[Federal Register Volume 78, Number 188 (Friday, September 27, 2013)]
[Notices]
[Pages 59702-59704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-23655]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4167-N]


Medicare Program; Medicare Appeals: Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2014

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, 2014. 
The calendar year 2014 AIC threshold

[[Page 59703]]

amounts are $140 for ALJ hearings and $1,430 for judicial review.

DATES: This notice is effective on January 1, 2014.

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 $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 (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. 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 (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/MA Appeals

    Section 940(b)(2) of the MMA applies the AIC adjustment requirement 
to Medicare Part C 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, 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, 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 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 2014

    The AIC threshold amount for ALJ hearing requests will remain at 
$140 and the AIC threshold amount for judicial review will rise to 
$1,430 for CY 2014. These amounts are based on the 42.754 percent 
increase in the medical care component of the CPI, which was at 297.600 
in July 2003 and rose to 424.836 in July 2013. The AIC threshold amount 
for ALJ hearing requests changes to $142.75 based on the 42.754 percent 
increase over the initial threshold amount of $100 established in 2003. 
In accordance with section 1869(b)(1)(E)(iii) of the Act, the adjusted 
threshold amounts are rounded to the nearest multiple of $10. 
Therefore, the CY 2014 AIC threshold amount for ALJ hearings is 
$140.00. The AIC threshold amount for judicial review changes to 
$1,427.54 based on the 42.754 percent increase over the initial 
threshold amount of $1,000. This amount was rounded to the nearest 
multiple of $10, resulting in the CY 2014 AIC threshold amount of 
$1,430.00 for judicial review.

[[Page 59704]]

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In the following table we list the CYs 2010 through 2014 threshold 
amounts.

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                                      CY 2010         CY 2011         CY 2012         CY 2013         CY 2014
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ALJ Hearing.....................            $130            $130            $130            $140            $140
Judicial Review.................           1,260           1,300           1,350           1,400           1,430
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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. 93.773 
Medicare--Hospital Insurance Program; and No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: September 23, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2013-23655 Filed 9-26-13; 8:45 am]
BILLING CODE 4120-01-P