing
necessary. Additionally, in Sec. 405.1020(i), we afford parties an
opportunity to object to a hearing scheduled to be conducted by VTC or
telephone, and request an in-person hearing. If the ALJ grants the
request for an in-person hearing, in many cases, the ALJ may need
additional time beyond the standard 90-day adjudication time period
specified in Sec. 405.1016 in order to schedule, prepare for, and
conduct an in-person hearing, and issue a decision. Accordingly, Sec.
405.1020(i)(4), as clarified in our correcting amendment to the interim
final rule issued June 30, 2005, states that the 90 day adjudication
timeframe is waived if a party objects to the ALJ's scheduling of a
hearing by VTC or telephone, and the ALJ, with the concurrence of the
Managing Field Office ALJ, grants the party's request for an in-person
hearing. See 70 FR 37700, 37701, 37704.
We have carefully considered the commenter's assertion that section
1869(d)(1)(B) of the Act only provides for a waiver of the adjudication
deadline upon motion or stipulation of the party, and that a request
for an in-person hearing is not a motion or stipulation to waive the
90-day time period. While we continue to believe that the statutory
language is consistent with a reading that a party can be deemed to
have waived the adjudication deadline when the party requests and is
granted an in-person hearing, after further consideration, we have
decided to amend Sec. 405.1020(i) to state that when a party's request
for an in-person hearing under Sec. 405.1020(i)(1) is granted, the ALJ
must issue a decision within the adjudication timeframe specified in
Sec. 405.1016 (including any applicable extensions provided in subpart
I), unless the party requesting the hearing waives the adjudication
timeframe in writing. We believe that this revised regulation also is
consistent with the statutory language.
Commenters also offered recommendations to impose a specific
adjudication timeframe for issuing decisions when an ALJ grants a
request for an in-person hearing in response to an objection to a
scheduled VTC or telephone hearing under Sec. 405.1020(i). Given the
revisions to Sec. 405.1020(i) described above, it is no longer
necessary to consider adopting these alternative timeframes.
Furthermore, under Sec. 405.1036(d), an appellant who waives the 90
day adjudication timeframe may work with the ALJ to establish an
alternative decision making timeframe to ensure they have some
expectation of when the ALJ will render his or her decision.
Finally, we are making a technical revision to Sec. 405.1022(a) to
clarify that even where a party waives receipt of the notice of
hearing, the ALJ must still send the notice of hearing to all other
parties and potential participants who have not waived their right to
receive the notice of hearing, consistent with Sec. 405.1020(c).
Section 405.1022(a) provides that the ALJ sets the time and place of
the hearing and mails the notice of hearing to the parties and other
potential participants as provided in Sec. 405.1020(c) unless the
parties have indicated in writing that they do not wish to receive this
notice. In turn, under Sec. 405.1020(c)(2), parties to the hearing
(and any potential participant from CMS or its contractor who wishes to
attend the hearing) are required to reply to the notice of hearing to
acknowledge whether they plan to attend the hearing, or to object to
the proposed time and/or place of the hearing. In addition, under Sec.
405.1010 and Sec. 405.1012, CMS or its contractor is required to
notify the ALJ, appellant, and all other parties identified in the
notice of hearing of their intent to participate in the hearing or join
as a party within 10 days after receiving the notice of hearing. In
order for parties and potential participants from CMS or its contractor
(who wish to attend the hearing) to comply with Sec. 405.1020(c)(2),
and for CMS and its contractors to provide the ALJ and all parties
timely notice of their intent to join as a party or participate in the
hearing consistent with Sec. 405.1010(b) and Sec. 405.1012(b), the
ALJ must send the notice of hearing to the appropriate parties and
potential participants, consistent with Sec. 405.1020(c)(1). Thus, we
are revising Sec. 405.1022(a) to clarify that even where a party
waives receipt of the notice of hearing, the ALJ must still send the
notice of hearing to all other parties and potential participants who
have not waived their right to receive the notice of hearing,
consistent with Sec. 405.1020(c).
We are finalizing Sec. 405.1020 and Sec. 405.1022 with
modifications as noted above and as discussed in section II.B.5.a. of
this preamble. We are finalizing Sec. 405.1024 with modification as
discussed in section II.B.5.a. of this preamble.
f. Disqualification of the ALJ (Sec. 405.1026)
In Sec. 405.1026, we state that an ALJ cannot conduct a hearing if
he or she is prejudiced or partial to any party or has any interest in
the matter pending for decision. We also explain the process that a
party must follow if they object to the ALJ assigned to conduct the
hearing.
Comment: A number of commenters raised concerns about the
independence of the DHHS ALJs. One commenter stated that, under SSA
regulations, an ALJ may grant an in-person hearing if the party
requesting it states they do not wish to appear by VTC. By contrast,
the commenter noted that under DHHS regulations for Medicare appeals,
the ALJ must seek the concurrence of the Managing Field Office ALJ in
order to grant requests for in-person hearings. Another commenter
questioned how an ALJ can be independent and base a decision on the
evidence before him or her, if such concurrence is needed in what may
be the first motion in the case.
A few commenters also questioned CMS' influence over the ALJs. One
commenter recommended that safeguards be put in place to avoid any
undue influence on the ALJs' independence. Another commenter viewed the
issuance of the new appeals regulation by CMS, and the content of the
provisions, as a strong indicator of CMS' intent to influence and
control the ALJs' decision-making process. Finally, a commenter stated
that formalized procedures in the form of promulgated rules on how the
new Office of Medicare Hearings and Appeals will function are necessary
to ensure ALJ independence.
Response: The Managing Administrative Law Judge (MALJ) is
responsible for the administration of the field office, and is charged
with ensuring the just, timely, accurate, and professional adjudication
of all Medicare claims appeals whether they are heard in-person, via
VTC, or by telephone. MALJ oversight is not intended to impede the
judicial independence of the ALJ assigned to the appeal, but rather,
such oversight will aid in the coordination of resources needed to
successfully carry out an in-person hearing and will also assist the
ALJs in fulfilling their responsibility to ensure that appellants
receive an appropriate hearing and that appeals are decided in a timely
manner.
In terms of structural organization, the DHHS is divided into a
series of operational divisions that are administratively and
programmatically independent of one another. Each
[[Page 65324]]
operational division has its own personnel, administrative support, and
programmatic mission. While each operational division is ultimately
accountable to the Secretary, they are independent of one another. As
described in the June 23, 2005 Office of Medicare Hearings and Appeals;
Statement of Organization, Functions, and Delegations of Authority that
formally established OMHA, OMHA is part of the Office of the Secretary
and is completely separate from CMS. 70 FR 36386. OMHA is under the
direction of the Chief Administrative Law Judge who reports directly to
the Secretary. 70 FR 36386 through 36387. Thus, consistent with section
931(b)(2) of MMA, Medicare appellants receive hearings before ALJs from
an office that is organizationally and functionally separate from CMS.
Section 521 of BIPA amended section 1869 of the Act to
substantially revise the Medicare claim appeals process. The statute
mandated a series of structural and procedural changes to the existing
appeals process, which necessitated the publication of new regulations
to implement the statutory changes. Since CMS administers the Medicare
program, and is responsible for safeguarding the interests of Medicare
beneficiaries, it was the agency's responsibility to issue regulations
implementing the BIPA provisions that revised the Medicare claims
appeals process. These regulations were first published by CMS in the
Federal Register as a proposed rule on November 15, 2002. CMS
subsequently published an interim final rule with comment period on
March 8, 2005, which included responses to the comments submitted on
the proposed rule. The MMA mandated that the transfer of ALJ appeals
from SSA to DHHS was not to begin earlier than July 1, 2005.
Consequently, the proposed and interim final regulations were drafted
and issued at a time when OMHA was not in existence. We note that the
Medicare Appeals Council has been involved in developing relevant
provisions of the proposed rule, interim final rule and this final
rule, and OMHA has been involved in developing responses to comments
and revisions to relevant regulatory provisions included in this final
rule.
Finally, as noted above, the June 23, 2005 Office of Medicare
Hearings and Appeals; Statement of Organization, Functions, and
Delegations of Authority established OMHA as a part of the Office of
the Secretary completely separate from CMS. See 70 FR 36386 through
36387. Pursuant to this Statement, OMHA is under the direction of the
Chief Administrative Law Judge who reports directly to the Secretary.
The Statement further describes the mission, organization and functions
of OMHA. We do not believe that additional formalized procedures in the
form of promulgated rules on how OMHA functions are necessary to ensure
ALJ independence.
Comment: One commenter inquired about the possibility of
establishing a complaint mechanism for appellants who feel the ALJ has
failed to maintain his/her impartiality.
Response: Section 405.1026(a) establishes that ``[a]n ALJ cannot
conduct a hearing if he or she is prejudiced or partial to any party or
has any interest in the matter pending for decision.'' Under Sec.
405.1026(b), ``[i]f a party objects to the ALJ who will conduct the
hearing, the party must notify the ALJ within 10 calendar days of the
date of the notice of hearing. The ALJ considers the party's objections
and decides whether to proceed with the hearing or withdraw.'' Section
405.1026(c) provides that ``[i]f the ALJ does not withdraw, the party
may, after the ALJ has issued an action in the case, present his or her
objections to the MAC in accordance with Sec. 405.1100 et seq.''
Section 405.1026(c) further provides that ``[i]f the case is escalated
to the MAC after a hearing is held but before the ALJ issues a
decision, the MAC considers the reasons the party objected to the ALJ
during its review of the case and, if the MAC deems it necessary, may
remand the case to another ALJ for a hearing and decision.'' We believe
that the provisions set forth in Sec. 405.1026 provide sufficient
procedures by which a party can object to the presiding ALJ for their
hearing. Given these safeguards, we believe that the regulation as
written sufficiently addresses the commenter's concerns.
Accordingly, we are finalizing Sec. 405.1026 without modification.
g. Review of Evidence Submitted to the ALJ, Hearing Procedures, and
Issues Before an ALJ (Sec. 405.1028 Through Sec. 405.1032)
In Sec. 405.1028, we explain the process for prehearing review of
evidence submitted to the ALJ, including the procedures an ALJ follows
in determining whether good cause exists to allow the submission of new
evidence at the ALJ hearing by a provider, supplier or beneficiary
represented by a provider or supplier, and the effect of a finding that
good cause does not exist. In Sec. 405.1030, we establish general
procedures for ALJ hearings, including the procedures that apply when
an ALJ determines that there is material evidence missing at the
hearing. In section 405.1032, we discuss the types of issues that an
ALJ may consider at a hearing, the conditions under which an ALJ may
consider new issues at the hearing, and the restrictions imposed on
adding new claims to pending appeals.
Comment: One commenter stated that Sec. 405.1032 appears to allow
an ALJ to consider new issues at the hearing that result from the
participation by CMS or its contractors. The commenter indicated that
this should not be allowed to occur if the matter could not have been
reopened under the reopening provisions of Sec. 405.980. The commenter
recommended that Sec. 405.1032 be amended to specify that no new issue
should be addressed by the ALJ unless the standards for reopening are
met.
Response: As noted in Sec. 405.1032(a), ALJs consider the issues
raised during previous levels of appeal not decided entirely in a
party's favor (although, if evidence presented before the hearing
causes the ALJ to question a favorable portion of the determination,
the ALJ notifies the parties before the hearing and may consider it an
issue at the hearing). However, there may be instances where the
evidence presented to the ALJ brings to light a new issue. Accordingly,
under Sec. 405.1032(b), we allow an ALJ to consider new issues at the
hearing, subject to the limitations described in Sec.
405.1032(b)(1)(i) and (ii).
In the interest of the efficient resolution of claims appeals, we
have developed procedures that foster the early resolution of disputes
over claim determinations. With the requirement for the full and early
presentation of evidence described above, as well as other provisions,
we are attempting to avoid a prolonged and costly appeals process.
Thus, we expect under the framework established in subpart I, that
parties will raise issues as soon as practicable. It is neither
efficient nor effective for parties to wait until the ALJ hearing to
raise issues if those issues could have been brought to light and
potentially resolved at previous levels. Therefore, in Sec. 405.1032,
we placed restrictions on the ability of a party to raise a new issue
at the ALJ level. We believe that the restrictions currently set forth
in Sec. 405.1032(b) strike a reasonable balance between the need for
efficient resolution of claims appeals and the need to consider new
issues in certain circumstances.
We agree with the commenter's general description of the provisions
of Sec. 405.1032(b). Under Sec. 405.1032(b)(1), an ALJ may raise and
consider a new issue at the hearing when the conditions set forth in
Sec. 405.1032(b) are met. Like
[[Page 65325]]
any other party, when CMS and its contractors elect to be a party to an
ALJ hearing under Sec. 405.1012, CMS and its contractors have the
right to raise new issues, but the conditions established in Sec.
405.1032(b) must be satisfied before the ALJ may consider a new issue
at the hearing. Section 405.1032(b) requires an ALJ to notify all of
the parties about the new issue prior to the start of the hearing, and
states that an ALJ may only consider a new issue at the hearing if its
resolution could have a material impact on the claim(s) that are the
subject of the request for hearing, and its resolution is permissible
under the rules governing reopening of determinations and decisions.
When electing to be a participant under Sec. 405.1010, CMS and its
contractors do not have the right to raise new issues at the ALJ level
under Sec. 405.1032. Rather, as a participant under Sec. 405.1010,
CMS or its contractor may provide evidence to the ALJ, and an ALJ may,
in response, raise and consider a new issue at the hearing based on
such evidence, consistent with Sec. 405.1032(b)(1).
We believe the regulation is sufficiently clear in explaining that
when an ALJ or a party, including CMS or its contractor when it elects
party status, raises a new issue, the conditions set forth in Sec.
405.1032(b) must be satisfied in order to have that new issue
considered at the hearing. As discussed above, Sec. 405.1032(b)
requires, in pertinent part, that if a new issue is to be considered at
the hearing, its resolution must be permissible under the rules
governing the reopening of determinations and decisions. Thus, we do
not believe it is necessary to amend Sec. 405.1032, since we believe
the regulation is already consistent with the commenter's suggested
amendment regarding the conditions under which an ALJ may consider new
issues.
Accordingly, we are finalizing Sec. Sec. 405.1030 and 405.1032
without modification. We are finalizing Sec. 405.1028 with
modification as discussed in section II.B.5.a. of this preamble.
h. Remand Authority (Sec. 405.1034)
Section 405.1034 discusses when the ALJ can remand a case to the
QIC. Section 405.1034(a) of the interim final rule states that in cases
where the ALJ believes that the written record is missing information
essential to resolving the issues on appeal, and such information can
be provided only by CMS or its contractors, ALJs may either remand the
case to the QIC that issued the reconsideration, or retain jurisdiction
and request that the contractor forward the missing information to the
appropriate hearing office.
It has come to our attention that there has been much confusion
regarding what we meant by the phrase set forth in Sec. 405.1034(a),
``can be provided only by CMS or its contractors.'' Thus, we are
revising Sec. 405.1034 to clarify that the phrase ``can be provided
only by CMS or its contractors'' means the information is not publicly
available, and is not in the possession of, and cannot be requested and
obtained by any of the parties to the appeal. ``Publicly available''
means the information is available to the general public via the
Internet, or in a printed publication. For example, information
available on a CMS or contractor Web site or included in an official
CMS or DHHS publication is publicly available information (for example,
provisions of NCDs or LCDs, procedure code or modifier descriptions,
fee schedule data, and contractor operating manual instructions).
Similarly, medical records and certificates of medical necessity are
examples of information that is in the possession of, or could be
requested and obtained by, one or more parties to the appeal, even
though CMS or its contractors may also possess or be able to request
such information.
Furthermore, we are revising Sec. 405.1034(a) to clarify that if
the missing information is not information that can be provided only by
CMS or its contractors, as clarified above, the ALJ must retain
jurisdiction of the case and obtain the missing information on his or
her own, or directly from one of the parties. We note that Sec.
405.1028 allows an ALJ, for good cause, to admit new evidence submitted
by a provider, supplier, or a beneficiary represented by a provider or
supplier. If there is missing information related to this new evidence
that is in the possession of, or could be requested and obtained by the
provider, supplier or beneficiary represented by a provider or
supplier, a remand pursuant to Sec. 405.1034(a) to obtain this missing
information would be inappropriate because such information is not
information that can be provided only by CMS or its contractors.
Similarly, if information missing from the administrative record
relates to a new issue raised for the first time at the ALJ level by
the ALJ or a party under Sec. 405.1032(b), the ALJ determines whether
the missing information related to the new issue can be provided only
by CMS or its contractors, consistent with Sec. 405.1034(a), in
determining whether remanding to the QIC or retaining jurisdiction of
the case is appropriate.
Accordingly, we are finalizing Sec. 405.1034 with modifications as
noted.
i. Description of the ALJ Hearing Process and Discovery (Sec. 405.1036
and Sec. 405.1037)
Section 405.1036 provides details regarding the ALJ hearing
process, including the procedures for the issuance of subpoenas by
ALJs. In Sec. 405.1037, we describe the discovery process available at
an ALJ hearing when CMS or its contractor elects to participate in the
hearing as a party. We received several comments regarding the subpoena
and discovery provisions. A summary of the comments and our responses
are included below. Detailed discussion of these provisions is included
in the interim final rule at 70 FR 11461 through 11462.
Comment: We received several comments concerning subpoena requests
at the ALJ level of appeal. The commenters expressed concern that a
party may only seek ALJ issuance of a subpoena after all of the steps
outlined in Sec. 405.1036(f)(4) regarding discovery have been taken,
but the subpoena must be requested within 10 calendar days of the
receipt of the notice of hearing. See Sec. 405.1036(f)(3). The
commenters recommended that the provision be amended to state that the
request for subpoena may be filed at any time before the ALJ issues a
decision. One commenter suggested that alternatively, a party making a
subpoena request should be allowed a ``reasonable'' amount of time to
file the request for a subpoena, after the party has exhausted all
other required efforts to obtain the records.
Response: We acknowledge that the rule requiring parties to submit
subpoena requests within 10 calendar days of receipt of the notice of
hearing as set forth in Sec. 405.1036(f)(3) may be difficult to comply
with given the requirements for the issuance of subpoenas described in
Sec. 405.1036(f)(4). We considered the commenters' suggestions to
allow for the submission of subpoena requests anytime prior to the
issuance of the ALJ decision, or alternatively, within a reasonable
time after exhausting required efforts to obtain the requested
information. However, we believe allowing subpoena requests to be
submitted at anytime prior to the decision may negatively impact the
ability of ALJs to issue hearing decisions within the applicable
adjudication timeframes once discovery is complete. Although we agree
that it would be appropriate to allow parties a reasonable time to
submit subpoena requests after exhausting all other efforts to obtain
the necessary records, we must
[[Page 65326]]
also consider the need to avoid unnecessary delays in the hearing
process and the need to define the timeframe during which discovery
will be completed. During the discovery process, parties to the hearing
will become aware of any failure to comply with an ALJ's order
compelling disclosure. Since a party's request for a subpoena must
follow non-compliance with an order to compel disclosure, we believe it
is reasonable to require parties to submit a request for subpoena prior
to the end of the discovery period established by the ALJ in accordance
with Sec. 405.1037(c). Thus, we are amending Sec. 405.1036(f)(3)
accordingly. Should an ALJ determine that additional time is necessary
in order to issue the subpoena and obtain the information requested or
secure an appearance and/or testimony, the ALJ may extend the discovery
period in accordance with Sec. 405.1037(c)(4).
Comment: We received two comments concerning the discovery
provisions. Both commenters objected to the policy making discovery
available only when CMS participates in the hearing as a party. See
Sec. 405.1037(a). One commenter suggested that any documents relied
upon by the contractors in making previous decisions should be
discoverable. Another commenter stated that the use of admissions and
interrogatories should be allowable under Sec. 405.1037 consistent
with the standards applicable to the use of depositions.
Response: Neither BIPA nor the MMA explicitly provides for
discovery during ALJ proceedings, and given the evidence requirements
and timeframes imposed by BIPA and the MMA, we do not believe that a
full discovery process is necessary or even feasible at the ALJ level.
Nevertheless, we decided, in response to comments received on the
proposed rule, to permit limited discovery in Sec. 405.1037 when CMS
or its contractors become a party at the ALJ hearing level. See 70 FR
11461 through 11462. We continue to believe it is appropriate to allow
only limited discovery in this instance, and that such discovery
enhances the fairness of proceedings and the accuracy of decisions. We
also believe that, in general, most information relevant to the issues
before an ALJ, including documents relied upon by contractors in making
their decisions, is obtainable by direct request of a party or the ALJ,
or is already included in the administrative record. With respect to
our prohibition on the use of interrogatories and admissions, we
believe such discovery practices are unnecessary because the factual
information typically obtained through the use of admissions and
interrogatories is often already included in the administrative record,
can be established during a pre-hearing conference under Sec.
405.1040, or can be developed at the hearing. In addition, if an ALJ
determines evidence is missing from the record, the ALJ may follow the
procedures set forth in Sec. 405.1030(c) to obtain such evidence.
Thus, we do not believe it is necessary to include more expansive
discovery provisions in the final rule.
Finally, we have determined that it is necessary to make technical
revisions to Sec. 405.1036(f) in order to clarify our policies, as
discussed below. Section 405.1036(f)(1) authorizes, when it is
reasonably necessary for the full presentation of the case, an ALJ to
issue subpoenas, on his or her own initiative or at the request of a
party, for the appearance and testimony of witnesses, and for a party
to make books, records, correspondence, papers, or other documents that
are material to an issue at the hearing available for inspection and
copying.
It has come to our attention that there has been some confusion
regarding the participation regulations at Sec. 405.1010 and Sec.
405.1012 and the use of subpoenas under Sec. 405.1036(f). As discussed
above, an ALJ may not require CMS or its contractors to participate in
a hearing either as a participant or as a party, and may not draw an
adverse inference if CMS or its contractors decide not to participate
or be a party in a proceeding before the ALJ. See Sec. Sec.
405.1010(a) and (f) and 405.1012(d). Under these regulations, CMS and
its contractors have discretion to determine whether to participate in
ALJ proceedings, and to determine the manner and extent of their
participation. We are clarifying in this final rule that Sec.
405.1036(f) is not intended to permit the use of subpoenas to
circumvent or limit the discretion provided to CMS and its contractors
regarding participation in ALJ hearings. Thus, we are amending Sec.
405.1036(f)(1) to clarify that an ALJ may not, on his or her own
initiative or at the request of a party, issue a subpoena to CMS or its
contractors to compel an appearance, testimony or the production of
evidence in the context of a Medicare claim appeal under this subpart.
For similar reasons, we are also amending Sec. 405.1122(d)(1) to
clarify that the MAC may not issue subpoenas to CMS or its contractors,
on its own initiative or at the request of a party, to compel the
production of evidence. Similar to the policies and procedures
applicable to ALJ proceedings, CMS and its contractors have discretion
to determine whether to participate, and to determine the manner and
extent of their participation, in a MAC review. Specifically, in Sec.
405.1124(d) regarding oral argument, the MAC may request, but not
require, CMS or its contractor to appear before it if the MAC
determines that it may be helpful in resolving issues in a case. In
addition, Sec. 405.1124(e) states that the MAC may not draw any
inference if CMS or its contractor decides not to participate in an
oral argument. Furthermore, under Sec. 405.1110, CMS or its
contractors may refer a case to the MAC for review under the MAC's own
motion authority. Thus, we are clarifying that Sec. 405.1122(d) is not
intended to permit the use of subpoenas to circumvent or limit the
discretion provided to CMS and its contractors regarding participation
in a MAC review. Finally, we note that the policy prohibiting the
issuance of subpoenas to CMS by ALJs and the MAC as described above, is
also supported by the long-settled doctrine of sovereign immunity.
Accordingly, we are finalizing Sec. Sec. 405.1036 and 405.1122
with modifications as noted above. We are finalizing Sec. Sec.
405.1036 and 405.1037 with modification as noted in section II.B.5.a.
of this preamble.
j. Deciding a Case Without an ALJ Hearing, Conferences, the
Administrative Record, and Consolidated Hearings (Sec. 405.1038
Through Sec. 405.1044)
In Sec. Sec. 405.1038 through 405.1044, we describe various
procedures established for the conduct of ALJ hearings. In Sec.
405.1038, we outline the circumstances in which an ALJ may issue a
decision without holding a hearing. In Sec. 405.1040, we describe the
process for holding prehearing and posthearing conferences. In Sec.
405.1042, we explain the requirements applicable to the creation of the
administrative record of the ALJ proceedings, and for requesting and
receiving copies of the administrative record. In Sec. 405.1044, we
describe the requirements applicable to holding a consolidated hearing
before the ALJ. Additional discussion is included in the interim final
rule at 70 FR 11464 through 11465.
We received no comments on these sections. However, in Sec.
405.1038(b)(1)(i) we made a technical correction, changing the term
``videoconferencing'' to ``videoteleconferencing'', consistent with the
use of the term throughout this regulation.
Accordingly, we are finalizing Sec. 405.1040 without modification.
We are finalizing Sec. 405.1038 with the
[[Page 65327]]
modification noted above. We are finalizing Sec. Sec. 405.1042 and
405.1044 with modification as discussed in section II.B.5.a. of this
preamble.
k. Notice and Effect of ALJ's Decision (Sec. 405.1046 Through Sec.
405.1048)
Section 405.1046 sets forth general rules regarding the notice of
an ALJ's decision and describes certain limitations on an ALJ's
decision, and Sec. 405.1048 explains the effect of an ALJ decision on
all parties to the hearing. We received one comment on the effect of an
ALJ decision. A summary of the comment and our response are included
below. Additional detailed discussion is included in the interim final
rule at 70 FR 11466 through 11467.
Comment: We received a comment concerning the effect of an ALJ
decision. The commenter urged CMS to state in the regulations that ALJ
decisions are entitled to substantial deference by other adjudicators
in the appeals process. The commenter believed that cases that have
made it to the ALJ level are more likely to be cases concerning issues
most important to beneficiaries and providers and, since the ALJ has
fully considered such issues, other levels of appeal should benefit
from these prior decisions and accord them substantial deference,
similar to that which a district court would accord to a decision by
another district court within the same circuit.
Response: We disagree with the commenter's recommendation, and note
that, in some instances, it would be inappropriate to require other
adjudicators to afford substantial deference to ALJ decisions. For
example, the MAC is responsible for reviewing certain ALJ decisions and
issuing final decisions on those appeals for the DHHS. Section 521 of
BIPA added 1869(d)(2)(B) of the Social Security Act to mandate that in
reviewing an ALJ decision, the MAC shall review the case de novo. See
Sec. 405.1100(c), Sec. 405.1108(a). This is an expansion of the scope
of review the MAC previously exercised in pre-BIPA appeals. Granting
ALJ decisions substantial deference would be inconsistent with the
DAB's expanded review authority provided by Congress.
In addition, the coverage and liability determinations made on
claims submitted for treatment are largely unique to the specific facts
and circumstances of a given case. Thus, it would prove extremely
difficult to identify a set of decisions that could be appropriately
afforded deference.
Finally, we note that section 931 of the MMA instructed DHHS to
assess the feasibility of developing a process to give decisions of the
DAB addressing broad legal issues, binding and precedential authority.
After thorough consideration, DHHS determined that it is neither
feasible, nor appropriate at this time to confer binding, precedential
authority upon decisions of the MAC. Because MAC decisions are not
given precedential weight, it would be impractical and illogical to
afford any form of deference to ALJ decisions. Therefore, we do not
believe it is appropriate to adopt the commenter's suggestion to
require other adjudicators in the Medicare administrative appeals
process to afford substantial deference to ALJ decisions.
We are finalizing Sec. Sec. 405.1046 and 405.1048 with
modification as discussed in section II.B.5.b. of this preamble.
Additionally, we are finalizing Sec. 405.1046 with modification as
discussed in section II.B.5.a. of this preamble.
l. Removal of a Hearing Request From the ALJ to the MAC, Dismissal of a
Request for ALJ Hearing, and the Effect of a Dismissal (Sec. 405.1050
Through Sec. 405.1054)
In Sec. 405.1050, we explain the process for the MAC to assume
responsibility for holding a hearing if a request for hearing is
pending before an ALJ. In Sec. 405.1052, we explain the bases under
which an ALJ dismisses a request for hearing, and, in Sec. 405.1054,
we explain the effect of a dismissal of a request for ALJ hearing.
Additional discussion is included in the interim final rule at 70 FR
11465 through 11466. We received no comments on these provisions.
We are finalizing Sec. Sec. 405.1050 and 405.1054 without
modification. We are finalizing Sec. 405.1052 with modification as
discussed in section II.B.5.b. of this preamble and with modification
as discussed in section II.B.5.a. of this preamble.
m. Applicability of Statutes, Regulations, Medicare Coverage Policies,
CMS Rulings and Other Program Guidance (Sec. 405.1060 Through Sec.
405.1063)
In Sec. 405.1060, we explain the applicability of national
coverage determinations (NCDs) to decisions made by fiscal
intermediaries, carriers, QIOs, QICs, ALJs, and the MAC. In Sec.
405.1062, we provide that ALJs and the MAC must afford LCDs, LMRPs and
CMS program guidance (including program memoranda and manual
instructions) substantial deference if they are applicable to a
particular case. In Sec. 401.108(c) and Sec. 405.1063, we explain
that CMS rulings are binding on all CMS components, on all DHHS
components that adjudicate matters under the jurisdiction of CMS, and
on the Social Security Administration to the extent that components of
the Social Security Administration adjudicate matters under the
jurisdiction of CMS.
We received several comments with respect to the requirement that
ALJs and the MAC afford Medicare local coverage determinations and
program guidance substantial deference. A summary of the comments, and
our response to those comments are included below. Additional
discussion is included in the interim final rule at 70 FR 11457 through
11458.
Comment: We received several comments concerning the provisions
requiring ALJs and the MAC to give substantial deference to Medicare
LCDs, LMRPs and CMS program guidance, if the pertinent policy or
guidance is applicable to the specific case (Sec. 405.1062). Most of
these commenters objected to the substantial deference provisions. Some
commenters objected to the presumption of validity attributed to
policies and guidance under this provision, and believed it would lead
to adjudicators ``rubber-stamping'' the previous appeal decision, while
another commenter noted that ALJs and the MAC currently decide whether
informal policies are entitled to deference based on Supreme Court
precedents.
Response: As noted above and further discussed below, ALJs and the
MAC are bound by the Medicare statute, CMS regulations, CMS Rulings,
and NCDs. See sections 405.1060, 405.1063, 401.108; in addition see our
discussion at 70 FR 11457 through 11458. In Sec. 405.1062, we explain
the degree to which ALJs and the MAC must defer to non-binding CMS
program guidance (such as manual instructions and program memoranda),
LMRPs and LCDs. ALJs and the MAC consider whether guidance documents,
LMRPs and LCDs should apply to a specific claim for benefits. If it is
determined that the policy is applicable in the instant case, then the
adjudicator must grant substantial deference to the policy. However, if
the adjudicator declines to follow a policy in a particular case, the
adjudicator must explain why the policy was not followed. The decision
to disregard a policy in a specific case does not have precedential
effect. See Sec. 405.1062(a) and (b). Thus, ALJs will continue their
traditional role as independent evaluators of the facts presented in
specific, individual cases. Requiring an ALJ to consider CMS policy and
give substantial deference to it, if applicable to a particular case,
does not alter the ALJ's role as an independent fact finder. See 70 FR
[[Page 65328]]
11458. Thus we do not believe this regulation will lead to adjudicators
``rubber-stamping'' the previous appeal decision.
In this final regulation, we are making a technical correction to
Sec. 405.1063. In Sec. 405.1063, we did not include a provision that
expressly stated our longstanding policy, as described in the interim
final rule, regarding the applicability of the Medicare statute and CMS
regulations to ALJs and the MAC. See 70 FR 11457. We are making this
correction by adding paragraph (a) to Sec. 405.1063 to specify that
ALJs and the MAC are bound by all laws and regulations pertaining to
the Medicare and Medicaid programs, including, but not limited to
Titles XI, XVIII, and XIX of the Social Security Act and applicable
implementing regulations.
Accordingly, we are finalizing Sec. 405.1060 and Sec. 405.1062
without modification. We are finalizing Sec. 405.1063 with
modifications as noted.
n. ALJ Decisions Involving Statistical Samples (Sec. 405.1064)
In Sec. 405.1064, we explain that when an appeal from the QIC
involves an overpayment, and the QIC relied on a statistical sample in
reaching its decision, the ALJ must base his or her decision on a
review of all claims in the sample. We received two comments regarding
this provision. A summary of the comments, and our responses are
provided below. Additional detailed discussion is included in the
interim final rule at 70 FR 11466.
Comment: Two commenters expressed concern that the regulation does
not address the authority of an ALJ to consider challenges to the
sampling methodology when an overpayment assessment is estimated
through extrapolation, and requested that we clarify our position on
this issue in the regulation. One of these commenters also suggested
that we include a provision requiring that appellants be given all
documentation concerning the contractor's sampling process.
Response: Medicare's longstanding policy has been to allow
appellants a full opportunity to challenge issues related to the
calculation of overpayments estimated by extrapolation from a sample.
We outlined in detail the basis for our authority to extrapolate
overpayments in CMS (HCFA) Ruling 86-1, and since 1986, have included
procedures for contractors in operating instructions. As explained in
Ruling 86-1, we agree with the commenter's assertion that appellants
may challenge, and an ALJ may review, the sampling methodology used to
calculate the overpayment.
Sampling does not deprive a provider of its rights to challenge
the sample, nor of its rights to procedural due process. Sampling
only creates a presumption of validity as to the amount of an
overpayment which may be used as the basis for recoupment. The
burden then shifts to the appellant to take the next step. The
appellant could attack the statistical validity of the sample, or it
could challenge the correctness of the determination in specific
cases identified by the sample (including waiver of liability [under
section 1879 of the Act] where medical necessity or custodial care
is at issue). In either case, the appellant is given a full
opportunity to demonstrate that the overpayment is wrong. If certain
individual cases within the sample are determined to be decided
erroneously, the amount of overpayment projected to the universe of
claims can be modified. If the statistical basis upon which the
projection was based is successfully challenged, the overpayment
determination can be corrected. (HCFAR 86-1-9, 10)
Adjudicators are bound by CMS rulings. Thus, we do not believe it
is necessary to include further clarification in the regulation.
Furthermore, parties may request and receive the information
contained in the case file. See Sec. 405.1042 and Sec. 405.1118. The
case file should include all documentation regarding the sampling
methodology used to calculate an overpayment. If such documentation is
not in the administrative record, a party may request the pertinent
documentation from the contractor or adjudicator. Thus, we believe that
appellants already have adequate access to documentation concerning the
contractor's sampling process, and that it is not necessary to include
an additional provision in the final rule.
Accordingly, we are finalizing Sec. 405.1064 without modification.
10. Review by the Medicare Appeals Council (Sec. 405.1100 Through
Sec. 405.1134)
Sections 405.1100 through 405.1134 set forth the procedures for MAC
review of ALJ decisions and dismissals. We received comments with
respect to the MAC's standard of review and submission of evidence
during MAC review. A brief description of the pertinent regulatory
provisions, a summary of the comments, and our responses to the
comments follow below. Additional discussion regarding MAC review is
included in the interim final rule at 70 FR 11454 through 11456, 11459
through 11464, and 11466 through 11467.
a. MAC Review of an ALJ's Action (Sec. 405.1100 Through Sec.
405.1120)
Section 405.1100 states that the MAC undertakes a de novo review of
an ALJ decision, and provides a general description of the MAC review
process. Section 405.1102 describes the process for requesting MAC
review of an ALJ decision or dismissal. Section 405.1104 describes an
appellant's right to request escalation of a case from the ALJ level to
the MAC. In Sec. 405.1106, we specify the locations where parties must
file requests for MAC review or escalation. Section 405.1108 sets forth
the actions a MAC may take upon receipt of a request for review or
escalation. Section 405.1110 describes the MAC's authority to review
ALJ decisions or dismissals on its own motion. Section 405.1112 sets
forth the content requirements for requests for MAC review. Section
405.1114 describes the circumstances in which the MAC dismisses a
request for review, and Sec. 405.1116 describes the effect of a
dismissal by the MAC. Section 405.1118 explains the process by which a
party may request a copy of the administrative record developed at the
ALJ hearing and an opportunity to comment on the evidence. Section
405.1120 discusses filing briefs with the MAC.
Comment: Two of the comments we received expressed concern about
the standard of review at the MAC level. One commenter suggested
modifying Sec. 405.1100 to provide for a ``substantial evidence''
standard of review as is applicable in judicial review, or
alternatively, a ``preponderance of evidence'' standard. However, both
commenters stated that although Sec. 405.1100 provides for the MAC to
undertake de novo review of an ALJ decision, the MAC's rules limit the
opportunity for face-to-face hearings and restrict a party's right to
submit evidence. The commenters indicated that these restrictions do
not constitute a de novo review.
Response: The de novo standard of review that is applicable at the
MAC level is statutorily required by section 1869(d)(2)(B) of the Act,
as added by BIPA. Thus, the MAC may not review ALJ decisions under a
substantial evidence standard as it had under previous rules, nor may
it utilize a preponderance of evidence standard to adjudicate appeals.
Similarly, the limitation on the submission of evidence set forth in
Sec. 405.1122 is required under section 1869(b)(3) of the Act. We note
that this limitation restricts the scope of the MAC's review, not the
applicable standard of review.
Finally, with respect to the commenter's concern about the
limitations on face-to-face hearings, while most cases before the MAC
are resolved without oral argument, under Sec. 405.1124, parties may
request to
[[Page 65329]]
appear before the MAC to present oral argument, or the MAC may
determine on its own that oral argument is necessary to decide the
issues in the case. The fact that the MAC may not grant a party's
request to permit oral argument in a case does not alter the de novo
standard of review by the MAC.
In this final rule, we are making certain technical revisions to
Sec. 405.1106 and Sec. 405.1110, and a technical correction to Sec.
405.1112(a). In Sec. 405.1106(a), parties seeking MAC review of an ALJ
hearing decision must send the request for review to the entity
specified in the notice of the ALJ's decision, and send a copy of the
request to the other parties to the ALJ decision or dismissal.
Similarly, when CMS or its contractor refers a case to the MAC for the
MAC to consider reviewing under its own motion review authority, in
accordance with Sec. 405.1110(b)(2), CMS sends a copy of the referral
to the ALJ and to all the parties to the ALJ's action. Furthermore, in
Sec. 405.1110(b)(2), a party may file exceptions to CMS' referral to
the MAC by submitting written comments to the MAC, to CMS and to all
other parties to the ALJ's decision.
We would like to clarify that, for the purposes of MAC review, when
an appellant is required to send a copy of the request for review to
the ``other parties to the ALJ decision or dismissal'' under Sec.
405.1106(a), this means the appellant must send a copy of the review
request to the other parties to the ALJ decision or dismissal who
received a notice of the ALJ's hearing decision under Sec.
405.1046(a), or a notice of the ALJ's dismissal under Sec.
405.1052(b). Similarly, if CMS refers a case to the MAC for the MAC to
consider under its own motion review authority, when CMS sends a copy
of the referral to ``all parties to the ALJ's action'' under Sec.
405.1110(b)(2), this means CMS must send a copy of the referral to all
parties to the ALJ's action who received a copy of the ALJ's hearing
decision under Sec. 405.1046(a) or a notice of the ALJ's dismissal
under Sec. 405.1052(b). Finally, when a party submits written comments
regarding CMS' referral to the MAC to ``all other parties to the ALJ's
decision'' under Sec. 405.1110(b)(2), this means that the party must
send a copy of such comments to all other parties to the ALJ's decision
who received a copy of the hearing decision under Sec. 405.1046(a) or
a notice of the ALJ's dismissal under Sec. 405.1052(b). We note that
if the ALJ sends a copy of the ALJ hearing decision or dismissal to a
person or entity that is not a party to the ALJ's decision or dismissal
order (for example, a Medicare contractor who has not elected party
status at the hearing under Sec. 405.1012), the appellant is not
required under Sec. 405.1106(a) to send a copy of the request for MAC
review to that person or entity because that person or entity is not a
party. See Sec. 405.906(b) and Sec. 405.1008(b) for a description of
the parties to an ALJ hearing. Pursuant to Sec. 405.906, unless a
beneficiary undertakes an assignment of appeal rights under Sec.
405.912, the beneficiary is always considered a party to the ALJ
hearing.
If the MAC determines that additional parties should receive a copy
of the request for MAC review, the CMS referral to the MAC, or comments
regarding CMS' referral to the MAC, the MAC may instruct the party or
CMS, as appropriate, to send copies to such party or parties. We
believe this will minimize any confusion regarding the parties an
appellant or CMS must notify, and will ensure that those parties with
an interest in the proceedings will be notified of the status of the
appeal action.
We are also making a technical correction to Sec. 405.1112(a) to
replace a comma with a semi-colon following the phrase, ``if any''.
Accordingly, we are finalizing Sec. Sec. 405.1108, 405.1114,
405.1116, and 405.1120 without modification. We are finalizing
Sec. Sec. 405.1102 and 405.1118 with modification as discussed in
section II.B.5.a. of this preamble. We are finalizing Sec. Sec.
405.1100, 405.1104, 405.1106, and 405.1110 with modification as
discussed in section II.B.5.b. of this preamble and with modification
as discussed in section II.B.5.a. of this preamble. We are finalizing
Sec. 405.1112 with modification as discussed in section II.B.5.b. of
this preamble. We are finalizing Sec. Sec. 405.1106, 405.1110, and
405.1112 with additional modifications as noted above.
b. Evidence That May Be Submitted to the MAC and Subpoenas (Sec.
405.1122)
Section 405.1122 describes the evidence that may be submitted to
and considered by the MAC, the process the MAC follows in issuing
subpoenas, the reviewability of MAC subpoena rulings, and the process
for seeking enforcement of subpoenas.
Comment: One commenter expressed concern about a party's ability to
submit new evidence for MAC review. The commenter acknowledged the
value of submitting evidence early in the appeals process. However, the
commenter believed new evidence should be allowed at the MAC level if
the evidence becomes pertinent following the ALJ's decision.
Response: As noted above, the limitation on submission of evidence
is set forth at section 1869(b)(3) of the Act. However, we believe that
there are certain circumstances in which submission of new evidence for
MAC review may be appropriate. We have described these circumstances at
Sec. 405.1122. As explained in Sec. 405.1122(a)(1), when the MAC
undertakes review of an ALJ decision, the MAC reviews all of the
evidence contained in the administrative record. However, as explained
in Sec. 405.1122(a)(1), if the hearing decision decides a new issue
that the parties were not afforded an opportunity to address at the ALJ
level, the MAC considers any evidence related to that issue if it is
submitted with the request for review. In addition, as set forth in
Sec. 405.1122(a)(2), if the MAC determines that additional evidence is
necessary to resolve the issues in the case, and the hearing record
indicates that there were no attempts to obtain such evidence in the
proceedings below, the MAC may remand the case to the ALJ to obtain the
evidence and issue a new decision.
Consistent with Sec. 405.1122(c), if a provider, supplier, or a
beneficiary represented by a provider or supplier, submits new evidence
related to issues previously considered by the QIC, the MAC determines
whether the party had good cause for submitting the evidence for the
first time at the MAC level. The MAC must exclude evidence from
consideration if good cause for late filing is not established, and
must notify all parties of the exclusion. However, the MAC may remand a
case to an ALJ if the new evidence was previously submitted by a
provider, supplier, or beneficiary represented by a provider or
supplier at the ALJ level, and was excluded from consideration because
the ALJ determined that good cause did not exist under Sec. 405.1028,
but the MAC determines that good cause for late filing existed under
Sec. 405.1028 and the ALJ should have reviewed the evidence. See Sec.
405.1122(c)(3). As set forth in Sec. 405.1122(c)(3)(iii), the MAC may
also remand a case to an ALJ if the new evidence is submitted by a
party that is not a provider, supplier, or beneficiary represented by a
provider or supplier. Therefore, we believe the regulations provide an
appropriate balance between the need for appellants to submit evidence
when the evidence becomes pertinent following the ALJ decision, and the
need for the full and early presentation of evidence as required by the
statute.
Although we received no comments on Sec. 405.1122(d) through (f),
we have determined that it is necessary to make certain technical
revisions to these subsections to clarify our policies.
[[Page 65330]]
Sections 405.1122(d) through (f) explain the procedures the MAC follows
when issuing subpoenas, the review process with respect to MAC rulings
on subpoena requests, and the enforcement procedures to be followed if
the MAC determines that either a party or non-party has failed to
comply with a subpoena. As explained above in section II.B.9.i. of this
preamble, we are revising Sec. 405.1122(d)(1) to clarify that the MAC
may not issue subpoenas to CMS or its contractors, on its own
initiative or at the request of a party, to compel the production of
evidence.
In addition, we note that Sec. 405.1122 contains several technical
errors that were not corrected in our previous technical correction
notice. First, we are correcting the numbering of Sec. 405.1122(e).
Second, we are revising paragraph (e)(2)(v) (renumbered in this final
rule as paragraph (e)(6)) to replace the word ``lifed'' with the word
``lifted.'' Third, in Sec. 405.1122(f)(1), we are correcting the
statutory reference to the process followed by the Secretary when
seeking enforcement of a subpoena issued by the MAC; we incorrectly
referenced section 205(c) of the Act and 42 U.S.C. 405(c) instead of
section 205(e) of the Act and 42 U.S.C. 405(e).
Accordingly, we are finalizing Sec. 405.1122 with modifications as
noted and with modification as discussed in section II.B.5.a. of this
preamble.
c. Oral Argument, Cases Remanded By the MAC, the Effect of MAC Actions,
Escalation to Federal District Court, and Extensions of Time To File
Actions in Federal District Court (Sec. 405.1124 Through Sec.
405.1134)
In Sec. 405.1124, we explain the circumstances in which the MAC
may hear oral argument and the procedures that apply when the MAC hears
oral argument. Section 405.1126 explains the MAC's remand authority and
the procedures that apply when the MAC receives a recommended decision
from the ALJ. Section 405.1128 describes the actions the MAC may take
after reviewing the administrative record and any additional evidence
(subject to the limitations on MAC consideration of additional
evidence), and Sec. 405.1130 describes the effect of the MAC's
decision.
Section 405.1132 explains the process for an appellant to seek
escalation of an appeal (other than an appeal of an ALJ dismissal) from
the MAC to Federal district court if the MAC does not issue a decision
or dismissal or remand the case to an ALJ within the adjudication
period specified in Sec. 405.1100, or as extended as provided in
subpart I. Section 405.1134 explains how parties may request an
extension of time to file an action in Federal district court.
We received no comments on these provisions. We are finalizing
Sec. Sec. 405.1128 and 405.1134 without modification. We are
finalizing Sec. 405.1124 with modification as discussed in section
II.B.5.a. of this preamble. We are finalizing Sec. Sec. 405.1126,
405.1130 and 405.1132 with modification as discussed in section
II.B.5.b. of this preamble and with modification as discussed in
section II.B.5.a. of this preamble.
11. Judicial Review (Sec. 405.1136 Through Sec. 405.1140)
Section 405.1136 sets forth the requirements and procedures for
filing requests for judicial review of a MAC decision in Federal
district court, specifies the Federal district court in which such
actions must be filed, and describes the standard of review. Sections
405.1138 and 405.1140 set forth the procedures that apply to cases that
are remanded by a Federal district court to the Secretary for further
consideration. We received two comments on these provisions. A summary
of these comments, and our responses are included below.
Comment: One commenter noted that, in Sec. 405.1136(b), we state
that a party to a MAC decision (or an appellant who requests escalation
from the MAC to Federal court) must file a civil action in the district
court of the United States for the judicial district in which the party
resides or where such individual, institution, or agency has its
primary place of business. The commenter believed that a party should
be able to file a civil action in Washington, DC or the judicial
district in which a regional office of DHHS exists.
Response: Section 1869(b)(1)(A) of the Act states that any
individual dissatisfied with any initial determination shall be
entitled to reconsideration of the determination, a hearing by the
Secretary to the same extent as is provided in section 205(b) of the
Act, and to judicial review of the Secretary's final decision after
such hearing as provided in section 205(g) of the Act. Section 205(g)
of the Act sets forth the filing requirements for judicial review. Our
regulation restates these statutory requirements. We do not have the
authority or discretion to alter the filing procedures established in
Federal statute.
Comment: A commenter suggested that the standard of review
established in Sec. 405.1136(f) restricts Federal judges from applying
the Administrative Procedure Act and evolving doctrines of judicial
review of administrative decisions that govern other agencies.
Response: We appreciate the commenter's concerns regarding the
standard of review applicable to judicial review of Medicare claim
determinations. As discussed above, section 1869(b)(1)(A) of the Act
provides for judicial review of the Secretary's final decision as
provided in section 205(g) of the Act. Section 205(g) of the Act sets
forth the standard of review that applies to actions in Federal
district court, and our regulation implements these statutory
requirements. We do not have the authority or discretion to alter the
standard of review established in the statute.
Accordingly, we are finalizing Sec. 405.1138 without modification.
We are finalizing Sec. 405.1136 with modification as discussed in
section II.B.5.b. of this preamble and with modification as discussed
in section II.B.5.a. of this preamble. We are finalizing Sec. 405.1140
with modification as discussed in section II.B.5.a. of this preamble.
III. Provisions of the Final Regulations
In this final rule, we made the following changes to the interim
final rule published on March 8, 2005:
In section 405.902, we are adding a definition for the
term contractor.
In Sec. Sec. 405.922, 405.942(a)(1), 405.942(b),
405.946(b), 405.950(b)(1), 405.950(b)(2), 405.950(b)(3), 405.962(a)(1),
405.962(a)(2), 405.962(b), 405.966(b), 405.966(c), 405.970(a)(2),
405.970(b)(1), 405.970(b)(2), 405.970(b)(3), 405.970(c), 405.970(e)(2),
405.974(b)(1), 405.974(b)(1)(i), 405.974(b)(1)(ii), 405.980(d)(1),
405.980(d)(2), 405.980(d)(3), 405.980(e)(1), 405.980(e)(2),
405.980(e)(3), 405.990(f)(2), 405.990(f)(4), 405.990(h)(2),
405.990(i)(2), 405.990(j)(1), 405.1002(a)(1), 405.1002(a)(3),
405.1002(a)(4), 405.1002(b)(2), 405.1004(a)(1), 405.1004(a)(3),
405.1004(a)(4), 405.1006(e)(1)(ii), 405.1010(b), 405.1012(b),
405.1014(b)(1), 405.1014(b)(2), 405.1016(a), 405.1016(c), 405.1018(a),
405.1018(b), 405.1020(g)(3)(ii), 405.1022(a), 405.1024(a), 405.1028(a),
405.1036(f)(5)(iv), 405.1037(c)(5), 405.1037(e)(2)(iii),
405.1042(b)(2), 405.1044(d), 405.1046(d), 405.1052(a)(2)(ii),
405.1052(a)(2)(iii), 405.1100(c), 405.1100(d), 405.1102(a)(1),
405.1102(a)(2), 405.1104(a)(2), 405.1106(b), 405.1110(a),
405.1110(b)(2), 405.1110(d), 405.1118, 405.1122(e)(4), 405.1124(b),
405.1126(d)(1), 405.1130, 405.1132(b), 405.1136(c)(3), 405.1136(d)(2),
[[Page 65331]]
405.1140(b)(1), 405.1140(c)(1), 405.1140(c)(4), 405.1140(d), we added
the word ``calendar'' in front of the word ``day'' or ``days'' to
clarify the timeframes referenced therein.
In Sec. 405.924, we removed paragraph (b)(7), because a
determination regarding the number of home health visits used by a
beneficiary is no longer considered an initial determination. We are
renumbering the remaining paragraphs accordingly.
In sections 405.952(e), 405.958, 405.972(e),
405.974(b)(3), 405.978, 405.980(a)(1), 405.980(a)(5), 405.1004(c), and
405.1052(a)(6), we made technical corrections by removing the term
``final'' or ``final and binding'' and replacing it with ``binding'' to
clarify that the actions taken by an adjudicator described in the above
sections are not considered final decisions of the Secretary for the
purposes of exhausting administrative remedies when seeking judicial
review in Federal court.
In Sec. 405.962(a) and Sec. 405.972(b)(3), we made a
technical correction by adding a reference to Sec. 405.974(b)(1),
which, as amended in this final rule, provides for a 60 calendar day
filing timeframe to request a reconsideration of a contractor's
redetermination dismissal action, as an exception to the 180 calendar
day timeframe for filing a request for reconsideration of a
contractor's redetermination decision.
In Sec. 405.972(e), we added a provision to clarify that
a QIC's dismissal of a request for reconsideration of a contractor's
dismissal action is binding and not subject to further review.
In Sec. 405.980(b), we made technical corrections by (1)
replacing the word ``its'' with the word ``an'', and (2) removing the
words ``and revise'' from the introductory sentence, so the sentence
will now read: ``A contractor may reopen an initial determination or
redetermination on its own motion-- * * *''. We are replacing the word
``its'' with ``an'' to more clearly convey our longstanding policy to
permit certain contractors, other than those who issue initial
determinations, to reopen initial determinations when appropriate. In
addition, removing the words ``and revise'' reflects our longstanding
policy that the timeframes for reopening a determination or decision
are measured by the date of the reopening not the date of the revision
of the determination or decision.
In Sec. 405.990(b)(1)(i)(A), we made a technical
correction to replace the phrase ``final decision'' with ``decision,
dismissal order, or remand order'' to specify the types of actions
that, if taken by an ALJ, preclude a request for EAJR and to be
consistent with our clarification regarding the term ``final''.
In Sec. 405.990(b)(1)(i)(B), we made a technical
correction by adding the phrase ``, dismissal order, or remand order''
after ``final decision'' to specify the types of actions that, if taken
by the MAC, preclude a request for EAJR and to be consistent with our
clarification regarding the term ``final.''
In Sec. 405.990(b)(1)(ii), we made a technical correction
by replacing the phrase ``final action'' with ``decision or dismissal
order'' in order to clarify the nature of the QIC's action and to be
consistent with our clarification regarding the term ``final.''
In Sec. 405.990(f)(3), we made a technical correction by
removing the words ``final and'' to state that the decision of the
review entity to certify or deny a request for EAJR is not subject to
further review.
In Sec. 405.1000(c), we removed the phrase ``, including
the QIC, QIO, fiscal intermediary or carrier'' consistent with our
revision to Sec. 405.902 in which we define the term contractor.
In Sec. 405.1000(d), we made a technical revision to
clarify that the ALJ conducts a de novo review.
In Sec. 405.1002(b)(2), we made a technical correction by
replacing the words ``final action'' with ``decision or dismissal
order'' in order to state the nature of the QIC's action and to be
consistent with our clarification regarding the term ``final.''
In Sec. 405.1004(c), we made a technical correction to
clarify that an ALJ's dismissal of a request for review of a QIC's
dismissal action is binding and not subject to further review unless
vacated by the MAC under Sec. 405.1108(b).
In Sec. 405.1010(a) and Sec. 405.1012(a), we made
technical corrections by removing the phrase ``, including a QIC''
consistent with our revision to Sec. 405.902 in which we define the
term contractor.
In Sec. 405.1020(c)(1), we removed the reference to,
``the contractor that issued the initial determination'' in specifying
which entities are to receive notice of the ALJ hearing.
We revised Sec. 405.1020(i)(4) to state that when a
party's request for an in-person hearing under Sec. 405.1020(i)(1) is
granted, the ALJ must issue a decision within the adjudication
timeframe specified in Sec. 405.1016 (including any applicable
extensions provided in this subpart) unless the party requesting the
hearing agrees to waive such adjudication timeframe in writing.
In Sec. 405.1022(a), we made a technical revision to
clarify that when a party waives its right to receive the notice of
hearing, the ALJ must still send the notice of hearing to all other
parties and potential participants who have not waived their right to
receive the notice of hearing, consistent with Sec. 405.1020(c).
In Sec. 405.1034(a), we made several clarifications to
the provisions allowing an ALJ to remand a case to the QIC. We explain
that the phrase ``can be provided only by CMS or its contractors''
means the information is not publicly available and is not in the
possession of and cannot be requested and obtained by any of the
parties to the appeal. We explain that the term ``publicly available''
refers to information that is available to the general public via the
Internet, or in a printed publication. We clarify that if the missing
information is not information that can be provided only by CMS or its
contractors (as that phrase is clarified above), the ALJ must retain
jurisdiction of the case and obtain the missing information on his or
her own, or directly from one of the parties.
In Sec. 405.1036(f)(1), we clarified that an ALJ may not
issue subpoenas to CMS or its contractors, to compel an appearance,
testimony or the production of evidence.
In Sec. 405.1036(f)(3), we revised the time period for
submitting requests for subpoenas to an ALJ, and now require parties to
submit a request for a subpoena no later than the end of the discovery
period established by the ALJ under Sec. 405.1037(c).
In Sec. 405.1038(b)(1)(i), we changed the term
``videoconferencing'' to ``videoteleconferencing'' consistent with the
use of the term throughout this regulation.
In Sec. 405.1046(c), we made a technical correction by
replacing the term ``final'' with ``binding on the contractor''
consistent with our clarification regarding the term ``final.''
In Sec. 405.1048(a), we made a technical correction by
replacing the phrase ``either issues a final action'' with ``issues a
final decision or remand order'' to clarify the types of actions issued
by the MAC that cause an ALJ decision to not become binding, and to be
consistent with our clarification regarding the term ``final.''
Added Sec. 405.1063(a) to clarify the additional
authorities that are binding on ALJs and the MAC. The original
paragraph in Sec. 405.1063 is reassigned to subsection (b).
In Sec. 405.1100(c) and Sec. 405.1100(d), we made
technical corrections by replacing the phrase ``final action'' with
``final decision or dismissal order'' to specify the actions taken by
the MAC
[[Page 65332]]
and to be consistent with our clarification regarding the term
``final.''
In Sec. 405.1104(a)(2) we made a technical correction by
replacing the phrase ``final action or remand the case to the QIC''
with ``decision, dismissal order, or remand order'' to specify the
actions taken by the MAC and to be consistent with our clarification
regarding the term ``final.''
In Sec. 405.1104(b)(1), we made a technical correction by
replacing the phrase ``final action or remand'' with ``decision,
dismissal order, or remand order'' to specify the actions taken by the
MAC and to be consistent with our clarification regarding the term
``final.''
In Sec. 405.1104(b)(2), we made a technical correction by
replacing the phrase ``final action or remand order'' with ``decision,
dismissal order, or remand order'' to specify the actions taken by the
MAC and to be consistent with our clarification regarding the term
``final.''
In Sec. 405.1104(b)(3), we made a technical correction by
replacing the phrase ``a final administrative decision for purposes of
MAC review'' with the phrase ``the decision that is subject to MAC
review consistent with Sec. 405.1102(a)'' in order to clarify the
effect of the QIC decision and to be consistent with our clarification
regarding the term ``final.''
In Sec. 405.1104(c), we made a technical correction by
replacing the phrase ``final action'' with the phrase ``decision,
dismissal order, or remand order'' in order to specify the actions
taken by the MAC and to be consistent with our clarification regarding
the term ``final.''
In Sec. 405.1106(a), we clarified the meaning of the
phrase ``other parties to the ALJ decision or dismissal.''
In Sec. 405.1106(b), we made a technical correction by
replacing the phrase ``final action or remand the case to the ALJ''
with the phrase ``final decision, dismissal order, or remand order'' in
order to specify the actions taken by the MAC and to be consistent with
our clarification regarding the term ``final.''
In Sec. 405.1110(b)(2), we clarified the meaning of the
phrases ``all parties to the ALJ's action'' and ``all other parties to
the ALJ's decision.''
In Sec. 405.1110(d), we made a technical correction by
replacing the phrase ``remains the final action in the case'' with the
phrase ``is binding on the parties to the ALJ decision'' consistent
with our clarification regarding the term ``final.''
In Sec. 405.1112(a), we made a technical correction by
replacing the phrase ``final action'' with the phrase ``decision or
dismissal order'' in order to specify the actions taken by the ALJ and
to be consistent with our clarification regarding the term ``final''.
We also made a technical correction by replacing a comma with a semi-
colon following the phrase ``if any.''
In Sec. 405.1122(d)(1), we clarified that the MAC may not
issue subpoenas to CMS or its contractors to compel the production of
evidence.
We made a technical correction in paragraph Sec.
405.1122(e)(2)(v), correcting the word ``lifed'' to read ``lifted.''
We renumbered the paragraphs in Sec. 405.1122(e).
In Sec. 405.1122(f)(1), we corrected the reference to the
Social Security Act regarding the Secretary's authority to seek
enforcement of subpoenas from ``section 205(c) of the Act, 42 U.S.C.
405(c)'' to ``section 205(e) of the Act, 42 U.S.C. 405(e).''
In Sec. 405.1126(a), we made a technical correction by
removing the word ``final'' consistent with our clarification regarding
the term ``final.''
In Sec. 405.1130, we made a technical correction by
adding the words ``final and'' before the word ``binding'' consistent
with our clarification regarding the term ``final.''
In Sec. 405.1132(b), we made a technical correction by
replacing the phrase ``final action or remand'' with ``final decision,
dismissal order, or remand order'' to specify the actions taken by the
MAC and to be consistent with our clarification regarding the term
``final.''
In Sec. 405.1136(a)(2), we made a technical correction by
replacing the phrase ``final action'' with ``final decision, dismissal
order, or remand order'' to specify the actions taken by the MAC and to
be consistent with our clarification regarding the term ``final.kathe''
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 30 day notice in the Federal Register and solicit public
comment when a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we
solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Therefore, we are soliciting public comments on each of these
issues for the information collection requirements discussed below.
The PRA exempts most of the information collection activities
referenced in this interim final rule. In particular, 5 CFR Sec.
1320.4 excludes collection activities during the conduct of
administrative actions such as redeterminations, reconsiderations, and/
or appeals. Specifically, these actions are taken after the initial
determination or a denial of payment. There is, however, one
requirement contained in this rule that is subject to the PRA because
the burden is imposed prior to an administrative action or denial of
payment. This requirement is discussed below.
Appointed Representatives (Sec. 405.910)
In summary, Sec. 405.910 states that an individual or entity may
appoint a representative to act on their behalf in exercising their
right to receive an initial determination on a request for payment, or
to pursue an appeal of an initial determination. This appointment of
representation must be in writing and must include all of the required
elements specified in this section.
The burden associated with this requirement is the time and effort
of the individual or entity to prepare an appointment of representation
containing all of the required information of this section. In an
effort to reduce some of the burden associated with this requirement,
we have developed a standardized form that the individual/entity may
use. This optional standardized form is currently approved under
OMB 0938-0950.
We estimate that approximately 13,413 individuals and entities will
elect to appoint a representative to act on their behalf each year.
Because we have developed the optional standardized form, we estimate
that it should only take approximately 15 minutes to supply the
required information to comply with the requirements of this section.
Therefore, we estimate the total burden to be 3,353 hours on an annual
basis.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this final rule; or
[[Page 65333]]
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
CMS 4064-F; Fax: (202) 395-6974; or E-mail: [email protected].
V. Regulatory Impact Statement
We have examined the impact of this final rule under the criteria
of Executive Order 12866 on Regulatory Planning and Review (September
30, 1993, as further amended), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism
(August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 (as amended by Executive Orders 13258 and
13422 directs agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). A regulatory impact analysis (RIA) must be
prepared for major rules with economically significant effects ($100
million or more in any 1 year). As detailed above, this final rule
makes only minimal changes to the existing Medicare claims appeals
procedures. Thus, this rule will have negligible financial impact on
beneficiaries, providers or suppliers.
Therefore, this does not constitute a major rule and, consistent
with Executive Order 12866, we are not preparing an RIA.
The RFA requires agencies, in issuing certain rules, to analyze
options for regulatory relief of small businesses, if a rule has a
significant impact on a substantial number of small entities. For
purposes of the RFA, small entities include small businesses, nonprofit
organizations, and government agencies. For purposes of the RFA, all
providers and suppliers affected by this regulation are considered to
be small entities. Individuals and States are not included in the
definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
RIA for a rule that may have a significant impact on the operations of
a substantial number of small rural hospitals. This analysis must
conform to the provisions of section 604 of the RFA. For purposes of
section 1102(b) of the Act, we define a small rural hospital as a
hospital that is located outside of a Metropolitan Statistical Area and
has fewer than 100 beds. As noted above, this final rule makes only
minimal changes to the existing appeals procedures and thus, does not
have a significant impact on small entities or the operations of a
substantial number of small rural hospitals. Therefore, we are not
preparing analyses for either the RFA or section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that would include any Federal mandate that may result
in expenditure in any one year by State, local, or Tribal governments,
in the aggregate, or by the private sector, of $100 million (adjusted
annually for inflation). In 2009, the threshold is approximately $133
million. This rule will not meet this threshold, in any 1 year, with
respect to expenditures by State, local, or Tribal governments, in the
aggregate, or by the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
interim final and final rules) that imposes substantial direct
requirement costs on State and local governments, preempts State law,
or otherwise has Federalism implications. This rule does not have a
substantial effect on State or local governments.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medical devices, Medicare, Reporting and
recordkeeping requirements, Rural areas, X-rays.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR Part 405 as set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority citation for part 405 is revised to read as follows:
Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874,
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a),
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
0
2. Section 405.902 is amended by adding the definition of contractor in
alphabetical order to read as follows:
Sec. 405.902 Definitions.
* * * * *
Contractor means an entity that contracts with the Federal
government to review and/or adjudicate claims, determinations and/or
decisions.
* * * * *
Sec. 405.922 [Amended]
0
3. Section 405.922 is amended by removing the phrase ``30 days'' and
adding in its place the phrase ``30 calendar days.''
Sec. 405.924 [Amended]
0
4. Section 405.924 is amended by--
0
A. Removing paragraph (b)(7).
0
B. Redesignating paragraphs (b)(8) through (b)(15) as paragraphs(b)(7)
through (b)(14), respectively.
Sec. 405.942 [Amended]
0
5. Section 405.942 is amended by--
0
A. In paragraph (a)(1), removing the phrase ``5 days'' and adding in
its place the phrase ``5 calendar days''.
0
B. In paragraph (b) introductory text, removing the phrase ``120-day''
and adding in its place the phrase ``120 calendar day''.
Sec. 405.946 [Amended]
0
6. Section 405.946(b) is amended by removing the phrase ``60-day'' and
adding in its place the phrase ``60 calendar day''.
Sec. 405.950 [Amended]
0
7. Section 405.950 is amended by--
0
A. In paragraph (b)(1), removing the phrase ``120-day'' and adding in
its place the phrase ``120 calendar day'', and removing the phrase
``60-day'' and adding in its place the phrase ``60 calendar day''.
0
B. In paragraph (b)(2), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
C. In paragraph (b)(3), removing the phrase ``60-day'' and adding in
its place the phrase ``60 calendar day''.
0
8. Section 405.952 is amended by revising paragraph (e) to read as
follows:
Sec. 405.952 Withdrawal or dismissal of a request for
redetermination.
* * * * *
(e) Effect of dismissal. The dismissal of a request for
redetermination is binding unless it is modified or reversed by a QIC
under Sec. 405.974(b) or vacated under paragraph (d) of this section.
0
9. Section 405.958 is amended by revising the introductory text to read
as follows:
Sec. 405.958 Effect of a redetermination.
In accordance with section 1869(a)(3)(D) of the Act, once a
[[Page 65334]]
redetermination is issued, it becomes part of the initial
determination. The redetermination is binding upon all parties unless--
* * * * *
0
10. Section 405.962 is amended by--
0
A. Revising paragraph (a) introductory text.
0
B. In paragraph (a)(1), removing the phrase ``5 days'' and adding in
its place the phrase ``5 calendar days''.
0
C. In paragraphs (a)(2) and (b)(1), removing the phrase ``180-day'' and
adding in its place the phrase ``180 calendar day''.
The revision reads as follows:
Sec. 405.962 Timeframe for filing a request for a reconsideration.
(a) Timeframe for filing a request. Except as provided in paragraph
(b) of this section and in Sec. 405.974(b)(1), regarding a request for
QIC reconsideration of a contractor's dismissal of a redetermination
request, any request for a reconsideration must be filed within 180
calendar days from the date the party receives the notice of the
redetermination.
* * * * *
Sec. 405.966 [Amended]
0
11. Section 405.966 is amended by--
0
A. In paragraph (b), removing the phrase ``60-day'' and adding in its
place the phrase ``60 calendar day''.
0
B. In paragraph (c), removing the phrase ``14-day'' and adding in its
place the phrase ``14 calendar day''.
Sec. 405.970 [Amended]
0
12. Section 405.970 is amended by--
0
A. In paragraph (a)(2), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
B. In paragraph (b)(1), removing the phrase ``180-day'' and adding in
its place the phrase ``180 calendar day'', and removing the phrase
``60-day'' and adding in its place the phrase ``60 calendar day''.
0
C. In paragraph (b)(2), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
D. In paragraph (b)(3), removing the phrase ``60-day'' and adding in
its place the phrase ``60 calendar day'', and removing the phrase ``14
days'' and adding in its place the phrase ``14 calendar days''.
0
E. In paragraph (c) introductory text, removing the phrase ``60 days''
and adding in its place the phrase ``60 calendar days''.
0
F. In paragraph (e)(2) introductory text, removing the phrase ``5
days'' wherever it appears and adding in its place the phrase ``5
calendar days''.
0
13. Section 405.972 is amended by revising paragraphs (b)(3) and (e) to
read as follows:
Sec. 405.972 Withdrawal or dismissal of a request for a
reconsideration.
* * * * *
(b) * * *
(3) When the party fails to file the reconsideration request in
accordance with the timeframes established in Sec. 405.962, or fails
to file the request for reconsideration of a contractor's dismissal of
a redetermination request in accordance with the timeframes established
in Sec. 405.974(b)(1);
* * * * *
(e) Effect of dismissal. The dismissal of a request for
reconsideration is binding unless it is modified or reversed by an ALJ
under Sec. 405.1004 or vacated under paragraph (d) of this section.
The dismissal of a request for reconsideration of a contractor's
dismissal of a redetermination request is binding and not subject to
further review unless vacated under paragraph (d) of this section.
0
14. Section 405.974 is amended by--
0
A. In paragraph (b)(1) introductory text, removing the phrase ``60
days'' and adding in its place the phrase ``60 calendar days''.
0
B. In paragraph (b)(1)(i), removing the phrase ``5 days'' and adding in
its place the phrase ``5 calendar days''.
0
C. In paragraph (b)(1)(ii), removing the phrase ``60-day'' and adding
in its place the phrase ``60 calendar day''.
0
D. Revising paragraph (b)(3).
The revision reads as follows:
Sec. 405.974 Reconsideration.
* * * * *
(b) * * *
(3) A QIC's reconsideration of a contractor's dismissal of a
redetermination request is binding and not subject to further review.
0
15. Section 405.978 is amended by revising the introductory text to
read as follows:
Sec. 405.978 Effect of a reconsideration.
A reconsideration is binding on all parties, unless--
* * * * *
0
16. Section 405.980 is amended by--
0
A. Revising paragraphs (a)(1) introductory text and (a)(5).
0
B. In paragraph (b) introductory text, removing the phrase ``and revise
its'' and adding in its place the word ``an''.
0
C. In paragraphs (d)(1), (d)(2), and (d)(3), removing the phrase ``180
days'' wherever it appears and adding in its place the phrase ``180
calendar days''.
0
D. In paragraphs (e)(1), (e)(2) and (e)(3), removing ``180 days'' and
adding in its place the phrase ``180 calendar days''.
The revisions are as follows:
Sec. 405.980 Reopenings of initial determinations, redeterminations,
and reconsiderations, hearings and reviews.
(a) * * *
(1) A reopening is a remedial action taken to change a binding
determination or decision that resulted in either an overpayment or
underpayment, even though the binding determination or decision may
have been correct at the time it was made based on the evidence of
record. That action may be taken by--
* * * * *
(5) The contractor's, QIC's, ALJ's, or MAC's decision on whether to
reopen is binding and not subject to appeal.
* * * * *
0
17. Section 405.990 is amended by--
0
A. Revising paragraphs (b)(1)(i)(A), (b)(1)(i)(B), (b)(1)(ii), and
(f)(3).
0
B. In paragraphs (f)(2), (f)(4) and (h)(2), removing the phrase ``60
days'' and adding in its place the phrase ``60 calendar days''.
0
C. In paragraph (i)(2), removing the phrase ``90-day'' and adding in
its place the phrase ``90 calendar day''.
0
D. In paragraph (j)(1), removing the phrase ``60-day'' and adding in
its place the phrase ``60 calendar day''.
The revisions are as follows:
Sec. 405.990 Expedited access to judicial review.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(A) An ALJ hearing in accordance with Sec. 405.1002 and a
decision, dismissal order, or remand order of the ALJ has not been
issued;
(B) MAC review in accordance with Sec. 405.1102 and a final
decision, dismissal order, or remand order of the MAC has not been
issued; or
(ii) The appeal has been escalated from the QIC to the ALJ level
after the period described in Sec. 405.970(a) and Sec. 405.970(b) has
expired, and the QIC does not issue a decision or dismissal order
within the timeframe described in Sec. 405.970(e).
* * * * *
(f) * * *
(3) A determination by the review entity either certifying that the
requirements for EAJR are met pursuant to paragraph (g) of this section
or denying the request is not subject to review by the Secretary.
* * * * *
0
18. Section 405.1000 is amended by revising paragraphs (c) and (d) to
read as follows:
[[Page 65335]]
Sec. 405.1000 Hearing before an ALJ: General rule.
* * * * *
(c) In some circumstances, a representative of CMS or its
contractor may participate in or join the hearing as a party. (See,
Sec. 405.1010 and Sec. 405.1012.)
(d) The ALJ conducts a de novo review and issues a decision based
on the hearing record.
* * * * *
0
19. Section 405.1002 is amended by--
0
A. In paragraph (a)(1), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
B. In paragraph (a)(3), removing the phrase ``5 days'' and adding in
its place the phrase ``5 calendar days''.
0
C. In paragraph (a)(4), removing the phrase ``60-day'' and adding in
its place the phrase ``60 calendar day''.
0
D. Revising paragraph (b)(2) to read as follows:
Sec. 405.1002 Right to an ALJ hearing.
* * * * *
(b) * * *
(2) The QIC does not issue a decision or dismissal order within 5
calendar days of receiving the request for escalation in accordance
with Sec. 405.970(e)(2); and
* * * * *
0
20. Section 405.1004 is amended by--
0
A. In paragraph (a)(1), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
B. In paragraph (a)(3), removing the phrase ``5 days'' and adding in
its place the phrase ``5 calendar days''.
0
C. In paragraph (a)(4), removing the phrase ``60-day'' and adding in
its place the phrase ``60 calendar day''.
0
D. Revising paragraph (c) to read as follows:
Sec. 405.1004 Right to ALJ review of QIC notice of dismissal.
* * * * *
(c) An ALJ's decision regarding a QIC's dismissal of a
reconsideration request is binding and not subject to further review.
The dismissal of a request for ALJ review of a QIC's dismissal of a
reconsideration request is binding and not subject to further review,
unless vacated by the MAC under Sec. 405.1108(b).
Sec. 405.1006 [Amended]
0
21. Section 405.1006(e)(1)(ii) is amended by removing the phrase ``60
days'' and adding in its place the phrase ``60 calendar days''.
0
22. Section 405.1010 is amended by--
0
A. Revising paragraph (a).
0
B. In paragraph (b), removing the phrase ``10 days'' and adding in its
place the phrase ``10 calendar days''.
The revision reads as follows:
Sec. 405.1010 When CMS or its contractors may participate in an ALJ
hearing.
(a) An ALJ may request, but may not require, CMS and/or one or more
of its contractors to participate in any proceedings before the ALJ,
including the oral hearing, if any. CMS and/or one or more of its
contractors may also elect to participate in the hearing process.
* * * * *
0
23. Section 405.1012 is amended by--
0
A. Revising paragraph (a).
0
B. In paragraph (b), removing the phrase ``10 days'' and adding in its
place the phrase ``10 calendar days''.
The revision reads as follows:
Sec. 405.1012 When CMS or its contractors may be a party to a
hearing.
(a) CMS and/or one or more of its contractors may be a party to an
ALJ hearing unless the request for hearing is filed by an unrepresented
beneficiary.
* * * * *
Sec. 405.1014 [Amended]
0
24. Section 405.1014 is amended by--
0
A. In paragraph (b)(1), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
B. In paragraph (b)(2), removing the phrase ``90-day'' where it appears
and adding in its place the phrase ``90 calendar day''.
Sec. 405.1016 [Amended]
0
25. Section 405.1016 is amended by--
0
A. In paragraph (a), removing the phrase ``90-day'' where it appears
and adding in its place the phrase ``90 calendar day''.
0
B. In paragraph (c), removing the phrase ``180-day'' where it appears
and adding in its place the phrase ``180 calendar day''.
Sec. 405.1018 [Amended]
0
26. Section 405.1018(a) and (b) is amended by removing the phrase ``10
days'' and adding in its place the phrase ``10 calendar days''.
0
27. Section 405.1020 is amended by--
0
A. Revising paragraph (c)(1).
0
B. In paragraph (g)(3)(ii), removing the phrase ``10 days'' and adding
in its place the phrase ``10 calendar days''.
0
C. Revising paragraph (i)(4).
The revisions read as follows:
Sec. 405.1020 Time and place for a hearing before an ALJ.
* * * * *
(c) * * *
(1) The ALJ sends a notice of hearing to all parties that filed an
appeal or participated in the reconsideration, any party who was found
liable for the services at issue subsequent to the initial
determination, and the QIC that issued the reconsideration, advising
them of the proposed time and place of the hearing.
* * * * *
(i) * * *
(4) When a party's request for an in-person hearing as specified
under paragraph (i)(1) of this section is granted, the ALJ must issue a
decision within the adjudication timeframe specified in Sec. 405.1016
(including any applicable extensions provided in this subpart) unless
the party requesting the hearing agrees to waive such adjudication
timeframe in writing.
* * * * *
0
28. Section 405.1022 is amended by revising paragraph (a) to read as
follows:
Sec. 405.1022 Notice of a hearing before an ALJ.
(a) Issuing the notice. After the ALJ sets the time and place of
the hearing, notice of the hearing will be mailed to the parties and
other potential participants, as provided in Sec. 405.1020(c) at their
last known address, or given by personal service. The ALJ is not
required to send a notice of hearing to a party who indicates in
writing that it does not wish to receive this notice. The notice is
mailed or served at least 20 calendar days before the hearing.
* * * * *
Sec. 405.1024 [Amended]
0
29. Section 405.1024(a) is amended by removing the phrase ``5 days''
and adding in its place the phrase ``5 calendar days''.
Sec. 405.1028 [Amended]
0
30. Section 405.1028(a) is amended by removing the phrase ``10 days''
and adding in its place the phrase ``10 calendar days''.
0
31. Section 405.1034 is amended by revising paragraph (a) to read as
follows:
Sec. 405.1034 When an ALJ may remand a case to the QIC.
(a) General rules. (1) If an ALJ believes that the written record
is missing information that is essential to resolving the issues on
appeal and that information can be provided only by CMS or its
contractors, then the ALJ may either:
(i) Remand the case to the QIC that issued the reconsideration or
(ii) Retain jurisdiction of the case and request that the
contractor forward the missing information to the appropriate hearing
office.
[[Page 65336]]
(2) If the information is not information that can be provided only
by CMS or its contractors, the ALJ must retain jurisdiction of the case
and obtain the information on his or her own, or directly from one of
the parties.
(3) ``Can be provided only by CMS or its contractors'' means the
information is not publicly available, and is not in the possession of,
and cannot be requested and obtained by one of the parties. Information
that is publicly available is information that is available to the
general public via the Internet or in a printed publication. It
includes, but is not limited to, information available on a CMS or
contractor Web site or information in an official CMS or DHHS
publication (including, but not limited to, provisions of NCDs or LCDs,
procedure code or modifier descriptions, fee schedule data, and
contractor operating manual instructions).
* * * * *
0
32. Section 405.1036 is amended by--
0
A. Revising paragraphs (f)(1) and (f)(3).
0
B. In paragraph (f)(5)(iv), removing the phrase ``15 days'' and adding
in its place the phrase ``15 calendar days''.
The revisions read as follows:
Sec. 405.1036 Description of an ALJ hearing process.
* * * * *
(f) * * *
(1) Except as provided in this section, when it is reasonably
necessary for the full presentation of a case, an ALJ may, on his or
her own initiative or at the request of a party, issue subpoenas for
the appearance and testimony of witnesses and for a party to make
books, records, correspondence, papers, or other documents that are
material to an issue at the hearing available for inspection and
copying. An ALJ may not issue a subpoena to CMS or its contractors, on
his or her own initiative or at the request of a party, to compel an
appearance, testimony, or the production of evidence.
* * * * *
(3) Parties to a hearing who wish to subpoena documents or
witnesses must file a written request for the issuance of a subpoena
with the requirements set forth in paragraph (f)(2) of this section
with the ALJ no later than the end of the discovery period established
by the ALJ under Sec. 405.1037(c).
* * * * *
Sec. 405.1037 [Amended]
0
33. Section 405.1037 is amended by--
0
A. In paragraph (c)(5), removing the phrase ``45 days'' and adding in
its place the phrase ``45 calendar days''.
0
B. In paragraph (e)(2)(iii), removing the phrase ``15 days'' and adding
in its place the phrase ``15 calendar days''.
Sec. 405.1038 [Amended]
0
34. Section 405.1038(b)(1)(i) is amended by removing the word
``videoconferencing'' and adding in its place the word
``videoteleconferencing''.
Sec. 405.1042 [Amended]
0
35. Section 405.1042(b)(2) is amended by removing the phrase ``90-day''
and adding in its place the phrase ``90 calendar day''.
Sec. 405.1044 [Amended]
0
36. Section 405.1044(d) is amended by removing the phrase ``10 days''
and adding in its place the phrase ``10 calendar days''.
0
37. Section 405.1046 is amended by--
0
A. Revising paragraph (c).
0
B. In paragraph (d), removing the phrase ``90-day'' where it appears
and adding in its place the phrase ``90 calendar day''.
The revision reads as follows:
Sec. 405.1046 Notice of an ALJ decision.
* * * * *
(c) Limitation on decision. When the amount of payment for an item
or service is an issue before the ALJ, the ALJ may make a finding as to
the amount of payment due. If the ALJ makes a finding concerning
payment when the amount of payment was not an issue before the ALJ, the
contractor may independently determine the payment amount. In either of
the aforementioned situations, an ALJ's decision is not binding on the
contractor for purposes of determining the amount of payment due. The
amount of payment determined by the contractor in effectuating the
ALJ's decision is a new initial determination under Sec. 405.924.
* * * * *
0
38. Section 405.1048 is amended by revising paragraph (a) to read as
follows:
Sec. 405.1048 The effect of an ALJ's decision.
* * * * *
(a) A party to the hearing requests a review of the decision by the
MAC within the stated time period or the MAC reviews the decision
issued by an ALJ under the procedures set forth in Sec. 405.1110, and
the MAC issues a final decision or remand order or the appeal is
escalated to Federal district court under the provisions at Sec.
405.1132 and the Federal district court issues a decision.
* * * * *
Sec. 405.1052 [Amended]
0
39. Section 405.1052 is amended by--
0
A. In paragraphs (a)(2)(ii) and (a)(2)(iii), removing the phrase ``10
days'' and adding in its place the phrase ``10 calendar days''.
0
B. In paragraph (a)(6), removing the word ``final'' and adding in its
place the word ``binding''.
0
40. Section 405.1063 is revised to read as follows:
Sec. 405.1063 Applicability of laws, regulations and CMS Rulings.
(a) All laws and regulations pertaining to the Medicare and
Medicaid programs, including, but not limited to Titles XI, XVIII, and
XIX of the Social Security Act and applicable implementing regulations,
are binding on ALJs and the MAC.
(b) CMS Rulings are published under the authority of the
Administrator, CMS. Consistent with Sec. 401.108 of this chapter,
rulings are binding on all CMS components, on all HHS components that
adjudicate matters under the jurisdiction of CMS, and on the Social
Security Administration to the extent that components of the Social
Security Administration adjudicate matters under the jurisdiction of
CMS.
Sec. 405.1100 [Amended]
0
41. Section 405.1100 is amended by revising paragraphs (c) and (d) to
read as follows:
Sec. 405.1100 Medicare Appeals Council review: General.
* * * * *
(c) When the MAC reviews an ALJ's decision, it undertakes a de novo
review. The MAC issues a final decision or dismissal order or remands a
case to the ALJ within 90 calendar days of receipt of the appellant's
request for review, unless the 90 calendar day period is extended as
provided in this subpart.
(d) When deciding an appeal that was escalated from the ALJ level
to the MAC, the MAC will issue a final decision or dismissal order or
remand the case to the ALJ within 180 calendar days of receipt of the
appellant's request for escalation, unless the 180 calendar day period
is extended as provided in this subpart.
Sec. 405.1102 [Amended]
0
42. Section 405.1102 is amended by--
0
A. In paragraph (a)(1), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
B. In paragraph (a)(2), removing the phrase ``5 days'' and adding in
its place ``5 calendar days''.
[[Page 65337]]
0
43. Section 405.1104 is amended by revising paragraphs (a)(2), (b) and
(c) to read as follows:
Sec. 405.1104 Request for MAC review when an ALJ does not issue a
decision timely.
(a) * * *
(2) The ALJ does not issue a decision, dismissal order, or remand
order within the later of 5 calendar days of receiving the request for
escalation or 5 calendar days from the end of the applicable
adjudication period set forth in Sec. 405.1016.
(b) Escalation. (1) If the ALJ is not able to issue a decision,
dismissal order, or remand order within the time period set forth in
paragraph (a)(2) of this section, he or she sends notice to the
appellant.
(2) The notice acknowledges receipt of the request for escalation,
and confirms that the ALJ is not able to issue a decision, dismissal
order, or remand order within the statutory timeframe.
(3) If the ALJ does not act on a request for escalation within the
time period set forth in paragraph (a)(2) of this section or does not
send the required notice to the appellant, the QIC decision becomes the
decision that is subject to MAC review consistent with Sec.
405.1102(a).
(c) No escalation. If the ALJ's adjudication period set forth in
Sec. 405.1016 expires, the case remains with the ALJ until a decision,
dismissal order, or remand order is issued or the appellant requests
escalation to the MAC.
0
44. Section 405.1106 is revised to read as follows:
Sec. 405.1106 Where a request for review or escalation may be filed.
(a) When a request for a MAC review is filed after an ALJ has
issued a decision or dismissal, the request for review must be filed
with the entity specified in the notice of the ALJ's action. The
appellant must also send a copy of the request for review to the other
parties to the ALJ decision or dismissal who received a copy of the
hearing decision under Sec. 405.1046(a) or a copy of the notice of
dismissal under Sec. 405.1052(b). Failure to copy the other parties
tolls the MAC's adjudication deadline set forth in Sec. 405.1100 until
all parties to the hearing receive notice of the request for MAC
review. If the request for review is timely filed with an entity other
than the entity specified in the notice of the ALJ's action, the MAC's
adjudication period to conduct a review begins on the date the request
for review is received by the entity specified in the notice of the
ALJ's action. Upon receipt of a request for review from an entity other
than the entity specified in the notice of the ALJ's action, the MAC
sends written notice to the appellant of the date of receipt of the
request and commencement of the adjudication timeframe.
(b) If an appellant files a request to escalate an appeal to the
MAC level because the ALJ has not completed his or her action on the
request for hearing within the adjudication deadline under Sec.
405.1016, the request for escalation must be filed with both the ALJ
and the MAC. The appellant must also send a copy of the request for
escalation to the other parties. Failure to copy the other parties
tolls the MAC's adjudication deadline set forth in Sec. 405.1100 until
all parties to the hearing receive notice of the request for MAC
review. In a case that has been escalated from the ALJ, the MAC's 180
calendar day period to issue a final decision, dismissal order, or
remand order begins on the date the request for escalation is received
by the MAC.
0
45. Section 405.1110 is amended by--
0
A. In paragraph (a), removing the phrase ``60 days'' and adding in its
place the phrase ``60 calendar days''.
0
B. Revising paragraphs (b)(2) and (d) to read as follows:
Sec. 405.1110 MAC reviews on its own motion.
* * * * *
(b) * * *
(2) CMS' referral to the MAC is made in writing and must be filed
with the MAC no later than 60 calendar days after the ALJ's decision or
dismissal is issued. The written referral will state the reasons why
CMS believes the MAC must review the case on its own motion. CMS will
send a copy of its referral to all parties to the ALJ's action who
received a copy of the hearing decision under Sec. 405.1046(a) or the
notice of dismissal under Sec. 405.1052(b), and to the ALJ. Parties to
the ALJ's action may file exceptions to the referral by submitting
written comments to the MAC within 20 calendar days of the referral
notice. A party submitting comments to the MAC must send such comments
to CMS and all other parties to the ALJ's decision who received a copy
of the hearing decision under Sec. 405.1046(a) or the notice of
dismissal under Sec. 405.1052(b).
* * * * *
(d) MAC's action. If the MAC decides to review a decision or
dismissal on its own motion, it will mail the results of its action to
all the parties to the hearing and to CMS if it is not already a party
to the hearing. The MAC may adopt, modify, or reverse the decision or
dismissal, may remand the case to an ALJ for further proceedings or may
dismiss a hearing request. The MAC must issue its action no later than
90 calendar days after receipt of the CMS referral, unless the 90
calendar day period has been extended as provided in this subpart. The
MAC may not, however, issue its action before the 20 calendar day
comment period has expired, unless it determines that the agency's
referral does not provide a basis for reviewing the case. If the MAC
does not act within the applicable adjudication deadline, the ALJ's
decision or dismissal is binding on the parties to the ALJ decision.
0
46. Section 405.1112 is amended by revising paragraph (a) to read as
follows:
Sec. 405.1112 Content of request for review.
(a) The request for MAC review must be filed with the MAC or
appropriate ALJ hearing office. The request for review must be in
writing and may be made on a standard form. A written request that is
not made on a standard form is accepted if it contains the
beneficiary's name; Medicare health insurance claim number; the
specific service(s) or item(s) for which the review is requested; the
specific date(s) of service; the date of the ALJ's decision or
dismissal order, if any; if the party is requesting escalation from the
ALJ to the MAC, the hearing office in which the appellant's request for
hearing is pending; and the name and signature of the party or the
representative of the party; and any other information CMS may decide.
* * * * *
Sec. 405.1118 [Amended]
0
47. Section 405.1118 is amended by removing the phrase ``90-day'' and
adding in its place the phrase ``90 calendar day''.
0
48. Section 405.1122 is amended by--
0
A. Revising paragraph (d)(1).
0
B. Redesignating paragraph (e)(2)(i) as paragraph (e)(2).
0
C. Redesignating paragraphs (e)(2)(ii) through (e)(2)(v) as paragraphs
(e)(3) through (e)(6), respectively.
0
D. In new redesignated paragraph (e)(4), removing the phrase ``15
days'' and adding in its place ``15 calendar days''.
0
E. In new redesignated paragraph (e)(2)(6), removing the word ``lifed''
and adding in its place the word ``lifted''.
0
F. In paragraph (f)(1), removing the reference to ``section 205(c) of
the Act, 42 U.S.C. 405(c).'' and adding in its place the reference
``section 205(e) of the Act, 42 U.S.C. 405(e).''.
The revision reads as follows:
[[Page 65338]]
Sec. 405.1122 What evidence may be submitted to the MAC.
* * * * *
(d) * * *
(1) Except as provided in this section, when it is reasonably
necessary for the full presentation of a case, the MAC may, on its own
initiative or at the request of a party, issue subpoenas requiring a
party to make books, records, correspondence, papers, or other
documents that are material to an issue at the hearing available for
inspection and copying. The MAC may not issue a subpoena to CMS or its
contractors, on its own initiative or at the request of a party, to
compel the production of evidence.
* * * * *
Sec. 405.1124 [Amended]
0
49. Section 405.1124(b) is amended by removing the phrase ``10 days''
and adding in its place the phrase ``10 calendar days''.
Sec. 405.1126 [Amended]
0
50. Section 405.1126 is amended by--
0
A. In paragraph (a), removing the word ``final'' from the last
sentence.
0
B. In paragraph (d)(1), removing the phrase ``20 days'' and adding in
its place the phrase ``20 calendar days''.
0
51. Section 405.1130 is revised to read as follows:
Sec. 405.1130 Effect of the MAC's decision.
The MAC's decision is final and binding on all parties unless a
Federal district court issues a decision modifying the MAC's decision
or the decision is revised as the result of a reopening in accordance
with Sec. 405.980. A party may file an action in a Federal district
court within 60 calendar days after the date it receives notice of the
MAC's decision.
0
52. Section 405.1132 is amended by revising paragraph (b) to read as
follows:
Sec. 405.1132 Request for escalation to Federal court.
* * * * *
(b) A party may file an action in a Federal district court within
60 calendar days after the date it receives the MAC's notice that the
MAC is not able to issue a final decision, dismissal order, or remand
order unless the party is appealing an ALJ dismissal.
0
53. Section 405.1136 is amended by--
0
A. Revising paragraph (a)(2).
0
B. In paragraphs (c)(3) and (d)(2), removing the phrase ``60 days'' and
adding in its place the phrase ``60 calendar days''.
The revision reads as follows:
Sec. 405.1136 Judicial review.
(a) * * *
(2) If the MAC's adjudication period set forth in Sec. 405.1100
expires and the appellant does not request escalation to Federal
district court, the case remains with the MAC until a final decision,
dismissal order, or remand order is issued.
* * * * *
Sec. 405.1140 [Amended]
0
54. Section 405.1140 is amended by--
0
A. In paragraph (b)(1), removing the phrase ``30 days'' wherever it
appears and adding in its place the phrase ``30 calendar days'', and
removing the phrase ``30-day'' wherever it appears and adding in its
place the phrase ``30 calendar day''.
0
B. In paragraph (c)(1), removing the phrase ``60 days'' and adding in
its place the phrase ``60 calendar days''.
0
C. In paragraph (c)(4), removing the phrase ``30 days'' and adding in
its place the phrase ``30 calendar days''.
0
D. In paragraph (d), removing the phrase ``60 days'' and adding in its
place the phrase ``60 calendar days''.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: February 6, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: August 6, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-28707 Filed 12-8-09; 8:45 am]
BILLING CODE 4120-01-P