[Federal Register Volume 75, Number 185 (Friday, September 24, 2010)]
[Notices]
[Pages 58407-58408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23584]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4143-N]


Medicare Program; Medicare Appeals; Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2011

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

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustment in the amount in 
controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) 
hearings and judicial review under the Medicare appeals process. The 
adjustment to the AIC threshold amounts will be effective for requests 
for ALJ hearings and judicial review filed on or after January 1, 2011. 
The 2011 AIC threshold amounts are $130 for ALJ hearings and $1,300 for 
judicial review.

DATES: Effective Date: This notice is effective on January 1, 2011.

FOR FURTHER INFORMATION CONTACT: Liz Hosna 
([email protected]), (410) 786-4993.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 1869(b)(1)(E) of the Social Security Act (the Act), as 
amended by section 521 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA), established the AIC 
threshold amounts for ALJ hearing requests and judicial review at $100 
and $1,000, respectively, for Medicare Part A and Part B appeals. 
Section 940 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA), amended section 1869(b)(1)(E) of the 
Act to require the AIC threshold amounts for ALJ hearings and judicial 
review to be adjusted annually. The AIC threshold amounts are to be 
adjusted, as of January 2005, by the percentage increase in the medical 
care component of the consumer price index for all urban consumers 
(U.S. city average) for July 2003 to July of the year preceding the 
year involved and rounded to the nearest multiple of $10. Section 
940(b)(2) of the MMA provided conforming amendments to apply the AIC 
adjustment requirement to Medicare Part C (Medicare Advantage ``MA'') 
appeals and certain health maintenance organization and competitive 
health plan appeals. Health care prepayment plans are also subject to 
MA appeals rules, including the AIC adjustment requirement. Section 101 
of the MMA provides for the application of the AIC adjustment 
requirement to Medicare Part D appeals.

A. Medicare Part A and Part B Appeals

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

B. Medicare Part C (Medicare Advantage) Appeals

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

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

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

D. Medicare Part D (Prescription Drug Plan) Appeals

    The annually adjusted AIC threshold amounts for ALJ hearings and 
judicial review that apply to Medicare Parts A, B, and C appeals also 
apply to Medicare Part D appeals. Section 101 of the MMA added section 
1860D-4(h)(1) of the Act regarding Part D appeals. This statutory 
provision requires a prescription drug plan sponsor to meet the 
requirements set forth in sections 1852(g)(4) and (g)(5) of the Act, in 
a similar manner as MA organizations. As noted above, the annually 
adjusted AIC threshold requirement was added to section 1852(g)(5) of 
the Act by section 940(b)(2)(A) of the MMA. The implementing 
regulations for Medicare Part D appeals can be found at 42 CFR Part 
423, Subpart M and Subpart U. The regulations impart at Sec.  
423.562(c) that,

[[Page 58408]]

unless the Part D appeals rules provide otherwise, the Part C appeals 
rules (including the annually adjusted AIC threshold amount) apply to 
Part D appeals to the extent they are appropriate. More specifically, 
Sec.  423.1970 and Sec.  423.1976 of the Part D appeals rules discuss 
the AIC threshold amounts for ALJ hearings and judicial review. Section 
423.1970(a) grants a Part D enrollee, who is dissatisfied with the 
Independent Review Entity (IRE) reconsideration determination, a right 
to an ALJ hearing if the amount remaining in controversy after the IRE 
reconsideration meets the threshold amount established annually by the 
Secretary. Sections 423.1976(a) and (b) allow a Part D enrollee to 
request judicial review of an ALJ or MAC decision if, in part, the AIC 
meets the threshold amount established annually by the Secretary.

II. Annual AIC Adjustments

A. AIC Adjustment Formula and AIC Adjustments

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

B. Calendar Year 2011

    The AIC threshold amount for ALJ hearing requests will remain at 
$130 and the AIC threshold amount for judicial review will rise to 
$1,300 for the 2011 calendar year. These updated amounts are based on 
the 30.34 percent increase in the medical care component of the CPI 
from July of 2003 to July of 2010. The CPI level was at 297.6 in July 
of 2003 and rose to 387.898 in July of 2010. This change accounted for 
the 30.34 percent increase. The AIC threshold amount for ALJ hearing 
requests changes to $130.34 based on the 30.34 percent increase. In 
accordance with section 940 of the MMA, this amount is rounded to the 
nearest multiple of $10. Therefore, the 2011 AIC threshold amount for 
ALJ hearings is $130. The AIC threshold amount for judicial review 
changes to $1,303.42 based on the 30.34 percent increase. This amount 
was rounded to the nearest multiple of $10, resulting in a 2011 AIC 
threshold amount of $1,300.

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In Table 1 below, we list the (CY) 2005 through 2011 threshold 
amounts.

                                Table 1--Amount-in-Controversy Threshold Amounts
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                                      CY 2005    CY 2006    CY 2007    CY 2008    CY 2009    CY 2010    CY 2011
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ALJ Hearing........................       $100       $110       $110       $120       $120       $130       $130
Judicial Review....................      1,050      1,090      1,130      1,180      1,220      1,260      1,300
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* CY--Calendar Year.

III. Collection of Information Requirements

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

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

    Dated: September 2, 2010.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2010-23584 Filed 9-23-10; 8:45 am]
BILLING CODE 4120-01-P