[Federal Register Volume 74, Number 235 (Wednesday, December 9, 2009)]
[Rules and Regulations]
[Pages 65340-65378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28710]



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Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 423



Medicare Program; Application of Certain Appeals Provisions to the 
Medicare Prescription Drug Appeals Process; Final Rule

  Federal Register / Vol. 74 , No. 235 / Wednesday, December 9, 2009 / 
Rules and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 423

[CMS-4127-F]
RIN 0938-AO87


Medicare Program; Application of Certain Appeals Provisions to 
the Medicare Prescription Drug Appeals Process

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

ACTION: Final rule.

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SUMMARY: This final rule will implement the procedures that the 
Department of Health and Human Services will follow at the 
Administrative Law Judge and Medicare Appeals Council levels in 
deciding appeals brought by individuals who have enrolled in the 
Medicare prescription drug benefit program. In addition, it will 
implement the reopening procedures that will be followed at all levels 
of appeal.

DATES: Effective date: This final rule is effective on January 8, 2010.

FOR FURTHER INFORMATION CONTACT:

Arrah Tabe-Bedward, (410) 786-7129 (for issues related to reopenings 
and expedited access to judicial review).
Peggy McFadden-Elmore, (703) 235-0126 (for issues related to ALJ level 
appeals policies).
Mary Peltzer, (202) 565-0169 (for issues related to MAC level appeals).

SUPPLEMENTARY INFORMATION:

Abbreviations

    Because of the many terms to which we refer by abbreviation in this 
final rule, we are listing these abbreviations and their corresponding 
terms in alphabetical order below:

ALJ Administrative Law Judge
CMS Centers for Medicare & Medicaid Services
DAB Departmental Appeals Board
EAJR Expedited Access to Judicial Review
IRE Independent Review Entity
LCD Local Coverage Determination
MAC Medicare Appeals Council
NCD National Coverage Determination
QIC Qualified Independent Contractor

I. Background

    The voluntary prescription drug benefit program (``Part D'') was 
enacted into law by section 101 of Title I of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-
173). The MMA specified that the prescription drug benefit would become 
available on January 1, 2006 for individuals entitled to benefits under 
Medicare Part A or enrolled under Medicare Part B. On January 28, 2005, 
the final rule (70 FR 4194) implementing the Part D program appeared in 
the Federal Register (hereinafter ``Part D rule''). This rule became 
effective on March 22, 2005.
    Section 1860D-4(h) of the Social Security Act (the Act) provides 
that Part D plan sponsors follow appeals procedures specified in 
section 1852(g)(5) of the Act in a manner similar to the manner such 
requirements apply to Medicare Advantage (MA) organizations for Part C 
appeals. Part D plan sponsors include a prescription drug plan sponsor, 
an MA organization offering a Medicare Advantage prescription drug plan 
(MA-PD plan), a Program of All-Inclusive Care for Elderly (PACE) 
organization offering a PACE plan, and a cost plan offering qualified 
prescription drug coverage.
    Section 1852(g)(5) of the Act provides that enrollees in MA plans 
who are dissatisfied with determinations regarding their Part C 
benefits are entitled, if they meet the amount in controversy 
requirement, to a hearing before the Secretary to the same extent as is 
provided in section 205(b) of the Act and judicial review of the 
Secretary's final decision as provided in section 205(g) of the Act.
    Section 1869(b)(1)(A) of the Act, which sets forth the requirements 
for Part A and Part B appeals, contains similar language to that set 
forth in section 1852(g)(5) of the Act and also refers to sections 
205(b) and (g) of the Act.
    These statutory concepts are reflected in the Part D rule and a 
closely related rule concerning MA organizations that also appeared in 
the Federal Register on January 28, 2005 (70 FR 4588), and became 
effective March 22, 2005 (hereinafter ``Part C rule''). The Part D rule 
is codified at 42 CFR part 423, and addresses grievances, coverage 
determinations, reconsiderations, and appeals in subpart M. The Part C 
rule is codified at 42 CFR part 422, and similarly addresses 
grievances, organization determinations, and appeals in subpart M. The 
Part D rule states that, unless otherwise provided, the Part C rules 
regarding appeals and reopenings will apply ``to the extent they are 
appropriate.'' (See 42 CFR 423.562(c).) Likewise, the Part C rule 
governing appeals at the Administrative Law Judge (ALJ) and Medicare 
Appeals Council (MAC) levels of appeal provides that adjudicators apply 
the Part A and Part B appeals and reopening procedures specified in 42 
CFR part 405 ``to the extent they are appropriate.'' (See 42 CFR 
422.562(d).)
    Based on this statutory and regulatory framework, CMS stated in the 
preamble to the interim final rule entitled ``Changes to the Medicare 
Claims Appeal Procedures,'' which established new procedures for 
appeals under Medicare Part A and Part B, the differences in the 
appeals procedures for Part D enrollees would be addressed in a future 
Part D rulemaking document (70 FR 11420), (hereinafter, ``Part 405, 
subpart I rule''). The purpose of this final appeals rule is to provide 
guidance on the differences in appeals procedures for Part D enrollees 
by implementing more detailed regulations to govern Part D appeals 
(requests for drug benefits and payment) to the ALJ, MAC, and Federal 
District Court and reopenings of determinations and decisions.

II. Highlights and Organization of Final Rule

    This final appeals rule contains revisions to Part 423, subpart M 
of title 42 of the CFR. We renamed, reorganized, and consolidated 
similar requirements into one section, and added a new subpart ``U''. 
We believe that these changes will maintain or clarify our original 
intent, making the revised regulation easier to read and understand. 
Specifically, we renamed subpart M, ``Grievances, Coverage 
Determinations, Redeterminations, and Reconsiderations''. This subpart 
will continue to set forth the requirements for Part D plan sponsors 
with respect to grievances, coverage determinations, redeterminations, 
and reconsiderations. We also added a new subpart U, ``Reopenings, ALJ 
Hearings, MAC Review, and Judicial Review'' that will set forth the 
requirements for Part D plan sponsors, the Part D Independent Review 
Entity (IRE), ALJs, and the MAC with respect to reopenings, ALJ 
hearings, and MAC review of Part D appeals. In addition, we 
redesignated and reserved Sec.  423.610, Sec.  423.612, Sec.  423.620, 
Sec.  423.630, and Sec.  423.634. We note that while we made conforming 
changes to the language of some of these redesignated sections, we did 
not make any substantive changes to the policies established by those 
provisions.
    Below we are providing a crosswalk table that enables the reader to 
easily locate where the requirements have been relocated. The crosswalk 
lists the former subparts and former sections along with the new 
subparts and new sections as they appear in this final appeals rule.

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                                                Table--Crosswalk
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            Former subpart                  Former section            New subpart              New section
----------------------------------------------------------------------------------------------------------------
Subpart M--Grievances, Coverage        423.610 Right to an ALJ  Subpart U--Reopening,    423.1970 Right to an
 Determinations, and Appeals.           hearing.                 ALJ Hearings, MAC        ALJ hearing.
                                                                 Review, and Judicial
                                                                 Review.
Subpart M--Grievances, Coverage        423.612 Request for an   Subpart U--Reopening,    423.1972 Request for an
 Determinations, and Appeals.           ALJ hearing.             ALJ Hearings, MAC        ALJ hearing.
                                                                 Review, and Judicial
                                                                 Review.
Subpart M--Grievances, Coverage        423.620 Medicare         Subpart U--Reopening,    423.1974 Medicare
 Determinations, and Appeals.           Appeals Council (MAC)    ALJ Hearings, MAC        Appeals Council (MAC)
                                        review.                  Review, and Judicial     review.
                                                                 Review.
Subpart M--Grievances, Coverage        423.630 Judicial review  Subpart U--Reopening,    423.1976 Judicial
 Determinations, and Appeals.                                    ALJ Hearings, MAC        review.
                                                                 Review, and Judicial
                                                                 Review.
Subpart M--Grievances, Coverage        423.634 Reopening and    Subpart U--Reopening,    423.1978 Reopening
 Determinations, and Appeals.           revising                 ALJ Hearings, MAC        determinations and
                                        determinations and       Review, and Judicial     decisions.
                                        decisions.               Review.
----------------------------------------------------------------------------------------------------------------

III. Technical Changes Based on Finalization of the Part 405, Subpart I 
Rule

    As indicated above, the purpose of this final appeals rule is to 
provide guidance on the differences between the Part D appeals 
procedures and the appeals procedures for Medicare Part A and Part B 
found in the Part 405, subpart I rule. The final rule for Medicare Part 
A and Part B claims appeals (referenced above as the Part 405, subpart 
I rule) published elsewhere in this Federal Register, and therefore, 
for this final rule, it is necessary based on statutory and regulatory 
framework discussed above in section I, and below in section IV.A., to 
make a number of technical changes to this final Part D appeals rule in 
order to be consistent with the provisions contained in the final rule 
for Part 405, subpart I. These changes are discussed and explained in 
greater detail in the final Medicare Parts A and B claims appeals rule, 
and thus, we will not include an extensive discussion of these 
technical corrections in this preamble. Rather we discuss generally the 
technical corrections being made in this final appeals rule, and 
provide references to the sections within the final Parts A and B 
claims appeals rule preamble for more in depth discussions on these 
changes.
    The technical corrections being made in this final Part D appeals 
rule include the following:
     Technical corrections to clarify the terms ``final'' and 
``binding,'' by reserving the term ``final'' to describe those actions 
or decisions for which judicial review may be immediately sought.'' See 
Sec. Sec.  423.1978, 423.1980(a)(1) and (a)(4), 423.2004(c), 
423.2046(c), 423.2052(a)(6), 423.2126(a)(1), and 423.2130. For a more 
detailed discussion on these technical changes, please reference 
section II.B.5.b. contained in the final rule entitled ``Medicare 
Program: Changes to the Medicare Claims Appeals Procedures,'' published 
elsewhere in this issue of the Federal Register.
     A number of technical changes are also being made to 
clarify the decisions or actions issued by adjudicators, and to further 
clarify the effect of a specific action issued by an adjudicator, and 
when judicial review may be available; similar technical corrections to 
clarify which actions, if taken by the ALJ or the MAC, may preclude a 
party from seeking EAJR, and to clarify that the decision of the review 
entity to certify or deny a request for EAJR is not subject to further 
review. These are technical corrections where the terms ``final 
action'' or ``final decision'' had been used. See Sec. Sec.  
423.1990(b)(1)(i), (b)(1)(ii), and (e)(3), 423.2048(a), 423.2100(c) and 
(d), 423.2048(a), and 423.2110(d)(5). For a more detailed discussion on 
these technical changes, please reference section II.B.5.b. contained 
in the final rule entitled ``Medicare Program: Changes to the Medicare 
Claims Appeals Procedures,'' published elsewhere in this issue of the 
Federal Register.
     A technical correction clarifying that the reopening time 
frames apply to the reopening of a determination or decision and not to 
the revision of a determination or decision. See Sec.  423.1980(b). For 
a more detailed discussion on these technical changes, please reference 
section II.B.7.a. contained in the final rule entitled ``Medicare 
Program: Changes to the Medicare Claims Appeals Procedures,'' published 
elsewhere in this issue of the Federal Register.
     A technical revision to clarify that ALJs conduct de novo 
reviews. See Sec.  423.2000(d). For a more detailed discussion on these 
technical changes, please reference section II.B.9.b. contained in the 
final rule entitled ``Medicare Program: Changes to the Medicare Claims 
Appeals Procedures,'' published elsewhere in this issue of the Federal 
Register.
     A technical correction regarding the adjudication 
timeframe when a request for an in-person hearing is granted. See Sec.  
423.2020(i)(4). For a more detailed discussion on these technical 
changes, please reference section II.B.9.e. contained in the final rule 
entitled ``Medicare Program: Changes to the Medicare Claims Appeals 
Procedures,'' published elsewhere in this issue of the Federal 
Register.
     Technical corrections to the remand provisions to clarify 
when an ALJ can remand a case to the IRE based on missing information. 
See Sec.  423.2034(a). For a more detailed discussion on these 
technical changes, please reference section II.B.9.h. contained in the 
final rule entitled ``Medicare Program: Changes to the Medicare Claims 
Appeals Procedures,'' published elsewhere in this issue of the Federal 
Register.
     Technical corrections to clarify the appropriate use of 
subpoenas by an ALJ or the MAC. See Sec. Sec.  423.2036(f)(1), 
423.2122(b). For a more detailed discussion on these technical changes, 
please reference sections II.B.9.i. and II.B.10.b. contained in the 
final rule entitled ``Medicare Program: Changes to the Medicare Claims 
Appeals Procedures,'' published elsewhere in this issue of the Federal 
Register.
     A technical correction to clarify the applicability of 
laws, regulations, and CMS rulings to ALJs and the MAC. See Sec.  
423.2063(a). For a more detailed discussion on these technical changes, 
please reference section II.B.9.m. contained in the final rule entitled 
``Medicare Program: Changes to the Medicare Claims Appeals 
Procedures,''

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published elsewhere in this issue of the Federal Register.
    Also, the reader can easily refer to section VI., Provisions of the 
Final Rule, in this document to see a comprehensive review of the 
modifications being made to this final rule, most of which are 
technical corrections made to ensure consistency between this final 
appeals rule, and the Medicare Part A and Part B claims appeals rule, 
upon which this rule is modeled.

IV. Summary of the Proposed Provisions and Response to Comments on the 
March 17, 2008 Proposed Rule

    Discussed below are the comments and technical corrections to the 
proposed rule. 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.
    We received 22 public comments on the proposed rule published in 
the Federal Register on March 17, 2008. Most of the comments received 
were from beneficiary advocacy organizations. Summaries of the public 
comments and our responses to those comments are set forth below.
    On January 12, 2009, we published CMS-4131-FC (74 FR 1494). In that 
final rule, we added a definition for ``other prescriber'' in Sec.  
423.560. We also inserted ``or other prescriber'' after ``prescribing 
physician'' or ``physician'' throughout subpart M of part 423 in order 
to authorize non-physician prescribers to carry out the same functions 
that prescribing physicians currently perform with respect to the 
coverage determination and appeals processes for the prescription drug 
program. To ensure consistency with CMS-4131-FC and current CMS policy, 
we revised Sec. Sec.  423.2014, 423.2016, 423.2102, and 423.2108 of 
CMS-4127-F to include ``or other prescriber'' after ``prescribing 
physician'' or ``physician'' where appropriate.

A. General Appeals Provisions

    Section 1860D-4(h)(1) of the Act, which sets forth the statutory 
requirements for Part D appeals, requires the Secretary to establish an 
appeals process that is ``similar'' to the process used for MA 
organizations under section 1852(g)(5) of the Act. Section 1852(g)(5) 
of the Act provides the right to a hearing ``before 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 as provided in 
section 205(g)'' of the Act. Thus, an enrollee dissatisfied by reason 
of the enrollee's failure to receive a Part D drug to which the 
enrollee believes he or she is entitled, and at no greater charge than 
the enrollee believes he or she is required to pay, is entitled to a 
hearing and may also request judicial review of the final decision of 
the Secretary.
    Section 1852(g)(5) of the Act also specifies the amount in 
controversy needed to pursue a hearing and judicial review. Like 
section 1852(g)(5) of the Act, section 1869(b)(1)(A) of the Act, which 
sets forth the statutory requirements for Part A and Part B appeals, 
provides the right to a hearing ``by the Secretary to the same extent 
as is provided in section 205(b)'' and the right to judicial review 
``of the Secretary's final decision after such hearing as is provided 
in section 205(g)'' of the Act. Under this authority, we believe that 
Congress gave us discretion in designing procedural rules for appeals 
under Part D.
    Section 423.562(c) of the Part D rule states that ``[u]nless this 
subpart provides otherwise, the regulations in part 422, subpart M of 
this chapter (concerning administrative review and hearing processes 
under titles II and XVIII, and representation of parties under title 
XVIII of the Act) and any interpretive rules or CMS rulings issued 
under these regulations, apply under this subpart to the extent they 
are appropriate.'' Section 422.562(d) of the Part C rule states that 
``[u]nless this subpart provides otherwise, the regulations in part 405 
of this chapter (concerning the administrative review and hearing 
processes and representation of parties under titles II and XVIII of 
the Act), apply under this subpart to the extent they are 
appropriate.'' Therefore, as discussed in the preamble to the Part D 
rule, since Sec.  423.562(c) incorporates part 422, and since part 422 
incorporates part 405, the provisions of part 405 apply to Part D 
appeals to the extent that they are appropriate. (70 FR at 4343).
    For these reasons, we are providing a similar appeals process for 
Part D appeals at the ALJ, MAC and judicial review levels as applies to 
Part A and Part B appeals, to the extent it is appropriate.
    The part 405 regulations at subparts G and H, which continue to 
apply to certain pending Medicare claims appeals under Medicare Part A 
and Part B, respectively, were issued before the enactment of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (BIPA), Public Law 106-554. BIPA made significant changes to 
Medicare claims appeals procedures. The MMA made further changes to 
these procedures. Part 405, subpart I, contains the new BIPA and MMA 
appeals procedures. Part 405, subpart I, applies to initial 
determinations issued by Medicare fiscal intermediaries on or after May 
1, 2005, and to initial determinations issued by carriers on or after 
January 1, 2006. Part 405, subpart I, is tailored to the Medicare Part 
A and Part B claims appeals process, unlike the provisions in subparts 
G and H, which, in large part, follow the Social Security 
Administration's procedures for disability claims. For this reason, we 
have concluded that it is appropriate to apply the provisions of Part 
405, subpart I, to Part D appeals at the ALJ and MAC levels with 
appropriate modifications to meet the needs of Part D appeals.
    Specific comments and our responses to those comments are as 
follows:
    Comment: We received a comment related to the statement in the 
preamble of the proposed rule that the Social Security Administration 
(SSA) does not process appeals related to enrollment in or entitlement 
to Part D. The commenter inquired about the responsible entity and 
applicable process when a beneficiary has an issue related to Part D 
enrollment, including eligibility for a special enrollment period.
    Response: There currently is no formal appeals process that applies 
with respect to an application for Part D enrollment. Consistent with 
Sec. Sec.  1860D-4(g)(1) and (h)(1) of the Act, only issues involving 
coverage of Part D benefits can be resolved through the Part D coverage 
determination and appeals processes. Enrollment disputes are distinct 
from disputes related to coverage of Part D benefits and therefore, 
cannot be resolved through the Part D coverage determination and 
appeals processes. However, beneficiaries not currently enrolled in a 
Part D plan, or who otherwise have problems related to eligibility and 
enrollment, may contact 1-800-Medicare and/or a CMS Regional Office 
(RO) caseworker for assistance in resolving the matter. Customer 
service representatives and RO caseworkers can resolve a wide range of 
enrollment issues, including matters related to eligibility for a 
special enrollment period.
    Comment: Commenters believe that the following statement in the 
preamble's ``Highlights and Organization of the Proposed Rule'' section 
is misleading and disingenuous: ``We note while we are proposing to 
make conforming changes to the language of some of the redesignated

[[Page 65343]]

sections, we are not proposing to make any substantive changes to the 
policies established by those provisions.'' The commenters stated that 
while some of the changes can be appropriately classified as 
nonconforming, many more of the general appeals provisions changes, 
especially those to the timeframes, submission of evidence, ALJ remand 
criteria and participants at a hearing, are definitely substantive.
    Response: We believe that the commenters may have misinterpreted 
our statement. Our characterization of the changes as non-substantive 
applies only to the redesignated sections that are specifically 
referenced in the statement, which include sections 423.610, 423.612, 
423.620, 423.630, and 423.634. These provisions have previously gone 
through the notice of proposed rulemaking process and are now only 
being redesignated to be included in the new subpart U. These 
provisions are also being cross-referenced in the new ALJ and MAC 
provisions that have been drafted to parallel Part 405, subpart I, as 
appropriate. For example, section 423.612, Request for an ALJ Hearing, 
has been redesignated as section 423.1972 and is cross-referenced in 
the new section 423.2014, Request for an ALJ Hearing. Section 423.2014 
contains the requirements of Sec.  423.1972 as well as new provisions 
that parallel Part 405, subpart I, such as specifying the required 
content of a request for an ALJ hearing.
    We agree with the commenters that the new provisions of this rule 
are substantive in nature and, accordingly, we provided the public an 
opportunity to comment on these provisions through the notice of 
proposed rulemaking process. Accordingly, we are finalizing Sec. Sec.  
423.1968, 423.1970, 423.1972, 423.1974, 423.1976, and 423.1978 as noted 
above, and as discussed in subsection III.

B. Parties to the ALJ Hearing and MAC Review

    Section 1860D-4(h) of the Act largely incorporates section 
1852(g)(5) of the Act. We interpret that section as providing the right 
to a hearing and to judicial review for an enrollee dissatisfied by 
reason of the enrollee's failure to receive a Part D drug to which the 
enrollee believes he or she is entitled, and at no greater charge than 
the enrollee believes he or she is required to pay. Section 1860D-
4(h)(1) of the Act specifies that ``only the Part D eligible 
individual'' is entitled to bring an appeal. Section 423.560 of the 
Part D rule states that an enrollee is a Part D eligible individual who 
has elected or has been enrolled in a Part D plan.
    Former Sec.  423.610 (now at Sec.  423.1970) and former Sec.  
423.612 (now at Sec.  423.1972) explain that, if an enrollee is 
dissatisfied with the reconsideration determination by an IRE, the 
enrollee may request a hearing before an ALJ, if the amount remaining 
in controversy meets the threshold requirement established annually by 
the Secretary. Consistent with Sec.  1869(b)(1)(E)(iii) of the Act, the 
threshold amounts for ALJ hearings and judicial review must be adjusted 
annually by the Secretary, beginning in January of 2005, by the 
percentage increase in the medical care component of the consumer price 
index (CPI) for all urban consumers (U.S. city average) for July 2003 
to the July of the preceding year involved and rounded to the nearest 
multiple of $10. The amounts are published annually in the Federal 
Register.
    Under former Sec.  423.620 (now at Sec.  423.1974), if an enrollee 
is dissatisfied with the ALJ's action, the enrollee may request that 
the MAC review the ALJ's decision or dismissal. Having the enrollee as 
the only party to an appeal differs from the Part A and B processes 
where the term ``party'' includes a beneficiary, a provider, a 
supplier, a Medicaid State agency, and CMS and/or its contractors, and 
from the Part C appeals process where the term ``party'' includes an 
enrollee, a provider, an entity with rights with respect to the 
organization determination, or an MA organization. In light of the Part 
D statutory and regulatory provisions, this final appeals rule makes 
clear that only the enrollee may request and be a party to an ALJ 
hearing or MAC review. (We note that an enrollee may appoint a 
representative to act on his or her behalf as discussed in Sec.  
423.560 and as set forth in Sec.  422.561 and Sec.  405.910. A 
representative could include an enrollee's physician or other 
prescriber.)
    We proposed not to make the Part D plan sponsor, the IRE, or CMS a 
party to an ALJ hearing or the MAC review in a Part D case. The statute 
and Part D rule do not explicitly provide these entities with party 
status, unlike Part C where the statute provides that the Secretary 
shall make an MA organization a party to ALJ hearings. Further, the 
preamble to the Part D rule (70 FR 4360) states that ``[t]he plan is 
not a party to the ALJ hearing.'' As discussed later in the preamble, 
we recognize that the involvement of CMS, the IRE, and/or the Part D 
plan sponsor may be necessary to resolve the issue(s) on appeal and we 
will allow these entities to participate in ALJ hearings at the ALJ's 
discretion. The participation of Part D plan sponsors in ALJ hearings 
was also contemplated in the preamble to the proposed Part D rule (69 
FR 46632, 46722), which noted that ``[a]lthough a PDP sponsor generally 
is not a party to the IRE appeal and may not request a hearing before 
an ALJ, the sponsor is considered a party to the ALJ hearing for the 
limited purpose of participation in the hearing.'' We received a few 
comments relating to the participation of plan sponsors, the IRE, and 
CMS at ALJ hearings. Those comments are discussed in the section of the 
preamble relating to participation in an ALJ hearing (Sec.  423.2010).

C. Timeframes for Deciding Appeals at the ALJ and MAC Levels

    Part 405, subpart I implements the provisions of section 1869 of 
the Act that require ALJs and the MAC to complete their actions within 
90 days of the date an appeal is timely filed. The Part D statute and 
rule do not establish timeframes for an ALJ or the MAC to issue a 
decision. However, we recognize the need to ensure that Part D 
enrollees receive timely actions on their requests for hearing and 
review, particularly in cases where the enrollee has not obtained the 
drug and a delayed decision may seriously jeopardize the enrollee's 
life or health or ability to regain maximum function.
    We proposed to apply a 90-day adjudicatory timeframe to Part D 
appeals with an expedited process for certain types of appeals. 
Specifically, we proposed that an ALJ and the MAC must provide an 
expedited decision in situations where the appeal involves one of the 
issues specified in Sec.  423.566(b), but does not include solely a 
request for payment of Part D drugs already furnished, and when the 
enrollee's prescribing physician indicates, or the ALJ or the MAC 
determines that applying the standard timeframe for making a decision 
may seriously jeopardize the enrollee's life or health or ability to 
regain maximum function. In these situations, the ALJ and the MAC must 
issue a decision, dismissal order, or remand as expeditiously as the 
enrollee's health condition requires, but no later than the end of the 
10-day period beginning on the date the request for hearing or request 
for review is received.
    In order to meet the shortened timeframes established for expedited 
appeals, we also proposed to allow certain requests, objections, 
decisions, orders, and notices to be conducted orally with written 
follow-up or documentation and to shorten certain timeframes for 
receiving certain notices, such as the notice of hearing. We note

[[Page 65344]]

that all time periods in this final appeals rule refer to calendar 
days.
    We also proposed to not include provisions regarding escalation, 
but rather, to address the timeliness concerns of Part D enrollees by 
providing for an expedited process, discussed in greater detail below.
    Specific comments received and responses to those comments are as 
follows:
    Comment: A number of commenters stated that Part D plan sponsors 
and the IRE routinely fail to issue timely coverage and payment 
decisions. To help improve this situation, these commenters suggest the 
proposed rule be revised to state that any ALJ or MAC request that is 
not responded to within the applicable timeframe is deemed approved.
    Response: Clearly, it is important that both Part D plan sponsors 
and subsequent adjudicators meet the applicable decision making 
timeframes for Part D appeals. CMS monitors Part D plan sponsor 
performance on meeting timeliness standards and although we do not 
believe timeliness issues are widespread, compliance action is taken 
when systemic problems are identified. Further, we note that the IRE's 
performance in this regard has been outstanding with a timeliness rate 
that is consistently close to 100 percent, based on calendar year 2007 
data.
    However, even in cases where Part D plan sponsors or adjudicators 
do not meet timeframes, we do not believe the commenters' 
recommendation is an appropriate remedy. There is no precedent in Part 
D, or anywhere in the Medicare program, for covering items and services 
solely on the grounds that a coverage or appeal determination was not 
made on a timely basis. Furthermore, if the request for coverage or 
reimbursement were to be deemed favorable solely because the 
adjudicator missed the decision making timeframe, the request would be 
covered without receiving any type of review, and possibly lead to the 
inappropriate coverage of drugs under the Medicare Part D drug benefit 
program. Instead, in cases where Part D plan sponsors do not meet the 
applicable timeframes, we have established, under both Parts C and D, a 
policy that an initial determination or plan-level appeal decision that 
is not made within the applicable timeframe is deemed unfavorable and 
the request is forwarded by the plan to the IRE for review. See 42 CFR 
422.568(f), 422.572(f), 422.590(c) and (f), 423.568(e), 423.572(d), and 
423.590(c) and (e). This approach puts in place a mechanism for moving 
appeals forward when decision making timeframes are missed, and ensures 
that all requests for Medicare Part D benefits or payment receive 
review as soon as possible. Under Part D, such review will ensure that 
payment is appropriate (for example, the drug is not an excluded drug). 
As noted above, the data we have collected thus far indicates that the 
IRE is meeting the applicable adjudication timeframes in the 
overwhelming majority of cases, and we do not expect missed timeframes 
to be a problem at the ALJ or MAC level. We will continue to monitor 
timeliness at all levels of appeal, but we do not believe the 
commenter's suggested approach is appropriate.
    Comment: Some commenters recommended that the ALJ and MAC 
automatically expedite a decision if it was expedited at a lower level 
of appeal. Given the documentation needed to support a request to 
expedite an appeal, these commenters felt that requiring enrollees to 
demonstrate the need for an expedited appeal at each level of the 
process would be burdensome for enrollees and their physicians.
    Response: Although we appreciate the commenters' interest in 
streamlining the appeals process, we disagree with the recommendation 
to require ALJs and the MAC to automatically expedite an appeal request 
if it was expedited at a lower level. If an enrollee's health status 
improves during the course of an appeal, or an enrollee purchases the 
drug in dispute while an appeal is pending, expedited status may no 
longer be warranted. Thus, we believe it is more appropriate for each 
adjudicator to make an independent determination about whether to 
expedite a request. In doing so, adjudicators may take into 
consideration a previous adjudicator's decision to expedite an appeal 
request. Under Sec.  423.2016(b) and Sec.  423.2108(d) of this rule the 
decision will be expedited if the appeal involves an issue specified in 
Sec.  423.566(b), but is not solely a request for payment of Part D 
drugs already furnished, and the enrollee's prescribing physician or 
other prescriber indicates, or the ALJ or the MAC determines, that 
applying the standard timeframe may seriously jeopardize the enrollee's 
life, health, or ability to regain maximum function.
    Comment: Several commenters noted that the preamble of the proposed 
rule stated that all time periods refer to calendar days. The 
commenters requested that the use of ``calendar days'' be explicitly 
stated in the applicable regulatory provisions.
    Response: We agree with the commenters and have revised all 
``days'' references in the regulatory provisions to ``calendar days.'' 
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.
    We are also making a conforming change to the Part D grievance, 
plan sponsor, and IRE provisions to ensure consistency throughout the 
Part D appeals process, by changing ``days'' references to ``calendar 
days'' in 42 CFR 423.564(d)(2), (e)(1), and (e)(2); 423.582(c)(2); 
423.584(d)(1) and (d)(2)(i); and 423.600(a).
    Comment: Commenters indicated that a provision similar to Sec.  
405.1104 and 42 CFR 405.1132 should be added, allowing an enrollee's 
appeal before an ALJ to be escalated to the MAC and an appeal before 
the MAC to be escalated to Federal district court if an enrollee does 
not receive a timely decision from an ALJ or the MAC.
    Response: The regulations referenced by the commenters are the 
result of explicit statutory provisions for appeals under Part A and 
Part B and there are no parallel statutory requirements for Part C and 
Part D appeals. We note also that the adjudication timeframes 
associated with escalated cases would be considerably longer than the 
decision making timeframes proposed in this rule. [Place holder] As we 
noted in the Part A and Part B final rule published elsewhere in the 
Federal Register, Part 405, subpart I implemented a 180-day 
adjudicatory timeframe for reviewing escalated appeals in light of the 
substantial additional burden on the adjudicator, including locating 
and acquiring relevant information, performing additional procedural 
and jurisdictional reviews, and organizing evidence in the case file. 
Thus, 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 adjudicator's duty to collect the 
evidence and perform the administrative tasks necessary to fully and 
fairly adjudicate an appeal that has not been addressed at the prior 
level of appeal. However, given the lack of similar statutory direction 
with respect to Part D appeals, we believe the concerns of enrollees 
seeking timely decisions from an ALJ and the MAC for Part D appeals are 
better met by establishing a 90-day adjudicatory timeframe accompanied 
by an expedited process, similar to the process established at the 
coverage

[[Page 65345]]

determination, redetermination, and reconsideration levels.

D. Evidence

    We proposed to provide enrollees with as much flexibility as 
possible concerning the evidence that may be presented for an ALJ 
hearing and MAC review. We also proposed that the entity that is best 
suited to review and evaluate the evidence be the entity that receives 
the evidence for review. We proposed that an enrollee may submit any 
written evidence about his or her condition at the time of the coverage 
determination that he or she wishes to have considered at the hearing. 
However, we proposed that in instances where an enrollee wishes to have 
evidence on changes in his or her condition since the coverage 
determination considered in the appeal, an ALJ or the MAC will remand 
the case to the Part D plan sponsor.
    We proposed not to follow the full and early presentation of 
evidence provisions in Part 405, subpart I, including Sec.  405.1028. 
For Part D appeals, we proposed that only the enrollee would be a party 
to the appeal and because the enrollee would not be represented by a 
provider or supplier we did not propose to include any provisions from 
Part 405, subpart I, on the full and early presentation of evidence. We 
proposed, as discussed above, that an enrollee may present new evidence 
at any time during the appeal.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Numerous commenters expressed nonsupport of an ALJ and/or 
the MAC remanding the appeal to the Part D plan sponsor when an 
enrollee wishes to have evidence of a change in his or her condition 
since the coverage determination considered. Commenters suggested that 
where an enrollee wishes to have such evidence considered, the appeal 
should be remanded to the Part D IRE instead of to the Part D plan 
sponsor for a new determination. The commenters expressed concern that 
the proposal would result in further delays in the adjudication process 
and force unrepresented beneficiaries to make a strategic decision 
about whether to forfeit the right to consideration of all evidence, 
including evidence of a worsening condition, in order to get review by 
an ALJ or the MAC.
    Response: Similar to the regulations found in Part 405, subpart I, 
an enrollee has been provided under the proposed regulations with as 
much flexibility as possible to submit evidence throughout the appeals 
process. We appreciate the commenters' concerns about the impact on the 
enrollee if the ALJ and the MAC remand a case to the Part D plan 
sponsor to consider evidence of a change in condition. After further 
consideration, we agree that remanding these types of cases back to the 
Part D plan sponsors may prolong the appeals process because the 
enrollee, if dissatisfied with a Part D plan sponsor's new coverage 
determination, would have to go through the entire Part D appeals 
process a second time. Thus, while both the Part D plan sponsor and the 
Part D IRE have the appropriate medical expertise to provide an 
effective and efficient review of the evidence related to an enrollee's 
change in condition, we believe that it is more appropriate for the ALJ 
and the MAC to remand these cases to the Part D IRE. This approach will 
ensure that an enrollee who is dissatisfied with the Part D IRE's new 
decision can immediately appeal that decision to an ALJ without having 
to navigate the Part D plan sponsor and IRE appeals levels a second 
time. As the IRE's new decision can immediately be appealed to an ALJ, 
we also believe that remanding to the Part D IRE instead of to the Part 
D plan sponsor will aid unrepresented enrollees when making decisions 
on whether to have evidence of a change in his or her condition since 
the coverage determination considered. Accordingly, Sec.  423.2034(c) 
and Sec.  423.2126(b) have been modified to state that the ALJ and the 
MAC, respectively, will remand a case to the Part D IRE if an enrollee 
wishes to have the ALJ or MAC consider evidence of a change in 
condition after the coverage determination was made.

E. Claims and Overpayment

    We proposed not to include any references to claims, overpayment, 
or underpayment since the Part A and Part B appeals process may involve 
claims for reimbursement from the Medicare Trust Fund made by parties 
to the appeal and issues of over- or underpayment by the Federal 
Government.
    A specific comment received and response to comment is as follows:
    Comment: One commenter expressed concern about the statements in 
the preamble to the proposed rule that the Part D appeals process does 
not involve overpayments or underpayments because, unlike Part A and 
Part B appeals, Part D appeals do not involve claims against the 
Medicare Trust Fund by enrollees. The commenter believes that this 
statement overlooks how the Part D program is funded and the statutory 
obligations of Part D plan sponsors because subsidy payments made by 
CMS to Part D plan sponsors to pay for covered Part D drugs and low-
income qualifying enrollees are Trust Fund dollars.
    Response: We continue to believe that the Part D beneficiary 
appeals process does not involve disputes about claims for 
reimbursement from the Medicare Trust Fund by enrollees and issues of 
overpayments or underpayments by the Federal Government. The Part A and 
Part B appeals process frequently involves claims for direct 
reimbursement from the Trust Fund by parties to the appeal and issues 
of large overpayments or underpayments by the Federal Government. Part 
D plan sponsors cannot be parties under the Part D appeals process and 
any claim for reimbursement by the enrollee would be made against the 
Part D plan sponsor, not the Medicare Trust Fund.

F. Other General Provisions

    We proposed not to include language similar to that in Sec.  
405.990(j) and Sec.  405.1006 regarding amount in controversy 
requirements for Part A and Part B appeals since the Part D rule 
already contains provisions in former Sec.  423.610 (now at Sec.  
423.1970), former Sec.  423.612 (now at Sec.  423.1972), and former 
Sec.  423.630 (now at Sec.  423.1976) regarding the amount in 
controversy requirements for ALJ hearings and judicial review. 
Similarly, we did not see a reason to include Part 405, subpart I, 
references to the applicability of national coverage determinations 
(NCDs) and local coverage determinations (LCDs). Because neither of 
these types of coverage policies applies to Part D, we proposed not to 
include any reference to NCDs and LCDs and not to include any provision 
that applies solely to the application of NCDs and/or LCDs from Part 
405, subpart I (for example, language from Sec.  405.1060).
    Part 405, subpart I, also refers to SSA rules for entitlement and 
enrollment appeals performed by SSA. We proposed not to include similar 
references to SSA because SSA does not perform appeals regarding 
enrollment in or entitlement to Part D.
    Finally, Part 405, subpart I includes a provision at Sec.  405.1064 
regarding ALJ decisions involving statistical samples. We are not 
including similar language for Part D appeals because, as discussed 
above, Part D appeals do not involve overpayment issues.
    We did not receive any comments related to these proposals. 
Accordingly, we are finalizing Sec.  423.1972 subject to the 
modification discussed in section III, which changes the word ``days'' 
to

[[Page 65346]]

``calendar days,'' and are finalizing the other provisions without 
modification.

G. Reopenings (Sec.  423.1980 Through Sec.  423.1986)

    As revised (based on technical corrections discussed above in 
section III), Sec.  423.1978(a) (former Sec.  423.634(a)) states that a 
coverage determination, a redetermination, a reconsideration or a 
decision of an ALJ or the MAC ``that is otherwise binding may be 
reopened and revised by the entity that made the determination or 
decision, under the rules in part 422, subpart M of this chapter.'' 
Section 422.616 of subpart M discusses reopenings and states that a 
determination or decision ``that is otherwise binding may be reopened 
and revised by the entity that made the determination or decision, 
under the rules in part 405 of this chapter.'' Therefore, we proposed 
reopening regulations that generally track the Part A and Part B 
reopening provisions in Sec.  405.980, Sec.  405.982, Sec.  405.984, 
and Sec.  405.986. We note that these regulations define reopening, 
explain who may initiate and revise determinations and decisions and 
when, and the effect of a revised determination or decision. We 
proposed at Sec.  423.1980(a)(1), (a)(3), and (a)(4), and Sec.  
423.1984(g) to add language that is consistent with former Sec.  
423.634 (now at Sec.  423.1978) on Part D reopenings. Since Part D 
appeals differ in part from Part A and Part B appeals, we proposed not 
to include several provisions from Sec.  405.980, Sec.  405.982, and 
Sec.  405.986.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Many commenters asked that CMS acknowledge a Part D 
enrollee's right to request a reopening of an unfavorable decision. 
Additionally, these same commenters recommended that we revise the 
proposed rule to include a provision stating that a request to reopen 
extends the 60-day timeframe to appeal an unfavorable decision. The 
commenters argue this regulatory change is necessary because many 
enrollees believe the deadline to appeal an unfavorable decision is 
extended when a reopening request is filed.
    Response: While enrollees do have a right to request that an 
unfavorable decision be reopened, reopenings are at the discretion of 
the adjudicator and an adjudicator's decision about whether to reopen 
is not subject to appeal. This policy is consistent with the reopening 
provisions contained in Part 405, subpart I of the regulations. The 
deadlines for requesting appeals are clearly explained in the decision 
letters, including the ALJ hearing decisions. While we understand the 
commenters' concerns regarding the potential effect a denied reopening 
request may have on appeal rights, we believe that allowing additional 
time to file an appeal once a reopening is requested would provide an 
inappropriate extension of the appeals filing time frames. If an 
enrollee misses the filing deadline for an appeal while awaiting a 
decision on a reopening request, he or she may request the adjudicator 
consider granting an extension to the filing time limit consistent with 
Sec.  423.2014(d). Thus, we are not adopting the commenters' suggestion 
to extend appeals filing time limits when a reopening is requested.
1. Reopenings of Coverage Determinations, Redeterminations, 
Reconsiderations, Hearings, and Reviews (Sec.  423.1980)
    We proposed in this section to track the language of Sec.  405.980 
on the general rules and timeframes for reopening determinations and 
decisions, except as discussed above and below. We proposed to define 
reopenings in Sec.  423.1980(a)(1), without referring to overpayments 
and underpayments because these terms do not apply to Part D appeals, 
as discussed above. We also proposed in Sec.  423.1980 not to include 
the provision in Sec.  405.980(a)(2) that involves situations where a 
fiscal intermediary or carrier denies a claim because it did not 
receive information that it requested about a claim during medical 
review. In addition, we proposed not to include Sec. Sec.  
405.980(a)(3), (b)(4), and (c)(3), as these sections refer to clerical 
errors related to claims submissions by providers to fiscal 
intermediaries and carriers, which is not applicable to Part D.
    In this final appeals rule, we are clarifying in Sec.  423.1980 
that a Part D plan sponsor may request a reopening of a 
reconsideration, hearing decision, or MAC review decision. Though not 
explicitly stated, nothing in the proposed rule prevented a Part D plan 
sponsor from asking an adjudicator to reopen a decision on its own 
motion. Thus, this option existed for Part D plan sponsors under the 
proposed rule. To make this option more clear, Sec.  423.1980 of this 
final appeals rule has been revised to explicitly state that a Part D 
plan sponsor may ask an adjudicator to reopen a decision on its own 
motion. We received no public comments on Sec.  423.1980. Accordingly, 
we are finalizing it subject to this clarification and the 
modifications discussed in section III, which include removing the term 
``final'' and replacing it with ``binding,'' removing the words ``and 
revise,'' and changing the term ``days'' to ``calendar days.''
2. Notice of a Revised Determination or Decision (Sec.  423.1982)
    We proposed in Sec.  423.1982 to follow the process established for 
Part A and Part B reopenings regarding notification of revised 
determinations or decisions. However, unlike Sec.  405.982, proposed 
Sec.  423.1982 does not refer to revised electronic or paper remittance 
for full or partial reversals. We are not incorporating this language 
because revised electronic or paper remittance advice notices are not 
issued for Part D appeals. Further, we proposed language requiring the 
IRE, ALJ, or the MAC to mail revised determinations or decisions to the 
Part D plan sponsor. We did not receive any public comments on the 
proposed provision, and accordingly, are finalizing this provision 
without modification.
3. Effect of a Revised Determination or Decision (Sec.  423.1984)
    In section 423.1984, we proposed that the revision of a coverage 
determination or appeal decision is binding unless the determination or 
decision is appealed and the appeal request is accepted and processed 
in accordance with the appropriate regulatory provisions. We also 
proposed to allow only the portion of the coverage determination or 
appeal decision revised by reopening to be appealed. We did not receive 
any comments on this section. Therefore, we are finalizing Sec.  
423.1984 without modification.
4. Good Cause for Reopening (Sec.  423.1986)
    We proposed in Sec.  423.1986 language similar to Sec.  405.986 
regarding good cause for reopening a determination or decision. We 
believe it is appropriate where possible for Part D reopenings to have 
the same good cause standards as Part A and Part B reopenings. We 
proposed in Sec.  423.1986(b)(1), to include the requirement in Sec.  
405.986(b) regarding good cause for reopening a determination or 
decision based on a change in substantive law or interpretive policy 
for appeals. However, many Part D appeals involve drug benefit appeals, 
where an enrollee has not received the drug. With respect to these 
appeals, we proposed in Sec.  423.1986(b)(2) that an adjudicator may 
reopen a determination or decision to apply the current law or CMS or 
Part D plan sponsor policy (rather than the law or CMS or Part D plan 
sponsor policy at the time the original coverage

[[Page 65347]]

determination was made). Because the enrollee has not received the 
drug, any change to the law or CMS or Part D plan sponsor policies 
since the initial coverage determination may affect whether the drug 
should be received.
    A specific comment received and response to comment is as follows:
    Comment: We received one comment suggesting the proposed good cause 
standards for reopening should be revised to allow an ALJ to reopen a 
decision when third party payor error occurs or there is a change in 
substantive law or interpretive policy. The commenter believes the ALJ 
should reopen the decision and review it in light of the third party 
payor error or new law or policy.
    Response: As with other Medicare programs, coverage policies in 
Part D are applied prospectively. Therefore, the coverage policy that 
applies for purposes of making a coverage determination is the policy 
that is in place at the time the drug is purchased. If there is a 
change in substantive law or interpretive policy and the enrollee is 
requesting benefits (not reimbursement), Sec.  423.1986(b)(2) allows 
reopenings to consider such changes. With respect to the commenter's 
request to amend the proposed rule to allow ALJs to reopen decisions in 
order to consider third party payor error, we note that the rules in 
part 405, subpart I, upon which the provisions in question are modeled, 
do not permit reopenings for this reason. Moreover, we do not believe 
it is necessary to establish a different policy in the Part D program.
    Accordingly, we are finalizing Sec.  423.1986 without modification.

H. Expedited Access to Judicial Review (EAJR) (Sec.  423.1990)

    Section 1869(b)(2) of the Act requires the Secretary to establish a 
process for Part A and Part B appeals where a provider, supplier or a 
beneficiary may obtain expedited access to judicial review in 
situations where the Departmental Appeals Board (DAB) does not have 
authority to decide the question of law or regulation relevant to the 
matters in controversy and where there is no material issue of fact in 
dispute.
    Unlike Part A and Part B appeals, there is no statutory requirement 
for enrollees to have access to an EAJR process for Part D appeals. 
However, we believe that it is appropriate to provide Part D enrollees 
with an EAJR process that mirrors the process established for Part A 
and Part B appeals. Under the Part A and Part B appeal process, a 
review entity determines whether the DAB has the authority to decide 
the question of law or regulation relevant to the matters in 
controversy after finding that there is no material issue of fact in 
dispute.
    If the review entity certifies that the requirements for expedited 
access to judicial review are met, a party may appeal directly to the 
United States District Court. Even though the Part D statute does not 
require this process for Part D, we believe that Part D enrollees would 
benefit from this process because it provides access to judicial review 
more quickly in cases where the DAB does not have the authority to 
decide the question of law or regulation relevant to the matters in 
controversy and there is no material issue of fact in dispute, 
resulting in a more efficient appeals process. We proposed in Sec.  
423.990 to provide Part D enrollees the opportunity to seek EAJR and 
requested specific comments on this proposal.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Commenters stated that providing expedited access to 
judicial review will benefit many enrollees. The commenters suggested 
that for those enrollees whose claims do not raise issues that can only 
be resolved by a federal court, a provision similar to 42 CFR 405.1104 
and 42 CFR 405.1132 allowing escalation to the MAC or to federal court 
should be added for instances when an enrollee has not received a 
decision in a timely manner from an appeal to an ALJ or the MAC.
    Response: As discussed previously, we believe that in addition to 
providing for expedited access to judicial review, providing a 90-day 
adjudicatory timeframe with an expedited process similar to the process 
established at the coverage determination, redetermination, and 
reconsideration levels more appropriately addresses the concerns of 
enrollees seeking timely decisions from an ALJ and the MAC. Therefore, 
we are finalizing Sec.  423.1990 with modifications as discussed in 
section III of this preamble, which include adding additional 
regulation text language to specify the various actions that may be 
taken by the ALJ, removing the words ``final and,'' and changing the 
word ``days'' to ``calendar days.''

I. Appeals to an ALJ (Sec.  423.2000 Through Sec.  423.2063)

1. General
    The Part D rule contains two specific provisions that apply to 
appeals before an ALJ. Former Sec.  423.610 (now at Sec.  423.1970) 
describes an enrollee's right to an ALJ hearing and explains how the 
amount in controversy requirements may be satisfied. Former Sec.  
423.612 (now at Sec.  423.1972) describes when and where to file a 
request for hearing, specifies that the time and place of the hearing 
will be set in accordance with the regulation governing Part A and Part 
B appeals at Sec.  405.1020, and explains when the ALJ will dismiss a 
request for hearing because it does not meet the amount in controversy 
requirement.
    We proposed to follow the process set forth under Part A and Part B 
for appeals to an ALJ, except as noted above and below. We tracked the 
language in the Part 405 rule for proposed Sec.  423.2000, Sec.  
423.2004, Sec.  423.2008, Sec.  423.2030, Sec.  423.2032, Sec.  
423.2042, Sec.  423.2044, Sec.  423.2048, Sec.  423.2050, Sec.  
423.2054, Sec.  423.2062, and Sec.  423.2063. We believe that it is 
appropriate for Part D appeals to follow the Part A and Part B appeals 
procedures set forth in these provisions.
2. Hearing Before an ALJ (Sec.  423.2000) and Right to an ALJ Hearing 
(Sec.  423.2002)
    Section 423.2000 provides an overview of the ALJ hearing process. 
Former Sec.  423.610(a) (now at Sec.  423.1970(a)) provides that an 
enrollee who is dissatisfied with the IRE reconsideration and meets the 
remaining amount in controversy threshold has a right to a hearing 
before an ALJ. We proposed to include this provision in Sec.  423.2002. 
We also proposed to include in this section language similar to that in 
Sec.  405.1002 on how to request an ALJ hearing, what is the date of 
receipt of the reconsideration, and when a request is considered filed.
    We believe it is appropriate to include this information (now at 
Sec.  423.2002) because it would be helpful to the enrollee and any 
representative of the enrollee to understand how to file a request, how 
we would determine the date of receipt of the reconsideration, and when 
a request would be considered filed.
    We also proposed in Sec.  423.2002(b) that an enrollee may request 
an expedited ALJ hearing, if the enrollee meets the amount in 
controversy threshold and submits a request for an ALJ hearing within 
60 days after receipt of the written notice of the IRE's 
reconsideration where the appeal involves an issue specified in Sec.  
423.566(b) but is not solely a request for payment of Part D drugs 
already furnished, as discussed previously. However, we proposed in 
Sec.  423.2016(b) that the ALJ grant the request only if the enrollee's 
prescribing physician indicates or the ALJ determines that

[[Page 65348]]

applying the standard timeframe for making a decision may seriously 
jeopardize the enrollee's life or health or ability to regain maximum 
function.
    In addition, we proposed at Sec.  423.2002(b)(2) a more informal 
process for requesting an expedited hearing by proposing to permit an 
enrollee to make a request for hearing orally. We believe that the oral 
request would make the initiation of the ALJ appeals process faster and 
easier for the enrollee. However, for the reasons stated below, an 
enrollee may only file an oral request for an expedited hearing after 
receiving the written IRE reconsideration notice. We also proposed to 
require the ALJ hearing office to document and maintain documentation 
of any oral request.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Some commenters stated that provisions of the rule are 
inconsistent. They pointed out that Sec.  423.1972 requires an enrollee 
to file a request for a hearing within 60 days of the date of the 
notice of an IRE decision, while Sec.  423.2002(a) requires an enrollee 
to file a written request for an ALJ hearing within 60 days after 
receipt of the written notice of the IRE's reconsideration. Commenters 
also pointed out that while Sec.  423.2002(a) requires an enrollee to 
file a written request for an ALJ hearing, Sec.  423.2002(b) allows an 
enrollee to submit a written or oral request for an expedited ALJ 
hearing. The commenters ask that the regulations be made consistent so 
to minimize enrollee confusion. The commenters also asked that 
enrollees be allowed to file oral requests for expedited hearings 
before receipt of a written IRE reconsideration when the IRE has not 
issued the written reconsideration notice within the regulatory 
timeframes and to be allowed to file oral requests for hearings and MAC 
review for non-expedited appeals.
    Response: We do not believe that these regulations are 
inconsistent, but rather may require additional explanation. Sections 
423.2002(a) and (b)(2) as well as Sec.  423.2014(b) and (c) provide 
more specificity for the requirement in Sec.  423.1972. Section 
423.1972, that is, redesignated section 423.612, was drafted consistent 
with part 405. At the time of the implementation of Sec.  423.612 there 
were no regulatorily established adjudication timeframes at the ALJ 
level. In particular, a regulatorily implemented expedited process that 
includes oral requests for hearings and a 10-day adjudication timeframe 
did not exist. In Sec. Sec.  423.2002(a) and (b) and Sec. Sec.  
423.2014(b) and (c) we clarify that a request for hearing must be filed 
within 60 days after receipt of a written notice of an IRE 
reconsideration. We require an enrollee to have a written decision 
because in some instances the IRE will issue an oral notice of 
reconsideration before issuing the written notice of reconsideration. 
The Office of Medicare Hearings and Appeals cannot process a request 
for an ALJ hearing without a written IRE reconsideration, especially 
under the constraints of a 10-day adjudication period. This also holds 
true for review by the Medicare Appeals Council. In both circumstances, 
a written decision from the lower level is necessary to further process 
the appeal.
    In Sec. Sec.  423.2002(a)(2) and 423.2014(b), we provide an 
exception to the provision in Sec.  423.2002(a)(1) that requires an 
enrollee to file a written request for an ALJ hearing. We permit the 
enrollee to either file a written or oral request for an expedited ALJ 
hearing. The ability to submit an oral request for an expedited hearing 
should help preserve time during the expedited process. We do not 
believe that the filing of oral requests is necessary in non-expedited 
appeals because there is not the same urgency with respect to an 
enrollee's health or function that would necessitate the appeals 
process to move more swiftly.
    Comment: Commenters recommended that the filing timeframe begin 
with the date of receipt of the IRE decision with the date of receipt 
presumed to be 5 days after the date of the notice, absent evidence to 
the contrary. The commenters also called for the regulations to be 
consistent with part 405 by providing for an extension of the filing 
timeframe when good cause is shown for a late filing.
    Response: The timeframe for submitting a request for an ALJ hearing 
will begin with receipt of the written notice of the IRE 
reconsideration. As specified in Sec.  423.2002(c), the date of receipt 
will be presumed to be 5 days after the date of written 
reconsideration, unless there is evidence to the contrary.
    Section 423.2014(d) provides the enrollee the opportunity to 
request an extension of the 60-day filing timeframe for good cause. 
This provision is consistent with Sec.  423.1972(b) and Part 405, 
subpart I. We did not receive any comments on Sec.  423.2000, and thus, 
are finalizing this provision consistent with the modifications 
described in section III of this preamble to clarify that the ALJ 
conducts a de novo review. With respect to Sec.  423.2002, we are 
finalizing this provision subject to the modification discussed in 
section III, which changes the word ``days'' to ``calendar days,'' and 
with a technical revision to Sec.  423.2002(b)(3). The inclusion of the 
ALJ documentation requirement in subsection (b)(3) was a technical 
error and the requirement has now been placed in a separate subsection. 
The requirement that the ALJ must document all oral request for 
expedited hearings in writing and maintain documentation is now 
specified in Sec.  423.2002(c) and the proposed subsections Sec.  
423.2002(c) and (d) have been redesignated as subsections Sec.  
423.2002(d) and (e), respectively.
3. Right to ALJ Review of an IRE Dismissal (Sec.  423.2004) and Parties 
to the ALJ Hearing (Sec.  423.2008)
    Section 423.2004 describes the process for obtaining ALJ review of 
a QIC dismissal of a reconsideration request. Section 423.2008 states 
who may request an ALJ hearing and who is considered a party to the ALJ 
hearing. We received no comments on these sections. Accordingly, we are 
finalizing Sec.  423.2004 with the modifications discussed in section 
III of this preamble to make a technical correction clarifying an ALJ's 
dismissal action is binding and not subject to further review unless 
vacated by the MAC, and changing the word ``days'' to ``calendar 
days.'' We are finalizing Sec.  423.2008 without modification.
4. Participation in an ALJ Hearing (Sec.  423.2010)
    In Part D appeals all requests for an ALJ hearing are brought by 
enrollees. Even if an enrollee is represented by a provider or 
supplier, that provider or supplier will not have a direct financial 
interest in the appeal. Therefore, we proposed that CMS, the IRE, and 
the Part D plan sponsor not be a party with a right to request a 
hearing under Part D. As noted above, this proposed policy is 
consistent with the applicable statutory and regulatory provisions. 
Moreover, this proposal is consistent with the preamble to the Part D 
rule (70 FR at 4360) where we explicitly state that the Part D plan 
sponsor is not a party to the appeal.
    In an effort to reduce the administrative burden and to assist the 
ALJ in resolving the issue(s) in an appeal more appropriately, we 
introduced specific procedures in Part 405, subpart I, to allow CMS 
and/or its contractors to participate in, or be a party to, an ALJ 
hearing. As explained in the preamble to the Part 405, subpart I rule 
(70 FR 11459 through 11460), if CMS and/or its contractors participate 
in an appeal, ALJs may be able to resolve issues of fact and law more

[[Page 65349]]

quickly and reduce the need for remands for additional factual 
development. CMS participation would also assist in creating a more 
complete record. Section 1860D-4(h) of the Act and the Part D rule 
neither require nor prohibit participation by CMS and/or its 
contractors in an ALJ hearing.
    We proposed in Sec.  423.2010, to allow CMS, the IRE, and/or the 
Part D plan sponsor to participate in an ALJ hearing at the ALJ's 
discretion, in a manner similar to Sec.  405.1010 for Part A and Part B 
appeals. Participation in an ALJ hearing does not give the entities 
``party'' status. We proposed in Sec.  423.2010(c) to give the ALJ 
discretion about whether to allow CMS, the IRE, and/or the Part D plan 
sponsor to participate in situations where any of these entities 
requests participation. The ALJ would be precluded from drawing any 
adverse inference if CMS, the IRE, and/or the Part D plan sponsor 
elected not to participate under proposed Sec.  423.2010(g).
    We believe that this proposal would allow an ALJ to decide when an 
appeal would benefit from participation by one or more of these 
entities. An ALJ, however, would also have the flexibility to balance 
the interests of the enrollee with the interests of these other 
entities and to deny a request to participate. We believe this proposal 
is consistent with the preamble language to the Part D rule (70 FR 
4360, 4361), with respect to the role of the Part D plan sponsor, which 
states, ``[t]he plan is not considered a party to the ALJ hearing, but 
may participate in the hearing at the discretion of the ALJ * * * 
[u]nlike under MA, the plans do not have the right to request an appeal 
of an ALJ decision with which the plan disagrees.'' We noted in the 
Part D rule that ``[e]ven though plans are not parties to ALJ hearings, 
we continue to believe that it is important to give plans the ability 
to participate in ALJ hearings. Therefore, plans may participate in 
hearings at the ALJ's discretion.''
    Further, if these entities do wish to participate, we proposed in 
Sec.  423.2010(b) to require that the request to participate be made 
within a shorter timeframe. For expedited appeals, any request by CMS, 
the IRE, and/or the Part D plan sponsor to participate must be made 
within 1 day of receipt of the notice of hearing (5 days for non-
expedited hearings). The ALJ must then notify the entity, the enrollee, 
and the Part D plan sponsor, if applicable, of his or her decision on 
the request to participate within 1 day of receipt of the request (5 
days for non-expedited appeals). We proposed these limitations due to 
the very tight timeframes for expedited appeals.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Commenters stated that the regulations provide 
insufficient time for notification to the enrollee of the participation 
of CMS, the IRE, and/or the Part D plan sponsor. Some commenters also 
believe that section 423.2010(a) should include a set timeframe by 
which the ALJ may request the participation of CMS, the IRE, or a Part 
D plan sponsor, preferably within 5 days of receipt of the hearing 
request for a non-expedited appeal.
    Response: We believe that the regulations provide sufficient 
notification to the enrollee of any participation by CMS, the IRE, and/
or the Part D plan sponsor and that the ALJ should not be subjected to 
a timeframe for requesting participation by these entities. Section 
423.2010(b)(2) requires an ALJ, in a non-expedited appeal, to notify 
the enrollee of his or her decision on a request to participate by CMS, 
the IRE, and/or the Part D plan sponsor within 5 days of receipt of the 
request. Section 423.2010(b)(4) requires an ALJ, in expedited appeals, 
to notify the enrollee of his or her decision on a request to 
participate by CMS, the IRE, and/or the Part D plan sponsor within 1 
day of receipt of the request. In both instances, an enrollee will know 
whether CMS, the IRE, and/or the Part D plan sponsor will be 
participating prior to the hearing.
    The ALJ hearing process is a fluid process. ALJs and their staff 
conduct reviews of the case file, make requests for additional 
information and accept additional evidence up to and through the date 
of the hearing. It would not be beneficial to the hearing process to 
preclude an ALJ from obtaining valuable information due to a timeframe 
that has no apparent connection to the preservation of enrollee's 
rights or the appropriate resolution of an appeal.
    We believe that participation by CMS, the IRE, and/or the Part D 
plan sponsor in ALJ hearings for Part D appeals has been constructed in 
a manner that allows for the resolution of an appeal more efficiently 
and appropriately while giving proper consideration to the interests of 
an enrollee. The participation of CMS, the IRE, and/or the Part D plan 
sponsor may allow the ALJ to resolve issues of fact and law more 
quickly, reduce the need for remands for additional factual 
development, and develop a more complete record. However, keeping with 
the interests of efficiency and fairness, participation is limited to 
filing position papers or providing written testimony to clarify 
factual or policy issues in a case. CMS, the IRE, and/or the Part D 
plan sponsor cannot be called as a witness, cannot call their own 
witnesses, and cannot cross-examine the witnesses of an enrollee at the 
hearing. Additionally, under Sec.  423.2042, an enrollee can review and 
comment on the record, which would include any position papers and 
written testimony by CMS, the IRE, and/or the Part D plan sponsor, at 
the hearing or any time before the ALJ's notice of decision is issued. 
Finally, under the regulations, the ALJ maintains the flexibility to 
balance the interests of the enrollee with the interests of CMS, the 
IRE, and/or the Part D plan sponsor to deny a request to participate.
    Comment: A commenter expressed concern about the 1-day timeframe 
provided to CMS, the IRE, and/or the Part D plan sponsor for requesting 
to participate in an expedited hearing. The commenter believes that the 
timeframe is too short and that meeting the timeframe will increase 
expenses because the only way to meet the timeframe with a written 
response would be by a process more expensive than regular mail.
    Response: Under the expedited process, all applicable timeframes 
have been significantly reduced to facilitate meeting the 10-day 
adjudication timeframe. Section 423.1010(b)(3) provides CMS, the IRE, 
and/or Part D plan sponsor, upon receipt of the notice of hearing, 1 
day to request to participate in the hearing. We believe that one day 
is sufficient time to review the notice of hearing, make a 
determination on whether to participate, and notify the ALJ. We want to 
emphasize that Sec.  423.2010(b)(3) allows for requests to participate 
to be made orally or submitted by facsimile to the ALJ hearing office. 
Therefore, a request to participate, including a written request, 
should be able to be submitted timely and without any increased costs.
    Comment: Some commenters stated that allowing the ALJ to request 
CMS, IRE, or Part D plan sponsor participation in an ALJ hearing is 
inappropriate given that the statute did not provide party status to 
these entities. The commenters stated that it is unclear why 
participation by these entities would be necessary or valuable. The 
commenters believe that such participation will add unnecessary 
confusion to the hearing, blindside the enrollee, and afford these 
entities a greater role than they are entitled to under the statute, 
including the opportunity to behave like a party. The commenters urge 
CMS to deny these entities the right to participate at

[[Page 65350]]

the ALJ hearing. If they are allowed to participate, the commenters 
believe the regulations should more clearly state that ALJs may not 
rely on statements made by representatives of CMS, the IRE, or a Part D 
plan sponsor.
    Response: We continue to believe that affording the ALJ the 
discretion to request and allow participation in a hearing by CMS, the 
IRE, and/or the Part D plan sponsor provides significant benefit to the 
appeals process by promoting the efficient and accurate resolution of 
factual and legal issues and by creating a more complete administrative 
record in the case. These entities cannot be parties to the proceeding, 
thus we believe that ALJ's should retain the discretion to determine 
when requesting or allowing CMS, the IRE, or Part D plan sponsor 
participation in a hearing would be helpful in resolving the issues 
involved in the appeal. We disagree with the commenters' suggestion 
that, even if these entities are allowed to participate in the hearing, 
the regulations should prescribe that the ALJ may not rely on 
statements made by representatives of these entities. Establishing such 
a policy would impede an ALJ's ability to make an independent 
assessment about the information and evidence presented at the hearing. 
We also disagree that allowing participation gives these entities the 
ability to behave like a party to the proceedings. These rules 
specifically prohibit participants from calling witnesses or cross-
examining the witnesses of an enrollee. Participation by CMS, the IRE, 
or the Part D plan sponsor is intended to be non-adversarial and for 
the purpose of aiding in the clarification of factual or policy issues.
    Accordingly, we are finalizing Sec.  423.2010 subject to the 
modification discussed in section III, which changes the word ``days'' 
to ``calendar days.''
5. Request for an ALJ Hearing (Sec.  423.2014)
    The Part D rule formerly at Sec. Sec.  423.612(a) and (b) (now at 
Sec. Sec.  423.1972(a) and (b)) describes how, where, and when to file 
a request for an ALJ hearing. We proposed to include this requirement 
in Sec.  423.2014. We also proposed to include in this section language 
similar to that in Sec.  405.1014 on requests for an ALJ hearing, 
including the content of a request, where and when to file a request 
and any extension of time to request a hearing. We believe these 
provisions appropriately apply to Part D appeals.
    Former Sec.  423.612(b) (now at Sec.  423.1978(b)) states that 
``[e]xcept when an ALJ extends the timeframe as provided in part 422, 
subpart M of this chapter, the enrollee must file a request for a 
hearing within 60 days of the date of the notice of an IRE 
reconsideration determination.'' Similarly, Sec.  422.602(b) of the 
Part C rule states that ``[e]xcept when an ALJ extends the timeframe as 
provided in part 405 of this chapter, a party must file a request for a 
hearing within 60 days of the date of the notice of a reconsidered 
determination.'' Therefore, we proposed in Sec.  423.2014 to closely 
track the language of Sec.  405.1014 regarding the time in which to 
request a hearing. Additionally, we proposed in Sec. Sec.  
423.2014(a)(1) and (a)(2) to require the telephone number of the 
enrollee and the appointed representative, if any, in any request for 
an ALJ hearing. This information would assist the ALJ in quickly 
contacting the enrollee or the appointed representative, particularly 
for expedited appeals. Because we proposed to adopt a specific 
provision to govern requests for ALJ hearings in Part D appeals, we 
proposed to revise former Sec.  423.612 (now at Sec.  423.1972) to 
replace the reference to the regulations in part 422, subpart M, with a 
cross reference to Sec.  423.2014.
    Furthermore, we proposed to require the plan name and the 
enrollee's Medicare health insurance claim number. This information 
would assist the ALJ in identifying the relevant plan and formulary 
involved in the appeal. We also proposed in Sec.  423.2014(a)(7) that 
an enrollee who seeks an expedited hearing indicate that in his or her 
request.
    As discussed previously, we proposed in Sec.  423.2014(b), a more 
informal process for requesting an expedited hearing by proposing to 
permit an enrollee to make a request for an expedited hearing orally. 
We believe that the oral request would make the initiation of the ALJ 
appeals process faster and easier for the enrollee. However, as 
explained above in the discussion of Sec.  423.2002(b)(2), an enrollee 
may only file an oral request for an expedited hearing after receiving 
the written IRE reconsideration notice. This requirement is reflected 
in Sec.  423.2014(b). A prescribing physician may also provide oral or 
written support for an enrollee's request for expedited hearing by an 
ALJ. In the same section, we also proposed to require the ALJ hearing 
office to document and maintain documentation of this oral request.
    Similarly, in Sec.  423.2014(d)(2), we proposed that an enrollee 
requesting an expedited hearing be permitted to request orally an 
extension of time for filing the hearing request and that such request 
be documented in writing and maintained in the case file by the ALJ 
hearing office.
    Specific comments received and responses to those comments are as 
follows:
    Comment: We received several comments pertaining to oral requests 
for an expedited ALJ hearing. One commenter expressed concern about the 
potential of oral requests for hearing to become lost, and therefore 
suggested that the ALJ be required to provide prompt written 
confirmation within two business days that the oral request has been 
received, along with a consumer friendly explanation of the ALJ appeals 
process and the enrollee's rights and obligations.
    Response: While we agree with the commenter's concern that it is 
possible for oral requests for hearing to become misplaced; we believe 
that we have sufficiently addressed this concern in Sec.  423.2002(c) 
and Sec.  423.2014(b) by requiring the ALJ hearing office to document 
all oral requests in writing and maintain the documentation in the case 
files. This procedure is similar to the expedited process established 
at the coverage determination, redetermination and reconsideration 
levels.
    Considering the expedited timeframe, we do not believe that issuing 
a notice acknowledging receipt of the oral request will add any benefit 
to the process. Rather, such a notice may cause confusion because the 
enrollee will receive notices on whether the request for an expedited 
hearing was granted or denied and/or a notice of hearing shortly after 
submission of the request for an expedited ALJ hearing. As to the 
request for a beneficiary-friendly explanation of the process and 
notification of the enrollee's right and obligations, we believe that 
the enrollee will be provided with all the necessary information 
through the notice of IRE reconsideration, the ALJ hearing notice, and 
interaction with ALJ staff. Accordingly, we are finalizing our 
proposals subject to the modification discussed in section III, which 
changes the word ``days'' to ``calendar days.''
6. Timeframes for Deciding an Appeal Before an ALJ (Sec.  423.2016)
    As discussed above, we proposed to apply a 90-day adjudicatory 
timeframe to Part D appeals with an expedited process for certain types 
of appeals. Specifically, we proposed in Sec.  423.2016(b)(1), that an 
ALJ would provide an expedited decision in situations where the 
enrollee requests an expedited hearing, the appeal involves an issue 
specified in Sec.  423.566(b), but does not include solely

[[Page 65351]]

a request for payment of Part D drugs already furnished and the 
enrollee's prescribing physician indicates, or the ALJ determines that 
applying the standard timeframe for making a decision may seriously 
jeopardize the enrollee's life or health or ability to regain maximum 
function. We also proposed that the ALJ may consider this standard as 
met if a lower level adjudicator has granted a request for an expedited 
appeal. The expedited appeals process is similar to the process 
established at the Part D plan sponsor and IRE levels under the Part D 
rule at Sec.  423.570, Sec.  423.584, and Sec.  423.600.
    In Sec.  423.2016(b), we proposed that the ALJ rule on a request 
for expedited hearing within 5 days of receiving the request. If the 
ALJ grants the request for expedited hearing, the ALJ will promptly 
provide the enrollee with oral notice of the decision and subsequently 
provide written notice of the decision, likely through the notice of 
hearing. We proposed in Sec.  423.2016(b)(5), that in a granted 
expedited hearing, the ALJ must issue a written decision, dismissal 
order, or remand as expeditiously as the enrollee's health condition 
requires, but no later than the end of the 10-day period beginning on 
the date the request for hearing is received.
    If the ALJ denies a request for an expedited hearing, the ALJ will 
provide prompt oral notice explaining that the appeal would be 
processed using the 90-day timeframe, and send an equivalent written 
notice within 3 days of issuance of the oral notice to the enrollee and 
to the Part D plan sponsor. We proposed in Sec.  423.2016(b)(4), that a 
decision on a request for an expedited hearing cannot be appealed to 
the MAC.
    Although the standard and expedited timeframes for the issuance of 
a written decision are somewhat longer than at the lower levels, we 
believe they are appropriate. The ALJ hearing is more complicated than 
the IRE reconsideration because it involves the scheduling and 
conducting of a hearing. The hearing entails the presentation of 
evidence including testimony by the enrollee and witnesses, which 
necessitates a longer adjudication period.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Many commenters appreciated the establishment of 
regulatory adjudication timeframes for Part D appeals at the ALJ and 
MAC levels. One commenter, however, requested shorter timeframes for 
both standard and expedited appeals, proposing 45- to 60-day timeframes 
for standard appeals and 72 hour timeframes for expedited appeals. One 
entity stated that it supported the proposed 5-day adjudication 
timeframe for expedited appeals, but noted that the timeframe 
conflicted with the 10-day expedited adjudication timeframe stated in 
the preamble.
    Response: The 90-day adjudication timeframe for standard appeals is 
consistent with the statutory and regulatory instruction to apply Part 
405, subpart I to Part D appeals, as appropriate. Part 405, subpart I 
establishes a 90-day adjudication period for Parts A and B appeals. 
Standard Part D appeals do not have characteristics that would justify 
deviating from the statutory and regulatory guidance or that would 
justify treating them differently than standard Parts A and B appeals 
relative to the adjudication timeframe.
    We have established an expedited adjudication timeframe for Part D 
appeals in situations where the appeal involves an issue specified in 
Sec.  423.566(b), but does not include solely a request for payment of 
Part D drugs already furnished, and the enrollee's prescribing 
physician or other prescriber indicates, or the ALJ or the MAC 
determines that applying the standard timeframe for making a decision 
may seriously jeopardize the enrollee's life or health or ability to 
regain maximum function. In these situations, the ALJ or the MAC must 
issue a decision, dismissal order, or remand as expeditiously as the 
enrollee's health condition requires, but no later than the end of the 
10-day period beginning on the date the request for hearing or request 
for review is received.
    An ALJ or the MAC will always strive to resolve an appeal as 
expeditiously as the enrollee's health requires. The 10-day timeframe, 
which is the maximum time period for expedited appeals, takes into 
account such factors as federal agencies operating only on business 
days, receiving the case file from the previous adjudicating entity, 
complying with all notice requirements, scheduling and holding a 
hearing, and issuing a written decision.
    The 5-day timeframe alluded to by one of the commenters is for 
ruling on a request for an expedited hearing. The timeframe provides an 
ALJ with sufficient time to review all the evidence and render an 
appropriate decision. As a practical matter, the timeframe is truly 
inconsequential to the enrollee because an ALJ must issue a decision as 
expeditiously as the enrollee's health condition requires or no later 
than within the applicable adjudication period. The 10-day expedited 
adjudication period and 90-day standard adjudication period begin on 
the day the request for hearing is received. See Sec. Sec.  
423.2016(a)(1), (2) and (b)(5)(i) and (ii). Therefore, the time it 
takes for an ALJ to issue a decision on a request for an expedited 
hearing will always count towards the applicable adjudication period. 
For instance, if an ALJ took 5 days to grant a request for an expedited 
hearing, then the ALJ would only have 5 more days to issue a decision 
before the applicable 10-day adjudication period expired. This would 
similarly hold true if the request for an expedited hearing is denied. 
If the request was denied on the 5th day, then there would be 85 days 
left in the standard adjudication period.
    Accordingly, we are finalizing our proposals subject to the 
modification discussed in section III, which changes the term ``days'' 
to ``calendar days.''
7. Submitting Evidence Before the ALJ Hearing (Sec.  423.2018)
    We proposed in Sec.  423.2018 to adopt concepts from Sec.  405.1018 
regarding when an enrollee must submit written evidence. However, we 
also proposed in this section to permit an enrollee to submit any 
written evidence that he or she wishes to have considered at the 
hearing. An ALJ will not consider any evidence submitted regarding a 
change in the enrollee's condition after the coverage determination was 
made. As explained above in section IV., D., under the provisions of 
this final appeals rule, if an enrollee wishes such evidence to be 
considered, the ALJ will remand the case to the Part D IRE. See 
Sec. Sec.  423.2034(c), 423.2126(b).
    Specific comments received and responses to those comments are as 
follows:
    Comment: We received several comments regarding the timeframes 
proposed for the enrollee to submit all written evidence to be 
considered at the hearing. These timeframes require the enrollee to 
submit evidence within 10 days, for standard appeals, and 2 days, for 
expedited appeals, of receiving the notice of hearing. Several 
commenters advised that the proposed regulations are supposed to, but 
do not mirror the regulations in part 405, which state that the 
timeframes for admission of evidence do not apply to oral testimony 
given at a hearing or to evidence submitted by an unrepresented 
beneficiary. The commenters contend that ``unrepresented beneficiary'' 
includes beneficiary advocates, who are often not contacted by the 
beneficiary soon enough to enable compliance. The commenters believe 
that there should be

[[Page 65352]]

no time constraints on the enrollee's ability to submit evidence.
    Response: We disagree with the comments that the proposed 
provisions must be exactly the same as the parallel provisions in part 
405. As contained in Sec.  423.562(c) and as discussed in the proposed 
rule, we will apply the provisions of Part 405 to Part D appeals at the 
ALJ level with appropriate modifications to meet the needs of Part D 
appeals.
    In Sec.  423.2018 we are adopting concepts from Sec.  405.1018 
regarding when an enrollee must submit written evidence. We have 
proposed that an enrollee must submit all written evidence that he or 
she wishes to have considered at the hearing within 2 days of receiving 
the notice of hearing for expedited appeals and 10 days for non-
expedited appeals. We believe that requiring evidence to be submitted 
within the 2-day timeframe provides the adjudicator sufficient time to 
review all evidence submitted before the hearing and issue a decision 
as expeditiously as the enrollee's health condition requires or within 
the 10-day adjudication period.
    In response to the comment, we have modified the 10-day timeframe 
in non-expedited appeals to apply to only represented enrollees. We 
believe this is more appropriately consistent with part 405. As the 
commenter noted, the timeframe requirements for the submission of 
evidence do not apply to unrepresented beneficiaries in part 405. We 
agree with the commenter that the same exception should apply to 
unrepresented enrollees in non-expedited appeals. Accordingly, we have 
revised Sec.  423.2018(b) to include this exception and to make clear 
that the 10-day timeframe only applies to represented enrollees.
    Finally, we also note that ``unrepresented beneficiary'' does not 
include beneficiary ``advocates.'' Section 423.560 states that an 
enrollee may have an appointed or authorized representative act on his 
or her behalf, but does not provide any role or rights for an 
``advocate'' in the appeals process.
    Therefore, Sec.  423.2018 is finalized with the modification 
exempting unrepresented enrollees from the 10-day evidence submission 
timeframe for non-expedited appeals, and subject to the modification 
discussed in section III, which changes the word ``days'' to ``calendar 
days.''
8. Time and Place for a Hearing Before an ALJ (Sec.  423.2020)
    Former Sec.  423.612(b) (now at Sec.  423.2020(a)) describes the 
time and place for a hearing before an ALJ and requires that it be set 
in accordance with Sec.  405.1020. Therefore, we proposed to include in 
Sec.  423.2020 language similar to that set forth in Sec.  405.1020, 
including information on the determination of how appearances are made, 
the notice of a hearing, an enrollee's right to waive a hearing, an 
enrollee's objection to the time and place of hearing, good cause for 
changing the time and place of the hearing, the effect of rescheduling 
a hearing, and an enrollee's request for an in-person hearing.
    As discussed previously, we proposed a more informal process for 
expedited hearings by proposing in Sec. Sec.  423.2020(e)(3) and (i)(3) 
to allow objections to the time and place for a hearing and requests 
for in-person hearings to be made orally, and to require the ALJ 
hearing office to document all oral objections or requests and maintain 
such documentation in the case files. We also proposed in Sec.  
423.2020(i)(4) to not waive the adjudication period for expedited 
hearings when an enrollee's request for an in-person hearing is granted 
because a waiver of the adjudication period under the circumstances of 
an expedited appeal could be detrimental to the enrollee's health 
condition.
    Specific comments received and responses to comments are as 
follows:
    Comment: We received several comments regarding the rescheduling of 
hearings. The commenters stated that, although the good cause examples 
listed in Sec.  423.2020(g)(3) for requesting the rescheduling of a 
hearing are not all-inclusive, experience has shown that the examples 
are often regarded as all-inclusive. The commenters suggested that the 
provision be more explicit in stating that the examples listed are not 
the only acceptable situations in which good cause can be found.
    Response: Section 423.2020(g)(3) is consistent with the parallel 
provision in Part 405, Sec.  405.1020(g)(3). Further, the provision 
clearly states that the good cause examples are not an all-inclusive 
list. Accordingly, we do not believe the provision requires additional 
clarification.
    Accordingly, Sec.  423.2020 is finalized consistent with the 
modifications discussed in section III of this preamble, which change 
the term ``days'' to ``calendar days,'' and provide clarification that 
when an enrollee's request for an in-person hearing is granted, the ALJ 
must issue a decision within the adjudication timeframe specified in 
Sec.  423.2016 (including any applicable extension provided in this 
subpart), unless the enrollee agrees to waive the adjudication 
timeframe in writing.
9. Notice of a Hearing Before an ALJ (Sec.  423.2022)
    We proposed to mirror the language in Sec.  405.1022 regarding 
notice of hearing before an ALJ in Sec.  423.2022. We believe that it 
is appropriate to apply to Part D appeals procedures similar to the 
Part A and Part B procedures regarding notice of a hearing. We also 
proposed a more informal process with respect to expedited hearings by 
proposing in Sec.  423.2022(a) to allow ALJs to transmit the notice of 
the hearing to the enrollee and other potential participants orally 
followed by an equivalent written notice within one day of the oral 
notice. Additionally, we proposed in the same provision that expedited 
hearing notices be mailed or served at least 3 days before the hearing.
    A specific comment received and response to comment is as follows:
    Comment: A commenter suggested that the ALJ hearing office be 
required to notify potential hearing participants by fax and/or 
telephone of an ALJ hearing, particularly in the event of an expedited 
appeal.
    Response: Section 423.2022(a)(1) requires the notice of hearing to 
be either mailed or otherwise transmitted, or given by personal 
service. For expedited appeals, Sec.  423.2022(a)(2) provides that 
notice may also be provided orally followed by an equivalent written 
notice within one day of the oral notice. If a party or participant 
indicates a preference for receipt of the notice of hearing by a 
particular method, we believe that section 423.2022 provides sufficient 
flexibility for the notice of hearing to be mailed or served by various 
means, including facsimile and e-mail. We believe that the inherent 
flexibility of Sec.  423.2022 allows the ALJ hearing process to 
appropriately adapt to technological advancements and enrollee and 
participant preferences. Requiring the notice of hearing to be provided 
in a limited manner would be contrary to our goal of providing 
flexibility to this process and would not be conducive to an efficient 
and beneficiary-friendly hearing process.
    We are making a technical correction to clarify that other 
potential participants may also indicate in writing that he or she does 
not wish to receive notice of a hearing before an ALJ. We are 
finalizing this provision with this technical correction, and subject 
to the modification discussed in section III, which changes the term 
``days'' to ``calendar days.''

[[Page 65353]]

10. Objections to the Issues and Disqualification of the ALJ (Sec.  
423.2024 and Sec.  423.2026)
    We proposed to follow in Sec.  423.2024 and Sec.  423.2026 the 
language in Sec.  405.1024 and Sec.  405.1026, which discusses the 
process for objecting to issues in the notice of hearing and 
disqualification of the ALJ. We believe it is appropriate to allow 
enrollees to object to the issues described in the notice of hearing 
and to maintain the processes set forth for Part A and Part B appeals 
for disqualification of the ALJ for Part D appeals.
    Additionally, for expedited hearings, we proposed in Sec.  
423.2024(a) and Sec.  423.2026(b), that an enrollee may submit oral or 
written notice of objections to issues described in the notice of 
hearing no later than 2 days before the hearing and orally notify the 
ALJ no later than 2 days after the date of the notice of hearing about 
any objections to the ALJ who will conduct the hearing. Further, in the 
same sections, we proposed that the ALJ document all oral objections or 
requests in writing and maintain the documentation in the case files.
    We received no comments on Sec. Sec.  423.2024 and 423.2026, and 
therefore, are finalizing them subject to the modification discussed in 
section III, which changes the word ``days'' to ``calendar days.''.
11. ALJ Hearing Procedures (Sec.  423.2030) and Issues Before an ALJ 
(Sec.  423.2032)
    Section 423.2030 establishes general procedures for ALJ hearings, 
including the procedures that apply when an ALJ determines that there 
is material evidence missing at the hearing. In Sec.  423.2032 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 a hearing, and 
the restrictions imposed on adding new claims to pending appeals. We 
received no comments on these sections and, therefore are finalizing 
them without modification.
12. When an ALJ May Remand a Case (Sec.  423.2034)
    We proposed to include language in Sec.  423.2034 similar to that 
in Sec.  405.1034 regarding when an ALJ may remand a case. This 
language is appropriate for Part D appeals because, like Part A and 
Part B appeals, it may be necessary for an ALJ to remand a case to a 
lower level. We proposed at Sec.  423.2034(c), to require the ALJ to 
remand a case to the Part D plan sponsor if the ALJ determines that the 
enrollee wishes to have evidence on his or her change in condition 
after the coverage determination considered in the appeal. However, as 
discussed in greater detail above in section IV.D., we have revised 
Sec.  423.2034(c) to require the ALJ to remand a case to the 
appropriate Part D IRE if the enrollee wishes to have evidence of a 
change in condition considered. Accordingly, Sec.  423.2034 is 
finalized with the modifications specified above and that discussed in 
section III of this preamble, which clarifies when an ALJ can remand a 
case to the IRE based on missing information.
13. Description of an ALJ Hearing Process (Sec.  423.2036)
    We reviewed the language in Sec.  423.1036 to determine whether to 
incorporate similar language in proposed Sec.  423.2036. In general, we 
follow the procedures set forth in Part A and Part B appeals regarding 
the right to appear and present evidence, waiver of the right to 
appear, presenting written statements and oral arguments, wavier of the 
adjudication period, what evidence is admissible at a hearing, and 
witnesses at a hearing. With respect to waiver of the right to appear 
for expedited hearings, we proposed at Sec.  423.2036(b), to allow an 
enrollee to indicate orally that he or she does not wish to appear at a 
hearing (with appropriate documentation of this request and maintenance 
of this documentation by the ALJ hearing office). At Sec.  
423.2036(b)(2), we proposed to allow an enrollee to withdraw his or her 
waiver in writing. We also proposed that by withdrawing his or her 
waiver, the enrollee agrees to an extension of the adjudication period 
as specified in Sec.  423.2016 that may be necessary to schedule and 
hold a hearing. We proposed in Sec.  423.2036(e) (what evidence is 
admissible at a hearing) that an ALJ may not consider evidence on any 
change in condition of the enrollee after the coverage determination by 
the Part D plan sponsor is made. We have finalized this provision, but 
have modified proposed Sec.  423.2036(e) by requiring the ALJ to remand 
the case to the appropriate Part D IRE as set forth in Sec.  
423.2034(b)(2).
    We also proposed not to include language similar to that in Sec.  
405.1036(f) on requests for subpoenas by a party. In Part 405, subpart 
I, requests for subpoena by a party are limited to instances where 
discovery has been sought. Discovery is permissible under Part 405, 
subpart I only when CMS and/or its contractors participate in an ALJ 
hearing as a party, because it is appropriate to permit discovery when 
an ALJ hearing is adversarial (that is, whenever CMS and/or its 
contractor is a party).
    For Part D appeals, however, section 1860D-4(h)(1) of the Act 
states ``only the Part D eligible individual'' is entitled to bring an 
appeal under Part D. We believe this statutory language prohibits CMS, 
the IRE, and the Part D plan sponsors from obtaining party status at an 
ALJ hearing. Thus, we proposed that only an enrollee may be a party, 
and therefore, Part D appeals will not be adversarial in nature. 
Accordingly, we also proposed not to apply to Part D appeals the 
provisions in Sec.  405.1036(f), which address subpoenas issued at the 
request of a party, and Sec.  405.1037, which address discovery. 
However, in the limited circumstances described in section 423.2036(f), 
we proposed to allow an ALJ to issue a subpoena on his or her own 
initiative for the appearance and testimony of witnesses, and for the 
enrollee and/or the Part D plan sponsor to make books, records, 
correspondence, papers, or other documents that are material to an 
issue at the hearing available for inspection and copying. We believe 
this policy will ensure that an ALJ is able to obtain information 
relevant to an appeal because these entities have access to the 
documents and records, such as medical records and plan formularies and 
marketing materials, that are needed in Part D appeals.
    In instances when an ALJ issues a subpoena, we intend to follow 
similar procedures regarding the reviewability and enforcement of 
subpoenas as outlined in Sec.  405.1036(f).
    Specific comments received and responses to those comments are as 
follows:
    Comment: We received several comments regarding an ALJ's authority 
to request expert testimony. Commenters suggested that the regulations 
should provide an ALJ with the authority to request expert testimony 
from outside medical professionals who are not connected in any way 
with CMS, the IRE, or the Part D plan sponsor. Numerous commenters also 
disagreed with our decision not to allow a party to request that the 
ALJ issue a subpoena in a Part D appeal. The commenters advised that 
some physicians are reluctant to provide medical records or to 
participate in the hearing because of the already burdensome nature of 
the appeals process in Part D cases. Therefore, the ability to request 
a subpoena may be necessary in order to protect a beneficiary's right 
to present evidence and state his or her position at the hearing.
    Response: The regulations clearly provide an ALJ with authority to 
request

[[Page 65354]]

expert testimony, including medical expert testimony from individuals 
unassociated with CMS, the IRE, or Part D plan sponsors. As mentioned 
in Sec.  423.2000(f), if an ALJ determines that it is necessary to 
obtain testimony from a person other than the enrollee, he or she may 
hold a hearing to obtain the testimony. This authority is made even 
more clear under Sec.  423.2036(f)(1). Section 423.2036(f)(1) states 
that, ``when it is reasonably necessary for the full presentation of a 
case, an ALJ may, on his or her own initiative, issue subpoenas for the 
appearance and testimony of witnesses and for the enrollee and/or the 
Part D plan sponsor to make books, records, correspondence, papers, or 
other documents that are material to an issue at the hearing available 
for inspection and copying.'' This provision grants an ALJ the 
authority to subpoena medical experts to testify, and addresses the 
commenters' concerns about physicians reluctant to provide records or 
testify.
    In the event that a physician or other prescriber is reluctant to 
provide medical records or is unwilling to participate in a hearing, an 
ALJ has the authority to subpoena the records or the testimony of the 
physician or other prescriber. Of course, the issuance of a subpoena in 
such circumstances can only be done by the ALJ on his or her own 
initiative and only when the ALJ has determined that the information is 
reasonably necessary for the full presentation of the case.
    We continue to believe that the ability for an enrollee to request 
that the ALJ issue a subpoena is not appropriate in Part D appeals. As 
set forth in Sec.  405.1036(f), requests for subpoenas by a party are 
limited to instances where discovery has been sought. Discovery is 
permissible under part 405 only when CMS and/or its contractors are a 
party to the ALJ hearing. In Part D appeals, only an enrollee may be a 
party to the hearing. As such, Part D appeals will not be adversarial 
in nature, and therefore, the ability for a party to request a subpoena 
is unnecessary.
    Therefore, Sec.  423.2036 is finalized consistent with the 
modifications described in section III of this preamble, which change 
the term ``days'' to ``calendar days,'' and make a technical correction 
to clarify that the ALJ may not issue a subpoena to CMS or the IRE to 
compel an appearance, testimony, or the production of evidence, or to 
the Part D plan sponsor to compel an appearance or testimony.
14. Deciding a Case Without a Hearing Before an ALJ and Prehearing and 
Posthearing Conferences (Sec.  423.2038 and Sec.  423.2040)
    We proposed in Sec.  423.2038 and Sec.  423.2040 to follow the 
language set forth in Sec.  405.1038 and Sec.  405.1040, which 
discusses the process for deciding a case without a hearing before an 
ALJ and prehearing and posthearing conferences. We believe it is 
appropriate to use these processes for Part D appeals. Additionally, 
for expedited hearings, we proposed in Sec.  423.2038(b)(1)(i) and 
Sec.  423.2040(c), that an enrollee may orally notify the ALJ that he 
or she does not wish to appear before the ALJ at a hearing and may also 
orally indicate that he or she does not wish to receive a written 
notice of the conference.
    Further, we proposed that the ALJ document all objections or 
requests in writing and maintain the documentation in the case files.
    Finally, we proposed in Sec.  423.2040(c) that, for expedited 
hearings, the ALJ inform the enrollee of the time, place, and purpose 
of the conference within a shorter timeframe (at least 2 days before 
the conference date) than for non-expedited appeals (at least 7 days 
before the conference date). We received no comments on these 
provisions. Therefore, we finalize Sec.  423.2038 without modification, 
and Sec.  423.2040 subject to the modification discussed in section 
III, which changes the word ``days'' to ``calendar days.''
15. The Administrative Record (Sec.  423.2042)
    Section 423.2042 explains the requirements applicable to the 
creation of the administrative record of the ALJ proceedings, and for 
requesting and receiving copies of the administrative record.
    Specific comments received and responses to those comments are as 
follows:
    Comment:
    One commenter stated that the costs for obtaining a copy of the 
administrative record unfairly impact enrollees who cannot afford to 
pay for a copy of the record. The commenter suggests revising the 
proposed regulation to allow each enrollee to receive one free copy of 
his or her administrative record. As an alternative, the commenter 
suggests adding regulatory language allowing any enrollee who can show 
he or she is unable to afford a copy of the administrative record to 
receive one free copy.
    Response: The requirements contained in proposed Sec.  423.2042 
were carried over from, and are consistent with, the requirements 
contained in Sec.  405.1042. As the commenter notes, there may be a 
cost associated with producing a copy of the administrative record for 
parties who request it. As a general matter we do not believe that a 
regulatory change to direct this cost to the appeals adjudicators is 
necessary or appropriate. The regulations do not require an ALJ to 
charge an enrollee a fee to copy the record, but rather state that the 
enrollee may be asked to pay the costs of providing such copies. Thus, 
an enrollee may ask an ALJ to waive any suggested fee based on 
financial hardship or for any other reason. Also, we do not have any 
evidence suggesting enrollees are encountering any difficulties 
requesting copies of case files.
    Comment: We received a related comment asking us to amend the 
regulation to allow Part D plan sponsors, the Part D IRE, or CMS to 
request a copy of the administrative record. The commenter suggests 
that receipt of the case file would assist Part D plan sponsors, the 
IRE, and CMS in making requests for own motion review by the MAC and 
would also afford participants an opportunity to review the record for 
accuracy.
    Response: We agree with the commenter's assessment that entities 
making referrals for own motion review should have access to case files 
when making these determinations. However, we believe the suggested 
revision is unnecessary. CMS and the IRE are the only entities that may 
refer cases to the MAC for own motion review under Sec.  423.2110. The 
Part D IRE is able to access Part D appeals case files because it is 
the final repository for all such files. In addition, CMS has access to 
Part D case files as a result of its contracting relationship with the 
Part D IRE. Thus, the entities responsible for referring cases to the 
MAC currently have access to any Part D case file that may be referred 
to the MAC for own motion review. Additionally, Sec.  423.2046(a)(4) 
requires ALJs to send a copy of the decision to both the IRE that 
issued the reconsideration and the Part D plan sponsor that issued the 
coverage determination. To the extent a Part D plan sponsor wants 
additional information related to the ALJ hearing, it may contact the 
IRE to request such information. For these reasons, we believe it is 
unnecessary to revise the proposed regulations to allow Part D plan 
sponsors, the Part D IRE, or CMS to request a copy of the 
administrative record.
    Accordingly, we are finalizing Sec.  423.2042 without modification.

[[Page 65355]]

16. Consolidation of a Hearing Before an ALJ (Sec.  423.2044)
    Section 423.2044 describes the requirements applicable to holding a 
consolidated hearing before the ALJ. We received no comments on this 
section and, therefore are finalizing it subject to the modification 
discussed in section III, which changes the term ``days'' to ``calendar 
days.''
17. Notice of an ALJ Decision (Sec.  423.2046) and the Effect of an 
ALJ's Decision (Sec.  423.2048)
    We proposed in Sec.  423.2046 to follow the procedures in Sec.  
405.1046 regarding notice of an ALJ decision. We believe it is 
appropriate to provide a similar notice process in Part D appeals. We 
did not propose to include language from Sec.  405.1046(a) regarding 
overpayment cases involving multiple beneficiaries because Part D 
appeals do not involve overpayments. We proposed in Sec.  423.2046(d), 
that an ALJ issue a decision, as expeditiously as the enrollee's health 
condition requires, but no later than the end of the 10-day period for 
expedited hearings.
    In Sec.  423.2048, we also proposed to follow the policy 
established in Sec.  405.1048 which explains the effect of an ALJ 
decision on all parties to the hearing.
    Specific comments received and responses to those comments are as 
follows:
    Comment: We received several comments concerning the notice of an 
ALJ decision. The commenters suggested that Sec.  423.2046(a)(3) 
include a requirement that a copy of the ALJ decision also be mailed to 
the enrollee's representative, if one has been appointed. The 
commenters advised that including this requirement will allow advocates 
to better assist beneficiaries, saving time and potential confusion.
    Response: We believe that the commenters' concern has already been 
adequately addressed. Section 423.560 defines the rights and 
responsibilities of an appointed representative. This provision 
provides an individual either appointed or authorized by State law or 
other applicable law with all the rights and responsibilities of an 
enrollee in obtaining a coverage determination and in dealing with any 
of the levels of the appeals process, including the right to receive a 
copy of the ALJ decision. Moreover, it has been the standard practice 
of OMHA and the MAC to send copies of decisions to all appropriately 
appointed representatives.
    Accordingly, we finalize Sec. Sec.  423.2046 and 423.2048 
consistent with the modifications described in section III of this 
preamble. With respect to Sec.  423.2046, the modifications replace the 
term ``final'' with ``binding on the Part D plan sponsor,'' and change 
the word ``days'' to ``calendar days.'' In Sec.  423.2048, the 
modification replaces the phrase ``issues a final action'' with 
``issues a final decision or remand order.''
18. Removal of a Hearing Request From an ALJ to the MAC (Sec.  
423.2050)
    In Sec.  423.2050 we explained the process for the MAC to assume 
responsibility for holding a hearing if a request for hearing is 
pending before an ALJ. We did not receive any comments on this section. 
Therefore, we are finalizing Sec.  423.2050 without modification.
19. Dismissal of a Request for Hearing Before an ALJ (Sec.  423.2052) 
and Effect of a Dismissal of a Request for a Hearing Before an ALJ 
(Sec.  423.2054)
    We proposed in Sec.  423.2052, to follow the language in Sec.  
405.1052 regarding dismissal of a request for an ALJ hearing because we 
believe that it is appropriate for an ALJ to dismiss Part D appeals for 
the same reasons as an ALJ would dismiss Part A and Part B appeals. We 
also proposed to shorten the timeframes for expedited appeals in two 
instances.
    First, we proposed at Sec.  423.2052(a)(2)(ii), that an ALJ may 
dismiss a request for expedited hearing when the enrollee (or his or 
her representative) does not appear at the time and place set for the 
hearing and has not contacted the ALJ hearing office within 2 days 
(instead of the standard 10 days for non-expedited appeals) and 
provided good cause (as determined by the ALJ) for not appearing.
    Second, we proposed at Sec.  423.2052(a)(2)(iii), that an ALJ may 
dismiss a request for hearing when the enrollee (or his or her 
representative) does not appear at the time and place set for the 
hearing and if the ALJ sends a notice to the enrollee asking why the 
enrollee did not appear, the ALJ does not receive a response to the 
notice from the enrollee within 2 days for expedited hearings (and 10 
days for non-expedited hearings) or the enrollee does not provide good 
cause for failing to appear.
    We also proposed at Sec.  423.2052(a)(5), that a request for 
hearing may be dismissed if the enrollee dies while the request for 
hearing is pending and the enrollee's representative has no remaining 
financial interest in the case and does not continue the appeal. Unlike 
Medicaid State agencies in Part A and Part B appeals, State 
Pharmaceutical Assistance Programs (SPAPs) do not have an independent 
right to appeal. While a SPAP may have a financial interest and may 
wish to pursue an appeal, the SPAP would have authority to do so only 
if the SPAP was appointed as the enrollee's representative. Therefore, 
we proposed that if an SPAP has been appointed as the enrollee's 
representative, the SPAP could continue an appeal after an enrollee 
dies provided that the appointment continues to be valid.
    Additionally, we proposed at Sec.  423.2052(b) to follow the 
language of Sec.  405.1052(b), which requires the ALJ to mail a written 
notice of dismissal to the enrollee. In proposed Sec.  423.2054 we 
explained the effect of a dismissal of a request for ALJ hearing.
    Section 423.2052 is therefore finalized consistent with the 
modifications discussed in section III of this preamble, which replace 
the word ``final'' with ``binding,'' and change the term ``days'' to 
``calendar days.'' We did not receive any comments on Sec.  423.2054 
and therefore finalize it without modification.
20. Applicability of Policies Not Binding on the ALJ and MAC (Sec.  
423.2062) and Applicability of Laws, Regulations, and CMS Rulings 
(Sec.  423.2063)
    In Sec.  423.2062, we proposed that ALJs and the MAC give 
substantial deference to CMS program guidance, and if they decline to 
follow such guidance provide an explanation for why the policy is 
inapplicable. We also proposed that such a determination had no 
precedential effect.
    In Sec.  423.2063, consistent with Sec.  405.1063, we proposed that 
CMS Rulings be binding on all CMS components and on all HHS components 
that adjudicate matters under CMS' jurisdiction.
    We received no comments on these sections. Therefore, we finalize 
Sec.  423.2062 without medication and Sec.  423.2063 consistent with 
the modifications described in section III of this preamble, which 
clarify the additional authorities that are binding on ALJs and the 
MAC.

J. Appeals to the MAC (Sec.  423.2100 Through Sec.  423.2134)

1. General
    The Part D rule includes one provision concerning MAC review. 
Former Sec.  423.620 (now at Sec.  423.1974) provides that an enrollee 
who is dissatisfied with an ALJ's hearing decision may request that the 
MAC review the ALJ decision or dismissal. Further, it states that 
``[t]he regulations

[[Page 65356]]

under part 422, subpart M of this chapter regarding MAC review apply to 
matters addressed by this subpart, to the extent applicable.'' Section 
422.608 of the Part C rule states that ``[t]he regulations under part 
405 of this chapter regarding MAC review apply to matters addressed by 
this subpart to the extent that they are appropriate.'' Therefore, we 
proposed in the provisions regarding MAC review to follow the language 
in Part 405, subpart I, as appropriate and have tracked the language in 
the Part 405, subpart I, for proposed Sec.  423.2106, Sec.  423.2116, 
Sec.  423.2118, Sec.  423.2120, Sec.  423.2128, and Sec.  423.2130. In 
addition, because we proposed to adopt a specific provision to govern 
requests for MAC review in Part D appeals, we proposed to revise former 
Sec.  423.620 (now at Sec.  423.1974) to replace the reference to the 
regulations in part 405, subpart I, with a cross reference to Sec.  
423.2102.
2. Medicare Appeals Council Review: General (Sec.  423.2100)
    Former Sec.  423.620 (now at Sec.  423.1970) provides that an 
enrollee who is dissatisfied with an ALJ's hearing decision may request 
that the MAC review the ALJ decision or dismissal. We proposed to 
include this requirement in Sec.  423.2100. We proposed in Sec.  
423.2100 to follow the language of Sec.  405.1100, which describes who 
may request MAC review, the de novo standard of MAC review, and 
timeframes for issuing a decision or remand because we believe that 
Part D appeals should not differ from Part A and Part B appeals with 
respect to these provisions, except as discussed above. We further 
proposed language in Sec.  423.2100(c) establishing the 10 day 
adjudicatory timeframe for expedited reviews.
    We received no comments on this section. Therefore, we have 
finalized Sec.  423.2100 consistent with the modifications described in 
section III of this preamble, which clarify the specific types of 
actions that may be taken by the MAC, and change the word ``days'' to 
``calendar days.''
3. Request for MAC Review When ALJ Issues Decision or Dismissal (Sec.  
423.2102)
    We proposed to include in Sec.  423.2102 language similar to that 
set forth in Sec.  405.1102 on requests for MAC review when the ALJ 
issues a decision or dismissal. We believe it is appropriate to include 
this information at Sec.  423.2102 because it would help the enrollee 
and any representative of the enrollee to understand how to file a 
request for MAC review, how the date of receipt of the request would be 
determined, and when a request would be considered filed. We also 
proposed at Sec.  423.2102(a)(2), that an enrollee may request 
expedited review if the enrollee submits a written request for MAC 
review within 60 days after receipt of the ALJ's decision or dismissal 
and the appeal involves an issue specified in Sec.  423.566(b) but does 
not include solely a request for payment of Part D drugs already 
furnished.
    We proposed at Sec.  423.2102(a)(2)(i), a more informal process for 
requesting an expedited review by proposing to permit an enrollee to 
make a request for review orally. We believe that the oral request 
would make the initiation of the MAC appeals process faster and easier 
for the enrollee. A prescribing physician may also provide oral or 
written support for an enrollee's request for expedited review by the 
MAC. We also proposed in Sec.  423.2102(a)(2)(ii) to require the MAC to 
document and maintain documentation of this oral request.
    Similarly, in Sec.  423.2102(b)(1), we proposed that an enrollee 
requesting an expedited review be permitted to orally request an 
extension of time for filing the request, and that the request be 
documented in writing and maintained in the case file by the MAC.
    We received no comments on this section. Therefore we are 
finalizing our proposed policies subject to the modification discussed 
in section III, which changes the word ``days'' to ``calendar days.''
4. Where a Request for Review May Be Filed (Sec.  423.2106)
    In Sec.  423.2106 we proposed to follow similar requirements in 
Sec.  405.1106(a). We received no comments on this section. Therefore 
we are finalizing Sec.  423.2106 without modification.
5. MAC Actions When Request for Review Is Filed (Sec.  423.2108)
    We proposed to follow the requirements in Sec.  405.1108 regarding 
MAC actions when a request for review is filed, including de novo 
review of an ALJ's decision.
    Specifically, we proposed in Sec.  423.2108(d) an expedited process 
for certain types of appeals. We proposed in Sec.  423.2108(d)(1), to 
require the MAC to provide an expedited decision where an enrollee 
requests the review, the appeal involves an issue specified in Sec.  
423.566(b), but does not include solely a request for payment of Part D 
drugs already furnished, and the enrollee's prescribing physician 
indicates, or the MAC determines that applying the standard timeframe 
for making a decision may seriously jeopardize the enrollee's life or 
health or ability to regain maximum function. We also proposed that the 
MAC may consider this standard as met if a lower level of adjudicator 
has granted a request for an expedited appeal.
    We proposed in Sec.  423.2108(d)(3)(i) that the MAC deny a request 
for expedited review, because the standard for expedited review is not 
met, within 5 days after receiving the request for expedited review. We 
also proposed in Sec.  423.2108(d)(3)(ii) that the MAC would send the 
enrollee and Part D plan sponsor written notice of the denial within 5 
days after receiving the request that explains that the appeal will be 
processed using the 90-day timeframe. Instead of notifying the enrollee 
and Part D plan sponsor that the MAC has granted the request for 
expedited review, we proposed to use these resources to process the 
expedited appeal.
    If the MAC accepts the request for expedited review, we proposed in 
Sec.  423.2108(d)(2), that the MAC issue a decision, dismissal order, 
or remand, as expeditiously as the enrollee's health condition 
requires, but no later than the end of the 10-day period beginning on 
the date the request for review is received by the entity specified in 
the ALJ's written notice of decision. This process is similar to the 
process established at the coverage determination, redetermination, and 
reconsideration levels under the Part D rule at Sec.  423.570, Sec.  
423.584, and Sec.  423.600.
    We received no comments on this section. Therefore, we are 
finalizing these proposals subject to the modification discussed in 
section III, which changes the term ``days'' to ``calendar days.''
6. MAC Review on Its Own Motion (Sec.  423.2110)
    On March 23, 2007, CMS published a CMS Ruling (CMS-4083-NR) in the 
Federal Register. The CMS ruling established an interim process for 
referring Part D cases to the MAC for review under its own motion 
authority. This ruling permits CMS and its IRE to refer cases to the 
MAC for own motion review and largely applies the provisions of Sec.  
405.1110, with the notable exception of the standard of review.
    We proposed to largely follow this Ruling and the requirements set 
forth in Sec.  405.1110 regarding MAC own motion reviews, with certain 
modifications. Proposed Sec.  423.2110, reflects our proposal that the 
enrollee is the only party to an ALJ hearing and that CMS and/or the 
Part D IRE may participate as

[[Page 65357]]

a non-party in the ALJ hearing. Proposed Sec.  423.2110 differs from 
Sec.  405.1110 in that Sec.  423.2110 applies the same standard of 
review to such requests whether CMS or IRE simply requested to 
participate in the ALJ hearing or actually participated in the ALJ 
hearing. This proposed difference is due to the ALJ having the 
discretion under proposed Sec.  423.2010 not to allow CMS or the Part D 
IRE to participate as a non-part in the ALJ hearing. Because ALJs have 
discretion to deny a CMS or IRE request to participate in an ALJ 
hearing, we believe it is appropriate under Sec.  423.2110 to apply the 
same standard of review to requests for MAC own motion review whether 
CMS or IRE requested to participate or actually participated in the ALJ 
hearing.
    For administrative efficiency, we proposed to limit to CMS and the 
Part D IRE the ability to refer a case to the MAC for review under its 
own motion authority. We expect that most of the referrals would be 
made through the Part D IRE, because it is responsible for monitoring 
plan effectuation of favorable decisions and serves as a repository for 
all completed Part D ALJ case files.
    The Part D IRE does not have a financial or business interest in 
the outcome of the case. Therefore, we believe that the Part D IRE is 
in the best position to objectively examine whether an ALJ decision 
warrants review by the MAC. While Part D plan sponsors would not be 
permitted to refer a Part D case to the MAC for review under its own 
motion authority, Part D plan sponsors would have the opportunity to 
communicate with, and provide input to, CMS or the Part D IRE on ALJ 
decisions that may warrant a referral to the MAC. Given the large 
number of Part D plan sponsors, we believe that limiting own motion 
referrals to CMS and the Part D IRE is a more streamlined and efficient 
approach.
    We also note that CMS Ruling (CMS-4083-NR) is superseded by these 
final regulations.
    Specific comments received and responses to comments are as 
follows:
    Comment: One commenter is opposed to the proposed language in Sec.  
423.2110(a) that precludes Part D plan sponsors from referring cases to 
the MAC for review on its own motion. The commenter strongly believes 
that the Part D plan sponsor should be allowed to refer cases to the 
MAC. It is the commenter's experience that the Part D plan sponsor is 
more likely than the IRE to participate in the ALJ hearing and in the 
best position to challenge the evidence considered by the ALJ. Finally, 
the commenter believes the Part D plan sponsor should be given due 
process to defend its coverage determination decisions through the 
ability to refer cases to the MAC.
    Response: We do not agree with the commenter's assertion that Part 
D plan sponsors should be given the ability to refer cases to the MAC 
in order to properly defend its coverage determination decisions. The 
Part D plan sponsors make coverage determinations and adjudicate the 
first level of appeals, redeterminations of coverage determinations. An 
enrollee dissatisfied with a redetermination decision has a right to a 
reconsideration by the IRE, and possibly, to higher levels of appeal. 
As we have explained earlier in our discussion about party status, we 
believe that only the enrollee may be a party to a Part D appeal. Part 
D plan sponsors do not have a right to party status at the ALJ level, 
nor do they have the right to appeal a decision of the IRE to the ALJ 
level. Rather, those rights lie solely with the enrollee. However, as 
the administrators of the Part D drug benefit program, we believe the 
Part D appeals process is designed to provide Part D plan sponsors the 
ability to protect their interests. In conducting coverage 
determinations and redeterminations, Part D plan sponsors are afforded 
an opportunity to provide detailed explanations of the rationale used 
to support their decisions. Moreover, the Part D plan sponsors are 
afforded the opportunity to request to participate at the ALJ hearing 
level. Part D plan sponsors may also communicate with, and provide 
input to, CMS or the Part D IRE on ALJ decisions that may warrant a 
referral to the MAC. Further, in this final appeals rule we are 
clarifying in Sec.  423.1980 that a Part D plan sponsor may request a 
reopening of a reconsideration, hearing or review. Thus, for the 
reasons set forth above, we believe the level of participation afforded 
to Part D plan sponsors is appropriate and adequate to protect their 
interests.
    Comment: Commenters noted that the IRE is the repository of MAC 
decisions and the decisions are not available to enrollees or their 
representatives. Commenters expressed concern over the IRE discussing 
prior MAC decisions in its request for MAC review and making 
substantive arguments based on those opinions. The commenters urged a 
provision be added, which requires CMS or the IRE to provide a redacted 
copy of any prior MAC decision to which the entity cites with a 
referral memorandum.
    Response: We do not agree that Sec.  423.2110 should be revised to 
include a provision for redacted copies of prior MAC decisions to be 
included with referral memorandum submitted to the MAC and copied to 
the enrollee. MAC decisions are not precedential and are unpublished. 
While the commenters expressed feelings of unfairness that the IRE, as 
the repository of official administrative records, has access to 
unpublished MAC decisions, any legal arguments submitted by CMS or the 
IRE for review by the MAC are contained in the referral memorandum.
    Comment: Commenters proposed that requiring the enrollee submitting 
comments to the MAC in response to an IRE referral memorandum to send 
the comments to CMS or the IRE is burdensome to unrepresented enrollees 
who are unlikely to understand their responsibilities and that the 
regulation should instead provide that the MAC will send copies of 
comments submitted by unrepresented enrollees to CMS or the IRE.
    Response: We do not believe that the regulations preclude the MAC 
from assisting an unrepresented enrollee by providing CMS or the IRE 
with a copy of any submitted comments. However, we believe that 
shifting responsibility to the MAC to provide CMS or the IRE with a 
copy of comments submitted by any unrepresented enrollee will add to 
the time it takes to adjudicate the referral for review. We believe 
that this added administrative processing time to cases of all 
unrepresented enrollee claims subject to referral is counter to the 
interest of the enrollee to receive a decision, as expeditiously as 
possible, from the MAC.
    Accordingly, we are finalizing this section consistent with the 
modifications described in section III of this preamble, which replace 
the phrase ``remains the final action in the case'' with the phrase 
``is binding,'' and change the word ``days'' to ``calendar days.''
7. Content of Request for Review (Sec.  423.2112)
    We proposed to include in Sec.  423.2112 language similar to that 
in Sec.  405.1112 on content of a request for review. However, we 
proposed at Sec.  423.2112(a)(4), to require the telephone number of 
the enrollee to be included in any request for MAC review. This 
information will assist the MAC in contacting the enrollee, 
particularly for expedited appeals. Additionally, we proposed in Sec.  
423.2112(a)(4) to require the plan name and the enrollee's Medicare 
health insurance claim number. We also proposed at Sec.  
423.2112(a)(4), that an enrollee who seeks an expedited review

[[Page 65358]]

indicate that his or her request is for an expedited review.
    As discussed previously, we proposed in Sec.  423.2112(a)(2) a more 
informal process for requesting an expedited review by proposing to 
permit an enrollee to make a request for review orally. We believe that 
the oral request would make the initiation of the MAC appeals process 
faster and easier for the enrollee. We also proposed to require the MAC 
to document and maintain documentation of this oral request.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Numerous commenters expressed belief that the content 
requirements of the request for review are overly rigid for 
unrepresented enrollees and enrollees represented by family, friends or 
other untrained advocates. Commenters urged that if the information is 
incomplete the MAC must be required to contact the enrollee or 
representative to obtain missing information and not be permitted to 
dismiss the appeal unless reasonable inquiries have failed. Commenters 
also suggested that an enrollee should be allowed to amend a MAC 
request for review to add missing information, as appropriate, as well 
as a provision allowing liberal leave to amend the request for review 
to add issues as appropriate when the enrollee subsequently obtains 
assistance from a trained advocate.
    Response: We disagree with the commenters' characterization of the 
review request content requirements as being overly rigid. The proposed 
regulation is similar to the requirements at Sec.  405.1112, which have 
been used successfully since 2005. As a practical matter, we believe 
the information required by the regulations is important for the 
efficient and complete retrieval of the ALJ administrative record by 
the MAC. We note that the standard review request form is included as 
an enclosure with every ALJ decision or dismissal, and the instructions 
for this form direct enrollees to submit a copy of the ALJ decision or 
dismissal with the request for review. In doing so, enrollees can 
satisfy most of the content requirements for the request for review. 
Additionally, we believe it is important to state these requirements in 
the regulations to ensure that if enrollees or appointed 
representatives choose not to use the standard form, they will 
nevertheless know up front what information must be included in the 
request for review.
    Finally, we note that the regulation does not preclude the MAC from 
contacting an enrollee to obtain missing information to correct any 
defects, which may impede the MAC from obtaining the administrative 
record or adjudicating the request for review. As for additional listed 
requirements for the request for review, Sec.  423.2112(c) clearly 
indicates that if an enrollee is unrepresented, the MAC will not limit 
its review to the exceptions raised by the enrollee. Also, if an 
enrollee subsequently obtains assistance from a trained advocate, we 
believe that Sec.  423.2120 addresses the commenters' concerns that the 
subsequently obtained advocate be allowed to amend the request for 
review and add issues by providing the opportunity for an enrollee or 
representative to file a brief or other written statements.
    Accordingly, we are finalizing this section without modification.
8. Dismissal of Request for Review (Sec.  423.2114)
    In Sec.  423.2114, we proposed the process for dismissing a request 
for review for Part D appeals. The process tracks the Part A and Part B 
process, except for dismissals involving deceased enrollees. We 
proposed at Sec.  423.2114(c), that a request for review may be 
dismissed if the enrollee dies while the request for review is pending 
and the enrollee's representative, if any, either has no remaining 
financial interest in the case or does not continue the appeal. As 
discussed above, unlike Medicaid State agencies in Part A and Part B 
appeals, SPAPs do not have an independent right to appeal. While an 
SPAP may have a financial interest and may wish to pursue an appeal, 
the SPAP would have authority to do so only if the SPAP was appointed 
as the enrollee's representative. Therefore, we proposed that an SPAP 
that has been appointed as the enrollee's representative could continue 
an appeal after an enrollee dies provided that the appointment 
continues to be valid.
    Specific comments received and responses to those comments are as 
follows:
    Comment: Commenters stated that if an enrollee dies while the 
request for review is pending, the current construction of the 
regulations does not protect the financial interests of the estate of a 
deceased beneficiary who paid for prescriptions drugs and was seeking 
reimbursement for those payments. Commenter suggested that the 
proceedings may be stayed for up to 90 days to provide time for the 
estate to review the matter and determine whether to continue the 
appeal. One commenter suggested that any entity with a financial 
interest, such as if a nonprofit organization advanced money to 
purchase necessary medications, should be able to pursue the enrollee's 
appeal upon the death of the enrollee.
    Response: As only an enrollee may request review by the MAC, we 
disagree that any entity should be able to decide to continue the 
enrollee's appeal. We believe additional entities without appeal rights 
are protected by allowing a representative appointed by the enrollee to 
continue the appeal if the representative has a financial interest in 
the case. We agree with the commenters that an estate of an enrollee 
who was seeking reimbursement for paid prescription drugs should also 
be able to continue the enrollee's appeal. Therefore, in response to 
comments we are finalizing this provision with a revision to Sec.  
423.2114(c) to allow for an appeal to continue if the enrollee died 
while the request for review is pending and the enrollee's estate or 
representative, if any, has a remaining financial interest and wants to 
continue the appeal.
9. Effect of Dismissal of Request for MAC Review or Request for Hearing 
(Sec.  423.2116), Obtaining Evidence From the MAC (Sec.  423.2118), and 
Filing Briefs With the MAC (Sec.  423.2120)
    Section 423.2116 details the effect of the MAC's dismissal of an 
enrollee's request for review or request for hearing. Section 423.2118 
discusses the evidence an enrollee may request from the MAC, while 
Sec.  423.2120 informs the enrollee how to file a brief. Both of these 
proposed sections indicated that the opportunities to comment on the 
requested evidence and to submit a brief do not count towards the MAC's 
adjudication deadline. The proposed language is similar to language in 
Sec. Sec.  405.1116, 405.1118, and 405.1120. We received no comments on 
these sections. Therefore, we are finalizing Sec. Sec.  423.2116, 
423.2118 and 423.2120 without modification.
10. What Evidence May Be Submitted to the MAC (Sec.  423.2122)
    We reviewed the language in Sec.  405.1122 to determine whether to 
incorporate similar language in proposed Sec.  423.2122. In general, we 
proposed to follow the procedures for Part A and Part B appeals 
regarding what evidence may be submitted to the MAC. We proposed in 
Sec.  423.2122(a)(3) that the MAC would not consider evidence on any 
change in condition after a coverage determination by the Part D plan 
sponsor that the enrollee wishes to have considered and would remand 
such a case to the Part D plan sponsor. We have finalized this 
provision but, as discussed above, modified the rule to require the MAC 
to

[[Page 65359]]

remand the case to the Part D IRE. Like in Sec.  405.1122, we proposed 
in Sec.  423.2122 to allow the MAC to issue a subpoena when it 
determines certain information is reasonably necessary for a full 
presentation of a case. We also proposed in Sec.  423.2122(b) not to 
include language similar to that in Sec.  405.1122(d) on party requests 
for subpoenas, as only the enrollee is a party to a Part D appeal, and 
as a result, there will be no discovery in these appeals. For the 
reasons set forth above, we proposed to allow the MAC to issue a 
subpoena only on its own initiative. In addition, if necessary, the MAC 
may request enforcement of a subpoena by the Secretary. The time period 
for the MAC to issue a final decision, dismissal order, or remand the 
case would be stayed for 15 days or until the Secretary makes a 
decision with respect to the enforcement request, whichever occurs 
first.
    A specific comment and our response to the comment is as follows:
    Comment: One commenter suggested that, if a participant at the ALJ 
hearing, CMS, the IRE, or the Part D plan sponsor should be afforded 
the opportunity to provide written submissions to the MAC.
    Response: We believe that since the Part D plan sponsor is not a 
party to a request for review, it is appropriate to limit submissions 
by CMS, the IRE and/or the Part D plan sponsor of briefs or position 
papers to when the MAC determines it is necessary to resolve the issues 
in the case as proposed under Sec.  423.2120.
    Accordingly, we are finalizing this section consistent with the 
modifications described in section III of this preamble, which clarify 
that the MAC may not issue a subpoena to CMS or the IRE to compel the 
production of evidence, and change the word ``days'' to ``calendar 
days.''
9. Oral Argument (Sec.  423.2124)
    We proposed in Sec.  423.2124, to follow the language similar to 
that in Sec.  405.1124 because we believe that oral arguments may be 
necessary in some Part D appeals. We also proposed in Sec.  423.2124(b) 
that, for expedited appeals, the enrollee be informed of the time and 
place of the oral argument at least 2 days before the scheduled date of 
the oral argument, which is shorter than our proposed 10-day timeframe 
for non-expedited appeals. We believe that providing notice of an oral 
argument within these timeframes provides the enrollee sufficient time 
to prepare for the oral argument. We received no comments on this 
section. Therefore we are finalizing Sec.  423.2124 subject to the 
modification described in section III of this preamble, which changes 
the term ``days'' to ``calendar days.''
11. Case Remanded by the MAC (Sec.  423.2126)
    We proposed in Sec.  423.2126, to mirror the language in Sec.  
405.1126 regarding when the MAC may remand a case. This language is 
appropriate for Part D appeals because it may be necessary for the MAC 
to remand a case to a lower level. Additionally, we proposed in Sec.  
423.2126(a)(4), that when an ALJ has issued a recommended decision, an 
enrollee may file with the MAC briefs or other written statements about 
the facts and law relevant to the case within 20 days of the date on 
the recommended decision or with the request for review for expedited 
appeals. We also proposed in Sec.  423.2126(b), to require the MAC to 
remand a case to the Part D plan sponsor if the MAC determines that the 
enrollee wishes to have evidence on his or her change in condition 
after the coverage determination by the Part D plan sponsor considered 
in the appeal. We are finalizing this provision consistent with the 
modifications discussed in sections III and IV of the preamble, which 
remove the word ``final,'' require the MAC to remand the case to the 
Part D IRE, and change the word ``days'' to ``calendar days.''
12. Action of the MAC (Sec.  423.2128), Effect of the MAC's Decision 
(Sec.  423.2130), and Extension of Time To File Action in Federal 
District Court (Sec.  423.2134)
    Section 423.2128 informs the enrollee of the actions the MAC will 
take when reviewing the administrative record, while Sec.  423.2130 
informs the enrollee that the MAC's decision is binding unless reopened 
or if the decision is modified by a Federal district court. Section 
423.2130 also notifies the enrollee that he or she may file an action 
in a Federal district court within 60 days of receipt of the MAC 
decision. Section 423.2134 details the requirements for filing for an 
extension of time to file a civil action. The proposed language is 
similar to language in Sec. Sec.  405.1128, 405.1130, and 405.1134. We 
received no comments on these sections. Therefore, we are finalizing 
Sec. Sec.  423.2128, and 423.2134 without modification. We are 
finalizing Sec.  423.2130 subject to the modifications discussed in 
section III of the preamble, which add the words ``final and'' before 
the word ``binding,'' and change the term ``days'' to ``calendar 
days.''
K. Judicial Review (Sec.  423.2136 Through Sec.  423.2140)
    The Part D rule includes one provision concerning judicial review. 
Former Sec.  423.630(a) (now at Sec.  423.1976(a)) provides that an 
enrollee may request judicial review of an ALJ's decision if the MAC 
denied the enrollee's request for review and the amount in controversy 
threshold is met. Former Sec.  423.630(b) (now at Sec.  423.1976(b)) 
also states that an enrollee may request judicial review of the MAC 
decision if it is the final agency decision and the mount in 
controversy threshold is met. To request judicial review, this section 
states that an enrollee must file a civil action in a District Court of 
the United States in accordance with section 205(g) of the Act. 
Finally, former Sec.  423.630(c) (now at Sec.  423.1976(c)) tells the 
reader to ``[s]ee part 422, subpart M of this chapter, for a 
description of the procedures to follow in requesting judicial 
review.''
    Section 422.612 explains that part 405 contains a description of 
the procedures to follow in requesting judicial review. Therefore, we 
proposed to follow the language of the Part 405, subpart I, as 
appropriate. Thus, we tracked the language in the Part 405, subpart I, 
for proposed Sec.  423.2134, Sec.  423.2138, and Sec.  423.2140. We 
believe that it is appropriate for Part D appeals to follow the Part A 
and Part B appeals procedures set forth in these provisions. Because we 
proposed to adopt specific procedures for requesting judicial review of 
final Part D decisions, we proposed to delete the cross-reference to 
Part 422, subpart M, from former Sec.  423.620(c) (now at Sec.  
423.1976(c)) and replace it with a cross-reference to the procedures 
for requesting judicial review in proposed Sec.  423.2136. We received 
no comments on these sections. Therefore we are finalizing Sec.  
423.2138 without modification, and Sec. Sec.  423.2136 and 423.2140 
subject to the modification discussed in section III of the preamble, 
which changes the term ``days'' to ``calendar days.''.

L. Miscellaneous

    Specific comments to this section and our responses to those 
comments are as follows:
    Comment: One commenter stated that neither existing regulations nor 
the proposed rule adequately address appeals that may arise when the 
Part D plan makes a conditional payment under the MSP rules and 
subsequently demands repayment from the enrollee if the enrollee is 
subsequently reimbursed by automobile or liability insurance or by 
worker's compensation. The

[[Page 65360]]

commenter also noted that the proposed rule does not adequately address 
the process to be followed when an enrollee wishes to appeal or reopen 
a determination that affects both Part C and Part D benefits. The 
example cited is a situation where an individual is injured in an 
automobile accident and requires medical care and prescription drugs 
and the plan makes conditional payments and subsequently determines 
that Medicare is the secondary payer and demands repayment. The 
commenter believes the regulations should clarify whether these appeals 
can be consolidated or whether the enrollee must pursue separate 
appeals with the possibility of inconsistent decisions.
    The commenter further stated that a determination by a Part D plan 
that a drug is not covered because another payer is or should be the 
primary payer should be considered an adverse coverage determination 
subject to appeal by the enrollee. The commenter believes there is a 
gap in the regulations on the applicability of the enrollee appeals 
regulations to determinations by Part D plan sponsors under the MSP 
rules.
    Response: If a Part D plan sponsor makes a decision not to provide 
or pay for a Part D drug, this action is an adverse coverage 
determination that is subject to the Part D appeals process. If an 
adverse coverage determination is made based on the Part D plan 
sponsor's determination that Medicare is not the primary payer under 
the MSP rules, we agree with the commenter that this adverse decision 
is subject to the Part D appeals process. We believe the current Part D 
regulations are sufficiently clear about the application of the MSP 
rules. Section 423.462 cross-references the MSP provisions of Sec.  
422.108 and provides that the MSP procedures apply to Part D sponsors 
and Part D plans with respect to the offering of qualified prescription 
drug coverage in the same way they apply to MA organizations and plans.
    With respect to the commenter's example of a plan making 
conditional payments for medical care and prescription drugs and then 
demanding repayment, we assume that the commenter is referring to this 
scenario arising in the context of an MA-PD enrollee. We disagree with 
the commenter's remark that the rules do not adequately address the 
process to be followed when an enrollee wishes to appeal or reopen a 
determination that affects both Part C and Part D benefits. The 
regulations at part 422 and part 423 clearly establish separate, but 
similar, appeals processes for Part C and Part D benefits, 
respectively. Since different adjudication timeframes apply based on 
whether it is a Part C or a Part D benefit, the appeals need to be 
processed under the applicable procedure and consolidation would not be 
appropriate.
    Comment: One commenter stated that CMS should require the IRE to 
provide information on the right to request an ALJ hearing in a 
consumer-friendly format at a 5th grade reading level in multiple 
languages. This commenter also believes there should be a standard form 
for the enrollee to use to request review by an ALJ.
    Response: All of the IRE's reconsideration decision notices that 
are not fully favorable to the enrollee contain an explanation of the 
enrollee's right to request further appeal before an ALJ and describe 
the process for obtaining an ALJ hearing. These notices are developed 
by the IRE in a manner calculated to be understood by the enrollee. We 
will consider the commenter's specific suggestions for future changes 
to the IRE's contractual obligations in terms of preparing 
reconsideration notices, although we do not believe this is an 
appropriate subject for rulemaking. We agree with the commenter's 
suggestion that a form should be made available for use by enrollees 
when requesting an ALJ hearing. The Office of Medicare Hearings & 
Appeals (OMHA) is developing such a form. However, even after such a 
form is available, any written request for an ALJ hearing that contains 
the information set out in Sec.  423.2014(a) of this rule will be 
accepted as a valid request.

V. Comments Beyond the Scope of the Final Rule

    In response to the proposed rule, some commenters chose to raise 
issues that are beyond the scope of our proposals. In this final rule, 
we are not summarizing or responding to those comments in this 
document. However, we will review the comments and consider whether to 
take other actions, such as revising or clarifying CMS program 
operating instructions or procedures, based on the information or 
recommendations in the comments.

VI. Provisions of the Final Rule

    For the most part, this final appeals rule incorporates the 
provisions of the proposed appeals rule. The provisions of the final 
appeals rule that differ from the proposed appeals rule are as follows:
     In response to a public comment requesting that the use of 
``calendar days'' be explicitly stated in the applicable regulatory 
provisions, we revised the regulatory text to include the word 
``calendar'' as appropriate.
     We are also making conforming revisions to the Part D 
grievance, plan sponsor, and IRE provisions to ensure consistency 
throughout the Part D appeals process, by changing the word ``days'' to 
``calendar days'' in 42 CFR 423.564(d)(2), (e)(1), and (e)(2); 
423.582(c)(2); 423.584(d)(1) and (d)(2)(i); and 423.600(a).
     In Sec.  423.1978, Sec.  Sec.  423.1980(a)(1) and (a)(4), 
Sec.  423.2004(c), and Sec.  423.2052(a)(6), we made technical 
clarifications 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.  423.1980(b), we made a technical correction by 
removing the words ``and revise'' from the introductory sentence, so 
the sentence will now read: ``A Part D plan sponsor may reopen its 
coverage determination or redetermination on its own motion--* * *''. 
As discussed in greater detail in the final Part 405, subpart I rule, 
published elsewhere in this Federal Register, this provision, as 
revised, reflects our longstanding policy that the timeframes for 
reopening a determination or decision are measured by the date of the 
reopening, and not the date of the revision of the determination or 
decision.
     In Sec.  423.1980(e) we are making a technical correction 
to clarify that a Part D plan sponsor may request that an IRE reopen 
its reconsideration, or an ALJ or the MAC reopen the hearing decision 
within 180 days from the date of the reconsideration or hearing 
decision for good cause in accordance with Sec.  423.1986.
     In Sec.  423.1990(b)(1)(i), 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.  423.1990(b)(1)(ii), we made a technical 
correction by adding the phrase ``dismissal order, or remand order'' 
after ``final decision'' to specify the types of action that, if taken 
by the MAC, preclude a request for EAJR and to be consistent with our 
clarification regarding the term ``final''.
     In Sec.  423.1990(e)(3), we made a technical correction by 
removing the words ``final and'' to make clear that the decision of the 
review entity to certify

[[Page 65361]]

or deny a request for EAJR is not subject to further review.
     In Sec.  423.2000(d), we made a technical revision to 
clarify that the ALJ conducts a de novo review.
     In Sec.  423.2002(b)(3), we made a technical correction 
separating out the requirement for the ALJ to document oral hearing 
requests as subsection (c) and redesignated subsections (c) and (d) as 
subsections (d) and (e) respectively.
     In Sec.  423.2004(c), we made a technical correction to 
clarify that an ALJ's dismissal action is binding and not subject to 
further review unless vacated by the MAC under Sec.  423.2108(b).
     We modified Sec.  423.2018(b) in response to public 
comments to exempt unrepresented enrollees from the 10-day evidence 
submission timeframe for non-expedited appeals.
     We clarified Sec.  423.2020(i)(4) to state that when an 
enrollee's request for an in-person hearing is granted, the ALJ must 
issue a decision within the adjudication timeframe specified in Sec.  
423.2016 (including any applicable extension provided in this subpart), 
unless the enrollee agrees to waive the adjudication timeframe in 
writing.
     In Sec.  423.2022(a) we made a technical correction to 
clarify that other potential participants may also indicate in writing 
that he or she does not wish to receive notice of a hearing before an 
ALJ.
     In Sec.  423.2034(a) we clarified when an ALJ can remand a 
case to the IRE based on missing information.
     In Sec.  423.2034(b)(2) and Sec.  423.2126(b) we modified 
the final appeals rule in response to public comment to direct an ALJ 
and the MAC to remand a case to the appropriate Part D IRE when the 
enrollee wants evidence of a change in condition after the coverage 
determination is made considered.
     In Sec.  423.2036(f)(1) we made technical corrections to 
clarify that the ALJ may not issue a subpoena to CMS or the IRE to 
compel an appearance, testimony, or the production of evidence, or to 
the Part D plan sponsor to compel an appearance or testimony. 
Similarly, in Sec.  423.2122(b) we made a technical correction to 
clarify that the MAC may not issue a subpoena to CMS or the IRE to 
compel the production of evidence.
     In Sec.  423.2046(c), we made a technical correction by 
replacing the term ``final'' with ``binding on the Part D plan 
sponsor'' consistent with our clarification regarding the term 
``final.''
     In Sec.  423.2048(a), we made a technical correction by 
replacing the phrase ``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''.
     We added Sec.  423.2063(a) to clarify the additional 
authorities that are binding on ALJs and the MAC. The original 
paragraph is reassigned to subsection (b).
     In Sec.  Sec.  423.2100(c) and (d), we made technical 
corrections by replacing the phrase ``final action'' with ``final 
decision, dismissal order'' to specify the types of actions that may be 
taken by the MAC and to be consistent with our clarification regarding 
the term ``final''.
     In Sec.  423.2110(d)(5), we made a technical correction by 
replacing the phrase ``remains the final action in the case'' with the 
phrase ``is binding'' to be consistent with our clarification regarding 
the term ``final''.
     We modified Sec.  423.2114(c) in response to public 
comments asking us to allow an appeal to continue when the enrollee 
dies while the request for review is pending and the enrollee's estate 
has a remaining financial interest and wants to continue the appeal.
     In Sec.  423.2126(a)(1), we made a technical correction by 
removing the word ``final'' consistent with our clarification regarding 
the term ``final''.
     In Sec.  423.2130, we made a technical correction by 
adding the words ``final and'' before the word ``binding'' consistent 
with our clarification regarding the term ``final''.

VII. Collection of Information Requirements

    This document does contain information collection requirements; 
however, the Paperwork Reduction Act of 1995 exempts the information 
collection activities referenced in this Final Rule. In particular, 5 
CFR 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.

VIII. Regulatory Impact Statement

A. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 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 (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 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 explained 
in the analysis that follows, we have determined that this final 
appeals rule is not a major rule since it will impose no consequential 
costs and will not have an economic effect of $100 million or more. 
Accordingly, it is not a major rule.
    The RFA requires agencies 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, we 
estimate that a number of Part D plan sponsors (insurers) are small 
entities as that term is used in the RFA (include small businesses, 
nonprofit organizations, and small governmental jurisdictions). As 
indicated above, a number of Part D plan sponsors (insurers) are small 
entities due to their nonprofit status. Few if any of the Part D plans 
sponsors meet the SBA size standard for a small insurance firm by 
having revenues of $7 million or less in any 1 year. Individuals and 
States are not included in the definition of a small entity.
    This final appeals rule will affect primarily individual's enrolled 
in Part D plans who appeal Part D plan decisions. It makes no 
substantive changes in the Part D benefit and deals directly only with 
appeals procedures administered by Federal employees or Federal 
contractors. To date, the volume of Part D appeals is small and the 
amounts of money involved, although substantial to many of these 
individuals, are a very small percentage of aggregate Part D plan 
costs. Accordingly, we do not believe that there will be significant 
economic impacts on Part D plans. Therefore, the Secretary has 
determined that this final appeals rule would not have a significant 
economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule 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

[[Page 65362]]

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. This rule will not have any effect on hospitals. 
Therefore, the Secretary has determined that this final appeals rule 
will not have a significant impact on the operations of a substantial 
number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. That threshold 
level is currently approximately $133 million. This final appeals rule 
contains no mandates on State, local, or tribal governments in the 
aggregate, or on the private sector in the amount of $133 million in 
any 1 year.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final appeals rule will not impose substantial 
direct requirement costs on State and local governments, preempt State 
law, or otherwise have Federalism implications.

B. Anticipated Effects

    This final appeals rule has no direct effects on the original 
Medicare program, since it applies only to the Part D prescription drug 
program. It would have few direct effects on Part D plans, since it 
addresses primarily the details of appeals procedures and process at 
the ALJ hearing and MAC review levels. Most of the procedures do not 
vary substantially from existing appeals practices. For example, under 
the existing practices upon which this final appeals rule is largely 
modeled, neither the government nor the Part D sponsor is a ``party'' 
to the appeal and therefore neither incurs any legal costs, unless it 
chooses to participate in the ALJ hearing or MAC review. However, some 
provisions are new. Most importantly, we will provide for an expedited 
appeals process when a delay in obtaining a drug may seriously 
jeopardize the enrollee's life, health, or ability to regain maximum 
function. Although this change will require plans to provide coverage 
for drugs more quickly whenever enrollees obtain a favorable decision 
in an expedited appeal, we do not expect it to affect actual spending 
by Part D and the Medicare program.
    The Part D appeals process is administered in large part by the 
Part D plan sponsors themselves. Our rules require Part D plan sponsors 
to have effective grievance and appeals processes that operate timely 
and effectively to meet enrollee needs. In addition, we impose 
substantive standards on issues such as plan formularies and the 
process for obtaining exceptions from formulary restrictions where 
medically necessary. We provide for within-plan appeals from initial 
plan decisions. If a problem cannot be resolved at the plan level, we 
provide for an independent external review through a CMS contractor. 
(Cases concerning the quality of care take a different route, through 
Quality Improvement Organizations.) Only those cases where the problem 
cannot be resolved at these lower levels go to the so-called third and 
fourth levels of appeal for a hearing before an ALJ and review by the 
Medicare Appeals Council, respectively.
    The primary effects of this final appeals rule will be to tailor 
the third and fourth level appeal procedures, designed primarily for 
the original Medicare program, to the unique aspects of the Part D 
program. This final appeals rule reflects and builds upon recent 
changes in the third and fourth levels of appeals process for Part A 
and Part B claims appeals, published elsewhere in this Federal 
Register. We note that the effects of that rule were extensively 
analyzed in the Regulatory Impact Analysis published with the rule. The 
overall conclusion of that impact analysis was that costs to affected 
persons and entities would be minimal, although the anticipated costs 
to the Federal government from revised procedures would be substantial.
    As discussed earlier in this preamble, our existing policy is that, 
unless otherwise provided, Part D procedures will follow the procedures 
established for appeals under Part A and Part B to the extent they are 
appropriate. The provisions parallel the Part A and Part B provisions, 
to the extent appropriate. For example, in this final appeals rule we 
eliminated references to national and local coverage determinations 
because these policies do not apply to Part D. Likewise, we eliminated 
references to Social Security appeals because they are irrelevant to 
Part D. We note that such changes do not necessarily imply an actual 
change in the procedures for processing Part D appeals. In addition, 
this final appeals rule will simply codify existing practices already 
in place. Other changes are intended to make the appeals process more 
flexible and responsive to the needs and circumstances of Part D 
enrollees. For example, a common type of appeal is an appeal from the 
denial of coverage for a drug used for an ``off-label'' indication (one 
that has not been officially approved by the Food and Drug 
Administration). Medicare Part D pays for many, but not all, ``off-
label'' uses. The process and procedure changes we proposed do not 
directly change the likelihood an enrollee will prevail in appeal, 
although they may slightly raise the number of such appeals by 
clarifying the procedures that will apply to such appeals and affording 
an opportunity to request an expedited appeal. The new expedited 
appeals procedures will allow us to respond quickly to urgent medical 
needs of enrollees.
    As of August 2009, total enrollment in Part D plans is about 27 
million persons (including enrollment in Medicare Advantage Plans that 
cover prescription drugs). We estimate the total number of third level 
appeals (ALJ hearings) in fiscal year 2007 to be approximately 350, or 
about 15 appeals per million enrollees. Only a fraction of these would 
ever be appealed to the fourth level (MAC review). While the dollar 
value of these appeals has not been tabulated, the amount is likely to 
reach several thousand dollars on average (the amount in controversy 
threshold for an appeal in 2008 is $120 for ALJ hearings and $1,180 for 
Federal District Court review, but the time and effort involved to 
pursue an appeal is likely to foster appeals most frequently when the 
amount is considerably higher). Consequently, the annual total of the 
amounts in controversy is likely to be in the range of several million 
dollars. In contrast, total Part D spending in calendar 2007 (which is 
roughly equivalent to the fiscal year total) is estimated to be 
approximately $50 billion dollars. Thus, viewed either in absolute or 
relative terms, any effects of this final appeals rule either on the 
administrative costs or outcomes of these cases are unlikely to be more 
than a fraction of one percent of the major rule threshold. Likewise, 
effects on overall plan costs or benefit payments are likely to be 
minimal.
    Accordingly, we do not believe that these procedures, which include 
both codifications of existing practices and new procedures for the 
third and fourth levels of appeal will have any consequential net 
effect on the Part D program, except to clarify the procedures that 
will apply to the relatively small number of cases that

[[Page 65363]]

reach the third and fourth levels of the appeals process. While the 
volume of appeal cases may increase slightly, adopting the procedures 
outlined in this final appeals rule will benefit enrollees by 
clarifying the procedures that will apply to these upper levels of 
appeals and affording an opportunity to request an expedited appeal in 
certain circumstances where a faster decision is necessary in order to 
protect the life and health of the enrollee. In the proposed rule, we 
solicited public comments on these conclusions.

C. Alternatives Considered

    In the proposed rule, we indicated that no major alternatives 
existed even though we proposed a number of specific provisions and 
provided justification for each in the preamble. Therefore, we 
solicited comments on the proposals and on any effects that we may not 
have anticipated, as well as comments on additional or alternative 
reforms that could improve the appeals process further.
    In accordance with the provisions of Executive Order 12866, this 
final rule was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Health 
professionals, Medicare, Penalties, Privacy, Reporting and 
recordkeeping requirements.


0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
1. The authority citation for part 423 continues to read as follows:

    Authority:  Secs 1102, 1106, 1860D-1 through 1860D-42, and 1871 
of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101 through 
1395w-152, and 1395hh).

Subpart M--Grievances, Coverage Determinations, Redeterminations, 
and Reconsiderations

0
2. The heading for Subpart M is revised to read as set forth above.
0
3. A new Sec.  423.558 is added to subpart M to read as follows:


Sec.  423.558  Scope.

    (a) This subpart sets forth the requirements relating to the 
following:
    (1) Part D plan sponsors with respect to grievances, coverage 
determinations, and redeterminations.
    (2) Part D IRE with respect to reconsiderations.
    (3) Part D enrollees' rights with respect to grievances, coverage 
determinations, redeterminations, and reconsiderations.
    (b) The requirements regarding reopenings, ALJ hearings, MAC 
review, and Judicial review are set forth in subpart U of this chapter.


Sec.  423.562  [Amended]

0
4. Section 423.562 is amended by--
0
A. In paragraph (b)(4)(iv), the cross-reference to ``Sec.  423.610'' is 
removed and the cross-reference to ``Sec.  423.1970'' is added in its 
place.
0
B. In paragraph (b)(4)(v), the cross-reference to ``Sec.  423.620'' is 
removed and the cross-reference to ``Sec.  423.1974'' is added in its 
place.
0
C. In paragraph (b)(4)(vi), the cross-reference to ``Sec.  423.630'' is 
removed and the cross-reference to ``Sec.  423.1976'' is added in its 
place.


Sec.  423.564  [Amended]

0
5. Section 423.564 is amended by--
0
A. In paragraph (d)(2), the word ``days'' is removed and ``calendar 
days'' is added in its place.
0
B. In paragraph (e)(1), the word ``days'' is removed and ``calendar 
days'' is added in its place.
0
C. In paragraph (e)(2), the word ``days'' is removed and ``calendar 
days'' is added in its place, and the phrase ``30-day'' is removed and 
``30 calendar day'' is added in its place.


Sec.  423.576  [Amended]

0
6. Section 423.576 is amended by--
0
A. The cross-reference to ``Sec.  423.580 through Sec.  423.630'' is 
removed and the cross-references to ``Sec.  423.580 through Sec.  
423.604 and Sec.  423.1970 through Sec.  423.1976'' are added in its 
place.
0
B. The cross-reference to ``423.634'' is removed and the cross-
reference to ``Sec.  423.1978'' is added in its place.


Sec.  423.580  [Amended]

0
7. Section 423.580 is amended by removing the cross-reference to 
``Sec.  423.634'', and adding in its place the cross-reference to 
``Sec.  423.1978''.


Sec.  423.582  [Amended]

0
8. Section Sec.  423.582(c)(2) is amended by removing the phrase ``60-
day'' and adding in its place ``60 calendar day''.


Sec.  423.584  [Amended]

0
9. Section 423.584 is amended by--
0
A. In paragraph (d)(1), the phrase ``7-day'' is removed and ``7 
calendar day'' is added in its place.
0
B. In paragraph (d)(2)(i), the phrase ``7-day'' is removed and ``7 
calendar day'' is added in its place.


Sec.  423.600  [Amended]

0
10. Section 423.600(a) is amended by removing the word ``days'' and 
adding in its place ``calendar days''.


Sec.  423.602  [Amended]

0
11. Section 423.602(b)(2) is amended by removing the cross-reference to 
``Sec.  423.610'', and adding in its place the cross-reference to 
``Sec.  423.1970''.


Sec.  423.604  [Amended]

0
12. Section 423.604 is amended by removing the cross-reference to 
``Sec.  423.612'', and adding in its place the cross-reference to 
``Sec.  423.1972''.


Sec.  423.610  [Removed and Reserved]

0
13. Section 423.610 is removed and reserved.


Sec.  423.612  [Removed and Reserved]

0
14. Section 423.612 is removed and reserved.


Sec.  423.620  [Removed and Reserved]

0
15. Section 423.620 is removed and reserved.


Sec.  423.630  [Removed and Reserved]

0
16. Section 423.630 is removed and reserved.


Sec.  423.634  [Removed and Reserved]

0
17. Section 423.634 is removed and reserved.

0
18. A new subpart U is added to read as follows:
Subpart U--Reopening, ALJ Hearings, MAC Review, and Judicial Review
Sec.
423.1968 Scope.
423.1970 Right to an ALJ hearing.
423.1972 Request for an ALJ hearing.
423.1974 Medicare Appeals Council (MAC) review.
423.1976 Judicial review.
423.1978 Reopening determinations and decisions.
423.1980 Reopening of coverage determinations, redeterminations, 
reconsiderations, hearings and reviews.
423.1982 Notice of a revised determination or decision.
423.1984 Effect of a revised determination or decision.
423.1986 Good cause for reopening.
423.1990 Expedited access to judicial review.
423.2000 Hearing before an ALJ: general rule.
423.2002 Right to an ALJ hearing.
423.2004 Right to ALJ review of IRE notice of dismissal.
423.2008 Parties to an ALJ hearing.
423.2010 When CMS, the IRE, or Part D plan sponsors may participate 
in an ALJ hearing.
423.2014 Request for an ALJ hearing.
423.2016 Timeframes for deciding an Appeal before an ALJ.

[[Page 65364]]

423.2018 Submitting evidence before the ALJ hearing.
423.2020 Time and place for a hearing before an ALJ.
423.2022 Notice of a hearing before an ALJ.
423.2024 Objections to the issues.
423.2026 Disqualification of the ALJ.
423.2030 ALJ hearing procedures.
423.2032 Issues before an ALJ.
423.2034 When an ALJ may remand a case.
423.2036 Description of an ALJ hearing process.
423.2038 Deciding a case without a hearing before an ALJ.
423.2040 Pre-hearing and post-hearing conferences.
423.2042 The administrative record.
423.2044 Consolidated hearing before an ALJ.
423.2046 Notice of an ALJ decision.
423.2048 The effect of an ALJ's decision.
423.2050 Removal of a hearing request from an ALJ to the MAC.
423.2052 Dismissal of a request for a hearing before an ALJ.
423.2054 Effect of dismissal of a request for a hearing before an 
ALJ.
423.2062 Applicability of policies not binding on the ALJ and MAC.
423.2063 Applicability of laws, regulations and CMS Rulings.
423.2100 Medicare Appeals Council (MAC) Review: general.
423.2102 Request for MAC review when an ALJ issues decision or 
dismissal.
423.2106 Where a request for review may be filed.
423.2108 MAC Actions when request for review is filed.
423.2110 MAC reviews on its own motion.
423.2112 Content of request for review.
423.2114 Dismissal of request for review.
423.2116 Effect of dismissal of request for MAC review or request 
for hearing.
423.2118 Obtaining evidence from the MAC.
423.2120 Filing briefs with the MAC.
423.2122 What evidence may be submitted to the MAC.
423.2124 Oral arguments.
423.2126 Case remanded by the MAC.
423.2128 Action of the MAC.
423.2130 Effect of the MAC's decision.
423.2134 Extension of time to file action in Federal District Court.
423.2136 Judicial review.
423.2138 Case remanded by a Federal District Court.
423.2140 MAC review of ALJ decision in a case remanded by a Federal 
District Court.

Subpart U--Reopening, ALJ Hearings, MAC review, and Judicial Review


Sec.  423.1968  Scope.

    This subpart sets forth the requirements relating to the following:
    (a) Part D sponsors, the Part D IRE, ALJs, and the MAC with respect 
to reopenings.
    (b) ALJs with respect to hearings.
    (c) MAC with respect to review of Part D appeals.
    (d) Part D enrollees' rights with respect to reopenings, ALJ 
hearings, MAC reviews, and judicial review by a Federal District Court.


Sec.  423.1970  Right to an ALJ hearing.

    (a) If the amount remaining in controversy after the IRE 
reconsideration meets the threshold requirement established annually by 
the Secretary, an enrollee who is dissatisfied with the IRE 
reconsideration determination has a right to a hearing before an ALJ.
    (b) If the basis for the appeal is the refusal by the Part D plan 
sponsor to provide drug benefits, CMS uses the projected value of those 
benefits to compute the amount remaining in controversy. The projected 
value of a Part D drug or drugs shall include any costs the enrollee 
could incur based on the number of refills prescribed for the drug(s) 
in dispute during the plan year.
    (c) Aggregating appeals to meet the amount in controversy (1) 
Enrollee. Two or more appeals may be aggregated by an enrollee to meet 
the amount in controversy for an ALJ hearing if--
    (i) The appeals have previously been reconsidered by an IRE;
    (ii) The request for ALJ hearing lists all of the appeals to be 
aggregated and each aggregated appeal meets the filing requirement 
specified in Sec.  423.1972(b); and
    (iii) The ALJ determines that the appeals the enrollee seeks to 
aggregate involve the delivery of prescription drugs to a single 
enrollee.
    (2) Multiple enrollees. Two or more appeals may be aggregated by 
multiple enrollees to meet the amount in controversy for an ALJ hearing 
if--
    (i) The appeals have previously been reconsidered by an IRE;
    (ii) The request for ALJ hearing lists all of the appeals to be 
aggregated and each aggregated appeal meets the filing requirement 
specified in Sec.  423.1972(b); and
    (iii) The ALJ determines that the appeals the enrollees seek to 
aggregate involve the same prescription drug.


Sec.  423.1972  Request for an ALJ hearing.

    (a) How and where to file a request. The enrollee must file a 
written request for a hearing with the entity specified in the IRE's 
reconsideration notice.
    (b) When to file a request. Except when an ALJ extends the 
timeframe as provided in Sec.  423.2014(d), the enrollee must file a 
request for a hearing within 60 calendar days of the date of the notice 
of an IRE reconsideration determination. The time and place for a 
hearing before an ALJ will be set in accordance with Sec.  423.2020 of 
this chapter.
    (c) Insufficient amount in controversy. (1) If a request for a 
hearing clearly shows that the amount in controversy is less than that 
required under Sec.  423.1970, the ALJ dismisses the request.
    (2) If, after a hearing is initiated, the ALJ finds that the amount 
in controversy is less than the amount required under Sec.  423.1970, 
the ALJ discontinues the hearing and does not rule on the substantive 
issues raised in the appeal.


Sec.  423.1974  Medicare Appeals Council (MAC) review.

    An enrollee who is dissatisfied with an ALJ hearing decision may 
request that the MAC review the ALJ's decision or dismissal as provided 
in Sec.  423.2102.


Sec.  423.1976  Judicial review.

    (a) Review of ALJ's decision. The enrollee may request judicial 
review of an ALJ's decision if--
    (1) The MAC denied the enrollee's request for review; and
    (2) The amount in controversy meets the threshold requirement 
established annually by the Secretary.
    (b) Review of MAC decision. The enrollee may request judicial 
review of the MAC decision if it is the final decision of CMS and the 
amount in controversy meets the threshold established in paragraph 
(a)(2) of this section.
    (c) How to request judicial review. In order to request judicial 
review, an enrollee must file a civil action in a district court of the 
United States in accordance with section 205(g) of the Act. (See Sec.  
423.2136 for a description of the procedures to follow in requesting 
judicial review.)


Sec.  423.1978  Reopening determinations and decisions.

    (a) A coverage determination or redetermination made by a Part D 
plan sponsor, a reconsideration made by the independent review entity 
specified in Sec.  423.600, or the decision of an ALJ or the MAC that 
is otherwise binding may be reopened and revised by the entity that 
made the determination or decision as provided in Sec.  423.1980 
through Sec.  423.1986.
    (b) The filing of a request for reopening does not relieve the Part 
D plan sponsor of its obligation to make payment or provide benefits as 
specified in Sec.  423.636 or Sec.  423.638 of this chapter.
    (c) Once an entity issues a revised determination or decision, the 
revisions made by the decision may be appealed.
    (d) A decision not to reopen by the Part D plan sponsor or any 
other entity is not subject to review.

[[Page 65365]]

Sec.  423.1980  Reopenings of coverage determinations, 
redeterminations, reconsiderations, hearings and reviews.

    (a) General rules. (1) A reopening is a remedial action taken to 
change a binding determination or decision, even though the binding 
determination or decision may have been correct at the time it was made 
based on the evidence of record. Consistent with Sec.  423.1978(a), 
that action may be taken by--
    (i) A Part D plan sponsor to revise the coverage determination or 
redetermination;
    (ii) An IRE to revise the reconsideration;
    (iii) An ALJ to revise the hearing decision; or
    (iv) The MAC to revise the hearing or review decision.
    (2) When an enrollee has filed a valid request for an appeal of a 
coverage determination, redetermination, reconsideration, hearing, or 
MAC review, no adjudicator has jurisdiction to reopen an issue that is 
under appeal until all appeal rights for that issue are exhausted. Once 
the appeal rights for the issue have been exhausted, the Part D plan 
sponsor, IRE, ALJ, or MAC may reopen as set forth in this section.
    (3) Consistent with Sec.  423.1978(b), the filing of a request for 
reopening does not relieve the Part D plan sponsor of its obligation to 
make payment or provide benefits as specified in Sec.  423.636 or Sec.  
423.638.
    (4) Consistent with Sec.  423.1978(d), the Part D plan sponsor's, 
IRE's, ALJ's, or MAC's decision on whether to reopen is binding and not 
subject to appeal.
    (5) A determination under the Medicare secondary payer provisions 
of section 1862(b) of the Act that Medicare has an MSP recovery claim 
for drug claims that were already reimbursed by the Part D plan sponsor 
is not a reopening.
    (b) Timeframes and requirements for reopening coverage 
determinations and redeterminations initiated by a Part D plan sponsor. 
A Part D plan sponsor may reopen its coverage determination or 
redetermination on its own motion:
    (1) Within 1 year from the date of the coverage determination or 
redetermination for any reason.
    (2) Within 4 years from the date of the coverage determination or 
redetermination for good cause as defined in Sec.  423.1986.
    (3) At any time if there exists reliable evidence as defined in 
Sec.  405.902 of this chapter that the coverage determination was 
procured by fraud or similar fault as defined in Sec.  405.902.
    (c) Timeframe and requirements for reopening coverage 
determinations and redeterminations requested by an enrollee. (1) An 
enrollee may request that a Part D plan sponsor reopen its coverage 
determination or redetermination within 1 year from the date of the 
coverage determination or redetermination for any reason.
    (2) An enrollee may request that a Part D plan sponsor reopen its 
coverage determination or redetermination within 4 years from the date 
of the coverage determination or redetermination for good cause in 
accordance with Sec.  423.1986.
    (d) Timeframes and requirements for reopening reconsiderations, 
hearing decisions and reviews initiated by an IRE, ALJ, or the MAC. (1) 
An IRE may reopen its reconsideration on its own motion within 180 
calendar days from the date of the reconsideration for good cause in 
accordance with Sec.  423.1986. If the IRE's reconsideration was 
procured by fraud or similar fault, then the IRE may reopen at any 
time.
    (2) An ALJ or the MAC may reopen a hearing decision on its own 
motion within 180 calendar days from the date of the decision for good 
cause in accordance with Sec.  423.1986. If the hearing decision was 
procured by fraud or similar fault, then the ALJ or the MAC may reopen 
at any time.
    (3) The MAC may reopen its review decision on its own motion within 
180 calendar days from the date of the review decision for good cause 
in accordance with Sec.  423.1986. If the MAC's decision was procured 
by fraud or similar fault, then the MAC may reopen at any time.
    (e) Timeframes and requirements for reopening reconsiderations, 
hearing decisions, and reviews requested by an enrollee or a Part D 
plan sponsor. (1) An enrollee who received a reconsideration or a Part 
D plan sponsor may request that an IRE reopen its reconsideration 
decision within 180 calendar days from the date of the reconsideration 
for good cause in accordance with Sec.  423.1986.
    (2) An enrollee who received an ALJ hearing decision or a Part D 
plan sponsor may request that an ALJ or the MAC reopen the hearing 
decision within 180 calendar days from the date of the hearing decision 
for good cause in accordance with Sec.  423.1986.
    (3) An enrollee who received a MAC decision or a Part D plan 
sponsor may request that the MAC reopen its decision within 180 
calendar days from the date of the review decision for good cause in 
accordance with Sec.  423.1986.


Sec.  423.1982   Notice of a revised determination or decision.

    (a) When adjudicators initiate reopenings. When any determination 
or decision is reopened and revised as provided in Sec.  423.1980:
    (1) The Part D plan sponsor, IRE, ALJ, or the MAC must mail its 
revised determination or decision to the enrollee at his or her last 
known address.
    (2) The IRE, ALJ, or the MAC must mail its revised determination or 
decision to the Part D plan sponsor.
    (3) An adverse revised determination or decision must state the 
rationale and basis for the reopening and revision and any right to 
appeal.
    (b) Reopenings initiated at the request of an enrollee or a Part D 
plan sponsor. (1) The Part D plan sponsor, IRE, ALJ, or the MAC must 
mail its revised determination or decision to the enrollee at his or 
her last known address.
    (2) The IRE, ALJ, or the MAC must mail its revised determination or 
decision to the Part D plan sponsor.
    (3) An adverse revised determination or decision must state the 
rationale and basis for the reopening and revision and any right to 
appeal.


Sec.  423.1984   Effect of a revised determination or decision.

    (a) Coverage determinations. The revision of a coverage 
determination is binding unless an enrollee submits a request for a 
redetermination that is accepted and processed in accordance with Sec.  
423.580 through Sec.  423.590.
    (b) Redeterminations. The revision of a redetermination is binding 
unless an enrollee submits a request for an IRE reconsideration that is 
accepted and processed in accordance with Sec.  423.600 through Sec.  
423.604.
    (c) Reconsiderations. The revision of a reconsideration is binding 
unless an enrollee submits a request for an ALJ hearing that is 
accepted and processed in accordance with Sec.  423.1970 through Sec.  
423.1972 and Sec.  423.2000 through Sec.  423.2063.
    (d) ALJ hearing decisions. The revision of a hearing decision is 
binding unless an enrollee submits a request for a MAC review that is 
accepted and processed as specified in Sec.  423.1974 and Sec.  
423.2100 through Sec.  423.2130.
    (e) MAC review. The revision of a MAC determination or decision is 
binding unless an enrollee files a civil action in which a Federal 
District Court accepts jurisdiction and issues a decision.
    (f) Appeal of only the portion of the determination or decision 
revised by the reopening. Only the portion of the coverage 
determination, redetermination, reconsideration, or hearing decision 
revised by the reopening may be subsequently appealed.

[[Page 65366]]

    (g) Effect of a revised determination or decision. Consistent with 
Sec.  423.1978(c), a revised determination or decision is binding 
unless it is appealed or otherwise reopened.


Sec.  423.1986   Good cause for reopening.

    (a) Establishing good cause. Good cause may be established when--
    (1) There is new and material evidence that--
    (i) Was not available or known at the time of the determination or 
decision; and
    (ii) May result in a different conclusion; or
    (2) The evidence that was considered in making the determination or 
decision clearly shows on its face that an obvious error was made at 
the time of the determination or decision.
    (b) Change in substantive law or interpretative policy. (1) General 
rule. A change of legal interpretation or policy by CMS in a 
regulation, CMS ruling, or CMS general instruction, whether made in 
response to judicial precedent or otherwise, is not a basis for 
reopening a determination or hearing decision regarding appeals under 
this section.
    (2) An adjudicator may reopen a determination or decision to apply 
the current law or CMS or the Part D plan sponsor policy rather than 
the law or CMS or the Part D plan sponsor policy at the time the 
coverage determination is made in situations where the enrollee has not 
yet received the drug and the current law or CMS or the Part D plan 
sponsor policy may affect whether the drug should be received.
    (c) Third party payer error. A request to reopen a claim based upon 
a third party payer's error in making a primary payment determination 
when Medicare processed the claim in accordance with the information in 
its system of records or on the claim form does not constitute good 
cause for reopening.


Sec.  423.1990   Expedited access to judicial review.

    (a) Process for expedited access to judicial review.
    (1) For purposes of this section, a ``review entity'' means an 
entity of up to three reviewers who are ALJs or members of the 
Departmental Appeals Board, as determined by the Secretary.
    (2) In order to obtain expedited access to judicial review (EAJR), 
a review entity must certify that the MAC does not have the authority 
to decide the question of law or regulation relevant to the matters in 
dispute and that there is no material issue of fact in dispute.
    (3) An enrollee may make a request for EAJR only once with respect 
to a question of law or regulation for a specific matter in dispute in 
an appeal.
    (b) Conditions for making the expedited appeals request. (1) An 
enrollee may request EAJR in place of an ALJ hearing or MAC review if 
the following conditions are met:
    (i) An IRE has made a reconsideration determination and the 
enrollee has filed a request for an ALJ hearing in accordance with 
Sec.  423.2002 and a final decision, dismissal order, or remand order 
of the ALJ has not been issued; or
    (ii) An ALJ has made a decision and the enrollee has filed a 
request for MAC review in accordance with Sec.  423.2102 and a final 
decision, dismissal order, or remand order of the MAC has not been 
issued.
    (2) The requestor is an enrollee.
    (3) The amount remaining in controversy meets the threshold 
requirements established annually by the Secretary.
    (4) If there is more than one enrollee to the hearing or MAC 
review, each enrollee concurs, in writing, with the request for the 
EAJR.
    (5) There are no material issues of fact in dispute.
    (c) Content of the request for EAJR. The request for EAJR must--
    (1) Allege that there are no material issues of fact in dispute and 
identify the facts that the enrollee considers material and that are 
not disputed; and
    (2) Assert that the only factor precluding a decision favorable to 
the enrollee is--
    (i) A statutory provision that is unconstitutional, or a provision 
of a regulation that is invalid and specify the statutory provision 
that the enrollee considers unconstitutional or the provision of a 
regulation that the enrollee considers invalid; or
    (ii) A CMS Ruling that the enrollee considers invalid.
    (3) Include a copy of the IRE reconsideration and of any ALJ 
hearing decision that the enrollee has received;
    (4) If the IRE reconsideration or ALJ hearing decision was based on 
facts that the enrollee is disputing, state why the enrollee considers 
those facts to be immaterial; and
    (5) If the IRE reconsideration or ALJ hearing decision was based on 
a provision of a law, regulation, or CMS Ruling in addition to the one 
the enrollee considers unconstitutional or invalid, a statement as to 
why further administrative review of how that provision applies to the 
facts is not necessary.
    (d) Place and time for an EAJR request. (1) Method and place for 
filing request. The enrollee may include an EAJR request in his or her 
request for an ALJ hearing or MAC review, or, if an appeal is already 
pending with an ALJ or the MAC, file a written EAJR request with the 
ALJ hearing office or MAC where the appeal is being considered. The ALJ 
hearing office or MAC forwards the request to the review entity within 
5 calendar days of receipt.
    (2) Time of filing request. The enrollee may file a request for 
EAJR--
    (i) If the enrollee has requested a hearing, at any time before 
receipt of the notice of the ALJ's decision; or
    (ii) If the enrollee has requested MAC review, at any time before 
receipt of notice of the MAC's decision.
    (e) Determination on EAJR request. (1) The review entity described 
in paragraph (a) of this section will determine whether the request for 
EAJR meets all of the requirements of paragraphs (b), (c), and (d) of 
this section.
    (2) Within 60 calendar days after the date the review entity 
receives a request and accompanying documents and materials meeting the 
conditions in paragraphs (b), (c), and (d) of this section, the review 
entity will issue either a certification in accordance with paragraph 
(f) of this section or a denial of the request.
    (3) A determination by the review entity either certifying that the 
requirements for EAJR are met pursuant to paragraph (f) of this section 
or denying the request is not subject to review by the Secretary.
    (4) If the review entity fails to make a determination within the 
timeframe specified in paragraph (e)(2) of this section, then the 
enrollee may bring a civil action in Federal District Court within 60 
calendar days of the end of the timeframe.
    (f) Certification by the review entity. If an enrollee meets the 
requirements for the EAJR, the review entity certifies in writing 
that--
    (1) The material facts involved in the appeal are not in dispute;
    (2) Except as indicated in paragraph (f)(3) of this section, the 
Secretary's interpretation of the law is not in dispute;
    (3) The sole issue(s) in dispute is the constitutionality of a 
statutory provision, or the validity of a provision of a regulation or 
CMS Ruling;
    (4) But for the provision challenged, the enrollee would receive a 
favorable decision on the ultimate issue; and
    (5) The certification by the review entity is the Secretary's final 
action for purposes of seeking expedited judicial review.
    (g) Effect of certification by the review entity. If an EAJR 
request results in a certification described in paragraph (f) of this 
section:

[[Page 65367]]

    (1) The enrollee that requested the EAJR is considered to have 
waived any right to completion of the remaining steps of the 
administrative appeals process regarding the matter certified.
    (2) The enrollee has 60 calendar days, beginning on the date of the 
review entity's certification within which to bring a civil action in 
Federal District Court.
    (3) The enrollee must satisfy the requirements for venue under 
section 205(g) of the Act, as well as the requirements for filing a 
civil action in a Federal District Court under Sec.  423.2136.
    (h) Rejection of EAJR. (1) If a request for EAJR does not meet all 
the conditions set out in paragraphs (b), (c), and (d) of this section, 
or if the review entity does not certify a request for EAJR, the review 
entity advises the enrollee in writing that the request has been 
denied, and returns the request to the ALJ hearing office or the MAC, 
which will treat it as a request for hearing or for MAC review, as 
appropriate.
    (2) Whenever a review entity forwards a rejected EAJR request to an 
ALJ hearing office or the MAC, the appeal is considered timely filed 
and the 90 calendar day decision making timeframe begins on the day the 
request is received by the hearing office or the MAC.


Sec.  423.2000   Hearing before an ALJ: general rule.

    (a) If an enrollee is dissatisfied with an IRE's reconsideration, 
the enrollee may request a hearing.
    (b) A hearing may be conducted in-person, by video-teleconference, 
or by telephone. At the hearing, the enrollee may submit evidence 
subject to the restrictions in Sec.  423.2018, examine the evidence 
used in making the determination under review, and present and/or 
question witnesses.
    (c) In some circumstances, the Part D plan sponsor, or a 
representative of CMS, including the IRE, may participate in the 
hearing as specified in Sec.  423.2010.
    (d) The ALJ conducts a de novo review and issues a decision based 
on the hearing record.
    (e) If an enrollee waives his or her right to appear at the hearing 
in person or by telephone or video-teleconference, the ALJ may make a 
decision based on the evidence that is in the file and any new evidence 
that is submitted for consideration.
    (f) The ALJ may require the enrollee to participate in a hearing if 
it is necessary to decide the case. If the ALJ determines that it is 
necessary to obtain testimony from a person other than the enrollee, he 
or she may hold a hearing to obtain that testimony, even if the 
enrollee has waived the right to appear. In that event, however, the 
ALJ will give the enrollee the opportunity to appear when the testimony 
is given, but may hold the hearing even if the enrollee decides not to 
appear.
    (g) An ALJ may also issue a decision on the record on his or her 
own initiative if the evidence in the hearing record supports a fully 
favorable finding.


Sec.  423.2002   Right to an ALJ hearing.

    (a) Consistent with Sec.  423.1970(a), an enrollee may request a 
hearing before an ALJ if--
    (1) The enrollee files a written request for an ALJ hearing within 
60 calendar days after receipt of the written notice of the IRE's 
reconsideration; and
    (2) The enrollee meets the amount in controversy requirements of 
Sec.  423.1970.
    (b) An enrollee may request that the hearing before an ALJ be 
expedited if:
    (1) The appeal involves an issue specified in Sec.  423.566(b) but 
does not include solely a request for payment of Part D drugs already 
furnished.
    (2) The enrollee submits a written or oral request for an expedited 
ALJ hearing within 60 calendar days of the date of the written notice 
of an IRE reconsideration determination. The request can only be 
submitted after the enrollee receives the written IRE reconsideration 
notice. The request should also explain why applying the standard 
timeframe may seriously jeopardize the life or health of the enrollee; 
and
    (3) The enrollee meets the amount in controversy requirements of 
Sec.  423.1970.
    (c) The ALJ must document all oral requests for expedited hearings 
in writing and maintain the documentation in the case files.
    (d) For purposes of this section, the date of receipt of the 
reconsideration is presumed to be 5 calendar days after the date of the 
written reconsideration, unless there is evidence to the contrary.
    (e) For purposes of meeting the 60 calendar day filing deadline, 
the request is considered as filed on the date it is received by the 
entity specified in the IRE's reconsideration.


Sec.  423.2004  Right to ALJ review of IRE notice of dismissal.

    (a) An enrollee has a right to have an IRE's dismissal of a request 
for reconsideration reviewed by an ALJ if:
    (1) The enrollee files a request for an ALJ review within 60 
calendar days after receipt of the written notice of the IRE's 
dismissal.
    (2) The enrollee meets the amount in controversy requirements of 
Sec.  423.1970.
    (3) For purposes of this section, the date of receipt of the IRE's 
dismissal is presumed to be 5 calendar days after the date of the 
written dismissal notice, unless there is evidence to the contrary.
    (4) For purposes of meeting the 60 calendar day filing deadline, 
the request is considered as filed on the date it is received by the 
entity specified in the IRE's dismissal.
    (b) If the ALJ determines that the IRE's dismissal was in error, he 
or she vacates the dismissal and remands the case to the IRE for a 
reconsideration.
    (c) An ALJ's decision regarding an IRE's dismissal of a 
reconsideration request is binding and not subject to further review. 
The dismissal of a request for ALJ review of an IRE's dismissal of a 
reconsideration request is binding and not subject to further review, 
unless vacated by the MAC under Sec.  423.2108(b).


Sec.  423.2008  Parties to an ALJ hearing.

    (a) Who may request a hearing. Only an enrollee (or an enrollee's 
representative) may request a hearing before an ALJ.
    (b) Who are parties to the ALJ hearing. The enrollee (or the 
enrollee's representative) who filed the request for hearing is the 
only party to the ALJ hearing.


Sec.  423.2010  When CMS, the IRE, or Part D plan sponsors may 
participate in an ALJ hearing.

    (a) An ALJ may request, but may not require, CMS, the IRE, and/or 
the Part D plan sponsor to participate in any proceedings before the 
ALJ, including the oral hearing, if any.
    (b) CMS, the IRE, and/or the Part D plan sponsor may request to 
participate in the hearing process.
    (1) For non-expedited hearings, any request by CMS, the IRE, and/or 
the Part D plan sponsor to participate must be made within 5 calendar 
days of receipt of the notice of hearing.
    (2) Within 5 calendar days of receipt of a request to participate 
in a non-expedited hearing, the ALJ must notify the entity, the Part D 
plan sponsor, if applicable and the enrollee of his or her decision on 
the request to participate.
    (3) For expedited hearings, any request by CMS, the IRE, and/or the 
Part D plan sponsor to participate must be made within 1 calendar day 
of receipt of the notice of hearing. Requests may be made orally or 
submitted by facsimile to the hearing office.
    (4) Within 1 calendar day of receipt of a request to participate in 
an expedited hearing, the ALJ must notify the entity, the Part D plan 
sponsor, if applicable, and the enrollee of his or her decision on the 
request to participate.

[[Page 65368]]

    (c) The ALJ has discretion not to allow CMS, the IRE, and/or the 
Part D plan sponsor to participate.
    (d) Participation may include filing position papers or providing 
written testimony to clarify factual or policy issues in a case, but it 
does not include calling witnesses or cross-examining the witnesses of 
an enrollee to the hearing.
    (e) When CMS, the IRE, and/or the Part D plan sponsor participates 
in an ALJ hearing, CMS, the IRE, and/or the Part D plan sponsor may not 
be called as a witness during the hearing.
    (f) CMS, the IRE, and/or the Part D plan sponsor must submit any 
position papers within the timeframe designated by the ALJ.
    (g) The ALJ cannot draw any adverse inferences if CMS, the IRE, 
and/or the Part D plan sponsor decide not to participate in any 
proceedings before an ALJ, including the hearing.


Sec.  423.2014  Request for an ALJ hearing.

    (a) Content of the request. The request for an ALJ hearing must be 
made in writing, except as set forth in paragraph (b) of this section. 
The request, including any oral request, must include all of the 
following:
    (1) The name, address, telephone number, and Medicare health 
insurance claim number of the enrollee.
    (2) The name, address, and telephone number of the appointed 
representative, as defined at Sec.  423.560, if any.
    (3) The appeals case number assigned to the appeal by the IRE, if 
any.
    (4) The prescription drug in dispute.
    (5) The plan name.
    (6) The reasons the enrollee disagrees with the IRE's 
reconsideration.
    (7) A statement of any additional evidence to be submitted and the 
date it will be submitted.
    (8) A statement that the enrollee is requesting an expedited 
hearing, if applicable.
    (b) Request for expedited hearing. If an enrollee is requesting 
that the hearing be expedited, the enrollee may make the request for an 
ALJ hearing orally, but only after receipt of the written IRE 
reconsideration notice. The ALJ hearing office must document all oral 
requests in writing and maintain the documentation in the case files. A 
prescribing physician or other prescriber may provide oral or written 
support for an enrollee's request for expedited review.
    (c) When and where to file. Consistent with Sec. Sec.  423.1972(a) 
and (b), the request for an ALJ hearing after an IRE reconsideration 
must be submitted:
    (1) Within 60 calendar days from the date the enrollee receives 
written notice of the IRE's reconsideration.
    (2) With the entity specified in the IRE's reconsideration.
    (i) If the request for hearing is timely filed with an entity other 
than the entity specified in the IRE's reconsideration, the deadline 
specified in Sec.  423.2016 for deciding the appeal begins on the date 
the entity specified in the IRE's reconsideration receives the request 
for hearing.
    (ii) If the request for hearing is filed with an entity, other than 
the entity specified in the IRE's reconsideration, the ALJ hearing 
office must notify the appellant of the date of receipt of the request 
and the commencement of the adjudication timeframe.
    (d) Extension of time to request a hearing. (1) Consistent with 
Sec.  423.1972(b), if the request for hearing is not filed within 60 
calendar days of receipt of the written IRE's reconsideration, an 
enrollee may request an extension for good cause.
    (2) Any request for an extension of time must be in writing or, for 
expedited reviews, in writing or oral. The ALJ hearing office must 
document all oral requests in writing and maintain the documentation in 
the case file.
    (3) The request must give the reasons why the request for a hearing 
was not filed within the stated time period, and must be filed with the 
entity specified in the notice of reconsideration.
    (4) If the ALJ finds there is good cause for missing the deadline, 
the time period for filing the hearing request will be extended. To 
determine whether good cause for late filing exists, the ALJ uses the 
standards set forth in Sec. Sec.  405.942(b)(2) and (b)(3) of this 
chapter.
    (5) If a request for hearing is not timely filed, the adjudication 
period in Sec.  423.2016 begins the date the ALJ grants the request to 
extend the filing deadline.


Sec.  423.2016  Timeframes for deciding an Appeal before an ALJ.

    (a) Hearings. (1) When a request for an ALJ hearing is filed after 
an IRE has issued a written reconsideration, the ALJ must issue a 
decision, dismissal order, or remand, as appropriate, no later than the 
end of the 90 calendar day period beginning on the date the request for 
hearing is received by the entity specified in the IRE's notice of 
reconsideration, unless the 90 calendar day period has been extended as 
provided in this subpart.
    (2) The adjudication period specified in paragraph (a) of this 
section begins on the date that a timely filed request for hearing is 
received by the entity specified in the IRE's reconsideration, or, if 
it is not timely filed, the date that the ALJ grants any extension to 
the filing deadline.
    (b) Expedited hearings. (1) Standard for expedited hearing. The ALJ 
must provide an expedited hearing decision if the appeal involves an 
issue specified in Sec.  423.566(b), but is not solely a request for 
payment of Part D drugs already furnished, and the enrollee's 
prescribing physician or other prescriber indicates, or the ALJ 
determines that applying the standard timeframe for making a decision 
may seriously jeopardize the enrollee's life, health or ability to 
regain maximum function. The ALJ may consider this standard as met if a 
lower level adjudicator has granted a request for an expedited hearing.
    (2) Grant of a request. If the ALJ grants a request for expedited 
hearing, the ALJ must--
    (i) Make the decision to grant an expedited hearing within 5 
calendar days of receipt of the request for expedited hearing;
    (ii) Give the enrollee prompt oral notice of this decision; and
    (iii) Subsequently send to the enrollee at his or her last known 
address and to the Part D plan sponsor written notice of the decision. 
This notice may be provided within the written notice of hearing.
    (3) Denial of a request. If the ALJ denies a request for expedited 
hearing, the ALJ must--
    (i) Make this decision within 5 calendar days of receipt of the 
request for expedited hearing;
    (ii) Give the enrollee prompt oral notice of the denial that 
informs the enrollee of the denial and explains that the ALJ will 
process the enrollee's request using the 90 calendar day timeframe for 
non-expedited ALJ hearings; and
    (iii) Subsequently send to the enrollee at his or her last known 
address and to the Part D plan sponsor an equivalent written notice of 
the decision within 3 calendar days after the oral notice.
    (4) A decision on a request for expedited hearing may not be 
appealed.
    (5) Timeframe for adjudication. (i) If the ALJ accepts a request 
for expedited hearing, the ALJ must issue a written decision, dismissal 
order or remand, as expeditiously as the enrollee's health condition 
requires, but no later than the end of the 10 calendar day period 
beginning on the date the request for hearing is received by the entity 
specified in the IRE's written notice of reconsideration, unless the 10 
calendar day period has been extended as provided in this subpart.
    (ii) The adjudication period specified in paragraph (b)(5)(i) of 
this section begins on the date that a timely

[[Page 65369]]

provided request for hearing is received by the entity specified in the 
IRE's reconsideration, or, if it is not timely provided, the date that 
the ALJ grants any extension to the filing deadline.


Sec.  423.2018  Submitting evidence before the ALJ hearing.

    (a) All hearings. An enrollee may submit any written evidence that 
he or she wishes to have considered at the hearing.
    (1) An ALJ will not consider any evidence submitted regarding a 
change in condition of an enrollee after the appealed coverage 
determination was made.
    (2) An ALJ will remand a case to the Part D IRE where an enrollee 
wishes evidence on his or her change in condition after the coverage 
determination to be considered.
    (b) Non-expedited hearings. (1) Except as provided in this 
paragraph, a represented enrollee must submit all written evidence he 
or she wishes to have considered at the hearing with the request for 
hearing or within 10 calendar days of receiving the notice of hearing.
    (2) If a represented enrollee submits written evidence later than 
10 calendar days after receiving the notice of hearing, the period 
between the time the evidence was required to have been submitted and 
the time it is received is not counted toward the adjudication deadline 
specified in Sec.  423.2016.
    (3) The requirements of this subsection do not apply to 
unrepresented enrollees.
    (c) Expedited hearings. (1) Except as provided in this section, an 
enrollee must submit all written evidence he or she wishes to have 
considered at the hearing with the request for hearing or within 2 
calendar days of receiving the notice of hearing.
    (2) If an enrollee submits written evidence later than 2 calendar 
days after receiving the notice of hearing, the period between the time 
the evidence was required to have been submitted and the time it is 
received is not counted toward the adjudication deadline specified in 
Sec.  423.2016.
    (d) The requirements of paragraphs (b) and (c) of this section do 
not apply to oral testimony given at a hearing.


Sec.  423.2020  Time and place for a hearing before an ALJ.

    (a) General. Consistent with Sec.  423.1972(b), the ALJ sets the 
time and place for the hearing, and may change the time and place, if 
necessary.
    (b) Determining how appearances are made. (1) The ALJ will direct 
that the appearance of an individual be conducted by video-
teleconferencing if the ALJ finds that video-teleconferencing 
technology is available to conduct the appearance.
    (2) The ALJ may also offer to conduct a hearing by telephone if the 
request for hearing or administrative record suggests that a telephone 
hearing may be more convenient for the enrollee.
    (3) The ALJ, with the concurrence of the Managing Field Office ALJ, 
may determine that an in-person hearing should be conducted if--
    (i) The video-teleconferencing technology is not available; or
    (ii) Special or extraordinary circumstances exist.
    (c) Notice of hearing. (1) The ALJ sends a notice of hearing to the 
enrollee, the Part D plan sponsor that issued the coverage 
determination, and the IRE that issued the reconsideration, advising 
them of the proposed time and place of the hearing.
    (2) The notice of hearing will require the enrollee (and any 
potential participant from CMS, the IRE, and/or the Part D plan who has 
requested to participate in the hearing consistent with Sec.  423.2010) 
to reply to the notice by:
    (i) Acknowledging whether they plan to attend the hearing at the 
time and place proposed in the notice of hearing; or
    (ii) Objecting to the proposed time and/or place of the hearing.
    (d) An enrollee's right to waive a hearing. An enrollee may also 
waive the right to a hearing and request that the ALJ issue a decision 
based on the written evidence in the record.
    (1) As specified in Sec.  423.2000, the ALJ may require the 
enrollee to attend a hearing if it is necessary to decide the case.
    (2) If the ALJ determines that it is necessary to obtain testimony 
from a person other than the enrollee, he or she may still hold a 
hearing to obtain that testimony, even if the enrollee has waived the 
right to appear. In those cases, the ALJ would give the enrollee the 
opportunity to appear when the testimony is given but may hold the 
hearing even if the enrollee decides not to appear.
    (e) An enrollee's objection to time and place of hearing. (1) If an 
enrollee objects to the time and place of the hearing, the enrollee 
must notify the ALJ at the earliest possible opportunity before the 
time set for the hearing.
    (2) The enrollee must state the reason for the objection and state 
the time and place he or she wants the hearing to be held.
    (3) The objection must be in writing except for an expedited 
hearing when the objection may be provided orally. The ALJ must 
document all oral objections to the time and place of an expedited 
hearing in writing and maintain the documentation in the case files.
    (4) The ALJ may change the time or place of the hearing if the 
enrollee has good cause. (Section 423.2052(a)(2) provides the 
procedures the ALJ follows when an enrollee does not respond to a 
notice of hearing and fails to appear at the time and place of the 
hearing.)
    (f) Good cause for changing the time or place. The ALJ can find 
good cause for changing the time or place of the scheduled hearing and 
reschedule the hearing if the information available to the ALJ supports 
the enrollee's contention that--
    (1) The enrollee or his or her representative is unable to attend 
or to travel to the scheduled hearing because of a serious physical or 
mental condition, incapacitating injury, or death in the family; or
    (2) Severe weather conditions make it impossible to travel to the 
hearing; or
    (3) Good cause exists as set forth in paragraph (g) of this 
section.
    (g) Good cause in other circumstances. (1) In determining whether 
good cause exists in circumstances other than those set forth in 
paragraph (f) of this section, the ALJ considers the enrollee's reason 
for requesting the change, the facts supporting the request, and the 
impact of the change on the efficient administration of the hearing 
process.
    (2) Factors evaluated to determine the impact of the change 
include, but are not limited to, the effect on processing other 
scheduled hearings, potential delays in rescheduling the hearing, and 
whether any prior changes were granted the enrollee.
    (3) Examples of other circumstances an enrollee might give for 
requesting a change in the time or place of the hearing include, but 
are not limited to, the following:
    (i) The enrollee has attempted to obtain a representative but needs 
additional time.
    (ii) The enrollee's representative was appointed within 10 calendar 
days of the scheduled hearing for non-expedited hearings (or 2 calendar 
days for expedited hearings) and needs additional time to prepare for 
the hearing.
    (iii) The enrollee's representative has a prior commitment to be in 
court or at another administrative hearing on the date scheduled for 
the hearing.
    (iv) A witness who will testify to facts material to an enrollee's 
case is unavailable to attend the scheduled

[[Page 65370]]

hearing and the evidence cannot be otherwise obtained.
    (v) Transportation is not readily available for an enrollee to 
travel to the hearing.
    (vi) The enrollee is unrepresented, and is unable to respond to the 
notice of hearing because of any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language).
    (h) Effect of rescheduling hearing. If a hearing is postponed at 
the request of the enrollee for any of the above reasons, the time 
between the originally scheduled hearing date and the new hearing date 
is not counted toward the adjudication deadline as specified in Sec.  
423.2016.
    (i) An enrollee's request for an in-person hearing. (1) If an 
enrollee objects to a video-teleconferencing hearing or to the ALJ's 
offer to conduct a hearing by telephone, the enrollee must notify the 
ALJ at the earliest possible opportunity before the time set for the 
hearing and request an in-person hearing.
    (2) The enrollee must state the reason for the objection and state 
the time or place he or she wants the hearing to be held.
    (3) The request must be in writing except for an expedited hearing 
for which the request may be provided orally. The ALJ must document all 
oral objections to an expedited video-teleconferencing or telephone 
hearing in writing and maintain the documentation in the case files.
    (4) When an enrollee's request for an in-person hearing is granted, 
the ALJ must issue a decision within the adjudicatory timeframe as 
specified in Sec.  423.2016 (including any applicable extensions 
provided in this subpart), unless the enrollee requesting the hearing 
agrees to waive such adjudication timeframe in writing.
    (5) The ALJ may grant the request, with the concurrence of the 
Managing Field Office ALJ, upon a finding of good cause and will 
reschedule the hearing for a time and place when the enrollee may 
appear in person before the ALJ.


Sec.  423.2022  Notice of a hearing before an ALJ.

    (a) Issuing the notice. (1) After the ALJ sets the time and place 
of the hearing, the notice of the hearing will be mailed or otherwise 
transmitted to the enrollee and other potential participants, as 
provided in Sec.  423.2020(c) at their last known addresses, or given 
by personal service, unless the enrollee or other potential participant 
indicates in writing that he or she does not wish to receive this 
notice.
    (2) The notice is mailed or served at least 20 calendar days before 
the hearing, except for expedited hearings where written notice is 
mailed or served at least 3 calendar days before the hearing. For 
expedited hearings, the ALJ may orally provide notice of the hearing to 
the enrollee and other potential participants but oral notice must be 
followed by an equivalent written notice within 1 calendar day of the 
oral notice.
    (b) Notice information. (1) The notice of hearing contains a 
statement of the specific issues to be decided and will inform the 
enrollee that he or she may designate a person to represent him or her 
during the proceedings.
    (2) The notice must include an explanation of the procedures for 
requesting a change in the time or place of the hearing, a reminder 
that, if the enrollee fails to appear at the scheduled hearing without 
good cause, the ALJ may dismiss the hearing request, and other 
information about the scheduling and conduct of the hearing.
    (3) The enrollee will also be told if his or her appearance or that 
of any other witness is scheduled by video-teleconferencing, telephone, 
or in person. If the ALJ has scheduled the enrollee to appear at the 
hearing by video-teleconferencing, the notice of hearing will advise 
that the scheduled place for the hearing is a video-teleconferencing 
site and explain what it means to appear at the hearing by video-
teleconferencing.
    (4) The notice advises the enrollee that if he or she objects to 
appearing by video-teleconferencing or telephone, and wishes instead to 
have his or her hearing at a time and place where he or she may appear 
in person before the ALJ, he or she must follow the procedures set 
forth at Sec.  423.2020(i) for notifying the ALJ of his or her 
objections and for requesting an in-person hearing.
    (c) Acknowledging the notice of hearing. (1) If the enrollee or his 
or her representative does not acknowledge receipt of the notice of 
hearing, the ALJ hearing office attempts to contact the enrollee for an 
explanation.
    (2) If the enrollee states that he or she did not receive the 
notice of hearing, an amended notice is sent to him or her by certified 
mail or, if available, fax or e-mail. See Sec.  423.2052 for the 
procedures the ALJ follows in deciding if the time or place of a 
scheduled hearing will be changed if an enrollee does not respond to 
the notice of hearing).


Sec.  423.2024  Objections to the issues.

    (a) If an enrollee objects to the issues described in the notice of 
hearing, he or she must notify the ALJ in writing at the earliest 
possible opportunity before the time set for the hearing, and no later 
than 5 calendar days before the hearing, except for expedited hearings 
in which the enrollee must submit written or oral notice of objection 
no later than 2 calendar days before the hearing. The ALJ hearing 
office must document all oral objections in writing and maintain the 
documentation in the case files.
    (b) The enrollee must provide the reasons for his or her 
objections.
    (c) The ALJ makes a decision on the objections either in writing or 
at the hearing.


Sec.  423.2026  Disqualification of the ALJ.

    (a) An ALJ may not conduct a hearing if he or she is prejudiced or 
partial to the enrollee or has any interest in the matter pending for 
decision.
    (b) If an enrollee objects to the ALJ who will conduct the hearing, 
the enrollee must notify the ALJ within 10 calendar days of the date of 
the notice of hearing, except for expedited hearings in which the 
enrollee must submit written or oral notice no later than 2 calendar 
days after the date of the notice of hearing. The ALJ must document all 
oral objections in writing and maintain the documentation in the case 
files. The ALJ considers the enrollee's objections and decides whether 
to proceed with the hearing or withdraw.
    (c) If the ALJ withdraws, another ALJ will be appointed to conduct 
the hearing. If the ALJ does not withdraw, the enrollee may, after the 
ALJ has issued an action in the case, present his or her objections to 
the MAC in accordance with Sec.  423.2100 through Sec.  423.2130. The 
MAC would then consider whether the hearing decision should be revised 
or a new hearing held before another ALJ.


Sec.  423.2030  ALJ hearing procedures.

    (a) General rule. A hearing is open to the enrollee and to other 
persons the ALJ considers necessary and proper.
    (b) At the hearing. The ALJ fully examines the issues, questions 
the enrollee and other witnesses, and may accept documents that are 
material to the issues consistent with Sec.  423.2018.
    (c) Missing evidence. The ALJ may also stop the hearing temporarily 
and continue it at a later date if he or she believes that there is 
material evidence missing at the hearing.
    (d) Reopen the hearing. The ALJ may reopen the hearing at any time 
before he or she mails a notice of the decision in order to receive new 
and material evidence pursuant to Sec.  423.1986. The ALJ may decide 
when the evidence is presented and when the issues are discussed.

[[Page 65371]]

Sec.  423.2032  Issues before an ALJ.

    (a) General rule. The issues before the ALJ include all the issues 
brought out in the coverage determination, redetermination, or 
reconsideration that were not decided entirely in an enrollee's favor. 
However, if evidence presented before the hearing causes the ALJ to 
question a favorable portion of the determination, he or she notifies 
the enrollee before the hearing and may consider it an issue at the 
hearing.
    (b) New issues--(1) General. The ALJ may consider a new issue at 
the hearing if he or she notifies the enrollee about the new issue any 
time before the start of the hearing.
    (2) Content of the new issues. The new issue may include issues 
resulting from the participation of CMS, the IRE, and/or the Part D 
plan sponsor at the ALJ level of adjudication and from any evidence and 
position papers submitted by CMS, the IRE, and/or the Part D plan 
sponsor for the first time to the ALJ.
    (3) Consideration of new issues. The ALJ or the enrollee may raise 
a new issue; however, the ALJ may only consider a new issue if its 
resolution--
    (i) Could have a material impact on the issue or issues that are 
the subject of the request for hearing; and
    (ii) Is permissible under the rules governing reopening of 
determinations and decisions as specified in Sec.  423.1980.
    (c) Adding issues to a pending appeal. An ALJ may not add any 
issue, including one that is related to an issue that is appropriately 
before an ALJ, to a pending appeal unless it has been adjudicated at 
the lower appeals levels and the enrollee is notified of the new 
issue(s) before the start of the hearing.


Sec.  423.2034  When an ALJ may remand a case.

    (a) General. (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, the IRE, and/or the 
Part D plan sponsor, then the ALJ may either:
    (i) Remand the case to the IRE that issued the reconsideration or
    (ii) Retain jurisdiction of the case and request that the CMS, the 
IRE, and/or the Part D plan sponsor forward the missing information to 
the appropriate hearing office.
    (2) If the information is not information that can be provided only 
by CMS, the IRE, and or the Part D plan sponsor, the ALJ must retain 
jurisdiction of the case and obtain the information on his or her own, 
or directly from the enrollee.
    (3) ``Can be provided only by CMS, the IRE, and/or the Part D plan 
sponsor'' means the information is not publicly available, is not in 
the possession of the enrollee, and cannot be requested and obtained by 
the enrollee. 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, IRE or Part D Plan sponsor website or information 
in an official CMS or HHS publication.
    (b) ALJ remands a case to an IRE.
    (1) Consistent with Sec.  423.2004(b), the ALJ will remand a case 
to the appropriate IRE if the ALJ determines that an IRE's dismissal of 
a request for reconsideration was in error.
    (2) The ALJ will remand a case to the appropriate Part D IRE if the 
ALJ determines that the enrollee wishes evidence on his or her change 
in condition after the coverage determination to be considered in the 
appeal.


Sec.  423.2036  Description of an ALJ hearing process.

    (a) The right to appear and present evidence. (1) An enrollee has 
the right to appear at the hearing before the ALJ to present evidence 
and to state his or her position. An enrollee may appear by video-
teleconferencing, telephone, or in person as determined under Sec.  
423.2020.
    (2) An enrollee may also make his or her appearance by means of a 
representative, who may make his or her appearance by video-
teleconferencing, telephone, or in person, as determined under Sec.  
423.2020.
    (3) Witness testimony may be given and CMS, IRE, and Part D plan 
sponsor participation may also be accomplished by video-
teleconferencing, telephone, or in person, as determined under Sec.  
423.2020.
    (b) Waiver of the right to appear. (1) An enrollee may send the ALJ 
a written statement indicating that he or she does not wish to appear 
at the hearing.
    (i) For expedited hearings, an enrollee may indicate in writing or 
orally that he or she does not wish to appear at the hearing.
    (ii) The ALJ hearing office must document all oral waivers in 
writing and maintain the documentation in the case files.
    (2) The enrollee may subsequently withdraw his or her waiver in 
writing at any time before the notice of the hearing decision is 
issued; however, by withdrawing the waiver the enrollee agrees to an 
extension of the adjudication period as specified in Sec.  423.2016, 
that may be necessary to schedule and hold the hearing.
    (3) Even if the enrollee waives his or her right to appear at a 
hearing, the ALJ may require him or her to attend an oral hearing if 
the ALJ believes that a personal appearance and testimony by the 
enrollee is necessary to decide the case.
    (c) Presenting written statements and oral arguments. An enrollee 
or an enrollee's appointed representative, as defined at Sec.  423.560, 
may appear before the ALJ to state the enrollee's case, to present a 
written summary of the case, or to enter written statements about the 
facts and law material to the case in the record.
    (d) Waiver of adjudication period. At any time during the hearing 
process, the enrollee may waive the adjudication deadline specified in 
Sec.  423.2016 for issuing a hearing decision. The waiver may be for a 
specific period of time agreed upon by the ALJ and the enrollee.
    (e) What evidence is admissible at a hearing. The ALJ may receive 
evidence at the hearing even though the evidence is not admissible in 
court under the rules of evidence used by the court. However, the ALJ 
may not consider evidence on any change in condition of an enrollee 
after a coverage determination. If the enrollee wishes for the evidence 
to be considered, the ALJ must remand the case to the Part D IRE as set 
forth in Sec.  423.2034(b)(2).
    (f)(1) Subpoenas. When it is reasonably necessary for the full 
presentation of a case, an ALJ may, on his or her own initiative, issue 
subpoenas for the appearance and testimony of witnesses and for the 
enrollee and/or the Part D plan sponsor 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 the IRE to compel an appearance, 
testimony, or the production of evidence, or to the Part D plan sponsor 
to compel an appearance or testimony.
    (2) Reviewability of an ALJ Subpoena. A subpoena issued by an ALJ 
is not subject to immediate review by the MAC. The subpoena may be 
reviewed solely during the MAC's review specified in Sec.  423.2102 and 
Sec.  423.2110.
    (3) Exception. To the extent a subpoena compels disclosure of a 
matter which an objection based on privilege, or other protection from 
disclosure such as case preparation, confidentiality, or undue burden, 
was made before an ALJ, the MAC may review immediately the ruling of 
the ALJ on the objections to the

[[Page 65372]]

subpoena or that portion of the subpoena as applicable.
    (i) Upon notice to the ALJ that the enrollee or a non-party, as 
applicable, intends to seek MAC review of the ALJ's ruling on the 
subpoena, the ALJ must stay all proceedings affected by the subpoena.
    (ii) The proceedings are stayed for 15 calendar days or until the 
MAC issues a written decision that affirms, reverses, or modifies the 
ALJ's subpoena, whichever comes first.
    (iii) If the MAC does not take action within the 15 calendar days, 
then the stay is lifted and the enrollee or non-party must comply with 
the ALJ's subpoena.
    (4) Enforcement. (i) If the ALJ determines that an enrollee or 
person other than the enrollee subject to a subpoena issued under this 
section has refused to comply with the subpoena, the ALJ may request 
that the Secretary seek enforcement of the subpoena in accordance with 
section 205(e) of the Act, 42 U.S.C. 405(e).
    (ii) After submitting the enforcement request, the time period for 
the ALJ to issue a decision, dismissal or remand a case in response to 
a request for hearing is stayed for 15 calendar days or until the 
Secretary makes a decision with respect to the enforcement request, 
whichever occurs first.
    (iii) Any enforcement request by an ALJ must consist of a written 
notice to the Secretary describing in detail the ALJ's findings of 
noncompliance and his or her specific request for enforcement, and 
providing a copy of the subpoena and evidence of its receipt by 
certified mail by the enrollee or person other than the enrollee 
subject to the subpoena.
    (iv) The ALJ must promptly mail a copy of the notice and related 
documents to the individual or entity subject to the subpoena, to the 
enrollee, and to any other affected person.
    (g) Witnesses at a hearing. Witnesses may appear at a hearing. They 
testify under oath or affirmation, unless the ALJ finds an important 
reason to excuse them from taking an oath or affirmation. The ALJ may 
ask the witnesses any questions relevant to the issues and allow the 
enrollee or his or her appointed representative, as defined at Sec.  
423.560.


Sec.  423.2038  Deciding a case without a hearing before an ALJ.

    (a) Decision wholly favorable. If the evidence in the hearing 
record supports a finding in favor of the enrollee(s) on every issue, 
the ALJ may issue a hearing decision without giving the enrollee(s) 
prior notice and without holding a hearing. The notice of the decision 
informs the enrollee(s) that he or she has the right to a hearing and a 
right to examine the evidence on which the decision is based.
    (b) Enrollee does not wish to appear. (1) The ALJ may decide a case 
on the record and not conduct a hearing if--
    (i) The enrollee indicates in writing or, for expedited hearings 
orally or in writing, that he or she does not wish to appear before the 
ALJ at a hearing, including a hearing conducted by telephone or video 
teleconferencing, if available. The ALJ hearing office must document 
all oral requests not to appear at a hearing in writing and maintain 
the documentation in the case files; or
    (ii) The enrollee lives outside the United States and does not 
inform the ALJ that he or she wants to appear.
    (2) When a hearing is not held, the decision of the ALJ must refer 
to the evidence in the record on which the decision was based.


Sec.  423.2040  Prehearing and posthearing conferences.

    (a) The ALJ may decide on his or her own, or at the request of the 
enrollee to the hearing, to hold a prehearing or posthearing conference 
to facilitate the hearing or the hearing decision.
    (b) For non-expedited hearings, the ALJ informs the enrollee of the 
time, place, and purpose of the conference at least 7 calendar days 
before the conference date, unless the enrollee indicates in writing 
that he or she does not wish to receive a written notice of the 
conference.
    (c) For expedited hearings, the ALJ informs the enrollee of the 
time, place, and purpose of the conference at least 2 calendar days 
before the conference date, unless the enrollee indicates orally or in 
writing that he or she does not wish to receive a written notice of the 
conference.
    (d) The ALJ hearing office must document all oral requests not to 
receive written notice of the conference in writing and maintain the 
documentation in the case files.
    (e) At the conference, the ALJ may consider matters in addition to 
those stated in the notice of hearing, if the enrollee consents in 
writing. A record of the conference is made.
    (f) The ALJ issues an order stating all agreements and actions 
resulting from the conference. If the enrollee does not object, the 
agreements and actions become part of the hearing record and are 
binding.


Sec.  423.2042  The administrative record.

    (a) Creating the record. (1) The ALJ makes a complete record of the 
evidence, including the hearing proceedings, if any.
    (2) The record will include marked as exhibits, the documents used 
in making the decision under review, including, but not limited to, 
medical records, written statements, certificates, reports, affidavits, 
and any other evidence the ALJ admits.
    (3) An enrollee may review the record at the hearing, or, if a 
hearing is not held, at any time before the ALJ's notice of decision is 
issued.
    (4) If a request for review is filed, the complete record, 
including any recording of the hearing, is forwarded to the MAC.
    (5) A typed transcription of the hearing is prepared if an enrollee 
seeks judicial review of the case in a Federal district court within 
the stated time period and all other jurisdictional criteria are met, 
unless, upon the Secretary's motion prior to the filing of an answer, 
the court remands the case.
    (b) Requesting and receiving copies of the record. (1) An enrollee 
may request and receive a copy of all or part of the record, including 
the exhibits list, documentary evidence, and a copy of the tape of the 
oral proceedings. The enrollee may be asked to pay the costs of 
providing these items.
    (2) If an enrollee requests all or part of the record from the ALJ 
and an opportunity to comment on the record, the time beginning with 
the ALJ's receipt of the request through the expiration of the time 
granted for the enrollee's response does not count toward the 
adjudication deadline.


Sec.  423.2044  Consolidated hearing before an ALJ.

    (a) A consolidated hearing may be held if one or more of the issues 
to be considered at the hearing are the same issues that are involved 
in another request for hearing or hearings pending before the same ALJ.
    (b) It is within the discretion of the ALJ to grant or deny an 
enrollee's request for consolidation. In considering an enrollee's 
request, the ALJ may consider factors such as whether the issue(s) may 
be more efficiently decided if the requests for hearing are combined. 
In considering the enrollee's request for consolidation, the ALJ must 
take into account the adjudication deadlines for each case and may 
require an enrollee to waive the adjudication deadline associated with 
one or more cases if consolidation otherwise prevents the ALJ from 
deciding all of the appeals at issue within their respective deadlines.
    (c) The ALJ may also propose on his or her own motion to 
consolidate two or more cases in one hearing for

[[Page 65373]]

administrative efficiency, but may not require an enrollee to waive the 
adjudication deadline for any of the consolidated cases.
    (d) Before consolidating a hearing, the ALJ must notify CMS of his 
or her intention to do so, and CMS may then elect to participate in the 
consolidated hearing by sending written notice to the ALJ.
    (1) For non-expedited hearings, any request by CMS to participate 
must be made within 5 calendar days of receipt of the ALJ's notice of 
the consolidation.
    (2) For expedited hearings, any request by CMS to participate must 
be made within 1 calendar day of receipt of the ALJ's notice of the 
consolidation. Requests may be made orally or submitted by facsimile to 
the hearing office.
    (e) If the ALJ decides to hold a consolidated hearing, he or she 
may make either a consolidated decision and record or a separate 
decision and record on each issue. The ALJ ensures that any evidence 
that is common to all appeals and material to the common issue to be 
decided is included in the consolidated record or each individual 
record, as applicable.


Sec.  423.2046  Notice of an ALJ decision.

    (a) General rule. Unless the ALJ dismisses the hearing, the ALJ 
will issue a written decision that gives the findings of fact, 
conclusions of law, and the reasons for the decision.
    (1) For expedited hearings, the ALJ issues a written decision 
within the 10 calendar day adjudication timeframe under Sec.  
423.2016(b)(5).
    (2) The decision must be based on evidence offered at the hearing 
or otherwise admitted into the record.
    (3) A copy of the decision should be mailed to the enrollee at his 
or her last known address.
    (4) A copy of the written decision should also be provided to the 
IRE that issued the reconsideration determination, and to the Part D 
plan sponsor that issued the coverage determination.
    (b) Content of the notice. The decision must be provided in a 
manner calculated to be understood by an enrollee and must include--
    (1) The specific reasons for the determination, including, to the 
extent appropriate, a summary of any clinical or scientific evidence 
used in making the determination;
    (2) The procedures for obtaining additional information concerning 
the decision; and
    (3) Notification of the right to appeal the decision to the MAC, 
including instructions on how to initiate an appeal under this section.
    (c) Limitation on decision. When the amount of payment for the Part 
D drug 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 Part D 
plan sponsor may independently determine the payment amount. In either 
of the aforementioned situations, an ALJ's decision is not binding on 
the Part D plan sponsor for purposes of determining the amount of 
payment due. The amount of payment determined by the Part D plan 
sponsor in effectuating the ALJ's decision is a new coverage 
determination under Sec.  423.566.
    (d) Timing of decision. For non-expedited hearings, the ALJ issues 
a decision no later than the end of the 90 calendar day period 
beginning on the date the request for hearing is received by the entity 
specified in the IRE's reconsideration, unless the 90 calendar day 
period is extended as provided in Sec.  423.2016. For expedited 
hearings, the ALJ issues a decision as expeditiously as the enrollee's 
health condition requires, but no later than the end of the 10 calendar 
day period beginning on the date the request for hearing is received by 
the entity specified in the IRE's reconsideration, unless the 10 
calendar day period is extended as provided in Sec.  423.2016.
    (e) Recommended decision. An ALJ issues a recommended decision if 
he or she is directed to do so in a MAC remand order. An ALJ may not 
issue a recommended decision on his or her own motion. The ALJ mails a 
copy of the recommended decision to the enrollee at his or her last 
known address.


Sec.  423.2048  The effect of an ALJ's decision.

    The decision of the ALJ is binding unless--
    (a) An enrollee 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.  423.2110, and the MAC issues a 
final decision or remand order;
    (b) The decision is reopened and revised by an ALJ or the MAC under 
the procedures explained in Sec.  423.1980;
    (c) The expedited access to judicial review process at Sec.  
423.1990 is used;
    (d) The ALJ's decision is a recommended decision directed to the 
MAC and the MAC issues a decision; or
    (e) In a case remanded by a Federal District Court, the MAC assumes 
jurisdiction under the procedures in Sec.  423.2138 and the MAC issues 
a decision.


Sec.  423.2050   Removal of a hearing request from an ALJ to the MAC.

    If a request for hearing is pending before an ALJ, the MAC may 
assume responsibility for holding a hearing by requesting that the ALJ 
send the hearing request. If the MAC holds a hearing, it conducts the 
hearing according to the rules for hearings before an ALJ. Notice is 
mailed to the enrollee at his or her last known address informing him 
or her that the MAC has assumed responsibility for the case.


Sec.  423.2052  Dismissal of a request for a hearing before an ALJ.

    Dismissal of a request for a hearing is in accordance with the 
following:
    (a) Dismissal of a request for a hearing. An ALJ dismisses a 
request for a hearing under any of the following conditions:
    (1) At any time before notice of the hearing decision is mailed, if 
the enrollee asks to withdraw the request. This request may be 
submitted in writing to the ALJ or be made orally at the hearing. The 
request for withdrawal must include a clear statement that the enrollee 
is withdrawing the request for hearing and does not intend to further 
proceed with the appeal. If an attorney or other legal professional on 
behalf of an enrollee files the request for withdrawal, the ALJ may 
presume that the representative has advised the enrollee of the 
consequences of the withdrawal and dismissal.
    (2) Neither the enrollee that requested the hearing nor the 
enrollee's representative appears at the time and place set for the 
hearing, if--
    (i) The enrollee was notified before the time set for the hearing 
that the request for hearing might be dismissed without further notice 
for failure to appear; or
    (ii) The enrollee did not appear at the time and place of hearing 
and does not contact the ALJ hearing office within 10 calendar days for 
non-expedited hearings and 2 calendar days for expedited hearings and 
provide good cause for not appearing; or
    (iii) The ALJ sends a notice to the enrollee asking why the 
enrollee did not appear; and the enrollee does not respond within 10 
calendar days for non-expedited hearings; the ALJ does not receive the 
enrollee's response within 2 calendar days for expedited hearings or 
the enrollee does not provide good cause for the failure to appear. For 
expedited hearings, an enrollee may submit his or her response orally 
to the ALJ.
    (iv) In determining whether good cause exists under paragraph 
(a)(2) of this section, the ALJ considers any

[[Page 65374]]

physical, mental, educational, or linguistic limitations (including any 
lack of facility with the English language) the enrollee may have.
    (3) The person requesting a hearing has no right to it under Sec.  
423.2002.
    (4) The enrollee did not request a hearing within the stated time 
period and the ALJ has not found good cause for extending the deadline, 
as provided in Sec.  423.2014(d).
    (5) The enrollee died while the request for hearing is pending and 
the request for hearing was filed by the enrollee or the enrollee's 
representative, and the enrollee's surviving spouse or estate has no 
remaining financial interest in the case and the enrollee's 
representative, if any, does not want to continue the appeal.
    (6) The ALJ dismisses a hearing request entirely or refuses to 
consider any one or more of the issues because an IRE, an ALJ or the 
MAC has made a previous determination or decision under this subpart 
about the enrollee's rights on the same facts and on the same issue(s), 
and this previous determination or decision has become binding by 
either administrative or judicial action.
    (7) The enrollee abandons the request for hearing. An ALJ may 
conclude that an enrollee has abandoned a request for hearing when the 
ALJ hearing office attempts to schedule a hearing and is unable to 
contact the enrollee after making reasonable efforts to do so.
    (8) Consistent with Sec.  423.1972(c)(1), the ALJ dismisses a 
hearing request if a request clearly shows that the amount in 
controversy is less than that required under Sec.  423.1970.
    (b) Notice of dismissal. The ALJ mails a written notice of the 
dismissal of the hearing request to the enrollee at his or her last 
known address. The written notice provides that there is a right to 
request that the MAC vacate the dismissal action.
    (c) Discontinuation of a hearing. Consistent with Sec.  
423.1972(c)(2), the ALJ discontinues a hearing and does not rule on the 
substantive issues raised in the appeal if, after a hearing is 
initiated, the ALJ finds that the amount in controversy is less than 
the amount required under Sec.  423.1970.


Sec.  423.2054   Effect of dismissal of a request for a hearing before 
an ALJ.

    The dismissal of a request for a hearing is binding, unless it is 
vacated by the MAC under Sec.  423.2108(b).


Sec.  423.2062   Applicability of policies not binding on the ALJ and 
MAC.

    (a) ALJs and the MAC are not bound by CMS program guidance, such as 
program memoranda and manual instructions, but will give substantial 
deference to these policies if they are applicable to a particular 
case.
    (b) If an ALJ or MAC declines to follow a policy in a particular 
case, the ALJ or MAC decision must explain the reasons why the policy 
was not followed. An ALJ or MAC decision to disregard a policy applies 
only to the specific coverage determination being considered and does 
not have precedential effect.


Sec.  423.2063   Applicability of laws, regulations and CMS Rulings.

    (a) All laws and regulations pertaining to the Medicare 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 CMS 
Administrator. Consistent with Sec.  401.108 of this chapter, rulings 
are binding on all CMS components, and on all HHS components that 
adjudicate matters under the jurisdiction of CMS.


Sec.  423.2100   Medicare appeals council review: general.

    (a) Consistent with Sec.  423.1974, the enrollee may request that 
the MAC review an ALJ's decision or dismissal.
    (b) When the MAC reviews an ALJ's written decision, it undertakes a 
de novo review.
    (c) The MAC issues a final decision, dismissal order, or remands a 
case no later than the end of the 90 calendar period beginning on the 
date the request for review is received (by the entity specified in the 
ALJ's written notice of decision), unless the 90 calendar day period is 
extended as provided in this subpart or the enrollee requests expedited 
MAC review.
    (d) If an enrollee requests expedited MAC review, the MAC issues a 
final decision, dismissal order or remand as expeditiously as the 
enrollee's health condition requires, but no later than the end of the 
10 calendar day period beginning on the date the request for review is 
received (by the entity specified in the ALJ's written notice of 
decision), unless the 10 calendar day period is extended as provided in 
this subpart.


Sec.  423.2102   Request for MAC review when ALJ issues decision or 
dismissal.

    (a)(1) An enrollee to the ALJ hearing may request a MAC review if 
the enrollee files a written request for a MAC review within 60 
calendar days after receipt of the ALJ's written decision or dismissal.
    (2) An enrollee may request that MAC review be expedited if the 
appeal involves an issue specified in Sec.  423.566(b) but does not 
include solely a request for payment of Part D drugs already furnished.
    (i) If an enrollee is requesting that the MAC review be expedited, 
the enrollee submits an oral or written request within 60 calendar days 
after the receipt of the ALJ's written decision or dismissal. A 
prescribing physician or other prescriber may provide oral or written 
support for an enrollee's request for expedited review.
    (ii) The MAC must document all oral requests for expedited review 
in writing and maintain the documentation in the case files.
    (3) For purposes of this section, the date of receipt of the ALJ's 
written decision or dismissal is presumed to be 5 calendar days after 
the date of the notice of the decision or dismissal, unless there is 
evidence to the contrary.
    (4) The request is considered as filed on the date it is received 
by the entity specified in the notice of the ALJ's action.
    (b) An enrollee requesting a review may ask that the time for 
filing a request for MAC review be extended if--
    (1) The request for an extension of time is in writing or, for 
expedited reviews, in writing or oral. The MAC must document all oral 
requests in writing and maintain the documentation in the case file.
    (2) The request explains why the request for review was not filed 
within the stated time period. If the MAC finds that there is good 
cause for missing the deadline, the time period will be extended. To 
determine whether good cause exists, the MAC uses the standards 
outlined at Sec.  405.942(b)(2) and Sec.  405.942(b)(3).
    (c) An enrollee does not have the right to seek MAC review of an 
ALJ's remand or an ALJ's affirmation of an IRE's dismissal of a request 
for reconsideration.


Sec.  423.2106  Where a request for review may be filed.

    When a request for a MAC review is filed after an ALJ has issued a 
written decision or dismissal, the request for review must be submitted 
to the entity specified in the notice of the ALJ's action. 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

[[Page 65375]]

entity specified in the notice of the ALJ's action, the MAC sends 
written notice to the enrollee of the date of receipt of the request 
and commencement of the adjudication timeframe.


Sec.  423.2108  MAC Actions when request for review is filed.

    (a) General. Except as specified in paragraph (c) of this section, 
when an enrollee requests that the MAC review an ALJ's decision, the 
MAC will review the ALJ's decision de novo. The enrollee requesting 
review does not have a right to a hearing before the MAC. The MAC will 
consider all of the evidence admitted into the administrative record. 
Upon completion of its review, the MAC may adopt, modify, or reverse 
the ALJ's decision or remand the case to the ALJ for further 
proceedings. Unless the MAC's review is expedited as provided in 
paragraph (d) of this section, the MAC must issue its action no later 
than 90 calendar days after receiving the request for review, unless 
the 90 calendar day period has been extended as provided in this 
subpart.
    (b) Review of ALJ's dismissal. When an enrollee requests that the 
MAC review an ALJ's dismissal, the MAC may deny review or vacate the 
dismissal and remand the case to the ALJ for further proceedings.
    (c) MAC dismissal of request for review. The MAC will dismiss a 
request for review when the individual or entity requesting review does 
not have a right to a review by the MAC, or will dismiss the request 
for a hearing for any reason that the ALJ could have dismissed the 
request for hearing.
    (d) Expedited reviews. (1) Standard for expedited reviews. The MAC 
must provide an expedited review if the appeal involves an issue 
specified in Sec.  423.566(b), but does not include solely a request 
for payment of Part D drugs already furnished, enrollee's prescribing 
physician or other prescriber indicates, or the MAC determines that 
applying the standard timeframe for making a decision may seriously 
jeopardize the enrollee's life or health or ability to regain maximum 
function. The MAC may consider this standard as met if a lower level 
adjudicator has granted a request for an expedited appeal.
    (2) Grant of a request. If the MAC grants a request for expedited 
review, the MAC must:
    (i) Make this decision within 5 calendar days of receipt of the 
request for expedited review;
    (ii) Give the enrollee prompt oral notice of this decision; and
    (iii) Issue a decision, dismissal order or remand, as expeditiously 
as the enrollee's health condition requires, but no later than the end 
of the 10 calendar day period beginning on the date the request for 
review is received by the entity specified in the ALJ's written notice 
of decision.
    (3) Denial of a request. If the MAC denies a request for expedited 
review, the MAC must:
    (i) Make this decision within 5 calendar days of receipt of the 
request for expedited review;
    (ii) Give the enrollee and Part D plan sponsor within 5 calendar 
days of receiving the request written notice of the denial. The written 
notice must inform the enrollee of the denial and explain that the MAC 
will process the enrollee's request using the 90 calendar day timeframe 
for non-expedited reviews.
    (4) Decision on a request. A decision on a request for expedited 
review may not be appealed.


Sec.  423.2110  MAC reviews on its own motion.

    (a) General rule. The MAC may decide on its own motion to review a 
decision or dismissal issued by an ALJ. CMS or the IRE may refer a case 
to the MAC for it to consider reviewing under this authority any time 
within 60 calendar days after the ALJ's written decision or dismissal 
is issued.
    (b) Referral of cases. (1) CMS or the IRE may refer a case to the 
MAC if, in the view of CMS or the IRE, the decision or dismissal 
contains an error of law material to the outcome of the claim or 
presents a broad policy or procedural issue that may affect the public 
interest. CMS or the IRE may also request that the MAC take own motion 
review of a case if--
    (i) CMS or the IRE participated or requested to participate in the 
appeal at the ALJ level; and
    (ii) In CMS' or the IRE's view, the ALJ's decision or dismissal is 
not supported by the preponderance of evidence in the record or the ALJ 
abused his or her discretion.
    (2) CMS' or the IRE's 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 written decision or dismissal is issued.
    (i) The written referral will state the reasons why CMS or the IRE 
believes that the MAC should review the case on its own motion.
    (ii) CMS or the IRE will send a copy of its referral to the 
enrollee and to the ALJ.
    (iii) The enrollee may file exceptions to the referral by 
submitting written comments to the MAC within 20 calendar days of the 
referral notice.
    (iv) An enrollee submitting comments to the MAC must send the 
comments to CMS or the IRE.
    (c) Standard of review. (1) Referral by CMS or the IRE when CMS or 
the IRE participated or requested to participate in the ALJ level. If 
CMS or the IRE participated or requested to participate in an appeal at 
the ALJ level, the MAC exercises its own motion authority if there is 
an error of law material to the outcome of the case, an abuse of 
discretion by the ALJ, the decision is not consistent with the 
preponderance of the evidence of record, or there is a broad policy or 
procedural issue that may affect the general public interest. In 
deciding whether to accept review under this standard, the MAC will 
limit its consideration of the ALJ's action to those exceptions raised 
by CMS or the IRE.
    (2) Referral by CMS or the IRE when CMS or the IRE did not 
participate or request to participate in the ALJ proceedings. The MAC 
will accept review if the decision or dismissal contains an error of 
law material to the outcome of the case or presents a broad policy or 
procedural issue that may affect the general public interest. In 
deciding whether to accept review, the MAC will limit its consideration 
of the ALJ's action to those exceptions raised by CMS or the IRE.
    (d) MAC's action. (1) If the MAC decides to review a decision or 
dismissal on its own motion, it will mail the results of its action to 
the enrollee and to CMS or the IRE, as appropriate.
    (2) 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.
    (3) The MAC must issue its action no later than 90 calendar days 
after receipt of the CMS or the IRE referral, unless the 90 calendar 
day period has been extended as provided in this subpart.
    (4) The MAC may not 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.
    (5) If the MAC declines to review a decision or dismissal on its 
own motion, the ALJ's decision or dismissal is binding.


Sec.  423.2112  Content of request for review.

    (a)(1) The request for MAC review must be filed with the entity 
specified in the notice of the ALJ's action.
    (2) The request for review must be in writing and may be made on a 
standard form, except for requests for expedited reviews which may be 
made orally.

[[Page 65376]]

    (3) The MAC must document all oral requests in writing and maintain 
the documentation in the case file.
    (4) A written request that is not made on a standard form or, for 
expedited requests, an oral request, is accepted if it includes the 
enrollee's name and telephone number, the plan name; Medicare health 
insurance claim number; the ALJ appeal number; the specific Part D 
drug(s) for which the review is requested; a statement that the 
enrollee is requesting an expedited review, if applicable; and the name 
and signature of the enrollee or the representative of the enrollee.
    (b) The request for review must identify the parts of the ALJ 
action with which the enrollee requesting review disagrees and explain 
why he or she disagrees with the ALJ's decision, dismissal, or other 
determination being appealed.
    (c) The MAC will limit its review of an ALJ's actions to those 
exceptions raised by the enrollee in the request for review, unless the 
enrollee is unrepresented. For purposes of this section only, a 
representative is either anyone with a valid appointment as the 
enrollee's representative or is a member of the enrollee's family, a 
legal guardian or an individual who routinely acts on behalf of the 
enrollee, such as a family member or friend who has a power of 
attorney.


Sec.  423.2114  Dismissal of request for review.

    The MAC dismisses a request for review if the enrollee requesting 
review did not file the request within the stated period of time and 
the time for filing has not been extended. The MAC also dismisses the 
request for review if--
    (a) The enrollee asks to withdraw the request for review;
    (b) The individual or entity does not have a right to request MAC 
review; or
    (c) The enrollee died while the request for review is pending and 
the enrollee's estate or representative, if any, either has no 
remaining financial interest in the case or does not want to continue 
the appeal.


Sec.  423.2116  Effect of dismissal of request for MAC review or 
request for hearing.

    The dismissal of a request for MAC review or denial of a request 
for review of a dismissal issued by an ALJ is binding and not subject 
to further review unless reopened and vacated by the MAC. The MAC's 
dismissal of a request for hearing is also binding and not subject to 
judicial review.


Sec.  423.2118  Obtaining evidence from the MAC.

    An enrollee may request and receive a copy of all or part of the 
record of the ALJ hearing, including the exhibits list, documentary 
evidence, and a copy of the CD of the oral proceedings. However, the 
enrollee may be asked to pay the costs of providing these items. If an 
enrollee requests evidence from the MAC and an opportunity to comment 
on that evidence, the time beginning with the MAC's receipt of the 
request for evidence through the expiration of the time granted for the 
enrollee's response will not be counted toward the adjudication 
deadline.


Sec.  423.2120  Filing briefs with the MAC.

    Upon request, the MAC will give the enrollee requesting review a 
reasonable opportunity to file a brief or other written statement about 
the facts and law relevant to the case. Unless the enrollee requesting 
review files the brief or other statement with the request for review, 
the time beginning with the date of receipt of the request to submit 
the brief and ending with the date the brief is received by the MAC 
will not be counted toward the adjudication timeframe set forth in 
Sec.  423.2100. The MAC may also request, but not require, CMS, the 
IRE, and/or the Part D plan sponsor to file a brief or position paper 
if the MAC determines that it is necessary to resolve the issues in the 
case. The MAC cannot draw any adverse inference if CMS, the IRE, and/or 
the Part D plan sponsor either participates, or decides not to 
participate in MAC review.


Sec.  423.2122  What evidence may be submitted to the MAC.

    (a) Appeal before the MAC on request for review of ALJ's decision. 
(1) If the MAC is reviewing an ALJ's decision, the MAC will consider 
the evidence contained in the record of the proceedings before the ALJ, 
and any new evidence that relates to the period before the coverage 
determination. If the hearing decision decides a new issue that the 
enrollee was not afforded an opportunity to address at the ALJ level, 
the MAC considers any evidence related to that issue that is submitted 
with the request for review.
    (2) If the MAC determines that additional evidence is needed to 
resolve the issues in the case and the hearing record indicates that 
the previous decision-makers have not attempted to obtain the evidence, 
the MAC may remand the case to an ALJ to obtain the evidence and issue 
a new decision.
    (3) The MAC will not consider any new evidence submitted regarding 
a change in condition of an enrollee after a coverage determination is 
made. The MAC will remand a case to the Part D IRE if the MAC 
determines that the enrollee wishes to have evidence on his or her 
change in condition after the coverage determination considered.
    (b) Subpoenas. When it is reasonably necessary for the full 
presentation of a case, the MAC may, on its own initiative, issue 
subpoenas requiring an enrollee or Part D plan sponsor 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 the IRE to compel the 
production of evidence.
    (1) To the extent a subpoena compels disclosure of a matter for 
which an objection based on privilege, or other protection from 
disclosure such as case preparation, confidentiality or undue burden, 
was made before the MAC, the Secretary may review immediately that 
subpoena or a portion of the subpoena.
    (2) Upon notice to the MAC that an enrollee or Part D plan sponsor 
intends to seek the Secretary review of the subpoena, the MAC must stay 
all proceedings affected by the subpoena, tolling the time period for 
the MAC to issue a final action or remand a case in response to a 
request for review for 15 calendar days or until the Secretary makes a 
decision with respect to the review request, whichever occurs first.
    (3) If the Secretary does not grant review within the time allotted 
for the stay, the stay is lifted and the subpoena stands.
    (c) Enforcement. (1) If the MAC determines that an enrollee or 
other person or entity subject to a subpoena issued under this section 
has refused to comply with the subpoena, the MAC may request the 
Secretary to seek enforcement of the subpoena in accordance with 
section 205(e) of the Act, 42 U.S.C. 405(e).
    (2) After submitting the enforcement request, the time period for 
the MAC to issue a final action or remand a case in response to a 
request for review is stayed for 15 calendar days or until the 
Secretary makes a decision with respect to the enforcement request, 
whichever occurs first.
    (3) Any enforcement request by the MAC must consist of a written 
notice to the Secretary describing in detail the MAC's findings of 
noncompliance and its specific request for enforcement, and providing a 
copy of the subpoena and evidence of its receipt by certified mail by 
the enrollee or other person or entity subject to the subpoena.
    (4) The MAC must promptly mail a copy of the notice and related 
documents to the enrollee or other person or entity subject to the 
subpoena, and to any other affected person.

[[Page 65377]]

Sec.  423.2124  Oral argument.

    An enrollee may request to appear before the MAC to present oral 
argument.
    (a) The MAC grants a request for oral argument if it decides that 
the case raises an important question of law, policy, or fact that 
cannot be readily decided based on written submissions alone.
    (b) The MAC may decide on its own that oral argument is necessary 
to decide the issues in the case. If the MAC decides to hear oral 
argument, it informs the enrollee of the time and place of the oral 
argument at least 10 calendar days before the scheduled date or, in the 
case of an expedited review, at least 2 calendar days before the 
scheduled date.
    (c) In case of a previously unrepresented enrollee, a newly hired 
representative may request an extension of time for preparation of the 
oral argument and the MAC must consider whether the extension is 
reasonable.
    (d) The MAC may also request, but not require, CMS, the IRE, and/or 
the Part D plan sponsor to appear before it if the MAC determines that 
it may be helpful in resolving the issues in the case.
    (e) The MAC cannot draw any adverse inference if CMS, the IRE, and/
or the Part D plan sponsor decide not to participate in the oral 
argument.


Sec.  423.2126  Case remanded by the MAC.

    (a) When the MAC may remand a case to the ALJ. (1) The MAC may 
remand a case in which additional evidence is needed or additional 
action by the ALJ is required. The MAC will designate in its remand 
order whether the ALJ will issue a decision or a recommended decision 
on remand.
    (2) Action by ALJ on remand. The ALJ will take any action that is 
ordered by the MAC and may take any additional action that is not 
inconsistent with the MAC's remand order.
    (3) Notice when case is returned with a recommended decision. When 
the ALJ sends a case to the MAC with a recommended decision, a notice 
is mailed to the enrollee at his or her last known address. The notice 
tells the enrollee that the case was sent to the MAC, explains the 
rules for filing briefs or other written statements with the MAC, and 
includes a copy of the recommended decision.
    (4) Filing briefs with the MAC when ALJ issues recommended 
decision. (i) An enrollee may file with the MAC briefs or other written 
statements about the facts and law relevant to the case within 20 
calendar days of the date on the recommended decision or with the 
request for review for expedited appeals. An enrollee may ask the MAC 
for additional time to file a brief or written statement. The MAC will 
extend this period, as appropriate, if the enrollee shows that he or 
she has good cause for requesting the extension.
    (ii) All other rules for filing briefs with and obtaining evidence 
from the MAC follow the procedures explained in this subpart.
    (5) Procedures before the MAC. (i) The MAC, after receiving a 
recommended decision, will conduct proceedings and issue its decision 
or dismissal according to the procedures explained in this subpart.
    (ii) If the MAC determines that more evidence is required, it may 
again remand the case to an ALJ for further inquiry into the issues, 
rehearing, receipt of evidence, and another decision or recommended 
decision. However, if the MAC decides that it can get the additional 
evidence more quickly, it will take appropriate action.
    (b) When the MAC must remand a case to the Part D IRE. The MAC will 
remand a case to the appropriate Part D IRE if the MAC determines that 
the enrollee wishes evidence on his or her change in condition after 
the coverage determination to be considered in the appeal.


Sec.  423.2128  Action of the MAC.

    (a) After it has reviewed all the evidence in the administrative 
record and any additional evidence received, subject to the limitations 
on MAC consideration of additional evidence in Sec.  423.2122, the MAC 
will make a decision or remand the case to an ALJ.
    (b) The MAC may adopt, modify, or reverse the ALJ hearing decision 
or recommended decision.
    (c) The MAC mails a copy of its decision to the enrollee at his or 
her last known address, to CMS, to the IRE, and to the Part D plan 
sponsor.


Sec.  423.2130  Effect of the MAC's decision.

    The MAC's decision is final and binding 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.  423.1980. 
An enrollee may file an action in a Federal District Court within 60 
calendar days after the date the enrollee receives written notice of 
the MAC's decision.


Sec.  423.2134  Extension of time to file action in Federal District 
Court.

    (a) An enrollee may request that the time for filing an action in a 
Federal District Court be extended.
    (b) The request must:
    (1) Be in writing.
    (2) Give the reasons why the action was not filed within the stated 
time period.
    (3) Be filed with the MAC.
    (c) If the enrollee shows that he or she had good cause for missing 
the deadline, the time period will be extended. To determine whether 
good cause exists, the MAC uses the standards specified in Sec. Sec.  
405.942(b)(2) or (b)(3) of this chapter.


Sec.  423.2136  Judicial review.

    (a) General rule. To the extent authorized by sections 
1876(c)(5)(B) and 1860D-4(h) of the Act and consistent with Sec.  
423.1976, an enrollee may obtain a court review of a MAC decision if 
the amount in controversy meets the threshold requirement estimated 
annually by the Secretary.
    (b) Court in which to file civil action. (1) Consistent with Sec.  
423.1976(c), any civil action described in paragraph (a) of this 
section must be filed in the District Court of the United States for 
the judicial district in which the enrollee resides.
    (2) If the enrollee does not reside within any judicial district, 
the civil action must be filed in the District Court of the United 
States for the District of Columbia.
    (c) Time for filing civil action. (1) Any civil action described in 
paragraph (a) of this section must be filed within the time periods 
specified in Sec.  423.2130 or Sec.  423.2134, as applicable.
    (2) For purposes of this section, the date of receipt of the notice 
of the MAC's decision shall be presumed to be 5 calendar days after the 
date of the notice, unless there is a reasonable showing to the 
contrary.
    (3) Where a case is certified for judicial review in accordance 
with the expedited access to judicial review process in Sec.  423.1990, 
the civil action must be filed within 60 calendar days after receipt of 
the review entity's certification, except where the time is extended by 
the ALJ or MAC, as applicable, upon a showing of good cause.
    (d) Proper defendant. (1) In any civil action described in 
paragraph (a) of this section, the Secretary of HHS, in his or her 
official capacity, is the proper defendant. Any civil action properly 
filed shall survive notwithstanding any change of the person holding 
the Office of the Secretary of HHS or any vacancy in such office.
    (2) If the complaint is erroneously filed against the United States 
or against any agency, officer, or employee of the United States other 
than the Secretary, the plaintiff enrollee will be notified that he or 
she has named an incorrect

[[Page 65378]]

defendant and is granted 60 calendar days from the date of receipt of 
the notice in which to commence the action against the correct 
defendant, the Secretary.
    (e) Standard of review. (1) Under section 205(g) of the Act, the 
findings of the Secretary of HHS as to any fact, if supported by 
substantial evidence, are conclusive.
    (2) When the Secretary's decision is adverse to an enrollee due to 
an enrollee's failure to submit proof in conformity with a regulation 
prescribed under section 205(a) of the Act pertaining to the type of 
proof an enrollee must offer to establish entitlement to payment, the 
court will review only whether the proof conforms with the regulation 
and the validity of the regulation.


Sec.  423.2138  Case remanded by a Federal District Court.

    When a Federal District Court remands a case to the Secretary for 
further consideration, unless the court order specifies otherwise, the 
MAC, acting on behalf of the Secretary, may make a decision, or it may 
remand the case to an ALJ with instructions to take action and either 
issue a decision, take other action, or return the case to the MAC with 
a recommended decision. If the MAC remands a case, the procedures 
specified in Sec.  423.2140 will be followed.


Sec.  423.2140  MAC Review of ALJ decision in a case remanded by a 
Federal District Court.

    (a) General rules. (1) In accordance with Sec.  423.2138, when a 
case is remanded by a Federal District Court for further consideration 
and the MAC remands the case to an ALJ, a decision subsequently issued 
by the ALJ becomes the final decision of the Secretary unless the MAC 
assumes jurisdiction.
    (2) The MAC may assume jurisdiction based on written exceptions to 
the decision of the ALJ that an enrollee files with the MAC or based on 
its authority under paragraph (c) of this section.
    (3) The MAC either makes a new, independent decision based on the 
entire record that will be the final decision of the Secretary after 
remand, or remands the case to an ALJ for further proceedings.
    (b) An enrollee files exceptions disagreeing with the decision of 
the ALJ. (1) If an enrollee disagrees with an ALJ decision described in 
paragraph (a) of this section, in whole or in part, he or she may file 
exceptions to the decision with the MAC.
    (2) Exceptions may be filed by submitting a written statement to 
the MAC setting forth the reasons for disagreeing with the decision of 
the ALJ.
    (i) The enrollee must file exceptions within 30 calendar days of 
the date the enrollee receives the decision of the ALJ or submit a 
written request for an extension within the 30 calendar day period.
    (ii) The MAC will grant a timely request for a 30 calendar day 
extension. A request for an extension of more than 30 calendar days 
must include a statement of reasons as to why the enrollee needs the 
additional time and may be granted if the MAC finds good cause under 
the standard established in Sec. Sec.  405.942(b)(2) or (b)(3) of this 
chapter.
    (3) If written exceptions are timely filed, the MAC considers the 
enrollee's reasons for disagreeing with the decision of the ALJ. If the 
MAC concludes that there is no reason to change the decision of the 
ALJ, it will issue a notice addressing the exceptions and explaining 
why no change in the decision of the ALJ is warranted. In this 
instance, the decision of the ALJ is the final decision of the 
Secretary after remand.
    (4) When an enrollee files written exceptions to the decision of 
the ALJ, the MAC may assume jurisdiction at any time. If the MAC 
assumes jurisdiction, it makes a new, independent decision based on its 
consideration of the entire record adopting, modifying, or reversing 
the decision of the ALJ or remanding the case to an ALJ for further 
proceedings, including a new decision. The new decision of the MAC is 
the final decision of the Secretary after remand.
    (c) MAC assumes jurisdiction without exceptions being filed. (1) 
Any time within 60 calendar days after the date of the written decision 
of the ALJ, the MAC may decide to assume jurisdiction of the case even 
though no written exceptions have been filed.
    (2) Notice of this action is mailed to the enrollee at his or her 
last known address.
    (3) The enrollee will be provided with the opportunity to file a 
brief or other written statement with the MAC about the facts and law 
relevant to the case.
    (4) After the brief or other written statement is received or the 
time allowed (usually 30 calendar days) for submitting them has 
expired, the MAC will either issue a final decision of the Secretary 
affirming, modifying, or reversing the decision of the ALJ, or remand 
the case to an ALJ for further proceedings, including a new decision.
    (d) Exceptions are not filed and the MAC does not otherwise assume 
jurisdiction. If no exceptions are filed and the MAC does not assume 
jurisdiction over the case within 60 calendar days after the date of 
the ALJ's written decision, the decision of the ALJ becomes the final 
decision of the Secretary after remand.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

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

    Dated: July 30, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: November 24, 2009.
Constance B. Tobias,
Chair, The Departmental Appeals Board.
    Dated: November 24, 2009.
Irwin Schroeder,
Acting Chief Administrative Law Judge, Office of Medicare Hearings and 
Appeals.
    Approved: September 1, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-28710 Filed 12-8-09; 8:45 am]
BILLING CODE 4120-01-P