[Federal Register Volume 76, Number 185 (Friday, September 23, 2011)]
[Notices]
[Pages 59138-59139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24539]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4152-N]


Medicare Program; Medicare Appeals; Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2012

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, 2012. 
The calendar year 2012 AIC threshold amounts are $130 for ALJ hearings 
and $1,350 for judicial review.

DATES: Effective Date: This notice is effective on January 1, 2012.

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 amount 
in controversy (AIC) threshold amounts for Administrative Law Judge 
(ALJ) hearing requests and judicial review at $100 and $1000, 
respectively, for Medicare Part A and Part B appeals. Section 940 of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (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 405.1006(b) 
and (c). 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 (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 405.1006(c) at the time judicial review

[[Page 59139]]

is requested for the court to have jurisdiction over the appeal 
(405.1136(a)).

B. Medicare Part C (Medicare Advantage) Appeals

    Section 940(b)(2) of the MMA applies the AIC adjustment requirement 
to Medicare Part C (MA) appeals by amending section 1852(g)(5) of the 
Act. The implementing regulations for Medicare Part C (MA) appeals are 
found at 42 CFR part 422, Subpart M. Specifically, 422.600 and 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, in part, that any party, including the MA organization, may 
request judicial review if, 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 previously, 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 previously, 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, Subparts M and U. The regulations at Sec.  423.562(c) prescribe 
that, unless the Part D appeals rules provide otherwise, the Part C 
appeals rules (including the annually adjusted AIC threshold amount) 
apply to Part D appeals to the extent they are appropriate. More 
specifically, 423.1970 and 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. Section 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 July of the year preceding the year involved and rounded to the 
nearest multiple of $10.

B. Calendar Year 2012

    The AIC threshold amount for ALJ hearing requests will remain at 
$130 and the AIC threshold amount for judicial review will rise to 
$1,350 for CY 2012. These updated amounts are based on the 34.51 
percent increase in the medical care component of the CPI from July 
2003 to July 2011. The CPI level was at 297.600 in July 2003 and rose 
to 400.305 in July 2011. This change accounted for the 34.51 percent 
increase. The AIC threshold amount for ALJ hearing requests changes to 
$134.51 based on the 34.51 percent increase. In accordance with section 
940 of the MMA, this amount is rounded to the nearest multiple of $10. 
Therefore, the 2012 AIC threshold amount for ALJ hearings is $130. The 
AIC threshold amount for judicial review changes to $1,345.11 based on 
the 34.51 percent increase. This amount was rounded to the nearest 
multiple of $10, resulting in the 2012 AIC threshold amount of $1,350 
for judicial review.

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In the following table we list the CYs 2005 through 2012 threshold 
amounts.

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                                                    CY 2005      CY 2006      CY 2007      CY 2008      CY 2009      CY 2010      CY 2011      CY 2012
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ALJ Hearing.....................................         $100         $110         $110         $120         $120         $130         $130         $130
Judicial Review.................................        1,050        1,090        1,130        1,180        1,220        1,260        1,300        1,350
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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 8, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2011-24539 Filed 9-22-11; 8:45 am]
BILLING CODE 4120-01-P