[Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
[Rules and Regulations]
[Pages 4974-5140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-32058]
[[Page 4973]]
Vol. 82
Tuesday,
No. 10
January 17, 2017
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 401, 405, 422, et al.
Medicare Program: Changes to the Medicare Claims and Entitlement,
Medicare Advantage Organization Determination, and Medicare
Prescription Drug Coverage Determination Appeals Procedures; Final Rule
Federal Register / Vol. 82 , No. 10 / Tuesday, January 17, 2017 /
Rules and Regulations
[[Page 4974]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 401, 405, 422, 423, and 478
[HHS-2016-79]
RIN 0991-AC02
Medicare Program: Changes to the Medicare Claims and Entitlement,
Medicare Advantage Organization Determination, and Medicare
Prescription Drug Coverage Determination Appeals Procedures
AGENCY: Centers for Medicare & Medicaid Services, HHS.
ACTION: Final rule.
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SUMMARY: This final rule revises the procedures that the Department of
Health and Human Services (HHS) follows at the Administrative Law Judge
(ALJ) level for appeals of payment and coverage determinations for
items and services furnished to Medicare beneficiaries, enrollees in
Medicare Advantage (MA) and other Medicare competitive health plans,
and enrollees in Medicare prescription drug plans, as well as appeals
of Medicare beneficiary enrollment and entitlement determinations, and
certain Medicare premium appeals. In addition, this final rule revises
procedures that the Department of Health and Human Services follows at
the Centers for Medicare & Medicaid Services (CMS) and the Medicare
Appeals Council (Council) levels of appeal for certain matters
affecting the ALJ level.
DATES: These regulations are effective on March 20, 2017.
FOR FURTHER INFORMATION CONTACT: Joella Roland, (410) 786-7638 (for
issues related to CMS appeals policies and reopening policies).
Jason Green, (571) 777-2723 (for issues related to Administrative
Law Judge appeals policies).
Angela Roach, (202) 565-0132 (for issues related to Council appeals
policies).
SUPPLEMENTARY INFORMATION:
Abbreviations
Because we refer to a number of terms by abbreviation or a
shortened form in this proposed rule, we are listing these
abbreviations and shortened forms, and their corresponding terms in
alphabetical order below:
AASIS--ALJ Appeal Status Information System
Act--Social Security Act
ALJ--Administrative Law Judge
APA--Administrative Procedure Act
BIPA--Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (Pub. L. 106-554)
CMS--Centers for Medicare & Medicaid Services
Council--Medicare Appeals Council
DAB--Departmental Appeals Board
DME--Durable Medical Equipment
EAJR--Expedited Access to Judicial Review
HHS--U.S. Department of Health and Human Services
IRE--Independent Review Entity
IRMAA--Income Related Monthly Adjustment Amount
MA--Medicare Advantage
MAO--Medicare Advantage Organization
MMA--Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173)
OCPM--OMHA Case Processing Manual
OIG--HHS Office of Inspector General
OMHA--Office of Medicare Hearings and Appeals
QIC--Qualified Independent Contractor
QIO--Quality Improvement Organization
SSA--Social Security Administration
VTC--Video-teleconferencing
Section 1557 of the Affordable Care Act
Independent of the standards in this final rule, the Department
commits to complying with section 1557 of the Affordable Care Act, Pub.
L. 111-148, 124 Stat. 470 (42 U.S.C. 18116), which prohibits
discrimination on the basis of race, color, national origin, sex, age,
or disability in certain health programs and activities. HHS issued a
final rule to implement section 1557, Nondiscrimination in Health
Programs and Activities, on May 18, 2016. 81 FR 31376. The final rule
applies, in part, to health programs and activities administered by the
Department.
Table of Contents
I. Background
A. Overview of the Appeals Process
B. Recent Workload Challenges
II. Summary of the Proposed Provisions and Response to Comments on
the July 5, 2016, Proposed Rule
A. General Provisions of the Proposed Regulations
1. Precedential Final Decisions of the Secretary
2. Attorney Adjudicators
3. Application of 405 Rules to Other Parts
4. OMHA References
5. Medicare Appeals Council References
B. Specific Provisions of Part 405, Subpart I and Part 423,
Subparts M and U
1. Overview
2. General Provisions, Reconsiderations, Reopenings, and
Expedited Access to Judicial Review
a. Part 423, Subpart M General Provisions (Sec. 423.562)
b. Part 423, Subpart U Title and Scope (Sec. 423.1968)
c. Medicare Initial Determinations, Redeterminations and Appeals
General Description (Sec. 405.904)
d. Parties to the Initial Determinations, Redeterminations,
Reconsiderations Proceedings on a Request for Hearing, and Council
Review (Sec. 405.906)
e. Medicaid State Agencies (Sec. 405.908)
f. Appointed Representatives (Sec. 405.910)
g. Actions That Are Not Initial Determinations (Sec. 405.926)
h. Notice of A Redetermination (Sec. 405.956)
i. Time Frame for Making a Reconsideration Following a
Contractor Redetermination, Withdrawal or Dismissal of a Request for
a Reconsideration, and Reconsideration (Sec. Sec. 405.970, 405.972,
and 405.974)
j. Notice of Reconsideration (Sec. 405.976)
k. Effect of a Reconsideration (Sec. 405.978)
l. Reopenings (Sec. Sec. 405.980, 405.982, 405.984, 423.1978,
423.1980, 423.1982, and 423.1984)
m. Expedited Access to Judicial Review (Sec. Sec. 405.990 and
423.1990)
3. ALJ Hearings
a. Hearing Before an ALJ and Decision by an ALJ and Attorney
Adjudicator: General Rule (Sec. Sec. 405.1000 and 423.2000)
b. Right to an ALJ Hearing (Sec. Sec. 405.1002 and 423.2002)
c. Right to a Review of QIC or IRE Notice of Dismissal
(Sec. Sec. 405.1004 and 423.2004)
d. Amount in Controversy Required for an ALJ Hearing (Sec. Sec.
405.1006 and 423.1970)
e. Parties to an ALJ Hearing (Sec. Sec. 405.1008 and 423.2008)
f. CMS and CMS Contractors as Participants or Parties in the
Adjudication Process (Sec. Sec. 405.1010, 405.1012, and 423.2010)
i. Section 405.1010: When CMS or Its Contractors May Participate
in the Proceedings on a Request for an ALJ Hearing
ii. Section 423.2010: When CMS, the IRE, or Part D Plan Sponsors
May Participate in the Proceedings on a Request for an ALJ Hearing
iii. Section 405.1012: When CMS or Its Contractors May Be a
Party to a Hearing
g. Request for an ALJ Hearing or Review of a QIC or an IRE
Dismissal (Sec. Sec. 405.1014, 423.1972 and 423.2014)
i. Requirements for a Request for Hearing or Review of a QIC or
an IRE Dismissal
ii. Requests for Hearing Involving Statistical Sampling and
Extrapolations
iii. Opportunity To Cure Defective Filings
iv. Where and When To File a Request for Hearing or Review of a
QIC or an IRE Dismissal
v. Sending Copies of a Request for Hearing and Other Evidence to
Other Parties to the Appeal
vi. Extending Time To File a Request for Hearing or Review of a
QIC or an IRE Dismissal
h. Time Frames for Deciding an Appeal of a QIC or an IRE
Reconsideration or an Escalated Request for a QIC Reconsideration,
and Request for Council Review When an ALJ Does Not Issue a Decision
Timely (Sec. Sec. 405.1016, 405.1104 and 423.2016)
i. Section 405.1016: Time Frames for Deciding an Appeal of a QIC
or an
[[Page 4975]]
Escalated Request for a QIC Reconsideration
ii. Section 405.1104: Request for Council Review When an ALJ
Does Not Issue a Decision Timely
iii. Section 423.2016: Time Frames for Deciding an Appeal of an
IRE Reconsideration
i. Submitting Evidence (Sec. Sec. 405.1018 and 423.2018)
j. Time and Place for a Hearing Before an ALJ (Sec. Sec.
405.1020 and 423.2020)
k. Notice of a Hearing Before an ALJ and Objections to the
Issues (Sec. Sec. 405.1022, 405.1024, 423.2022, and 423.2024)
l. Disqualification of the ALJ or Attorney Adjudicator
(Sec. Sec. 405.1026 and 423.2026)
m. Review of Evidence Submitted by the Parties (Sec. 405.1028)
n. ALJ Hearing Procedures (Sec. Sec. 405.1030 and 423.2030)
o. Issues Before an ALJ or Attorney Adjudicator (Sec. Sec.
405.1032, 405.1064 and 423.2032)
p. Requesting Information From the QIC or IRE, and Remanding an
Appeal (Sec. Sec. 405.1034, 405.1056, 405.1058, 423.2034, 423.2056,
and 423.2058)
q. Description of the ALJ Hearing Process and Discovery
(Sec. Sec. 405.1036, 405.1037, and 423.2036)
r. Deciding a Case Without a Hearing Before an ALJ (Sec. Sec.
405.1038 and 423.2038)
s. Prehearing and Posthearing Conferences (Sec. Sec. 405.1040
and 423.2040)
t. The Administrative Record (Sec. Sec. 405.1042 and 423.2042)
u. Consolidated Proceedings (Sec. Sec. 405.1044 and 423.2044)
v. Notice of Decision and Effect of an ALJ's or Attorney
Adjudicator's Decision (Sec. Sec. 405.1046, 405.1048, 423.2046, and
423.2048)
w. Removal of a Hearing Request From an ALJ to the Council
(Sec. Sec. 405.1050 and 423.2050)
x. Dismissal of a Request for Hearing or Request for Review and
Effect of a Dismissal of a Request for Hearing or Request for Review
(Sec. Sec. 405.1052, 405.1054, 423.2052 and 423.2054)
4. Applicability of Medicare Coverage Policies (Sec. Sec.
405.1060, 405.1062, 405.1063, 423.2062, and 423.2063)
5. Council Review and Judicial Review
a. Council Review: General (Sec. Sec. 405.1100, 423.1974 and
423.2100)
b. Request for Council Review When ALJ Issues Decision or
Dismissal (Sec. Sec. 405.1102 and 423.2102)
c. Where a Request for Review or Escalation May Be Filed
(Sec. Sec. 405.1106 and 423.2106)
d. Council Actions When Request for Review or Escalation Is
Filed (Sec. Sec. 405.1108 and 423.2108)
e. Council Reviews on Its Own Motion (Sec. Sec. 405.1110 and
423.2110)
f. Content of Request for Review (Sec. Sec. 405.1112 and
423.2112)
g. Dismissal of Request for Review (Sec. Sec. 405.1114 and
423.2114)
h. Effect of Dismissal of Request for Council Review or Request
for Hearing (Sec. Sec. 405.1116 and 423.2116)
i. Obtaining Evidence From the Council (Sec. Sec. 405.1118 and
423.2118)
j. What Evidence May Be Submitted to the Council (Sec. Sec.
405.1122 and 423.2122)
k. Case Remanded by the Council (Sec. Sec. 405.1126 and
423.2126)
l. Action of the Council (Sec. Sec. 405.1128 and 423.2128)
m. Request for Escalation to Federal Court (Sec. 405.1132)
n. Judicial Review (Sec. Sec. 405.1136, 423.1976, and 423.2136)
o. Case Remanded by a Federal Court (Sec. Sec. 405.1038 and
423.2138)
p. Council Review of ALJ decision in a Case Remanded by a
Federal District Court (Sec. Sec. 405.1140 and 423.2140)
C. Specific Provisions of Part 405, Subpart J Expedited
Reconsiderations
D. Specific Provisions of Part 422, Subpart M
1. General Provisions (Sec. 422.562).
2. Notice of Reconsidered Determination by the Independent
Entity (Sec. 422.594).
3. Request for an ALJ Hearing (Sec. 422.602).
4. Medicare Appeals Council (Council) Review (Sec. 422.608).
5. Judicial Review (Sec. 422.612)
6. Reopening and Revising Determinations and Decisions (Sec.
422.616)
7. How an MA Organization Must Effectuate Standard
Reconsideration Determinations and Decisions, and Expedited
Reconsidered Determinations (Sec. Sec. 422.618 and 422.619)
8. Requesting Immediate QIO Review of the Decision To Discharge
From the Inpatient Hospital and Fast-Track Appeals of Service
Terminations to Independent Review Entities (IREs) (Sec. Sec.
422.622 and 422.626).
E. Specific Provisions of Part 478, Subpart B
1. Applicability and Beneficiary's Right to a Hearing
(Sec. Sec. 478.14 and 478.40)
2. Submitting a Request for a Hearing (Sec. 478.42)
3. Determining the Amount in Controversy (Sec. 478.44)
4. Medicare Appeals Council and Judicial Review (Sec. 478.46)
5. Reopening and Revision of a Reconsidered Determination or a
Decision (Sec. 478.48)
F. Effective Date and Applicability of the Provisions of the
Final Rule
III. Comments Beyond the Scope of the Final Rule
IV. Provisions of the Final Rule
V. Collection of Information Requirements
VI. Regulatory Impact Statement
VII. Federal Analysis
I. Background
A. Overview of the Appeals Process
In accordance with provisions of sections 1155, 1852, 1860D-4,
1869, and 1876 of the Social Security Act (Act), and associated
implementing regulations, there are multiple administrative appeal
processes for Medicare fee-for-service (Part A and Part B) claim,
entitlement and certain premium initial determinations; MA (Part C) and
other competitive health plan organization determinations; and Part D
plan sponsor coverage determinations and certain premium
determinations. The first, and in many instances a second, level of
administrative appeal are administered by Medicare contractors, Part D
plan sponsors, MA organizations or Medicare plans, or by the SSA. For
example, under section 1869 of the Act, the Medicare claims appeal
process involves redeterminations conducted by the Medicare
Administrative Contractors (which are independent of the staff that
made the initial determination) followed by reconsiderations conducted
by Qualified Independent Contractors (QICs). However, all of the
appeals discussed in this final rule can be appealed to the ALJs at the
Office of Medicare Hearings and Appeals (OMHA) if the amount in
controversy requirement and other requirements are met after these
first and/or second levels of appeal.
OMHA, a staff division within the Office of the Secretary of HHS,
administers the nationwide ALJ hearing program for Medicare claim,
organization and coverage determination, and entitlement and certain
premium appeals. If the amount in controversy and other filing
requirements are met, a hearing before an ALJ is available following a
Quality Improvement Organization (QIO) reconsidered determination under
section 1155 of the Act; a Social Security Administration (SSA) or QIC
reconsideration, or a request for QIC reconsideration for which a
decision is not issued timely and a party requests escalation of the
matter under section 1869(b)(1)(A) and (d) of the Act (Part A and Part
B appeals); an Independent Review Entity (IRE) reconsideration or QIO
reconsidered determination under sections 1876(c)(5)(B) or 1852(g)(5)
of the Act (Part C and other managed health plan appeals); or an IRE
reconsideration under section 1860D-4(h) of the Act (Part D appeals).
In addition, under current regulations a review by an ALJ is available
following a dismissal of a request for reconsideration, if the amount
in controversy and other filing requirements are met.
OMHA provides Medicare beneficiaries and the providers and
suppliers that furnish items or services to Medicare beneficiaries, as
well as applicable plans, Medicare Advantage Organizations (MAOs), and
Medicaid State agencies with a fair and impartial forum to address
disagreements regarding: Medicare coverage and
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payment determinations made by Medicare contractors, MAOs, or Part D
plan sponsors; and determinations related to Medicare beneficiary
eligibility and entitlement, Part B late enrollment penalties, and
income related monthly adjustment amounts (IRMAAs), which apply to
Medicare Part B and Part D premiums, made by SSA. Further review of
OMHA ALJ decisions, except decisions affirming a dismissal of a request
for reconsideration, is available from the Medicare Appeals Council
(Council) within the DAB, a staff division within the Office of the
Secretary of HHS. Judicial review is then available for Council
decisions in Federal courts, if the amount in controversy and other
requirements are met.
OMHA ALJs began adjudicating appeals in July 2005, based on section
931 of the MMA, which required the transfer of responsibility for the
ALJ hearing level of the Medicare claim and entitlement appeals process
from SSA to HHS. New rules at 42 CFR part 405, subpart I and subpart J
were also established to implement statutory changes to the Medicare
fee-for-service (Part A and Part B) appeals process made by BIPA in
2000 and the MMA in 2003. Among other things, these new rules addressed
appeals of reconsiderations made by QICs, which were created by BIPA
for the Part A and Part B programs. These rules also apply to appeals
of SSA reconsiderations. The statutory changes made by BIPA included a
90-day adjudication time frame for ALJs to adjudicate appeals of QIC
reconsiderations beginning on the date that a request for an ALJ
hearing is timely filed. The new part 405, subpart I rules were
initially proposed in the November 15, 2002 Federal Register (67 FR
69312) (2002 Proposed Rule) to implement BIPA, and were subsequently
implemented in an interim final rule with comment period, which also
set forth new provisions to implement the MMA, in the March 8, 2005
Federal Register (70 FR 11420) (2005 Interim Final Rule). Correcting
amendments to the 2005 Interim Final Rule were published in the June
30, 2005 Federal Register (70 FR 37700) (2005 Correcting Amendment I)
and in the August 26, 2005 Federal Register (70 FR 50214) (2005
Correcting Amendment II), and the final rule was published in the
December 9, 2009 Federal Register (74 FR 65296) (2009 Final Rule).
Subsequent revisions to part 405, subpart I to implement the
Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act,
Pub. L. 112-242) were published in the February 27, 2015 Federal
Register (80 FR 10611) (SMART Act Final Rule).
In addition to the part 405, subpart I rules, OMHA applies the
rules at 42 CFR part 478, subpart B to individuals' appeals of QIO
reconsidered determinations; part 422, subpart M to appeals of IRE
reconsiderations or QIO reconsidered determinations under the MA (Part
C) and other competitive health plan programs; and part 423, subpart U
to appeals of IRE reconsiderations under the Medicare prescription drug
(Part D) program.
B. Recent Workload Challenges
In recent years, the Medicare appeals process has experienced an
unprecedented and sustained increase in the number of appeals. At OMHA,
for example, the number of requests for an ALJ hearing or review
increased 1,222 percent, from fiscal year (FY) 2009 through FY 2014. We
attribute the growth in appeals to: (1) The expanding Medicare
beneficiary population \1\ and utilization of services across that
population; (2) enhanced monitoring of payment accuracy in the Medicare
Part A and Part B (fee-for-service) programs; (3) growth in appeals
from State Medicaid agencies \2\ for beneficiaries dually enrolled in
both Medicare and Medicaid; and (4) national implementation of the
Medicare fee-for-service Recovery Audit program \3\ in 2009. The
increasing number of requests has strained OMHA's available resources
and resulted in delays for appellants to obtain hearings and decisions.
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\1\ Enrollment in fee-for-service Medicare and MA and other
competitive health plans increased from roughly 49 million
beneficiaries and enrollees in 2011 to 55.5 million in 2015, while
enrollment in Part D prescription drug plans and MA prescription
drug plans increased from roughly 29.5 million in 2011 to 39.5
million in 2015 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Dashboard/Medicare-Enrollment/Enrollment%20Dashboard.html).
\2\ In FY 2009, OMHA received 230 requests for hearing filed by
Medicaid State agencies, compared to nearly 25,000 in FY 2014.
\3\ As of April 25, 2016, Recovery Audit-related appeals
accounted for 31 percent of the pending appeals at OMHA. Based on
trends in receipts at this time, we estimate that Recovery Audit
related appeals currently constitute 20 percent of incoming appeals.
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Despite significant gains in OMHA ALJ productivity (in FY 2014,
each OMHA ALJ issued, on average, a record 1,048 decisions and an
additional 456 dismissals, compared to an average of 471 decisions and
80 dismissals per ALJ in 2009), and CMS and OMHA initiatives to address
the increasing number of appeals,\4\ the number of requests for an ALJ
hearing and requests for reviews of QIC and IRE dismissals continue to
exceed OMHA's capacity to adjudicate the requests. As of September 30,
2016, OMHA had over 650,000 pending appeals, while OMHA's adjudication
capacity--based on a maximum sustainable capacity of 1,000 appeals per
ALJ team--was approximately 92,000 appeals per year.
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\4\ CMS and OMHA initiatives include OMHA's Settlement
Conference Facilitation and Statistical Sampling Initiative; and
CMS's QIC formal telephone discussion demonstration and increased
use of prior authorization models for areas with high payment error
rates.
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HHS has a three-prong approach to addressing the increasing number
of appeals and the current backlog of claims waiting to be adjudicated
at OMHA: (1) Request new resources to invest at all levels of appeal to
increase adjudication capacity and implement new strategies to
alleviate the current backlog; (2) take administrative actions to
reduce the number of pending appeals and implement new strategies to
alleviate the current backlog ; and (3) propose legislative reforms
that provide additional funding and new authorities to address the
volume of appeals. In this final rule, HHS is pursuing the three-prong
approach by implementing rules that expand the pool of available OMHA
adjudicators and improve the efficiency of the appeals process by
streamlining the processes so less time is spent by adjudicators and
parties on repetitive issues and procedural matters. In particular, we
believe the proposals we are finalizing in section II.A.2 below to
provide authority for attorneys to issue decisions when a decision can
be issued without an ALJ hearing, dismissals when an appellant
withdraws his or her request for an ALJ hearing, remands as provided in
Sec. Sec. 405.1056 and 423.2056 as finalized in this rule or at the
direction of the Council, and reviews of QIC and IRE dismissals, could
redirect approximately 24,500 appeals per year to attorney
adjudicators, who would be able to process these appeals at a lower
cost than would be required if only ALJs were used to address the same
workload (see section VI below for more details regarding our
estimate).
II. Summary of the Proposed Provisions and Responses to Comments on the
July 5, 2016, Proposed Rule
In the July 5, 2016 Federal Register, we published a proposed rule
that would revise the procedures that the Department of Health and
Human Services would follow at the ALJ level for appeals of payment and
coverage determinations for items and services furnished to Medicare
beneficiaries, enrollees in MA and other Medicare competitive health
plans, and enrollees
[[Page 4977]]
in Medicare prescription drug plans, as well as appeals of Medicare
beneficiary enrollment and entitlement determinations, and certain
Medicare premium appeals. 81 FR 43790. In addition, we proposed to
revise procedures that the Department of Health and Human Services
would follow at the CMS and the Council levels of appeal for certain
matters affecting the ALJ level. Discussed below are the comments to
the July 5, 2016, proposed rule. We include a summary and explanation
of each proposed 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 68 timely comments on the proposed rule from
individuals, organizations representing providers and suppliers,
beneficiary advocacy groups, law offices, health plans, CMS
contractors, and others. Summaries of the public comments and our
responses to those comments are set forth below.
A. General Provisions of the Proposed Regulations
1. Precedential Final Decisions of the Secretary
Council decisions are binding on the parties to that particular
appeal and are the final decisions of the Secretary from which judicial
review may be sought under section 205(g) of the Act, in accordance
with current Sec. Sec. 405.1130, 422.612(b), 423.2130, and 478.46(b).
As explained in the 2009 Final Rule (74 FR 65307 through 65308),
``binding'' indicates the parties are obligated to abide by the
adjudicator's action or decision unless further recourse is available
and a party exercises that right. ``Final'' indicates that no further
administrative review of the decision is available and judicial review
may be immediately sought.
In 1999, the HHS Office of Inspector General (OIG) issued a report
entitled ``Medicare Administrative Appeals--ALJ Hearing Process'' (OEI-
04-97-00160) (Sept. 1999) (http://oig.hhs.gov/oei/reports/oei-04-97-00160.pdf). In that report, the OIG noted that the DAB respondents
voiced strong interest in having precedent setting authority in the
Medicare administrative appeals process ``to clean-up inconsistencies
in the appeals process.'' The OIG recommended that such a case
precedent system be established.
Pursuant to section 931(a) of the MMA, HHS and SSA developed a plan
for the transition of the ALJ hearing function for some types of
Medicare appeals from SSA to HHS, and addressed the feasibility of
precedential authority of DAB decisions. See Report to Congress: Plan
for the Transfer of Responsibility for Medicare Appeals (Mar. 2004)
(https://www.ssa.gov/legislation/medicare/medicare_appeal_transfer.pdf). HHS determined that at that time, it was
not feasible or appropriate to confer precedential authority on Council
decisions, but indicated that it would reevaluate the merits of
granting precedential authority to some or all Council decisions after
the BIPA and MMA changes to the appeals process were fully implemented.
BIPA and MMA changes to the appeals process have now been fully
implemented and we stated in the proposed rule that we believed it was
appropriate to propose that select Council decisions be made
precedential to increase consistency in decisions at all levels of
appeal for appellants. We proposed in proposed Sec. 401.109 to
introduce precedential authority to the Medicare claim and entitlement
appeals process under part 405, subpart I for Medicare fee-for-service
(Part A and Part B) appeals; part 422, subpart M for appeals of
organization determinations issued by MA and other competitive health
plans (Part C appeals); part 423, subparts M and U for appeals of Part
D prescription drug coverage determinations; and part 478, subpart B
for appeals of certain QIO determinations. 81 FR 43790, 43792-43794. We
proposed in Sec. 401.109(a) that the Chair of the DAB would have
authority to designate a final decision of the Secretary issued by the
Council as precedential. In the proposed rule we stated that we
believed this would provide appellants with a consistent body of final
decisions of the Secretary upon which they could determine whether to
seek appeals. We also stated it would assist appeal adjudicators at all
levels of appeal by providing clear direction on repetitive legal and
policy questions, and in limited circumstances, factual questions.
Further, we stated that in the limited circumstances in which a
precedential decision would apply to a factual question, the decision
would be binding where the relevant facts are the same and evidence is
presented that the underlying factual circumstances have not changed
since the Council issued the precedential final decision.
We stated in the proposed rule that it is appropriate for the DAB
Chair to have the role of designating select Council decisions as
precedential. The DAB Chair leads the DAB, which was established in
1973. The DAB has wide jurisdiction over disputes arising under many
HHS programs and components, and has issued precedential decisions for
many years within several of its areas of jurisdiction. (Examples of
DAB jurisdiction may be found at 45 CFR part 16, 42 CFR part 498, 42
CFR part 426, and on the DAB's Web site at www.hhs.gov/dab.) The
Council has been housed within the DAB as an organization since 1995
and is itself also under the leadership of the DAB Chair. Thus, we
stated that the DAB Chair brings both expertise in the Medicare claims
appeals over which the Council has jurisdiction and experience from the
DAB's precedential cases to carrying out the role of designating
Council decisions to be precedential. Moreover, we stated in the
proposed rule that having the designation performed by the DAB Chair
respects the continued independence of the Council as an adjudicative
body by allowing the DAB to determine the effect of its own decisions.
We also stated that limiting binding precedential effect to selected
decisions provides the necessary discretion to designate as
precedential those Council decisions in which a significant legal or
factual issue was fully developed on the record and thoroughly
analyzed. We further stated that designation might not be appropriate
where an issue was mentioned in the decision as relevant but was not
outcome determinative, and therefore may not have been as fully
developed as is necessary for precedential decisions or where the
issues addressed are not likely to have broad application beyond the
particular case.
To help ensure appellants and other stakeholders are aware of
Council decisions that are designated as precedential, we proposed in
Sec. 401.109(b) that notice of precedential decisions would be
published in the Federal Register, and the decisions themselves would
be made available to the public, with necessary precautions taken to
remove personally identifiable information that cannot be disclosed
without an individual's consent. We stated that designated precedents
would be posted on an accessible Web site maintained by HHS, and that
decisions of the Council would bind all lower-level decision-makers
from the date that the decisions are posted on the HHS Web site.
We proposed in Sec. 401.109(c) to make these precedential
decisions binding on all CMS components, on all HHS components that
adjudicate matters under the jurisdiction of CMS, and on SSA to the
extent that SSA components adjudicate matters under the jurisdiction of
CMS, in the same manner
[[Page 4978]]
as CMS Rulings under current Sec. 401.108. That means the precedential
decision would be binding on CMS and its contractors in making initial
determinations, redeterminations, and reconsiderations, under part 405
subpart I, or equivalent determinations under parts 422 subpart M, 423
subparts M and U, and 478 subpart B; OMHA ALJs and, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2
below), attorney adjudicators; the Council in its future decisions; and
SSA to the extent that it adjudicates matters under the jurisdiction of
CMS. Individual determinations and decisions by CMS contractors, OMHA
ALJs, and the Council currently are not precedential and have no
binding effect on future initial determinations (and equivalent
determinations) or claims appeals. We did not propose to change the
non-precedential status and non-binding effect on future initial
determinations (and equivalent determinations) or claim appeals of any
determinations or decisions except as to Council decisions designated
as precedential by the DAB Chair.
We proposed to specify the scope of the precedential effect of a
Council decision designated by the DAB Chair in Sec. 401.109(d).
Specifically, we proposed that the Council's legal analysis and
interpretation of an authority or provision that is binding (see, for
example Sec. Sec. 405.1060 and 405.1063) or owed substantial deference
(see, for example Sec. 405.1062) would be binding in future
determinations and appeals in which the same authority or provision is
applied and is still in effect. However, we proposed that if CMS
revises the authority or provision that is the subject of a
precedential decision, the Council's legal analysis and interpretation
would not be binding on claims or other disputes to which the revised
authority or provision applies. For example, if a Council decision
designated as precedential by the DAB Chair interprets a CMS manual
instruction, that interpretation would be binding on pending and future
appeals and initial determinations to which that manual instruction
applies. However, CMS would be free to follow its normal internal
process to revise the manual instruction at issue. Once the revised
instruction is issued through the CMS process, the revised instruction
would apply to making initial determinations on all claims thereafter.
We stated that this would help ensure that CMS continues to have the
ultimate authority to administer the Medicare program and promulgate
regulations, and issue sub-regulatory guidance and policies on Medicare
coverage and payment.
If the decision is designated as precedential by the DAB Chair, we
proposed in Sec. 401.109(d) that the Council's findings of fact would
be binding in future determinations and appeals that involve the same
parties and evidence. For example, we stated in the proposed rule that
if a precedential Council decision made findings of fact related to the
issue of whether an item qualified as durable medical equipment (DME)
and the same issue was in dispute in another appeal filed by the same
party, and that party submitted the same evidence to support its
assertion, the findings of fact in the precedential Council decision
would be binding. However, we noted that many claim appeals turn on
evidence of a beneficiary's condition or care at the time discrete
items or services are furnished, and that therefore Sec. 401.109, as
proposed, is unlikely to apply to findings of fact in these appeals.
In addition, consistent with Sec. 401.109, we proposed at Sec.
405.968(b)(1) to add precedential decisions designated by the Chair of
the Departmental Appeals Board (DAB) as an authority that is binding on
the QIC. We also proposed at Sec. Sec. 405.1063 and 423.2063, which
currently cover the applicability of laws, regulations, and CMS
Rulings, to add new paragraph (c) to the sections to provide that
precedential decisions designated by the DAB Chair in accordance with
Sec. 401.109 are binding on all CMS components, all HHS components
that adjudicate matters under the jurisdiction of CMS, and (in Sec.
405.1063(c)) on the Social Security Administration to the extent that
components of the Social Security Administration adjudicate matters
under the jurisdiction of CMS. Finally, we proposed to add precedential
decisions to the titles of Sec. Sec. 405.1063 and 423.2063 to reflect
the additional topic covered by proposed paragraph (c).
We received forty-eight comments on this proposal. In two
instances, the same commenter submitted the same comment twice, so
there were forty-six distinct comments. Among those offering comments
were providers and suppliers and organizations representing them,
beneficiary advocacy groups, health plan providers and administrators,
and individuals. Overall, the majority of commenters supported the
proposal to designate certain Council cases as precedent, but some of
them made requests for clarification or modification, which we address
below. Twelve commenters either opposed the proposal or suggested that
it be tabled for further review. Some commenters did not take a clear
position in favor of or against adoption of the proposal but offered
various comments which we address below. Provided below are summaries
of the specific comments received and responses to these comments:
Comment: Numerous commenters raised concerns regarding the lack of
specific standards or criteria for selecting precedential decisions.
One commenter suggested that the Council should adopt the standards
currently used by federal circuit courts for designating precedential
decisions. Two commenters requested clarity on the precedential effect
of factual findings. One further opined that factual statements should
never be given precedential effect because the Council is not a fact
finding institution and because facts change over time. One commenter
suggested that only decisions fully favorable to beneficiaries should
be designated as precedential. Two commenters suggested that all
Council decisions involving legal analysis or interpretations of
authority should have precedential force, and others suggested that in
addition to granting precedential authority to the Council, the rule
should require MACs and QICs to treat prior ALJ decisions as
precedential.
Response: We appreciate the commenters' concern about additional
clarity as to how decisions will be selected to have precedential
effect. As explained above, the purpose of Sec. 401.109 is to increase
predictability and consistency in decision-making throughout the
appeals process, and to provide clear direction on repetitive legal and
policy questions. We believe that designating certain decisions as
precedential, and therefore binding on all lower levels of review, will
help ensure that appellants and other stakeholders are provided a more
predictable outcome at all stages of review. In addition, selecting
certain decisions as precedential helps to ensure that similar cases
receive consistent results.
We understand commenters' concern that stakeholders understand the
considerations that will guide designation of precedential Council
decisions. However, given that the variety of issues that may arise in
the interpretation and application of Medicare law and policy is broad
and changes rapidly, it is not practicable to articulate a
comprehensive set of criteria that the DAB Chair must follow to
determine which decisions are appropriate for such designation. We can,
however, identify some factors that the DAB Chair may consider when
[[Page 4979]]
determining whether to designate a decision as precedential. The
primary goal is to identify Council decisions involving issues of wide
applicability where designation as precedent is likely to materially
contribute to improving predictability and consistency in decisions
prospectively. For example, decisions that address recurring legal
issues, or interpret or clarify an existing law, CMS rule or policy,
may be appropriately designated as precedential. In addition, the DAB
Chair may also consider whether a decision has general application to a
broad number of cases. Another factor the DAB Chair may consider is
whether a decision analyzes or interprets a legal issue of general
public interest. Before designating a decision as precedential, the DAB
Chair may also take into consideration the state of the record
developed at the lower levels of review. Records where the facts are
fully developed and analyzed, or where legal arguments have been fully
raised and argued are better candidates for precedential designation.
In response to the commenter's suggestion that the Council should
adopt standards currently used by federal circuit courts for
designating precedential decisions, we do not believe federal court
standards provide the best model for criteria transferable to this
internal agency administrative adjudication process. As a threshold
matter, each federal circuit court establishes its own standards for
designating precedent, so there is no uniform circuit court rule the
Council can simply adopt. Moreover, there are substantial differences
between the Medicare appeals system and the federal court system, and
many factors considered by federal circuit courts in designating
precedential decisions have no application in the Medicare appeals
context. For example, many federal circuit courts will designate a
decision as precedential if it establishes a rule of law within the
circuit or creates a conflict with another circuit. Such criteria would
not be applicable or helpful for the Council to consider because the
Medicare appeals process is not divided into circuits. It is worth
noting, however, that the factors identified in the preceding paragraph
are similar to some of the factors federal circuit courts typically
consider in designating precedent.
In regards to the effect of factual findings in precedential
decisions, the Council's legal analysis and interpretation in a
decision is applied in a specific factual context, as is also true with
court decisions. That analysis and interpretation in a decision
designated as precedential must be applied by decision-makers at lower
levels in future cases in which the same authority or provision applies
and is still in effect. If the same authority or provision would not
apply in a future case because the relevant facts are not the same, the
precedential decision also would not be applicable in the future case.
Moreover, if CMS issues new regulatory provisions or revised policies,
a precedential decision analyzing and interpreting the prior
regulations or policies may not apply on review of a coverage decision
made under the new regulation or policy if the relevant content of the
new regulation or policy is different from that interpreted in the
precedential decision.
We understand the commenters may be concerned that proposed Sec.
401.109(d)(2) authorizes the establishment of generally applicable
``factual precedent.'' That proposed section, however, provides that
factual findings in precedential decisions are binding only in future
determinations and appeals involving the same parties, facts, and
circumstances. The purpose of this provision is to discourage parties
to a precedential decision from subsequently filing repetitive appeals
involving the same facts in an effort to get a ``second bite at the
apple.'' It does not mean factual findings in a precedential decision
would be binding in future claims involving different facts, parties,
or circumstances.
We also disagree with the assertion that the Council is not a fact-
finding institution. The Council's review is de novo and based on
review of the entire administrative record as compiled through the OMHA
level of appeal, including review of the hearing if one was conducted,
as well as all additional admissible evidence and briefings submitted
to the Council. Accordingly, Council decisions properly include factual
findings and, as stated above, adjudicators will take into
consideration relevant factual changes when determining whether a
precedential decision should apply. We disagree with the suggestion
that the DAB Chair should limit the pool of precedential decisions to
only those that are favorable to the beneficiary. We do not believe the
DAB should take into consideration to which party the decision was
favorable when designating a decision as precedential. To do so would
insert bias into the selection process, which goes against the DAB's
mission to provide impartial and independent review. We also disagree
with the suggestion that all Council decisions involving legal analysis
or interpretations of authority should have precedential effect. We
understand the commenter's suggestion in this regard is to ensure
consistency in the types of decisions that are designated as
precedential. However, many Council decisions turn on the resolution of
specific disputes of fact or on issues too unusual to have
applicability or usefulness in other cases. As such, in those
instances, the legal analyses or interpretations will not have
widespread applicability or usefulness. We also decline to require MACs
and QICs to treat prior ALJ decisions as precedential. Although there
are limited circumstances where an ALJ decision may become a final
decision, it is the role of the Council to issue final decisions on
behalf of the Secretary. Those decisions of the Council designated as
precedent will be binding on cases to which they are applicable at all
lower levels of the agency adjudication process nationwide. We do not
believe it would be appropriate for the decision of a single ALJ to
establish precedent affecting parties nationwide without having been
subject to review by the Council. Moreover, because ALJs would not be
bound by each other's decisions, the decision of a MAC or QIC issued in
compliance with one ALJ's decision might be reversed by a different
ALJ. Therefore, making individual ALJ decisions precedential and
binding on MACs and QICs would not necessarily serve the goal of
increasing predictability and consistency.
Based on comments received and for the reasons we set forth, we are
adding the following language to the final regulation at Sec.
401.109(a) to include general criteria the DAB Chair may consider when
selecting a Council decision as precedential, ``In determining which
decisions should be designated as precedential, the DAB Chair may take
into consideration decisions that address, resolve, or clarify
recurring legal issues, rules or policies, or that may have broad
application or impact, or involve issues of public interest.''
Comment: Several commenters questioned the provision granting the
DAB Chair sole authority to designate decisions as precedential, or
suggested that the designation process should include input from other
sources, including providers, contractors, stakeholders, CMS, and OMHA.
One commenter expressed concern that the DAB Chair as an agency
employee may be biased against appellants. Other commenters felt the
rule should provide a mechanism for appellants, advocates, and
stakeholders to request that specific decisions be deemed precedential.
In a
[[Page 4980]]
similar vein, some commenters felt that the rule should include
procedures for challenging and overturning precedent. Some commenters
suggested that these procedures should include granting appellants the
right to seek judicial review after a decision is deemed precedential.
A few commenters expressed concern that the rule contains no time
frames for designating and applying precedential decisions.
Response: We disagree that it is inappropriate for the DAB Chair to
have the sole authority to designate certain Council decisions as
precedential. The Council is an adjudicatory and deliberative body
comprised of the DAB Chair, Administrative Appeals Judges and Appeals
Officers and is independent of the agency's operating divisions. To
involve others, whether components of the agency or outside parties, in
the designation process would undermine the independence of the
Council. Any influence on the Council's legal interpretation or
analysis outside the record and arguments developed within the scope of
a case is inappropriate. Moreover, the DAB Chair, as a member of the
Council, has the expertise and experience to determine which decisions
should be designated as precedential because they will provide improved
predictability and consistency across future cases. We also note here
the designation of a decision as precedential does not create a new law
or policy. By designating decisions as precedential, the DAB Chair is
merely providing for consistent legal interpretation and analysis of
CMS's existing laws, rule and policies. The contention that the DAB
Chair as an ``agency employee'' may create a body of law that is more
favorable to HHS is unsupported. The mission of the DAB is to provide
impartial, independent review of disputed decisions in a wide range of
HHS programs under more than 60 statutory provisions. The DAB Chair
will continue to advance that mission when designating precedential
Council decisions.
To the extent that appellants or CMS or its contractors believe
that a case may result in a decision that should be considered
precedential, then the parties are free to argue so in their appeal
requests or own motion referrals. In addition, the Council routinely
permits parties to file briefs and other written statements pursuant to
42 CFR 405.1120, which constitutes an appropriate mechanism by which
parties could argue the potential precedential status of a decision.
Filing a brief in a case would also aid in the fuller development and
analysis of legal issues, which may make the resulting decision a
better candidate for precedential designation.
The regulations provide recourse to those appellants who do not
agree with a Council's decision--judicial review. Appellants who
disagree with the Council's legal interpretation or analysis in a
decision may appeal the decision to federal district court in
accordance with Sec. 405.1136, regardless of whether the decision is
designated as precedential. CMS also has recourse if it disagrees with
a precedential decision. If CMS disagrees with the Council's legal
interpretation and analysis of CMS's policy or rule, then CMS may
change the policy or rule, or issue a later clarification or ruling.
Given these existing mechanisms by which parties may challenge
decisions on the merits or by which CMS may prospectively change
policies, we do not believe it is necessary to include appeal rights or
other procedures specific to challenging the designation of particular
decisions as precedential.
We also decline to specify a timeframe in which the DAB Chair must
designate a decision as precedential because resource and procedural
constraints may limit how quickly the designation process may be
completed. We do anticipate, however, that the DAB Chair will generally
make the designation within a reasonable amount of time after the
issuance of the decision, though as noted below, the DAB Chair may
choose to wait to designate certain decisions as precedent until the
time to file a request for judicial review expires. We also expect
publication of the decision in the Federal Register to be done around
the same time as a precedential decision is identified on the HHS Web
site in order to provide public notice.
Comment: We received several comments requesting clarification on
the effects of Council decisions designated as precedential. Two
commenters sought clarification as to how findings made in precedential
decisions should be used in the context of Medicare Part C and D
appeals, and asked whether MAOs and Part D plan sponsors will be held
accountable to these findings from an oversight perspective. One
commenter sought clarification as to whether the Council will designate
as precedential decisions relating to pre-service and copayment issues.
Other commenters requested clarification on the effect of federal
district court decisions that reverse Council decisions designated as
precedential. One commenter further opined that because of the
possibility of precedential decisions being overturned on judicial
review, it is inappropriate to make Council decisions precedential. A
few commenters also suggested that the rule should include procedures
for reversing claim denials resulting from subsequently overturned
precedent. One commenter requested clarification as to whether a party
whose appeal is denied based on a precedential decision must proceed
through the full appeals process prior to seeking judicial review of
the denial.
Response: We understand the desire for clarification on the effects
of precedential decisions. To the extent the commenters are seeking
clarification as to whether Part C and D plans will be required to
determine the applicability of precedential decisions when adjudicating
future cases, we clarify that Sec. 401.109, as finalized, applies to
all Medicare parts. As previously stated, the legal analysis and
interpretation of a Medicare authority or provision in a decision
designated as precedential must be applied by decision-makers at lower
levels in future cases in which the same authority or provision applies
and is still in effect. If the commenters seek clarification on whether
Part C and D plans will be subject to additional oversight by CMS
related to the application of precedential decisions, after the rule is
finalized CMS will evaluate the extent to which the application of
precedential decisions will require modification to existing plan
oversight processes. In regards to whether Council decisions related to
pre-service and copayment issues will be designated as precedential, we
have outlined the factors the DAB Chair may consider when designating a
precedential decision in the final regulation at Sec. 401.109(a). With
regard to the effect of a federal court decision that reverses a
particular Council decision designated as precedential, the individual
case would no longer be binding on the parties and would no longer
serve as precedent. In order to ensure that this situation rarely
arises, however, the DAB Chair may choose to wait to designate certain
decisions as precedent until the time for appeal expires or until a
federal court renders a final, unreviewable, decision on judicial
review. Although we recognize the possibility that a Council decision
designated as precedential may later be reversed, we do not agree that
it is therefore inappropriate to designate certain decisions as
precedential. The proposed structure is similar to the federal court
system, where a federal circuit court's decision may be given
precedential effect even though it ultimately may be reversed by the
United States Supreme Court.
[[Page 4981]]
We also recognize the possibility that an appellant may seek
judicial review of a later case applying the precedential decision. If
a federal court reverses a later case applying a precedential Council
decision, then the effect of the court's ruling on the original
precedential decision will depend on many factors, including the
court's basis for reversal, whether the court remands to the Council,
whether the court's decision itself is non-precedential or non-
published, and whether other federal courts have issued conflicting
decisions. For example, a finding by the court that the precedent was
misapplied to the later case might have a different impact than a
finding that the rationale underlying the precedent was erroneous. Due
to the many different possibilities, we do not believe we can address
in advance the possible effects of federal court decisions on later
cases applying precedential Council decisions.
For the same reasons, we also do not find it appropriate to create
new procedures for reversing claim denials resulting from subsequently
overturned precedent. We do note, however, that the existing appeals
process permits some of the relief sought. If a party believes that a
denial is based on overturned precedent, then it is free to appeal the
denial and make that argument before the adjudicator.
If a party believes that its claim has been inappropriately denied
because of the application of a precedential decision, the party must
still exhaust the administrative appeals process as statutorily
required under sections 1869 and 205 of the Act. We are without
authority in this rulemaking to waive statutory requirements.
Comment: Some commenters expressed concerns that the proposal
undermines ALJ independence and one commenter expressed concern that
granting precedential authority to the Council will impose greater
limits on the scope of ALJ reviews than currently exist.
Response: We disagree that the proposed rule impedes ALJ
independence. ALJs, as well as the Council, are required to apply the
laws and regulations pertaining to the Medicare and Medicaid programs
as well as CMS rulings published under the authority of the CMS
Administrator, regardless of whether a decision is designated as
precedential (see Sec. 405.1063). Council decisions do not create new
laws or policies, but instead interpret CMS's existing laws,
regulations and rulings and determine how they apply to specified
circumstances. An ALJ remains free to determine whether and how the
relevant authority as interpreted by the Council applies in the context
of a specific case.
Comment: Many commenters voiced general support for the proposal,
but indicated contractors, providers, and suppliers need to be
adequately trained and educated regarding the proper application of
precedential decisions. A few commenters suggested that MACs and QICs
should be provided with summaries of each precedential decision
explaining how the decision may be applied to future claims. A few
commenters sought clarification as to whether precedential decisions
will be treated as supplemental to CMS manuals and guidelines. A few
commenters also requested that all OMHA and Council decisions be made
publicly available, even if non-precedential. One commenter suggested
that precedential decisions should be posted on the Council's Web site
and should only apply to claims decided after the posting date.
Response: We thank the commenters for their support. As we stated
in the proposed rule, in addition to publishing decisions designated as
precedential in the Federal Register, precedential decisions will be
posted on an accessible HHS Web site and a precedential decision would
be binding from the date posted. As regards the request that all OMHA
and Council decisions be made publicly available (even if not
precedential), we note that implementing this suggestion to publish the
high volume of decisions issued at both the OMHA and Council levels
would require extensive additional resources.
We agree that it is important for CMS, its contractors, providers,
beneficiaries and other stakeholders to be educated on the existence of
precedential decisions and their effects on pending appeals. In order
to promote consistency, CMS, OMHA and the Council have participated in
joint training sessions for the past several years. We anticipate
including training sessions on precedential decisions as an effective
means of educating all levels of adjudicators. In addition, education
sessions may also be appropriate during forums where the public
participates, such as the OMHA Appellant Forum. We find it inadvisable,
however, to require the Council to provide to MACs and QICs summaries
of each precedential decision discussing the precedential effect of a
decision and how it should be applied to future cases. The precedent
arises from the Council decision itself, and creating separate
summaries risks possible ambiguity or misunderstanding. While lower
levels of review are bound by a legal interpretation or analysis, or
certain factual findings, stated in a Council decision that has been
designated as precedential, it is outside the Council's jurisdiction to
instruct the review of lower-level adjudicators in cases not before the
Council.
As we have noted, Council precedents do not create new law or
policy and therefore do not ``supplement'' manuals or guidelines but
may analyze, interpret, and apply them.
Comment: One commenter felt the proposal will not effectively
reduce the backlog because it will take a significant amount of time to
establish a meaningful body of precedential decisions.
Response: We acknowledge that it will take time to establish a body
of precedential decisions addressing enough issues to meaningfully
impact the backlog. Nevertheless, we believe that establishing
precedential decisions will allow for more predictable and consistent
outcomes at all levels of administrative review. Moreover, we
anticipate that designating certain Council decisions as precedential
will help parties better determine the likelihood of success on appeal
and assist parties in making decisions regarding whether to pursue
administrative appeal of their cases.
After review and consideration of the comments received, and for
the reasons discussed above and in the proposed rule, we are finalizing
the changes to Sec. Sec. 405.968, 405.1063, and 423.2063 as proposed
without modification, and are finalizing Sec. 401.109 with the
following modification. As discussed above, we are adding the following
language to Sec. 401.109(a) to include the general factors the DAB
Chair may consider when selecting a Council decision as precedential:
``In determining which decisions should be designated as precedential,
the DAB Chair may take into consideration decisions that address,
resolve, or clarify recurring legal issues, rules or policies, or that
may have broad application or impact, or involve issues of public
interest.''
2. Attorney Adjudicators
As described below, we proposed changes to provide authority for
attorney adjudicators to issue decisions when a decision can be issued
without an ALJ conducting a hearing under the regulations, to dismiss
appeals when an appellant withdraws his or her request for an ALJ
hearing, to remand appeals as provided in Sec. Sec. 405.1056 and
423.2056 or at the direction of the Council, and to conduct reviews of
QIC
[[Page 4982]]
and IRE dismissals. 81 FR 43790, 43794-43795. Sections 1155,
1852(g)(5), 1860D-4(h), 1869(b)(1)(A), and 1876(c)(5)(B) of the Act
provide a right to a hearing to the same extent as provided in section
205(b) by the HHS Secretary for certain appealable decisions by
Medicare contractors or SSA, when the amount in controversy and other
filing requirements are met. Hearings under these statutory provisions
are conducted by OMHA ALJs with delegated authority from the HHS
Secretary, in accordance with these sections and the APA.
Under current Sec. Sec. 405.1038 and 423.2038, OMHA ALJs are also
responsible for a portion of the appeals workload that does not require
a hearing because a request for an ALJ hearing may also be addressed
without conducting a hearing. For example, under Sec. Sec. 405.1038
and 423.2038, if the evidence in the hearing record supports a finding
in favor of the appellant(s) on every issue, or if all parties agree in
writing that they do not wish to appear before the ALJ at a hearing,
the ALJ may issue a decision on the record without holding a hearing.
Under current Sec. Sec. 405.1052(a)(1) and 423.2052(a)(1), OMHA ALJs
must also address a large number of requests to withdraw requests for
ALJ hearings, which appellants often file pursuant to litigation
settlements, law enforcement actions, and administrative agreements in
which they agree to withdraw appeals and not seek further appeals of
resolved claims. In addition, pursuant to Sec. Sec. 405.1004 and
423.2004, OMHA ALJs review whether a QIC or IRE dismissal was in error.
Under these sections, the ALJ reviews the dismissal, but no hearing is
required. In FY 2015, OMHA ALJs addressed approximately 370 requests to
review whether a QIC or IRE dismissal was in error. Also adding to the
ALJs' workload are remands to Medicare contractors for information that
can only be provided by CMS or its contractors under current Sec. Sec.
405.1034(a) and 423.2034(a), and for further case development or
information at the direction of the Council. Staff may identify the
basis for these remands before an appeal is assigned to an ALJ and a
remand order is prepared, but an ALJ must review the appeal and issue
the remand order, taking the ALJ's time and attention away from
hearings and making decisions on the merits of appeals.
Under section 1869(d) of the Act, an ALJ must conduct and conclude
a hearing on a decision of a QIC under subsection (c). Subsection (c)
of section 1869 of the Act involves the conduct of reconsiderations by
QICs. We stated in the proposed rule that we believe the statute does
not require the action to be taken by an ALJ in cases where there is no
QIC reconsideration (for example, where the QIC has issued a
dismissal), or in cases of a remand or a withdrawal of a request for an
ALJ hearing, and therefore the findings of fact and conclusions of law
need not be rendered. As we stated in the proposed rule, ALJ hearings
are ideally suited to obtain testimony and other evidence, and hear
arguments related to the merits of a claim or other determination on
appeal. ALJs are highly qualified to conduct those hearings and make
findings of fact and conclusions of law to render a decision in the
more complex records presented with a mix of documentary and
testimonial evidence. However, we stated in the proposed rule that
well-trained attorneys can perform a review of the administrative
record and more efficiently draft the appropriate order for certain
actions, such as issuing dismissals based on an appellant's withdrawal
of a request for an ALJ hearing, remanding appeals for information or
at the direction of the Council, and conducting reviews of QIC and IRE
dismissals.
In addition, current Sec. Sec. 405.1038 and 423.2038 provide
mechanisms for deciding cases without an oral hearing, based on the
written record. Cases may be decided without an oral hearing when the
record supports a finding in favor of the appellant(s) on every issue;
all of the parties have waived the oral hearing in writing; or the
appellant lives outside of the United States and did not inform the ALJ
that he or she wishes to appear, and there are no other parties who
wish to appear. We stated in the proposed rule that, in these
circumstances, the need for an experienced adjudicator knowledgeable in
Medicare coverage and payment law continues, and well-trained attorneys
can review the record, identify the issues, and make the necessary
findings of fact and conclusions of law when the regulations do not
require a hearing to issue a decision in the appealed matter.
To enable OMHA to manage requests for ALJ hearings and requests for
reviews of QIC and IRE dismissals in a more timely manner and increase
service to appellants, while preserving access to a hearing before an
ALJ in accordance with the statutes, we proposed to revise rules
throughout part 405, subparts I and J; part 422, subpart M; part 423,
subparts M and U; and part 478, subpart B, to provide authority that
would allow attorney adjudicators to issue decisions when a decision
can be issued without an ALJ conducting a hearing under the
regulations, to dismiss appeals when an appellant withdraws his or her
request for an ALJ hearing, and to remand appeals for information that
can only be provided by CMS or its contractors or at the direction of
the Council, as well as to conduct reviews of QIC and IRE dismissals.
We also proposed to revise the rules so that decisions and dismissals
issued by attorney adjudicators may be reopened and/or appealed in the
same manner as equivalent decisions and dismissals issued by ALJs. As
we stated in the proposed rule, allowing attorney adjudicators to issue
decisions, dismissals, and remands as described above, and to conduct
reviews of QIC and IRE dismissals would expand the pool of OMHA
adjudicators and allow ALJs to focus on cases going to a hearing, while
still providing appellants with quality reviews and decisions,
dismissals, and remands. In addition, we proposed that the rights
associated with an appeal adjudicated by an ALJ would extend to any
appeal adjudicated by an attorney adjudicator, including any applicable
adjudication time frame, escalation option, and/or right of appeal to
the Council.
In addition, we noted that even if an attorney adjudicator was
assigned to adjudicate a request for an ALJ hearing, that hearing
request still could be reassigned to an ALJ for an oral hearing if the
attorney adjudicator determined that a hearing could be necessary to
render a decision. For example, if the parties waived their rights to
an oral hearing in writing, allowing a decision to be issued without
conducting an oral hearing in accordance with current Sec. Sec.
405.1038(b)(1) or 423.2038(b)(1), but the attorney adjudicator believed
testimony by the appellant or another party would be necessary to
decide the appeal, the attorney adjudicator would refer the appeal to
an ALJ to determine whether conducting an oral hearing would be
necessary to decide the appeal regardless of the waivers, pursuant to
current Sec. Sec. 405.1036(b)(3) or 423.2036(b)(3). We also noted that
parties to a decision that is issued without an ALJ conducting an oral
hearing pursuant to current Sec. Sec. 405.1038(a) or 423.2038(a) (that
is, the decision is favorable to the appellant on every issue and
therefore may be issued based on the record alone) continue to have a
right to a hearing and a right to examine the evidence on which the
decision is based and may pursue that right by requesting a review of
the decision by the Council, which can remand the case for an ALJ to
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conduct a hearing and issue a new decision.
To implement this proposal, we proposed to revise provisions
throughout part 405 subpart I, part 422 subpart M, part 423 subparts M
and U, and part 478 subpart U, as detailed in proposed revisions to
specific sections and in section III of the proposed rule. In addition,
we proposed to define an attorney adjudicator in Sec. 405.902, which
provides definitions that apply to part 405 subpart I, as a licensed
attorney employed by OMHA with knowledge of Medicare coverage and
payment laws and guidance. We also proposed to indicate in Sec.
405.902 that the attorney adjudicator is authorized to take the actions
provided for in subpart I on requests for ALJ hearing and requests for
reviews of QIC dismissals. We stated that these revisions to Sec.
405.902 would provide the public with an understanding of the attorney
adjudicator's qualifications and scope of authority, and we also noted
that attorney adjudicators would receive the same training as OMHA
ALJs, which we note would focus on substantive areas of Medicare
coverage and payment policy, as well as administrative procedures
unrelated to the hearing components for which ALJs are exclusively
responsible.
Provided below are summaries of the specific comments received and
responses to these comments:
We received forty-seven comments on this proposal. A majority of
the comments came from providers and suppliers, organizations
representing providers and suppliers, beneficiary advocacy
organizations, representatives, health plan providers, CMS contractors,
and individuals. Twenty-nine of the commenters, mostly from the
appellant community, generally supported or raised no objection to the
proposal, but had requests for clarification, suggestions for
modifications, and concerns or questions. Three commenters fully
supported the proposal. Five commenters were equivocal. Three
commenters generally supported the proposal, but opposed allowing
attorney adjudicators to conduct reviews of QIC and IRE dismissals.
Seven commenters opposed the proposal, including two comments from
professional associations for ALJs.
Comment: A majority of commenters, mostly from organizations
representing the appellant community, voiced broad support for the
proposal, but a few commenters questioned whether the use of attorney
adjudicators would significantly alleviate the backlog. One commenter
questioned the utility of using attorney adjudicators given that all
attorney adjudicators would be afforded the same training as ALJs. The
commenter suggested it seemed logical to simply hire more ALJs instead.
Response: We thank the commenters for their support. Requests for a
hearing before an ALJ have increased dramatically in recent years and
appeals pending at OMHA continue to exceed OMHA's capacity to
adjudicate appeals within the time frames set forth in the statute and
rules. The introduction of attorney adjudicators is one action that
would help OMHA process cases more efficiently. Attorney adjudicators
would allow OMHA to identify and adjudicate appeals that do not require
a hearing as early in the administrative process as possible. The use
of attorney adjudicators to adjudicate these appeals would reduce the
wait time for appellants to receive decisions in cases in which no
hearing is required or conducted. It would also help to address the
volume of appeals OMHA continues to receive by channeling some of those
appeals through a less costly adjudicator, which will allow OMHA to
hire more adjudicators than the same resources would allow if allocated
to hiring ALJs and support staff, while reserving ALJs and their
support staff for appeals that require a hearing. We estimated in the
proposed rule that, based on FY 2015 data, the proposal to expand the
pool of adjudicators at OMHA could redirect approximately 23,650
appeals per year to attorney adjudicators, to process these appeals at
a lower cost to the government than would be required if only ALJs were
used to address the same workload. (Basing the estimates on FY 2016
data, we now estimate the impact to be approximately 24,500 appeals per
year.) Thus, we believe the use of attorney adjudicators will help OMHA
manage high receipt levels, and help alleviate the backlog by allowing
OMHA to increase its overall adjudication capacity. OMHA has added as
many ALJs and support staff as its current space and budget allow it to
sustain. Additional ALJs and support staff will be hired to meet the
need for adjudicators, as resources become available. However, the
proposal would allow for OMHA to adjudicate more appeals using existing
resources by providing for adjudication by attorney adjudicators of
appeals that do not require a hearing before an ALJ.
Comment: Two commenters asked if attorney adjudicators would be
doing the work that paralegals are already currently performing under
the direction of an ALJ.
Response: Some OMHA paralegals do currently draft remands,
dismissals, and decisions that will be made on the record under the
direction of an ALJ. However, we do not believe that is comparable to
the work that will be performed by attorney adjudicators. Attorney
adjudicators would be licensed attorneys and would have full
responsibility for reviewing the record, assessing the pertinent facts
in the record and identifying the relevant authorities, conducting the
necessary analysis, and drafting and issuing the decision, remand, or
dismissal under the attorney adjudicator's signature.
Comment: A few commenters believed that attorney adjudicators would
not resolve the backlog because providers are unlikely to waive their
right to a hearing if doing so would require them to forego the ability
to present clinical information to either an ALJ or an attorney
adjudicator.
Response: As discussed above and in the proposed rule, we believe
attorney adjudicators will be an important new resource to help address
the volume of appeals by increasing OMHA's adjudications capacity,
which may help alleviate the backlog of pending appeals at OMHA.
However, we have not suggested that the attorney adjudicator proposal
will resolve the backlog; it is one of a number of administrative
actions that we are undertaking to address the appeals workload and
resulting backlog, and is in concert with other actions, such as
requesting additional funding for the program. Further, we do not
believe the proposal would require providers or other appellants to
forego the ability to present clinical information to either an ALJ or
attorney adjudicator. Although waiving the right to a hearing under
current Sec. Sec. 405.1038(b) and 423.2038(b) means an appellant and
the other parties forgo the ability to present clinical information to
an ALJ at a hearing, that does not preclude the appellant and other
parties from presenting written information, including clinical
information, for the ALJ to consider in issuing a decision based on the
record alone, in accordance with current Sec. Sec. 405.1018 and
423.2018. The same would be true under the regulations as finalized in
this rule, except that an attorney adjudicator instead of an ALJ would
issue the decision. The decision to waive the right to appear at a
hearing before an ALJ is solely at the discretion of the appellant and,
as finalized in this rule, the other parties who would be sent a notice
of hearing if a hearing were to be scheduled. By waiving the right to
appear at a hearing, the party would be requesting that the ALJ or
attorney adjudicator issue a decision based on the written evidence in
the record. In
[[Page 4984]]
addition, we note that parties also have the option to withdraw a
waiver of the right to appear at the hearing any time before a notice
of decision has been issued under Sec. Sec. 405.1036(b)(2) and
423.2036(b)(2).
Comment: Many of the commenters who generally supported the
proposal believed that OMHA should establish clear and specific
guidelines for both the qualifications and the hiring of attorney
adjudicators. Commenters suggested that attorney adjudicators should
have at least one to three years of experience in Medicare coverage,
payment, and appeals, obtained through work with a provider, OMHA, or
CMS or its contractors. A few commenters recommended that OMHA hire its
existing attorney advisors working under the direction of ALJs as
attorney adjudicators.
Response: We thank the commenters for their support. We believe the
definition we proposed in Sec. 405.902 is sufficient to identify the
requirement that attorney adjudicators be licensed attorneys, the
knowledge that attorney adjudicators will possess, and their scope of
authority. OMHA will identify desirable qualifications, including the
specific knowledge, skills, and abilities necessary for an attorney
adjudicator to be successful in the position, and human resource
professionals will determine the specific guidelines for the
qualifications and hiring for the position of attorney adjudicator in
accordance with the Office of Personnel Management and HHS Departmental
standards, after the effective date of the rule. The position
description for the attorney adjudicator position and the job
announcements will reflect these assessments and determinations.
Further, although we may consider hiring existing OMHA attorney
advisors as attorney adjudicators, we do not believe it would be
appropriate to detail this type of information in the regulations at
this time, or to make statements about what the qualifications may be
before those delegated with authority to take human resource actions,
such as the classification of positions and the determination of
qualification standards, are consulted.
Comment: Most commenters emphasized the importance of training to
help ensure attorney adjudicator decisions are consistent with Medicare
law and guidance. One commenter from a professional association for
ALJs indicated ``with no definition of well trained or review criteria,
an attorney adjudicator with little or no Medicare adjudicatory
training or experience is more likely to issue a legally or factually
incorrect decision than a well-seasoned ALJ.'' By contrast, several of
the commenters who generally supported the proposal appreciated that,
as discussed above and in section II.B of the proposed rule, attorney
adjudicators would receive the same training as ALJs.
Response: We thank the commenters for their support, and disagree
with the commenter who opined that in the absence of clearly defined
training or review criteria, an attorney adjudicator with little or no
Medicare adjudicatory training/experience would be more likely to issue
a legally or factually incorrect decision than an ALJ. Section 405.902,
as finalized in this rule, defines an attorney adjudicator as a
licensed attorney employed by OMHA ``with knowledge of Medicare
coverage and payment laws and guidance.'' As noted above (and discussed
in section II.B of the proposed rule), attorney adjudicators would
undergo the same training as new OMHA ALJs to help ensure that their
decisions are consistent with Medicare law and guidance. In addition to
hiring qualified adjudicators, OMHA ALJs and other legal staff, which
would include attorney adjudicators, are required to attend continuing
education and training programs to maintain familiarity with the most
current Medicare law and guidance.
Comment: One commenter, on behalf of an association for ALJs, asked
``what does guidance mean with respect to the Medicare Program, and if
the attorney adjudicator receives guidance as to how to proceed with
the claim from a supervisor at OMHA, an attorney adjudicator is not an
independent decision-maker.''
Response: We believe this commenter misinterpreted the term
``guidance'' as set forth in the definition of attorney adjudicator in
Sec. 405.902. CMS and its contractors issue guidance that describe
criteria for coverage and payment of items and services in the form
local coverage determinations (LCDs), and CMS program memoranda and
manual instructions. This is the guidance that is referenced in the
definition of attorney adjudicator in Sec. 405.902. Current Sec.
405.1062(a) provides that ALJs are not bound by LCDs or CMS program
guidance but must give substantial deference to these policies if they
are applicable to a particular case. Section 405.1062(a), as finalized
in this rule, extends the provision to require that attorney
adjudicators, like ALJs, give the same substantial deference to these
polices.
Comment: To guarantee an impartial and fair adjudication process,
some commenters suggested OMHA should require attorney adjudicators to
file a financial disclosure report to ensure no financial conflicts of
interest exist. Other commenters believed that the fact that attorney
adjudicators would be rated and eligible for awards could create a
conflict of interest because attorney adjudicators would have no
protection from agency interference and may be assigned cases outside
of rotation.
Response: As executive branch employees, all OMHA employees are
subject to the Federal criminal conflict of interest statute at 18
U.S.C. 208, which prohibits a federal employee from participating in
matters in which the employee, certain family members, or certain
business associates have a financial interest, and to the Federal
Employee Standards of Conduct at 5 CFR 2635, which provide general
principles of ethical conduct and administer requirements regulating
appearances of conflicts of interests, gifts, financial interests,
impartiality in official duties, outside employment, and misuse of
position. The regulations at 5 CFR 2634, implementing Federal statutes
and administered by the Office of Government Ethics, set the guidelines
for which employees are required to file financial disclosure reports
subject to certification by an ethics official, in accordance with
applicable statutes. HHS ethics officials, in consultation with the
Office of Government Ethics, will determine which employees will be
required to submit financial disclosures in accordance with the ethics
regulations at 5 CFR 2634, which determines the content of such
disclosures.
In addition, Sec. Sec. 405.1026 and 423.2026, as finalized in this
rule, serve as important safeguards in the administrative appeals
process, and provide that an ALJ or attorney adjudicator cannot
adjudicate an appeal if he or she is prejudiced or partial to any party
or has any interest in the matter pending for decision. This rule as
finalized also provides a process that would allow a party to object to
an assigned ALJ or attorney adjudicator. The objecting party would also
have the opportunity to have the Council review the objections in cases
where an adjudicator does not withdraw pursuant to Sec. Sec. 405.1026
and 423.2026.
Under 5 U.S.C. 43 and 5 CFR 430.101, attorney adjudicators, as
Federal employees, would be subject to the Performance Management
Appraisal Program (PMAP), which provides for an annual performance
appraisal of HHS Federal employees. ALJs are exempt from annual
performance appraisals pursuant to 5 U.S.C. 4301(2)(D) and 5 CFR
430.202(b). However, the statutes
[[Page 4985]]
governing PMAPs do not provide an exclusion that would exempt attorney
adjudicators from annual performance reviews. Annual performance
reviews are an important tool for holding employees accountable and we
believe that as stewards of taxpayer dollars, we are responsible for
holding adjudicators accountable for minimal production levels and
levels of quality in their work, through annual performance reviews or
otherwise. However, in managing its obligation to administer PMAPs for
all OMHA employees except ALJs, OMHA will take precautions to avoid
performance criteria that would interfere with an attorney
adjudicator's ability to independently make findings of fact based on
the record, identify the applicable authorities, and issue a decision
in accordance with those authorities, so as to afford attorney
adjudicators with a similar level of qualified decisional independence
that is afforded to ALJs. Further, OMHA's business process is to assign
appeals to ALJs in rotation so far as practicable, as required under 5
U.S.C. 3105, and OMHA would assign appeals to attorney adjudicators in
the same manner. Based on the foregoing, we believe there will be
protections in place to guarantee an impartial and fair adjudication
process for all parties to an appeal before an OMHA adjudicator,
regardless of whether the case is assigned to an ALJ or to an attorney
adjudicator.
Comment: Some commenters felt that attorney adjudicator decisions
should be subject to oversight or a quality review process.
Response: We thank the commenters for their suggestion. In addition
to reviews by the Council pursuant to a party's request for review or a
referral by CMS as a check on individual decisions issued by ALJs and
as proposed, attorney adjudicators, OMHA has a quality assurance
program (QAP). The OMHA QAP involves a retrospective review of ALJ
decisions and assists OMHA in identifying opportunities for training
and policy development to increase decisional quality. The OMHA QAP
will include attorney adjudicator decisions after the rule is
implemented.
Comment: One commenter suggested OMHA should compile a yearly
report to assess the impact attorney adjudicators have on the backlog,
including the types of decisions issued and the percentage of
dispositions that were in favor of the government.
Response: We thank the commenter for its suggestion. The OMHA Web
site (www.hhs.gov/omha) currently contains summary tables that list
overall disposition data and dispositions by ALJ. The data, which is
organized by fiscal year, includes the number of dispositions that were
fully favorable, unfavorable, partially favorable, and dismissed. The
disposition data will be expanded to include data for attorney
adjudicators as they begin to decide appeals. We believe this data
would assist OMHA and the public with assessing the impact of attorney
adjudicators on the appeals workload.
Comment: One commenter indicated the proposed rule does not specify
who would assign the cases to the ALJs and attorney adjudicators.
Several commenters asked how cases will be assigned to attorney
adjudicators and suggested OMHA must establish a well-defined process
for assignment of cases to attorney adjudicators.
Response: OMHA's business process is to assign appeals to ALJs in
rotation so far as practicable, as required under 5 U.S.C. 3105, and
OMHA would assign appeals to attorney adjudicators in the same manner.
More information on the appeal assignment process is available in the
OMHA Case Processing Manual (OCPM), which is accessible to the public
at the OMHA Web site (www.hhs.gov/omha). If an appeal is initially
assigned to an ALJ and the ALJ later determines it can be adjudicated
by an attorney adjudicator, the appeal would be reassigned to an
attorney adjudicator in the same manner as a new appeal assignment to
an attorney adjudicator. Similarly, if an appeal is initially assigned
to an attorney adjudicator and the attorney adjudicator later
determines that only an ALJ can adjudicate the appeal, the appeal would
be reassigned to an ALJ in the same manner as a new appeal assignment
to an ALJ.
Comment: Several commenters supported the proposal to allow
requests for hearings initially assigned to an attorney adjudicator to
be reassigned to an ALJ for oral hearing if necessary in order to
render a decision. However, commenters suggested OMHA establish clearer
guidance and thresholds for reassignment and a timeline for an attorney
adjudicator to reassign an appeal to an ALJ. One commenter indicated
the proposal does not provide the regulatory text or authority for an
attorney adjudicator to refer an appeal to an ALJ for hearing when the
attorney adjudicator determines a hearing is required. A few commenters
also indicated the proposal does not specify the procedure for
reassignment of cases from an ALJ to an attorney adjudicator, where the
ALJ has determined the disposition could be fully favorable, nor does
the proposal require the ALJ to make a record of such a determination.
Response: We believe the threshold requirement of whether a hearing
is necessary for a decision is clear in the statute and regulations. In
addition, we decline to establish a time frame in the regulations for
an attorney adjudicator to reassign a case to an ALJ, as this would be
an internal process, and to do so would limit our flexibility to
establish and change business processes through OMHA operational
policies, which the Administrative Procedure Act (APA) permits OMHA to
adopt without notice and comment rulemaking. We also do not believe
that regulation text or authority is necessary for an attorney
adjudicator to refer an appeal to an ALJ, as an attorney adjudicator
would be referring the appeal to an ALJ because the attorney
adjudicator believes that he or she does not have the authority to
issue a decision in the appeal, for example, because the attorney
adjudicator believes a hearing is necessary to decide the appeal.
Further, the procedure for reassignment of cases from an ALJ to an
attorney adjudicator, for example, where the ALJ has determined the
disposition could be fully favorable to the appellants on every issue
based on the record and no other party is liable for the claims at
issue, will also be established by OMHA operational policies, including
the OCPM. However, we note that in the scenario presented in the
comment, the ALJ would also have the authority to retain assignment of
the appeal and issue a decision without conducting a hearing. In the
event that an ALJ determines the disposition could be fully favorable
to the appellants on every issue based on the record and no other party
is liable for the claims at issue and the case is reassigned to an
attorney adjudicator, the ALJ will not make a record of the
determination because the attorney adjudicator will make an independent
assessment and will not be bound by the ALJ's determination.
Comment: Several commenters asked whether OMHA would inform the
parties to an appeal when the appeal is assigned to an attorney
adjudicator.
Response: OMHA would continue its current practice of issuing a
Notice of Assignment to appellants when a request is assigned, which
includes the assigned adjudicator. Appellants and other parties can
also obtain and track the status of a pending appeal, including its
assigned adjudicator, by visiting OMHA's ALJ Appeal Status Information
System (AASIS) page at: http://aasis.omha.hhs.gov.
Comment: Several commenters asked whether a party waiving the right
to attend the hearing could choose a
[[Page 4986]]
decision by either an attorney adjudicator or an ALJ, and whether
parties could object to the assignment. One commenter suggested
modeling the attorney adjudicator process on existing Federal court
process for the assignment of magistrates, where all parties would be
given the option for their case to be assigned to an attorney
adjudicator.
Response: Sections 405.1038 and 423.2038, as finalized in this
rule, specifically indicate an ALJ or attorney adjudicator may decide a
case on the record when an appeal can be decided without a hearing
before an ALJ. These regulations, as finalized, serve as notice that
waiving the right to appear at a hearing allows an attorney adjudicator
to issue a decision, if a hearing is not necessary to decide the appeal
(we note that a hearing may still be conducted by an ALJ if it is
necessary to decide the appeal, even if one or more of the parties has
waived their right to appear at the hearing). We believe that allowing
the parties to choose whether an ALJ or attorney adjudicator will issue
the decision when the right to appear at the hearing is waived, or to
object if the appeal is assigned to an attorney adjudicator would
negate some of the anticipated efficiencies of the proposal and provide
the parties with undue influence over the adjudicator assigned to the
appeal. However, we note that under Sec. Sec. 405.1036(b)(2) and
423.2036(b)(2), as finalized in this rule, appellants and other parties
may withdraw a waiver of the right to appear at the hearing at any time
before a notice of decision has been issued. In addition, if an
appellant has concerns about the individual assigned to the appeal
having a conflict or bias, Sec. Sec. 405.1026 and 423.2026, as
finalized in this rule, can be used to request that the adjudicator
withdraw from the appeal. We appreciate the suggestion to consider
having an option for the parties to have their case assigned to an
attorney adjudicator, similar to the Federal court process for some
magistrate assignments. However, we do not believe that such an option
would be appropriate for the administrative appeals addressed in this
rule, because attorney adjudicators may only adjudicate appeals that do
not require a hearing. A hearing may be necessary in some cases to
decide the appeal, and in these cases, under section 1869 of the Act
and the regulations finalized in this rule, only an ALJ may conduct a
hearing.
Comment: Two commenters from professional associations for ALJs
indicated that appellants, including self-represented appellants, may
not know the difference between a decision by an independent ALJ as
compared to a decision issued by an attorney adjudicator. In the
commenters' opinion, the record must clearly demonstrate a valid and
informed waiver of the right to have a claim heard by an ALJ.
Response: We do not believe there will be a qualitative distinction
in decisions issued by ALJs and attorney adjudicators, and both
adjudicators will share a similar qualified decisional independence
with respect to the decisions that they issue, as discussed further
below. However, parties to Medicare claims and appeals are presumed to
have knowledge of the published Medicare rules and guidance, regardless
of whether they have representation. Therefore, we believe this final
rule would serve as sufficient notice that by waiving the right to
appear at a hearing, parties would be aware that the decision may be
issued by either an ALJ or an attorney adjudicator, if no hearing is
required to decide the appeal. However, we will review and revise
appeal instructions, and online and other guidance available to
appellants to highlight that if an oral hearing is waived, an attorney
adjudicator may issue the decision. We will also review and revise
current Form HHS-723 (Waiver of Right to an Administrative Law Judge
(ALJ) Hearing) to clearly convey that a decision may be issued by an
attorney adjudicator.
With regard to unrepresented beneficiaries and enrollees, we
believe they represent the most vulnerable segment of the appellant
population. However, it is rare that an unrepresented beneficiary
waives the right to appear at the hearing. In practice, in the few
instances when this does occur, OMHA reviews the stated reason for
waiving the right to appear at the hearing and may contact the
unrepresented beneficiary or enrollee to confirm that the waiver is
knowingly made. We believe this process will help ensure that an
unrepresented beneficiary or enrollee understands the implications of
waiving his or her right to appear at the hearing and the record
demonstrates that understanding. In addition, we are reviewing the
current form for waiving the right to appear at a hearing (form HHS-
723), to determine if revisions may be necessary so users will
understand that by waiving the right to appear at the hearing, the
waiving party would be aware that the decision may be issued by either
an ALJ or an attorney adjudicator, if no hearing is required to decide
the appeal.
Comment: Several commenters asked whether a party could appeal an
unfavorable decision by an attorney adjudicator to an ALJ. Several
commenters believed OMHA should allow parties who disagree with the
attorney adjudicator's decision to request an ALJ review the attorney
adjudicator's decision and allow the ALJ to reissue an amended decision
should the ALJ find the attorney adjudicator's decision to be
deficient.
Response: A party would not have the right to appeal an unfavorable
decision by an attorney adjudicator to an ALJ. All parties to an appeal
would receive a written notice of decision issued by an attorney
adjudicator. The notice of decision would provide instructions for
requesting a review of the decision by the Council if a party disagrees
with the decision. The rights associated with an appeal adjudicated by
an ALJ would extend to any appeal adjudicated by an attorney
adjudicator, including any applicable adjudication time frame,
escalation option, and/or right of appeal to the Council (see
Sec. Sec. 405.1102 and 405.1106, as finalized in this rule). Parties
to a decision issued without an ALJ conducting an oral hearing pursuant
to Sec. Sec. 405.1038(a) or 423.2038(a) continue to have a right to a
hearing and a right to examine the evidence on which the decision is
based, and may pursue that right by requesting review of the decision
by the Council, which can remand the case for an ALJ to conduct a
hearing and issue a new decision.
Comment: One commenter noted that the proposed rule is silent on
the requirements for a timely request for ALJ hearing when a party to
an appeal wishes to appeal a fully favorable on the record decision
issued by an attorney adjudicator.
Response: As discussed above, parties to a decision issued without
an ALJ conducting an oral hearing pursuant to Sec. Sec. 405.1038(a) or
423.2038(a) continue to have a right to an ALJ hearing, and may pursue
that right by appealing to the Council, which can remand the case for
an ALJ to conduct a hearing and issue a new decision. Sections
405.1102(a)(1) and 423.2102(a)(1), as finalized in this rule, provide
that a party to a decision or dismissal issued by an ALJ or attorney
adjudicator may request a review of the decision by the Council by
filing a written request for review within 60 calendar days after
receipt of the ALJ's or attorney adjudicator's decision or dismissal.
We believe Sec. Sec. 405.1102(a)(1) and 423.2102, as finalized in this
rule, provide the requirements for filing a timely request to appeal a
decision issued by an attorney adjudicator, including a fully favorable
decision issued by an attorney
[[Page 4987]]
adjudicator. In addition, we note that the notice of decision sent with
an attorney adjudicator's decision will include instructions for filing
a request for review with the Council, including the time frame in
which the request for review must be filed.
Comment: One commenter stated ``in any waiver to allow a decision
by an attorney adjudicator, it must be clearly explained that by
accepting such a decision, the beneficiary may be waiving his or her
right to appeal the decision to the Federal district court as it will
not have completed all administrative proceedings below.''
Response: We disagree with the commenter's interpretation that a
beneficiary would be waiving their right to appeal to Federal district
court by waiving the right to an ALJ hearing. Section 405.904(a)(2), as
finalized in this rule, states ``If the beneficiary obtains a hearing
before the ALJ and is dissatisfied with the decision of the ALJ, or if
the beneficiary requests a hearing and no hearing is conducted, and the
beneficiary is dissatisfied with the decision of an ALJ or attorney
adjudicator, he or she may request the Council to review the case. If
the Council reviews the case and issues a decision, and the beneficiary
is dissatisfied with the decision, the beneficiary may file suit in
Federal district court if the amount remaining in controversy and the
other requirements for judicial review are met.''
Comment: A few commenters, on behalf of Medicare contractors, asked
whether attorney adjudicators could render summary decisions in favor
of CMS Recovery Auditors or other interested contractors, or only in
favor of the appellant. These commenters suggested summary decisions
should be permitted to extend in both directions.
Response: We interpret the commenter's use of the term ``summary
decisions'' to mean decisions that are issued on the record without a
hearing before an ALJ, and we assume the commenters are asking whether
attorney adjudicators could issue decisions on the record that are
favorable to CMS and its contractors (or to CMS, the IRE, and/or the
plan sponsor) pursuant to Sec. Sec. 405.1038(a) and 423.2038(a).
Sections 405.1038(a) and 423.2038(a), as finalized in this rule,
clearly limit the ALJ's or attorney adjudicator's ability to issue
decisions on the record to situations where the administrative record
supports a finding fully in favor of the appellant(s) on every issue
and no other party to the appeal is liable for claims at issue.
Decisions that are favorable to CMS and its contractors (or to CMS, the
IRE, and/or the plan sponsor), are not fully favorable to the
appellant(s) (because CMS and its contractors (or CMS, the IRE and/or
the plan sponsor) are not appellants in a request for an ALJ hearing),
and therefore, such a decision could not be issued on the record under
Sec. Sec. 405.1038(a) and 423.2038(a.), as finalized in this rule.
Comment: Many commenters suggested that OMHA establish a bright
line rule and clear scope of an attorney adjudicator's authority. One
commenter indicated ``the number of cases that fall within [attorney
adjudicators'] scope of authority is so limited, that their use will
have no more than negligible impact on the processing of appeals.''
Response: We believe the rule as finalized, clearly establishes the
scope of an attorney adjudicator's authority. The scope and authority
of an attorney adjudicator to issue decisions under the rule as
finalized, is set forth in Sec. 405.902, which states an ``attorney
adjudicator means a licensed attorney employed by OMHA with knowledge
of Medicare coverage and payment laws and guidance, and authorized to
take the actions provided for in this subpart on requests for ALJ
hearing and requests for reviews of QIC dismissals.'' Other rules in
the subpart then describe when an attorney adjudicator may issue a
decision, dismissal, or remand. As finalized in this rule, an attorney
adjudicator may issue: (1) Decisions that can be issued without an ALJ
conducting a hearing in accordance with Sec. Sec. 405.1038 and
423.2038; (2) dismissals when an appellant withdraws his or her request
for an ALJ hearing in accordance with Sec. Sec. 405.1052 and 423.2052;
(3) remands to the QIC, IRE, or other contractor, or the Part D plan
sponsor, in accordance with Sec. Sec. 405.1056 and 423.2056; and (4)
reviews of QIC and IRE dismissals in accordance with Sec. Sec.
405.1004 and 423.2004.
Comment: Some commenters supported allowing attorney adjudicators
to issue dismissals when an appellant withdraws a request for hearing,
remands for information that can only be supplied by CMS or contractors
and, in certain instances, issue decisions that are fully favorable to
the appellant, but the commenters opposed allowing attorney
adjudicators to review a QIC or IRE dismissal, stating neither Sec.
405.1004 nor Sec. 423.2004 preclude a hearing being held for review of
a QIC or IRE dismissal, respectively. These commenters suggested that
the review of QIC and IRE dismissals ``may sometimes require a hearing
to determine findings of fact or conclusions of law.''
Response: We recognize that current Sec. Sec. 405.1004 and
423.2004 do not preclude conducting a hearing on a review or a QIC or
IRE dismissal, and acknowledge review of QIC and IRE dismissals may
sometimes require a hearing to determine findings of fact or
conclusions of law. As discussed previously regarding the reassignment
of cases from an attorney adjudicator to an ALJ, an attorney
adjudicator may refer an appeal to an ALJ because the attorney
adjudicator believes that he or she does not have the authority to
issue a decision in the appeal, for example, because the attorney
adjudicator believes a hearing is necessary to determine findings of
fact or conclusions of law. These appeals will be reassigned to an ALJ
to conduct a hearing. However, as discussed above and in section II.B
of the proposed rule, although under section 1869(d) of the Act, an ALJ
must conduct and conclude a hearing on a decision of a QIC, we believe
that the statute does not require that the same action be taken by an
ALJ in cases where there is no QIC reconsideration, for example, where
the QIC has dismissed the request for reconsideration. In addition, we
believe the determination whether a QIC or IRE dismissal was issued in
error generally can be conducted on the record, given the limited scope
of review, in the same manner as QICs review MAC dismissals of
redetermination requests, and the Council reviews ALJ dismissals of
requests for hearing. Moreover, we believe attorney adjudicators will
be capable of reviewing the administrative record, identifying the
issues related to the dismissal, and determining whether the QIC and
IRE dismissal was issued in error.
Comment: One commenter requested that for cases where an attorney
adjudicator finds the QIC or IRE dismissed an appeal in error, the
appeal should be remanded to the QIC or IRE with the attorney
adjudicator's reasoning for the decision and with instructions on how
to proceed.
Response: Sections 405.1004(b) and 423.2004(b), as finalized in
this rule, state if the ALJ or attorney adjudicator determines that the
QIC's or IRE's dismissal was in error, he or she vacates the dismissal
and remands the case to the QIC or IRE for a reconsideration in
accordance with Sec. Sec. 405.1056 and 423.2056. We expect that an
ALJ's or attorney adjudicator's notice of remand will explain the ALJ's
or attorney adjudicator's basis for vacating the QIC's or IRE's
dismissal, and Sec. Sec. 405.1056(d) and 423.2056(d)), as finalized in
this rule, state that the ALJ or attorney adjudicator will remand the
case to the
[[Page 4988]]
QIC or IRE for a reconsideration, which we believe is the only required
instruction.
Comment: A few commenters, including two professional associations
for ALJs, opposed the attorney adjudicator proposal on the basis that
the proposal is inconsistent with the APA or the Act and improperly
delegates decision-making authority to individuals who are not
appointed as ALJs. The commenters also argued provisions of the APA and
the Act give ALJs judicial independence to render decisions, and
attorney adjudicators do not have judicial independence to the same
extent as ALJs.
Response: We disagree with the commenters and believe the proposal
is fully consistent the APA and the Act. As a preliminary matter, we
note that in interpreting the APA, courts have held that ALJs have
``qualified decisional independence'' in carrying out their
adjudicative functions, rather than full ``judicial independence.''
According to the case law, the intent of the APA is that ALJs should
decide each case based on the record evidence, free from any pressure
from their employing agencies to reach a particular result in a
particular case. This decisional independence is designed to help
ensure impartial decision-making and to maintain public confidence in
the essential fairness of the process. This decisional independence is,
however, ``qualified'' because ALJs are still bound to follow the
regulations and policies of their employing agency, and are also
subject to direction designed to ensure efficient operation and service
to the public. See Butz v. Economou, 438 U.S. 478, 513 (1978); Abrams
v. Social Security Administration, 703 F. 3d 538, 545 (Fed. Cir. 2012);
Nash v. Bowen, 869 F. 2d 675, 680 (2nd Cir. 1989), cert. denied, 493
U.S. 812 (1989); Nash v. Califano, 613 F. 2d 10, 15 (2nd Cir. 1980). In
implementing this final rule, OMHA will afford attorney adjudicators
the same level of qualified decisional independence. As discussed
above, OMHA will take precautions to avoid performance criteria that
would interfere with an attorney adjudicator's ability to independently
make findings of fact based on the record, identify the applicable
authorities, and issue a decision in accordance with those authorities,
so as to afford attorney adjudicators with a similar level of qualified
decisional independence that is afforded to ALJs. Further, OMHA's
business process is to assign appeals to ALJs in rotation so far as
practicable, as required under 5 U.S.C. 3105, and OMHA would assign
appeals to attorney adjudicators in the same manner. This qualified
decisional independence helps ensure an impartial and fair adjudication
process for all parties to an appeal before an OMHA adjudicator,
regardless of whether the case is assigned to an ALJ or to an attorney
adjudicator.
Sections 554 and 556 of the APA apply only to adjudications that
are required by statute to be determined on the record after an
opportunity for an agency hearing. In accordance with sections 1155,
1852(g)(5), 1860D-4(h), 1869(b)(1)(A), and 1876(c)(5)(B) of the Act and
their implementing regulations (at 42 CFR part 405 subpart I, part 478
subpart B, part 422 subpart M, and part 423 subpart U), individuals
dissatisfied with certain lower level appeal determinations are
entitled to a hearing, subject to timely filing and amount in
controversy limitations, to the same extent as is provided under
section 205(b) of the Act. Reading these sections together, the Act
directs the Secretary of Health and Human Services to provide an
opportunity for a hearing regarding the right to Medicare benefits,
which the Secretary has delegated to OMHA ALJs to conduct and render a
decision. The rule, as finalized, is not inconsistent with the APA or
the Act, but instead would augment this process by authorizing attorney
adjudicators to make decisions in appeals when there is no requirement
for a hearing, or in cases where parties waive the right to appear at a
hearing before an ALJ and the hearing is not necessary to make a
decision. The Act requires only that parties be given an opportunity
for a hearing; no provision of the Act requires the Secretary to
utilize an ALJ to issue a decision that does not require a hearing, for
example, because the parties have waived their right to one or because
no reconsideration has been issued.
Parties will continue to have an opportunity for a hearing where a
reconsideration has been issued, the hearing request has been timely
filed, and the amount remaining in controversy has been met. In that
respect, the proposal, as finalized in this rule, does not change the
process or the rights of the parties. For example, if the parties
waived their rights to an oral hearing in writing, allowing a decision
to be issued without conducting an oral hearing in accordance with
Sec. Sec. 405.1038(b)(1) or 423.2038(b)(1), but the attorney
adjudicator believed testimony by the appellant or another party would
be necessary to decide the appeal, the attorney adjudicator would refer
the appeal to an ALJ to determine whether conducting an oral hearing
would be necessary to decide the appeal regardless of the waivers,
pursuant to Sec. Sec. 405.1036(b)(3) or 423.2036(b)(3). In addition,
parties to a decision issued without an ALJ conducting an oral hearing
pursuant to Sec. Sec. 405.1038(a) or 423.2038(a) continue to have a
right to a hearing and a right to examine the evidence on which the
decision is based, and may pursue that right by requesting review of
the decision by the Council, which can remand the case for an ALJ to
conduct a hearing and issue a new decision. Under the rule we are
finalizing, either an attorney adjudicator or an ALJ may issue a
decision when no hearing is required before an ALJ, but if a hearing is
to be held, the ALJ will conduct that hearing and issue the decision.
We believe this process is fully in accord with the APA and the Act.
Comment: One commenter suggested that ``it is a violation of
statute to assign attorney adjudicators to render decisions that are
less than fully favorable to a beneficiary because it deprives the
beneficiary of an impartial ALJ, appointed and protected under the
provisions of the APA.''
Response: We disagree with the commenter. In accordance with
section 1869(b)(1)(A) of the Act, any individuals dissatisfied with an
initial determination and reconsideration are entitled to a hearing,
subject to timely filing and amount in controversy limitations, and
(d)(1)(A) states that an ALJ ``shall conduct and conclude a hearing on
a decision of a qualified independent contractor under subsection (c)
and render a decision on such hearing'' (emphasis added). However, the
rule we are finalizing, provides for a decision by another adjudicator
(an attorney adjudicator) if such a hearing is waived under Sec.
405.1038(b) or not required under Sec. 405.1038(c), as finalized in
this rule. As discussed above, no provision of the Act requires the
Secretary to utilize an ALJ to issue a decision that does not require a
hearing. OMHA will afford attorney adjudicators with a similar level of
qualified decisional independence that is afforded to ALJs, to help
ensure an impartial and fair adjudication process for all parties to an
appeal before an OMHA adjudicator, regardless of whether the case is
assigned to an ALJ or to an attorney adjudicator.
Comment: One commenter referred to the language in section II.B of
the proposed rule where we stated that we believed well-trained
attorneys could review the record, identify the issues, and make the
necessary findings of fact and conclusions of law when the regulations
do not require a hearing to
[[Page 4989]]
issue a decision in the appealed matter. 81 FR 43790, 43794. The
commenter indicated ``well-trained attorney'' is not defined in the
proposed regulation and asked whether a ``well trained'' attorney is
required to be a member in good standing of a bar in the United States.
Response: Section Sec. 405.902, as finalized in this rule, states
an ``Attorney Adjudicator means a licensed attorney employed by OMHA
with knowledge of Medicare coverage and payment laws and guidance, and
authorized to take the actions provided for in this subpart on requests
for ALJ hearing and requests for reviews of QIC dismissals.'' A
licensed attorney would be a member in good standing of a bar in the
United States.
Comment: One commenter argued that proposed Sec.
405.1006(e)(1)(ii), (e)(1)(iii) and (e)(2)(iii) may overcomplicate the
process of aggregating claims because an attorney adjudicator could
determine that the minimum amount in controversy was met, but would be
required to refer the appeal to an ALJ if it appeared that the claims
were not properly aggregated or if the appeal did not meet the required
amount in controversy, in order for an ALJ to dismiss the request for
hearing. The commenter also believed ALJs might simply adopt the
attorney adjudicator's preliminary determination, which could result in
improperly denied requests for hearing.
Response: We appreciate the commenter's perspective but believe
these procedures are necessary to help ensure that a request for a
hearing before an ALJ is reviewed by an ALJ before being dismissed for
not meeting the amount in controversy required for an ALJ hearing. A
referral to an ALJ would only be necessary when the attorney
adjudicator believes the appealed claims do not meet the amount in
controversy requirement and the aggregation request may not be valid,
because the request for hearing would be subject to a possible
dismissal for not meeting the amount in controversy requirement.
Section 405.1006(e)(1) and (2), as finalized in this rule, provide that
only an ALJ may determine that the claims were not properly aggregated
and therefore do not meet the minimum amount in controversy required
for an ALJ hearing. Thus, the ALJ is required to make this
determination, and would not be permitted to simply adopt the attorney
adjudicator's preliminary determination without conducting an
independent review. If an ALJ dismisses a request for hearing after
determining that an aggregation request was not valid, and therefore
the minimum amount in controversy was not met, and the appellant does
not agree with the dismissal, the appellant may request a review of the
dismissal by the Council. Instructions for requesting a review by the
Council will be included in the notice of dismissal sent to the
appellant with the ALJ's dismissal order.
After review and consideration of the comments received, and for
the reasons discussed above and in the proposed rule, we are finalizing
our proposals as discussed above without modification to provide
authority for attorney adjudicators to issue decisions when a decision
can be issued without an ALJ conducting a hearing under the
regulations, dismissals when an appellant withdraws his or her request
for an ALJ hearing, remands as provided in Sec. Sec. 405.1056 and
423.2056 or at the direction of the Council, and reviews of QIC and IRE
dismissals. Also, we are finalizing the definition of attorney
adjudicator in Sec. 405.902 as proposed without modification.
In addition, we are making a conforming technical revision to Sec.
423.558(b) to replace ``ALJ hearings'' with ``ALJ hearings and ALJ and
attorney adjudicator decisions'' for consistency with the revised title
of part 423, subpart U, and the revisions discussed above providing for
attorney adjudicator reviews.
3. Application of 405 Rules to Other Parts
Current Sec. 422.562(d) states that unless subpart M regarding
grievances, organization determinations and appeals under the MA
program provides otherwise, the regulations found in part 405 apply
under subpart M to the extent appropriate. In addition, current Sec.
422.608, which is a section within subpart M, provides that the
regulations under part 405 regarding Council review apply to the
subpart to the extent that they are appropriate. Pursuant to Sec.
417.600, these rules governing MA organization determinations are also
applicable to beneficiary appeals and grievances when the beneficiary
is enrolled in a competitive medical plan or HMO (also known as ``cost
plan'') under section 1876 of the Act; therefore our discussion of MA
proceedings applies also to cost plan appeals and grievances initiated
under Sec. 417.600.
Similar to current Sec. 422.562(d), Sec. 478.40(c) indicates that
the part 405 regulations apply to hearings and appeals under subpart B
of part 478 regarding QIO reconsiderations and appeals, unless they are
inconsistent with specific provisions in subpart B. Thus, the part 405
rules are used, to the extent appropriate, for administrative review
and hearing procedures in the absence of specific provisions related to
administrative reviews and hearing procedures in part 422, subpart M;
and part 478, subpart B, respectively. These general references to part
405 are often helpful in filling in gaps in procedural rules when there
is no rule on point in the respective part. However, as we stated in
the proposed rule, there has been confusion on the application of part
405 rules when a part 405 rule implements a specific statutory
provision that is not in the authorizing statute for the referring
subpart and HHS has not adopted a similar policy for the referring
subpart in its discretion to administer the MA, QIO, and cost plan
appeals programs (81 FR 43795). For example, certain procedures and
provisions of section 1869 of the Act (governing certain determinations
and appeals under Medicare Part A and Part B) that are implemented in
part 405, subpart I are different than or not addressed in sections
1155 (providing for reconsiderations and appeals of QIO
determinations), 1852(g) (providing for appeals of MA organization
determinations), and 1876 (providing for appeals of organization
determinations made by section 1876 health maintenance organizations
(HMOs) and competitive medical plans (CMPs)). Section 1869 of the Act
provides for, among other things, redeterminations of certain initial
determinations, QIC reconsiderations following redeterminations or
expedited determinations; ALJ hearings and decisions following a QIC
reconsideration; DAB review following ALJ decisions; specific time
frames in which to conduct the respective adjudications; and, at
certain appeal levels, the option to escalate appeals to the next level
of appeal if the adjudication time frames are not met. In addition,
section 1869(b)(3) of the Act does not permit providers and suppliers
to introduce evidence in an appeal brought under section 1869 of the
Act after the QIC reconsideration, unless there is good cause that
precluded the introduction of the evidence at or before the QIC
reconsideration.
In contrast, sections 1852(g)(5) of the Act and 1876(c)(5)(B) of
the Act incorporate some, but not all, of the provisions of section
1869 of the Act, and add certain requirements, such as making the MAO,
HMO, or CMP a party to an ALJ hearing. For example, sections 1852(g)(5)
and 1876(c)(5)(B) of the Act specifically incorporate section
1869(b)(1)(E)(iii) of the Act to align the amount in controversy
requirements for an ALJ hearing and judicial review among the three
sections. However,
[[Page 4990]]
sections 1852(g) and 1876(c)(5)(B) do not incorporate adjudication time
frames and escalation provisions, or the limitation on new evidence
provision of section 1869(b)(3) of the Act.
Additionally, section 1155 of the Act provides for an individual's
right to appeal certain QIO reconsidered determinations made under
section 1154 of the Act directly to an ALJ for hearing. However,
section 1155 of the Act does not reference section 1869 of the Act or
otherwise establish an adjudication time frame, and provides for a
different amount in controversy requirement for an ALJ hearing.
Despite these statutory distinctions, HHS has established similar
procedures by regulation to the extent practicable, when not addressed
by statute. For example, section 1860D-4(h) of the Act, which addresses
appeals of coverage determinations under Medicare Part D, incorporates
paragraphs (4) and (5) of section 1852(g) of the Act. As discussed
above, section 1852(g) does not incorporate adjudication time frames
from section 1869 of the Act or otherwise establish such time frames.
However, through rulemaking for Part D coverage determination appeals,
HHS has adopted a 90-day adjudication time frame for standard requests
for an ALJ hearing and requests for Council review of an ALJ decision,
as well as a 10-day adjudication time frame when the criteria for an
expedited hearing or review are met.
To clarify the application of the part 405 rules, we proposed
revisions to parts 422 and 478. Specifically, we proposed in Sec. Sec.
422.562(d) and 422.608 that the part 405 rules would not apply when the
part 405 rule implements a statutory provision that is not also
applicable to section 1852 of the Act (81 FR 43796, 43876-43877).
Similarly, we proposed in Sec. 478.40(c) that the part 405 rules would
not apply when the part 405 rule implements a statutory provision that
is not also applicable to section 1155 of the Act (81 FR 43890-43891).
In addition, we proposed in Sec. 478.40(c) to remove language that
equates an initial determination and reconsidered determination made by
a QIO to contractor initial determinations and reconsidered
determinations under part 405 because that language has caused
confusion with provisions that are specific to part 405 and QIC
reconsiderations, and it is not necessary to apply the remaining part
405, subpart I procedural rules in part 478, subpart B proceedings. We
stated in the proposed rule that, in addition to clarifying the
application of part 405 rules to other parts, these revisions would
help ensure that statutory provisions that are specific to certain
Medicare appeals are not applied to other appeals without HHS first
determining, through rulemaking, whether it would be appropriate to
apply a provision and how best to tailor aligning policies for those
other appeals (81 FR 43796). In our discussion of these proposals, we
identified the statutory differences in sections 1155 and 1852(g) of
the Act compared to section 1869 discussed above.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received three comments on proposed Sec. Sec.
422.562(d), 422.608, and 478.40(c), expressing concern that the added
language is too general and does not address the specific changes that
are intended by the proposals. The commenters indicated that the
general language will create more confusion rather than clarifying
existing ambiguity about which part 405 rules apply to MA program
appeals under part 422, subpart M and to appeals of QIO reconsidered
determinations under part 478, subpart B, and may have the unintended
consequence of stripping away protections for unrepresented
beneficiaries. Two of the commenters stated that the proposals will
take away important safeguards that currently provide consistency in
application of beneficiary rights across the appeals spectrum and
provide answers in the absence of specific applicable provisions. The
same commenters argued that under proposed Sec. Sec. 422.562(d) and
422.608, part 405 rules apply to administrative reviews, hearing
processes, and representation of parties ``to the extent that they are
appropriate, unless the part 405 regulation implements a provision of
section 1869 of the Act that is not also in section 1852(g)(5) of the
Act'' but the only provisions of section 1869 of the Act that are
referenced in section 1852(g)(5) of the Act relate to amounts in
controversy. The commenters argued that the language of the proposals
would mean that all sections of part 405, other than those relating to
amounts in controversy, are unavailable to fill the gaps in part 422,
subpart M. The same commenters used the part 405 rule in Sec.
405.1018, which requires a good cause determination for the submission
of new evidence by providers, suppliers, and beneficiaries represented
by a provider or supplier, if such evidence was not submitted prior to
the issuance of the QIC's reconsideration determination, as an example
of where the proposals may have an unintended consequence of taking
away a beneficiary safeguard. The commenters suggested that if current
Sec. 405.1018(d), which states that the requirements of Sec. 405.1018
do not apply to oral testimony given at a hearing, or to evidence
submitted by an unrepresented beneficiary, was not available in part
422, subpart M proceedings, then an enrollee in the MA program may not
be able to invoke the protections in Sec. 405.1018(d). All commenters
requested that after the agency provides further details on which part
405 rules do not apply, it should provide the public with an
opportunity to review the specific changes and allow them to make more
meaningful comments on the proposal.
Response: We do not agree with the comment that the proposal would
mean that all sections of part 405, other than those relating to
amounts in controversy, are unavailable to fill the gaps in part 422,
subpart M. The proposal related to part 405, subpart I provisions that
implement requirements in section 1869 of the Act that are not also
contained in section 1852(g). Section 1852(g)(5) of the Act, which is
implemented in part 422, subpart M, does, as the commenter highlights,
reference portions of section 1869 of the Act related to the amount in
controversy threshold. However, section 1852(g)(5) of the Act also
entitles an MA enrollee to ``a hearing before the Secretary to the same
extent as is provided in section 205(b) [of the Act],'' which is also
referenced in section 1869 of the Act. Thus, section 1852(g) of the Act
includes certain provisions, in addition to the amount in controversy
provisions, that are also in section 1869 of the Act. The provisions of
part 405, subpart I that implement these provisions would continue to
apply to part 422, subpart M appeals to the extent they are
appropriate, and therefore the proposal would not mean that all
sections of part 405, subpart I, other than those relating to amounts
in controversy, are unavailable to fill the gaps in part 422, subpart
M. Rather, as we explained in the preamble to the proposed rule, the
proposal would serve to clarify that the provisions of part 405,
subpart I that implement provisions of section 1869 of the Act that are
not also addressed in sections 1852 and 1155 of the Act, are not
appropriate to apply in appeals initiated under part 422, subpart M,
and part 478, subpart B. Using the commenter's example of Sec.
405.1018, only paragraphs (c) and (d)(2) specifically relate to a
provision of section 1869 of the Act; specifically, as we explained in
the proposed rule, section 1869(b)(3) of the Act does not permit
providers and suppliers to
[[Page 4991]]
introduce evidence in an appeal brought under section 1869 of the Act
after the QIC reconsideration, unless there is good cause that
precluded the introduction of the evidence at or before the QIC
reconsideration. The other subsections of Sec. 405.1018 do not
effectuate a specific provision of section 1869 of the Act, but rather
relate to the hearing before the Secretary, which is also required
under section 1852(g) of the Act, and therefore applying the other
subsections of Sec. 405.1018 to part 422, subpart M would continue to
be appropriate under the proposal.
Proposed Sec. Sec. 422.562(d), 422.608, and 478.40(c) were
intended to clarify the application of part 405 rules to appeals and
hearings initiated under other parts and to help ensure that statutory
provisions that are specific to appeals under section 1869 of the Act
are not applied to other appeals without HHS first determining, through
rulemaking, whether it would be appropriate to apply a provision and
how best to tailor aligning policies for those other appeals. In
explaining the proposal, we also provided examples of specific
provisions in section 1869 of the Act that are not also in sections
1852 and 1155 of the Act, and therefore the proposal would impact the
part 405, subpart I provisions that implement those specific provisions
of section 1869 of the Act that we discussed in explaining the
proposal. While we believe our proposals provided sufficient
information and notice regarding the part 405, subpart I provisions
that would not apply in MA program appeals under part 422, subpart M
and in appeals of QIO reconsidered determinations under part 478,
subpart B, commenters raised concerns that the proposal and proposed
regulation text were not sufficiently detailed. In response to the
commenters' concerns we are finalizing Sec. Sec. 422.562(d), 422.608,
and 478.40(c) with modifications to specify in greater detail those
part 405 provisions that implement provisions of section 1869 of the
Act that are not also applicable to sections 1852 or 1155 of the Act,
and that we do not believe apply to part 422, subpart M and part 478,
subpart B adjudications. We specifically discussed three such
provisions in section II.C of the proposed rule. The three specific
topics covered by part 405, subpart I that implement provisions of
section 1869 of the Act and that we believe do not apply to part 422,
subpart M and part 478, subpart B adjudications are: (1) Specific time
frames to conduct adjudications at each level of administrative appeal
(sections 1869(a)(3)(C)(ii), (c)(3)(C)(i), (d)(1), and (d)(2) of the
Act); (2) the option to request escalation of appeals when a QIC, OMHA,
or the Council does not render a decision within an applicable
adjudication time frame (sections 1869(c)(3)(C)(ii) and (d)(3) of the
Act); and (3) the requirement that a provider or supplier, or
beneficiary represented by a provider or supplier, must establish good
cause to introduce evidence that was not presented at the
reconsideration by the QIC (section 1869(b)(3) of the Act). Because
these provisions of section 1869 of the Act were discussed in the
proposed rule as examples of provisions that are not also included in
sections 1852 and 1155 of the Act, and that we do not believe apply to
appeals and hearings under part 422, subpart M and part 478, subpart B,
and because these three areas have historically been the subject of the
greatest confusion for appellants and OMHA staff regarding application
of part 405 rules to other parts, we are finalizing the proposal with
respect to those three areas. We will conduct additional notice and
comment rulemaking if we identify additional provisions in the part
405, subpart I rules that implement provisions of section 1869 of the
Act that are not also included in sections 1852(g) and 1155 of the Act,
and we believe those provisions should not apply to part 422, subpart M
and part 478, subpart B adjudications. Furthermore, we believe that
listing the specific sections of part 405, subpart I that do not apply
in MA program appeals under part 422, subpart M, and in appeals of QIO
reconsidered determinations under part 478, subpart B addresses
commenters' concerns regarding confusion or ambiguity.
Section 1869(d)(1)(A) of the Act provides that unless the appellant
waives the statutory adjudication time frame, the ALJ conducts and
concludes a hearing on a decision of the QIC and renders a decision no
later than the end of the 90-day period beginning on the date a request
for hearing is timely filed. In addition, section 1869(d)(2) of the Act
provides that the DAB conducts and concludes a review of the decision
on a hearing and renders a decision no later than the end of the 90-day
period beginning on the date a request for review is timely filed.
Sections 1852(g)(5) and 1155 of the Act do not contain similar
adjudication time frames for an ALJ and DAB to render a decision.
Therefore, we are specifying in Sec. Sec. 422.562(d) and 478.40(c),
and in Sec. 422.608 through reference to Sec. 422.562(d)(2), that the
adjudication time frames at the OMHA level and the Council in part 405
do not apply in proceedings under either part 422, subpart M or part
478, subpart B. Similarly, because the part 405 escalation provisions
originate in section 1869(c)(3)(C)(ii) and (d)(3) of the Act and are
not incorporated into sections 1852(g) or 1155 of the Act, and the part
405 rules for adjudication time frames for an ALJ or the Council do not
apply, we are specifying that the options to request escalation of an
appeal in part 405 do not apply in proceedings under either part 422,
subpart M or part 478, subpart B. In addition, we do not think it would
be appropriate to apply the part 405, subpart I rules to time frames
for adjudications below the OMHA level for Part C and QIO appeals
because those parts already contain regulations regarding time frames
and expediting appeals that are different from the part 405, subpart I
provisions. For example, under Sec. 422.572(f) and Sec. 422.590(g),
if an MAO fails to provide the enrollee with timely notice of an
expedited organization determination or expedited reconsideration, the
failure constitutes an adverse determination; the adverse decision
then, respectively, is subject to appeal or must be forwarded to the
IRE. With respect to OMHA-level adjudication time frames and the option
to escalate an appeal from the OMHA level to the Council, we note that
Sec. 405.1016, as finalized in this rule, applies only to requests for
a hearing filed after a QIC has issued a reconsideration. In the final
rule establishing the MA program, CMS stated that part 405 regulatory
provisions that are dependent upon QICs would not apply to part 422,
subpart M adjudications because an IRE--not a QIC--conducts
reconsiderations for MA appeals (70 FR 4588, 4676). We believe the same
rationale extends to reconsiderations conducted by a QIO under part
478, subpart B. We also believe it is unwise to extend the adjudication
time frames to additional cases or to create an option for escalation
of an appeal where such provisions are not required by statute given
the current volume of pending appeals at OMHA and the Council. However,
we note that the vast majority of MA and QIO appeals are filed by
beneficiaries and enrollees, and current OMHA and Council policy
provides for the prioritization of appeals filed by beneficiaries or
enrollees. Thus, we anticipate that there will be little change in
adjudicatory processing times for most appellants in MA program appeals
and appeals of QIO reconsidered determinations. Accordingly, we do not
believe that the policies we are finalizing above will take away
current
[[Page 4992]]
protections or safeguards for beneficiaries.
In addition, section 1869(b)(3) of the Act states that a provider
or supplier may not introduce evidence in any appeal that was not
presented at the QIC reconsideration unless there is good cause that
precluded the introduction of such evidence at or before that
reconsideration. Several provisions in part 405 implement this
limitation on the submission of new evidence by providers and
suppliers, as well as beneficiaries represented by providers and
suppliers, and further implement rules for the review of whether good
cause exists for late submissions. Neither section 1852(g)(5) nor
section 1155 of the Act contains a similar limitation on the submission
of new evidence by providers and suppliers if such evidence was not
presented at an earlier stage in the appeal proceedings. Furthermore,
the requirement to show good cause for the introduction of new evidence
applies to evidence that was not presented at the QIC reconsideration
and, as noted above, part 405 provisions that are dependent upon QICs
do not apply to adjudications under part 422, subpart M, and we believe
the same rationale extends to reconsiderations conducted by QIOs under
part 478, subpart B. Therefore, we are specifying in Sec. Sec.
422.562(d) and 478.40(c), and in Sec. 422.608 through reference to
Sec. 422.562(d)(2), that the good cause limitations on new evidence
submitted by providers, suppliers, and beneficiaries represented by a
provider or supplier, outlined in part 405, subpart I do not apply in
proceedings under part 422, subpart M or part 478, subpart B. Although
two commenters expressed concern that the proposals could mean that an
enrollee in the MA program would not be able to invoke the protection
of current Sec. 405.1018(d), these finalized rules specifically
identify Sec. Sec. 405.1018(c), 405.1028(a), and 405.1122(c) as part
405 sections that do not apply in part 422, subpart M, and therefore
the protections afforded to unrepresented beneficiaries in current
Sec. 405.1018(d) are unnecessary in part 422, subpart M appeals
because there is no need for any appellant in a Part C appeal to show
good cause for the introduction of new evidence for the first time at
the OMHA level. As we stated above, we do not believe that the policies
we are finalizing will take away current protections or safeguards for
beneficiaries appealing an MA organization determination (or cost plan
determination) or appealing from a QIO determination.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
following changes to Sec. Sec. 422.562(d), 422.608, and 478.40(c). We
are specifying in Sec. Sec. 422.562(d) and 478.40(c), and in 422.608
through reference to Sec. 422.562(d)(2), those specific provisions of
part 405, subpart I discussed in the proposed rule that are not
applicable to MA program appeals under part 422, subpart M or appeals
of QIO reconsidered determinations under part 478, subpart B, as
discussed above. The provisions we are specifying are: (1) Sec.
405.950 (time frames for making a redetermination); (2) Sec. 405.970
(time frame for making a reconsideration following a contractor
redetermination, including the option to escalate an appeal to the OMHA
level); (3) Sec. 405.1016 (time frames for deciding an appeal of a QIC
reconsideration or escalated request for a QIC reconsideration,
including the option to escalate an appeal to the Council); (4) The
option to request that an appeal be escalated from the OMHA level to
the Council as provided in Sec. 405.1100(b) and the time frames for
the Council to decide an appeal of an ALJ's or attorney adjudicator's
decision or an appeal that is escalated from the OMHA level to the
Council as provided in Sec. 405.1100(c) and (d); (5) Sec. 405.1132
(request for escalation to Federal court); and (6) Sec. Sec.
405.956(b)(8), 405.966(a)(2), 405.976(b)(5)(ii), 405.1018(c),
405.1028(a), and 405.1122(c) and any other references to requiring a
determination of good cause for the introduction of new evidence by a
provider, supplier, or a beneficiary represented by a provider or
supplier.
4. OMHA References
When the 2005 Interim Final Rule was published in March 2005,
implementing the part 405, subpart I rules, OMHA was not yet in
operation. Further, processes and procedures were being established
under the part 405 subpart I rules, with new CMS contractors and the
newly transitioned ALJ hearing function. Since that time, OMHA and CMS
and its contractors have developed operating arrangements to help
ensure appeals flow between CMS contractors and OMHA, and that appeal
instructions for appellants provide clear direction on how and where to
file requests for hearings and reviews. However, many of the current
rules for the ALJ hearing program that OMHA administers reflect the
transition that was occurring at the time of the 2005 Interim Final
Rule, and OMHA is not mentioned in the regulation text.
To provide clarity to the public on the role of OMHA in
administering the ALJ hearing program, and to clearly identify where
requests and other filings should be directed, we proposed to define
OMHA in Sec. 405.902 as the Office of Medicare Hearings and Appeals
within the U.S. Department of Health and Human Services, which
administers the ALJ hearing process in accordance with section
1869(b)(1) of the Act. We also proposed to amend rules throughout part
405, subparts I and J; part 422, subpart M; part 423, subparts M and U;
and part 478, subpart B to reference OMHA or an OMHA office, in place
of current references to an unspecified entity, ALJs, and ALJ hearing
offices, when a reference to OMHA or an OMHA office provides a clearer
explanation of a topic. To implement these changes, we proposed to
revise provisions throughout part 405 subparts I and J, part 422
subpart M, part 423 subparts M and U, and part 478 subpart U, as
detailed in proposed revisions to specific sections in section III of
the proposed rule.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received three comments on this proposal. One commenter
supported the proposal as necessary to update regulatory language to
clearly reflect the role of OMHA in administering ALJ appeals. Two
commenters opposed the proposal. One commenter argued that each change
from ``ALJ'' to ``OMHA'' takes a specific power granted directly to an
ALJ adjudicating a case and transfers it to OMHA administrators.
Another commenter interpreted the proposal as a transfer of control
over ALJs' workloads from ALJs to OMHA.
Response: We disagree with the commenters' interpretation of the
proposal as a transfer of authority from ALJs to OMHA administrators.
Rather, the proposal provides clarity to the public on the role of OMHA
in administering the ALJ hearing program and clearly identifies where
requests and other filings should be directed to ease appellant
confusion and more efficiently process appeals by helping to ensure
filings are properly routed. As discussed above (and in section II.D of
the proposed rule), many of the current rules for the ALJ hearing
program that OMHA administers reflect the transition that was occurring
at the time of the 2005 Interim Final Rule. OMHA was not yet in
operation or mentioned in the regulation text at the time the Interim
Final Rule was published in March 2005. We believe that reference to
OMHA or an OMHA office in place of current references to an unspecified
entity, ALJs, and ALJ hearing offices
[[Page 4993]]
would provide a clearer explanation of a topic in certain regulations
and would clarify areas of the regulations that may have confused
appellants in the past. For example, current Sec. 405.970(e)(2)(ii)
states that, for cases that have been escalated from the
reconsideration level of appeal to the OMHA level of appeal, the QIC
forwards the case file ``to the ALJ hearing office.'' The concept of an
ALJ hearing office is most analogous to OMHA's individual field
offices. In practice, however, the QIC sends case files for escalated
cases to a centralized location, not to individual field offices. Thus,
we believe reference to OMHA would be more appropriate here. Similarly,
as another example, current Sec. 405.1104 states that an appellant who
files a timely request for hearing before an ALJ and whose appeal
continues to be ``pending before the ALJ'' at the end of an applicable
adjudication time period under Sec. 405.1016 may request to escalate
the appeal to the Council level of review. However, appeals that are
eligible to be escalated may be unassigned and not yet before an ALJ.
Thus, we believe that it would be appropriate to state ``pending with
OMHA'' in this regulation (see Sec. 405.1016(f)(1), as finalized).
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing our
proposals without modification to define OMHA and replace certain
references to ALJs, ALJ hearing offices, and unspecified entities with
a reference to OMHA or an OMHA office.
5. Medicare Appeals Council References
The Council is currently referred to as the ``MAC'' throughout
current part 405, subpart I; part 422, subpart M; and part 423,
subparts M and U. This reference has caused confusion in recent years
with the transition from Fiscal Intermediaries and Carriers, to
Medicare administrative contractors--for which the acronym ``MAC'' is
also commonly used--to process claims and make initial determinations
and redeterminations in the Medicare Part A and Part B programs. In
addition, current Sec. Sec. 422.618 and 422.619 reference the Medicare
Appeals Council but use ``Board'' as the shortened reference, and part
478, subpart B, references the DAB as the reviewing entity for appeals
of ALJ decisions and dismissals but the Council is the entity that
conducts reviews of ALJ decisions and dismissals, and issues final
decisions of the Secretary for Medicare appeals under part 478, subpart
B.
To address potential confusion with references to Medicare
administrative contractors and align references to the Council as the
reviewing entity for appeals of ALJ decisions and dismissals throughout
part 405, subpart I; part 422, subpart M; and part 423, subparts M and
U, we proposed to amend the following rules to replace ``MAC'' or
``Board'' with ``Council'': Sec. Sec. 405.902, 405.904, 405.906,
405.908, 405.910, 405.926, 405.980, 405.982, 405.984, 405.990,
405.1026, 405.1036, 405.1037, 405.1042, 405.1046, 405.1048, 405.1050,
405.1052, 405.1054, 405.1060, 405.1062, 405.1063, 405.1100, 405.1102,
405.1104 (as re-designated and revised as proposed Sec. 405.1016(e)-
(f)), 405.1106, 405.1108, 405.1110, 405.1112, 405.1114, 405.1116,
405.1118, 405.1120, 405.1122, 405.1124, 405.1126, 405.1128, 405.1130,
405.1132, 405.1134, 405.1136, 405.1138, 405.1140, 422.561, 422.562,
422.608, 422.612, 422.616, 422.618, 422.619, 422.622, 422.626, 423.560,
423.562, 423.1968, 423.1974, 423.1976, 423.1978, 423.1980, 423.1982,
423.1984, 423.1990, 423.2026, 423.2036, 423.2042, 423.2046, 423.2048,
423.2050, 423.2052, 423.2054, 423.2062, 423.2063, 423.2100, 423.2102,
423.2106, 423.2108, 423.2110, 423.2112, 423.2114, 423.2116, 423.2118,
423.2120, 423.2122, 423.2124, 423.2126, 423.2128, 423.2130, 423.2134,
423.2136, 423.2138, and 423.2140.
In addition, to align references to the Council as the reviewing
entity for appeals of ALJ decisions and dismissals in part 478, subpart
B, we proposed to amend Sec. Sec. 478.46 and 478.48 to replace
``Departmental Appeals Board'' and ``DAB,'' with ``Medicare Appeals
Council'' and ``Council''.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received two comments on this proposal--one of which
was a collective comment submitted by the four then-current CMS DME
Medicare Administrative Contractors (MACs). Both comments supported the
proposal to replace references to ``MAC'' with ``Council'' as necessary
to reduce confusion between the Council and CMS Medicare Administrative
Contractors.
Response: We thank the commenters for their support and agree that
the proposed revisions will reduce confusion.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing our
proposals without modification to replace references to ``MAC'' and
``Board,'' with ``Council'' in the sections listed above, and to
replace references to ``Departmental Appeals Board'' and ``DAB'' with
``Medicare Appeals Council'' and ``Council'' in Sec. Sec. 478.46 and
478.48. In addition to the sections listed above, we are also making a
conforming technical revision to Sec. 423.558(b) to replace the
reference to ``MAC'' in Sec. 423.558(b) with ``Council.''
B. Specific Provisions of Part 405, Subpart I and Part 423, Subparts M
and U
1. Overview
Part 405, subpart I and part 423, subpart U contain detailed
procedures for requesting and adjudicating a request for an ALJ
hearing, and a request for a review of a QIC or IRE dismissal. Part
423, subpart U provisions were proposed in the March 17, 2008 Federal
Register (73 FR 14342) and made final in the December 9, 2009 Federal
Register (74 FR 65340), and generally follow the part 405, subpart I
procedures. In this final rule, we generally discuss provisions of the
proposed rule related to part 405, subpart I, and then whether any
aligning revisions to part 423, subpart U, were proposed, unless a
provision is specific to part 405 and there is no corresponding part
423 provision. We then discuss the policies we are finalizing in this
final rule related to parts 405 and 423.
2. General Provisions, Reconsiderations, Reopenings, and Expedited
Access to Judicial Review
a. Part 423, Subpart M General Provisions (Sec. 423.562)
Current Sec. 423.562(b)(4) lists the appeal rights of a Part D
plan enrollee, if the enrollee is dissatisfied with any part of a
coverage determination. Specifically, paragraph (b)(4)(v) describes the
right to request Council review of the ALJ's hearing decision if the
ALJ affirms the IRE's adverse coverage determination in whole or in
part, and paragraph (b)(4)(vi) describes the right to judicial review
of the hearing decision if the Council affirms the ALJ's adverse
coverage determination in whole or in part, and the amount in
controversy requirements are met. We proposed revisions to paragraphs
(b)(4)(v) and (vi) to account for the possibility that an appeal at the
OMHA level could be decided by an attorney adjudicator or by an ALJ
without conducting a hearing. 81 FR 43790, 43797. We proposed to revise
paragraph (b)(4)(v) to insert ``or attorney adjudicator'' after each
instance of ``the ALJ.'' We stated in the proposed rule that this
proposal was necessary to implement the proposal to allow attorneys to
adjudicate requests for an ALJ hearing when no hearing is
[[Page 4994]]
conducted as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above), by stating the right to request
Council review of an attorney adjudicator decision that affirms the
IRE's adverse coverage determination. We also proposed to remove
``hearing'' before ``decision'' in paragraph (b)(4)(v) to reflect that
an attorney adjudicator issues decisions without conducting a hearing,
and an ALJ may issue a decision without conducting a hearing.
In paragraph (b)(4)(vi), we proposed to remove ``ALJ's'' and insert
``ALJ's or attorney adjudicator's'' in its place to implement the
proposal to allow attorneys to adjudicate requests for an ALJ hearing
when no hearing is conducted as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), by including an
attorney adjudicator's decision as a decision that may be affirmed by
the Council. We also proposed to remove ``hearing'' before ``decision''
in paragraph (b)(4)(vi) because while the Council may conduct a
hearing, Council decisions are generally issued without conducting a
hearing, and the decision of the Council is subject to judicial review.
We received no comments on these proposals, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing these changes to Sec. 423.562 as
proposed without modification.
b. Part 423, Subpart U Title and Scope (Sec. 423.1968)
The current heading of part 423, subpart U references ALJ hearings
but does not reference decisions. We proposed to revise the heading by
replacing ``ALJ Hearings'' with ``ALJ hearings and ALJ and attorney
adjudicator decisions'' to reflect that subpart U covers decisions by
ALJs and attorney adjudicators, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above). 81 FR 43790,
43797.
Current Sec. 423.1968 explains the scope of the requirements in
subpart U. We proposed in Sec. 423.1968 to expand the scope of subpart
U to include actions by attorney adjudicators, as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 above). 81
FR 43790, 43797. Specifically, we proposed at Sec. 423.1968(a) to add
that subpart U sets forth requirements relating to attorney
adjudicators with respect to reopenings; at Sec. 423.1968(b) to add
that subpart U sets forth requirements relating to ALJ decisions and
decisions of attorney adjudicators if no hearing is conducted; and at
Sec. 423.1968(d) to add that subpart U sets forth the requirements
relating to Part D enrollees' rights with respect to ALJ hearings and
ALJ or attorney adjudicator reviews. We stated that these changes are
necessary to accurately describe the scope of the revised provisions of
subpart U to implement the attorney adjudicator proposal discussed in
section II.B of the proposed rule and II.A.2 of this final rule above.
We received no comments on these proposals, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing these changes to Sec. 423.1968 as
proposed without modification.
c. Medicare Initial Determinations, Redeterminations and Appeals:
General Description (Sec. 405.904)
Section 405.904(a) provides a general overview of the entitlement
and claim appeals process to which part 405, subpart I applies. Current
paragraphs (a)(1) and (a)(2) provide that if a beneficiary obtains a
hearing before an ALJ and is dissatisfied with the decision of the ALJ,
the beneficiary may request that the Council review the case. To
provide for the possibility that a decision may be issued without
conducting a hearing by an ALJ, as permitted under current rules, or an
attorney adjudicator, as proposed in II.B of the proposed rule (and
discussed in section II.A.2 of this final rule above), we proposed to
add language in paragraphs (a)(1) and (a)(2) to provide that if the
beneficiary is dissatisfied with the decision of an ALJ or attorney
adjudicator when no hearing is conducted, the beneficiary may request
that the Council review the case. We stated in the proposed rule that
this would provide a comprehensive overview of the entitlement and
claim appeals process, with information on the potential for and right
to appeal decisions by ALJs when no hearing is conducted, and the right
to appeal decisions by attorney adjudicators. 81 FR 43790, 43797.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on this proposal. The commenter
supported our proposal as necessary to ensure that beneficiaries'
concerns were given appropriate consideration by clearly stating that
there is a right to request that the Council review a case when no
hearing is conducted and a decision is issued by an ALJ or attorney
adjudicator.
Response: We thank the commenter for its support. We believe the
changes will help beneficiaries (and others appellants pursuant to
Sec. 405.904(b)) understand that they have the same right to appeal
decisions by ALJs when no hearing is conducted, or decisions by
attorney adjudicators, as they currently have to appeal decisions by an
ALJ when a hearing is conducted.
After review and consideration of the comment received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. 405.904 as proposed, with the following
modifications. We are removing ``Administrative Law Judge (ALJ)'' and
``Medicare Appeals Council (Council)'' from paragraph (a)(1) and adding
``ALJ'' and ``Council'' in their places, respectively, for consistency
with the rest of part 405, subpart I and because the term ``ALJ'' is
already defined in Sec. 405.902.
d. Parties to the Initial Determinations, Redeterminations,
Reconsiderations Proceedings on a Request for Hearing, and Council
Review (Sec. 405.906)
Section 405.906 discusses parties to the appeals process and
subsection (b) addresses parties to the redetermination,
reconsideration, hearing and MAC. We proposed in the paragraph heading
and introductory text to subsection (b) to replace the phrases
``hearing and MAC'' and ``hearing, and MAC review,'' respectively, with
``proceedings on a request for hearing, and Council review'' because,
absent an assignment of appeal rights, the parties are parties to all
of the proceedings on a request for hearing, including the hearing if
one is conducted, and they are parties to the Council's review. 81 FR
43790, 43797.
We received no comments on this proposal, other than comments in
support of our general proposals to replace references to ``MAC'' and
``Board,'' with ``Council,'' and to replace references to
``Departmental Appeals Board'' and ``DAB'' with ``Medicare Appeals
Council'' and ``Council,'' as
[[Page 4995]]
discussed in section II.A.5 above. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing these
changes to Sec. 405.906 as proposed without modification.
e. Medicaid State Agencies (Sec. 405.908)
Section 405.908 discusses the role of Medicaid State agencies in
the appeals process and states that if a State agency files a request
for redetermination, it may retain party status at the QIC, ALJ, MAC
and judicial review levels. We proposed to replace ``ALJ'' with
``OMHA'' to provide that the State agency has party status regardless
of the adjudicator assigned to the State agency's request for an ALJ
hearing or request for review of a QIC dismissal at the OMHA level of
review, as attorney adjudicators may issue decisions on requests for
hearing and adjudicate requests for reviews of QIC dismissals, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 above). 81 FR 43790, 43797-43798.
Provided below is a summary of the specific comment received and
response to the comment:
Comment: We received one comment on this proposal. The commenter
supported the proposal to clarify that Medicaid State agencies that
file a request for redetermination have the right to retain party
status at the OMHA level regardless of whether a case is assigned to an
ALJ or to an attorney adjudicator. However, the commenter asked that
the term ``OMHA level of review'' be replaced with ``and attorney
adjudicator or ALJ review,'' or, alternatively, that the term ``OMHA
level of review'' be defined as the level of review that entails review
by an ALJ or attorney adjudicator, and used consistently throughout the
regulations. The commenter expressed concern that the term ``OMHA level
of review'' could be confusing because the term is not currently in
common use.
Response: We thank the commenter for the recommendation. As a
preliminary matter, we note that the changes proposed in Sec. 405.908
to which the commenter is referring would revise the last sentence to
read, ``If a State agency files a request for redetermination, it may
retain party status at the QIC, OMHA, Council, and judicial review
levels.'' The word ``review'' in this sentence is part of the term
``judicial review'' as described in Sec. 405.1136, rather than a
general descriptor of all levels of appeal. Therefore, we believe the
term to which the commenter objects can more accurately be described as
the ``OMHA level.'' We believe the term ``OMHA level'' provides a
convenient shorthand for referring to the adjudication level that
entails an ALJ hearing, or an on-the-record review by an ALJ or
attorney adjudicator, and we note that the term is also used in
proposed Sec. Sec. 405.910, 405.956, 405.976, 405.1028, 405.1032,
405.1046, 405.1100, 405.1108, 405.1110, 405.1122, 423.2032, 423.2110,
and 423.2122. We do not share the commenter's concern that the term as
used in proposed Sec. 405.908 or elsewhere in part 405, subpart I or
part 423, subparts M and U is confusing, especially in light of the
proposed addition of ``OMHA'' and ``attorney adjudicator'' to the
definitions being finalized in Sec. 405.902, which collectively define
OMHA as administering the ALJ hearing process in accordance with
section 1869(b)(1) of the Act, and attorney adjudicators as employees
of OMHA who are authorized to take actions under subpart I on requests
for ALJ hearing.
After review and consideration of the comment received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. 405.908 as proposed without modification.
f. Appointed Representatives (Sec. 405.910)
As described below, we proposed a number of revisions to the rules
in Sec. 405.910 concerning the appointment of a representative to act
on behalf of an individual or entity in exercising his or her right to
an initial determination or appeal. 81 FR 43790, 43798-43799. The 2002
Proposed Rule (67 FR 69318 through 69319) explained that the Sec.
405.910 requirements for a valid appointment of a representative are
necessary to help ensure that adjudicators are sharing and
disseminating confidential information with the appropriate
individuals. The 2005 Interim Final Rule (70 FR 11428 through 11431)
adopted a general requirement to include a beneficiary's health
insurance claim number (HICN) for a valid appointment of a
representative in Sec. 405.910(c)(5). The SMART Act Final Rule (80 FR
10614, 10617) revised Sec. 405.910(c)(5) to explicitly limit the
requirement to include a beneficiary's HICN to instances in which the
beneficiary is the party appointing a representative. However, the
Medicare manual provision for completing a valid appointment of
representative (Medicare Claims Processing Manual (Internet-Only Manual
100-4), chapter 29, section 270.1.2) details the requirements for an
appointment of representation to contain a unique identifier of the
party being represented. Specifically, if the party being represented
is the beneficiary, the Medicare number must be provided, and if the
party being represented is a provider or supplier, the National
Provider Identifier (NPI) number should be provided. Additionally, the
official form for executing a valid appointment of representative (form
CMS-1696 (OMB No. 0938-0950), available at https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS1696.pdf) provides a blank
space for the party to include a Medicare or NPI number. To assist
adjudicators in sharing and disseminating confidential information only
with appropriate individuals, we proposed to revise Sec. 405.910(c)(5)
to add a requirement to include the Medicare NPI of the provider or
supplier that furnished the item or service when the provider or
supplier is the party appointing a representative. We stated in the
proposed rule that we were retaining the requirement to identify the
beneficiary's Medicare HICN when the beneficiary is the party
appointing a representative.
Section 405.910 also addresses defective appointments, and
delegations and revocations of appointments. However, there has been
confusion on the effects on the adjudication of an appeal when a
defective appointment must be addressed, or when an adjudicator is not
timely informed of a delegation or revocation of an appointment. To
address the effect of a defective appointment on the adjudication of an
appeal to which an adjudication time frame applies, we proposed to add
Sec. 405.910(d)(3), which would extend an applicable adjudication time
frame from the later of (1) the date that a defective appointment of
representative was filed or (2) the date the current appeal request was
filed by the prospective appointed representative, to the date that the
defect in the appointment was cured or the party notifies the
adjudicator that he or she will proceed with the appeal without a
representative. We proposed this revision because, in accordance with
Sec. 405.910(d)(1) and (d)(2), a prospective appointed representative
lacks the authority to act on behalf of a party and is not entitled to
obtain or receive any information related to the appeal. Thus, contact
with the party may be necessary to obtain missing information from the
appointment, which may delay adjudicating the appeal until the
appointment is cured or the party decides to proceed with the appeal
without a representative. However, we proposed that if the request was
filed by a prospective
[[Page 4996]]
appointed representative, the request would be considered filed for the
purpose of determining timeliness of the request, even if the
individual is not the appointed representative after the appointment is
cured, or the party decides to proceed with the appeal without a
representative.
We also proposed at Sec. 405.910(f)(1) to replace ``ALJ level''
with ``OMHA level'' so there would be no confusion that proceedings at
the OMHA level are considered proceedings before the Secretary for
purposes of appointed representative fees, regardless of whether the
case is assigned to an ALJ or attorney adjudicator.
Section 405.910(i)(2) and (i)(3) provide that if an appeal involves
an appointed representative, an ALJ sends notices of actions or appeal
decisions, and requests for information or evidence regarding a claim
that is appealed to the appointed representative. We proposed to insert
``or attorney adjudicator'' after ``ALJ'' in Sec. 405.910(i)(2) and
(i)(3). This would provide that attorney adjudicators, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2 of
this final rule above), like an ALJ under the current provisions, would
send notices of actions or appeal decisions, and requests for
information or evidence regarding a claim that is appealed to the
appointed representative.
A representative and/or the represented party is responsible for
keeping the adjudicator of a pending appeal current on the status of
the representative. In practice, sometimes adjudicators are not
informed of a delegation or revocation of an appointment of
representative that has been filed for an appeal, which results in
confusion and potentially duplicative or unnecessary proceedings. We
proposed to revise Sec. 405.910(l)(2) (which, as described later, we
proposed to re-designate as (l)(1)(ii)) to add that a delegation is not
effective until the adjudicator receives a copy of the party's written
acceptance of the delegation, unless the representative and designee
are attorneys in the same law firm or organization, in which case the
written notice to the party of the delegation may be submitted if the
acceptance is not obtained from the party. This revision would
emphasize the importance of keeping adjudicators current on the status
of the representative and also state the effects of failing to do so.
The revisions we proposed to Sec. 405.910(l)(2) (re-designated as
proposed (l)(1)(ii)) would also serve to assist adjudicators in sharing
and disseminating confidential information only with appropriate
individuals, and to provide adjudicators with appropriate contact
information for scheduling purposes. To accommodate proposed paragraph
(l)(2), we proposed to re-designate current paragraph (l), except for
the title of the paragraph, as paragraph (l)(1), and to also re-
designate the current subparagraphs accordingly. In addition, we
proposed to add a missing ``by'' in current paragraph (l)(1)(ii) (re-
designated as (l)(1)(i)) of Sec. 405.910 to indicate that a designee
accepts to be obligated ``by'' and comply with the requirements of
representation. We also proposed to revise language in current
paragraph (l)(2) (re-designated as proposed (1)(l)(ii)) of Sec.
405.910 to clarify that ``this signed statement'' refers to the
``written statement signed by the party,'' and the written statement
signed by the party is not required when the appointed representative
and designee are attorneys in the same law firm or organization and the
notice of intent to delegate under paragraph (l)(1)(i) indicates that
fact. To further emphasize the importance of keeping adjudicators
current on the status of the representative and clarify the effects of
failing to do so, we also proposed to add at Sec. 405.910(l)(3) and
(m)(4) that a party's or representative's failure to notify the
adjudicator that an appointment of representative has been delegated or
revoked, respectively, is not good cause for missing a deadline or not
appearing at a hearing.
We did not propose any changes for part 423, subpart U because it
does not have a corresponding provision for representative
appointments.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: Two commenters expressed concern that the proposed changes
will not resolve the inefficiencies and inconsistencies that parties
currently experience when appointing and changing representatives. The
commenters recommended that instead of adding additional regulations,
changes are needed in OMHA's internal procedures for receiving and
processing appointments of representatives and changes in
representatives to ensure that these appointments and changes are
processed efficiently and consistently.
Response: OMHA is currently implementing several tools that we
believe will assist with making our internal processing procedures more
consistent, more efficient, and more appellant-friendly. The OCPM,
available on the OMHA Web site, establishes uniform day-to-day
procedures for processing appeals at the OMHA level of adjudication,
including a detailed chapter outlining procedures related to
representatives. OMHA is also developing an electronic case management
system that will streamline case processing and will have a public
facing portal for appellants and representatives to electronically file
documents, including relevant appointment of representative forms, and
to check the status of appeals online. OMHA maintains a toll free
beneficiary help line and an OMHA national toll free line to assist
beneficiaries and other appellants with questions regarding their
appeals. Finally, OMHA provides in-house training periodically to its
ALJs, attorneys, and other staff to help ensure understanding and
compliance with all regulations and internal policy applicable to
processing appeals. We anticipate that these tools and ongoing training
will help improve OMHA's case processing and address the commenters'
concerns. However, we note that OMHA is responsible for protecting the
personally identifiable information and protected health information
contained in the administrative record, and as such, requires changes
in representation to be filed for each appeal to which the change is
applicable. We believe the tools discussed above and the proposed
changes to the regulation that we are adopting in this final rule, will
help to ensure the administrative record for the appeal is complete,
and the authorization for the representative to receive appeal-related
information is present for each appeal.
Comment: One commenter asked whether the regulations required use
of the beneficiary's entire Medicare health insurance claim number
(HICN) for a valid appointment of representative or if an abbreviated
HICN is adequate, and whether it is statutorily required to send a copy
of the appointment of representative form to the other parties when the
representative files an appeal or if it is sufficient to include it
only in the copy of the appeal request that is sent to the ``DME MAC,
QIC, ALJ, or adjudicator.''
Response: We note as an initial matter that the proposed changes to
Sec. 405.910 do not specifically address or impact either of the
questions asked by the commenter. The regulation at Sec.
405.910(c)(5), which is also carried over into Sec. 405.910(c)(5) as
finalized in this rule, requires that when a beneficiary is the
represented party, a valid appointment must include the beneficiary's
HICN. The language of the regulation does not permit an abbreviated or
partial identification and therefore a complete HICN is required. With
respect to the commenter's second
[[Page 4997]]
question, the regulation at Sec. 405.910(c)(7), which is carried over
into the Sec. 405.910(c)(7) as finalized in this rule, states that to
be valid, the appointment of representation must be filed with the
entity processing the party's initial determination or appeal. There is
no requirement in section 1869 of the Act or in part 405, subpart I to
send a copy of an appointment of representative to other parties to the
appeal. While section III.A.3.g.v of the proposed rule (discussed in
section II.B.3.g.v of the final below) addresses certain copy
requirements when submitting a request for hearing, the Appointment of
Representative form is not specifically addressed in that section.
Section 405.1014(d)(1), as finalized in this rule, states that if
additional materials submitted with a request are necessary to provide
the information required for a complete request in accordance with
Sec. 405.1014(b), copies of those materials must be sent to the other
parties as well. With respect to representative information, Sec.
405.1014(a)(1)(iii), as finalized in this rule, specifies that a
request for hearing must contain the name, address, and telephone
number of the designated representative and does not separately require
that the appellant also provide a copy of the Appointment of
Representative form. However, to the extent the request for hearing
does not otherwise contain this information, a copy of the Appointment
of Representative form may be sent to the other parties to fulfill this
requirement. With regard to appeals filed with a Medicare
Administrative Contractor and QIC, there is no requirement, statutory
or otherwise, that an appellant provide a copy of a request for appeal
or any other filings to the other parties to the appeal. Although the
commenter did not specifically mention requests for review filed with
the Council, we note that Sec. 405.1106(a) and (b), as finalized in
this rule, require that appellants send requests for Council review or
request for escalation to the entity specified in the notice of the
ALJ's or attorney adjudicator's action or to OMHA respectively, and
copies of the request to the other parties who received notice of the
ALJ or attorney decision or dismissal or the QIC reconsideration,
respectively. Section 405.1112, as finalized, requires that the request
for review or escalation contain the name and signature of the
representative. As with requests for an ALJ hearing, if the request for
Council review or escalation does not otherwise include the
representative's name or signature, a copy of the Appointment of
Representative form may be sent to the other parties in fulfillment of
the copy requirements in Sec. 405.1106(a) and (b).
Comment: Two commenters noted that the official form used for
appointment of a representative (CMS-1696) required revisions to
address certain appointments and representatives. One commenter
indicated that the form did not provide for a physician's National
Provider Identification number (NPI) when the party being represented
is a physician. Another commenter noted that the form should include a
place for a health plan to indicate ``the name/title of [its]
representative and whether they will be attending as a witness,
representative, or medical expert.''
Response: Form CMS-1696 provides that when the party being
represented is a provider, the provider's NPI must be provided, and
contains a box at the top of the form after the party name for either
the HICN or National Provider Identifier number. In the context of an
NPI, the term ``provider'' has been given a broader definition than in
other Medicare contexts. When the final rule adopting the NPI as the
standard unique health identifier for health care providers for use in
the health care system was published in 2004, the term ``health care
provider'' was defined as ``a provider of services (as defined in
section 1861(u) of the Act, 42 U.S.C. 1395x(u)), a provider of medical
or health services (as defined in section 1861(s) of the Act, 42 U.S.C.
1395x(s)), and any other person or organization who furnishes, bills,
or is paid for health care in the normal course of business.''45 CFR
160.103. In Sec. 405.902, the term ``provider'' is defined more
narrowly as ``a hospital, critical access hospital, skilled nursing
facility, comprehensive outpatient rehabilitation facility, home health
agency, or hospice that has in effect an agreement to participate in
Medicare, or clinic, rehabilitation agency, or public health agency
that has in effect a similar agreement, but only to furnish outpatient
physical therapy or speech pathology services, or a community mental
health center that has in effect a similar agreement but only to
furnish partial hospitalization services.'' ``The term ``supplier'' is
separately defined as ``unless the context otherwise requires, a
physician or other practitioner, a facility, or other entity (other
than a provider of services) that furnishes items or services under
Medicare.''
Consistent with existing Medicare manual provisions found in
chapter 29, section 270.1.2 of the Medicare Claims Processing Manual
(Internet-Only Manual 100-4), Sec. 405.910(c)(5), as finalized in this
rule, expressly requires that when a provider or supplier is the party
appointing a representative, the provider's or supplier's NPI must be
provided in order to create a valid appointment, and a physician is
included in the Sec. 405.902 definition of supplier. We thank the
commenters for the suggestion to revise form CMS-1696, and may consider
the suggestion for potential future clarification to the form. However,
we note that the regulation is the binding authority, and parties
wishing to appoint a representative must comply with the requirements
of Sec. 405.910.
With respect to the second comment, the commenter is correct that
form CMS-1696 does not currently address appointment of a
representative by a health plan. The MAO is a party to a Part C MA
appeal, and an applicable plan (which may be a health plan) may be a
party to an appeal involving a Medicare Secondary Payer (MSP)
overpayment recovery assessed against the applicable plan. Although the
form does not currently address health plans, health plans may use form
CMS-1696, instead of a providing a separate notice that complies with
Sec. 405.910(c). However, in our experience, the individuals who file
an appeal or appear at a hearing on behalf of health plans are
generally employees of the plan, including medical directors, physician
or nurse advisors, regulatory analysts, or in-house counsels. Indeed,
this appears consistent with the commenter's request for a space to
indicate whether the ``representative'' will be attending as a witness,
representative, or medical expert. An appointment of representation
under Sec. 405.910 is not necessary where an individual who is
employed by the plan is the person filing the appeal or appearing on
behalf of the plan, and a representative, as that term is used in Sec.
405.910, generally does not serve as a witness or medical expert in an
appeal. Nevertheless, there may be instances where a health plan or
applicable plan wishes to appoint a non-employee representative. In
these instances Sec. 405.910(a) is clear that any party to an appeal
may appoint a representative. We note, however, that health plans and
applicable plans that opt to use form CMS-1696 to appoint a
representative would not have HICNs or NPIs, and would not need to
complete that box, and we did not propose to require that another
unique identifier be included in appointments of representative where a
health plan or applicable plan is the party being represented.
After review and consideration of the comments received, for the
reasons
[[Page 4998]]
discussed above and in the proposed rule, we are finalizing the changes
noted above to Sec. 405.910 as proposed without modification.
g. Actions That Are Not Initial Determinations (Sec. 405.926)
Current Sec. 405.926(l) provides that an ALJ's decision to reopen
or not to reopen a decision is not an initial determination, and in
accordance with the introductory language of Sec. 405.926, is
therefore not appealable under subpart I. In section III.A.2.l of the
proposed rule, we proposed to revise the reopening rules to provide
that attorney adjudicators would have the authority to reopen their
decisions to the same extent that ALJs may reopen their decisions under
the current provisions. We proposed to insert ``or attorney
adjudicator's'' after ``ALJ's'' in Sec. 405.926(l) to provide that the
attorney adjudicator's decision to reopen or not reopen a decision also
is an action that is not an initial determination and therefore not an
appealable action under subpart I. 81 FR 43790, 43799.
Current Sec. 405.926(m) provides that a determination that CMS or
its contractors may participate in or act as parties in an ALJ hearing
is not an initial determination, and in accordance with the
introductory language of Sec. 405.926, is therefore not appealable
under subpart I. As explained in section III.A.3.f of the proposed rule
and II.B.3.f of this final rule below, we proposed to revise Sec.
405.1010, which currently discusses when CMS or a contractor may
participate in an ALJ hearing. As explained in the proposal to revise
Sec. 405.1010, CMS or a contractor may elect to participate in the
proceedings on a request for an ALJ hearing for which no hearing is
conducted, in addition to participating in an ALJ hearing as a non-
party participant. To align with our proposed revision to Sec.
405.1010, we proposed to revise Sec. 405.926(m) to indicate that CMS
or its contractors may participate in the full scope of the proceedings
on a request for an ALJ hearing, including the hearing, by replacing
``participate in or act as parties in an ALJ hearing,'' with
``participate in the proceedings on a request for an ALJ hearing or act
as parties in an ALJ hearing.'' 81 FR 43790, 43799.
We received no comments on these proposals, other than: (1)
Comments discussed in section II.A.2 of the final rule above related to
our general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs; and (2) comments discussed in
sections III.A.3.f.i through III.A.3.f.iii of this final rule below
related to our proposals regarding CMS and CMS contractors as
participants or parties in the adjudication process. Accordingly, for
the reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. 405.926 as proposed without modification.
h. Notice of a Redetermination (Sec. 405.956)
Current Sec. 405.956(b)(8) requires that the notice of a
redetermination include a statement that evidence not submitted to the
QIC is not considered at an ALJ hearing or further appeal, unless the
appellant demonstrates good cause as to why that evidence was not
provided previously. We proposed to remove ``an ALJ hearing'' and add
``the OMHA level'' in its place so that the notice of a redetermination
is clear that, absent good cause and subject to the exception in Sec.
405.956(d) for beneficiaries not represented by a provider or supplier,
evidence that was not submitted to the QIC is not considered by an ALJ
or an attorney adjudicator, as defined in section II.B of the proposed
rule and II.A.2 of this final rule above. 81 FR 43790, 43799.
We received no comments on this proposal, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing these
changes to Sec. 405.956 as proposed without modification.
i. Time Frame for Making a Reconsideration Following a Contractor
Redetermination, Withdrawal or Dismissal of a Request for a
Reconsideration, and Reconsideration (Sec. Sec. 405.970, 405.972, and
405.974)
As discussed in the 2005 Interim Final Rule (70 FR 11444 through
11445) and the 2009 Final Rule (74 FR 65311 through 65312), HHS adopted
a policy of providing for one level of administrative review of a
dismissal of a request for appeal. As a result, an adjudicator's
decision or dismissal when reviewing a dismissal action issued at the
previous level is binding and not subject to further review. The policy
balances a party's need for review and the need for administrative
finality. The policy is embodied in the rules relating to reviews of
dismissals at the next adjudicative level in Sec. Sec. 405.972(e),
405.974(b)(3), 405.1004(c), 405.1102(c), 405.1108(b), and 405.1116.
At the QIC level of appeal, a review of a contractor
redetermination and a review of a contractor's dismissal of a request
for a redetermination are both characterized as a ``reconsideration.''
While the outcome of a QIC's reconsideration of a contractor dismissal
is differentiated and further reviews are not permitted in accordance
with Sec. 405.974(b)(3), an ambiguity exists with regard to the time
frame for completing this type of reconsideration and escalation
options when that time frame is not met. Current Sec. 405.970
establishes the time frame for making a reconsideration without further
qualification. However, section 1869(b)(1)(D)(i) of the Act establishes
that a right to a reconsideration of an initial determination (which
includes a redetermination under section 1869(a)(3)(D) of the Act)
exists if a timely request for a reconsideration is filed within 180
days following receipt of a contractor's redetermination, which is
discussed in Sec. 405.962. In contrast, Sec. 405.974(b)(1) requires
that a request for a QIC reconsideration of a contractor's dismissal of
a request for redetermination be filed within 60 calendar days after
receiving the contractor's notice of dismissal. Section 1869 of the Act
does not address dismissals. Rather, section 1869(c)(3)(C)(i) and
(c)(3)(C)(ii) of the Act only provide for a time frame to complete a
reconsideration of an initial determination, and an option to escalate
a case if that time frame is not met.
The effect of the ambiguity in Sec. 405.970 is the potential
escalation of a request for a QIC reconsideration of a contractor's
dismissal when the reconsideration is not completed within 60 calendar
days of a timely filed request for a reconsideration of the dismissal,
and a potential hearing being required in accordance with Sec.
405.1002(b). The potential effect of this ambiguity is contrary to the
policy of limiting reviews of dismissals to the next adjudicative level
of administrative appeal, as well as the statutory construct for
providing ALJ hearings after QIC reconsiderations of redeterminations,
or escalations of requests for reconsiderations following a
redetermination. We also note that in the parallel context of an ALJ
review of
[[Page 4999]]
a QIC's dismissal of a request for reconsideration, Sec. Sec. 405.1002
and 405.1004 establish a clear distinction between a request for
hearing following a QIC reconsideration and a request for a review of a
QIC dismissal, and Sec. Sec. 405.1016 and 405.1104 address the
adjudication time frames for ALJ decisions, and the option to escalate
an appeal to the Council when a time frame is not met, only in the
context of a request for hearing, in accordance with section 1869(d)(1)
and (d)(3)(A) of the Act.
To address this unintended outcome of Sec. 405.970, we proposed to
amend the title of Sec. 405.970 and paragraphs (a), (b)(1), (b)(2),
(b)(3), (c), (e)(1), and (e)(2)(i) to provide that the provisions would
only apply to a request for a reconsideration following a contractor
redetermination, and not to a request for QIC review of a contractor's
dismissal of a request for redetermination. We stated in the proposed
rule that these revisions would further our policy on reviews of
dismissals and help appellants better understand what may be escalated
to OMHA for an ALJ hearing. We also proposed to replace ``the ALJ
hearing office'' in current paragraph (e)(2)(ii) with ``OMHA'' because
the QIC sends case files for escalated cases to a centralized location,
not to individual field offices. We did not propose any parallel
changes for part 423 because subpart U does not address IRE
reconsiderations and subpart M does not have a provision with the same
ambiguity. 81 FR 43790, 43799-43800.
To provide additional clarity to the procedures for reviews of
dismissal actions, we also proposed to amend the text in Sec. Sec.
405.972(b)(3), (e) and 405.974(b)(3), and the introductory text of
Sec. 405.974(b) to replace the references to a ``reconsideration'' of
a contractor's dismissal of a request for redetermination with the word
``review'' so that the QIC's action is referred to as a review of a
contractor's dismissal of a request for redetermination. We also
proposed to revise the section heading of Sec. 405.972 to read
``Withdrawal or dismissal of a request for reconsideration or review of
a contractor's dismissal of a request for redetermination,'' and the
section heading of Sec. 405.974 to read, ``Reconsideration and review
of a contractor's dismissal of a request for redetermination.'' We
stated in the proposed rule that these revisions are consistent with
the description of a reconsideration in section 1869(c)(3)(B)(i) of the
Act and Sec. 405.968(a). As we stated in the proposed rule, a QIC's
review of a contractor dismissal action is limited to the
appropriateness of the dismissal action and does not consist of a
review of the initial determination and redetermination, which is the
meaning attributed to a reconsideration. In reviewing a contractor
dismissal action, the QIC either affirms or vacates the dismissal of
the request for redetermination. If a dismissal action is vacated, the
appeal is remanded back to the MAC to conduct a redetermination on the
merits (Sec. 405.974). 81 FR 43790, 43800.
Current Sec. 405.972(e) provides that a QIC's dismissal of a
request for reconsideration is binding unless it is modified or
reversed by an ALJ under Sec. 405.1004. As discussed in section II.B
of the proposed rule and II.A.2 of this final rule above, we proposed
that an attorney adjudicator may conduct a review of a QIC's dismissal
of a request for reconsideration and in section III.A.3.c of the
proposed rule (discussed in section II.B.3.c of this final rule below),
we proposed to revise Sec. 405.1004 to provide the effect of an
attorney adjudicator's action taken in reviewing the QIC dismissal is
equivalent to the effect of an ALJ's action taken in reviewing the QIC
dismissal. To align with our proposed revision to Sec. 405.1004, we
proposed to insert ``or attorney adjudicator'' after ``an ALJ'' in
Sec. 405.972(e) to indicate that a QIC's dismissal of a request for
reconsideration is binding unless it is modified or reversed by an ALJ
or attorney adjudicator under Sec. 405.1004. 81 FR 43790, 43800.
We received no comments on these proposals, other than: (1)
Comments discussed in section II.A.2 above related to our general
proposals to provide authority for attorney adjudicators to issue
certain decisions, dismissals and remands, and to revise the rules so
that decisions and dismissals issued by attorney adjudicators may be
reopened and/or appealed in the same manner as equivalent decisions and
dismissals issued by ALJs; and (2) comments discussed in section II.A.4
above related to our general proposal to reference OMHA or an OMHA
office, in place of current references to an unspecified entity, ALJs,
and ALJ hearing offices, when a reference to OMHA or an OMHA office
provides a clearer explanation of a topic. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing these
changes to Sec. Sec. 405.970, 405.972, and 405.974 as proposed without
modification.
j. Notice of Reconsideration (Sec. 405.976)
Section 1869(b)(3) of the Act states that a provider or supplier
may not introduce evidence in any appeal that was not presented at the
reconsideration conducted by a QIC unless there is good cause as to why
the evidence was not provided prior to the issuance of the QIC's
reconsideration. Under this authority, Sec. 405.976(b)(5)(ii) provides
that a notice of reconsideration must include a summary of the
rationale for the reconsideration that specifies that all evidence that
is not submitted prior to the issuance of the reconsideration will not
be considered at the ALJ level, or made part of the administrative
record, unless the appellant demonstrates good cause as to why the
evidence was not provided prior to the issuance of the QIC's
reconsideration; however, it does not apply to a beneficiary unless the
beneficiary is represented by a provider or supplier or to state
Medicaid agencies. The statement that the evidence will not be made
part of the administrative record is inconsistent with our practice of
making a complete record of the administrative proceedings for further
reviews, including documents submitted by parties that were not
considered in making the decision. Current Sec. 405.1028(c) states
that if good cause does not exist, the ALJ must exclude the evidence
from the proceedings and may not consider it in reaching a decision.
However, it does not instruct the ALJ to remove the evidence from the
administrative record, and to do so would preclude an effective review
of the good cause determination. In addition, we noted in the 2005
Interim Final Rule (70 FR 11464) that under current Sec.
405.1042(a)(2), excluded evidence is part of the record because it
states that in the record, the ALJ must also discuss any evidence
excluded under Sec. 405.1028 and include a justification for excluding
the evidence. To help ensure that the evidence is preserved in the
administrative record, we proposed to delete ``or made part of the
administrative record'' from the paragraph in Sec. 405.976(b)(5)(ii).
81 FR 43790, 43800.
Current Sec. 405.976(b)(7) requires that the QIC notice of
reconsideration contain a statement of whether the amount in
controversy needed for an ALJ hearing is met when the reconsideration
is partially or fully unfavorable. As further discussed in section
III.A.3.d of the proposed rule and II.B.3.d of the final rule below, we
proposed revisions to Sec. 405.976(b)(7) along with revisions to the
methodology for calculating the amount in controversy required for an
ALJ hearing under Sec. 405.1006(d) to better align the
[[Page 5000]]
amount in controversy with the actual amount in dispute. Please refer
to section III.A.3.d of the proposed rule and II.B.3.d of this final
rule below for a discussion of these proposals.
We did not propose any changes to part 423 because subpart U does
not address IRE reconsiderations and subpart M does not contain similar
provisions.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter requested that the notice of reconsideration
contain language clarifying that good cause does not exist for a
provider's submission of new evidence for the first time at the OMHA
level, if the documentation was in the provider's possession during an
audit that results in an initial determination.
Response: We appreciate the commenter's input, but believe the
regulations as finalized in this rule clearly indicate that providers
and suppliers should submit all evidence that is relevant to their
appeal as early in the appeal process as possible, and the
circumstances in which an ALJ or attorney adjudicator may find good
cause for the introduction of new evidence at the OMHA level (see
Sec. Sec. 405.966(a)(2), 976(b)(5)(ii), 405.1018, 405.1028, and
405.1030). We understand that appellants may not always know which
documents are necessary to support their appeal. To assist appellants,
contractors issuing redetermination notices are instructed at Sec.
405.956(b)(6) to identify ``specific missing documentation,'' that
should be submitted with the request for reconsideration. We encourage
appellants to submit any and all evidence that may help with their
appeal before the OMHA level. Section 405.1018 requires a provider,
supplier, or a beneficiary represented by a provider or supplier, that
wishes to introduce new evidence to submit a statement explaining why
the evidence was not previously submitted to the QIC, or a prior
decision-maker. We also believe the regulations, as finalized in this
rule, clearly set forth the consequences for not showing good cause. We
proposed that Sec. 405.1018(c)(2) be added to state that if the
provider or supplier, or beneficiary represented by a provider or
supplier, fails to include the statement explaining why the evidence
was not previously submitted, the evidence will not be considered. To
strengthen the existing requirement for the full and early presentation
of evidence, we are finalizing our proposed changes at Sec.
405.1018(c)(2), as discussed in section II.B.3.i below.
We proposed at Sec. 405.1028(a)(2)(i) through (v) to include
specific instances when an ALJ or attorney adjudicator may find good
cause for the introduction of new evidence submitted by a provider,
supplier, or beneficiary represented by a provider or supplier that is
submitted for the first time at the OMHA level, but the ultimate
finding of whether there is good cause under these provisions would be
at the discretion of the ALJ or attorney adjudicator. We believe that
the proposed changes to Sec. 405.1028 that we are adopting provide
sufficient guidance regarding the circumstances in which an ALJ or
attorney adjudicator may find good cause, and thus we do not believe it
is necessary to include the commenter's requested revision in the
notice of reconsideration. As explained above (and discussed in section
III.A.2.j of the proposed rule), the proposed change to the notice of
reconsideration at Sec. 405.976(b)(5)(ii) was intended to reflect that
evidence submitted after the reconsideration that does not meet the
good cause standard will still be preserved in the administrative
record, as the statement in Sec. 405.976(b)(5)(ii) that the evidence
would not be made part of the administrative record was inconsistent
with current practice of making a complete record of the administrative
proceedings for further review. In our ongoing effort to streamline the
Medicare Appeals process, we encourage appellants to submit evidence as
early on in the appeals process as possible, but do not believe the
commenter's suggested revision is necessary to accomplish this goal.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
without modification this change to Sec. 405.976(b)(5)(ii) as
proposed.
k. Effect of a Reconsideration (Sec. 405.978)
Section 405.978 discusses the effect of a QIC reconsideration, and
states that a reconsideration is binding on all parties unless, among
other things, an ALJ decision is issued in accordance with a request
for an ALJ hearing made in accordance with Sec. 405.1014. As discussed
in section II.B of the proposed rule and II.A.2 of this final rule
above, we proposed that an attorney adjudicator may issue a decision on
a request for an ALJ hearing when a hearing is not conducted, and in
section III.A.3.v of the proposed rule (as discussed in section
II.B.3.v of this final rule below), we proposed to revise Sec.
405.1048 to provide the effect of an attorney adjudicator's decision is
equivalent to the effect of an ALJ's decision. To align with our
proposals to provide that an attorney adjudicator may issue a decision
on a request for an ALJ hearing when a hearing is not conducted and the
effect of that decision is equivalent to the effect of an ALJ's
decision, we proposed to insert ``or attorney adjudicator'' after the
first use of ``ALJ'' in Sec. 405.978(a) to indicate that a QIC
reconsideration is binding on all parties unless, among other things,
an ALJ or attorney adjudicator decision is issued in accordance to a
request for an ALJ hearing made in accordance with Sec. 405.1014. 81
FR 43790, 43800-43801.
We received no comments on this proposal, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing this change to Sec. 405.978 as
proposed without modification.
l. Reopenings (Sec. Sec. 405.980, 405.982, 405.984, 423.1978,
423.1980, 423.1982, and 423.1984)
As discussed below, we proposed a number of revisions to the rules
governing reopening and revision of initial determinations and appeal
decisions. 81 FR 43790, 43801. Sections 405.980 and 423.1980 set forth
the rules governing reopening and revision of initial determinations,
redeterminations, reconsiderations, decisions, and reviews; Sec. Sec.
405.982 and 423.1982 set forth the rules governing notice of a revised
determination or decision; and Sec. Sec. 405.984 and 423.1984 set
forth the rules on the effect of a revised determination or decision.
Pursuant to Sec. Sec. 405.1038 and 423.2038, an ALJ may issue a
decision on a request for hearing without conducting a hearing in
specified circumstances. As proposed in section II.B of the proposed
rule (and discussed in section II.A.2 of this final rule above), an
attorney adjudicator also would be able to issue decisions on requests
for an ALJ hearing in specified circumstances, issue dismissals when a
party withdraws a request for hearing, and issue decisions on requests
to review QIC or IRE dismissals.
We proposed to insert ``or attorney adjudicator'' or ``attorney
adjudicator's,'' after ``ALJ'' or ``ALJ's'' in
[[Page 5001]]
Sec. Sec. 405.980(a)(1)(iii), (a)(4), (a)(5), (d) introductory text,
(d)(2), (e)(2); 405.982(a), (b); 405.984(d); 423.1980(a)(1)(iii),
(a)(4), (d) introductory text, (d)(2), (e)(2); 423.1982(a), (a)(1),
(a)(2), (b), (b)(1), and (b)(2); 423.1984(d); 423.1978(a);
423.1980(a)(2). We stated in the proposed rule that these revisions
would provide that decisions issued by attorney adjudicators, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 of this final rule above), may be reopened in the same manner as
decisions issued by an ALJ (that is, when there is good cause in
accordance with Sec. Sec. 405.986 or 423.1986, or the decision was
procured by fraud or similar fault), and with the same limitations,
requirements, and effects as reopening an ALJ decision. We stated in
the proposed rule that we believe it is necessary for an attorney
adjudicator or the Council to have the authority to reopen the attorney
adjudicator's decision on the same bases as an ALJ or the Council may
reopen the ALJ's decision under the current rules; to address instances
in which there is good cause to reopen the attorney adjudicator's
decision (in accordance with Sec. Sec. 405.986 or 423.1986) or the
attorney adjudicator's decision was procured by fraud or similar fault;
and the action should be subject to the same limitations and
requirements, and have the same effects as an ALJ's action under the
provisions.
We also proposed to replace ``hearing decision,'' ``hearing
decisions,'' or ``hearings,'' with ``decision'' or ``decisions'' in the
titles of Sec. Sec. 405.980 and 423.1980; Sec. Sec.
405.980(a)(1)(iii), (d) introductory text, (d)(2), (e) introductory
text, and (e)(2); 423.1980(a)(1)(iii), (d) introductory text, (d)(2),
(e) introductory text, and (e)(2); to replace ``hearing'' with ``ALJ or
attorney adjudicator decision'' in Sec. Sec. 405.980(a)(1)(iv),
(a)(4), (e)(2); 423.1980(a)(1)(iv), (a)(2), and (e)(2); and to replace
``ALJ hearing decisions'' and ``hearing decision,'' with ``ALJ or
attorney adjudicator decisions'' and ``ALJ or attorney adjudicator
decision'', respectively, in Sec. Sec. 405.984(d) and 423.1984(d). We
stated in the proposed rule that these revisions would avoid any
confusion that reopening under these provisions is limited to decisions
for which an oral hearing was conducted, whether the decision is issued
by an ALJ without conducting a hearing, as permitted under current
rules or by an attorney adjudicator without conducting a hearing, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 of this final rule above).
In addition, we proposed to add in Sec. Sec. 405.980(a)(1)(iii),
(d)(2), (e)(2), and 423.1980(a)(1)(iii), (d)(2), (e)(2) that an ALJ, or
attorney adjudicator as proposed in section II.B of the proposed rule
(and discussed in section II.A.2 of this final rule above), revises
``his or her'' decision and may reopen ``his or her'' decision, which
reflects our current policy that the deciding ALJ may reopen his or her
decision, and avoids any potential confusion that an ALJ or attorney
adjudicator may reopen the decision of another ALJ or attorney
adjudicator. We also proposed to insert ``its'' before ``review'' in
Sec. Sec. 405.980(a)(1)(iv) and 423.1980(a)(1)(iv) to indicate that
the Council's review decision may only be reopened by the Council, to
differentiate it from an ALJ or attorney adjudicator decision that the
Council may also reopen. In addition, we proposed to specify in
Sec. Sec. 405.980(d)(2) and (e)(2), and 423.1980(d)(2) and (e)(2) that
the Council may reopen ``an ALJ or attorney adjudicator'' decision
consistent with the current policy that the Council may reopen an ALJ
decision, and to differentiate the provisions from Sec. Sec.
405.980(d)(3) and (e)(3), and 423.1980(d)(3) and (e)(3), which provide
for the Council to reopen its review decision. We also proposed in
Sec. 405.980(e)(3) to insert ``Council'' before ``review'' to clarify
that a party to a Council review may request that the Council reopen
its decision.
Finally, we proposed at Sec. 405.984(c) to replace ``in accordance
with Sec. 405.1000 through Sec. 405.1064'' with ``in accordance with
Sec. 405.1000 through Sec. 405.1063'' to account for the proposed
removal of Sec. 405.1064 discussed below.
We received no comments on these proposals, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing our proposals as discussed above,
without modification, to revise the rules governing the reopening and
revision of initial determinations, redeterminations, reconsiderations,
decisions, and reviews.
m. Expedited Access to Judicial Review (Sec. Sec. 405.990 and
423.1990)
Sections 405.990 and 423.1990 set forth the procedures governing
expedited access to judicial review (EAJR). Current Sec. Sec.
405.990(d) and 423.1990(d) allow a requesting party to file an EAJR
request with an ALJ or the Council, which is then responsible for
forwarding the request to the EAJR review entity within 5 calendar days
of receipt. In accordance with Sec. Sec. 405.990(f) and 423.1990(e), a
request for EAJR must be acted upon by the EAJR review entity within 60
calendar days after the date that the review entity receives a request
and accompanying documents and materials. In practice, this process has
resulted in confusion and delays for requesting parties when EAJR
requests are sent directly to an ALJ or the Council. To simplify the
process for requesting parties and to help ensure the timely processing
of EAJR requests, we proposed to revise Sec. Sec. 405.990(d)(1) and
423.1990(d)(1) to direct EAJR requests to the DAB, which administers
the EAJR process. Specifically, we proposed at Sec. Sec.
405.990(d)(1)(i) and (ii), and 423.1990(d)(1)(i) and (ii) that the
requestor or enrollee may file a written EAJR request with the DAB with
the request for ALJ hearing or Council review if a request for ALJ
hearing or Council review is not pending, or file a written EAJR
request with the DAB if an appeal is already pending for an ALJ hearing
or otherwise before OMHA or the Council. We also proposed to revise
Sec. Sec. 405.990(i)(1) and (2) and 423.1990(h)(1) and (2) so that the
review entity would forward a rejected EAJR request to OMHA or the
Council instead of an ALJ hearing office or the Council, to align with
the revised EAJR filing process in which a request for ALJ hearing is
submitted to the DAB with an EAJR request; we stated that this would
also help ensure OMHA can process the request for an ALJ hearing as
quickly as possible in the event an EAJR request is rejected.
Sections 405.990(i)(2) and 423.1990(h)(2) provide that a 90
calendar day time frame will apply to an appeal when a rejected EAJR
request is received by the hearing office or the Council. Section
405.990(b)(1)(ii) states that an EAJR request may be filed when a
request for a QIC reconsideration has been escalated for an ALJ
hearing, and in accordance with current Sec. 405.1016(c), a 180
calendar day time frame will apply in that circumstance. In addition,
Sec. Sec. 405.1036(d) and 423.2036(d) allow an appellant or enrollee
to waive the adjudication period for an ALJ to issue a decision
specified in Sec. Sec. 405.1016 and 405.2016, respectively, at any
time during the hearing process. To address the possibility that a time
frame other than
[[Page 5002]]
90 calendar days applies to an appeal, or no adjudication time frame
applies to an appeal, we proposed to revise Sec. Sec. 405.990(i)(2)
and 423.1990(h)(2) to remove the reference to 90 calendar days and
provide that if an adjudication time frame applies to an appeal, the
adjudication time frame begins on the day the request for hearing is
received by OMHA or the request for review is received by the Council,
from the EAJR review entity.
In addition, we proposed at Sec. 405.990(i)(1) to remove the
redundant ``request'' after ``EAJR request'' in current paragraph
(i)(1), which was a drafting error; and at Sec. 423.1990(b)(1)(i) to
remove ``final'' before referring to a decision, dismissal, or remand
order of the ALJ or attorney adjudicator, as proposed in section II.B
of the proposed rule (and discussed in section II.A.2 above), because
as we explained in the 2009 Final Rule (74 FR 65307 through 65308),
final decisions of the Secretary are those for which judicial review
may be immediately sought under section 205(g) of the Act and the use
of ``final'' in current Sec. 423.1990(b)(1)(i) may cause confusion
with such a final decision.
We received no comments on these proposals, other than: (1)
comments discussed in section II.A.2 above related to our general
proposals to provide authority for attorney adjudicators to issue
certain decisions, dismissals and remands, and to revise the rules so
that decisions and dismissals issued by attorney adjudicators may be
reopened and/or appealed in the same manner as equivalent decisions and
dismissals issued by ALJs; and (2) comments discussed in section II.A.4
above related to our general proposal to reference OMHA or an OMHA
office, in place of current references to an unspecified entity, ALJs,
and ALJ hearing offices, when a reference to OMHA or an OMHA office
provides a clearer explanation of a topic. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing these
changes to Sec. 405.990 and 423.1990 as proposed without modification.
3. ALJ hearings
a. Hearing Before an ALJ and Decision by an ALJ and Attorney
Adjudicator: General Rule (Sec. Sec. 405.1000 and 423.2000)
As described below, we proposed a number of revisions to Sec. Sec.
405.1000 and 423.2000, which provide a general overview and rules for
hearings before an ALJ and decisions on requests for hearings. 81 FR
43790, 43802-43803. We proposed to revise Sec. Sec. 405.1000(d), (e),
(g); and 423.2000(d), (e), (g) to include decisions by attorney
adjudicators, as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above). We also proposed to retitle the
sections to reflect that the provisions of the section extend to
decisions by both ALJ and attorney adjudicators. We proposed to change
the language in Sec. Sec. 405.1000(a), (b), (c), and (d); and
423.2000(a) and (b) to state that a hearing may only be conducted by an
ALJ. We stated in the proposed rule that these revisions would provide
readers with an accurate overview of how a request for an ALJ hearing
would be adjudicated, including the potential that a decision could be
issued without conducting a hearing by an ALJ or an attorney
adjudicator as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above), while informing readers that if a
hearing is conducted, an ALJ will conduct the hearing.
Section 405.1000(c) provides that CMS or a contractor may elect to
participate in a hearing, and Sec. 423.2000(c) provides that CMS, the
IRE or Part D plan sponsor may request to participate in a hearing. As
discussed in section III.A.3.f of the proposed rule and II.B.3.f of
this final rule below, we proposed to revise Sec. Sec. 405.1010 and
423.2010 so that these entities may elect (for Sec. 405.1010) or
request (for Sec. 423.2010) to participate in the proceedings on a
request for hearing, including participation before a hearing is
scheduled. We proposed to revise Sec. Sec. 405.1000(c) and 423.2000(c)
so that the sections would reference Sec. Sec. 405.1010 and 423.2010,
respectively, with regard to participating in the proceedings. We
stated in the proposed rule that by referencing Sec. Sec. 405.1010 and
423.2010, the proposed revisions would direct readers to those sections
addressing the full scope of potential participation by CMS or its
contractors, or a Part D plan sponsor, on a request for an ALJ hearing,
including participating in the proceedings on a request for an ALJ
hearing, which as discussed in proposed Sec. Sec. 405.1010 and
423.2010, may include any proceedings before an oral hearing is
scheduled. We also proposed in Sec. 405.1000(c) to state that CMS or
its contractor may join the hearing before an ALJ as a party under
Sec. 405.1012, which would direct readers to the appropriate section
addressing the full scope of CMS or its contractor acting as a party.
(Because CMS, the IRE, and the Part D plan sponsor may not be a party
to a hearing under part 423, subpart U, there is no corollary to Sec.
405.1012 in that subpart and therefore a similar revision was not
proposed for Sec. 423.2000(c).)
Sections 405.1000(d) and 423.2000(d) provide that a decision is
based on the hearing record, and Sec. Sec. 405.1000(g) and 423.2000(g)
reference a hearing record in describing when a decision can be issued
based on the record, without a hearing. However, Sec. Sec. 405.1042
and 423.2042 identify the record as the administrative record. We
stated in the proposed rule that the references to a hearing record in
paragraphs (d) and (g) may cause confusion when no hearing is
conducted. To make the terminology consistent throughout the rules,
account for decisions that are issued without a hearing being
conducted, and minimize confusion, we proposed to revise Sec. Sec.
405.1000(d) and 423.2000(d) so that a decision is based on the
administrative record, including, for an ALJ, any hearing record, and
Sec. Sec. 405.1000(g) and 423.2000(g) to provide that a decision is
based on the administrative record.
Section 405.1000(e) and (g) discuss two circumstances in which a
decision on a request for hearing can be issued by an ALJ without
conducting a hearing, either where the parties waive the hearing or
where the record supports a fully favorable finding. Related to Sec.
405.1000(e), Sec. 405.1000(f) discusses the ALJ's authority to conduct
a hearing even if the parties waive the hearing. As discussed in
section III.A.3.r of the proposed rule and II.B.3.r of this final rule
below, we proposed to revise Sec. 405.1038 to modify the circumstances
in which a decision on a request for hearing can be issued without
conducting a hearing. As discussed in the proposed revisions to Sec.
405.1038, we proposed in Sec. 405.1038 that a case could be decided
without a hearing before an ALJ if: (1) waivers are obtained by the
parties entitled to a notice of hearing in accordance with Sec.
405.1020(c) (Sec. 405.1038(b)(1)(i)); or (2) the record supports a
fully favorable finding for the appellant on every issue and no other
party to the appeal is liable for the claims at issue, unless CMS or a
contractor has elected to be a party to the hearing (Sec.
405.1038(a)). We proposed to revise Sec. 405.1000(e), (f), and (g) for
consistency with the Sec. 405.1038 proposals and to accurately
summarize when a decision on a request for hearing can be issued
without conducting a hearing in accordance with proposed Sec.
405.1038. We did not propose similar changes in Sec. 423.2000(e), (f),
and (g) because we did not propose changes to when a decision on a
request for hearing can be issued without conducting a hearing in Sec.
423.2038.
Current Sec. 405.964(c) requires a QIC to consolidate requests for
a
[[Page 5003]]
reconsideration filed by different parties on the same claim before a
reconsideration is made on the first timely filed request. While
current Sec. 405.1044 permits an ALJ to consolidate requests for
hearing 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
pending before the same ALJ, the provision is discretionary and
dependent on the requests being assigned to the same ALJ. To mitigate
the potential of requests for hearing on the same claim filed by
different parties being separately adjudicated, we proposed to add
Sec. 405.1000(h) to require that when more than one party files a
timely request for hearing on the same claim before a decision is made
on the first timely filed request, the requests are consolidated into
one proceeding and record, and one decision, dismissal, or remand is
issued. We noted in the proposed rule that if a decision was issued on
the first timely request before an additional request is timely filed
or good cause is found to extend the period to file the additional
request for hearing, a reopening of the decision could be considered by
the deciding adjudicator in accordance with Sec. 405.980. For example,
we stated that if a request is submitted with new and material evidence
that was not available at the time of the decision and may result in a
different conclusion, the reopening provisions at Sec. 405.980 would
apply. Because only the enrollee is a party in a part 423, subpart U
proceeding on a request for an ALJ hearing, no corresponding changes
were proposed for Sec. 423.2000.
Provided below are summaries of the specific comment received and
response to the comment:
Comment: We received one comment on these proposals. The commenter
strongly supported our proposal to revise Sec. 405.1000(e), (f), and
(g) for consistency with our Sec. 405.1038 proposals which, among
other things, would preclude an ALJ from issuing a fully favorable
decision on the record if CMS or a CMS contractor has elected to be a
party to the hearing in accordance with Sec. 405.1012. The commenter
stated that when audit contractors have an opportunity to present their
findings, it helps ensure that ALJ decisions reflect a fuller
understanding of the circumstances.
Response: We thank the commenter for its support. As the commenter
indicated, we proposed to revise Sec. 405.1000(e), (f), and (g) for
consistency with proposed Sec. 405.1038. However, we note that we
inadvertently included language in proposed Sec. 405.1000(g) that is
not consistent with the language in proposed Sec. 405.1038(a)
(relating to fully favorable decisions issued on the record). Proposed
Sec. 405.1000(g) states that an ALJ or attorney adjudicator may issue
a decision on the record if the evidence in the administrative record
supports a fully favorable finding for the appellant, ``and there is no
other party or no other party is entitled to a notice of hearing in
accordance with Sec. 405.1020(c).'' However, proposed Sec.
405.1038(a) states that an ALJ or attorney adjudicator may issue a
decision without an ALJ conducting a hearing if the evidence in the
administrative record supports a finding fully in favor of the
appellant(s) on every issue ``and no other party to the appeal is
liable for the claims at issue . . . unless CMS or a contractor has
elected to be a party to the hearing in accordance with Sec.
405.1012.'' Thus, consistent with our proposal to revise Sec.
405.1000(g) for consistency with Sec. 405.1038(a), in this final rule,
we are revising the language in Sec. 405.1000(g) to be consistent with
the language of Sec. 405.1038(a) as finalized in this rule. We are
revising Sec. 405.1000(g) to state that, ``An ALJ or attorney
adjudicator may also issue a decision on the record on his or her own
initiative if the evidence in the administrative record supports a
fully favorable finding for the appellant, and no other party to the
appeal is liable for the claims at issue, unless CMS or a contractor
has elected to be a party to the hearing in accordance with Sec.
405.1012.''
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, and in section
II.B.3.r below concerning Sec. 405.1038 (which also explains the
circumstances in which a decision on a request for hearing can be
issued without conducting a hearing), we are finalizing Sec. Sec.
405.1000 and 423.2000 as proposed with the modifications discussed
above.
b. Right to an ALJ Hearing (Sec. Sec. 405.1002 and 423.2002)
As discussed below, we proposed a number of revisions to Sec. Sec.
405.1002 and 423.2002, which discuss a right to an ALJ hearing. 81 FR
43790, 43803. Current Sec. Sec. 405.1002(a) and 423.2002(a) provide
that a party to a QIC reconsideration or the enrollee who receives an
IRE reconsideration, respectively, may ``request'' a hearing before an
ALJ if the party or enrollee files a timely request and meets the
amount in controversy requirement. However, a party or enrollee is
entitled to a hearing only when those requirements are met. See
sections 1860D-4(h) and 1869(b)(1)(A) of the Act. Therefore, we
proposed to revise Sec. Sec. 405.1002(a) and 423.2002(a) introductory
text to state that the party to a QIC reconsideration or the enrollee
who receives an IRE reconsideration has a right to a hearing rather
than may request a hearing. These revisions would align the provisions
with the statute and clarify that the party or enrollee has a right to
a hearing before an ALJ when the criteria are met.
Current Sec. Sec. 405.1002(a)(4) and 423.2002(e) provide that the
request is considered filed on the date it is received by the entity
specified in the QIC's or IRE's reconsideration. There has been
confusion when a request is sent to an OMHA office that is not
specified in the reconsideration, and this error causes delays in
processing the request. We proposed to revise Sec. Sec. 405.1002(a)(4)
and 423.2002(e) to replace ``entity'' with ``office'' to avoid
confusion that the request may be filed with OMHA as an entity, and
therefore any OMHA office, rather than the specific OMHA office
identified in the QIC's or IRE's reconsideration. We stated in the
proposed rule that this would help ensure appellants are aware that a
request for hearing must be filed with the office indicated in the
notice of reconsideration to avoid delays. For example, when the notice
of reconsideration indicates that a request for hearing must be filed
with the OMHA central docketing office, an appellant will cause a delay
if the request is sent to the QIC or IRE, or an OMHA field office. We
also noted in the proposed rule that as explained in the 2009 Final
Rule (74 FR 65319 through 65320), pursuant to current Sec.
405.1014(b)(2), if a request for hearing is timely filed with an entity
other than the entity specified in the notice of reconsideration, the
request is not treated as untimely or otherwise rejected. We stated
that this would remain true for requests that are timely filed with an
office other than the office specified in the notice of
reconsideration, pursuant to proposed Sec. 405.1014(c)(2), which
incorporates the requirement from current Sec. 405.1014(b)(2). This
would also apply in part 423, subpart U adjudications because the same
language appears in current Sec. 423.2014(c)(2) and is incorporated in
proposed Sec. 423.2014(d)(2).
Current Sec. 405.1002(b)(1) provides that when a party files a
request with the QIC to escalate the appeal, it is escalated to ``the
ALJ level.'' We proposed to revise Sec. 405.1002(b)(1) to replace ``to
the ALJ level'' with ``for a hearing before an ALJ'' so that when a
request for a QIC
[[Page 5004]]
reconsideration is escalated, it is escalated ``for a hearing before an
ALJ.'' We stated in the proposed rule that this would help ensure that
the right to a hearing is clear when an appeal is escalated from the
QIC. There is no corresponding provision in part 423, subpart U.
Current Sec. 423.2002(c) provides that the ALJ must document all
oral requests for expedited hearings. However, an ALJ is not assigned
to an appeal until after the request for hearing is received and
processed. Thus, we proposed to revise Sec. 423.2002(c) to state that
``OMHA'' must document all oral requests for expedited hearings. There
is no corresponding provision in part 405, subpart I.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: Two commenters generally supported the proposal to replace
``entity'' with ``office'' in proposed Sec. Sec. 405.1002(a)(4) and
423.2002(e), but expressed concern that beneficiaries may nevertheless
continue to send requests for hearing to the wrong entity or office.
The commenters therefore urged OMHA to continue its policy of accepting
requests that are timely filed with the wrong entity or office, and to
incorporate this policy in regulation.
Response: As we explained in section III.A.3.g.iv of the proposed
rule (and discussed in section II.B.3.g.iv below), Sec. Sec.
405.1014(b)(2) and 423.2014(c)(2)(i) state that if a request for
hearing is timely filed with an entity other than the entity specified
in the QIC's or IRE's reconsideration, the deadline specified in Sec.
405.1016 or Sec. 423.2016 for deciding the appeal begins on the date
the entity specified in the QIC's or IRE's reconsideration receives the
request for hearing. We proposed to incorporate portions of Sec. Sec.
405.1014(b)(2) and 423.2014(c)(2)(i) in proposed Sec. Sec.
405.1014(c)(2) and 423.2014(d)(2)(i), respectively, but to replace
``entity'' with ``office'' in both sections (to help ensure appellants
are aware that a request for hearing or request for review of a QIC or
IRE dismissal must be filed with the office indicated in the QIC's or
IRE's notice of reconsideration or dismissal in order to avoid delays)
and ``submitted'' with ``filed'' in Sec. 423.2014(d)(1) (for
consistency with Sec. 405.1014 and Sec. 422.602). We also noted above
and in section III.A.3.b and section III.A.3.g.iv of the proposed rule
(discussed in section II.B.3.g.iv below) that, for those few requests
for hearing that are misrouted by a party, the date the request for
hearing was received in the incorrect office would be used to determine
the timeliness of the request, as explained in the 2009 Final Rule (74
FR 65319 through 65320).
We agree with the commenter that OMHA's policy of not treating as
untimely a request for an ALJ hearing that is timely filed with an
office other than the office specified in the QIC's or IRE's
reconsideration should be expressly stated in the regulation. Thus, as
discussed in section II.B.3.g.iv below, we are finalizing the
additional language in proposed Sec. Sec. 405.1014(c)(2) and
423.2014(d)(2)(i) to clarify that, if the request for hearing is timely
filed with an office other than the office specified in the QIC's
reconsideration, the request is not treated as untimely.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. Sec. 405.1002 and 423.2002 as proposed without
modification. In addition, as discussed above and in section
II.B.3.g.iv below, we are adding language in Sec. Sec. 405.1014(c)(2)
and 423.2014(d)(2)(i) to clarify that, if the request for hearing is
timely filed with an office other than the office specified in the
QIC's reconsideration, the request is not treated as untimely.
c. Right to a Review of QIC or IRE Notice of Dismissal (Sec. Sec.
405.1004 and 423.2004)
As discussed below, we proposed several revisions to Sec. Sec.
405.1004 and 423.2004, which discuss the right to an ALJ review of a
QIC notice of dismissal or IRE notice of dismissal, respectively. 81 FR
43790, 43803-43804. As proposed in section II.B of the proposed rule
(and discussed in section II.A.2 above), attorney adjudicators or ALJs
would conduct reviews of QIC or IRE dismissals. Accordingly, we
proposed to remove references to an ALJ in the titles of proposed
Sec. Sec. 405.1004 and 423.2004, though ALJs would continue to have
the authority to conduct reviews of QIC or IRE dismissals if a request
for a review of a QIC or IRE dismissal is assigned to an ALJ. We also
proposed to insert ``or attorney adjudicator'' after ALJ in Sec. Sec.
405.1004(a) introductory language, (b), (c); and 423.2004(a)
introductory language, (b), and (c), to provide that an attorney
adjudicator could review a QIC or IRE dismissal, as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 above). We
also proposed to replace the reference to ``entity'' in current
Sec. Sec. 405.1004(a)(4) and 423.2004(a)(4), with ``office,'' for the
same reasons discussed in III.A.3.b of the proposed rule and II.B.3.b
of this final rule above, for amending parallel language in Sec. Sec.
405.1002 and 423.2002.
Current Sec. Sec. 405.1004(b) and 423.2004(b) provide that if an
ALJ determines that the QIC's or IRE's dismissal was in error, he or
she vacates the dismissal and remands the case to a QIC or IRE. As
discussed in III.A.3.p of the proposed rule and II.B.3.p of this final
rule below, we proposed to revise the remand provisions and add new
Sec. Sec. 405.1056 and 405.1058, 423.2056, and 423.2058 to govern when
remands may be issued, whether and to what extent remands may be
reviewed, providing notice of a remand, and the effect of a remand. We
also proposed to revise Sec. Sec. 405.1004(b) and 423.2004(b) to add
references to proposed Sec. Sec. 405.1056 and 423.2056, respectively,
to explain that the remand would be in accordance with proposed
Sec. Sec. 405.1056 and 423.2056, which as discussed in section
III.A.3.p of the proposed rule and II.B.3.p of this final rule below,
would address issuing remands and notices thereof, including for
remands of QIC or IRE dismissals.
Current Sec. Sec. 405.1004(c) and 423.2004(c) state that an ALJ's
decision regarding a QIC's or IRE's dismissal of a reconsideration
request is binding and not subject to further review, and that the
dismissal of a request for ALJ review of a QIC's or IRE's dismissal of
a reconsideration request is binding and not subject to further review,
unless vacated by the Council under Sec. 405.1108(h) or Sec.
423.2108(b), respectively. In our experience, these sections as
currently drafted have been a source of confusion for adjudicators and
appellants. The two sentences convey different actions that can result
from a request for review of a QIC or IRE dismissal--a decision
regarding whether the QIC's or IRE's dismissal was correct, or a
dismissal of the appellant's request for an ALJ review of the QIC's or
IRE's dismissal. We proposed to separate and further distinguish the
two situations to avoid the current confusion that results from two of
the three possible outcomes that may result from a request to review a
QIC or IRE dismissal (the third being a remand of the dismissal,
addressed in paragraph (b) in the respective sections) being in the
same paragraph by proposing a separate paragraph for each outcome
currently addressed in paragraph (c).
We proposed to revise Sec. Sec. 405.1004(c) and 423.2004(c) to
include the possible outcome in the first sentence of current
Sec. Sec. 405.1004(c) and 423.2004(c) of a decision affirming the
QIC's or IRE's dismissal. We also proposed to move language in current
Sec. Sec. 405.1004(c) and 423.2004(c) stating that the decision of an
ALJ on a request for review of a QIC dismissal is binding and not
subject to
[[Page 5005]]
further review, to proposed Sec. Sec. 405.1048(b) and 423.2048(b),
which as discussed in section III.A.3.v of the proposed rule and
II.B.3.v of this final rule below, would address the effects of
decisions on requests to review a QIC or IRE dismissal. In addition, we
proposed in Sec. Sec. 405.1004(c) and 423.2004(c), respectively, to
state that a decision affirming a QIC or IRE dismissal would be issued
in accordance with proposed Sec. Sec. 405.1046(b) and 423.2046(b),
which as discussed in section III.A.3.v of the proposed rule and
II.B.3.v of this final rule below, would address issuing decisions on
requests for review of a QIC or IRE dismissal and notices thereof.
The 2009 Final Rule (74 FR 65311 through 65312) also explained that
if a request for ALJ review of a QIC dismissal was invalid and thus
subject to dismissal, the dismissal of the request to review a QIC
dismissal was binding and not subject to further review (however, a
party could request that the dismissal be vacated by the Council
pursuant to Sec. 405.1108(b)). We proposed to add Sec. Sec.
405.1004(d) and 423.2004(d) to state that the ALJ or attorney
adjudicator may dismiss a request for review of a QIC's or an IRE's
dismissal in accordance with proposed Sec. Sec. 405.1052(b) or
423.2052(b), respectively, which as discussed in section III.A.3.x of
the proposed rule and II.B.3.x of this final rule below, would address
dismissals of requests for review of a QIC or IRE dismissal and notices
thereof. We also proposed to move language in current Sec. Sec.
405.1004(c) and 423.2004(c) stating that the dismissal is binding and
not subject to further review unless the dismissal is vacated, to
proposed Sec. Sec. 405.1054(b) and 423.2054(b), which would address
the effects of a dismissal of a request for review of a QIC's or an
IRE's dismissal and as discussed in section III.A.3.x of the proposed
rule and II.B.3.x of this final rule below, would provide authority for
an ALJ or attorney adjudicator to vacate a dismissal and therefore
replace the current reference to the Council.
We received no comments on these proposals, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing these changes to Sec. Sec. 405.1004
and 423.2004 as proposed without modification.
d. Amount in Controversy Required for an ALJ Hearing (Sec. Sec.
405.976, 405.1006, 422.600, 423.1970, and 478.44)
As described below, we proposed a number of changes to the amount
in controversy provisions in Sec. Sec. 405.1006, 423.1970, and 478.44,
as well as an associated change to Sec. 405.976(b)(7) regarding the
content of a QIC's notice of reconsideration. 81 FR 43790, 43804-43810,
43854. Current Sec. 405.1006 sets forth the requirements for meeting
the amount in controversy for an ALJ hearing. The title of current
Sec. 405.1006 states that the amount in controversy is required to
``request'' an ALJ hearing and judicial review. However, as discussed
in III.A.3.b of the proposed rule and II.B.3.b of this final rule
above, section 1869(b)(1)(A) of the Act states that a party is entitled
to a hearing before the Secretary and judicial review, subject to the
amount in controversy and other requirements. To align the title of
Sec. 405.1006 with the statutory provision, we proposed that the
amount in controversy is required ``for'' an ALJ hearing and judicial
review rather than ``to request'' an ALJ hearing and judicial review.
Put another way, a party may request an ALJ hearing or judicial review,
albeit unsuccessfully, without satisfying the amount in controversy
requirement.
Section 1869(b)(1)(E) of the Act establishes the minimum amounts in
controversy for a hearing by the Secretary and for judicial review, but
does not establish how to calculate the amounts in controversy. Current
Sec. 405.1006(d) states that the amount remaining in controversy is
calculated based on the actual amount charged to the individual (a
beneficiary) for the items or services in question (commonly referred
to as billed charges), reduced by any Medicare payments already made or
awarded for the items or services, and any deductible and coinsurance
amounts applicable to the particular case. In an effort to align the
amount in controversy with a better approximation of the amount at
issue in an appeal, we proposed to revise the basis (that is, the
starting point before any deductions for any payments already made by
Medicare or any coinsurance or deductible that may be collected) used
to calculate the amount in controversy. For appeals of claims submitted
by providers of services, physicians, and other suppliers that are
priced based on a published Medicare fee schedule or published
contractor-priced amount (as discussed below), rather than using the
actual amount charged to the individual as the basis for the amount in
controversy, we proposed to use the Medicare allowable amount for the
items and/or services being appealed, subject to the exceptions
discussed below. An allowable amount is the maximum amount of the
billed charge deemed payable for the item or service. For the purposes
of the amount in controversy under Sec. 405.1006, we proposed at Sec.
405.1006(d)(2)(i)(A) that for items and services with a published
Medicare fee schedule or published contractor-priced amount, the basis
for the amount in controversy would be the allowable amount, which
would be the amount reflected on the fee schedule or in the contractor-
priced amount for those items or services in the applicable
jurisdiction and place of service.
We stated in the proposed rule that for a vast majority of items
and services furnished and billed by physicians and other suppliers,
allowable amounts are determined based on Medicare fee schedules. Fee
schedules generally are updated and published on an annual basis by CMS
through rulemaking, and CMS and its contractors have tools and
resources available to inform physicians and other suppliers of
allowable amounts based on these fee schedules, including the Physician
Fee Schedule Look-up Tool available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PFSlookup/ and spreadsheets for other
fee schedules that can be accessed on the CMS Web site through the fee
schedule main page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FeeScheduleGenInfo/index.html. Allowable amounts for
many contractor-priced items and services are also included in these
tools and resources. Allowable amounts are included on the Medicare
remittance advice for paid items and services, but not for items and
services that are denied. However, where the allowable amount for an
item or service is determined based on a published fee schedule or
contractor-priced amount, we stated that we anticipated that
appellants, other than beneficiaries who are not represented by a
provider, supplier, or Medicaid State agency, would be able to use the
existing CMS and contractor tools and resources to determine allowable
amounts for denied services when filing a request for hearing, and
those amounts could be verified by OMHA in determining whether the
claims included in the request meet the amount in controversy
requirement. As discussed below, where the appellant is a beneficiary
who is not represented by a provider, supplier, or Medicaid State
[[Page 5006]]
agency, we proposed that CMS would require the QIC to specify in the
notice of reconsideration, for partially or fully unfavorable
reconsideration decisions, whether the amount remaining in controversy
is estimated to meet or not meet the amount required for an ALJ hearing
under proposed Sec. 405.1006(d).
We stated in the proposed rule that, due to the pricing methodology
for many items and services furnished by providers of services, such as
hospitals, hospices, home health agencies, and skilled nursing
facilities, at the present time an allowable amount is not easily
discerned or verified with existing CMS and contractor pricing tools
(for example, there is no pricing tool available for hospital
outpatient services paid under the outpatient prospective payment
system (OPPS)) for pre-payment claim denials (where items or services
on the claim are denied, in full or in part, before claim payment has
been made). Similarly, we stated that items and services furnished by
providers or suppliers that are always non-covered, as well as unlisted
procedures, may not have published allowable amounts based on a fee
schedule or a published contractor-priced amount. Therefore, we
proposed at Sec. 405.1006(d)(2)(i)(B) to continue using the provider's
or supplier's billed charges as the basis for calculating the amount in
controversy for appeals of claims that are not priced according to a
CMS-published fee schedule and do not have a published contractor-
priced amount (except as discussed below). We noted that the method for
calculating the amount in controversy in this scenario would be the
same as under current Sec. 405.1006(d), and we stated that we believe
that all appellants have access to this information through claims
billing histories, remittance advices, or the column titled ``Amount
Provider [or Supplier] Charged'' on the Medicare Summary Notice.
However, we solicited comment on whether existing tools and resources
are available that would enable providers, suppliers, and Medicaid
State agencies to submit an allowable amount in their request for
hearing, as proposed in section III.A.3.g.i of the proposed rule (and
discussed in section II.B.3.g.i below) for items and services not
subject to published fee schedules or published contractor-priced
amounts, and whether those amounts could also be verified by OMHA. We
also solicited comment on how such tools and resources could be used in
appeals filed by beneficiaries.
Current Sec. 405.1006(d)(1) introductory text uses ``the actual
amount charged the individual for the items and services in question''
as the basis (starting point) for calculating the amount in
controversy, before any reductions described in paragraphs (d)(1)(i)
and (ii) (for any Medicare payments already made or awarded and any
deductible and coinsurance applicable in the particular case) occur.
For the reasons discussed above, we proposed to revise paragraph (d)(1)
introductory text to state that in situations other than those
described in Sec. 405.1006(d)(3) through (7) (discussed below), the
amount in controversy is computed as ``the basis for the amount in
controversy for the items and services in the disputed claim as defined
in paragraph (d)(2)'', less applicable reductions described in
paragraphs (d)(1)(i) and (ii), and proposed to revise paragraph (d)(2)
to specify the amount that would be used as the basis for the amount in
controversy on a situational basis. We also proposed at Sec.
405.1006(d)(3) through (7) five exceptions to the general calculation
methodology specified in proposed paragraphs (d)(1) and (2).
There has also been confusion in calculating the amount in
controversy when an appealed reconsideration involves multiple claims.
Section 1869 of the Act and part 405, subpart I provide for an appeals
process in which each claim decision is appealed and separately
adjudicated. However, in some instances, claims are considered together
based on an appellant's request. To address confusion with calculating
the amount in controversy when reconsiderations involve multiple claims
and to help ensure Sec. 405.1006 clearly conveys that the amount in
controversy requirement must be met for each appealed claim unless the
claim can be aggregated as discussed below, we proposed in Sec.
405.1006(d)(1) to clarify that the amount in controversy is based on
the items or services in the disputed ``claim.''
We proposed to maintain the current reduction to the calculation of
the amount in controversy in Sec. 405.1006(d)(1)(i), which states that
the basis for the amount in controversy is reduced by any Medicare
payments already made or awarded for the items or services. In
addition, current Sec. 405.1006(d)(1)(ii) provides that the basis for
the amount in controversy is further reduced by ``[a]ny deductible and
coinsurance amounts applicable in the particular case.'' We proposed to
revise Sec. 405.1006(d)(1)(ii) to read, ``Any deductible and/or
coinsurance amounts that may be collected for the items or services.''
We stated in the proposed rule that we believe revising this provision
is appropriate to better align the amount at issue in the appeal and
the amount in controversy so that in situations where a provider or
supplier is prohibited from collecting applicable coinsurance and/or
deductible, or must refund any such amounts already collected, the
basis for the amount in controversy is not reduced by that amount (for
example, if a provider or supplier is held liable for denied services
under the limitation on liability provision in section 1879 of the Act,
any amounts collected for the denied service, including coinsurance
and/or deductible must be refunded).
As discussed above, we proposed at Sec. 405.1006(d)(2)(i) that,
for situations other than those described in Sec. 405.1006(d)(2)(ii)
and (iii), the basis for calculating the amount in controversy under
Sec. 405.1006(d)(1) would be the Medicare allowable amount, which is
the amount reflected on the fee schedule or in the contractor-priced
amount for those items or services in the applicable jurisdiction and
place of service if there is a published Medicare fee schedule or
published contractor-priced amount for the items or services in the
disputed claim; or if there is no published Medicare fee schedule or
contractor-priced amount for the items or services in the disputed
claim, the basis for the amount in controversy would be the provider or
supplier's billed charges submitted on the claim for the items and
services. We stated that we believe providers, suppliers, and Medicaid
State agencies would be able to utilize existing CMS and CMS contractor
tools and resources to determine the allowable amount for items and
services with published fee schedule or published contractor-priced
amounts, and for items or services without a published fee schedule or
published contractor-priced amount, the calculation methodology for the
amount in controversy would be the same as the calculation methodology
specified in current Sec. 405.1006(d). However, we stated there may be
instances where a beneficiary would appeal a claim for items and
services for which the allowable amount would be the basis for the
amount in controversy under proposed Sec. 405.1006(d)(2)(i)(A) (for
example, a claim for items or services with a published fee schedule or
published contractor-priced amount that does not involve an overpayment
and for which the beneficiary has not been determined to be financially
responsible). We stated that we believe most beneficiaries are not
familiar with published fee schedule or contractor-priced amounts and
may be unable to determine the amount in controversy in
[[Page 5007]]
these circumstances with the resources currently available to them.
However, as discussed below, we proposed at Sec. 405.976(b)(7) that
the QIC include in the notice of reconsideration a statement of whether
the amount in controversy is estimated to meet or not meet the amount
required for an ALJ hearing, if the request for reconsideration was
filed by a beneficiary who is not represented by a provider, supplier,
or Medicaid State agency, and the reconsideration is partially or fully
unfavorable to the appellant. For appeals filed by beneficiaries, often
the amount at issue is aligned not with the Medicare allowable amount,
but rather with the billed charges of the provider or supplier. For
example, where a beneficiary is held financially responsible for a
denied claim under the limitation on liability provisions in section
1879 of the Act because he or she received an Advance Beneficiary
Notice of Noncoverage (ABN), the beneficiary is responsible for the
billed charges on the claim. Or, for a claim not submitted on an
assignment-related basis that is denied, the beneficiary may be
responsible for the billed charges, or the billed charges subject to
the limiting charge in section 1848(g) of the Act. Medicare notifies
the beneficiary of the amount he or she may be billed for denied
services on the Medicare Summary Notice in a column titled, ``Maximum
You May Be Billed.'' For appeals filed by a provider, supplier, or
Medicaid State agency for denied items or services for which the
beneficiary was determined to be financially responsible, we stated in
the proposed rule that we believed providers, suppliers, and Medicaid
State agencies would have sufficient access to the provider or
supplier's billing information and Medicare claims processing data to
determine the amount charged to the beneficiary. Accordingly, we
proposed at Sec. 405.1006(d)(2)(ii) that for any items or services for
which a beneficiary has been determined to be financially responsible,
the basis for the amount in controversy is the actual amount charged to
the beneficiary (or the maximum amount the beneficiary may be charged
if no bill has been received) for the items or services in the disputed
claim. As discussed above, this amount would be set forth on the
Medicare Summary Notice in the column titled ``Maximum You May Be
Billed.''
We also proposed at Sec. 405.1006(d)(2)(iii) that if a beneficiary
received or may be entitled to a refund of the amount the beneficiary
previously paid to the provider or supplier for the items or services
in the disputed claim under applicable statutory or regulatory
authorities, the basis for the amount in controversy would be the
actual amount originally charged to the beneficiary for the items or
services in the disputed claim, as we stated in the proposed rule we
believed that the amount originally charged to the beneficiary is more
reflective of the actual amount at issue for the beneficiary and for
the provider or supplier in this situation. We also stated we believed
appellants would have access to and would use the same information for
determining the basis for the amount in controversy under paragraph
Sec. 405.1006(d)(2)(iii) as they would under Sec. 405.1006(d)(2)(ii).
As discussed above, we proposed at Sec. 405.1006(d)(3) through (7)
five exceptions to the general methodology used to calculate the amount
in controversy specified in Sec. 405.1006(d)(1). Current Sec.
405.1006(d)(2) provides that, notwithstanding current Sec.
405.1006(d)(1), when payment is made for items or services under
section 1879 of the Act or Sec. 411.400, or the liability of the
beneficiary for those services is limited under Sec. 411.402, the
amount in controversy is computed as the amount that the beneficiary
would have been charged for the items or services in question if those
expenses were not paid under Sec. 411.400 or if that liability was not
limited under Sec. 411.402, reduced by any deductible and coinsurance
amounts applicable in the particular case. We proposed to re-designate
current Sec. 405.1006(d)(2) as Sec. 405.1006(d)(3) and to revise the
paragraph to state that when payment is made for items or services
under section 1879 of the Act or Sec. 411.400, or the liability of the
beneficiary for those services is limited under Sec. 411.402, the
amount in controversy would be calculated in accordance with Sec.
405.1006(d)(1) and (2)(i), except there is no deduction under paragraph
(d)(1)(i) for expenses that are paid under Sec. 411.400 or as a result
of liability that is limited under Sec. 411.402. For example, when a
claim for items or services is denied under section 1862(a)(1)(A) of
the Act because the items or services were not reasonable and necessary
for the treatment of illness or injury or to improve the functioning of
a malformed body member, Medicare payment may nonetheless be made under
the limitation on liability provisions of section 1879 of the Act if
neither the provider/supplier nor the beneficiary knew, or could
reasonably have been expected to know, that payment would not be made.
In instances such as these, we proposed that the amount in controversy
would be calculated as if the items or services in the disputed claim
were denied and no payment had been made under section 1879 of the Act.
We stated in the proposed rule that we believed this exception was
appropriate because appellants may still wish to appeal findings of
non-coverage related to items and services for which liability of the
party was limited or payment was made under section 1879 of the Act or
Sec. 411.400 or for which the beneficiary was indemnified under Sec.
411.402, but if these payments or indemnifications were deducted from
the basis for the amount in controversy, the amount in controversy
could be zero. As this exception relates only to whether deductions are
made under Sec. 405.1006(d)(1)(i) for any Medicare payments already
made or awarded for the items or services, and the amount in
controversy would otherwise be calculated in accordance with proposed
Sec. 405.1006(d)(1) and (d)(2)(i), we stated we believed appellants
would have access to and would use the same information for determining
the amount in controversy under Sec. 405.1006(d)(3) as they would
under Sec. 405.1006(d)(1) and (d)(2)(i).
Current Sec. 405.1006 does not address calculating the amount in
controversy for matters involving a provider or supplier termination of
a Medicare-covered item or service when the beneficiary did not elect
to continue receiving the item or service (for example, Sec.
405.1206(g)(2) provides that if a beneficiary is dissatisfied with a
QIO's determination on his or her discharge and is no longer an
inpatient in a hospital, the determination is subject to the general
claims appeal process). In this circumstance, items and services have
not been furnished, and therefore, a claim has not been submitted. Yet
the beneficiary may elect not to continue receiving items or services
while appealing the provider or supplier termination due to potential
financial responsibility for the items or services. While an amount in
controversy cannot be assessed for a period of time during which no
items or services were furnished, a beneficiary may assert a continuing
need for the items or services based on his or her condition at the
time an appeal is heard. To address this circumstance, we proposed new
Sec. 405.1006(d)(4), which would provide that when a matter involves a
provider or supplier termination of Medicare-covered items or services
and the beneficiary did not elect to continue receiving the items or
services that are disputed by a
[[Page 5008]]
beneficiary, the amount in controversy is calculated as discussed above
regarding proposed (d)(1) and (d)(2)(ii) (which addresses situations
where the beneficiary is determined to be financially responsible),
except that the basis for the amount in controversy and any deductible
and coinsurance that may be collected for the items or services are
calculated using the amount the beneficiary would have been charged if
the beneficiary had received the items or services that the beneficiary
asserts should be covered by Medicare based on the beneficiary's
current condition at the time an appeal is heard, and Medicare payment
was not made. We stated that this proposal would allow the beneficiary
to pursue coverage for an item or service and potentially meet the
amount in controversy requirement in instances in which he or she would
not otherwise be able to pursue a hearing before an ALJ because no
items or services have been rendered and therefore no amount in
controversy exists because there is no disputed claim. In these
instances, the beneficiary has been notified of a preliminary decision
by a provider or supplier that Medicare will not cover continued
provision of the items or services in dispute. Therefore, we stated in
the proposed rule that we believed using the amount the beneficiary
would be charged if the beneficiary elected to continue receiving the
items or services that the beneficiary asserts should be covered and if
Medicare payment were not made for these items or services (in other
words, the amount the beneficiary would be charged if the beneficiary
were financially responsible for these items or services) is most
reflective of the actual amount in dispute. Most beneficiary appeals of
provider or supplier terminations of Medicare-covered items or services
involve the termination of Part A services and, therefore, we stated
that we expected it would be rare that the amount in controversy would
be less than that required for an ALJ hearing. However, we also stated
that we expected that beneficiaries wishing to determine if the amount
in controversy required for an ALJ hearing was met could obtain from
the provider or supplier the amount the beneficiary would be charged if
the beneficiary elected to continue receiving the items or services and
Medicare payment were not made. In addition, as discussed below, we
proposed at Sec. 405.976(b)(7) that the QIC would include in its
notice of reconsideration a statement of whether the amount in
controversy is estimated to meet or not meet the amount required for an
ALJ hearing, if the request for reconsideration was filed by a
beneficiary who is not represented by a provider, supplier, or Medicaid
State agency, and the reconsideration decision was partially or fully
unfavorable.
We considered using Medicare payable amounts for denied items and
services as the basis for the amount in controversy calculation
specified in proposed Sec. 405.1006(d)(1), as we stated that would be
a more precise estimate of the amount at issue in the appeal than
either the Medicare allowable amount or the billed charges. Payable
amounts would take into account payment rules related to the items and
services furnished that may increase or decrease allowable amounts (for
example, multiple surgery reductions, incentive payments, and
competitive bidding payments). However, we stated that CMS systems do
not currently calculate payable amounts for denied services, and
undertaking major system changes would delay implementation and has
been determined not to be cost effective. While payable amounts may be
a better representation of the amount at issue in the appeal, we stated
in the proposed rule that we believed the Medicare allowable amount and
the other amount in controversy calculations provided in proposed Sec.
405.1006(d) are appropriate and reliable estimates that align well with
the amount at issue for claims for which a payable amount has not been
calculated.
However, we stated that for post-payment denials, or overpayments,
a payable amount has been determined and would be the most reliable
indicator of the amount actually at issue in the appeal. Therefore, we
proposed new Sec. 405.1006(d)(5) to state that, notwithstanding the
calculation methodology in proposed paragraphs (d)(1) and (2), when a
claim appeal involves an overpayment determination, the amount in
controversy would be the amount of the overpayment specified in the
demand letter. In a post-payment denial, the amount of the overpayment
identified in the demand letter is readily available to appellants, and
is the most accurate reflection of the amount actually at issue in the
appeal. In addition, current Sec. 405.1006 does not address appeals
that involve an estimated overpayment amount determined through the use
of sampling and extrapolation. In this circumstance, the claims sampled
to determine the estimated overpayment may not individually meet the
amount in controversy requirement, but the estimated overpayment
determined through the use of extrapolation may meet the amount in
controversy requirement. To address this circumstance, we also proposed
in new Sec. 405.1006(d)(5) that when a matter involves an estimated
overpayment amount determined through the use of sampling and
extrapolation, the estimated overpayment as extrapolated to the entire
statistical sampling universe is the amount in controversy. We stated
that this proposal would provide appellants the opportunity to appeal
claims that may not individually meet the amount in controversy
requirement if such claims were part of the sample used in making an
overpayment determination that does meet the amount in controversy
requirement. Because the overpayment determination reflects the amount
for which the appellant is financially responsible, we stated in the
proposed rule that we believed it would be appropriate to allow
appellants to appeal individual claims in the sample that was used to
determine the overpayment. Whether an appeal involves an individual
overpayment or an estimated overpayment determined through the use of
sampling and extrapolation, we stated in the proposed rule that we
believed appellants against whom an overpayment was assessed would need
only to consult the demand letter they received in order to determine
the amount in controversy. However, we also stated that we expected
there may be circumstances where a beneficiary wishes to appeal an
overpayment that was assessed against a provider or supplier, and in
these situations the beneficiary may not have a copy of the demand
letter that was received by the provider or supplier. For this reason,
and as discussed below, we proposed at Sec. 405.976(b)(7) that the QIC
would include in its notice of reconsideration a statement of whether
the amount in controversy is estimated to meet or not meet the amount
required for an ALJ hearing, if the request for reconsideration was
filed by a beneficiary who is not represented by a provider, supplier,
or Medicaid State agency, and the reconsideration decision was
partially or fully unfavorable.
We also proposed new Sec. 405.1006(d)(6), which would provide that
when a beneficiary files an appeal challenging only the computation of
a coinsurance amount, or the amount of a remaining deductible
applicable to the items or services in the disputed claim, the amount
in controversy is the difference between the amount of the coinsurance
or remaining deductible, as
[[Page 5009]]
determined by the contractor, and the amount of the coinsurance or
remaining deductible the beneficiary believes is correct. We stated in
the proposed rule that we believed this provision is appropriate in
these instances because, without this provision, the amount in
controversy determined under the general calculation methodology in
Sec. 405.1006(d)(1) would be zero for a paid claim. In addition, we
also stated that we believed that the calculation proposed at Sec.
405.1006(d)(6) would appropriately reflect the amount at issue for the
beneficiary in these appeals where the computation of a coinsurance
amount, or the amount of a remaining applicable deductible is
challenged. We further stated that we believed beneficiaries would have
access to the coinsurance and/or deductible amounts determined by the
contractor for the paid claim on the beneficiary's Medicare Summary
Notice, in the column titled ``Maximum You May Be Billed,'' and would
need only to subtract the amount of coinsurance and/or deductible the
beneficiary believes he or she should have been charged in order to
arrive at the amount in controversy. We stated we expected it would be
extremely rare for a non-beneficiary appellant to file an appeal
challenging the computation of a coinsurance amount or the amount of a
remaining deductible.
In addition, we proposed new Sec. 405.1006(d)(7) to provide that
for appeals of claims where the allowable amount has been paid in full
and the appellant is challenging only the validity of the allowable
amount, as reflected in the published Medicare fee schedule or in the
published contractor-priced amount applicable to the items or services
in the disputed claim, the amount in controversy is the difference
between the amount the appellant argues should have been the allowable
amount for the items or services in the disputed claim in the
applicable jurisdiction and place of service, and the published
allowable amount for the items or services. We stated in the proposed
rule that we believed this provision is appropriate in these instances
because, without this provision, the amount in controversy determined
under the general calculation methodology in Sec. 405.1006(d)(1) would
be zero for such paid claims. In addition, we stated we believed that
the calculation proposed at Sec. 405.1006(d)(7) would appropriately
reflect the amount at issue for the appellant in these appeals. We also
stated that we believed that, generally, these types of appeals are
filed by providers and suppliers who are already familiar with the
allowable amount for the items or services in the disputed claim based
on information obtained from published fee schedules or contractor-
priced amounts. Further, we stated that we believed that a fee schedule
or contractor price challenge filed by a beneficiary on a paid claim
would be a very rare occurrence. However, as discussed below, in the
event a beneficiary would want to file such an appeal, the beneficiary
could obtain an estimate of the amount in controversy from the QIC
reconsideration. As discussed further below, we proposed at Sec.
405.976(b)(7) that the QIC would include in its notice of
reconsideration a statement of whether the amount in controversy is
estimated to meet or not meet the amount required for an ALJ hearing,
if the request for reconsideration was filed by a beneficiary who is
not represented by a provider, supplier, or Medicaid State agency, and
the reconsideration decision was partially or fully unfavorable.
In the event that a reconsideration, or a redetermination if the
appeal was escalated from the QIC without a reconsideration, involves
multiple claims and some or all do not meet the amount in controversy
requirement, section 1869 of the Act states that, in determining the
amount in controversy, the Secretary, under regulations, shall allow
two or more appeals to be aggregated if the appeals involve the
delivery of similar or related services to the same individual by one
or more providers or suppliers, or common issues of law and fact
arising from services furnished to two or more individuals by one or
more providers or suppliers. Under this authority, Sec. 405.1006(e)
provides for aggregating claims to meet the amount in controversy
requirement.
The title of current Sec. 405.1006(e)(1) for aggregating claims
when appealing a QIC reconsideration is phrased differently than the
corresponding title for aggregating claims when escalating a request
for a QIC reconsideration in current Sec. 405.1006(e)(2), which may
cause confusion. We proposed to revise the title to Sec.
405.1006(e)(1) to ``Aggregating claims in appeals of QIC
reconsiderations for an ALJ hearing'' so it clearly applies to
aggregating claims in appeals of QIC reconsiderations, and is parallel
to the phrasing used in the title of Sec. 405.1006(e)(2). The proposed
titles of Sec. 405.1006(e)(1) and (e)(2), and proposed Sec.
405.1006(e)(2)(ii) would also replace ``to the ALJ level'' with ``for
an ALJ hearing'' to again highlight that the appeal of a QIC
reconsideration or escalation of a request for a QIC reconsideration is
for an ALJ hearing.
Current Sec. 405.1006(e)(1)(ii) provides that to aggregate claims,
the request for ALJ hearing must list all of the claims to be
aggregated. We stated in the proposed rule that this has caused
confusion because some appellants read current Sec. 405.1006(e)(1)(ii)
as allowing appeals of new claims to be aggregated with claims in
previously filed appeals, provided the new request for hearing lists
the claims involved in the previously filed appeals. However, current
Sec. 405.1006(e)(2)(i), which applies to aggregating claims that are
escalated from the QIC for a hearing before an ALJ, requires that the
claims were pending before the QIC in conjunction with the same request
for reconsideration. We noted in the proposed rule that in the context
of a request for hearing, aggregating new claims with claims from
previously filed requests could delay the adjudication of the requests
and is inconsistent with the current rule for aggregating claims that
are escalated from the QIC. To address these issues and bring
consistency to the aggregation provisions, we proposed to revise Sec.
405.1006(e)(1)(ii) to require the appellant(s) to request aggregation
of the claims in the same request for ALJ hearing or in multiple
requests for an ALJ hearing filed with the same request for
aggregation. We stated that this would allow an individual or multiple
appellants to file either one request for an ALJ hearing for multiple
claims to be aggregated, or multiple requests for an ALJ hearing for
the appealed claims when requesting aggregation, while requiring them
to be filed together with the associated request for aggregation. We
also proposed in Sec. 405.1006(e)(1)(iii) and (e)(2)(iii) that an ALJ
or attorney adjudicator may determine that the claims that a single
appellant seeks to aggregate involve the delivery of similar or related
services, or the claims that multiple appellants seek to aggregate
involve common issues of law and fact, but only an ALJ may determine
the claims that a single appellant seeks to aggregate do not involve
the delivery of similar or related services, or the claims that
multiple appellants seek to aggregate do not involve common issues of
law and fact. We proposed this because an attorney adjudicator
adjudicating requests for an ALJ hearing when no hearing is conducted,
as proposed in section II.B of the proposed rule (and discussed in
section II.A.2 above), would not be permitted under this proposed rule
to dismiss a request for an ALJ hearing due to procedural issues such
as an invalid aggregation
[[Page 5010]]
request. Because only an ALJ would be permitted to dismiss a request
for an ALJ hearing because there is no right to a hearing, which
includes not meeting the amount in controversy requirement for a
hearing, in accordance with proposed Sec. 405.1052(a), an attorney
adjudicator could not make a determination that the aggregation
criteria were not met because that determination would result in a
dismissal of a request for an ALJ hearing.
Current Sec. 405.976(b)(7) requires that the QIC notice of
reconsideration contain a statement of whether the amount in
controversy needed for an ALJ hearing is met when the reconsideration
is partially or fully unfavorable. We proposed to revise Sec.
405.976(b)(7) to require that the QIC notice of reconsideration include
a statement of whether the amount in controversy is estimated to meet
or not meet the amount required for an ALJ hearing only if the request
for reconsideration was filed by a beneficiary who is not represented
by a provider, supplier, or Medicaid State agency, and the
reconsideration is partially or fully unfavorable. In line with current
practice, we did not propose to require that the QIC indicate what it
believes to be the exact amount in controversy, but rather only an
estimate of whether it believes the amount in controversy is met,
because, as we stated in the proposed rule, we believe the ultimate
responsibility for determining whether the amount in controversy
required for an ALJ hearing is met lies with appellants, subject to
verification by an ALJ or attorney adjudicator (though, as discussed in
section II.B of the proposed rule and II.A.2 of this final rule above,
only an ALJ would be able to dismiss a request for hearing for failure
to meet the amount in controversy required for an ALJ hearing). We
stated in the proposed rule that we believe that providers, suppliers,
and Medicaid State agencies have the tools, resources, and payment
information necessary to calculate the amount in controversy in
accordance with Sec. 405.1006(d), and are familiar with the allowable
amounts for the places of service in which they operate. Furthermore,
applicable plans against whom a Medicare Secondary Payer overpayment is
assessed would have access to the overpayment amount specified in the
demand letter, which would be used to determine the amount in
controversy under proposed Sec. 405.1006(d)(5). Thus, we stated that
we did not believe it was necessary for the QICs to continue to provide
this statement for providers, suppliers, applicable plans, Medicaid
State agencies, or beneficiaries represented by providers, suppliers or
Medicaid State agencies. Furthermore, as discussed in section
III.A.3.g.i of the proposed rule and II.B.3.g.i of this final rule
below, we proposed that appellants, other than beneficiaries who are
not represented by a provider, supplier, or Medicaid State agency,
include the amount in controversy in their requests for hearing (unless
the matter involves a provider or supplier termination of Medicare-
covered items or services that is disputed by a beneficiary, and the
beneficiary did not elect to continue receiving the items or services).
As providers, suppliers, Medicaid State agencies, applicable plans, and
beneficiaries represented by a provider, supplier, or Medicaid State
agency would be responsible for calculating the amount in controversy
and including it on the request for hearing as proposed in section
III.A.3.g.i of the proposed rule (and discussed in section II.B.3.g.i
below), we stated that we did not believe a statement by the QIC that
indicates only whether the amount in controversy was or was not met
adds significant value to such appellants. Furthermore, we expected
that the Medicare allowable amount under proposed Sec.
405.1006(d)(2)(i)(A) would be the basis for the amount in controversy
in the majority of Part B appeals filed by non-beneficiary appellants.
While QICs have access to the amount charged to an individual based on
billed charges, the allowable amounts for claims vary based on where
these items and services were furnished, and the applicable fee
schedules and contractor-priced amounts, and continuing to require the
QICs to include a statement whether the amount in controversy needed
for an ALJ hearing is met in all instances in which the decision is
partially or fully unfavorable to the appellant would require
substantially more work by the QIC, and could delay reconsiderations
and increase costs to the government.
Although we did not propose that beneficiaries who are not
represented by a provider, supplier, or Medicaid State agency would
need to include the amount in controversy on their requests for hearing
(as discussed later in this preamble), we stated in the proposed rule
that we believed there may be instances where a beneficiary would want
to know if the amount in controversy meets the amount required for an
ALJ hearing when deciding whether to file a request for hearing. We
also stated we believed there may be instances where a beneficiary who
is not represented by a provider, supplier, or Medicaid State agency
may not currently have sufficient information to determine whether the
amount in controversy required for an ALJ hearing is met under proposed
Sec. 405.1006. For example, under proposed Sec. 405.1006(d)(2)(i)(A),
for items and services with a published Medicare fee schedule or
published contractor-priced amount (and for which the beneficiary was
determined to be not financially responsible), the basis for the amount
in controversy would generally be the allowable amount, which is the
amount reflected on the fee schedule or in the contractor-priced amount
for those items or services in the applicable jurisdiction and place of
service. Beneficiaries not represented by a provider, supplier, or
Medicaid State agency would not generally be expected to be familiar
with fee schedule and contractor-priced amounts, and we stated we
believed they may have difficulty determining whether the amount in
controversy required for an ALJ hearing is met in these cases. We also
stated we believed beneficiaries not represented by a provider,
supplier, or Medicaid State agency might be unable to determine the
amount of an overpayment assessed against a provider or supplier for
items or services furnished to the beneficiary for purposes of
calculating the amount in controversy under proposed Sec.
405.1006(d)(5), as the beneficiary might not have access to the demand
letter received by the provider or supplier, and may no longer have
access to the Medicare Summary Notice reflecting the original payment
amount. Accordingly, because there are situations where such
beneficiaries may not have sufficient information to determine the
amount in controversy, we proposed to revise Sec. 405.976(b)(7) to
state that the QIC would include in its notice of reconsideration a
statement of whether the amount in controversy is estimated to meet or
not meet the amount required for an ALJ hearing, if the request for
reconsideration was filed by a beneficiary who is not represented by a
provider, supplier, or Medicaid State agency, and the reconsideration
decision was partially or fully unfavorable.
Current Sec. 423.1970 describes the amount in controversy
requirement for part 423, subpart U proceedings. For the same reasons
we proposed to revise Sec. 405.1006(e)(1)(ii), we proposed in Sec.
423.1970(c)(1)(ii) and (c)(2)(ii) to provide that a single enrollee's
or multiple enrollees' request for
[[Page 5011]]
aggregation, respectively, must be filed at the same time the request
(or requests) for hearing for the appealed reconsiderations is filed.
In addition, we proposed to revise Sec. 423.1970(c)(1)(ii) and Sec.
423.1970(c)(2)(ii) to state that the request for aggregation and
requests for hearing must be filed within 60 calendar days after
receipt of the notice of reconsideration for each reconsideration being
appealed, unless the deadline is extended in accordance with Sec.
423.2014(d). Our proposal would help ensure there is no confusion that
the timely filing requirement applies to each of the requests for
hearing filed with the request for aggregation. Because we proposed to
directly reference the 60 calendar day filing requirement under Sec.
423.1972(b) and the possible extension of the filing requirement under
Sec. 423.2014(d), we also proposed to remove the current references in
Sec. 423.1970(c)(1)(ii) and (c)(2)(ii) to the filing requirement in
Sec. 423.1972(b). In addition, for the same reasons we proposed to
revise Sec. 405.1006(e)(1)(iii) and (e)(2)(iii), we proposed in Sec.
423.1970(c)(1)(iii) and (c)(2)(iii) that an ALJ or attorney adjudicator
may determine that the appeals that a single enrollee seeks to
aggregate involve the delivery of prescription drugs to a single
enrollee, or the appeals that multiple enrollees seek to aggregate
involve the same prescription drugs, but only an ALJ may determine
appeals that a single enrollee seeks to aggregate do not involve the
delivery of prescription drugs to a single enrollee, or the appeals
that multiple enrollees seek to aggregate do not involve the same
prescription drugs. We proposed to replace ``prescription'' in current
Sec. 423.1970(c)(2)(iii) with ``prescription drugs'' in proposed Sec.
423.1970(c)(2)(iii) for consistency with current and proposed Sec.
423.1970(c)(1)(iii). Finally, we also proposed to correct the spelling
of ``prescription'' in current Sec. 423.1970(c)(2)(iii).
Current Sec. 422.600(b) provides that the amount in controversy
for appeals of reconsidered determinations to an ALJ (under the Part C
MA program), is computed in accordance with part 405. However, if the
basis for the appeal is the MAO's refusal to provide services, current
Sec. 422.600(c) provides that the projected value of those services
are used to compute the amount in controversy. We did not propose to
revise these provisions because, as we stated in the proposed rule, we
believed the proposed revisions to Sec. 405.1006 described above
encompass and have application to the scenarios appealed under part
422, subpart M. In particular, we noted that as is the case under
current Sec. 405.1006, if an enrollee received items or services and
is financially responsible for payment because the MAO has refused to
cover the item or services, the amount in controversy would be
calculated using the billed charges as the basis for the amount in
controversy, as provided in proposed Sec. 405.1006(d)(2)(ii). We
stated that if the enrollee did not receive the items or services, the
provisions of current Sec. 422.600(c) would apply. We also noted that
current Sec. Sec. 422.622(g)(2) and 422.626(g)(3) provide for an
appeal to an ALJ, the Council, or federal court of an IRE's affirmation
of a termination of provider services ``as provided for under [part
422, subpart M],'' thus triggering the amount in controversy rules in
422.600, which cross-reference part 405 (that is, the rules proposed
here). We stated that proposed Sec. 405.1006 would address scenarios
appealed under part 422, subpart M that are not clearly addressed in
current Sec. 405.1006, such as provider service terminations, which
would be addressed in proposed Sec. 405.1006(d)(4), and coinsurance
and deductible challenges, which would be addressed in proposed Sec.
405.1006(d)(6).
Current Sec. 478.44(a) also references back to part 405 provisions
for determining the amount in controversy when requesting an ALJ
hearing after a QIO reconsidered determination. We proposed revisions
to Sec. 478.44 in section III.D.3 of the proposed rule (as discussed
in section II.E.3 below), to update part 405 references, but we did not
propose in Sec. 478.44 to revise how the current or proposed part 405
provision would be applied in calculating the amount in controversy.
Similar to the part 422, subpart M provisions discussed above, we
stated that we believe the proposed revisions to Sec. 405.1006
described above encompass and have application to the scenarios
appealed under part 478, subpart B.
We received 14 comments on these proposals. Provided below are
summaries of the specific comments received and responses to these
comments:
Comment: Two commenters supported our proposal to revise the title
of Sec. 405.1006 to reflect that the amount in controversy threshold
is required ``for an ALJ hearing and judicial review'' rather than ``to
request an ALJ hearing and judicial review.'' One commenter felt that
this revision would more closely align the regulation with the
corresponding statutory provision at Sec. 1869(b)(1)(E) of the Act.
The other commenter believed that the current title of Sec. 405.1006
may have resulted in beneficiaries not filing a request for hearing if
they were confused or unsure about whether the minimum amount in
controversy was met.
Response: We thank the commenters for their support, and we are
finalizing the proposal to revise the title of Sec. 405.1006 without
modification.
Comment: Six commenters opposed our proposal at Sec.
405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the basis
for the amount in controversy for items and services that are priced
based on a published Medicare fee schedule or published contractor-
priced amount, and recommended we withdraw the proposal or publish
user-friendly, online resources to help the public better understand
the proposed calculation methodology. In general, the commenters felt
that the proposal would prevent physicians, beneficiaries, and other
appellants from appealing low-dollar claims and, rather than
streamlining the appeals process, the proposal would create confusion
among appellants, ALJs, and attorney adjudicators. One commenter
recommended that the higher of the Medicare allowable amount or the
amount charged the individual for the items or services in question be
used to determine the amount in controversy.
Response: As explained above, we proposed to revise the calculation
methodology for the amount in controversy in order to arrive at an
amount that more accurately reflects the amount at stake for
appellants. We estimated in section VI (Regulatory Impact Statement) of
the proposed rule (81 FR 43790, 43856) that our proposals could remove
appeals related to over 2,600 low-value Part B claims per year from the
ALJ hearing process, after accounting for the likelihood that
appellants would aggregate claims to meet the minimum amount in
controversy required for an ALJ hearing. However, we noted in the
proposed rule that appeals filed by Medicare beneficiaries and MA and
Part D prescription drug plan enrollees would be minimally impacted
because these individuals often appeal claim or coverage denials for
which they are financially responsible, and for which we would continue
basing the amount in controversy on the provider or supplier's billed
charges.
After considering the comments received and further analysis of our
proposal to revise the calculation of the amount in controversy to use
the Medicare allowable amount as set forth in proposed Sec.
405.1006(d)(2)(i)(A), we
[[Page 5012]]
have decided not to finalize proposed Sec. 405.1006(d)(2)(i)(A) at
this time. While we continue to believe that the amount in controversy
should more closely reflect the actual amount at stake in an appeal, we
believe that the costs to the appellant community and the government
outweigh the benefits of fewer appeals entering the ALJ hearing process
under the proposed methodology for calculating the amount in
controversy.
Based on further analysis spawned by the public comments, we
believe the costs of the proposal are likely higher than originally
anticipated. These costs include costs to the appellant community in
identifying the published Medicare fee schedule or published
contractor-priced amount to include in the request for hearing; and the
administrative costs to the government of calculating the amount for
certain appellants, and verifying and resolving conflicts over the
calculation. While our estimation of 2,600 fewer appeals for low-value
claims that we believe would enter the appeals process if the proposal
were finalized does provide a clear benefit, we estimate the costs to
the Federal government would be roughly twice the projected benefit and
recognize the appellant community would incur additional costs as well.
Therefore, we do not believe this estimated benefit outweighs the
potential costs at this time based on our revised analysis.
Thus, at this time we are not finalizing our proposal under Sec.
405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the basis
for the amount in controversy for items and services that are priced
based on a published Medicare fee schedule or published contractor-
priced amount. In addition, we are not finalizing proposed Sec.
405.1006(d)(2)(i)(B), because, given that we are not finalizing
proposed Sec. 405.1006(d)(2)(i)(A), there is no longer a need to
distinguish between items and services with and without a published
Medicare fee schedule or contractor-priced amount. Instead, we will
continue to use the methodology specified in Sec. 405.1006(d)(1) as
the general methodology for calculating the amount in controversy,
except that we are finalizing our proposal to replace ``for the items
and services in question'' with ``for the items and services in the
disputed claim'' in Sec. 405.1006(d)(1) introductory text because the
amount in controversy is calculated on a claim-by-claim basis, and
there has been confusion when a single reconsideration decision
involves multiple claims. We are also replacing ``applicable in the
particular case'' with ``that may be collected for the items or
services'' in Sec. 405.1006(d)(1)(ii) because, as explained above and
in section III.A.3.d of the proposed rule, there may be situations
where a provider or supplier is prohibited from collecting applicable
coinsurance and/or deducible amounts, or must refund any such amounts
already collected, and in these situations the amount in controversy
should not be reduced by that amount. Furthermore, because we will
continue to use Sec. 405.1006(d)(1), as revised above, we are not
finalizing proposed Sec. 405.1006(d)(1).
In addition, we also are not finalizing proposed Sec.
405.1006(d)(2)(ii) and (iii) because there is no need to define the
basis for the amount in controversy in specific situations, as the
amount in controversy would be calculated on the basis of the amount
charged the individual in all of the scenarios described in proposed
Sec. 405.1006(d)(2)(i) through (iii). However, for the reasons
discussed above and in section III.A.3.d of the proposed rule, we
continue to believe that it would be appropriate to finalize separate
calculations of the amount in controversy to address the situations in
proposed Sec. 405.1006(d)(3) through (7). Therefore, we are
finalizing, with the modifications discussed below, the exceptions to
the general calculation methodology that we proposed at Sec.
405.1006(d)(3) through (7), which are being renumbered as Sec.
405.1006(d)(2) through (6) in this final rule.
Comment: One commenter supported our proposal to use the Medicare
allowable amount as the basis for the amount in controversy for items
and services that are priced based on a published Medicare fee schedule
or published contractor-priced amount. Another commenter supported our
proposal to continue using the provider's or supplier's billed charges
as the basis for calculating the amount in controversy for appeals of
claims that are not priced according to a CMS-published fee schedule
and do not have a published contractor-priced amount (subject to the
exceptions delineated in the proposed rule).
Response: We thank the commenters for their support. However, for
the reasons explained above, we are not finalizing our proposal at
Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the
basis for the amount in controversy for items and services that are
priced based on a published Medicare fee schedule or published
contractor-priced amount.
Comment: One commenter stated that the proposed rule ``establishes
the minimum amounts in controversy for a hearing by the Secretary and
for judicial review, but does not establish how to calculate the
amounts in controversy.'' The commenter also stated that the proposal
to use the Medicare allowable amount as the basis for the amount in
controversy for appeals of claims that are priced based on a published
Medicare fee schedule or published contractor-priced amount, could be
burdensome for MAOs, who would need to provide their contracted rates
for every provider and plan type for appeals that involve supplemental
benefits offered by the plan. Finally, the commenter requested
clarification on how the proposal would affect pre-service requests for
coverage.
Response: We disagree with the comment that the proposed rule would
establish the minimum amounts in controversy for an ALJ hearing and
judicial review, but that it would not establish how to calculate the
amount in controversy. Section 1869(b)(1)(E) of the Act establishes the
amount in controversy threshold amounts for an ALJ hearing and judicial
review at $100 and $1,000, respectively, for Medicare Part A and Part B
appeals, adjusted annually 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 1869(b)(1)(E) of the Act is then referenced and the same amount
in controversy thresholds and adjustments are made applicable to
competitive medical plan (also known as cost plan) appeals in section
1876(c)(5)(b) of the Act, to Part C MA appeals in section 1852(g)(5) of
the Act, and to Part D Prescription Drug appeals in section 1860D-4(h)
of the Act (by reference back to section 1852(g) of the Act). Thus, the
minimum amount in controversy thresholds required for an ALJ hearing
and judicial review are established by statute, and are reflected in
the regulations at current Sec. 405.1006(b) and (c).
However, as we explained above and in the proposed rule, the
statute does not specify how to calculate the amount in controversy.
Section 405.1006(d)(1) provides that, subject to the exception in
paragraph (d)(2), the amount in controversy is computed as the actual
amount charged the individual for the items and services in question,
reduced by any Medicare payments already made or awarded for the items
or services and any deductible or coinsurance amounts applicable in the
particular case. Because the actual amount charged the individual may
not
[[Page 5013]]
always be an accurate reflection of the amount at issue for appellants,
we proposed to revise the calculation methodology in Sec. 405.1006(d)
in a manner that better aligns the amount in controversy with the
amount at stake in an appeal. In general, we proposed in Sec.
405.1006(d)(1) that, subject to certain exceptions, the amount in
controversy would be the calculated as the basis for the amount in
controversy as defined in paragraph (d)(2), reduced by any Medicare
payments already made or awarded for the items or services and any
deductible and/or coinsurance amounts that may be collected for the
items or services. In proposed Sec. 405.1006(d)(2), we explained how
the basis for the amount in controversy would be calculated in
different situations, and in Sec. 405.1006(d)(3) through (7) we
proposed five exceptions to the general calculation methodology
specified in proposed paragraphs (d)(1) and (2).
With regard to the commenter's concern that under our proposal at
Sec. 405.1006(d)(2)(i)(A), MAOs would need to provide their contracted
rates for appeals that involve supplemental plan benefits, and the
commenter's request for clarification regarding how this proposal would
affect pre-service requests for coverage, we note that, for the reasons
explained above, we are not finalizing our proposal in Sec.
405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the basis
for the amount in controversy for items and services that are priced
based on a published Medicare fee schedule or published contractor-
priced amount, nor are we finalizing proposed Sec. 405.1006(d)(2)(ii)
or (d)(2)(iii).
Comment: Two commenters suggested HHS consider increasing the
minimum amount in controversy required for an ALJ hearing. One of these
commenters recommended raising the minimum amount in controversy from
$100 to $300, and the other recommended raising it from $100 to $500.
(As the annually adjusted amount in controversy threshold for an ALJ
hearing was $150 at the time the comments were received, we presume the
commenters are referring to the amount in controversy without regard to
the annual adjustments required under section 1869(b)(1)(E)(iii) of the
Act.) The commenters stated that raising the amount in controversy
would reduce the number of appeals for small-dollar claims and generate
savings in adjudication costs for the government and staffing costs for
health plans.
Response: The amount in controversy threshold required for an ALJ
hearing is specified in section 1869(b)(1)(E) of the Act. We appreciate
the commenters' recommendations, but we do not have the authority to
change the amount in controversy threshold specified in the statute.
Comment: One commenter observed that claim determinations resulting
from a single audit are frequently separated into multiple overpayment
recovery actions, which increases administrative burden on appellants
and CMS, and also may make it difficult for appellants to aggregate
claims to meet the amount in controversy requirement because the
overpayment recovery actions often occur on different dates. The
commenter recommended the agency prohibit Medicare contractors from
separating claims that result from the same audit or investigation.
Another commenter felt our proposals at Sec. Sec. 405.1006(e)(1)(iii),
(e)(2)(iii), 423.1970(c)(1)(iii), and (c)(2)(iii) providing that only
an ALJ could determine that a request for aggregation was invalid were
overly complicated, could make the role of an attorney adjudicator
duplicative, and, without appropriate safeguards, could result in an
ALJ merely adopting an attorney adjudicator's recommendation on whether
a request for aggregation was valid without further review.
Response: With regard to the recommendation that the agency
prohibit contractors from separating claims that result from the same
audit or investigation, we note that permitted practices for CMS
contractor audits are not within the scope of this rulemaking. We do
not agree with the commenter that our proposal that only an ALJ can
determine the invalidity of a request for aggregation is overly
complicated. As explained above and in section III.A.3.d of the
proposed rule, we believe that only an ALJ can determine the invalidity
of a request for aggregation, because that determination would result
in a dismissal of a request for an ALJ hearing. However, we believe it
would be unnecessary and inefficient to require an ALJ to determine
that a request for aggregation was valid for an appeal that was
assigned to an attorney adjudicator. With respect to the concern that
the ALJ could merely adopt the attorney adjudicator's recommendation on
whether a request for aggregation was valid without further review, we
note that Sec. 405.1006(e)(1) and (2), as finalized in this rule,
provide that only an ALJ may determine that the claims were not
properly aggregated and therefore do not meet the minimum amount in
controversy required for an ALJ hearing. Thus, the ALJ is required to
make this determination, and would not be permitted to simply adopt the
attorney adjudicator's preliminary determination without doing an
independent review. We address the commenters concerns regarding the
role of an attorney adjudicator compared to that of an ALJ more fully
in section II.A.2 above.
Comment: One commenter stated that, for durable medical equipment,
prosthetics, orthotics and supplies (DMEPOS) claims, in the case of an
unrepresented beneficiary, the amount in controversy should include any
set-up, handling or freight charges incurred in delivering the item to
the beneficiary. The commenter stated that this amount is included in
the allowable amount, but that the basis for the amount in controversy
in situations described in proposed Sec. 405.1006(d)(2)(iii) (where
the beneficiary received or may be entitled to a refund of the amount
the beneficiary previously paid to the provider or supplier for the
items or services in the disputed claim under applicable statutory or
regulatory authority) would be the actual amount originally charged to
the beneficiary for those items and services as delivered to the
beneficiary.
Response: We believe the commenter is requesting to define the
basis in proposed Sec. 405.1006(d)(2)(iii) as the amount originally
charged to the beneficiary for the items or services, including any
set-up or delivery fees. Because we are not finalizing our proposal at
Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the
basis for the amount in controversy for items and services that are
priced based on a published Medicare fee schedule or published
contractor-priced amount, as discussed above, we are not finalizing
proposed Sec. 405.1006(d)(2)(iii) to define the basis for the amount
in controversy when a beneficiary received or may be entitled to a
refund of the amount the beneficiary previously paid to the provider or
supplier for the items or services in the disputed claim under
applicable statutory or regulatory authority. Under proposed Sec.
405.1006(d)(2)(iii), the basis for the amount in controversy would be
the actual amount originally charged to the beneficiary. We proposed
Sec. 405.1006(d)(2)(iii) as an exception to the calculation in
proposed Sec. 405.1006(d)(2)(i) in situations where the beneficiary
received or may be entitled to a refund of the amount the beneficiary
previously paid to the provider or supplier under applicable authority.
Because we are no longer finalizing Sec. 405.1006(d)(2)(i) as
proposed, there is no longer a need to finalize Sec.
405.1006(d)(2)(iii). Therefore, as discussed above, the amount in
[[Page 5014]]
controversy in this situation would be calculated as provided under
Sec. 405.1006(d)(1) as finalized in this rule (the actual amount
charged the individual for the items and services in the disputed
claim, reduced by any Medicare payments already made or awarded and any
deductible and/or coinsurance amounts that may be collected for the
items or services). In most cases, we expect that the amount charged
the individual for the items and services in the disputed claim would
be inclusive of delivery and set-up expenses. Subject to a few
exceptions, suppliers rarely include a separate charge for delivery and
set-up. Delivery and service are an integral part of a DME supplier's
cost of doing business, and such costs are ordinarily assumed to have
been taken into account by suppliers in setting the prices they charge
for covered items and services (see Medicare Claims Processing Manual
(Internet-Only Manual 100-04), chapter 20, section 60). As such, and as
noted by the commenter, these costs have already been accounted for in
the calculation of the fee schedules, and separate delivery and service
charges for DME items are not permitted except in rare and unusual
circumstances. In the rare and unusual circumstances where a separate
charge is permitted (for example, when a supplier delivers an item
outside the area in which the supplier normally does business), that
charge, if billed on the same claim, would be factored into the amount
charged the individual for purposes of calculating the amount in
controversy under Sec. 405.1006(d)(1) as finalized in this rule.
Comment: One commenter opposed our revision to current Sec.
405.1006(d)(2), which we proposed to re-designate as Sec.
405.1006(d)(3), because the commenter felt that current Sec.
405.1006(d)(2) was easier to understand.
Response: Because we are not finalizing our proposal at Sec.
405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the basis
for the amount in controversy for items and services that are priced
based on a published Medicare fee schedule or published contractor-
priced amount, we are also not finalizing our proposal to revise and
re-designate current Sec. 405.1006(d)(2), except the proposal to add
``Limitation on liability'' as a paragraph heading. In addition, for
consistency with paragraph (d)(1)(ii) as finalized in this rule, we are
also replacing the phrase ``any deductible and coinsurance amounts
applicable in the particular case'' as set forth in current Sec.
405.1006(d)(2) with ``any deductible and/or coinsurance amounts that
may be collected for the items or services.''
Comment: One commenter asked how to calculate the amount in
controversy when Medicare is secondary to another insurer and makes a
supplemental payment under Sec. 411.32 because the primary payment is
less than the charges for the services, but the supplemental payment
amount is less than required under Sec. 411.33(a) or (e). The
commenter also asked why in these instances the beneficiary's Medicare
Summary Notice (MSN) does not include a footnote stating that the
amount of Medicare's payment was determined in accordance with Sec.
411.33(a) or (e).
Response: Under current Sec. 405.1006(d), the amount in
controversy in this situation is calculated as the amount charged the
individual for the items and services in question, reduced by any
Medicare payments already made or awarded for the items or services and
any deductible and coinsurance amounts applicable in the particular
case, regardless of any payment amounts made or awarded by the primary
insurer. Because the scenario raised by the commenter does not fall
under any of the exceptions in Sec. 405.1006(d)(2) through (6) as
finalized in this rule, the amount in controversy would continue to be
calculated as provided under Sec. 405.1006(d)(1) as finalized in this
rule (the amount charged the individual for the items and services in
the disputed claim, reduced by any Medicare payments already made or
awarded for the items or services and any deductible and/or coinsurance
amounts that may be collected for the items or services). The
commenter's question regarding footnotes on Medicare Summary Notices is
outside the scope of this rulemaking.
Comment: One commenter supported the addition of proposed Sec.
405.1006(d)(4) to address how the amount in controversy is calculated
for a provider or supplier termination of Medicare-covered items or
services that is disputed by a beneficiary, and the beneficiary did not
elect to continue receiving the items or services. The commenter, a
beneficiary advocacy organization, also asked what relief could be
sought when a provider refuses to furnish or reinstate the terminated
item or service after an ALJ determines the termination was not
appropriate, or when the ALJ lacks the authority to rule on whether
Medicare payment should be made for items or services that the
beneficiary continued to receive (and paid for) after the termination
date. The commenter was concerned that beneficiaries receive inadequate
notice of the limited scope of an ALJ's authority in these matters, and
earlier notice on the scope of expedited appeals under part 405,
subpart J and the right to request a demand bill could help avoid these
situations.
Response: We thank the commenter for its support of our proposal to
address how the amount in controversy is calculated for a provider or
supplier termination of Medicare-covered items or services that is
disputed by a beneficiary, and the beneficiary did not elect to
continue receiving the items or services. The comments regarding what
relief may be sought when a provider refuses to furnish the terminated
item or service after the ALJ determines the termination was not
appropriate or when the ALJ lacks authority to rule on whether payment
should be made for items or services that the beneficiary continued to
receive after termination, and the suggestions regarding notice on the
scope of expedited appeals and the right to request a demand bill are
all outside the scope of this rulemaking. However, we may take them
into consideration when making any future revisions to the provider
service termination process.
Comment: We received two comments in support of our proposal at
Sec. 405.976(b)(7) to require QICs to include in their notice of
reconsideration a statement of whether the amount in controversy is
estimated to meet or not meet the amount required for an ALJ hearing,
if the request for reconsideration was filed by a beneficiary who is
not represented by a provider, supplier, or Medicaid State agency, and
the reconsideration decision was partially or fully unfavorable.
Response: We thank the commenters for their support. As discussed
in section II.B.3.d below, we are not finalizing our proposal under
Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the
basis for the amount in controversy for items and services that are
priced based on a published Medicare fee schedule or published
contractor-priced amount. However, we continue to believe that the
ultimate responsibility for determining whether the amount in
controversy required for an ALJ hearing is met lies with appellants,
subject to verification by an ALJ or attorney adjudicator. Therefore we
are finalizing without modification our proposal to require QICs to
include in their notice of reconsideration a statement of whether the
amount in controversy is estimated to meet or not meet the amount
required for an ALJ hearing only
[[Page 5015]]
if the request for reconsideration was filed by a beneficiary who is
not represented by a provider, supplier, or Medicaid State agency, and
the reconsideration decision was partially or fully unfavorable. As we
stated above and in section III.A.3.d of the proposed rule, we believe
providers, suppliers, Medicaid State agencies, and applicable plans
have the tools, resources, and payment information necessary to
calculate the amount in controversy, and we believe that to be
especially true in light of our decision not to finalize proposed Sec.
405.1006(d)(2)(i)(A) to use the Medicare allowable amount to calculate
the amount in controversy for items and services that are priced based
on a published Medicare fee schedule or published contractor-priced
amount. However, we recognize that beneficiaries may not have access to
these same tools, resources, and payment information, and we believe it
is appropriate for the QIC to continue furnishing an estimate of
whether the amount in controversy is met for reconsiderations that are
partially or fully unfavorable on requests for reconsideration filed by
beneficiaries who are not represented by a provider, supplier, or
Medicaid State agency.
Comment: We received several comments on our proposal under Sec.
405.1014(a)(1)(viii) to require that appellants, other than
beneficiaries who are not represented by a provider, supplier, or
Medicaid State agency, to include the amount in controversy in their
requests for hearing.
Response: We address these comments in sections II.B.3.g.i below.
After review and consideration of the comments received, for the
reasons discussed above, we are finalizing proposed Sec. 405.1006 with
the following modifications. We are not finalizing our proposal at
Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable amount to
calculate the amount in controversy for items and services that are
priced based on a published Medicare fee schedule or published
contractor-priced amount. In addition, we are not finalizing Sec.
405.1006(d)(2)(i)(B), because, given that we are not finalizing Sec.
405.1006(d)(2)(i)(A), there is no longer a need to distinguish between
items and services with and without a published Medicare fee schedule
or contractor-priced amount. We also are not finalizing proposed Sec.
405.1006(d)(2) or (d)(2)(i) introductory text, as there is no need for
this language given that we are not finalizing Sec.
405.1006(d)(2)(i)(A) or (B). Accordingly, we are maintaining the text
of current Sec. 405.1006(d)(1), except that we are: (1) Adding ``In
general'' as a paragraph heading as proposed; (2) replacing ``for the
items and services in question'' with ``for the items and services in
the disputed claim'' in Sec. 405.1006(d)(1) introductory text as
proposed; and (3) replacing ``Any deductible and coinsurance amounts
applicable in the particular case'' in current Sec. 405.1006(d)(1)(ii)
with ``Any deductible and/or coinsurance amounts that may be collected
for the items or services'' as proposed. Furthermore, as discussed
above, because we will continue to use current Sec. 405.1006(d)(1) as
revised above to calculate the amount in controversy, we are not
finalizing proposed Sec. 405.1006(d)(1) introductory text.
In addition, we also are not finalizing proposed Sec.
405.1006(d)(2)(ii) and (iii) because there is no need to define the
basis for the amount in controversy in specific situations, as the
amount in controversy would be calculated on the basis of the amount
charged the individual in all of the scenarios described in proposed
Sec. 405.1006(d)(2)(i) through (iii). Furthermore, we are not
finalizing our proposal to revise and re-designate current Sec.
405.1006(d)(2) as Sec. 405.1006(d)(3), except for the proposal to add
``Limitation on liability'' as a paragraph heading. However, for
consistency with paragraph (d)(1)(ii) as finalized, we are replacing
``any deductible and coinsurance amounts applicable in the particular
case'' in current Sec. 405.1006(d)(2) with ``any deductible and/or
coinsurance amounts that may be collected for the items or services.''
We are finalizing proposed Sec. 405.1006(d)(4), (5), (6), and (7)
with the modifications discussed below, but re-designating them as
paragraphs (d)(3), (4), (5), and (6), respectively, because we are not
finalizing proposed Sec. 405.1006(d)(2) or re-designating current
Sec. 405.1006(d)(2) as Sec. 405.1006(d)(3). We are replacing ``in
accordance with paragraphs (d)(1) and (d)(2)(ii) of this section,
except that the basis for the amount in controversy'' in paragraph
(d)(3) as finalized (proposed paragraph (d)(4)) with ``in accordance
with paragraph (d)(1) of this section, except that the amount charged
to the individual.'' In addition, we are replacing ``Notwithstanding
paragraphs (d)(1) and (2) of this section'' in paragraphs (d)(4), (5),
and (6) as finalized (proposed paragraphs (d)(5), (6), and (7)) with
``Notwithstanding paragraph (d)(1) of this section.''
Finally, we are finalizing our proposal to revise Sec.
405.976(b)(7), the section heading of Sec. 405.1006, and the changes
to Sec. 405.1006(e)(1) introductory text, (e)(1)(ii) and (iii), (e)(2)
introductory text, (e)(2)(ii) and (iii), and Sec. 423.1970(c)(1)(ii)
and (iii), (c)(2)(ii) and (iii) as proposed, without modification.
e. Parties to an ALJ Hearing (Sec. Sec. 405.1008 and 423.2008)
Current Sec. Sec. 405.1008 and 423.2008 discuss the parties to an
ALJ hearing. Because current Sec. Sec. 405.1002(a) and 423.2002(a)
already address who may request a hearing before an ALJ after a QIC or
IRE issues a reconsideration and current Sec. 405.1002(b) addresses
who may request escalation of a request for a QIC reconsideration, we
proposed to remove current Sec. Sec. 405.1008(a) and 423.2008(a). 81
FR 43790, 43810.
We proposed to retain and revise the language as discussed below in
current Sec. Sec. 405.1008(b) and 423.2008(b), but remove the
paragraph designation. Current Sec. Sec. 405.1008(b) and 423.2008(b)
identify the parties ``to the ALJ hearing,'' but this could be read to
be limited to parties to an oral hearing, if a hearing is conducted. To
address this potential confusion, we proposed to revise Sec. Sec.
405.1008 and 423.2008 to replace ``parties to an ALJ hearing'' with
``parties to the proceedings on a request for an ALJ hearing'' and
``party to the ALJ hearing'' with ``party to the proceedings on a
request for an ALJ hearing.'' Likewise, we also proposed to revise the
titles to Sec. Sec. 405.1008 and 423.2008 from ``Parties to an ALJ
hearing'' to ``Parties to the proceedings on a request for an ALJ
hearing.'' 81 FR 43790, 43810.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received one comment on proposed Sec. Sec. 405.1008
and 423.2008 regarding parties to an ALJ hearing. The comment was
submitted by a Recovery Auditor trade/advocacy group and expressed
concerns about how the proposals related to status at ALJ hearings
would impact CMS audit contractors' interests in the hearings and their
ability to elect party status.
Response: As we explain above, these proposals removed some
redundancies in current Sec. Sec. 405.1008(a) and 423.2008(a) and
clarified the language to address potential confusion that the sections
applied only to parties to an oral hearing, if a hearing is conducted,
rather than to parties to the proceedings on a request for an ALJ
hearing. Although the commenter included the caption to this proposal
in its submission, the comments relate to proposed Sec. Sec. 405.1010,
405.1012 and 423.2010. Therefore, we respond to this comment in section
II.B.3.f.i below.
[[Page 5016]]
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. Sec. 405.1008 and 423.2008 as proposed without
modification.
f. CMS and CMS Contractors as Participants or Parties in the
Adjudication Process (Sec. Sec. 405.1010, 405.1012, and 423.2010)
As further described below, we proposed significant revisions to
Sec. Sec. 405.1010 and 405.1012 regarding CMS and CMS contractors as
participants or parties in proceedings on a request for an ALJ hearing,
and to Sec. 423.2010 regarding CMS, the IRE, or a Part D plan sponsor
as participants in proceedings on a request for an ALJ hearing. 81 FR
43790, 43810-43816, 43862-43863, and 43879-43880.
i. Section 405.1010: When CMS or Its Contractors May Participate in the
Proceedings on a Request for an ALJ Hearing
Current Sec. 405.1010(a) provides that an ALJ may request, but may
not require, CMS and/or its contractors to participate in any
proceedings before the ALJ, including the oral hearing, if any, and CMS
or its contractors may elect to participate in the hearing process.
Under current Sec. 405.1010(b), if that election is made, CMS or its
contractor must advise the ALJ, the appellant, and all other parties
identified in the notice of hearing of its intent to participate no
later than 10 calendar days after receiving the notice of hearing.
Section 405.1010(c) sets forth what participation includes and Sec.
405.1010(d) states that participation does not include CMS or its
contractor being called as a witness during the hearing. Section
405.1010(e) requires CMS or its contractors to submit any position
papers within the time frame designated by the ALJ. Finally, Sec.
405.1010(f) states that the ALJ cannot draw any adverse inferences if
CMS or a contractor decides not to participate in any proceedings
before an ALJ, including the hearing.
We stated in the proposed rule that the reference to the period in
which an election to participate must be filed beginning upon receipt
of the notice of hearing in current Sec. 405.1010(b) has caused
confusion when CMS or its contractors attempt to enter proceedings
before a hearing is scheduled, or when no notice of hearing is
necessary because an appeal may be decided on the record. To help
ensure that CMS and its contractors have the opportunity to enter the
proceedings with minimal disruption to the adjudication process prior
to a hearing being scheduled or when a hearing may not be conducted, we
proposed in Sec. 405.1010(a)(1) to provide that CMS or its contractors
may elect to participate in the proceedings on a request for an ALJ
hearing upon filing a notice of intent to participate in accordance
with paragraph (b), at either of, but not later than, two distinct
points in the adjudication process described in paragraph (b)(3).
As provided in current Sec. 405.1010(a) and (f), we proposed at
Sec. 405.1010(a)(2) that an ALJ may request but may not require CMS
and/or one or more of its contractors to participate in any proceedings
before the ALJ, including the oral hearing, if any; and the ALJ cannot
draw any adverse inferences if CMS or the contractor decides not to
participate in the proceedings.
We proposed in Sec. 405.1010(b) to address how CMS or a contractor
makes an election to participate in an appeal, before or after receipt
of a notice of hearing or when a notice of hearing is not required.
Under Sec. 405.1010(b)(1), we proposed that if CMS or a contractor
elects to participate before receipt of a notice of hearing (such as
during the 30 calendar day period after being notified that a request
for hearing was filed as proposed in Sec. 405.1010(b)(3)(i)) or when a
notice of hearing is not required, CMS or the contractor must send
written notice of its intent to participate to the parties who were
sent a copy of the notice of reconsideration, and to the assigned ALJ
or attorney adjudicator, as proposed in section II.B of the proposed
rule (and discussed in section II.A.2 above), or if the appeal is not
yet assigned, to a designee of the Chief ALJ. We proposed at Sec.
405.1010(b)(1) to provide for sending the written notice of intent to
participate to an ALJ or attorney adjudicator assigned to an appeal
because, as we discussed in section II.B of the proposed rule and
II.A.2 of this final rule above, an attorney adjudicator also would
have the authority to issue decisions on a request for an ALJ hearing
when no hearing is conducted, and in accordance with proposed Sec.
405.1010, CMS or its contractors are permitted to participate in the
proceedings on such a request. We also proposed at Sec. 405.1010(b)(1)
to provide for sending the notice of intent to participate to a
designee of the Chief ALJ if a request for an ALJ hearing is not yet
assigned to an ALJ or attorney adjudicator because CMS or a contractor
could file an election to be a participant in the proceedings before
the assignment process is complete. We stated in the proposed rule that
proposed Sec. 405.1010(b)(1) would help ensure that the potential
parties to a hearing, if a hearing is conducted, would receive notice
of the intent to participate, and also help ensure that adjudicators
who are assigned to an appeal after an election is made would be aware
of the election. Because only an ALJ may conduct a hearing and the
parties to whom a notice of hearing is sent may differ from the parties
who were sent a copy on the notice of reconsideration, we proposed at
Sec. 405.1010(b)(2) that if CMS or a contractor elects to participate
after receiving a notice of hearing, CMS or the contractor would send
written notice of its intent to participate to the ALJ and the parties
who were sent a copy of the notice of hearing.
We proposed at Sec. 405.1010(b)(3)(i) that CMS or a contractor
would have an initial opportunity to elect to be a participant in an
appeal within 30 calendar days after notification that a request for
hearing has been filed with OMHA, if no hearing is scheduled. CMS and
its contractors have the capability to see that a QIC reconsideration
had been appealed to OMHA in the case management system used by QICs.
This system would provide constructive notice to the QICs when the
system indicates an appeal has been filed with OMHA, which OMHA can
monitor through the date that the reconsideration data is transferred
to OMHA to adjudicate the request for an ALJ hearing. Under proposed
Sec. 405.1010(b)(3)(ii), a second opportunity to elect to be a
participant in an appeal would become available if a hearing is
scheduled; as in the current rule, CMS or a contractor would have 10
calendar days after receiving the notice of hearing to make the
election.
As we stated in the proposed rule, we considered allowing CMS or a
contractor to make an election at any time prior to a decision being
issued if a hearing was not scheduled, or sending a notice that a
decision would be issued without a hearing and establishing an election
period after such notice. However, both of these options would disrupt
and delay the adjudication process, as well as add administrative
burdens on OMHA. We stated in the proposed rule that we believed the 30
calendar day period after notification that a request for hearing was
filed is sufficient time for CMS or a contractor to determine whether
to elect to be a participant in the appeal while the record is reviewed
for case development and to prepare for the hearing, or determine
whether a decision may be appropriate based on the record in accordance
with Sec. 405.1038.
We proposed to consolidate current Sec. 405.1010(c) through (e) in
proposed
[[Page 5017]]
Sec. 405.1010(c) to address the roles and responsibilities of CMS or a
contractor as a participant. Proposed Sec. 405.1010(c)(1) would
incorporate current Sec. 405.1010(c), which provides that
participation may include filing position papers or providing testimony
to clarify factual or policy issues, but it does not include calling
witnesses or cross-examining a party's witnesses. However, we proposed
to revise Sec. 405.1010(c) to state in Sec. 405.1010(c)(1) that
participation may include filing position papers ``and/or'' providing
testimony to emphasize that either or both may be done, and to state
that participation would be subject to proposed Sec. 405.1010(d)(1)
through (3) (discussed below). We proposed to incorporate current Sec.
405.1010(d) in proposed Sec. 405.1010(c)(2) to provide that when CMS
or a contractor participates in a hearing, they may not be called as
witnesses and, thus, are not subject to examination or cross-
examination by parties to the hearing. However, to be clear about how a
party and the ALJ may address statements made by CMS or a contractor
during the hearing given that limitation, we also proposed in Sec.
405.1010(c)(2) that the parties may provide testimony to rebut factual
or policy statements made by the participant, and the ALJ may question
the participant about the testimony.
We proposed to incorporate current Sec. 405.1010(e) in proposed
Sec. 405.1010(c)(3) with certain revisions as discussed below. Current
Sec. 405.1010(e) states that CMS or its contractor must submit any
position papers within the time frame designated by the ALJ. We
proposed in Sec. 405.1010(c)(3) to include written testimony in the
provision, establish deadlines for submission of position papers and
written testimony that reflect the changes in participation elections
in proposed Sec. 405.1010(b), and require that copies of position
papers and written testimony be sent to the parties. Specifically, we
proposed in Sec. 405.1010(c)(3)(i) that CMS or a contractor position
paper or written testimony must be submitted within 14 calendar days of
an election to participate if no hearing has been scheduled, or no
later than 5 calendar days prior to the scheduled hearing unless
additional time is granted by the ALJ. We proposed to add ``written
testimony'' to recognize that CMS or a contractor may submit written
testimony as a participant, in addition to providing oral testimony at
a hearing. We proposed to require position papers and written testimony
be submitted within 14 calendar days after an election if no hearing is
scheduled to help ensure the position paper and/or written testimony
are available when determinations are made to schedule a hearing or
issue a decision based on the record in accordance with Sec. 405.1038.
We also proposed to require that if a hearing is scheduled, position
papers and written testimony be submitted no later than 5 calendar days
prior to the hearing (unless the ALJ grants additional time) to help
ensure the ALJ and the parties have an opportunity to review the
materials prior to the hearing. Additionally, under proposed Sec.
405.1010(c)(3)(ii), CMS or a contractor would need to send a copy of
any position paper or written testimony submitted to OMHA to the
parties who were sent a copy of the notice of reconsideration if the
position paper or written testimony is submitted to OMHA before receipt
of a notice of hearing, or to the parties who were sent a copy of the
notice of hearing if the position paper or written testimony is
submitted after receipt of a notice of hearing. Current Sec. 405.1010
does not address the repercussions of a position paper not being
submitted in accordance with the section. Therefore, we proposed in
Sec. 405.1010(c)(3)(iii) that a position paper or written testimony
would not be considered in deciding an appeal if CMS or a contractor
fails to send a copy of its position paper or written testimony to the
parties, or fails to submit its position paper or written testimony
within the established time frames. We stated in the proposed rule that
this would help ensure CMS or contractor position papers and written
testimony are submitted timely and shared with the parties.
Current Sec. Sec. 405.1010 does not limit the number of entities
that may elect to be participants, which currently includes
participating in a hearing if a hearing is conducted, and current Sec.
405.1012 does not limit the number of entities that may elect to be a
party to a hearing. We stated in the proposed rule that this has
resulted in hearings for some appeals being difficult to schedule and
taking longer to conduct due to multiple elections. To address these
issues, we proposed at Sec. 405.1010(d)(1) that when CMS or a
contractor has been made a party to the hearing under Sec. 405.1012,
CMS or a contractor that elected to be a participant under Sec.
405.1010 may not participate in the oral hearing, but may file a
position paper and/or written testimony to clarify factual or policy
issues in the case (oral testimony and attendance at the hearing would
not be permitted). Similarly, we proposed at Sec. 405.1010(d)(1) that
CMS or a contractor that elected to be a party to the hearing, but was
made a participant under Sec. 405.1012(d)(1), as discussed below,
would also be precluded from participating in the oral hearing, but
would be permitted to file a position paper and/or oral testimony to
clarify factual or policy issues in the case. We proposed at Sec.
405.1010(d)(2) that if CMS or a contractor did not elect to be a party
to the hearing under Sec. 405.1012, but more than one entity elected
to be a participant under Sec. 405.1010, only the first entity to file
a response to the notice of hearing as provided under Sec. 405.1020(c)
may participate in the oral hearing, but additional entities that filed
a subsequent response to the notice of hearing could file a position
paper and/or written testimony to clarify factual or policy issues in
the case (though they would not be permitted to attend the hearing or
provide oral testimony). We proposed that the first entity to file a
response to the notice of hearing as provided under Sec. 405.1020(c)
may participate in the hearing for administrative efficiency. Under
this approach, if multiple entities elected to participate in the
proceedings prior to the issuance of a notice of hearing, in accordance
with proposed Sec. 405.1010(b)(1), any of these entities wishing to
participate in the oral hearing would need to indicate this intention
in the response to the notice of hearing. If more than one entity
indicated its intention to attend and participate in the oral hearing,
only the first entity to file its response would be permitted to do so.
The remaining entities would be permitted only to file a position paper
and/or written testimony (unless the ALJ grants leave to additional
entities to attend the hearing, as discussed below). We considered an
alternate proposal of the first entity that made an election to
participate being given priority for participating in the hearing, but
believed that would result in other participants being uncertain
whether they will be participating in the hearing until as few as 5
days prior to the hearing. We also considered a process in which the
ALJ would assess which participant that responded to the notice of
hearing would be most helpful to the ALJ at the hearing, or in the
alternative, permitting all participants to be at the hearing unless
the ALJ determined a participant is not necessary for the hearing, but
we were concerned that both of these approaches would add
administrative burden to the ALJ and could result in participants and
parties being uncertain of which participants will be at the hearing
until shortly
[[Page 5018]]
before the hearing. We solicited comments on the alternatives
considered above, and other potential alternatives.
Notwithstanding the limitations on CMS and CMS contractor
participation in proposed Sec. 405.1010(d)(1) and (2), we proposed in
Sec. 405.1010(d)(3) that the ALJ would have the necessary discretion
to allow additional participation in the oral hearing when the ALJ
determines an entity's participation is necessary for a full
examination of the matters at issue. For example, we stated in the
proposed rule that if an appeal involves LCDs from multiple MAC
jurisdictions, the ALJ may determine that allowing additional MACs to
participate in a hearing is necessary for a full examination of the
matters at issue. Similarly, if an overpayment determined through the
use of a statistical sample and extrapolation is at issue, the ALJ may
determine that allowing the contractor that conducted the sampling to
participate in the hearing is necessary to address issues related to
the sampling and extrapolation, in addition to another contractor that
made an election to clarify the policy and factual issues related to
the merits of claims in the sample.
Currently, there are no provisions in Sec. 405.1010 to address the
possibility of CMS or a contractor making an invalid election. We
proposed to revise Sec. 405.1010(e) to add new provisions to establish
criteria for when an election may be deemed invalid and provide
standards for notifying the entity and the parties when an election is
deemed invalid. We proposed in Sec. 405.1010(e)(1) that an ALJ or
attorney adjudicator may determine an election is invalid if the
election was not timely filed or the election was not sent to the
correct parties. We stated that this would help ensure that CMS and its
contractors make timely elections and inform parties of elections. To
provide notice to the entity and the parties that an election was
deemed invalid, we proposed in Sec. 405.1010(e)(2) to require a
written notice of an invalid election be sent to the entity that
submitted the election and the parties who are entitled to receive
notice of the election. We proposed in Sec. 405.1010(e)(2)(i) that if
no hearing is scheduled for the appeal or the election was submitted
after the hearing occurred, the notice of an invalid election would be
sent no later than the date the decision, dismissal, or remand notice
is mailed. We proposed in Sec. 405.1010(e)(2)(ii) that if a hearing is
scheduled for the appeal, the written notice of an invalid election
would be sent prior to the hearing, and that if the notice would be
sent fewer than 5 calendar days before the hearing is scheduled to
occur, oral notice must be provided to the entity, and the written
notice must be sent as soon as possible after the oral notice is
provided.
ii. Section 423.2010: When CMS, the IRE, or Part D Plan Sponsors May
Participate in the Proceedings on a Request for an ALJ Hearing
Current Sec. 423.2010 is similar to current Sec. 405.1010, except
that CMS, the IRE, or the Part D plan sponsor may only request to
participate, and the time periods to request to participate are shorter
than the time periods to elect to participate under Sec. 405.1010,
which provides the ALJ with time to consider the request to participate
and make a determination on whether to allow participation by the
entity. In addition, current Sec. 423.2010 addresses participation in
Part D expedited appeals. Like proposed Sec. 405.1010(a), we proposed
at Sec. 423.2010(a) to provide CMS, the IRE, and the Part D plan
sponsor with an opportunity to participate in the proceedings on a
request for an ALJ hearing at two distinct points in the adjudication
process, but the current policy of requiring the entity to request to
participate is maintained. We proposed at Sec. 423.2010(b)(3)(i) and
(ii) that, if no hearing is scheduled, CMS, the IRE and/or the Part D
plan sponsor would have an initial opportunity to request to be a
participant in an appeal within 30 calendar days after notification
that a standard request for hearing was filed with OMHA, or within 2
calendar days after notification that a request for an expedited
hearing was filed. We stated in the proposed rule that the initial 30
calendar day period after notification that a standard request for
hearing was filed with OMHA would be the same time frame provided under
Sec. 405.1010 for initial CMS and contractor elections, and we stated
that we believed that the 30 calendar day period after notification
that a request for hearing was filed is sufficient time for CMS, the
IRE, and the Part D plan sponsor to determine whether to request to be
a participant in the proceedings and for the request to be considered
and granted or denied as the case is reviewed to determine whether a
decision may be appropriate based on the record in accordance with
Sec. 423.2038. We also stated we believed the 2 calendar day period
after notification that an expedited request for hearing was filed is a
reasonable period of time for CMS, the IRE, or the Part D plan sponsor
to determine whether to request to be a participant in the proceedings
given the 10-day adjudication time frame. We proposed at Sec.
423.2010(b)(3)(iii) and (iv) to provide a second opportunity to request
to be a participant in an appeal if a hearing is scheduled. We proposed
at Sec. 423.2010(b)(3)(iii) that if a non-expedited hearing is
scheduled, CMS, the IRE, or the Part D plan sponsor would continue to
have 5 calendar days after receiving the notice of hearing to make the
request. We proposed at Sec. 423.2010(b)(3)(iv) that if an expedited
hearing is scheduled, CMS, the IRE, or the Part D plan sponsor would
continue to have 1 calendar day after receiving the notice of hearing
to make the request. These time frames were carried over from current
Sec. 423.2010(b)(1) and (b)(3), and provide the ALJ with time to
consider the request and notify the entity of his or her decision on
the request to participate. As provided in current Sec. 423.2010(a)
and (g), we proposed at Sec. 423.2010(a)(2) to provide that an ALJ may
request but may not require CMS, the IRE, or the Part D plan sponsor to
participate in any proceedings before the ALJ, including the oral
hearing, if any, and that the ALJ may not draw any adverse inferences
if CMS, the IRE, or the Part D plan sponsor declines to be a
participant to the proceedings.
We proposed in Sec. 423.2010(b) to adopt the standards governing
how an election is made in proposed Sec. 405.1010(b) in governing how
a request to participate is made, except that an oral request to
participate could be made for an expedited hearing, and OMHA would
notify the enrollee of the request to participate in such cases.
Current Sec. 423.2010(b)(2) and (b)(4) provide that an ALJ will
notify an entity requesting to participate of the decision on the
request within 5 calendar days for a request related to a non-expedited
hearing, or 1 calendar day for a request related to an expedited
hearing. We proposed to incorporate these time frames into proposed
Sec. 423.2010(c). In addition, we proposed in Sec. 423.2010(c)(1)
that if no hearing is scheduled, the notification is made at least 20
calendar days before the ALJ or attorney adjudicator (as proposed in
section II.B of the proposed rule (and discussed in section II.A.2
above)) issues a decision, dismissal, or remand. This would provide the
participant with time to submit a position paper in accordance with
proposed Sec. 423.2010(d)(3)(i), as discussed below. We also proposed
to incorporate current Sec. 423.2010(c) into proposed Sec.
423.2010(c), so that the provision clearly states that the assigned ALJ
or attorney adjudicator (as proposed in section II.B of the proposed
rule (and
[[Page 5019]]
discussed in section II.A.2 above)) has discretion to not allow CMS,
the IRE, or the Part D plan sponsor to participate. We proposed in
Sec. 423.2010(c) that an attorney adjudicator as well as the ALJ may
make a decision on a request to participate because a request to
participate may be submitted for appeals that may be assigned to an
attorney adjudicator and those appeals could also benefit from CMS, the
IRE, or the Part D plan sponsor participation in the proceedings. We
did not propose to limit the number of participants in a hearing
similar to proposed Sec. 405.1010(d) because the ALJ has the
discretion to deny a request to participate under Sec. 423.1010 and
may therefore deny a request to participate if the ALJ determines that
a hearing would have sufficient participant involvement or does not
need participant involvement.
We proposed at Sec. 423.2010(d) to consolidate current Sec.
423.2010(d) through (f), to address the roles and responsibilities of
CMS, the IRE, or the Part D plan sponsor as a participant.
Specifically, we proposed at Sec. 423.2010(d)(1) to generally
incorporate current Sec. 423.2010(d), which provides that
participation may include filing position papers or providing testimony
to clarify factual or policy issues, but it does not include calling
witnesses or cross-examining a party's witnesses. However, we proposed
in Sec. 423.2010(d)(1) that participation may include filing position
papers ``and/or'' providing testimony to emphasize that either or both
may be done, and to remove the limitation that testimony must be
written because participation may include providing oral testimony
during the hearing. We proposed at Sec. 423.2010(d)(2) to incorporate
current Sec. 423.2010(e), which provides that when participating in a
hearing, CMS, the IRE, or the Part D plan sponsor may not be called as
a witness during the hearing and, thus, are not subject to examination
or cross-examination by the enrollee at the hearing. However, to be
clear about how an enrollee and the ALJ may address statements made by
CMS, the IRE, or the Part D plan sponsor during the hearing given that
limitation, we also proposed in Sec. 423.2010(d)(2) that the enrollee
may rebut factual or policy statements made by the participant, and the
ALJ may question the participant about its testimony.
We proposed at Sec. 423.2010(d)(3) to incorporate current Sec.
423.2010(f) with certain revisions as discussed below. Current Sec.
423.2010(f) states that CMS, the IRE, and/or the Part D plan sponsor
must submit any position papers within the time frame designated by the
ALJ. We proposed in Sec. 423.2010(d)(3) to include written testimony
in the provision, establish deadlines for submission of position papers
and written testimony that reflect the changes in participation
requests in proposed 423.2010(b), and require that copies of position
papers and written testimony be sent to the enrollee. Specifically, we
proposed in Sec. 423.2010(d)(3) that, unless the ALJ or attorney
adjudicator grants additional time to submit a position paper or
written testimony, a CMS, the IRE, or the Part D plan sponsor position
paper or written testimony must be submitted within 14 calendar days
for a standard appeal or 1 calendar day for an expedited appeal after
receipt of the ALJ's or attorney adjudicator's decision on a request to
participate if no hearing has been scheduled, or no later than 5
calendar days prior to a non-expedited hearing or 1 calendar day prior
to an expedited hearing. We proposed to add ``written testimony'' to
recognize that CMS, the IRE, or the Part D plan sponsor may submit
written testimony as a participant, in addition to providing oral
testimony at a hearing. We proposed to require that position papers and
written testimony be submitted within 14 calendar days for a standard
appeal or 1 calendar day for an expedited appeal after receipt of the
ALJ's or attorney adjudicator's decision on a request to participate if
no hearing has been scheduled to help ensure the position paper and/or
written testimony are available when determinations are made to
schedule a hearing or issue a decision based on the record in
accordance with Sec. 405.1038. We also proposed to require that if a
hearing is scheduled, position papers and written testimony be
submitted no later than 5 calendar days prior to a non-expedited
hearing or 1 calendar day prior to an expedited hearing (unless the ALJ
grants additional time) to help ensure the ALJ and the enrollee have an
opportunity to review the materials prior to the hearing. Similar to
proposed Sec. 405.1010(c)(3)(iii), we also proposed at Sec.
423.2010(d)(3)(ii) that a copy of the position paper or written
testimony must be sent to the enrollee, and at Sec. 423.2010(d)(iii)
that a position paper or written testimony would not be considered in
deciding an appeal if CMS, the IRE, and/or the Part D plan sponsor
fails to send a copy of the position paper or written testimony to the
enrollee or fails to submit the position paper or written testimony
within the established time frames. This would help ensure CMS, IRE, or
Part D plan sponsor position papers and written testimony are submitted
timely and shared with the enrollee.
Currently, there are no provisions in Sec. 423.2010 to address the
possibility of CMS, the IRE, and/or the Part D plan sponsor making an
invalid request to participate. We proposed to revise Sec. 423.2010(e)
to add new provisions to establish criteria for when a request to
participate may be deemed invalid and provide standards for notifying
the entity and the enrollee when a request to participate is deemed
invalid. We proposed in Sec. 423.2010(e)(1) that an ALJ or attorney
adjudicator may determine a request to participate is invalid if the
request to participate was not timely filed or the request to
participate was not sent to the enrollee. We stated that this would
help ensure that CMS, the IRE, and/or the Part D plan sponsor make
timely requests to participate and inform the enrollee of requests. To
provide notice to the entity and the enrollee that a request to
participate was deemed invalid, we proposed in Sec. 423.2010(e)(2) to
require that a written notice of an invalid request be sent to the
entity that made the request and the enrollee. We proposed in Sec.
423.2010(e)(2)(i) that if no hearing is scheduled for the appeal or the
request was made after the hearing occurred, the notice of an invalid
request would be sent no later than the date the decision, dismissal,
or remand order is mailed. We proposed in Sec. 423.2010(e)(2)(ii) that
if a non-expedited hearing is scheduled for the appeal, written notice
of an invalid request would be sent prior to the hearing, and that if
the notice would be sent fewer than 5 calendar days before the hearing,
oral notice must be provided to the entity, and the written notice must
be sent as soon as possible after the oral notice is provided. We
proposed in Sec. 423.2010(e)(2)(iii) that if an expedited hearing is
scheduled for the appeal, oral notice of an invalid request must be
provided to the entity, and the written notice must be sent as soon as
possible after the oral notice is provided. We proposed to require the
oral notice for expedited hearings because the very short time frames
involved in expedited hearing proceedings often do not allow for
delivery of a written notice and the oral notice will help ensure the
entity is made aware of the invalid request prior to the hearing.
iii. Section 405.1012: When CMS or Its Contractors May Be a Party to a
Hearing
Current Sec. 405.1012(a) states that CMS and/or its contractors
may be a party to an ALJ hearing unless the request for hearing is
filed by an unrepresented beneficiary. Current Sec. 405.1012(b) states
[[Page 5020]]
that CMS and/or the contractor(s) advises the ALJ, appellant, and all
other parties identified in the notice of hearing that it intends to
participate as a party no later than 10 calendar days after receiving
the notice of hearing. Current Sec. 405.1012(c) states that, when CMS
or its contractors participate in a hearing as a party, it may file
position papers, provide testimony to clarify factual or policy issues,
call witnesses or cross-examine the witnesses of other parties. CMS or
its contractor(s) will submit any position papers within the time frame
specified by the ALJ. CMS or its contractor(s), when acting as parties,
may also submit additional evidence to the ALJ within the time frame
designated by the ALJ. Finally, current Sec. 405.1012(d) states that
the ALJ may not require CMS or a contractor to enter a case as a party
or draw any adverse inferences if CMS or a contractor decides not to
enter as a party. As stated previously, we proposed significant changes
to Sec. 405.1012.
Current Sec. 405.1012 does not limit the number entities that may
elect to be a party to the hearing. We stated in the proposed rule that
this has resulted in hearings for some appeals being difficult to
schedule and taking longer to conduct due to multiple elections. To
address these issues, we proposed at Sec. 405.1012(a)(1), except as
provided in proposed paragraph (d) discussed below, to only allow
either CMS or one of its contractors to elect to be a party to the
hearing (unless the request for hearing is filed by an unrepresented
beneficiary, which precludes CMS and its contractors from electing to
be a party to the hearing). Current Sec. 405.1012(b) states that CMS
or a contractor advises the ALJ, appellant, and all other parties
identified in the notice of hearing that it intends to participate as a
party no later than 10 calendar days after receiving the notice of
hearing. We proposed at Sec. 405.1012(a) to incorporate and revise a
portion of current Sec. 405.1012(b), to require that an election to be
a party must be filed no later than 10 calendar days after the QIC
receives the notice of hearing, because notices of hearing are sent to
the QIC in accordance with Sec. 405.1020(c) (the remaining portion of
current Sec. 405.1012(b) is incorporated with revisions into proposed
Sec. 405.1012(b), as discussed below).
Current Sec. 405.1012 does not have a provision similar to current
Sec. 405.1010(a), which states that an ALJ may request that CMS and/or
one or more of its contractors participate in the proceedings, but
current Sec. 405.1012(d) does provide that the ALJ may not require CMS
or a contractor to enter a case as a party or draw any adverse
inference if CMS or a contractor decided not to enter as a party. In
practice, ALJs do at times request that CMS or a contractor elect to be
a party to the hearing, in conjunction with a request for participation
under current Sec. 405.1010(a). To align the provisions and reflect
ALJ practices, we proposed at Sec. 405.1012(a)(2) to state that an ALJ
may request but not require CMS and/or one or more of its contractors
to be a party to the hearing. We also proposed in Sec. 405.1012(a)(2)
to incorporate current Sec. 405.1012(d) to provide that that an ALJ
cannot draw any adverse inferences if CMS or a contractor decides not
to enter as a party.
We proposed at Sec. 405.1012(b) to address how CMS or a contractor
elects to be a party to the hearing. We proposed to follow the same
process in current Sec. 405.1012(b) so that under proposed Sec.
405.1012(b), CMS or the contractor would be required to send written
notice of its intent to be a party to the hearing to the ALJ and the
parties identified in the notice of hearing, which includes the
appellant.
We proposed to set forth the roles and responsibilities of CMS or a
contractor as a party in Sec. 405.1012(c). Proposed Sec.
405.1012(c)(1) would incorporate current Sec. 405.1012(c) with some
changes in wording, both of which provide that as a party to the
hearing, CMS or a contractor may file position papers, submit evidence,
provide testimony to clarify factual or policy issues, call witnesses,
or cross-examine the witnesses of other parties. We proposed in Sec.
405.1012(c)(2) to include written testimony, such as an affidavit or
deposition, in the provision; establish deadlines for submission of
position papers, written testimony, and evidence; and require that
copies of position papers, written testimony, and evidence be sent to
the parties that were sent a copy of the notice of hearing.
Specifically, we proposed in Sec. 405.1012(c)(2)(i) and (c)(2)(ii)
that any position papers, written testimony, and evidence must be
submitted no later than 5 calendar days prior to the hearing, unless
the ALJ grants additional time to submit the materials, and copies must
be sent to the parties who were sent a copy of the notice of hearing.
We proposed to add ``written testimony'' to recognize that CMS or a
contractor may submit written testimony, in addition to providing oral
testimony at a hearing. We also proposed to require that position
papers, written testimony, and/or evidence be submitted no later than 5
calendar days prior to the hearing (unless the ALJ grants additional
time), and that copies be submitted to the parties sent notice of the
hearing, to help ensure the ALJ and the parties have an opportunity to
review the materials prior to the hearing. Current Sec. 405.1012 does
not address the consequence of failure to submit a position paper or
evidence in accordance with the section. We proposed in Sec.
405.1012(c)(2)(iii) that a position paper, written testimony, and/or
evidence would not be considered in deciding an appeal if CMS or a
contractor fails to send a copy of its position paper, written
testimony, and/or evidence to the parties or fails to submit the
position paper, written testimony, and/or evidence within the
established time frames. We stated in the proposed rule that this would
help ensure CMS or contractor position papers and evidence are
submitted timely and shared with the parties.
As discussed above, current Sec. 405.1012 does not limit the
number of entities (that is, CMS and its contractors) that may elect to
be a party to the hearing and, as also discussed above, we proposed to
revise Sec. 405.1010 and 405.1012 to limit the number of entities that
participate in a hearing unless an ALJ determines that an entity's
participation is necessary for a full examination of the matters at
issue. We proposed to revise Sec. 405.1012(d)(1) to provide that if
CMS and one or more contractors, or multiple contractors file elections
to be a party to a hearing, the first entity to file its election after
the notice of hearing is issued is made a party to the hearing and the
other entities are made participants in the proceedings under Sec.
405.1010, subject to Sec. 405.1010(d)(1) and (3) (and as such may file
position papers and provide written testimony to clarify factual or
policy issues in the case, but may not participate in the oral hearing
unless the ALJ grants leave to the entity to participate in the oral
hearing in accordance with Sec. 405.1010(d)(3)). Similar to proposed
Sec. 405.1010(d)(3), we also proposed in Sec. 405.1012(d)(2) that,
notwithstanding the limitation in proposed Sec. 405.1012(d)(1), an ALJ
may grant leave for additional entities to be parties to the hearing if
the ALJ determines that an entity's participation as a party is
necessary for full examination of the matters at issue.
We stated in the proposed rule that we believed allowing the first
entity to file an election after a notice of hearing is issued to be a
party to the hearing is administratively efficient and provides an
objective way to determine which entity is made a party based on the
competing elections, while providing an opportunity to participate in
the appeal
[[Page 5021]]
by filing a position paper and/or written testimony under Sec.
405.1010 for those that file later in time, or to be made a participant
or party to the hearing by the ALJ under the ALJ's discretionary
authority under proposed Sec. Sec. 405.1010(d)(3) and 405.1012(d)(2).
We considered an alternate proposal of the first entity that had
elected participant status under Sec. 405.1010, if any, being given
priority for being made a party to the hearing, but stated that we
believed that would result in other entities making a party election
being uncertain whether they will be made a party to the hearing until
as few as 5 days prior to the hearing (assuming the notice of hearing
is sent 20 days prior to the scheduled hearing, as required by Sec.
405.1022(a), the QIC receives the notice of hearing 5 days later, and
the entity or entities responding to the notice of hearing can make
their election as late as 10 calendar days after the QIC's receipt of
the notice, leaving only 5 days prior to the hearing). We also
considered a process by which the ALJ would assess which entity making
a party election would be most helpful to the ALJ at the hearing, or in
the alternative, permitting all entities that filed a party election to
be made a party to the hearing unless the ALJ determined an entity is
not necessary for the hearing, but both of these approaches would add
administrative burden to the ALJ and could result in CMS, contractors
and parties being uncertain of which entities will be parties to the
hearing until shortly before the hearing. We solicited comments on the
alternatives considered above.
Finally, we proposed to add new Sec. 405.1012(e) to address the
possibility of CMS or a contractor making an invalid election. Proposed
Sec. 405.1012(e)(1) would provide that an ALJ or attorney adjudicator
may determine an election is invalid if the request for hearing was
filed by an unrepresented beneficiary, the election was not timely, the
election was not sent to the correct parties, or CMS or a contractor
had already filed an election to be a party to the hearing and the ALJ
did not determine that the entity's participation as a party is
necessary for a full examination of the matters at issue. We stated
that this would help ensure that CMS and its contractors make timely
elections and inform parties of elections, and also provide a mechanism
to address an election when the request for hearing was filed by an
unrepresented beneficiary or when another entity has already filed an
election to be a party to the hearing. To provide notice to the entity
and the parties that an election was deemed invalid, we proposed in
Sec. 405.1012(e)(2) to require that a written notice of an invalid
election be sent to the entity that made the election and the parties
who were sent the notice of hearing. We proposed in Sec.
405.1012(e)(2)(i) that if the election was submitted after the hearing
occurred, the notice of an invalid election would be sent no later than
the date the decision, dismissal, or remand notice is mailed. We
proposed in Sec. 405.1012(e)(2)(ii) that if the election was submitted
before the hearing occurs, the written notice of invalid election would
be sent prior to the hearing, and that if the notice would be sent
fewer than 5 calendar days before the hearing is scheduled to occur,
oral notice would be provided to the entity that submitted the
election, and the written notice to the entity and the parties who were
sent the notice of hearing would be sent as soon as possible after the
oral notice is provided.
Provided below are summaries of the specific comments we received
relating to our proposed revisions to Sec. Sec. 405.1010, 405.1012,
and 423.2010, and responses to these comments. Because many commenters
submitted comments that touched on all three proposals, we are
collectively addressing in this section comments that related to
sections III.A.3.f.i, ii, and iii of the proposed rule:
Comment: We received five comments expressing support of proposed
Sec. Sec. 405.1010, 405.1012, and 423.2010 and discussing some
specific benefits that commenters believed the proposal will have on
the hearing process. One commenter noted that the clarifications in the
proposed rules will help appellants better prepare their arguments if
they are aware that CMS or a contractor will be participating in the
hearing process. Several commenters noted that the proposed limitation
on the number of entities that may be a party to a hearing and
participate in the oral hearing will eliminate unnecessary delays and
duplicative and redundant argument and testimony that currently occur
when multiple contractors elect or request to be a participant or party
to the same hearing. One commenter indicated that the proposals will
make scheduling hearings easier. One commenter indicated that the
proposed changes will help ALJs make better use of limited time,
allowing them to hear more cases. The same commenter noted that because
the quality and credibility of the evidence, rather than the quantity,
influences decision making, having more than one contractor present
during the hearing does not add value to the process.
Response: We thank the commenters for their support and agree that
the proposed rules set necessary parameters that will help ensure that
hearings involving CMS or a contractor as a participant or a party will
be as efficient as possible and that the expectations and roles of
those entities when they elect either status are clear.
Comment: Two commenters suggested that the rules should go further
and prohibit CMS or one of its contractors from participating in the
proceedings on a request for an ALJ hearing if CMS or one of its
contractors has entered the appeal as a party. The commenters argued
that the rights of a party encompass all the rights of a participant
and it is unclear what additional value would be gained from allowing
another entity to enter as a participant in such instances.
Response: Section 405.1010(d)(1), as finalized in this rule, states
that if CMS or a contractor has been made a party to a hearing in
accordance with Sec. 405.1012, no entity that elected to be a
participant in the proceedings in accordance with Sec. 405.1010 (or
that elected to be a party to the hearing but was made a participant in
accordance with Sec. 405.1012(d)(1) as finalized in this rule) may
participate in the oral hearing, but such entity may file a position
paper and/or written testimony to clarify factual or policy issues in
the case. We believe that involvement by CMS or its contractors in the
proceedings on a request for hearing may be beneficial and can assist
in clarifying factual and policy issues and providing a fuller
examination of the matters at issue that may be necessary to resolve
appeals.
While the interest of administrative efficiency supports limiting
participation at the oral hearing, we do not believe the same rationale
applies to position papers and written testimony. The submission of
position papers and written testimony adds minimal burden to the
appeals process, may assist with clarifying facts and policy, and
allows for a fuller presentation of the appeal. While it is possible
that there may be some repetition in the written submissions, we
believe that there is potential added value in permitting contractors
to submit position papers and written testimony for consideration in
this situation.
Comment: Two commenters that currently hold QIC contracts submitted
comments opposed to the limitations placed on CMS and its contractors
participating in an oral hearing pursuant to Sec. 405.1010(d).
According to one commenter, contractors often bring a
[[Page 5022]]
unique perspective to ALJ hearings and participation of all interested
parties and participants allows for a robust and complete presentation
of the case and often yields greater consistency in decisions. The
commenter noted that given the involvement of multiple contractors in
any given appeal prior to the OMHA level--such as MACs, Zone Program
Integrity Contractors (ZPICs), and Recovery Auditors--one contractor
cannot always effectively address all issues in an appeal, and argued
that when multiple contractors participate in an oral hearing, the
contractors coordinate their presentations so that they do not repeat
testimony when they are in agreement to keep the hearing duration at a
minimum. The second commenter argued that the limitations proposed in
Sec. 405.1010(d) would significantly impact the QIC's ability to meet
its contractual requirements for oral non-party participation at
hearings and that QICs, in response, would have to elect participation
in many additional hearings in order to meet those requirements,
placing an administrative burden on OMHA to manage the participation
requests.
Response: We agree that there is value in having CMS and its
contractors involved in the proceedings at OMHA as participants, but we
believe that limiting the number of participants at the oral hearing
while still providing CMS and its contractors with an opportunity to
share their unique perspectives through position papers and written
testimony strikes an appropriate balance between administrative
efficiency and obtaining as much information as possible for the ALJ to
render a decision on the matter. In addition, we note that Sec.
405.1010(d)(3), as finalized in this rule, also permits additional
participation in the oral hearing if the ALJ determines that a
precluded entity's participation is necessary for a full examination of
the matters at issue such as cases involving multiple MAC
jurisdictions, significant dollar amounts at issue, extrapolation, and
pre-pay or post-pay audits. Finally, with respect to concerns related
to a contractor's ability to satisfy its contractual obligations, after
the final rule is effective, CMS intends to make necessary contract
modifications to account for the provisions of this final rule related
to contractor participation, and encourage the contractors to
coordinate participation in the hearings.
Comment: We also received one comment, jointly submitted by four
entities holding DME MAC contracts, opposing the limitation on the
number of contractor participants at oral hearings. The commenters
noted that in the case of a large appeal involving statistical sampling
and extrapolation or consolidated hearings, multiple DME MACs may have
processed claims that are at issue in the appeals, and the restriction
on the number of participants at the oral hearing makes it impossible
for each to have its ``day in court.'' The commenters argued that the
contractor permitted to participate at the oral hearing may not have
access to information on the beneficiaries and claims from other DME
MAC jurisdictions and could not present any argument or defense for
those denials. Finally, the commenters noted that it is impossible for
those contractors who are not permitted to participate at the oral
hearing to anticipate and refute arguments in a position paper written
in the absence of knowledge of the appellant's defense.
Response: Section 405.1010(d)(3), as finalized in this rule,
provides that if CMS or a contractor is precluded from participating in
the oral hearing under the provisions limiting the number of
participants, the ALJ may grant leave to the precluded entity to
participate in the oral hearing if the ALJ determines that the entity's
participation is necessary for a full examination of the matters at
issue. This paragraph provides the ALJ with necessary discretion to
permit additional participants at the hearing in situations such as the
ones noted above by the commenter, where multiple contractor
participants at hearing may be necessary for a full examination of the
issues. We provided examples above highlighting when an ALJ may find it
necessary to exercise the discretion afforded to the ALJ in Sec.
405.1010(d)(3). In one example, we indicated that when an appeal
involves LCDs from multiple MAC jurisdictions, the ALJ may determine
that allowing additional MACs to participate in a hearing is necessary
for a full examination of the matters at issue. In another example, we
suggested that in overpayment cases involving statistical sampling and
extrapolation, the ALJ may allow participation in the oral hearing by
both the contractor that conducted the sampling who is necessary to
address issues related to the sampling and extrapolation and another
contractor that made an election to participate to clarify the policy
and factual issues related to the merits of the claims in the sample.
The examples presented by the commenter--cases involving statistical
sampling and extrapolation or consolidated hearings in which multiple
contractor jurisdictions are involved and a single contractor does not
have information on all beneficiaries or claims involved--are similar
instances when the ALJ may use his or her discretion to permit
additional participants at the oral hearing because the additional
participants may be necessary for a full examination of the matters at
issue.
With respect to the commenter's concern that the contractor
permitted to participate in the oral hearing may not have access to
information on the beneficiaries and claims from other DME MAC
jurisdictions and could not present any argument or defense for those
denials, we note that even when a contractor is not permitted to
participate in the oral hearing under Sec. 405.1010(d)(1), the
contractor can still submit position papers and written testimony,
which may provide helpful information to the contractor participating
in the oral hearing. However to help further ensure that CMS or a CMS
contractor that has elected party status is able to fully represent the
position of CMS in cases where the entity that elected party status
does not have information on all beneficiaries or claims involved, or
where the entity that has elected party status deems it necessary to
call another CMS contractor as a witness, we are amending proposed
Sec. 405.1010(d)(3) to provide that CMS or a contractor that is
precluded from participating in the oral hearing under paragraph Sec.
405.1010(d)(1) may still be called as a witness by CMS or a contractor
that is a party to the hearing in accordance with Sec. 405.1012. We
expect the need for CMS or a contractor as a party to call another CMS
contractor as a witness would be an infrequent occurrence, and believe
this approach strikes the appropriate balance between administrative
efficiency and addressing the commenter's concerns.
With respect to the commenter's concern that position papers and
written testimony will be inadequate to refute arguments that are made
at the hearing, we note that the role of participants, both in written
submissions and participating in the oral hearing, is to provide
testimony to clarify factual or policy issues, and does not include
calling witnesses or cross-examining the witness of a party to the
hearing. In addition, we believe that CMS and its contractors are
already familiar with the appellant's arguments based on the
contractors' review of the record and involvement in the lower-level
appeal decisions or the initial determination. Accordingly, we believe
that contractors have generally set forth their positions on those
arguments in the lower-level decisions or will have an
[[Page 5023]]
opportunity to do so through the written submissions to OMHA.
Comment: One commenter requested that OMHA institute a notification
process to notify contractors of which entity submitted its election to
participate first and, therefore, is permitted to participate in the
oral hearing. The commenter noted that timely notification is important
because it takes additional time and resources to plan for
participation at the hearing. The commenter also suggested that instead
of adopting a rule in which the first entity to file a response to the
notice of hearing may participate in the oral hearing, OMHA should give
priority to MACs and QICs over RAs because initial determinations,
redeterminations, and reconsiderations are formal steps in the appeals
process.
Response: The proposed rules do not specifically address
notification to the entities regarding whether they will participate at
the oral hearing or participate by submission of position papers and/or
written testimony. If a hearing is scheduled, the assigned ALJ will
notify the contractors regarding their participation prior to the
hearing. OMHA will develop a consistent notification process, including
guidance on when notification to the contractors should be made and the
method of delivery of such notification, which will be made part of the
OCPM. The OCPM describes OMHA case processing procedures in greater
detail, provides frequent examples to aid understanding, and it is
accessible by the public on the OMHA Web site (www.hhs.gov/omha).
As discussed in the comment summary above, we considered
alternatives to the proposed rule that the first entity to file a
response to a notice of hearing be given priority for participating at
the hearing, however we decided that giving the first entity priority
is administratively efficient and provides an objective and clear way
of determining which contractor is allowed to participate at the oral
hearing. We do not agree with the commenter that OMHA should give
priority to MACs and QICs over RAs as we believe, from our experience
and from feedback we received from stakeholders, that there are valid
and equal arguments why each of these entities' participation may be
valuable in the proceedings. We again note that Sec. 405.1010(d)(3),
as finalized in this rule, would allow the ALJ to permit multiple
participants to attend the hearing if the participation of multiple
entities at the hearing would be necessary for a full examination of
the matters at issue.
Comment: We received one comment in support of proposed Sec.
405.1010(b)(3) allowing two distinct points in the adjudication process
for contractors to elect to participate. However, the commenter
suggested that the timing of the election periods specified in Sec.
405.1010(b)(3)(i) and (ii) be calculated starting with notification to
the contractor rather than notification to the QIC. The commenter
indicated that notice to the QIC does not give equal notice to the
contractors and that there are delays in the transmission of
information regarding whether a request for hearing has been filed and
when the case is advanced in the Medicare appeals case processing
system from the QIC level to the OMHA level.
Response: We thank the commenter for its support of proposed Sec.
405.1010(b)(3) and believe that by providing two distinct points
governing the timing of an election to participate in the proceedings
helps ensure that CMS and its contractors have the opportunity to enter
the proceedings with minimal disruption to the adjudication process.
The proposed regulation on timing of the election to participate
provides that if no hearing is scheduled, CMS or its contractors must
make the election no later than 30 calendar days after the notification
that a request for hearing was filed or, if a hearing is scheduled, no
later than 10 calendar days after receiving the notice of hearing. We
believe that the 30 calendar day and 10 calendar day timeframes set
forth in Sec. 405.1010(b)(3)(i) and (ii) (as finalized) provide
adequate time for all contractors to receive notice and to file an
election to be a participant. With respect to the commenter's concern
regarding notice to the contractors when a request for hearing is
filed, in addition to the constructive notice provided to the QICs,
OMHA and CMS will begin the process of modifying contract provisions
with regards to hearing request notifications after the effective date
of this final rule. CMS and OMHA will develop a process to notify the
contractors of the hearing requests and CMS will convey the process to
the contractors when it is ready to be operationalized.
Pursuant to Sec. 405.1020(c)(1) (as finalized in this rule), if a
hearing is scheduled, the ALJ would send notice of the hearing to the
QIC, to CMS and any contractor that the ALJ believes would be
beneficial to the hearing, and, as discussed below, to CMS or any
contractor that elected to participate in the proceedings in accordance
with Sec. 405.1010(b). Therefore, if a contractor has elected to
participate in the proceedings before a notice of hearing has been
sent, under Sec. 405.1020(c)(1), if a hearing is ultimately scheduled
that entity will receive a copy of the notice of hearing directly from
OMHA. While contractors not specified in Sec. 405.1020(c)(1) will not
receive a copy of the notice of hearing directly from OMHA, we believe
that limiting the number of notices provided to those entities
specified in Sec. 405.1020(c)(1) is necessary to minimize the
administrative burden on OMHA. Further, we do not believe that limiting
the number of notices will compromise the interests of contractors
because we plan to issue sub-regulatory guidance, including educational
materials and contractual modifications that will establish processes
to accommodate the regulatory changes. These processes will relate to
timely notice, information sharing, and coordination among affected
contractors that may have an interest in participating in the same
hearing. CMS will begin the process of issuing sub-regulatory guidance
and contractual modifications after the effective date of this final
rule.
Comment: We received a comment asking whether the submission of a
written notice of intent to participate will be the same for cases
assigned to an attorney adjudicator and cases assigned to an ALJ, and
whether the notice of intent to participate will be accepted in
electronic form. The comment also asked, with respect to the filing of
a notice of intent to participate prior to assignment of the appeal to
an ALJ or attorney adjudicator, if the Chief ALJ will have only one
designee and, if not, how contractors will know to whom to send the
notices.
Response: The process for submission of a notice of intent to
participate under Sec. 405.1010(b) is the same regardless of whether
the appeal is assigned to an ALJ or an attorney adjudicator. Rather,
the distinctions in Sec. 405.1010(b) regarding the notice of intent to
participate are based on whether a notice of hearing has been issued
and the timing of the election. After the final rule becomes effective,
OMHA will develop consistent procedures for the receipt of notices of
intent to participate in ALJ and attorney adjudicator proceedings,
including specific instructions regarding where notices of intent to
participate for appeals that are not yet assigned to an ALJ or attorney
adjudicator should be directed. We will also consider including an
option for submitting notices of the intent to participate in
electronic form. These case processing details will be made part of the
OCPM, a reference guide outlining the day-to-day operating
instructions, policies, and
[[Page 5024]]
procedures of OMHA. The OCPM describes OMHA case processing procedures
in greater detail and is accessible to the public on the OMHA Web site
(www.hhs.gov/omha).
Comment: We received two comments in support of proposed Sec. Sec.
405.1010(c)(3) and 423.2010(d)(3), which place time frames on the
submission of position papers and written testimony by CMS or its
contractors, and by CMS, the IRE, and/or Part D plan sponsor,
respectively, require that copies are sent to other parties, and
provide that if the participating entities fail to submit the items
within the specified time frame or to send copies to the other parties,
then the position paper and/or written testimony will not be considered
in deciding the appeal. The commenters recommended that the time frames
in proposed Sec. Sec. 405.1010(c)(3) and 423.2010(d)(3) for submitting
position papers and written testimony also apply to the requirement to
send copies to other parties. We also received one comment requesting
that the same revision be made to Sec. 405.1012(c)(2)(ii) regarding
the time frame for sending to the other parties copies of any position
papers, written testimony, and evidentiary submissions that CMS or one
of its contractors submits to OMHA as a party to the hearing.
Response: We thank the commenters for their support. We intended
that the time frames in Sec. Sec. 405.1010(c)(3)(i),
423.2010(d)(3)(i), and 405.1012(c)(2)(i) also be applied to copies of
position papers and written testimony sent to the other parties. Given
this was not clear to the commenters, we are modifying the language in
proposed Sec. Sec. 405.1010(c)(3)(ii), 423.2010(d)(3)(ii), and
405.1012(c)(2)(ii) to better convey the requirement. We are revising
Sec. 405.1010(c)(3)(ii) to state that a copy of any position paper or
written testimony submitted to OMHA must be sent to the other parties
within the same time frame specified in Sec. 405.1010(c)(3)(i).
Because Sec. 405.1010(c)(3)(i) requires the submission to OMHA to be
sent within 14 calendar days of an election to participate, if no
hearing has been scheduled, or no later than 5 calendar days prior to
the hearing if a hearing is scheduled, unless the ALJ grants additional
time, the requirement that the copies be sent to the other parties
within these same time frames will ensure that the copies are also
timely received by the parties. Similarly, we are revising Sec.
423.2010(d)(3)(ii) to state that a copy of any position paper and
written testimony that CMS, the IRE, or the Part D plan sponsor submits
to OMHA must be sent to the enrollee within the same time frames that
it must be submitted to OMHA as provided in Sec. 423.2010(d)(3)(i)(A)
and (B). Finally, we also are revising Sec. 405.1012(c)(2)(ii) to
state that a copy of any position paper, written testimony, or evidence
submitted to OMHA must be sent to the other parties within the same
time frame specified in Sec. 405.1012(c)(2)(i).
Comment: We received one comment supporting the 14 calendar day
time frame proposed in Sec. 405.1010(c)(3)(i) for submitting a
position paper or written testimony after an election to participate if
no hearing is scheduled, but suggesting that the start for calculating
the 14 calendar days should begin with ``response to the contractor and
not the QIC.''
Response: We thank the commenter for its support but believe that
the commenter misinterpreted when the 14 calendar day time frame
proposed in Sec. 405.1010(c)(3)(i) begins. The time frame for
submission of a position paper or written testimony specified in
proposed Sec. 405.1010(c)(3)(i) begins on the date of the contractor's
election to participate if no hearing has been scheduled, not on the
date the QIC or the contractor receives the notice of hearing.
Comment: We received one comment that expressed concern that the
stated time frame in Sec. 405.1010(c)(3)(i), requiring the submission
of CMS or contractor position papers and written testimony no later
than 5 calendar days prior to the scheduled hearing, unless additional
time is granted by the ALJ, is an unreasonably short period and does
not allow sufficient time for an appellant to react to new arguments or
proposed theories that may be contained in those written submissions
prior to the hearing. The commenter suggested that this short time
frame is unfavorable to appellants.
Response: Current Sec. 405.1010 does not set forth specific time
frames for submitting position papers and written testimony. Current
Sec. 405.1010(e) states only that CMS or its contractor must submit
any position papers within the timeframe designated by the ALJ. ALJs,
however, would often accept written submissions up to and including on
the day of the hearing. We believe that the requirement to submit any
position papers or written testimony not later than 5 calendar days
prior to the scheduled hearing provides sufficient time for the ALJ and
the parties to review the submissions prior to the hearing and will
provide a clear and consistent time frame regarding these submissions.
In addition, we believe that Sec. 405.1010(c)(3)(iii) (as finalized in
this rule), which provides that if CMS or a contractor fails to submit
its position paper or written testimony within the set time frames then
the submissions will be excluded from consideration, provides
additional protections that are favorable to appellants.
Comment: Another commenter noted that when CMS or its contractor
``is called to provide position papers and written testimony'' but
fails to submit the position paper or written testimony on time, the
entities should be required to provide the requested written
submissions or provide a valid reason for why the requested information
could not be provided. The commenter noted that the information may
have a significant impact on the outcome of an appeal.
Response: We first want to clarify that, under the rules as
finalized, when CMS or a contractor makes an affirmative election to
participate and wishes to submit a position paper and/or written
testimony, it must do so within the specified time frames provided in
Sec. 405.1010(c)(3)(i) or the submissions are excluded from
consideration pursuant to Sec. 405.1010(c)(3)(iii). We believe that
providing time frames for submissions by CMS or its contractors when
they elect to participate helps to ensure that any submissions are
timely received and that appellants and other parties will have an
opportunity to review them prior to the hearing, if a hearing is
conducted. The comment suggests that the position paper and written
testimony of concern was requested by the ALJ, however Sec. Sec.
405.1010(a)(2) and 405.1012(a)(2) (both as finalized in this rule)
provide that although an ALJ may request CMS and/or one of its
contractors to participate in any proceedings before the ALJ, or to be
a party at the hearing, the ALJ cannot require such participation or
party status and cannot draw any adverse inferences if CMS or the
contractor decides not to participate in any proceedings or to be a
party at the hearing. The language set forth in proposed Sec.
405.1010(a)(2) was not changed from the current regulations, but rather
combines the rules currently found at Sec. 405.1010(a) and (f).
Similarly, the language in proposed Sec. 405.1012(a)(2) was carried
forward from current Sec. 405.1012(d). We do not believe that the
commenter's suggestion of making the submissions mandatory or requiring
that CMS or its contractor provide valid reasons for failing to submit
certain requested written testimony is consistent with the established
rule that an ALJ may not require that CMS or a contractor participate
in the proceedings or be a
[[Page 5025]]
party at the hearing. The limited resources and broad programmatic
responsibilities facing CMS and its contractors may not allow for
participation or party status election in all appeals. We believe that
CMS and its contractors must have some discretion in determining when
election of participant or party status under Sec. Sec. 405.1010 and
405.1012 is most appropriate given those resources and other
responsibilities.
Finally, we disagree with the commenter's suggestion that when CMS
or a contractor fails to provide requested position papers and/or
written testimony that it will have a significant impact on the appeal.
First, if an ALJ or attorney adjudicator believes that the written
record is missing information that is essential to resolving the issues
on appeal and that information can be provided only by CMS or its
contractors, the information may be requested from the QIC that
conducted the reconsideration or its successors under Sec. 405.1034,
as finalized in this rule. Second, CMS or its contractors will likely
elect participation or party status in those appeals that involve more
complex issues of fact or law and where their participation or party
status will be most useful. Finally, while position papers and/or
written testimony submitted by CMS or its contractors may be helpful in
clarifying factual issues or policy, we do not believe that the failure
to submit position papers or written testimony is likely to result in
any negative impact on the appellant or other parties. The appellant
and other parties obviously may still present their full testimony and
arguments and the ALJ or attorney adjudicator will consider evidence in
the administrative record as appropriate, including all administrative
proceedings, prior to issuing a decision.
Comment: We received two comments supporting the clarification in
proposed Sec. 405.1010(c)(2) that even though CMS or its contractor is
not subject to examination or cross-examination by the parties, the
parties ``may provide testimony to rebut factual or policy statements
made by a participant, and the ALJ may question the participant about
its testimony.'' The commenters requested that this language be
modified to more affirmatively require that the parties be given the
opportunity to provide testimony and to ensure that beneficiaries are
made aware of this option at the hearing. The commenter also requested
that CMS provide advocate education about this provision. We received
one comment that made this same request with respect to the enrollee's
ability to rebut factual or policy statements made by CMS, the IRE, or
the Part D plan sponsor participant in the course of Part D hearings as
provided in proposed Sec. 423.2010(d)(2).
Response: We thank the commenters for their support. We agree that
the proposed language in both Sec. Sec. 405.1010(c)(2) and
423.2010(d)(2) helps to clarify how a party and the ALJ may address
statements made by participating entities during the hearing. However,
we believe that the ALJ is in the best position to help ensure that a
beneficiary or enrollee is aware of this option during the course of
the hearing, and that ALJs may use their discretion to regulate the
course of the hearing, including by affirmatively asking parties if
they want to rebut factual or policy statements made by a participant
during the hearing. We anticipate that OMHA ALJs will receive training
on all the rules once they become effective, including the rules in
Sec. Sec. 405.1010(c)(2) and 423.2010(d)(2). We do not agree that
additional revisions to the language in Sec. Sec. 405.1010(c)(2) and
423.2010(d)(2) are necessary because the language as finalized in this
rule provides the necessary protection while still balancing the right
and role of the ALJ to control the hearing. CMS provides ongoing
stakeholder education and anticipates that education regarding this
provision and the other rules will be available after the rules are
effective.
Comment: One commenter stated that although the regulations at
Sec. 405.1010(c)(2) provide that contractors participating in an ALJ
hearing cannot be called as witnesses, the regulations should clarify
that they cannot also voluntarily testify as a witness. The commenter
noted that in its experience, Medical Directors of the contractors
often participate in the hearings and offer commentary on the clinical
judgment of the treating professionals, which the commenter views as
inappropriate witness testimony. The commenter stated that if witness
testimony is desired by a contractor, a witness must be identified and
qualified, and the appellant must have the right to cross-examine the
witness.
Response: We believe that Sec. 405.1010(c) as finalized in this
rule clarifies the roles and responsibilities of CMS and contractors
who are participants at the oral hearing. We note that Sec.
405.1010(c)(1) and (2), as finalized in this rule, incorporate the
policies from current Sec. 405.1010(c) and (d), providing that
participants may file position papers or provide testimony to clarify
factual or policy issues in a case, but may not call witnesses or
cross-examine the witnesses of a party to the hearing, and may not be
called as a witness itself, with the exception we are finalizing in
Sec. 405.1010(d)(3) of this rule to allow CMS or a contractor that has
been made a party to the hearing in accordance with Sec. 405.1012 to
call as a witness CMS or another contractor that has been precluded
from participating in the hearing. Further, Sec. 405.1010(c)(2), as
finalized, now clarifies that a participant is also not subject to
examination or cross examination by the parties and includes a new
provision that clarifies that a party may rebut factual or policy
statements made by a participant and the ALJ may question the
participant about its testimony. Although the commenter suggests that
contractor participants often do not follow the limitations on
participation set by the regulations, including by voluntarily
testifying as witnesses, we believe that the additional clarification
in these provisions regarding the roles and responsibilities of CMS or
a contractor as a participant will help ensure that participants only
provide testimony to clarify factual or policy issues in a case. In
circumstances in which a party believes that a participant is providing
testimony outside of the scope of clarifying factual or policy issues,
the party may raise the issue with the ALJ.
Comment: Two commenters recommended that the rules clarify how an
ALJ should proceed if a contractor fails to make an appearance at the
hearing after notifying the ALJ and appellant(s) of its intention to be
a participant or party to the oral hearing. The commenters recommended
that if CMS or a contractor fails to appear at a hearing, ``no further
participation or party status should be permitted for that entity.''
Response: If CMS or a contractor is a party or participant to the
oral hearing but does not appear at the scheduled time and place of the
hearing after notice of the hearing has been provided, the hearing may
proceed without that entity. While the involvement of CMS and/or a
contractor in the hearing as either a participant or a party is
permitted by Sec. Sec. 405.1010 and 405.1012, the regulations do not
require or guarantee such participation or party status, and thus the
election of participant or party status, and the extent of
participation, is at the discretion of CMS and its contractors. We
believe this is clear in the regulations as finalized at Sec. Sec.
405.1010(a), 405.1012(a), and 423.2010(a), and that the regulations do
not need to be further clarified in this regard. Therefore, we believe
that if CMS or a contractor that has elected to
[[Page 5026]]
be a participant or a party at the hearing fails to appear at the
hearing and notice of the hearing time and place has been duly
provided, then the ALJ may proceed without that entity. Also, there is
no provision that excludes the entity from further participation in the
proceedings if there are opportunities for such participation, and we
do not believe it would be appropriate to limit further participation
after an election is made, as we believe that CMS and contractor
participation may be beneficial and can assist in clarifying factual or
policy issues in a case. In addition, there may be administrative
reasons, including scheduling conflicts, which prevent an entity from
appearing at the hearing at the last minute. For the same reasons
discussed above, we believe that any position papers or written
testimony that had been previously submitted in accordance with the
time frames in Sec. Sec. 405.1010(c)(3) and 405.1012(c)(2) may still
be considered by the ALJ.
Comment: One commenter requested the rules be revised to add a
requirement making CMS's or its contractor's attendance mandatory
``when one of the issues in the hearing concerns that entity's
violation or non-compliance with existing statute or CMS policy.'' The
commenter suggested that by inviting CMS or its contractor to the
hearing, the entities are given an opportunity to recognize that they
are in violation and will have a chance of correcting the situation.
Response: Section 405.1010(a)(2), as finalized in this rule,
provides that an ALJ may request that CMS and/or one of its contractors
participate in the proceedings before the ALJ, including the oral
hearing, if any, but also provides that the ALJ may not require the
participation and may not draw any adverse inferences if CMS or the
contractor decides not to participate. These provisions carry forward
policies in current Sec. 405.1010(a) and (f). The limited resources
and broad programmatic responsibilities facing CMS and its contractors
may not allow for participation or party status election in all
appeals. We believe that CMS and its contractors must have some
discretion in determining when election of participant or party status
under Sec. Sec. 405.1010 and 405.1012 is most appropriate given those
resources and other responsibilities. Finally, it is not clear what the
commenter means when he suggests that ``one of the issues in the
hearing concerns that entity's violation or non-compliance with
existing statute or CMS policy.'' The ALJ scope of review is on the
issues related to the appealed claim in accordance with Sec. 405.1032.
If the appellant believes the claim was denied in error as a result of
non-compliance with relevant authority, such as a statute or
regulation, or authority that is owed substantial deference, such as
LCDs and program memoranda, those arguments should be articulated for
the ALJ to consider in adjudicating the appealed claim. It is not
necessary that CMS or a contractor be present for the ALJ to consider
that argument and make a de novo determination applying the authority.
On the other hand, if the commenter is suggesting that CMS or a
contractor needs to be present at hearing for the ALJ to explain to
that entity why that entity's decision constituted a ``violation or
non-compliance with existing statute or CMS policy,'' we do not agree
that this is necessary because the ALJ's decision and rationale will be
explained in the ALJ's written decision on the case, a copy of which is
sent to the QIC in accordance with Sec. 405.1046(a)(1) as finalized in
this rule, and therefore available to CMS and its contractors. OMHA
ALJs are responsible for administering hearings to resolve coverage and
payment disputes, not to provide CMS or contractor education, and we do
not believe that mandating CMS or a contractor to attend the hearing to
address the appellant's assertions furthers the hearing process.
Comment: One commenter pointed out that under the proposed
regulations no actual notice would be provided to CMS contractors when
appeals are filed, and the ``30-day constructive notice window'' is the
only opportunity for a contractor to participate in an appeal that
could be assigned to an attorney adjudicator. The commenter stated that
under the proposed rule, an ALJ hearing notice is the only actual
notice to the contractors and the only opportunity for contractors to
appear as parties. The commenter suggested that the proposed rule may
be ``a step backward in the important area of program integrity.''
Response: We do not agree with the commenter and believe that the
rules as finalized make necessary clarifications in defining when and
how CMS or its contractors may elect, or request (for Part D appeals),
to participate in the proceedings on a request for an ALJ hearing.
Current Sec. 405.1010 provides that CMS or its contractors may elect
to be a participant within 10 calendar days of receiving the notice of
hearing. Current Sec. 423.2010 requires CMS, the IRE, or the Part D
plan sponsor to request participation no later than 5 calendar days
after receipt of the notice of hearing for a non-expedited hearing, or
1 calendar day after receipt of the notice of hearing for an expedited
hearing. Neither current rule specifically addresses appeals for which
a hearing is not scheduled. Sections 405.1010(b) and 423.2010(b), as
finalized, clarify that CMS or its contractors may elect or request
participant status in proceedings even if a hearing is not conducted or
is not necessary, with the applicable limitations and timeframes to
help ensure that an election or request is filed in a timely manner
after notification that a request for hearing is filed. We believe
that, as finalized, Sec. Sec. 405.1010(b) and 423.2010(b) provide
necessary clarity for contractors in electing or requesting
participation in appeals for which no hearing is scheduled, and in
providing such clarification, may encourage additional participation in
such proceedings and therefore support program integrity. In response
to the commenter's concern that the only notice provided to CMS
contractors when a request for hearing is filed is a constructive
notice to the QICs, we note that OMHA and CMS plan to establish a
process for notification to CMS contractors that a request for hearing
has been filed, and we will communicate that process to the contractors
after the effective date of the rule. As this is an internal process,
we are not including this process in the regulations, because to do so
would limit our flexibility to establish and change business processes
and take advantage of emerging technologies through operational
policies. The APA permits OMHA to adopt internal business processes
without notice and comment rulemaking.
Comment: One commenter asked OMHA to specify what sort of notice
would be given to the Part D plan sponsor when no notice of hearing is
issued, and what would be the acceptable forms of communication when
the Part D plan sponsor elects to participate in the proceedings when
no notice of hearing is required, including in appeals assigned to an
attorney adjudicator.
Response: OMHA and CMS plan to establish a process for notification
to Part D plan sponsors that a request for hearing has been filed, and
CMS will communicate that process to the Part D plan sponsors after the
final rule becomes effective.
In response to the commenter's question regarding acceptable forms
of communication, Sec. 423.2010(b)(1), as finalized in this rule,
provides that, if the Part D plan sponsor requests participation before
it receives notice of hearing, or when no notice of hearing is
required, the Part D Plan ``must send written notice of its request to
[[Page 5027]]
participate to the assigned ALJ or attorney adjudicator, or a designee
of the Chief ALJ if the request is not yet assigned to an ALJ or
attorney adjudicator, and the enrollee, except that the request may be
made orally if a request for an expedited hearing was filed and OMHA
will notify the enrollee of the request to participate.'' Written
communication may be mailed or fax. However, faxes must be sent in
accordance with procedures to protect personally identifiable
information.
Comment: We received two comments from CMS contractors noting that
the initial opportunity to elect to be a participant in an appeal
within 30 calendar days after notification that a request for hearing
has been filed as set forth in proposed Sec. 405.1010(b)(3)(i) will
require additional work and resources for those entities to monitor
requests for hearings being filed with OMHA. One comment stated that
the proposed rules create additional work that may not be productive
because QICs will have to screen cases appealed to OMHA for potential
participation election even though those cases may never be heard, may
be dismissed on procedural grounds, or may be withdrawn before a
hearing is scheduled, which is a larger number of cases than those
currently screened by contractors upon receipt of an ALJ's notice of
hearing. Another comment noted that although it is possible for DME
MACs to locate cases that have been appealed beyond the QIC, the
process of researching the lists of appealed cases and selecting cases
for which an election of participation is desired is not part of those
entities' normal work structure. Both comments noted that additional
resources, including as one commenter indicated, increased
``visibility'' of appeals filed at the OMHA level in the Medicare
appeals case management system, and/or additional manpower, would be
necessary to monitor cases appealed to OMHA. One comment stated that
the DME MACs are only funded for small staffs to address ALJ appeals
and may not have the resources to monitor and respond to the greater
volume of appeals that may be anticipated after these rules are
effective.
Response: While Sec. 405.1010(b)(3)(i) as finalized in this rule
may require increased coordination and perhaps shared resources among
CMS and its contractors to monitor requests for hearing being filed at
OMHA for possible participation election, we do not believe that these
administrative concerns outweigh the benefits of Sec. 405.1010 as
finalized in this rule, or that the final rules would impose
unreasonable burdens on CMS or its contractors. We believe Sec.
405.1010 as finalized adds necessary clarifications on CMS and
contractor participation, and encourages participation in a greater
number of appeals by clarifying that CMS and contractors may
participate in appeals for which a hearing is not scheduled. However,
Sec. 405.1010 as finalized does not require a contractor to make an
election or request participation, so while participation is encouraged
and permitted, the rules do not obligate CMS or its contractors to
perform additional work or expend any additional resources. The limited
resources and broad programmatic responsibilities facing CMS and its
contractors likely will not allow for participation in all appeals, so
CMS and its contractors will use their discretion in determining when
election of participant status is most appropriate. With regard to the
commenter's concern that electing participant status for cases that
have not been scheduled for a hearing would be outside DME MACs' normal
work structure, CMS will address modifications to systems, contractor
coordination, and contractor resources in guidance outside of this
rule. If necessary, after the final rule is effective, CMS will make
the necessary contract modifications to account for the provisions of
this final rule.
Comment: Another comment from one of the entities that currently
holds a QIC contract indicated that proposed Sec. 405.1010(b)(1) would
create scheduling difficulties for contractors that may be electing to
participate in a hearing before they receive notice of the hearing date
and time. The commenter argued that even under the current rules,
contractors often have to choose between cases for participation
because hearing dates and times with different ALJs conflict or
overlap. The commenter noted that in practical terms, there is a large
amount of time between when a request for hearing is filed and eventual
assignment and scheduling of a hearing, and that it would be extremely
challenging, if not impossible, for the QIC to plan for attendance at a
hearing of unknown date and time.
Response: Although Sec. 405.1010(b)(1) as finalized in this rule
permits CMS or a contractor to elect to participate in the proceedings
on a request for an ALJ hearing before receipt of a notice of hearing
or when a notice of hearing is not required, if a hearing is then
scheduled, the participating entity is not obligated to attend the
hearing and if it has not already filed a positon paper and/or written
testimony, it may do so up to 5 calendar days prior to the hearing.
Moreover, if a hearing is ultimately scheduled, any entity that has
already elected to participate in the proceedings will receive a notice
of hearing pursuant to Sec. 405.1020(c)(1) as finalized in this rule,
and will have at that time notice of the scheduled hearing date and
time. If the entity's schedule allows and the entity still wishes to
participate at the oral hearing, it may file a response to the notice
of hearing. If the scheduled hearing date and time does create a
scheduling conflict for that entity, the entity may still elect to
participate in the proceedings by submission of position papers or
written testimony no later than 5 calendar days prior to the hearing,
unless the ALJ grants additional time to submit the position paper or
written testimony.
Comment: One commenter requested clarification on the recourse
available to a DME MAC if it elects to be a participant in an appeal
and the hearing is scheduled for a date and/or time that contractor is
unable to attend, and what effect the contractor's withdrawal from
participation due to a schedule conflict would have on the decision of
the ALJ or attorney adjudicator.
Response: Consistent with Sec. 405.1020(e), CMS or a contractor
that has elected participant status cannot request a change in the
scheduled date or time of the hearing (unlike CMS or a contractor that
has elected party status). However, the contractor may respond to the
notice of hearing by indicating that it will not be able to attend due
to a scheduling conflict without any adverse inference on the part of
the ALJ as provided in Sec. 405.1010(a)(2), and submit a position
paper and/or written testimony for consideration within the time frame
set forth in Sec. 405.1010(c)(3).
Comment: We received two comments, one from an entity that
currently holds a QIC contract and one from the four entities that
currently hold the DME MAC contracts, quoting the language in proposed
Sec. 405.1010(b)(1) regarding how CMS or its contractors may make an
election to participate ``when a notice of hearing is not required''
and indicating that it was unclear when a notice of hearing would not
be required for a case.
Response: Under our regulations as finalized in this rule, a notice
of hearing is not required for any case in which an on-the-record
decision may be issued pursuant to Sec. 405.1038, including: When an
ALJ or attorney adjudicator determines the evidence in the record
supports a finding fully in favor of the appellant(s) on every issue
and no other party to the appeal is liable for claims at issue, unless
CMS or a contractor has
[[Page 5028]]
elected to be a party pursuant to Sec. 405.1012 (as provided in Sec.
405.1038(a)); when all parties who would be sent a notice of hearing
indicate in writing that they do not wish to appear before an ALJ at a
hearing (as provided in Sec. 405.1038(b)(1)(i)); when the appellant
lives outside the United States and does not inform OMHA that he or she
wants to appear at a hearing and there are no other parties who would
be sent a notice of hearing and who wish to appear (as provided in
Sec. 405.1038(b)(1)(ii)); or if CMS or one of its contractors submits
a written statement or makes an oral statement at a hearing indicating
that the item or service should be covered or payment may be made such
that an ALJ or attorney adjudicator issues a stipulated decision in
favor of the appellant or other liable parties (as provided in Sec.
405.1038(c)).
Comment: We received the following questions from the four entities
that currently hold the DME MAC contracts regarding administrative and
procedural mechanisms related to proposed Sec. 405.1010: (1) ``will
the request for hearing contain a list of all parties to whom a
response should be sent;'' (2) what mechanisms will be in place to
assist with the assignment of cases to OMHA adjudicators in a timely
manner; (3) how quickly after a request for hearing has been filed will
it be assigned a firm hearing date; and (4) when and how will the DME
MAC contractor become aware of that firm hearing date?
Response: DME MACs would not typically receive a copy of an
appellant's request for hearing (see Sec. 405.1014(d), as finalized in
this rule). Furthermore, Sec. 405.1010(b)(1), as finalized in this
rule, provides that if CMS or a contractor elects to participate in the
proceedings before a notice of hearing is sent, or when a notice of
hearing is not required, then the contractor must send written notice
of its intent to participate to the assigned ALJ or attorney
adjudicator, or a designee of the Chief ALJ if the appeal is not yet
assigned, and the parties who were sent a copy of the notice of
reconsideration. Therefore, we believe the commenter may have intended
to ask whether the notice of reconsideration (as opposed to a request
for hearing) contains a list of all parties to whom an election to
participate would be sent under Sec. 405.1010(b)(1), as finalized in
this rule. Under Sec. 405.976(a)(1)(i), the QIC generally sends notice
of the reconsideration to all parties at their last known address, and
current QIC practice involves listing all the parties to whom the
notice of reconsideration was sent in either the address block or the
courtesy copy section of the notice. Therefore, CMS or a CMS contractor
need only look to the notice of reconsideration to determine which
parties were sent a copy of the notice of reconsideration, and send a
copy of its election to participate to the same parties.
Proposed Sec. 405.1010 does not address the mechanisms for
assignment of cases to OMHA adjudicators. OMHA's case assignment
process is subject to the priority of the case (to help ensure appeals
filed by beneficiaries are adjudicated as quickly as possible, OMHA
designates these appeals as priority appeals, with some exceptions),
OMHA's pending workload, and the availability of an adjudicator. More
details on the OMHA case assignment process are available in the OCPM,
which is accessible on the OMHA Web site (www.hhs.gov/omha).
Contractors and others may determine whether a case has been assigned
to an OMHA adjudicator and, if it is assigned, the assigned OMHA
adjudicator, using AASIS, which also can be accessed through the OMHA
Web site.
Similarly, proposed Sec. 405.1010 does not address the length of
time between when an appeal is filed and when a hearing date will be
selected. The length of time between when an appeal is filed and when a
hearing date is selected will vary based on how quickly the case is
assigned to an OMHA ALJ, because only OMHA ALJs may conduct hearings,
and the assigned ALJ's availability and docket of other cases. Because
this time is subject to significant variation based on the stated
factors, we cannot provide a generally applicable estimate.
If and when a hearing is scheduled, the ALJ will issue a notice of
hearing consistent with Sec. 405.1022 to the parties and other
potential participants provided for in Sec. 405.1020(c), including,
among others, to the QIC that issued the reconsideration and CMS or any
contractor that the ALJ believes would be beneficial to the hearing. In
consideration of the commenter's question regarding when and how the
DME MAC will become aware of the hearing date if the request for
hearing is only sent to the QIC that issued the reconsideration, DME
MACs and other non-QIC contractors would be notified of the hearing
date by the QIC that issues the reconsideration in accordance with CMS
instructions to QICs for notifying other contractors of a scheduled ALJ
hearing. However, we believe it is also appropriate for the notice of
hearing to be sent to CMS or any contractor that elected to participate
in the proceedings consistent with Sec. 405.1010(b), and we are
revising our proposal at Sec. 405.1020(c)(1) to require this. Thus, a
non-QIC contractor will receive notice of the hearing either directly
from OMHA, if the contractor has elected to participate before receipt
of a notice of hearing or if the ALJ believes the non-QIC contractor
would be beneficial to the hearing, or it will receive notice of the
hearing from the QIC if it elects to participate after notice of
hearing is sent.
Comment: We received one comment requesting clarification of the
language in proposed Sec. 405.1012(a)(2), which in the commenter's
opinion, suggests that an ALJ may request that CMS and/or one of its
contractors be a party to a hearing requested by an unrepresented
beneficiary. The commenter noted that although Sec. 405.1012(a)(1)
expressly precludes CMS or its contractors from electing to be a party
when a request for hearing is filed by an unrepresented beneficiary,
the phrase ``and unless otherwise provided in this section'' suggests
that an ALJ may request CMS or a contractor to be a party in hearings
when the request is filed by an unrepresented beneficiary. The
commenter requested that the language in proposed Sec. 405.1012(a)(2)
expressly exclude the possibility that an ALJ may request CMS or its
contractors to be a party in a hearing when the request for hearing is
filed by an unrepresented beneficiary.
Response: The ``unless otherwise provided in this section''
language in proposed Sec. 405.1012(a)(1) was added to address
situations in which CMS or a CMS contractor elected to be a party but
was precluded from being a party due to limitations on the number of
CMS or CMS contractor parties in Sec. 405.1012(d), or due to an
election that the ALJ determines is invalid under Sec. 405.1012(e). We
agree that when the request for hearing is submitted by an
unrepresented beneficiary, CMS and its contractors may not be a party
at the hearing. This was our intent in current Sec. 405.1012(a) as
well as our intent in proposed Sec. 405.1012(a)(2). Thus, we have
revised the language in Sec. 405.1012(a)(2) as finalized in this rule
to expressly state that an ALJ may request CMS or one of its
contractors to be a party to a hearing unless the request for hearing
is filed by an unrepresented beneficiary.
Comment: We received one comment from a Recovery Auditor trade/
advocacy group that was submitted as a comment to proposed Sec. Sec.
405.1008 and 423.2008, but was related to how proposed Sec. Sec.
405.1010, 405.1012 and 423.2010 would impact CMS audit contractors'
interests in hearings and their ability to
[[Page 5029]]
elect party status. The commenter noted that audit contractors have
both contractual obligations under the draft Statement Work for the
Recovery Audit Program to support their findings at hearings and a
substantial interest in being permitted to offer a defense of their
findings through oral testimony, cross examination, and attendance at
the hearings. The commenter recommended that there should be a clear
process for deciding which contractor should have primary
responsibility for participating in hearings and suggested that the
contractor who first denied the claim should be granted party status,
with the subsequent contractors taking participant status. As an
alternative, the commenter recommended that multiple entities should be
permitted to elect to be a party to the hearing, and the ALJ could
limit each party to only addressing issues that have not yet been
addressed by the other parties. The commenter characterized the rules
regarding electing party status in Sec. 405.1012 as a ``new process
[that] would require frequent requests for leave, if audit contractors
are not permitted to act as a party at the ALJ hearing level'' and
stated that ``the requirement that an entity must seek permission from
an ALJ to act as a party to a hearing imposes a cumbersome, time-
consuming step in the process, increasing the administrative burden on
both CMS contractors and on ALJs.'' Finally, the commenter noted
several concerns regarding timing of the election of party status and
delays in audit contractors receiving the notice of hearing. The
commenter indicated that the 10-day time limit for electing party
status after the QIC receives the notice of hearing is unworkable
because QICs frequently do not forward notices of hearings to the audit
contractors within 10 calendar days. The commenter recommended that the
window to elect party status be expanded to 20 calendar days and/or
that QICs should be required to forward all notices of hearings to the
audit contractors in a timely fashion, and failure by the QICs to do so
should result in an extension in the time that audit contractors have
to elect party status. Alternatively, the commenter recommended that
ALJs should be required to notify audit contractors of all ALJ hearings
directly. The comment noted that if QICs, which may receive the notice
of hearing first, preemptively elect party status before the audit
contractors receive notice of a hearing, audit contractors would be
prevented from participating at the hearing, and such exclusion would
make it difficult for audit contractors to satisfy their contractual
obligations and raises due process concerns.
Response: We believe that the rules we are finalizing on CMS and
contractor participant and party status strike an appropriate balance
between administrative efficiency and obtaining as much information as
possible for the ALJ to render a decision on the matter. In addition,
we believe that Sec. Sec. 405.1010, 405.1012, and 423.2010, as
finalized in this rule, continue to allow for effective participation
in the ALJ hearing process for QICs and other contractors consistent
with 1869(c)(3)(J) of the Act and current Sec. Sec. 405.1010 and
405.1012, as further discussed below.
Section 405.1012(d)(1), as finalized in this rule, limits party
status at the oral hearing to the first entity to elect party status
after the notice of hearing is issued, but any other entity that filed
an election for party status is made a participant in the proceedings
under proposed Sec. 405.1010 (subject to Sec. 405.1010(d)(1) and
(3)), and may file a position paper and/or written testimony to clarify
factual or policy issues in the case. We believe that allowing a
contractor that is precluded from being a party to the hearing to file
positions papers and/or written testimony still provides the contractor
with a meaningful opportunity to participate in the proceedings. As we
explained in the proposed rule, we considered alternatives to the first
to file provision in proposed Sec. 405.1012(d)(1). However, we believe
that providing that the first entity to elect party status be made a
party to the hearing is an administratively efficient and objective
method of determining which contractor will be made a party to the
hearing if more than one entity makes a party election. We do not agree
with the commenter that the first contractor to deny the claim is
necessarily the best entity or the most beneficial entity to have at
the hearing. In some cases, subsequent contractors may have resolved
the issue identified by the first contractor and further developed the
record, and that subsequent contractor may have a more current
understanding of the issues on appeal and the facts. In addition, when
multiple contractors would be necessary for a full examination of the
matters at issue, Sec. Sec. 405.1010(d)(3) and 405.1012(d)(2) as
finalized could be used by the ALJ to grant leave to a precluded entity
to participate in the oral hearing or to be a party to the hearing,
respectively. Although the commenter suggested that as an alternative,
multiple parties should always be permitted to participate at the oral
hearing and the ALJ could use his or her discretion to limit testimony
and argument as necessary, we believe that the process finalized in
this final rule is more efficient and provides more clarity regarding
expectations.
We also disagree with the commenter's characterization of the
process for CMS or its contractor to elect to be a party to the hearing
as ``new'' to the extent that Sec. 405.1012(b), as finalized in this
rule, follows the same process in current Sec. 405.1012(b) for
electing party status by sending written notice of intent to be a party
to the hearing to the ALJ and the parties identified in the notice of
hearing, which includes the appellant. Although Sec. 405.1012(d), as
finalized in this rule, places a new limitation on the number of
contractors who have elected to be a party that may participate in the
oral hearing, unless the ALJ grants leave to an entity to also be a
party to the hearing, we do not believe this process imposes an
additional administrative burden or time-consuming step. Section
405.1012(d)(2) states that if CMS or a contractor is precluded under
the rules from being a party to a hearing, an ALJ may grant leave for
CMS or a contractor to be a party to the hearing if the ALJ determines
that the entity's participation as a party is necessary for a full
examination of the matters at issue. We disagree that this
determination by the ALJ imposes any cumbersome, time-consuming, or
administratively burdensome requirements on CMS of its contractors.
While the commenter has characterized the process as requiring that
entities ``seek permission from the ALJ to act as a party to the
hearing,'' we do not agree that Sec. 405.1012(d)(2), as finalized in
this rule, necessarily requires any additional filings or actions from
the entity other than the written notice of intent to participate as a
party provided for in Sec. 405.1012(b).
With respect to the commenter's concern regarding audit
contractors' ability to meet contractual obligations, including the
concern that QICs may preemptively elect party status and preclude
participation or party status for audit contractors, we direct the
commenter to our response to a similar comment above that was submitted
by a QIC. As we noted above, after the final rule is effective, we
intend to issue sub-regulatory guidance, including educational
materials and contractual modifications that will establish processes
to accommodate the regulatory changes and help ensure contractor
understanding of roles and responsibilities. These processes will
relate to timely notice, information
[[Page 5030]]
sharing, and coordination among affected contractors that may have an
interest in participating in the same hearing. In addition, we intend
to update the Joint Operations Agreements to capture contractor roles
and establish timeframes. CMS intends to make any necessary
modifications to its contractors' statements of work and contracts to
require coordination among the multiple contractors who may have an
interest in electing participant and/or party status in the same
hearing.
Finally, we recognize that there may be some delay in certain
contractors' receipt of the notice of hearing as it is processed
through the QICs. However, we believe that the 10 calendar day time
frame still provides adequate time to give notice to all contractors.
The timeframe for forwarding a notice of hearing is reflected in the
QIC contracts. CMS will take steps to help ensure that the QICs and
other contractors follow the applicable regulations and contractual
requirements. Because the QICs' contractual obligations already reflect
a workable timeframe, and because CMS will take steps to help ensure
that the QICs follow those contractual obligations, we do not agree
that the first two alternatives suggested by the commenter--revising
the regulations to extend the time frame to elect party status to 20
days or extending the timeframe to elect party status if a QIC fails to
timely notify contractors of the receipt of a notice of hearing--are
necessary. We believe that the commenter's third suggestion of
requiring that OMHA always send the notice of hearing to all
contractors places an unnecessary administrative burden on OMHA and
would duplicate the process for notifying the various contractor
entities that is already managed by CMS through the QICs' contracts. As
we noted above, after the final rule is effective, we intend to issue
sub-regulatory guidance that will establish processes to accommodate
the regulatory changes. CMS will begin the process of modifying
contract provisions with regards to notices of hearing after the
effective date of this final rule. In addition, we note that any
contractor, including an audit contractor, that has elected to
participate in the proceedings on a request for an ALJ hearing under
Sec. 405.1010 will receive notice of a hearing, if one is scheduled,
directly from OMHA pursuant to Sec. 405.1020(c)(1) as finalized in
this rule.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. Sec. 405.1010, 405.1012, and 423.2010 as
proposed, with the following modifications. We are adding a requirement
in Sec. Sec. 405.1010(c)(3)(ii), 405.1012(c)(2)(ii) and
423.2010(d)(3)(ii) that copies of position papers and/or written
testimony (and for purposes of Sec. 405.1012(c)(2)(ii), any evidence)
submitted to OMHA must be sent to the other parties within the same
timeframes that apply to the submissions to OMHA. In addition, we are
adding language to Sec. 405.1010(d)(3) to state that if the ALJ does
not grant leave to the precluded entity to participate in the oral
hearing, the precluded entity may still be called as a witness by CMS
or a contractor that is a party to the hearing in accordance with Sec.
405.1012. To accommodate this change, we are also revising Sec.
405.1010(c)(2) to state that when CMS or its contractor participates in
an ALJ hearing, CMS or its contractor may not be called as a witness
during the hearing and is not subject to examination or cross-
examination by the parties, except as provided in Sec. 405.1010(d)(3).
We are also adding clarifying language in Sec. 405.1012(a)(2) that an
ALJ may not request that CMS and/or one or more of its contractors be a
party to the hearing if the request for hearing was filed by an
unrepresented beneficiary. Finally, we are correcting a drafting error
in the text of proposed Sec. 405.1010(c)(3)(i) by replacing ``by
within 14 calendar days'' with ``within 14 calendar days.''
g. Request for an ALJ Hearing or Review of a QIC or an IRE Dismissal
(Sec. Sec. 405.1014 and 423.2014)
Sections Sec. Sec. 405.1014 and 423.2014 explain the requirements
for requesting an ALJ hearing, including what must be contained in the
request, when and where to file the request, the extension of time to
request a hearing, and in Sec. 405.1014 to whom a copy of the request
for hearing must be sent. We proposed to restructure the sections,
clarify and provide additional instructions, and address other matters
that have caused confusion for parties and adjudicators. 81 FR 43790,
43816-43820.
i. Requirements for a Request for Hearing or Review of a QIC or an IRE
Dismissal
We proposed to revise the title and provisions of Sec. Sec.
405.1014 and 423.2014 to more clearly cover a request for a review of a
QIC or IRE dismissal. While the current requirements for requesting an
ALJ hearing are generally used for requesting a review of a QIC or IRE
dismissal in form HHS-725, we stated in the proposed rule that we
believe that explicitly extending Sec. Sec. 405.1014 and 423.2014 to
cover requests for these types of review would provide clarity to
parties and adjudicators on the requirements for requesting a review of
a QIC or IRE dismissal. As such, we proposed in the title to Sec.
405.1014 and in subsection (a)(1) (current subsection (a)) to add ``or
a review of a QIC dismissal'' after ``ALJ hearing,'' and in subsection
(c) (current subsection (b)) to delete ``after a QIC reconsideration''
and add ``or request for review of a QIC dismissal'' after ``an ALJ
hearing.'' Similarly, we proposed in the title to Sec. 423.2014 and in
subsection (a)(1) (current subsection (a)) to add ``or a review of an
IRE dismissal'' after ``ALJ hearing,'' and in subsection (d) (current
subsection (c)) to add ``or request for review of an IRE dismissal''
after ``IRE reconsideration.''
We proposed in Sec. 405.1014(a)(1)(i) through (a)(1)(vi) to
incorporate current Sec. 405.1014(a)(1) through (a)(6) with revisions.
In addition to the current requirements in subsection (a)(1), we
proposed in Sec. 405.1014(a)(1)(i) to require the beneficiary's
telephone number if the beneficiary is the filing party and is not
represented. We stated in the proposed rule that this would help ensure
that OMHA is able to make timely contact with the beneficiary to
clarify his or her filing, or other matters related to the adjudication
of his or her appeal, including scheduling the hearing. We proposed in
Sec. 405.1014(a)(1)(ii) to require the appellant's telephone number,
along with the appellant's name and address as currently required in
subsection (a)(2), when the appellant is not the beneficiary, and in
Sec. 405.1014(a)(1)(iii) to require a representative's telephone
number, along with the representative's name and address which is
currently included in subsection (a)(3), if a representative is
involved. Like the beneficiary telephone number requirement, we stated
that these requirements would help ensure that OMHA is able to make
timely contact with a non-beneficiary appellant and any representative
involved in the appeal to clarify the filing or other matters related
to the adjudication of the appeal, including scheduling the hearing.
Current subsection (a)(4) states that the request must include the
document control number assigned to the appeal by the QIC, if any. We
proposed in Sec. 405.1014(a)(1)(iv) to require the Medicare appeal
number or document control number, if any, assigned to the QIC
reconsideration or dismissal notice being appealed, to reduce confusion
for appellants. We proposed in Sec. 405.1014(a)(1)(v) to add
[[Page 5031]]
language to the current language in subsection (a)(5), so that instead
of requiring the ``dates of service,'' we would require the ``dates of
service for the claims being appealed, if applicable,'' because an
appellant may appeal some but not all of the partially favorable or
unfavorable claims in a QIC reconsideration and a small number of
appeals do not involve a date of service (for example, entitlement
appeals). We proposed to incorporate the same language in current
subsection (a)(6) into proposed subsection (a)(1)(vi).
We proposed to add a new requirement to the content of the request
in Sec. 405.1014(a)(1)(vii) by requiring a statement of whether the
filing party is aware that it or the claim is the subject of an
investigation or proceeding by the OIG or other law enforcement
agencies. We stated that this information is necessary to assist OMHA
staff in checking whether the provider or supplier was excluded from
the program on the date of service at issue prior to scheduling a
hearing or issuing a decision, as well as for the ALJ to determine
whether to request the participation of CMS or any program integrity
contractors that may have been involved in reviewing the claims below.
However, we noted that the information is only required if the filing
party is aware of an investigation and proceeding, and the information
would not be the basis for a credibility determination on evidence or
testimony, as an investigation or allegations prior to findings of
wrongdoing by a court of competent jurisdiction are not an appropriate
foundation for credibility determinations in the context of part 405,
subpart I administrative appeals.
As discussed in section III.A.3.d of the proposed rule and II.B.3.d
of this final rule above, we proposed changes to the methodology for
calculating the amount in controversy required for an ALJ hearing to
better align the amount in controversy with the actual amount in
dispute. We also proposed new Sec. 405.1014(a)(1)(viii) to require
that providers, suppliers, Medicaid State agencies, applicable plans,
and beneficiaries represented by a provider, supplier, or Medicaid
State agency include in their request for hearing the amount in
controversy applicable to the disputed claim, as specified in Sec.
405.1006(d), unless the matter involves a provider or supplier
termination of Medicare-covered items or services that is disputed by a
beneficiary, and the beneficiary did not elect to continue receiving
the items or services. As we discussed in section III.A.3.d of the
proposed rule and II.B.3.d of this final rule above, we stated that in
instances where the Medicare allowable amount would serve as the basis
for the amount in controversy (which we believe would be the majority
of Part B appeals), we believe providers, suppliers, and Medicaid State
agencies would be able to utilize existing CMS tools and resources to
determine the allowable amount used as the basis for the amount in
controversy under proposed Sec. 405.1006(d)(2)(i)(A) and arrive at the
amount in controversy after deducting any Medicare payments that have
already been made or awarded and any deductible and/or coinsurance that
may be collected for the items and services in the disputed claim. In
addition, we stated that we believe that providers, suppliers,
applicable plans, and Medicaid State agencies also would have access to
the billing, payment and other necessary information to calculate the
amount in controversy under other provisions of Sec. 405.1006(d). For
scenarios where the basis for the amount in controversy would be
calculated in accordance with proposed Sec. 405.1006(d)(2)(i)(B),
(ii), (iii), or where the amount in controversy would be calculated in
accordance with Sec. 405.1006(d)(3), (5), (6), or (7), we discussed in
section III.A.3.d of the proposed rule and II.B.3.d of this final rule
above how appellants would determine the amount in controversy in order
to include it on their request for hearing. However, we stated that
because we believe there may be instances where a beneficiary who is
not represented by a provider, supplier, or Medicaid State agency may
not have the information necessary to determine the amount in
controversy under Sec. 405.1006(d) (as discussed above), we did not
propose to require beneficiaries who are not represented by a provider,
supplier, or Medicaid State agency to include the amount in controversy
in their requests for hearing. Furthermore, as noted above, we did not
propose that any appellant include the amount in controversy on
requests for hearing where the amount in controversy would be
calculated in accordance with Sec. 405.1006(d)(4) (for a provider or
supplier termination of Medicare-covered items or services that is
disputed by a beneficiary, and the beneficiary did not elect to
continue receiving the items or services). We stated that we expected
in this situation, a beneficiary could easily determine whether the
minimum amount in controversy required for an ALJ hearing would be met
through a conversation with the provider or supplier, or from the
statement we proposed that the QIC include in its notice of
reconsideration as discussed in section III.A.3.d of the proposed rule
and II.B.3.d of this final rule above. However, we stated that we
believe the exact amount in controversy could be difficult to determine
because it may depend on unknown factors, such as the length of
continued services that may be required, and so we are not requiring
appellants to include this amount in the request for hearing.
Lastly, we proposed that current Sec. 405.1014(a)(7), which
requires a statement of any additional evidence to be submitted and the
date it will be submitted, would be separately designated in its
entirety as proposed Sec. 405.1014(a)(2) because the information in
proposed Sec. 405.1014(a)(1) must be present for a request for hearing
to be processed and therefore would make the request subject to
dismissal if the information is not provided, as discussed below. In
contrast, we stated that the information in proposed Sec.
405.1014(a)(2) is only necessary if evidence would be submitted and
would not make the request subject to dismissal if not present in the
request.
Similar to proposed Sec. 405.1014(a), we proposed at Sec.
423.2014(a)(1)(i) through (a)(1)(vi) to incorporate current Sec.
423.2014(a)(1) through (a)(6) with revisions. Current subsection (a)(3)
states that the request must include the appeals case number assigned
to the appeal by the IRE, if any. We proposed in Sec.
405.1014(a)(1)(iii) to revise the requirement to state that the request
must include the Medicare appeal number, if any, assigned to the IRE
reconsideration or dismissal being appealed, to reflect the terminology
used by the IRE and thereby reduce confusion for enrollees. Current
subsection (a)(6) states that the request must include the reasons the
enrollee disagrees with the IRE's reconsideration. We proposed to
insert ``or dismissal'' after ``reconsideration'' to again reflect the
terminology used by the IRE and thereby reduce confusion for enrollees.
For the same reasons as we proposed for Sec. 405.1014(a)(1)(vii), we
proposed at Sec. 423.2014(a)(1)(vii) to require a statement of whether
the enrollee is aware that he or she, or the prescription for the drug
being appealed, is the subject of an investigation or proceeding by the
OIG or other law enforcement agencies. In addition, we proposed at
Sec. 423.2014(a)(2) to incorporate the current Sec. 423.2014(a)(7)
requirement to include a statement of any additional evidence to be
submitted and the date it will be submitted, and at Sec.
423.2014(a)(3) to incorporate the current Sec. 423.2014(a)(8)
requirement to include a statement that the enrollee is
[[Page 5032]]
requesting an expedited hearing, if applicable.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: Several commenters objected to the introduction of
proposed Sec. 405.1014(a)(1)(vii), stating that it would be unduly
burdensome to require appellants to disclose any and all investigations
and proceedings by any law enforcement agency, particularly for large
providers such as hospital systems where the proceeding or
investigation may relate to a different facility or be otherwise
unrelated to the claims on appeal. In addition, the commenters
indicated that the requirement was unclear with respect to whether a
multi-hospital system would be considered subject to, and therefore
required to disclose, an investigation of a single hospital within the
system. The commenters also stated that it was unclear which individual
in the appellant organization must be aware of the investigation or
proceeding to trigger the obligation to disclose, for instance, whether
an individual in the hospital's claims department would be obligated to
report information that was known to the hospital's legal department.
Further, the commenters expressed concern that the existence of a
pending investigation, which has not yet determined any wrongdoing, has
the potential to unfairly prejudice the adjudicator, who should instead
be focused on the merits of the specific claims on appeal. In addition,
the commenters stated that there could be instances in which an
individual is unable to disclose a proceeding pursuant to a court
order.
Response: While we continue to believe that adjudicators in the
claim appeals process should have information related to systemic
issues with appellants that may have a bearing on the credibility of
evidence or testimony presented to the adjudicator in an individual
claim appeal, we believe the commenters have raised valid questions and
concerns with proposed Sec. 405.1014(a)(1)(vii) (which would require
appellants to disclose pending investigations or proceedings), that we
believe require further consideration. Therefore, we are not finalizing
proposed Sec. Sec. 405.1014(a)(1)(vii) or 423.2014(a)(1)(vii) at this
time.
Comment: Two commenters suggested allowing beneficiaries to furnish
an email address instead of, or in addition to, a telephone number on
the request for hearing because beneficiaries may not have immediate or
consistent access to a telephone.
Response: If the filing party is an unrepresented beneficiary, we
proposed to require the beneficiary's telephone number to help ensure
that OMHA is able to make timely contact with the beneficiary to
clarify his or her filing, or other matters related to the adjudication
of his or her appeal, including scheduling the hearing. We believe that
the majority of beneficiaries will be able to provide a telephone
number where they can be contacted by OMHA, or receive voicemail
messages regarding their appeal. However, if a beneficiary indicates
that he or she does not have a telephone number (for example, by
writing ``none'' or ``n/a'' as his or her telephone number on the
request for hearing or request for review of a QIC or IRE dismissal),
the request will not be dismissed as incomplete because the beneficiary
provided information related to the telephone number, even though an
actual telephone number was not provided. To ensure that a
beneficiary's personally identifiable information is protected, any
electronic communication between OMHA and a beneficiary would need to
be conducted via secure email or a secure portal; however, these
technologies are not currently available for use by OMHA staff.
Consequently, we believe it is reasonable to require a telephone number
as the general rule, and address situations in which a beneficiary does
not have a telephone number on an individual basis.
Comment: Three commenters opposed requiring appellants to provide
the amount in controversy on the request for hearing, arguing that it
would increase the burden on appellants and it would be difficult for
appellants without access to billing information, such as Medicaid
State agencies, to calculate the amount in controversy.
Response: As discussed in section II.B.3.d above, we are not
finalizing our proposal to use the Medicare allowable amount as the
basis for the amount in controversy for appeals of claims that are
priced based on a published Medicare fee schedule or published
contractor-priced amount. Because we will generally be retaining the
existing methodology for calculating the amount in controversy under
Sec. 405.1006(d), subject to certain revisions and the exceptions in
Sec. 405.1006(d)(2) through (6) as finalized, we believe the
information necessary to calculate the amount in controversy will be
available in the record and ALJs can continue, as they do now,
determining whether the amount in controversy was met on the basis of
that information. Accordingly, we are not finalizing proposed Sec.
405.1014(a)(1)(viii) to require that providers, suppliers, Medicaid
State agencies, applicable plans, and beneficiaries represented by a
provider, supplier, or Medicaid State agency include in their request
for hearing the amount in controversy applicable to the disputed claim.
Comment: Two commenters suggested that OMHA should be prohibited
from dismissing a timely filed request for hearing due to missing
information, such as when an appellant provides incorrect dates of
service. The commenters also suggested that the request for hearing
form should be simplified to avoid deterring appeals by unrepresented
beneficiaries. One commenter added that increasing the burden on
appellants by requiring additional information in the request for
hearing makes it harder for appellants to exercise their rights.
Response: We disagree with the commenters' suggestion that requests
for hearing should not be dismissed if an appellant does not provide
the required information. A complete request, consistent with
Sec. Sec. 405.1014 and 423.2014, provides OMHA with the minimum
information necessary to process the request, identify the claims on
appeal, and schedule a hearing if necessary, as efficiently as
possible. In addition, if any of the required information is not
included in a request, the appellant will be given the opportunity to
provide the information, as discussed below in section II.B.3.g.iii of
this final rule, before the request may be dismissed (see Sec. Sec.
405.1014(b)(1) and 423.2014(c)(1) as finalized). As further discussed
below in section II.B.3.x of this final rule, the proposal clarifying
the ability to dismiss a request due to missing information will
prevent an appeal from remaining pending indefinitely if an appellant
has demonstrated an unwillingness to provide the information necessary
to complete the request. In addition, we believe the information
required in the regulations for a complete request for hearing or
request for review of a QIC or IRE dismissal will not deter appeals by
unrepresented beneficiaries or other appellants. We do not believe
Sec. Sec. 405.1014(a) and (b) and 423.2014(a) and (b), as finalized,
would create additional burdens as compared to the current rule, except
for requiring a telephone number for the beneficiary, appellant, and
that party's representative (as discussed above, other proposed
information requirements for filing a request are not being made
final). Instead, the final regulations clarify the information
requirements for requesting a hearing or
[[Page 5033]]
review of a QIC or IRE dismissal and the process for resolving missing
information, thereby reducing confusion for appellants and, ultimately,
reducing the number of requests that are dismissed as incomplete.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. Sec. 405.1014 and 423.2014 as proposed, with the
following exceptions. We are not finalizing proposed Sec. Sec.
405.1014(a)(1)(vii), (viii), and 423.2014(a)(1)(vii).
ii. Requests for Hearing Involving Statistical Sampling and
Extrapolations
We proposed to add new Sec. 405.1014(a)(3) to address appeals in
which an appellant raises issues regarding a statistical sampling
methodology and/or an extrapolation that was used in making an
overpayment determination. We stated in the proposed rule that OMHA has
encountered significant issues when an appellant challenges aspects of
a statistical sampling methodology and/or the results of extrapolations
in separate appeals for each sampled claim involved in the statistical
sampling and/or extrapolation. We stated that appeals often need to be
reassigned to avoid multiple adjudicators addressing the challenges to
the statistical sampling methodology and/or extrapolation, and any
applicable adjudication time frames that attach to the individual
appeals. Under proposed Sec. 405.1014(a)(3), if an appellant is
challenging the statistical sampling methodology and/or extrapolation,
the appellant's request for hearing must include the information in
proposed Sec. 405.1014(a)(1) and (a)(2) for each sample claim that the
appellant wishes to appeal, be filed within 60 calendar days of the
date that the party received the last reconsideration for the sample
claims (if they were not all addressed in a single reconsideration),
and assert the reasons the appellant disagrees with the statistical
sampling methodology and/or extrapolation in the request for hearing.
We stated in the proposed rule that we believed it would be appropriate
in this situation to allow the appellant's request for hearing to be
filed within 60 calendar days of the date that the party received the
last reconsideration for the sample claims (if they were not all
addressed in a single reconsideration), because if the appellant also
wishes to challenge the statistical sampling methodology and/or
extrapolation, the appellant would wait to file a request for hearing
until all of the QIC reconsiderations for the sample units are
received, which could be more than 60 calendar days after the first
received QIC reconsideration of one of the sample claims. We also
stated that the 60 calendar day period in proposed Sec.
405.1014(a)(3)(ii) would begin on the date the party receives the last
reconsideration of a sample claim, regardless of the outcome of the
claim in the reconsideration or whether the sample claim is appealed in
the request for hearing. We stated we believed proposed Sec.
405.1014(a)(3) would balance the party's rights to request a hearing on
individual claims when only the sample claims are appealed, with the
needs to holistically address issues related to statistical sampling
methodologies and extrapolations when those determinations are also
challenged. We did not propose any corresponding changes to Sec.
423.2014 because sampling and extrapolation are not currently used in
Part D appeals.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: Several commenters supported the proposal to allow
appellants to file a single request for hearing that includes all of
the sample claims the appellant wishes to appeal when the sample claims
were adjudicated in separate reconsiderations and the appellant is also
challenging the sampling methodology and/or extrapolation, so that all
of the sample claims and related issues are before the same
adjudicator. Two of the commenters specifically noted that revising the
time frames to allow an appellant to wait to file a request for hearing
until the appellant receives the last reconsideration for the sample
claims without losing the right to appeal earlier-decided claims will
conserve time and resources for both appellants and OMHA.
Response: We thank the commenters for their support.
Comment: One commenter stated that the requirement to include
information for each sample claim in the request for hearing is too
vague and does not provide adequate guidance as to what must be
provided, potentially resulting in more requests for hearings being
dismissed as incomplete. The commenter further stated that it would be
difficult to summarize the expert analyses required for statistical
sampling challenges in a manner suitable for a request for hearing.
Response: With respect to the individual claim information that
must be included in a request for hearing, we do not believe that the
standard is vague and will result in an increased number of dismissals
due to incomplete requests. Under Sec. 405.1014(a)(3)(i) as finalized
in this rule, if an appellant is challenging the statistical sampling
methodology and/or extrapolation, the request for hearing must include
all of the information in Sec. 405.1014(a)(1) and (a)(2) for each
sample claim that the appellant wishes to appeal. This individual claim
information is necessary for OMHA to identify the claims on appeal and
process the request for hearing. We note that some of the required
information may be the same for all of the sample claims, such as the
provider or supplier information, or the Medicare appeal number if the
claims were all part of the same reconsideration. Because all of the
sample claims must be appealed together under Sec. 405.1014(a)(3) as
finalized, any redundant information would only need to be provided
once for the request for hearing to be considered complete, and would
not need to be listed separately for each claim so long as it is
apparent from the request that the information provided applies to all
of the appealed claims.
Section 405.1014(a)(3)(iii), as finalized, requires an appellant to
include in the request for hearing the reasons the appellant disagrees
with the statistical sampling methodology and/or extrapolation. If an
appellant is unable to summarize the reasons he or she disagrees with
the statistical sampling methodology and/or extrapolation in a format
suitable for a request for hearing, the appellant may choose to attach
a position paper or other documentation to the request for hearing to
better explain the reasons for the challenge. We also note that the
requirement to include the reasons the appellant disagrees with how the
statistical sample and/or extrapolation was conducted does not limit
the appellant's ability to provide additional information or arguments
during the course of the appeal. The requirement, which is similar to
the existing requirement in Sec. 405.1014 to state the reasons the
appellant disagrees with the QIC's reconsideration or other
determination being appealed, provides the adjudicator with information
on the appellant's basis for the appeal and is necessary to evaluate
the record and prepare for the hearing. Moreover, a request for hearing
may not be dismissed as incomplete based on the strength of the
appellant's reasons for disagreeing with the statistical sampling
methodology and/or extrapolation; a dismissal for an incomplete request
would only result if no reason were provided, and only after an
opportunity to cure the request had been provided,
[[Page 5034]]
as provided at Sec. 405.1014(b)(1) as finalized.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
Sec. 405.1014(a)(3) as proposed without modification.
iii. Opportunity To Cure Defective Filings
There has been considerable confusion on the implications of not
providing the information required by current Sec. 405.1014(a) in
order to perfect a request for hearing, and significant time and
resources have been spent on this procedural matter by parties, OMHA,
and the Council. To provide clearer standards and reduce confusion, we
proposed in Sec. 405.1014(b)(1) that a request for hearing or request
for a review of a QIC dismissal must contain the information specified
in proposed Sec. 405.1014(a)(1) to the extent the information is
applicable, in order to be considered a complete request, and that any
applicable adjudication time frame will not begin until the request is
complete because the missing information is necessary to the
adjudication of the appeal. We proposed in Sec. 405.1014(b)(1) to also
provide an appellant with an opportunity to complete any request found
to be is incomplete. However, we proposed that if the appellant fails
to provide the information necessary to complete the request in the
time frame provided, the incomplete request would be dismissed in
accordance with proposed Sec. 405.1052(a)(7) or (b)(4). In order to
reinforce the concept that an appellant's request and supporting
materials is considered in its totality, we also proposed at Sec.
405.1014(b)(2) to allow for consideration of supporting materials
submitted with a request when determining whether the request is
complete, provided the necessary information is clearly identifiable in
the materials. For example, we stated in the proposed rule that if an
appellant were to submit a request for hearing and included a copy of
the QIC reconsideration, the Medicare appeal number on the QIC
reconsideration would generally satisfy the subsection (a)(1)(iv)
requirement because it clearly provides the required information.
However, if there are multiple claims in the QIC reconsideration, the
same document possibly would not satisfy subsection (a)(1)(v) because
the appellant is not required to appeal all partially favorable or
unfavorable claims, and subsection (a)(1)(v) requires the appellant to
indicate the dates of service for the claims that are being appealed.
Similarly, we stated that including medical records only for the dates
of service that the appellant wishes to appeal would generally not
satisfy subsection (a)(1)(v) because it would be unclear whether the
appellant intended to limit the appeal to only those dates of service
for which medical records were included, or those were the only dates
of service for which the appellant had medical records. We proposed
that the provisions of proposed Sec. 405.1014(b) also be adopted in
proposed Sec. 423.2014(c) for requesting an ALJ hearing or a review of
an IRE dismissal in Part D appeals.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
supported the proposal to deem a request complete if supporting
materials submitted with the request clearly provide the required
information. The commenter encouraged HHS to afford unrepresented
beneficiaries as much flexibility and leniency as possible when
applying the requirement to submit a complete request for hearing. To
that end, the commenter suggested that OMHA should clearly identify any
missing information and offer guidance as to where to locate the
missing information.
Response: As discussed above and in section III.A.3.g.iii of the
proposed rule, there has been considerable confusion and considerable
time spent on procedural matters concerning the requirements for a
request for hearing to be considered complete. We believe that allowing
for consideration of supporting materials submitted with a request when
determining whether the request is complete, and providing appellants
with an opportunity to complete the request if the request is not
complete, would provide clearer standards and reduce confusion for all
appellants, including unrepresented beneficiaries, with respect to the
standards used to determine whether a request is complete. Providing
appellants with an opportunity to complete a request for hearing when
required information is missing would necessarily involve clearly
identifying the missing information for the appellant. Currently, when
a request for hearing is missing required information, OMHA sends the
appellant a ``Request for Hearing Deficiency Notice'' that specifies
the information that must be provided to complete the request and the
time frame in which to respond (generally 60 calendar days). This
practice helps ensure that appellants will have an opportunity to
provide any missing information before a request is dismissed as
incomplete, and this practice would continue under the final rule.
Allowing for consideration of supporting materials when determining
whether a request is complete would also provide ALJs and attorney
adjudicators with additional flexibility to deem the request complete,
even if all of the information necessary for a complete request is not
contained on the same document. We believe the rules as finalized
provide all appellants, including unrepresented beneficiaries, with an
appropriate level of flexibility in providing that the all documents
submitted with a request for hearing will be considered in determining
whether a request is complete, and an appropriate level of leniency in
providing for an opportunity to supplement the request with any missing
information if OMHA identifies missing information that is required for
a complete request.
After review and consideration of the comment received, for the
reasons discussed above and in the proposed rule, we are finalizing
Sec. Sec. 405.1014(b) and 423.2014(c) as proposed without
modification.
iv. Where and When To File a Request for Hearing or Review of a QIC or
an IRE Dismissal
We proposed to incorporate portions of current Sec. 405.1014(b) in
proposed Sec. 405.1014(c) and portions of current Sec. 423.2014(c) in
proposed Sec. 423.2014(d) to address when and where to file a request
for hearing or review. We proposed in Sec. Sec. 405.1014(c)
introductory language and (c)(1), and 423.2014(d) introductory language
and (d)(1), to incorporate a request for a review of a QIC dismissal
and a request for a review of an IRE dismissal, respectively, and
provide that the current 60 calendar day period to file a request for
hearing after a party receives a QIC or an IRE reconsideration also
applies after a party receives a QIC or IRE dismissal, which is the
time frame stated in Sec. Sec. 405.1004 and 423.2004 to request a
review of a QIC or IRE dismissal, respectively. We also proposed in
Sec. 405.1014(c)(1) to add an exception for requests filed in
accordance with proposed Sec. 405.1014(a)(3)(ii), because as discussed
above, we proposed to require that requests for hearing on sample
claims that are part of a statistical sample and/or extrapolation that
the appellant also wishes to challenge would be filed together, which
may be more than 60 calendar days after the appellant receives the
first QIC reconsideration of one of the sample claims. In addition, we
proposed to
[[Page 5035]]
revise the statement that a request must be ``submitted'' in current
Sec. 423.2014(c)(1), with a request must be ``filed'' in Sec.
423.2014(d)(1), for consistency with Sec. Sec. 405.1014 and 422.602,
both of which use the term ``filed.'' We also proposed in Sec. Sec.
405.1014(c)(2) and 423.2014(d)(2) to replace references to sending
requests to the ``entity'' specified in the QIC's or IRE's
reconsideration in current Sec. Sec. 405.1014(b)(2) and
423.2014(c)(2), with sending requests to the ``office'' specified in
the QIC's or IRE's reconsideration or dismissal, respectively, so they
are properly routed. As discussed in sections III.A.3.b and III.A.3.c
of the proposed rule (and discussed in sections II.B.3.b and II.B.3.c
above), regarding proposed Sec. Sec. 405.1002 and 405.1004, and
423.2002 and 423.2004, replacing ``entity'' with ``office'' in
Sec. Sec. 405.1014, 423.1972, and 423.2014 would help ensure
appellants are aware that a request for hearing or request for a review
of a QIC or IRE dismissal must be filed with the office indicated in
the QIC's or IRE's reconsideration or dismissal and avoid delays.
However, we again noted that for the few requests for hearing that are
misrouted by a party, a notice would be sent to the appellant when the
request for hearing is received in the correct office and the date the
timely request was received by the incorrect office would be used to
determine the timeliness of the request, in accordance with proposed
Sec. Sec. 405.1014(c)(2) and 423.2014(d)(2)(i), which would
incorporate the misrouted request provisions from current Sec. Sec.
405.1014(b)(2) and 423.2014(c)(2)(i). We also proposed in Sec. Sec.
405.1014(c)(2) and 423.2014(d)(2)(i) that the adjudication time frame
is only affected if there is an applicable adjudication time frame for
the appeal.
Current Sec. 423.1972(b) states that an enrollee must file a
request for a hearing within 60 calendar days of the date of the notice
of the IRE reconsideration determination. This requirement differs from
Sec. 423.2002(a)(1), which states that a request for hearing must be
filed within 60 calendar days after receipt of the IRE's
reconsideration (this is also the standard for filing Part A and Part B
requests for hearing after receipt of QIC reconsiderations, at Sec.
405.1002(a)(1)). Thus, we proposed to revise Sec. 423.1972(b)(1) to
state that a request for hearing must be filed within 60 calendar days
after receipt of the IRE's reconsideration. We also proposed to add new
Sec. 423.1972(b)(2), to incorporate current Sec. 423.2002(d), which
provides 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 (this is also a presumption for
receipt of QIC reconsiderations in Part A and Part B appeals, at Sec.
405.1002). These changes would align proposed Sec. 423.1972(b) with
current Sec. 423.2002, and remove potential enrollee confusion on when
a request for an ALJ hearing must be filed.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
asked whether the same requirements would apply when a request for
hearing is misrouted because the CMS contractor provided the appellant
with an incorrect address, for example, if the contractor moved or
changed jurisdictions after the address was provided.
Response: We assume the requirements to which the commenter is
referring are the provisions of current Sec. Sec. 405.1014(b)(2) and
423.2014(c)(2)(ii), which we proposed to incorporate into proposed
Sec. Sec. 405.1014(c)(2) and 423.2014(d)(2)(ii) as a requirement for
OMHA to notify the appellant of the date a misrouted request for
hearing is received in the correct office and the commencement of any
applicable adjudication time frame. We also stated in the proposed rule
that the date a timely request was received by an incorrect office
would be used to determine the timeliness of the request (as set forth
in proposed Sec. Sec. 405.1014(c)(2) and 423.2014(d)(2)(i)). For most
appeals, the notice of reconsideration or dismissal of a request for
reconsideration instructs appellants to file their requests for hearing
or review of a dismissal with the OMHA central docketing office, and we
do not anticipate that changes in CMS contractors or changes to a CMS
contractor's address will affect the accuracy of the filing address
that is provided in the QIC's or IRE's reconsideration or dismissal.
However, for a small segment of cases, such as Part C appeals, the
notice of reconsideration instructs appellants to file their requests
for hearing or review of a dismissal with the entity that conducted the
reconsideration, which then forwards the request, along with the case
file, to the OMHA central docketing office. In the event that the
entity that conducted the reconsideration changes the address to file a
request for hearing or review, due to operational changes or a change
in the contractor, there would be a transition plan to address
providing a new address in filing instructions and a process for
forwarding requests sent to the previous address. Regardless, if a
timely request for hearing or review of a dismissal is mistakenly sent
to another CMS contractor, to an incorrect or outdated address, or to
an OMHA field office, the request is not treated as untimely or
otherwise rejected. In accordance with Sec. Sec. 405.1014(c)(2) and
423.2014(d)(2)(i) as finalized in this rule, the date the request was
received by the incorrect office would be used to determine the
timeliness of the request, and OMHA would notify the appellant of the
date the request was received in the correct office and the
commencement of any applicable adjudication time frame in accordance
with Sec. Sec. 405.1014(c)(2) and 423.2014(d)(2)(ii) as finalized.
After review and consideration of the comment received, for the
reasons discussed above and in the proposed rule, we are finalizing
Sec. 423.1972(b) as proposed without modification. In addition, we are
finalizing Sec. Sec. 405.1014(c) and 423.2014(d) with the following
modifications. As discussed in section II.B.3.b above, we are adding
language to Sec. Sec. 405.1014(c)(2) and 423.2014(d)(2)(i) to clarify
that a request for an ALJ hearing that is timely filed with an office
other than the office specified in the QIC's or IRE's reconsideration
is not treated as untimely. We are also removing the term ``entity
office,'' which was a drafting error, from proposed Sec.
405.1014(c)(2) and adding ``office'' in its place.
v. Sending Copies of a Request for Hearing and Other Evidence to Other
Parties to the Appeal
We proposed to incorporate the portion of current Sec.
405.1014(b)(2) that states that the appellant must also send a copy of
the request for hearing to the other parties and failure to do so will
toll the ALJ's 90 calendar day adjudication deadline until all parties
to the QIC reconsideration receive notice of the requested ALJ hearing
in proposed Sec. 405.1014(d) with changes discussed below. Current
Sec. 405.1014(b)(2) has been another source of considerable confusion,
and significant time and resources have been spent on this procedural
matter by parties, OMHA, and the Council. Current Sec. 405.1014(b)(2)
requires an appellant to send a copy of the request for hearing to the
other parties. Other parties consist of all of the parties specified in
Sec. 405.906(b) as parties to the reconsideration, including
beneficiaries in overpayment cases that involve multiple beneficiaries
who have
[[Page 5036]]
no liability, in which case the QIC may elect to only send a notice of
reconsideration to the appellant, in accordance with Sec.
405.976(a)(2). We proposed in Sec. 405.1014(d)(1) to amend the current
copy requirement by only requiring an appellant to send a copy of a
request for an ALJ hearing or review of a QIC dismissal to the other
parties who were sent a copy of the QIC's reconsideration or dismissal.
We stated in the proposed rule that this change would make the standard
consistent with requests for Council review, a copy of which must be
sent by the appellant to the other parties who received a copy of an
ALJ's decision or dismissal, in accordance with current Sec.
405.1106(a). We also stated that this change would also extend the
requirement to requests for review of a QIC dismissal to provide the
other parties who received notice of the QIC's dismissal action with
notice of the appellant's appeal of that action.
We also proposed in Sec. 405.1014(d)(1) to address whether copies
of materials that an appellant submits with a request for hearing or
request for review of a QIC dismissal must be sent to other parties.
Currently some ALJs consider the materials to be part of the request
and require an appellant to send copies of all materials submitted with
a request, while other ALJs do not consider the materials to be part of
the request. We proposed in Sec. 405.1014(d)(1) that if additional
materials submitted with a request are necessary to provide the
information required for a complete request in accordance with proposed
Sec. 405.1014(b), copies of the materials must be sent to the parties
as well (subject to authorities that apply to disclosing the personal
information of other parties). We also proposed that if additional
evidence is submitted with the request for hearing, the appellant may
send a copy of the evidence or briefly describe the evidence pertinent
to the party and offer to provide copies of the evidence to the party
at the party's request (subject to authorities that apply to disclosing
the evidence). For example, if a complete request includes a position
paper or brief that explains the reasons the appellant disagrees with
the QIC's reconsideration, in accordance with proposed Sec.
405.1014(a)(1)(v), a copy of the position paper or brief would be sent
to the other parties, subject to any authorities that apply to
disclosing the personal information of other parties. However, we
stated that additional evidence such as medical records, is generally
not required for a complete request, and therefore copies would not
have to be sent, but could instead be summarized and provided to the
other parties at their request, again subject to any authorities that
apply to disclosing the personal information of other parties. We
stated that this approach would balance the objectives of ensuring that
parties to a claim and an appeal of that claim remain informed of the
proceedings that are occurring on the claim, with the burdens on
appellants to keep their co-parties so informed. We also noted that in
sending a copy of the request for hearing and associated materials,
appellants are free to include cover letters to explain the request,
but we noted that such letters on their own do not satisfy the copy
requirement in its current or proposed form. No corresponding changes
were proposed in Sec. 423.2014 because the enrollee is the only party
to the appeal.
Current Sec. 405.1014 does not contain standards for what
constitutes evidence that a copy of the request for hearing or review,
or copy of the evidence or a summary thereof, was sent to the other
parties, which has led to confusion and inconsistent practices.
Therefore, we proposed in Sec. 405.1014(d)(2) to address this issue by
establishing standards that an appellant would follow to satisfy the
requirement. We proposed in Sec. 405.1014(d)(2) that evidence that a
copy of the request for hearing or review, or a copy of submitted
evidence or a summary thereof, was sent includes: (1) Certifications
that a copy of the request for hearing or request for review of a QIC
dismissal is being sent to the other parties on the standard form for
requesting a hearing or review of a QIC dismissal; (2) an indication,
such as a copy or ``cc'' line on a request for hearing or review, that
a copy of the request and any applicable attachments or enclosures are
being sent to the other parties, including the name and address of the
recipients; (3) an affidavit or certificate of service that identifies
the name and address of the recipient and what was sent to the
recipient; or (4) a mailing or shipping receipt that identifies the
name and address of the recipient and what was sent to the recipient.
We stated in the proposed rule that we believed these options would
provide an appellant with flexibility to document the copy requirement
was satisfied and bring consistency to the process.
Beyond stating that an adjudication time frame is tolled if a party
does not satisfy the copy requirement, current Sec. 405.1014 does not
address the consequence of not satisfying the requirement, and
adjudicators are faced with an appeal being indefinitely tolled because
an appellant refuses to comply with the requirement. OMHA ALJs have
addressed this issue by providing appellants with an opportunity to
send the required copy of the request for hearing, and by informing the
appellant that if the copy is not sent, its request will be dismissed.
This allows OMHA ALJs to remove requests that do not satisfy the
requirement from their active dockets so time and resources can be
focused on appeals of those who comply with the rules. We proposed in
Sec. 405.1014(d)(3) that, if the appellant fails to send a copy of the
request for hearing or request for review of a QIC dismissal, any
additional materials, or a copy of the submitted evidence or a summary
thereof, the appellant would be provided with an opportunity to cure
the defects by sending the request, materials, and/or evidence or
summary thereof described in proposed subsection (d)(1). Further, we
proposed in Sec. 405.1014(d)(3) that if an adjudication time frame
applies, it does not begin until evidence that the request, materials,
and/or evidence or summary thereof were sent is received. We also
proposed in Sec. 405.1014(d)(3) that if an appellant does not provide
evidence within the time frame provided to demonstrate that the
request, materials, and/or evidence or summary thereof were sent to
other parties, the appellant's request for hearing or review would be
dismissed.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received three comments on the proposal clarifying an
appellant's obligation to furnish supporting documentation filed with a
request for hearing or review of a QIC dismissal to the other parties,
which the commenters opposed on the grounds that it would increase the
amount of paperwork involved in filing an appeal. The commenters stated
it would be costly and burdensome for appellants to produce and send
the extra copies; would cause delays and increased time spent on
appeals; and would be confusing for beneficiaries who are otherwise
uninvolved in the appeal to receive additional paperwork.
Response: We do not agree that this proposal increases the amount
of paperwork that an appellant is required to send to the other
parties. Proposed Sec. 405.1014(d)(1) incorporates the requirement to
send a copy of the request for hearing to the other parties from
current Sec. 405.1014(b)(2). As noted above, there has been
considerable confusion under the current rule as to whether materials
submitted with a request for hearing are considered part of that
request and, therefore, whether
[[Page 5037]]
copies of that material must be sent to the other parties. Currently
some ALJs consider any materials sent with the request for hearing to
be part of the request and require an appellant to send copies of all
the materials submitted with a request to the other parties. The
proposed clarification will standardize how this requirement is applied
and bring uniformity to the filing process by limiting the materials
that must be sent to the other parties to those materials that provide
the information that is required for a complete request in accordance
with proposed Sec. 405.1014(b). Any evidence that is not required for
a complete request can be simply summarized and provided to the other
parties at their request, subject to any authorities that apply to
disclosing the personal information of other parties. For example, if
new evidence is submitted in the form of medical records, a brief
description explaining that medical records were submitted and how to
contact the appellant for a copy of those medical records can be
provided to the other parties, rather than sending copies of the
medical records with the copy of the request for hearing. In contrast,
if a copy of the QIC reconsideration is included for the purpose of
providing the Medicare appeal number or claim-specific information that
is required for a complete request for hearing (that is, the
information is not contained on a request for hearing form or letter
sent from the appellant requesting the appeal), then a copy of the QIC
reconsideration would have to be sent to the other parties because the
appellant is relying on it to provide information required for a
complete request for hearing.
We further note that Sec. 405.1014(d)(1) as finalized actually
reduces the number of recipients to whom an appellant is required to
send a copy of the request and other materials. Instead of all of the
parties to the reconsideration, which potentially includes
beneficiaries who are not liable in overpayment cases that involve
multiple beneficiaries, and therefore did not receive the notice of
reconsideration in accordance with Sec. 405.976(a)(2), Sec.
405.1014(d)(1) as finalized only requires an appellant to send a copy
to those parties who received a copy of the QIC's reconsideration or
dismissal. This change will reduce the time and expense for an
appellant to produce and send the required copies, and will reduce the
amount of paperwork sent to beneficiaries who are otherwise uninvolved
in the appeal.
Comment: One commenter recommended, as an alternative approach,
only requiring providers to notify the beneficiary of the outcome of an
appeal, and only in cases where the claims remain denied.
Response: We do not believe that notifying beneficiaries solely of
the outcome of the appeal when a claim remains denied would be
sufficient in cases where the beneficiary received notice of the QIC's
reconsideration or dismissal. Providing a complete copy of the request
for hearing or review of a dismissal to the other parties is necessary
to ensure that beneficiaries remain informed of the proceedings related
to items or services furnished to them and can provide information or
make inquiries about the appeal if they wish to do so. However, we also
emphasize that, under the final rule, appellants are not required to
send a copy of the request for hearing or review of a dismissal to any
party that did not receive notice of the QIC's reconsideration or
dismissal. This aligns the standard with current Sec. 405.1106(a),
which requires appellants to send a copy of a request for Council
review to the other parties who received a copy of an ALJ's decision or
dismissal.
Comment: Another commenter asserted that requiring an appellant to
send copies of additional materials sent with a request for hearing or
review of dismissal to the beneficiaries would discourage filing
requests for claims involving multiple beneficiaries together due to
confidentiality issues, and would result in more individual appeals and
increased delays.
Response: We do not agree that requiring appellants to send the
other parties a copy of the complete request, including any additional
materials that are necessary to complete the request, will discourage
appellants from filing requests for claims involving multiple
beneficiaries together. While appellants must comply with any
authorities that apply to disclosing the personal information of other
parties, if an appeal involves multiple beneficiaries, we believe the
minor inconvenience of redacting a party's personal information from a
brief or position paper when sending a copy to the other parties will
be outweighed by the added efficiency of appealing multiple claims
together in one request. We also note that in overpayment appeals that
involve multiple beneficiaries who have no liability, the QIC generally
does not send a copy of the reconsideration to the beneficiaries in
accordance with Sec. 405.976(a)(2), and under Sec. 405.1014(d)(1) as
finalized, a copy of the request for hearing or review of a dismissal
is only sent to the parties who received a copy of the reconsideration.
In addition, we note that the current requirement to send a copy of the
request for hearing to all parties to the QIC reconsideration,
regardless of whether the parties were sent a copy of that
reconsideration, which has been in place since part 405, subpart I was
promulgated in 2005, has not appeared to discourage appellants from
filing appeals of QIC reconsiderations individually or together. Thus,
for the reasons discussed above, we do not believe that Sec.
405.1014(d) as finalized in this rule will discourage filing requests
for hearing for multiple beneficiaries together, or result in more
individual appeals or increased delays.
Comment: One commenter expressed concern that unrepresented
beneficiaries may have difficulty identifying where to send the
required copies, determining which materials need to be copied, or
summarizing other evidence. The commenter suggested that unrepresented
beneficiaries should be afforded leniency or assisted with meeting the
copy requirement, and suggested that QIC reconsiderations and
dismissals should include the full names and mailing addresses of the
parties so that appellants can easily find the information.
Response: We thank the commenter for its suggestions. We agree that
unrepresented beneficiaries may have difficulty determining where to
send copies of a request, or what materials to provide to the other
parties. Historically, if it is not apparent that an unrepresented
beneficiary sent a copy of his or her request to the other parties, it
has been the informal practice of both OMHA and the Council to send
notice of the request to the other parties on the beneficiary's behalf.
In response to the commenter's concerns, we agree that requests filed
by unrepresented beneficiaries should not be subject to dismissal for
failing to meet this requirement. Accordingly, we are amending Sec.
405.1014(d)(3) to state that unrepresented beneficiaries are exempt
from the consequences of failing to send a copy of the request,
materials, and/or evidence or summary thereof to the other parties. We
are also amending Sec. 405.1052(a)(7) and (b)(4) to reflect this
exemption, as discussed in section II.B.3.x below.
With respect to including the full names and mailing addresses of
the parties in a QIC reconsideration or dismissal, we thank the
commenter for its suggestion and will share this recommendation with
the QICs. However, at this time we do not believe that it would be
appropriate to add the parties' contact information as a content
requirement for QIC reconsiderations
[[Page 5038]]
and dismissals in this final rule. Instead, OMHA will continue its
current practice of assisting unrepresented beneficiaries with meeting
the copy requirement by mailing copies of the request, materials, and/
or evidence or summary thereof to the other parties if it is not
apparent that copies were sent by the beneficiary.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing our
proposals to revise Sec. 405.1014(d) with modification. We are
amending Sec. 405.1014(d)(3) to state that unrepresented beneficiaries
are exempt from the consequences of failing to send a copy of the
request for hearing, any additional materials, and/or a copy of
submitted evidence or summary thereof, as described in Sec.
405.1014(d)(1), to the other parties.
vi. Extending Time To File a Request for Hearing or Review of a QIC or
an IRE Dismissal
We proposed that the provisions of current Sec. Sec. 405.1014(c)
and 423.2014(d) for extensions of time to file a request for hearing
would be incorporated in proposed Sec. Sec. 405.1014(e) and
423.2014(e) with changes, and would extend to requests for reviews of
QIC and IRE dismissals. On occasion, OMHA is asked whether a request
for an extension should be filed without a request for hearing, for a
determination on the request for extension before the request for
hearing is filed. We stated that in those instances, we ask the filer
to file both the request for hearing and request for extension at the
same time because an independent adjudication of the extension request
would be inefficient and any adjudication time frame begins on the date
that the ALJ grants the extension request, in accordance with current
Sec. Sec. 405.1014(c)(4) and 423.2014(d)(5). We proposed in Sec. Sec.
405.1014(e)(2) and 423.2014(e)(3) to require a request for an extension
be filed with the request for hearing or request for review of a QIC or
IRE dismissal, with the office specified in the notice of
reconsideration or dismissal. We stated that the revisions we proposed
in Sec. Sec. 405.1014(e)(2) and 423.2014(e)(3) would also align the
provisions with proposed Sec. Sec. 405.1014(c) and 423.2014(d) by
specifying that a request for an extension must be filed with the
``office,'' rather than the ``entity,'' specified in the notice of
reconsideration. We proposed in Sec. Sec. 405.1014(e)(3) and
423.2014(e)(4) that an ALJ or attorney adjudicator may find good cause
to extend the deadline to file a request for an ALJ hearing or a
request for a review of a QIC or IRE dismissal, or there is no good
cause for missing the deadline to file a request for a review of a QIC
or IRE dismissal, but only an ALJ may find there is no good cause for
missing the deadline to file a request for an ALJ hearing. As we stated
in the proposed rule, because only an ALJ may dismiss a request for an
ALJ hearing for an untimely filing in accordance with proposed
Sec. Sec. 405.1052 and 423.2052, an attorney adjudicator could not
make a determination on a request for an extension that would result in
a dismissal of a request for hearing. We also proposed to incorporate
current Sec. Sec. 405.1014(c)(4) and 423.2014(d)(5) into proposed
Sec. Sec. 405.1014(e)(4) and 423.2014(e)(5), but indicate that the
adjudication time frame begins on the date the ALJ or attorney
adjudicator grants the request to extend the filing deadline only if
there is an applicable adjudication period. Finally, we proposed in
Sec. Sec. 405.1014(e)(5) and 423.2014(e)(6) to add a new provision to
provide finality for the appellant with regard to a determination to
grant an extension of the filing deadline. We proposed that if an ALJ
or attorney adjudicator were to make a determination to grant the
extension, the determination is not subject to further review. However,
we did not propose to preclude review of a determination to deny an
extension because such a denial would result in a dismissal for an
untimely filing, and the dismissal and determination on the request for
an extension would be subject to review by the Council.
We received no comments on these proposals, other than comments
discussed in section II.A.2 above related to our general proposals to
provide authority for attorney adjudicators to issue certain decisions,
dismissals and remands, and to revise the rules so that decisions and
dismissals issued by attorney adjudicators may be reopened and/or
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs. Accordingly, for the reasons discussed above and in the
proposed rule, we are finalizing our proposals, as discussed above,
without modification to revise Sec. Sec. 405.1014(e) and 423.2014(e).
h. Time Frames for Deciding an Appeal of a QIC or an IRE
Reconsideration or an Escalated Request for a QIC Reconsideration, and
Request for Council Review When an ALJ Does Not Issue a Decision Timely
(Sec. Sec. 405.1016, 405.1104 and 423.2016)
i. Section 405.1016: Time Frames for Deciding an Appeal of a QIC
Reconsideration or an Escalated Request for a QIC Reconsideration
As discussed below, we proposed changes to Sec. 405.1016, which
addresses the adjudication time frames for requests for hearing filed
after a QIC has issued its reconsideration, in accordance with section
1869(d)(1)(A) of the Act, and escalations of requests for a QIC
reconsideration when the QIC does not issue its reconsideration within
its adjudication time frame, which is permitted by section
1869(c)(3)(C)(ii) of the Act. 81 FR 43790, 43820-43821 We proposed to
revise the title of Sec. 405.1016 from ``Time frames for deciding an
appeal before an ALJ'' to ``Time frames for deciding an appeal of a QIC
reconsideration or escalated request for a QIC reconsideration''
because the section specifically applies to appeals of QIC
reconsiderations and escalated requests for QIC reconsiderations (as
specified in current and proposed Sec. 405.1016(a) and (c)). This
revision would also allow for application of this section to requests
for hearing adjudicated by attorney adjudicators, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2
above). We also proposed to replace each instance of the term ``the
ALJ'' with ``the ALJ or attorney adjudicator'' throughout proposed
Sec. 405.1016 to assist appellants in understanding that an
adjudication time frame, and the option to escalate, also would apply
to a request for an ALJ hearing following a QIC reconsideration when
the request has been assigned to an attorney adjudicator, as proposed
in section II.B of the proposed rule (and discussed in section II.A.2
above). We did not propose to change the reference to ``a request for
an ALJ hearing'' because, as explained in section II.B of the proposed
rule and II.A.2 above, even if an appellant waives its right to
hearing, the case would remain subject to a potential oral hearing
before an ALJ, and we believe the request is therefore properly
characterized as a request for an ALJ hearing.
We proposed to add titles to proposed Sec. 405.1016(a) to indicate
that this paragraph discusses the adjudication period for appeals of
QIC reconsiderations, and proposed Sec. 405.1016(c) to indicate that
this
[[Page 5039]]
paragraph discusses the adjudication period for escalated requests for
QIC reconsiderations. In addition, we proposed at Sec. 405.1016(a) and
(c) to remove ``must,'' in providing that when a request for an ALJ
hearing is filed after a QIC has issued a reconsideration, an ALJ or
attorney adjudicator issues a decision, dismissal order, or remand to
the QIC, 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
office specified in the QIC's notice of reconsideration. While the
statute envisions that appeals will be adjudicated within the statutory
time frame, the statute also provides for instances in which the
adjudication time frame is not met by allowing an appellant to escalate
his or her appeal to the next level of appeal. We believe ``must''
should be reserved for absolute requirements, and in the context of
adjudication time frames, the statute provides the option for an
appellant to escalate an appeal if the adjudication time frame is not
met.
We proposed to add a title to proposed Sec. 405.1016(b) to
indicate that the paragraph discusses when an adjudication period
begins. We also proposed to re-designate current Sec. 405.1016(b),
which explains that the adjudication period for an appeal of a QIC
reconsideration begins on the date that a timely filed request for
hearing is received unless otherwise specified in the subpart, as Sec.
405.1016(b)(1). We proposed in Sec. 405.1016(b)(2) that if the Council
remands a case and the case was subject to an adjudication time frame
under paragraph (a) or (c), the remanded appeal would be subject to the
adjudication time frame of Sec. 405.1016(a) beginning on the date that
OMHA receives the Council remand. Currently the regulations do not
address whether an adjudication time frame applies to appeals that are
remanded from the Council, and whether escalation is an option for
these appeals. To provide appellants with an adjudication time frame
for remanded appeals that were subject to an adjudication time frame
when they were originally appealed to OMHA, we proposed in Sec.
405.1016(b)(2) to apply the adjudication time frame under Sec.
405.1016(a) to a remanded appeal that was subject to an adjudication
time frame under paragraph (a) or (c). For example, if an ALJ decision
reviewed by the Council involved a QIC reconsideration and was remanded
by the Council, a 90 calendar day time frame would apply from the date
that OMHA received the remand order. If the adjudication time frame is
not met under proposed Sec. 405.1016(b)(2), the appeal would be
subject to escalation, in accordance with proposed Sec. 405.1016(e).
In addition, we proposed in Sec. 405.1016(a) and (b) to align the
paragraphs with proposed Sec. 405.1014(c) by specifying that a request
for hearing is received by the ``office,'' rather than the ``entity,''
specified in the QIC's notice of reconsideration.
We proposed to add a title to proposed Sec. 405.1016(d) to
indicate that the paragraph discusses waivers and extensions of the
adjudication period. We proposed in Sec. 405.1016(d)(1) to incorporate
the adjudication period waiver provision in current Sec. 405.1036(d),
which states that, at any time during the hearing process, the
appellant may waive the adjudication deadline specified in Sec.
405.1016 for issuing a hearing decision, and that the waiver may be for
a specific period of time agreed upon by the ALJ and the appellant. We
proposed to move the provision because, as we stated in the proposed
rule, we believe it is more appropriately addressed in Sec. 405.1016,
as it is directly related to the adjudication period. We also proposed
in Sec. 405.1016(d) to revise the language in current Sec.
405.1036(d) to reference an attorney adjudicator consistent with our
proposals in section II.B of the proposed rule and as discussed in
section II.A.2 above; to reference the ``adjudication'' process rather
than the ``hearing process'' to account for appeals that may not
involve a hearing; to consistently reference an adjudication ``period''
for internal consistency; and to replace the reference to Sec.
405.1016 with internal paragraph references.
Current Sec. 405.1016 does not address delays that result from
stays ordered by U.S. Courts. In addition, we have had instances in
which an appellant requests a stay of action on his or her appeals
while related matters are addressed by another court or tribunal, or by
investigators. To address these circumstances, we proposed in Sec.
405.1016(d)(2) that the adjudication periods specified in paragraphs
(a) and (c) are extended as otherwise specified in subpart I, and for
the duration of any stay of action on adjudicating the claims or
matters at issue ordered by a court or tribunal of competent
jurisdiction, or the duration of any stay of proceedings granted by an
ALJ or attorney adjudicator on the motion of the appellant, provided no
other party also filed a request for hearing on the same claim at
issue.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received fifteen comments opposing our proposal to
remove ``must'' from Sec. 405.1016(a) and (c). Commenters opposed the
proposal on the grounds that the 90-day adjudication time frame is a
statutory requirement under section 1869 of the Act, and removing
``must'' undermines the duty owed to appellants by OMHA adjudicators
and would only serve to increase delays in the appeals process. Several
commenters cited a recent decision by the Court of Appeals for the
District of Columbia Circuit that held that the statute mandated a
decision within ninety days. The commenters stated that the ability to
escalate an appeal to the Council is a remedy for when the statutory
deadline is not met, as opposed to an alternative to the timely
adjudication of an appeal, and the existence of that remedy does not
negate the mandatory nature of the statutory time frame. One commenter
opposed the proposal with respect to appeals filed by beneficiaries and
Medicaid State agencies, asserting that escalation is an inadequate
remedy for those appellants because it means forgoing a level of
administrative review where beneficiaries have historically had the
greatest likelihood of success, and facing similar delays at the
Council. Another commenter stated that it was particularly important
not to weaken the statutory right to a timely decision for low-income
beneficiaries. One commenter interpreted the proposal as eliminating
the option to escalate an appeal if the adjudication time limit is
exceeded.
Response: We do not agree that removing ``must'' from Sec.
405.1016(a) and (c) would undermine or weaken the adjudication time
frame set forth in section 1869(d)(1)(A) of the Act. We recognize that
one court of appeals has held that the statutory timeframe is
mandatory, while another court of appeals has not. Compare Cumberland
County Hospital System, Inc., d/b/a Cape Fear Valley Health System v.
Burwell, 816 F.3d 48, 56 (4th Cir. 2016) (holding that the Act does not
provide a clear and indisputable right to adjudication of appeals
before an ALJ within 90 days) with American Hospital Association, et
al. v. Burwell, 812 F.3d 183, 192 (D.C. Cir. 2016) (holding that the
Act imposes a clear duty on the Secretary to comply with the statutory
time frame). We respectfully disagree that the statute mandates that
all ALJ decisions reviewing QIC reconsiderations be issued within 90
days. Section 1869(d)(3)(A) of the Act,
[[Page 5040]]
which provides for the consequences of failing to meet the adjudication
time frame to render a decision in an appeal of QIC reconsideration
decision made under section 1869(c) of the Act, contemplates that the
adjudication time frame for an ALJ to render such a decision will not
always be met, and provides the option for an appellant to request a
review by the Council if the ALJ adjudication time frame is not met.
Consistent with this section, Sec. 405.1016(f), as finalized in this
rule, provides for escalating an appeal of a QIC reconsideration to the
Council when a decision, dismissal, or remand is not issued by an ALJ
or attorney adjudicator within the adjudication time frame. Removing
``must'' does not abrogate the general expectation that a decision,
dismissal, or remand will be issued within an applicable adjudication
time frame, such as the 90 day time frame provided for at section
1869(d)(1)(A) of the Act to render a decision in an appeal of QIC
reconsideration decision made under section 1869(c) of the Act. As we
conveyed in the proposed rule, removing ``must'' only has the effect of
more appropriately setting expectations with regard to whether there is
an absolute and unqualified requirement to issue a decision, dismissal,
or remand within the adjudication time frame. Removing the word
``must'' from Sec. 405.1016(a) and (c) also does not change the amount
of time that an ALJ or attorney adjudicator has to issue a decision,
dismissal, or remand before an appellant may choose to escalate his or
her appeal to the Council. Moreover, removing ``must'' will have no
effect on ALJs (and attorney adjudicators) issuing a decision,
dismissal, or remand as quickly as possible, thus the change will not
result in increased delays in obtaining a decision, dismissal, or
remand. The Department has publicly committed itself to resolving the
appeals backlog as quickly as possible while acting within statutory
constraints. In particular, appeals brought by beneficiaries are
prioritized under current OMHA policy and are generally decided within
the applicable adjudication time frame.
Comment: One commenter pointed out that we did not propose to
remove ``must'' from other sections of the regulations where it
appears, such as current Sec. 405.1014(b)(1), which states that a
request for an ALJ hearing after a QIC reconsideration must be filed
within 60 days from the date the party receives notice of the
reconsideration. Two commenters stated that if filing deadlines and
other regulatory time frames are mandatory for the parties, they should
be mandatory for the government, too.
Response: Although we recognize that there are other uses of
``must'' in the regulations that we did not propose to revise, those
are distinguishable. As we stated in the proposed rule, we believe
``must'' should be reserved for absolute requirements. In those
instances, the result of not meeting the requirement does not trigger
another option. As the commenter identified, current Sec.
405.1014(b)(1) provides that a request for hearing after a QIC
reconsideration must be filed within 60 calendar days from the date the
party receives notice of the reconsideration. However, we also note
that current Sec. 405.1014(c) provides for extensions of that time
frame in certain circumstances. Current Sec. 405.1014(b)(1) implements
section 1869(b)(1)(D)(ii) of the Act, which provides that ``[t]he
Secretary shall establish in regulations time limits for the filing of
a request for a hearing by the Secretary in accordance with provisions
in sections 205 and 206'' of the Act. Section 205(b)(1) of the Act in
turn provides that a request for hearing ``must be filed within [60]
days after notice of [the decision being appealed] is received by the
individual making such request.'' Thus the statute establishes a clear
duty for the appealing party to request a hearing within a specific
time period after receiving a decision that the party wishes to appeal.
If the party does not act, the party does not have a right to a
hearing. However, we again note that when the time limit for filing a
request for hearing is not met, the Secretary provides a mechanism for
a party to request an extension for good cause in current Sec.
405.1014(c).
In contrast to the time limit for filing a request for hearing,
Sec. 405.1016(a) and (c) set forth time frames to obtain a decision,
dismissal, or remand, which, consistent with section 1869(d)(3)(A) of
the Act, if not met results in the appellant having the option to
escalate the appeal to the Council. Whereas the consequence of not
meeting the time limit for filing a request for hearing is that an
adjudicator is precluded from reviewing the decision being appealed,
the consequence of exceeding the adjudication time frames is the
appellant then has the option to escalate the appeal to the next level.
If the appellant at the hearing level chooses not to escalate his or
her appeal to the Council, the appeal remains pending with OMHA in
accordance with Sec. 405.1016(e) as finalized, which replaces current
Sec. 405.1104(c) explaining the same.
Comment: One commenter stated that a decision should be issued in
the provider's favor if the 90-day time frame cannot be met. Another
commenter stated that if the government cannot meet its deadlines, the
claim should be forfeited.
Response: We interpret the commenters' statements as suggesting
that Medicare should pay every denied claim that is the subject of an
appeal of a QIC reconsideration for an ALJ hearing if a decision,
dismissal, or remand is not issued within the adjudication time frame
applicable to the appeal, which could include time in addition to the
90 days based on certain regulatory provisions that allow for the
extension of that time for certain actions or events (for example,
Sec. 405.1016(d)). We believe such a provision would be inappropriate
because Medicare may only pay a claim if the item or service is a
covered benefit and coverage is not excluded by statute, and any
applicable conditions of payment are met, unless specific statutory
criteria are met for limiting liability on denied claims under section
1879 of the Act or waiving an overpayment under section 1870 of the
Act. Medicare cannot make payment on a claim when a QIC has issued a
reconsideration that determined that the item or service is not covered
by Medicare or payment may not be made, and if applicable, that the
provisions for limiting liability or waiving an overpayment are not
met. Further, there is no statutory limitation on liability or
overpayment waiver provision that permits payment to be made if an
adjudication time frame is not met. Rather, the statute provides that
when an ALJ's adjudication time frame is not met for an appeal of a QIC
reconsideration, the appellant has the option to request a review by
the DAB, which is implemented in Sec. 405.1016(f), as finalized in
this rule, which provides for escalating an appeal of a QIC
reconsideration to the Council when a decision, dismissal, or remand is
not issued by an ALJ or attorney adjudicator within the adjudication
time frame. Moreover, we believe requiring payment to be made on a
claim only because an adjudication time frame for an appeal of a denial
is not met could increase the appeals workload and raise significant
program integrity risks by creating an incentive for providers and
suppliers to overwhelm the appeals process with appeals in an effort to
obtain payment on claims that may not meet coverage requirements or
conditions of payment.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to
[[Page 5041]]
Sec. 405.1016 as proposed without modification.
ii. Incorporation of the Provisions of Section 405.1104 (Request for
Council Review When an ALJ Does Not Issue a Decision Timely) Into
Section 405.1016(f)
Section 405.1104 addresses how to request escalation from an ALJ to
the Council, when an ALJ has not issued a decision, dismissal or remand
on a QIC reconsideration within an applicable adjudication time frame,
in accordance with section 1869(d)(3)(A) of the Act in paragraph (a);
the procedures for escalating an appeal in paragraph (b); and the
status of an appeal for which the adjudication time frame has expired
but the appellant has not requested escalation in paragraph (c). We
proposed to remove and reserve Sec. 405.1104 and incorporate the
current Sec. 405.1104 providing for escalating a request for an ALJ
hearing to the Council into proposed Sec. 405.1016(e) and (f) with
revisions, as its current placement in the Council portion of part 405,
subpart I has caused confusion. We also proposed to insert ``or
attorney adjudicator'' after ``ALJ'' in proposed Sec. 405.1016(e) and
(f) to assist appellants in understanding that the effect of exceeding
the adjudication period and the option to escalate would apply to a
request for an ALJ hearing following a QIC reconsideration when the
request has been assigned to an attorney adjudicator, as discussed in
section II.B of the proposed rule and II.A.2 above.
Section 405.1104(c) is titled ``No escalation'' and states that if
the ALJ's adjudication period set forth in Sec. 405.1016 expires, the
case remains pending with the ALJ until a decision, dismissal order, or
remand order is issued or the appellant requests escalation to the
Council. We proposed in Sec. 405.1016(e) to incorporate Sec.
405.1104(c) with changes. We proposed to revise the paragraph title for
proposed Sec. 405.1016(e) to indicate that the paragraph discusses the
effect of exceeding the adjudication period. Proposed Sec. 405.1016(e)
would provide that if an ALJ or an attorney adjudicator assigned to a
request for hearing (as proposed in section II.B of the proposed rule
and discussed in section II.A.2 of this final rule above) does not
issue a decision, dismissal order, or remand to the QIC within an
adjudication period specified in the section, the party that filed the
request for hearing may escalate the appeal when the adjudication
period expires. However, if the adjudication period expires and the
party that filed the request for hearing does not exercise the option
to escalate the appeal, the appeal remains pending with OMHA for a
decision, dismissal order, or remand. We proposed to indicate that the
appeal remains pending with OMHA to be inclusive of situations in which
the appeal is assigned to an ALJ or attorney adjudicator, or not yet
assigned.
Section 405.1104(a) describes how to request an escalation and
states that an appellant who files a timely request for hearing before
an ALJ and whose appeal continues to be pending before the ALJ at the
end of the applicable ALJ adjudication period may request Council
review if the appellant files a written request with the ALJ to
escalate the appeal to the Council after the adjudication period has
expired, and the ALJ does not issue a decision, dismissal order, or
remand order within the later of 5 calendar days of receiving the
request for escalation or 5 calendar days from the end of the
applicable adjudication period set forth in Sec. 405.1016. We proposed
in Sec. 405.1016(f)(1) to remove the requirement to request Council
review in the course of requesting an escalation and to describe when
and how to request escalation. Specifically, we proposed to revise the
current procedures at Sec. 405.1104(a) and (a)(1), to provide that an
appellant who files a timely request for a hearing with OMHA and whose
appeal continues to be pending at the end of an applicable adjudication
period may exercise the option to escalate the appeal to the Council by
filing a written request with OMHA to escalate the appeal to the
Council, which would simplify the process for appellants and
adjudicators by only requiring appellants to file a single request for
escalation with OMHA. We proposed to replace the reference to an appeal
that ``continues to be pending before the ALJ'' in Sec. 405.1104(a)
with an appeal that ``continues to be pending with OMHA'' in proposed
Sec. 405.1016(f)(1) to be inclusive of situations in which the appeal
is assigned to an ALJ or attorney adjudicator, or not yet assigned. We
also proposed that a written request to escalate an appeal to the
Council would be filed with OMHA to allow OMHA to provide a central
filing option for escalation requests. Section 405.1106(b) requires
that the appellant send a copy of the escalation request to the other
parties and failing to do so tolls the Council's adjudication deadline
set forth in Sec. 405.1100 until the other parties to the hearing have
received notice. As discussed in section III.A.5.c of the proposed rule
and II.B.5.c of this final rule below, we proposed to revise Sec.
405.1106(b) to require that the request for escalation be sent to other
parties who were sent a copy of the QIC reconsideration. Therefore, we
also proposed at Sec. 405.1016(f)(1) that the appellant would send a
copy of the escalation request to the other parties who were sent a
copy of the QIC reconsideration so appellants would be aware of the
requirement and which parties must be sent a copy of the escalation
request.
Section 405.1104(b) describes the escalation process and states if
the ALJ is not able to issue a decision, dismissal order, or remand
order within the time period set for in paragraph (a)(2) of the section
(later of 5 calendar days of receiving the request for escalation or 5
calendar days from the end of the applicable adjudication period set
forth in Sec. 405.1016), he or she sends notice to the appellant
acknowledging receipt of the request for escalation and confirming that
the ALJ is not able to issue a decision, dismissal order, or remand
order within the statutory time frame. Section 405.1104(b)(3) sates
that if the ALJ does not act on a request for escalation within the
time period set forth in paragraph (a)(2) of the section or does not
send the required notice to the appellant, the QIC decision becomes the
decision that is subject to Council review consistent with Sec.
405.1102(a). We stated in the proposed rule that this process has
caused confusion for both appellants and adjudicators because an
initial escalation request must be filed with the ALJ, and if the ALJ
is unable to issue a decision, dismissal or remand within 5 calendar
days of receiving the escalation request or within 5 calendar days from
the end of the applicable adjudication period, the appellant must file
a request with the Council to move the appeal to the Council level. We
also stated that some appellants neglect to take this second step of
filing an escalation request with the Council. This leaves it unclear
to the ALJ and support staff whether to continue adjudicating the
appeal after issuing a notice that the ALJ is unable to issue a
decision, dismissal or remand within the later of 5 calendar days of
receiving the escalation request or 5 calendar days from the end of the
applicable adjudication period. We proposed in Sec. 405.1016(f)(2) to
revise the escalation process. Specifically, we proposed that if an
escalation request meets the requirements of proposed Sec.
405.1016(f)(1), and an ALJ or attorney adjudicator is not able to issue
a decision, dismissal order, or remand within the later of 5 calendar
days of receiving the request for escalation or 5
[[Page 5042]]
calendar days from the end of the applicable adjudication period, OMHA
(to be inclusive of situations in which the appeal is assigned to an
ALJ or attorney adjudicator, or not yet assigned) would send a notice
to the appellant stating that an ALJ or attorney adjudicator is not
able to issue a decision, dismissal order, or remand order within the
adjudication period set forth in paragraph (a) or (c) of Sec.
405.1016. We also proposed that the notice would state that the QIC
reconsideration would be the decision that is subject to Council review
consistent with Sec. 405.1102(a); and the appeal would then be
automatically escalated to the Council in accordance with Sec.
405.1108. We proposed that OMHA would then forward the case file, which
would include the file received from the QIC and the request for
escalation and all other materials filed with OMHA, to the Council. We
stated in the proposed rule that we believed that this proposed process
would help alleviate the current confusion, and would simplify the
escalation process for appellants because appellants would not have to
file a separate request for Council review after filing an escalation
request with OMHA.
Currently, invalid escalation requests are not addressed in the
regulations. We proposed in Sec. 405.1016(f)(3) to address invalid
escalation requests. We proposed that if an ALJ or attorney adjudicator
determines an escalation request does not meet the requirements of
proposed Sec. 405.1016(f)(1), OMHA would send a notice to the
appellant explaining why the request is invalid within 5 calendar days
of receiving the request for escalation. For example, we stated in the
proposed rule that an escalation request would be deemed invalid if
escalation is not available for the appeal, such as appeals of SSA
reconsiderations; the escalation request is premature because the
adjudication period has not expired; or the party that filed the
escalation request did not file the request for hearing. We stated in
the proposed rule that if an ALJ or attorney adjudicator were to
determine the request for escalation was invalid for a reason that
could be corrected (for example, if the request was premature), the
appellant could file a new escalation request when the adjudication
period expires.
We received no comments on our proposals to revise and incorporate
the provisions of Sec. 405.1104 into Sec. 405.1016(e) and (f), other
than: (1) Comments discussed in section II.A.2 above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs; and (2) comments discussed in
section II.A.4 above related to our general proposal to reference OMHA
or an OMHA office, in place of current references to an unspecified
entity, ALJs, and ALJ hearing offices, when a reference to OMHA or an
OMHA office provides a clearer explanation of a topic. Accordingly, for
the reasons discussed above and in the proposed rule, we are finalizing
the proposals without modification.
iii. Section 423.2016: Time Frames for Deciding an Appeal of an IRE
Reconsideration
As discussed below, we proposed changes to Sec. 423.2016, which
addresses the adjudication time frames for requests for hearing filed
after an IRE has issued its reconsideration. 81 FR 43790, 43823. The
title of current Sec. 423.2016 states, ``Timeframes for deciding an
Appeal before an ALJ.'' We proposed to revise the title of Sec.
423.2016 to read ``Time frames for deciding an appeal of an IRE
reconsideration'' in order to state that the section addresses
adjudication time frames related to appeals of IRE reconsiderations and
to accommodate the application of this section to attorney
adjudicators, as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above), and as discussed earlier. We also
proposed to insert ``or attorney adjudicator'' after ``ALJ'' throughout
proposed Sec. 423.2016 so that an adjudication time frame would apply
to a request for an ALJ hearing following an IRE reconsideration when
the request has been assigned to an attorney adjudicator, as discussed
in section II.B of the proposed rule and II.A.2 above.
Current Sec. 423.2016(a) and (b) explain the adjudication time
frames for standard and expedited appeals of IRE reconsiderations,
respectively. However, the current paragraph titles refer to hearings
and expedited hearings. We proposed at Sec. 423.2016(a) and (b) to
retitle the paragraphs to refer to standard appeals and expedited
appeals because the time frames apply to issuing a decision, dismissal,
or remand, and are not limited to appeals in which a hearing is
conducted. We proposed at Sec. 423.2016(a) and (b) to remove ``must''
in providing when an ALJ or attorney adjudicator issues a decision,
dismissal order, or remand to the IRE, as appropriate, after the
request for hearing is received by the office specified in the IRE's
notice of reconsideration because there may be instances in which a
decision, dismissal, or remand cannot be issued within the adjudication
time frame, though we stated that we expect those instances to be rare
because beneficiary and enrollee appeals are generally prioritized by
OMHA. In addition, we proposed in Sec. 423.2016(a) and (b) to replace
references to sending a request to the ``entity'' specified in the
IRE's reconsideration, with the ``office'' specified in the IRE's
reconsideration notice, to minimize confusion and delays in filing
requests with OMHA. Similar to proposed Sec. 405.1016(b)(2), we
proposed at Sec. 423.2016(a)(3) and (b)(6) to adopt adjudication time
frames for appeals that are remanded by the Council. Specifically, we
proposed in Sec. 423.2016(a)(3) that if the Council remands a case and
the case was subject to an adjudication time frame, the remanded appeal
would be subject to the same adjudication time frame beginning on the
date that OMHA receives the Council remand to provide enrollees with an
adjudication time frame for remanded appeals. In Sec. 423.2016(b)(6),
we proposed to require that if the standards for an expedited appeal
continue to be met after the appeal is remanded from the Council, the
10-day expedited time frame would apply to an appeal remanded by the
Council. If the standards for an expedited appeal are no longer met,
the adjudication time frame for standard appeals would apply because
the criteria for an expedited hearing are no longer present. Finally,
we proposed at Sec. 423.2016(b) to revise the expedited appeal request
process to permit an ALJ or attorney adjudicator to review a request
for an expedited hearing, but not require the same ALJ or attorney
adjudicator to adjudicate the expedited appeal, to provide OMHA with
greater flexibility to review and assign requests for expedited
hearings, and help ensure the 10-day adjudication process is completed
as quickly as the enrollee's health requires. For example, if an
attorney adjudicator were to review a request for an expedited hearing
and determine that the standards for an expedited hearing were met, but
did not believe a decision could be issued without a hearing, the
attorney adjudicator could provide the enrollee with notice that the
appeal would be expedited and transfer the appeal to an ALJ for an
expedited hearing and decision.
As described in section III.A.3.q of the proposed rule and II.B.3.q
below, we proposed to move the provision for
[[Page 5043]]
waiving the adjudication period from current Sec. 423.2036(d) to
proposed Sec. 423.2016(c) because proposed Sec. 423.2016 addresses
adjudication time frames and, as we stated in the proposed rule, we
believed the section is a better place for discussing adjudication time
frame waivers.
We proposed that the provisions of proposed Sec. 405.1016(d) also
be adopted in proposed Sec. 423.2016(c) for adjudication period
waivers and stays of the proceedings ordered by a court or granted by
an ALJ or attorney adjudicator on motion by an enrollee.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: Two commenters opposed the proposal to remove ``must''
from Sec. 423.2016(a) and (b), stating that it would be detrimental to
beneficiaries given the current state of the appeals system. One
commenter added that if beneficiary and enrollee appeals are
prioritized by OMHA, there is no compelling reason to alter the time
frame requirement.
Response: We disagree that the proposal will be detrimental to
beneficiaries. As discussed in section II.B.3.h.i above in response to
similar comments about our proposal to remove ``must'' from Sec.
405.1016(a) and (c), removing ``must'' does not alter the applicable
adjudication time frames, and so does not abrogate the general
expectation that a decision, dismissal, or remand will be issued within
those time frames. Nor will removing ``must'' have an effect on ALJs
and attorney adjudicators issuing a decision, dismissal, or remand as
quickly as possible, so the change will not result in delays in
obtaining a decision, dismissal, or remand. Moreover, appeals brought
by beneficiaries, including appeals by Part D enrollees, are
prioritized under current OMHA policy and are generally decided within
the applicable adjudication time frame.
We also disagree that the proposal is unnecessary. As we explained
in the proposed rule, there may be times in which it is not possible to
issue a decision, dismissal, or remand within the applicable
adjudication time frame. 81 FR 43790, 43823. Removing ``must'' from
Sec. 423.2016(a) and (b) more accurately reflects that the time frames
in those sections will not always be met.
Comment: One commenter supported the proposal to adopt adjudication
time frames for appeals that are remanded by the Council. The commenter
requested clarification regarding how an appellant will know when OMHA
receives a remand, starting the adjudication time frame for cases that
are subject to an adjudication time frame.
Response: We thank the commenter for its support. We note that when
the Council remands an appeal to OMHA, notice of the remand is also
sent to the appellant and other parties consistent with Sec. 405.1128.
This notice shows the date that a remand was issued by the Council,
giving the appellant a general idea of when a remand would have been
received by OMHA. If an appellant would like to know the exact date
that a remand was received by OMHA for purposes of calculating any
applicable adjudication time frame, the appellant can contact OMHA
directly or check the status of a specific appeal using AASIS, which
provides public access to appeal status information and can be accessed
through the OMHA Web site (www.hhs.gov/omha). Currently, for appeals
that have been remanded by the Council, the original ALJ appeal number
assigned to the case will display in AASIS with a status indicator of
``Reopened,'' along with the new ALJ appeal number assigned to the
remanded appeal.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. 423.2016 as proposed without modification.
i. Submitting Evidence (Sec. Sec. 405.1018 and 423.2018)
As described below, we proposed a number of changes to current
Sec. Sec. 405.1018 and 423.2018, which address submitting evidence
before an ALJ hearing is conducted. 81 FR 43790, 43823-43824. We
proposed to retitle the sections from ``Submitting evidence before the
ALJ hearing'' to ``Submitting evidence'' because evidence may be
submitted and considered in appeals for which no hearing is conducted
by an ALJ, and we believe an attorney adjudicator should be able to
consider submitted evidence in deciding appeals as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 above). For
the same reason, we proposed in Sec. 423.2018 to replace the
references to ``hearings'' in the heading to paragraph (a) and in the
introductory text to paragraphs (b) and (c), with ``appeals.'' We also
proposed to add headings to paragraphs that do not currently have
headings, for clarity of the matters addressed in the paragraphs.
Current Sec. 405.1018(a) states that, except as provided in this
section, parties must submit all written evidence they wish to have
considered at the hearing with the request for hearing (or within 10
calendar days of receiving the notice of hearing). We proposed in Sec.
405.1018(a) to provide for the submission of other evidence, in
addition to written evidence, that the parties wish to have considered.
Other evidence could be images or data submitted on electronic media.
We proposed to also adopt this revision in Sec. 405.1018(b) and Sec.
423.2018(a), (b), and (c). We also proposed in Sec. 405.1018(a) to
remove ``at the hearing'' so that parties would submit all written or
other evidence they wish to have considered, and consideration of the
evidence would not be limited to the hearing. We proposed a
corresponding change to Sec. 423.2018(a).
Current Sec. 405.1018(a) states that evidence must be submitted
with the request for hearing, or within 10 calendar days of receiving
the notice of hearing. This provision has caused confusion as to when
evidence is required to have been submitted because current Sec.
405.1014(a)(7) allows an appellant to state in the request for hearing
that additional evidence will be submitted and the date it will be
submitted. To reconcile the provisions, we proposed in Sec.
405.1018(a) to provide that parties must submit all written or other
evidence they wish to have considered with the request for hearing, by
the date specified in the request for hearing in accordance with
proposed Sec. 405.1014(a)(2), or if a hearing is scheduled, within 10
calendar days of receiving the notice of hearing. We proposed to also
adopt these revisions in Sec. 423.2018(b) and (c).
Current Sec. 405.1018(b) addresses how the submission of evidence
impacts the adjudication period, and provides that if evidence is
submitted later than 10 calendar days after receiving the notice of
hearing, the period between when the evidence ``was required to have
been submitted'' and the time it is received does not count towards an
adjudication period. To simplify the provision, we proposed at Sec.
405.1018(b) that if evidence is submitted later than 10 calendar days
after receiving the notice of hearing, any applicable adjudication
period is extended by the number of calendar days in the period between
10 calendar days after receipt of the notice of hearing and the day the
evidence is received. We also proposed to adopt this provision in Sec.
423.2018(b)(2) and (c)(2), except that in (c)(2), the adjudication time
frame is affected if the evidence is submitted later than 2 calendar
days after receipt of the notice of expedited hearing because 2
calendar days is the equivalent time frame to submit evidence for
expedited appeals before the adjudication period is affected under
current Sec. 423.2018.
[[Page 5044]]
Current Sec. 405.1018(c) addresses new evidence, and is part of
the implementation of section 1869(b)(3) of the Act, which precludes a
provider or supplier from introducing evidence after the QIC
reconsideration unless there is good cause that prevented the evidence
from being introduced at or before the QIC's reconsideration. These
provisions, which provide for the early submission of evidence, help
adjudicators to obtain evidence necessary to reach the correct decision
as early in the appeals process as possible. We proposed to incorporate
current Sec. 405.1018(c), which requires a provider, supplier, or
beneficiary represented by a provider or supplier that wishes to
introduce new evidence to submit a statement explaining why the
evidence was not previously submitted to the QIC, or a prior decision-
maker, in proposed Sec. 405.1018(c)(1). However, current Sec.
405.1018 does not address the consequences of not submitting the
statement. The statute sets a bar to introducing new evidence, and the
submitting party must establish good cause by explaining why the
evidence was not previously submitted to the QIC, or a prior decision-
maker. However, when a provider or supplier, or beneficiary represented
by a provider or supplier, fails to include the required statement,
OMHA ALJs and staff spend time seeking out the explanation and
following up with parties to fulfill their obligation. Thus, we
proposed to revise Sec. 405.1018(c)(2) to state that if the provider
or supplier, or beneficiary represented by a provider or supplier fails
to include the statement explaining why the evidence was not previously
submitted, the evidence will not be considered. Because only the
enrollee is a party to a Part D appeal, we did not propose a
corresponding revision to Sec. 423.2018.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter questioned whether directing parties to
submit all evidence with the request for hearing is incompatible with
the appeal instructions currently sent by QICs, which instruct
appellants not to attach evidence to the hearing request and instead
submit the evidence directly to the ALJ when the case is assigned.
Response: We do not agree that proposed Sec. 405.1018(a) requires
an appellant to submit all evidence with the request for hearing, or
that the proposals are incompatible with appeal instructions currently
sent by QICs. Under current Sec. 405.1018(a), appellants may submit
evidence with the request for hearing or within 10 calendar days of
receiving the notice of hearing. However, current Sec. 405.1014(a)(7)
also provides that in a request for hearing, an appellant could provide
a statement of any additional evidence to be submitted and the date it
will be submitted. Due to the significant increase in appeals to OMHA
in recent years, OMHA requested that the QICs include language
encouraging appellants to use current Sec. 405.1014(a)(7) to submit
evidence directly to the ALJ after the appeal was assigned, to help
OMHA process requests for hearing more efficiently.
Under proposed Sec. 405.1018(a), we proposed to add an explicit
reference to the Sec. 405.1014(a)(7) provision (re-designated as
proposed Sec. 405.1014(a)(2)) to more fully specify in proposed Sec.
405.1018(a) when evidence may be submitted. Under proposed Sec.
405.1018(a), evidence can be submitted after a request for hearing is
submitted and, therefore, an appellant would not be precluded from
submitting the evidence at a later time. For example, an appellant
could indicate in the request for hearing that it has additional
evidence to submit and will submit it when the appeal is assigned to an
adjudicator. However, there may be times when the appellant wishes to
submit new evidence with the request for hearing, such as when the
appellant waives his or her right to appear at a hearing before an ALJ
and requests that a decision be made on the record, or the appellant
believes the evidence addresses the issues identified in the
reconsideration and including the evidence may increase the likelihood
that a decision that is fully favorable could be issued based on the
record alone in accordance with proposed Sec. 405.1038(a). The current
appeal instructions do not preclude an appellant from submitting
evidence with the request for hearing, but rather request that
appellants consider submitting it at a later time. Therefore, we
believe that by allowing for the submission of evidence with the
request for hearing or after the request is submitted, by the date
specified in the request for hearing in accordance with Sec.
405.1014(a)(2) or, if a hearing is scheduled, within 10 calendar days
of receiving the notice of hearing, proposed Sec. 405.1018(a) is not
incompatible with appeal instructions currently sent by QICs. However,
we will review the appeal instructions being issued by QICs to
determine if clarification may be appropriate to reduce potential
confusion.
Comment: Two commenters recommended adding language to specifically
state that Medicaid State agencies are exempt from the requirement of
current Sec. 405.1018(c) to provide a statement of good cause
explaining why evidence was submitted for the first time at the OMHA
level.
Response: As discussed above, current Sec. 405.1018(c) is part of
the implementation of section 1869(b)(3) of the Act (42 U.S.C.
1395ff(b)(3)), which precludes a provider or supplier from introducing
evidence after the QIC reconsideration without a showing of good cause.
Considering the language of the statute, which expressly states that
this limitation applies to providers and suppliers, we agree that the
requirement under Sec. 405.1018(c) to support the introduction of new
evidence with a statement of good cause does not apply to Medicaid
State agencies. Further, we note that the provision would not apply to
other parties or potential parties such as unrepresented beneficiaries,
applicable plans, CMS and its contractors, or beneficiaries represented
by someone other than a provider or supplier. To address the comment
and more broadly clarify the application of the requirements under
proposed Sec. 405.1018, we are redesignating proposed Sec.
405.1018(d) as (d)(1) and clarifying that the requirements in
paragraphs (a) and (b) do not apply to oral testimony given at a
hearing, or to evidence submitted by unrepresented beneficiaries, as is
the case under current Sec. 405.1018(d). Because current Sec.
405.1018(c) applies only to providers, suppliers, and beneficiaries
represented by a provider or supplier, we are also adding paragraph
(d)(2) to clarify that the requirements in paragraph (c) to show good
cause for the submission of new evidence do not apply to oral testimony
given at a hearing or to evidence submitted by unrepresented
beneficiaries, Medicaid State agencies, applicable plans, CMS and its
contractors, or beneficiaries represented by someone other than a
provider or supplier.
Comment: One commenter stated that any limitation on new evidence
prevents a fair hearing because OMHA does not always receive evidence
that was submitted earlier in the appeal process. Another commenter
suggested that Sec. 405.1018(c)(2) should be amended to provide
flexibility for an ALJ or attorney adjudicator to review evidence that
was not timely submitted, in his or her discretion, even without an
explanation of good cause.
Response: We disagree with the commenter that any limitation on new
evidence prevents a fair hearing because OMHA does not always receive
evidence that was submitted earlier in the appeal process. There are
ample
[[Page 5045]]
opportunities to submit evidence at the redetermination and
reconsideration levels of appeal, and section 1869(b)(3) of the Act
expressly states that providers and suppliers may not introduce new
evidence in any appeal that was not presented at the reconsideration,
unless there is good cause which precluded the introduction of such
evidence at or before the reconsideration. This statutory provision was
added to promote an efficient appeals process in which adjudicators
receive evidence as early in the appeals process as possible, but also
allow new evidence to be introduced after the reconsideration when
there is good cause. OMHA receives evidence from the contractors and,
in the vast majority of cases, there is no question regarding missing
evidence that was submitted at prior levels of appeal; but in the few
cases in which that is a question, good cause could be found to admit
the evidence in accordance with proposed Sec. 405.1028(a)(2)(iv). We
also disagree with the commenter who suggested allowing additional
flexibility for an ALJ or attorney adjudicator to consider evidence
that was not timely submitted in accordance with section 1869(b)(3) of
the Act without a statement of good cause, because doing so would be
contrary to section 1869(b)(3) of the Act.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1018 and 423.2018 as proposed with the
following modifications. We are revising Sec. 405.1018(d) to provide
in paragraph (d)(1) that the requirements in paragraphs (a) and (b) do
not apply to oral testimony given at a hearing or to evidence submitted
by unrepresented beneficiaries, and in (d)(2) that the requirement in
paragraph (c) to support new evidence with a statement of good cause
does not apply to oral testimony given at a hearing or to evidence
submitted by an unrepresented beneficiary, CMS or any of its
contractors, a Medicaid State agency, an applicable plan, or a
beneficiary represented by someone other than a provider or supplier.
We are also correcting a drafting error and adding a missing comma to
Sec. 423.2018(b)(1) and (c)(1) for consistency with Sec. 405.1018(a)
and to clarify that there are three time frames when a represented
enrollee may submit written or other evidence he or she wishes to have
considered with the request for hearing: (1) With the request for
hearing; (2) by the date specified in the request for hearing in
accordance with Sec. 423.2014(a)(2); or (3) if a hearing is scheduled,
within 10 calendar days of receiving the notice of hearing.
j. Time and Place for a Hearing Before an ALJ (Sec. Sec. 405.1020 and
423.2020)
As described below, we proposed a number of changes to provisions
concerning the time and place for a hearing before an ALJ in Sec. Sec.
405.1020 and 423.2020. 81 FR 43790, 43824-43827. As the ALJ hearing
function transitioned from SSA, where hearings could be held at over
140 hearing sites nation-wide, to OMHA with four field offices, OMHA
became one of the first agencies to use video-teleconferencing (VTC) as
the default mode of administrative hearings. The effective use of VTC
mitigated OMHA's reduced geographic presence, and allowed OMHA to
operate more efficiently and at lower cost to the American taxpayers.
However, the preference of most appellants quickly turned to hearings
conducted by telephone. We stated in the proposed rule that, in FY
2015, over 98% of hearings before OMHA ALJs were conducted by
telephone. Telephone hearings provide parties and their representatives
and witnesses with the opportunity to participate in the hearing
process with minimal disruption to their day, and require less
administrative burden at even lower cost to the American taxpayers than
hearings conducted by VTC. OMHA ALJs also prefer telephone hearings in
most instances, because they allow more hearings to be conducted
without compromising the integrity of the hearing. However, even if a
telephone hearing is being conducted, when the ALJ conducting the
hearing believes visual interaction is necessary for a hearing, he or
she may conduct a VTC hearing, and when special circumstances are
presented, ALJs may conduct in-person hearings.
Despite the shift in preferences for most appellants to telephone
hearings, current Sec. 405.1020 still makes VTC the default mode of
hearing, with the option to offer a telephone hearing to appellants. In
fact, some appellants have required the more expensive VTC hearing even
when their representative is presenting only argument and no testimony
is being offered. We stated in the proposed rule that we believe this
is inefficient and results in wasted time and resources that could be
invested in adjudicating additional appeals, and unnecessarily
increases the administrative burdens and costs on the government for
conducting a hearing with little to no discernable benefit to the
parties in adjudicating denials of items or services that have already
been furnished. Based on these considerations, we proposed that a
telephone hearing be the default method, unless the appellant is an
unrepresented beneficiary. We stated in the proposed rule that we
believed that this proposal balances the costs and administrative
burdens with the interests of the parties, recognizing that
unrepresented beneficiaries may have an increased need and desire to
visually interact with the ALJ.
We proposed in Sec. 405.1020(b) to provide two standards for
determining how appearances are made, depending on whether appearances
are by unrepresented beneficiaries or by individuals other than
unrepresented beneficiaries. We proposed to incorporate the provisions
of current Sec. 405.1020(b) into proposed Sec. 405.1020(b)(1), and
revise them to specify that they are applicable to an appearance by an
unrepresented beneficiary who files a request for hearing. We proposed
in subsection (b)(1) that the ALJ would direct that the appearance of
an unrepresented beneficiary who filed a request for hearing be
conducted by VTC if the ALJ finds that VTC technology is available to
conduct the appearance, unless the ALJ finds good cause for an in-
person appearance. As in the current rule, we also proposed in Sec.
405.1020(b)(1) to allow the ALJ to offer to conduct a telephone hearing
if the request for hearing or administrative record suggests that a
telephone hearing may be more convenient to the unrepresented
beneficiary. The current standard for determining whether an in-person
hearing should be conducted involves a finding that VTC technology is
not available or special or extraordinary circumstances exist. Because,
absent special or extraordinary circumstances, a hearing could still be
conducted by telephone if VTC technology were unavailable, we proposed
that the standard for an in-person hearing be revised to state that VTC
or telephone technology is not available or special or extraordinary
circumstances exist, and the determination would be characterized as
finding good cause for an in-person hearing, to align with current
Sec. 405.1020(i)(5), which provides for granting a request for an in-
person hearing on a finding of good cause. We also proposed in
Sec. Sec. 405.1020(b)(1) and 405.1020(i)(5) to replace the reference
to obtaining the concurrence of the ``Managing Field Office ALJ'' with
the ``Chief ALJ or designee.'' We stated in the proposed rule that the
position of the Managing Field Office ALJ became what is now an
Associate Chief ALJ, see
[[Page 5046]]
80 FR 2708, and using ``Chief ALJ or designee'' would provide OMHA with
the flexibility to designate the appropriate individual regardless of
future organizational changes. We proposed to adopt these revisions in
proposed Sec. 423.2020(b)(1) for appearances by unrepresented
enrollees and Sec. 423.2020(i)(5), for when an ALJ may grant a request
for an in-person hearing. We also proposed in Sec. 405.1020(b)(1) to
replace ``videoteleconferencing,'' with ``video-teleconferencing,'' for
consistency with terminology used in Sec. Sec. 405.1000, 405.1036,
423.2000, 423.2020 and 423.2036.
Section 405.1020(b)(2), as proposed, addresses appearances by an
individual other than an unrepresented beneficiary who files a request
for hearing. We proposed in Sec. 405.1020(b)(2) that the ALJ would
direct that those individuals appear by telephone, unless the ALJ finds
good cause for an appearance by other means. Further, we proposed in
Sec. 405.1020(b)(2) that the ALJ may find good cause for an appearance
by VTC if he or she determines that VTC is necessary to examine the
facts or issues involved in the appeal. Also, we proposed that the ALJ,
with the concurrence of the Chief ALJ or designee, may find good cause
that an in-person hearing should be conducted if VTC and telephone
technology are not available, or special or extraordinary circumstances
exist. We proposed to adopt these revisions in Sec. 423.2020(b)(2) for
appearances by represented enrollees, which is more specific than
proposed Sec. 405.1020(b)(2) because only enrollees are parties to
appeals under part 423, subpart U, and the provisions of subsection
(b)(2) would apply only to appearances by represented enrollees.
Current Sec. 405.1020(c)(1) states that the ALJ sends a notice of
hearing. This has caused confusion as to whether the ALJ must
personally sign the notice, or whether it can be sent at the direction
of the ALJ. We believe that the notice may be sent at the direction of
the ALJ, and requiring an ALJ signature adds an unnecessary step in the
process of issuing the notice. Therefore, we proposed in Sec.
405.1020(c)(1) that a notice of hearing be sent without further
qualification, and to let other provisions indicate the direction that
is necessary from the ALJ in order to send the notice, such as Sec.
405.1022(c)(1), which provides that the ALJ sets the time and place of
the hearing. We proposed to adopt these provisions in Sec.
423.2020(a)(1).
Current Sec. 405.1020(c)(1) also requires that the notice of
hearing be sent to the parties who filed an appeal or participated in
the reconsideration, any party who was found liable for the services at
issue subsequent to the initial determination, and the QIC that issued
the reconsideration. However, there are instances in which a party who
does not meet the criteria may face liability because the ALJ may
consider a new issue based on a review of the record. To address this,
we proposed in Sec. 405.1020(c)(1) to add that a party that may be
found liable based on a review of the record must be sent a notice of
hearing. In addition, current Sec. 405.1020 does not address notices
of hearing sent to CMS or a non-QIC contractor. We stated in the
proposed rule that, currently, ALJs may also send a notice of hearing
to CMS or a contractor when the ALJ believes their input as a
participant or party may be beneficial. We proposed in Sec.
405.1020(c)(1) that the notice of hearing also be sent to CMS or a
contractor that the ALJ believes would be beneficial to the hearing. We
did not propose any corresponding revisions to current Sec.
423.2020(c)(1) because only enrollees are parties to appeals under part
423, subpart U.
OMHA ALJs have expressed concern that parties and representatives
who appear at a hearing with multiple individuals and witnesses who
were not previously identified, complicate and slow the hearing
process. We stated that while a party or representative has
considerable leeway in determining who will attend the hearing or be
called as a witness, prior notice of those individuals is necessary for
the ALJs to schedule adequate hearing time, manage their dockets, and
conduct the hearing. To address these concerns, we proposed at Sec.
405.1020(c)(2)(ii) to add a requirement to specify the individuals from
the entity or organization who plan to attend the hearing if the party
or representative is an entity or organization, and at subsection
(c)(2)(iii) to add a requirement to list the witnesses who will be
providing testimony at the hearing, in the response to the notice of
hearing. We also proposed to consolidate the provisions in current
Sec. 405.1020(c)(2)(i) and (c)(2)(ii) in proposed Sec.
405.1020(c)(2)(i) to simplify the provisions related to the current
requirements for replying to the notice of hearing. Thus, subsection
(c)(2)(i) would require all parties to the ALJ hearing to reply to the
notice by acknowledging whether they plan to attend the hearing at the
time and place proposed in the notice of hearing, or whether they
object to the proposed time and/or place of the hearing. We proposed at
Sec. 423.2020(c)(2) to adopt corresponding revisions for an enrollee's
reply to the notice of hearing.
We also proposed in Sec. 405.1020(c)(2) to remove the provision
for CMS or a contractor that wishes to participate in the hearing to
reply to the notice of hearing in the same manner as a party because a
non-party may not object to the proposed time and place of the hearing,
or present witnesses. Instead, we proposed in Sec. 405.1020(c)(3) to
require CMS or a contractor that wishes to attend the hearing as a
participant to reply to the notice of hearing by acknowledging whether
it plans to attend the hearing at the time and place proposed in the
notice of hearing, and specifying who from the entity plans to attend
the hearing. We proposed at Sec. 423.2020(c)(3) to adopt corresponding
revisions for CMS's, the IRE's, or the Part D plan sponsor's reply to
the notice of hearing when the entity requests to attend the hearing as
a participant.
In discussing a party's right to waive a hearing, current Sec.
405.1020(d) states that a party may waive the right to a hearing and
request that the ALJ issue a decision based on the written evidence in
the record. In light of proposed Sec. 405.1038(b), which would allow
attorney adjudicators to issue decisions in appeals that do not require
hearings on the record without an ALJ conducting a hearing in certain
situations, we proposed in Sec. 405.1020(d) to state that a party also
may waive the right to a hearing and request a decision based on the
written evidence in the record in accordance with Sec. 405.1038(b),
but an ALJ may require the parties to attend a hearing if it is
necessary to decide the case. We proposed at Sec. 423.2020(d) to adopt
corresponding revisions for an enrollee to waive his or her right to a
hearing and request a decision based on the written evidence in the
record in accordance with Sec. 423.2038(b), but an ALJ could require
the enrollee to attend a hearing if it is necessary to decide the case.
We stated in the proposed rule that these references would direct
readers to the section that provides the authority for a decision based
on the written record, which would provide them with a complete
explanation of when the authority may be used and notify them that an
ALJ or attorney adjudicator may issue the decision.
In addressing the ALJ's authority to change the time or place of
the hearing if the party has good cause to object, current Sec.
405.1020(e) requires a party to make the request to change the time or
place of the hearing in writing. However, we stated that on occasion, a
party may need to request a change on the day prior to, or the day of,
a hearing due to an emergency, such as a sudden illness or injury, or
inability to get to a
[[Page 5047]]
site for the hearing. In this circumstance, we stated in the proposed
rule that we believed an oral request should be permitted. Therefore,
we proposed in Sec. 405.1020(e)(3) that the request must be in
writing, except that a party may orally request that a hearing be
rescheduled in an emergency circumstance the day prior to or day of the
hearing, and the ALJ must document the oral request in the
administrative record. We proposed at Sec. 423.2020(e)(3) to adopt a
corresponding provision for an enrollee to orally request a rescheduled
standard hearing, and to modify the documentation requirement, which is
currently limited to documenting oral requests made for expedited
hearings, to include all oral objections.
In addition, current Sec. Sec. 405.1020(e)(4) and 423.2020(e)(4),
which explain the ALJ may change the time or place of the hearing if
the party has good cause, contain a parenthetical that references the
procedures that an ALJ follows when a party does not respond to a
notice of hearing and fails to appear at the time and place of the
hearing. The parenthetical does not appear to address or assist in
understanding the circumstances covered by current Sec. Sec.
405.1020(e)(4) and 423.2020(e)(4), and we, therefore, proposed to
remove the parenthetical from the respective sections.
Current Sec. Sec. 405.1020(g)(3) and 423.2020(g)(3) provide a list
of examples of circumstances a party might give for requesting a change
in the time or place of the hearing. We stated in the proposed rule
that we have heard from ALJs and stakeholders that it would be helpful
to also include the following two additional examples: (1) The party or
representative has a prior commitment that cannot be changed without
significant expense, in order to account for circumstances in which
travel or other costly events may conflict with the time and place of a
hearing, which the ALJ may determines warrants good cause for changing
the time or place of the hearing; and (2) the party or representative
asserts that he or she did not receive the notice of hearing and is
unable to appear at the scheduled time and place, which the ALJ may
determine warrants good cause for changing the time or place of the
hearing. We proposed in Sec. Sec. 405.1020(g)(3)(vii) and (viii), and
423.2020(g)(3)(vii) and (viii) to add these two examples to address
these circumstances. We believe these additional examples will provide
greater flexibility in the appeals process and better accommodate the
needs of appellants.
We proposed in Sec. Sec. 405.1020(h) and 423.2020(h) to revise the
references to the adjudication ``deadline'' with references to the
adjudication ``period,'' for consistency in terminology with the
specified cross-references.
We proposed revisions to Sec. 405.1020(i) to align the provision
with proposed Sec. 405.1020(b). We proposed in Sec. 405.1020(i) that
if an unrepresented beneficiary who filed the request for hearing
objects to a VTC hearing or to the ALJ's offer to conduct a hearing by
telephone, or if a party other than an unrepresented beneficiary who
filed the request for hearing objects to a telephone or VTC hearing,
the party must notify the ALJ at the earliest possible opportunity
before the time set for the hearing and request a VTC or in-person
hearing. The party would be required to state the reason for the
objection and the time and/or place that he or she wants an in-person
or VTC hearing to be held, and the request must be in writing. We
proposed in Sec. 405.1020(i)(4) to incorporate the current Sec.
405.1020(i)(4) provision that requires the appeal to be adjudicated
within the time frame specified in Sec. 405.1016 if a request for an
in-person or VTC hearing is granted unless the party waives the time
frame in writing. However, we proposed at Sec. 405.1020(i)(4) to
revise the language to more accurately state that the ALJ issues a
``decision, dismissal, or remand to the QIC,'' rather than just a
``decision,'' within the adjudication time frame specified in Sec.
405.1016. We proposed revisions to Sec. 423.2020(i) to align the
provision with proposed Sec. 423.2020(b). We proposed in Sec.
423.2020(i) that if an unrepresented enrollee who filed the request for
hearing objects to a VTC hearing or to the ALJ's offer to conduct a
hearing by telephone, or if a represented enrollee who filed the
request for hearing objects to a telephone or VTC hearing, the enrollee
or representative must notify the ALJ at the earliest possible
opportunity before the time set for the hearing and request a VTC or
in-person hearing. The enrollee would be required to state the reason
for the objection and the time and/or place that he or she wants an in-
person or VTC hearing to be held. We proposed in Sec. 423.2020(i)(4)
to incorporate the current Sec. 423.2020(i)(4) provision with some
modifications so that the appeal would be adjudicated within the time
frame specified in Sec. 423.2016 if a request for an in-person or VTC
hearing is granted unless the party waives the time frame in writing.
We proposed at Sec. 423.2020(i)(4) to revise the language to more
accurately state that the ALJ issues a ``decision, dismissal, or remand
to the IRE,'' rather than just a ``decision,'' within the adjudication
time frame specified in Sec. 423.2016 and to include requests for VTC
hearings as well as requests for in-person hearings. In addition, we
proposed at Sec. Sec. 405.1020(i)(5) and 423.2020(i)(5) to provide
that upon a finding of good cause, a hearing would be rescheduled at a
time and place when the party may appear in person or by VTC, to
account for objections to VTC hearings as well as objections to
telephone hearings or offers to conduct a hearing via telephone. We
also proposed to replace ``concurrence of the Managing Field Office
ALJ'' with ``concurrence of the Chief ALJ or a designee'' because the
position of Managing Field Office ALJ was replaced by the position of
Associate Chief ALJ (80 FR 2708) and providing a more general reference
would provide greater flexibility in the future as position titles
change.
Current Sec. Sec. 405.1020 and 423.2020 do not address what occurs
when the ALJ changes the time or place of the hearing. We proposed at
Sec. 405.1020(j) to add a provision titled ``Amended notice of
hearing'' to clarify that, if the ALJ changes or will change the time
and/or place of the hearing, an amended notice of hearing must be sent
to all of the parties who were sent a copy of the notice of hearing and
CMS or its contractors that elected to be a participant or party to the
hearing, in accordance with the procedures of Sec. 405.1022(a), which
addresses issuing a notice of hearing. We proposed at Sec. 423.2020(j)
to add a provision to clarify that, if the ALJ changes or will change
the time and/or place of the hearing, an amended notice of hearing must
be sent to the enrollee and CMS, the IRE, and/or the Part D plan
sponsor in accordance with the procedures of Sec. 423.2022(a), which
addresses issuing a notice of hearing. We stated that these revisions
would help ensure that if changes are made to the time or place of the
hearing, a new notice is issued or waivers are obtained in a consistent
manner.
Provided below are summaries of the specific comments received and
responses to these comments:
We received ten comments on the proposed changes to time and place
for a hearing before an ALJ. We received five comments on the proposal
to make telephone the default method for conducting hearings, except
when the appellant is an unrepresented beneficiary, unless an ALJ finds
good cause for conducting a hearing by VTC or an in-person hearing. The
remaining
[[Page 5048]]
comments addressed other aspects of the time and place for hearing
before an ALJ and are discussed in further detail below.
Comment: Three commenters on behalf of advocacy organizations and
one individual commenter, opposed making telephone the default method
for conducting hearings for appellants who are not unrepresented
beneficiaries. Commenters generally argued that conducting a hearing by
telephone reduces due process, but they appreciated the proposal to
maintain VTC as the default method for conducting hearings for
unrepresented beneficiaries. By contrast, one commenter supported the
proposal.
Response: We thank the commenter who supports the proposal. We
disagree with opposing commenters that telephone hearings reduce due
process. We believe that all ALJ hearings currently conducted by OMHA
fully protect appellants' rights to procedural due process, and that
our proposed changes do not compromise those rights. Furthermore,
section 1869(b)(1)(A) of the Act does not specify the manner in which
hearings must be held, and in legislation that led to the establishment
of OMHA to administer the ALJ hearing program, Congress instructed HHS
to explore the possibility of providing hearings using formats other
than in-person hearings. Specifically, the MMA instructed HHS to
consider the feasibility of conducting Medicare hearings ``using tele-
or videoconference technologies.'' See section 931(a)(2)(G) of the MMA.
Under both the current regulations and our proposed changes,
procedural safeguards are in place that meet the due process
requirements for administrative hearings such as the right to proper
notice that a hearing has been scheduled, the right of a party to
appear before the ALJ to present evidence and to state his or her
position, the right to have a representative present at the hearing,
the right to present witnesses and testimony, the right to cross
examine witnesses, the right to object to the issues in the notice and/
or the hearing method, the right to request and receive a copy of all
or part of the record from OMHA (including the hearing audio), and the
right to appeal the ALJ's decision. Parties also have the same access
to the audio hearing record when appearing by telephone as they would
have if appearing by VTC or in-person. In addition, the proposal
includes mechanisms in Sec. 405.1020(b) that permit a VTC or in-person
hearing if there is a finding of good cause in a given appeal. Given
the procedural safeguards existing in the regulations, we do not
believe changing the default method of conducting hearings to telephone
hearings for appellants other than unrepresented beneficiaries would
compromise an appellant's due process or right to a hearing.
However, while we do not believe that due process requires a
hearing that includes a visual component as a matter of right in all
cases, we acknowledge that those who are most unfamiliar with legal
proceedings, specifically unrepresented beneficiaries, may benefit from
the interaction with the ALJ and be more comfortable with a visual
component. Thus, the proposal provides two standards for determining
how hearings would be conducted, depending on whether appearances are
by unrepresented beneficiaries or by individuals other than
unrepresented beneficiaries. We have retained VTC as the default
hearing method for unrepresented beneficiaries under Sec.
405.1020(b)(1), unless the ALJ finds good cause for an in-person
hearing (note that the ALJ also may offer a telephone hearing in
certain circumstances). Under Sec. 405.1020(b)(2) (as discussed
below), in appearances by individuals other than unrepresented
beneficiaries, telephone hearings are the default hearing method,
though the parties may obtain a VTC or in-person hearing if the ALJ
finds good cause.
Comment: One commenter indicated telephone hearings do not take
appreciably less time than VTC hearings, and also OMHA is budgeted to
provide VTC hearings and there is no evidence that the volume of VTC
hearings in past years has exceeded this line item on OMHA's
operational budget.
Response: We disagree with the commenter's assertions.
As we stated in the proposed rule (81 FR 43824), in FY2015 alone,
over 98% of hearings before OMHA ALJs were conducted by telephone, and
in FY2016 over 99% of hearings before OMHA ALJs were conducted by
telephone. Contrary to the commenter's assertion, we have learned over
eleven years of operation that telephone hearings take less time and
are less costly for parties, representatives, and witnesses because
telephone hearings do not require travel time or travel expenses for
parties to a VTC site. Telephone hearings also provide parties with the
opportunity to participate in the hearing process with minimal
disruption to the day. Further, telephone hearings take less time for
OMHA to schedule and conduct. When a VTC hearing room is reserved or
unavailable, scheduling of the hearing is delayed. Support staff must
also remain present during the entire duration of a VTC hearing to
assist the ALJ in case the equipment does not operate properly. We
believe this is inefficient and can result in wasted staff time and
resources that could be redirected to scheduling additional appeals.
Although we acknowledge the volume of VTC hearings in past years
has not exceeded OMHA's operational budget, due in part to the fact
that a majority of hearings were conducted by telephone, telephone
hearings cost less to conduct, and would result in significant savings
to the agency and ultimately to the taxpayers. We also believe the
money budgeted to provide for the more expensive VTC hearings could
instead be reallocated to hire additional support staff and resources
to address the backlog. On balance, telephone hearings require less
administrative burden to parties and OMHA, at a lower cost to
taxpayers.
Comment: Commenters who opposed the proposal to make telephone
hearing the default method of conducting a hearing for individuals
other than unrepresented beneficiaries and supported maintaining VTC as
the default method of conducting a hearing argued: (1) VTC is
beneficial to ALJs in lengthy hearing sessions ``due to the volume of
appeals, issues, documentation, and complexity of the arguments being
conveyed''; (2) VTC allows a party to show and discuss images of
injuries, wounds, and other visual evidence; (3) it is unreasonable to
require an appellant to make their case by telephone ``where millions
of dollars are at stake, or perhaps the very existence of an
appellant''; (4) VTC is beneficial where reference to the medical
documentation can be cumbersome; and (5) VTC can be particularly
valuable in facilitating communication when representatives of
appellants have limited familiarity with the OMHA appeals process.
Response: Although telephone hearings are the default hearing
method under proposed Sec. 405.1020(b)(2), (which we are finalizing in
this rule), parties still have the opportunity under that section for a
VTC or in-person hearing in certain circumstances. Sections
405.1020(b)(2) and 423.2020(b)(2), as finalized, state the ALJ will
direct that the appearance of an individual, other than an
unrepresented beneficiary who filed a request for hearing, be conducted
by telephone unless the ALJ finds good cause for an appearance by other
means. Specifically, the ALJ may find good cause for an appearance by
VTC if the ALJ determines VTC is necessary to examine the facts or
issues in an appeal. In addition, the ALJ, with the concurrence of the
Chief ALJ or
[[Page 5049]]
designee, may find good cause for an in-person hearing if VTC and phone
technology are not available or special or extraordinary circumstances
exist. We believe the situations raised by the commenters who opposed
the proposal could be examples where ``the ALJ may find good cause for
an appearance by VTC if he or she determines that VTC is necessary to
examine the facts or issues involved in the appeal,'' depending on the
facts of a particular appeal. See Sec. Sec. 405.1020(b)(2)(i) and
423.2020(b)(2)(i). For example, under Sec. 405.1020(b)(2)(i) and
423.2020(b)(2)(i), an ALJ could find that visual interaction is
necessary and that there is good cause for a VTC hearing where: (1) The
ALJ or appellant raises an issue with an individual's credibility; (2)
a party presents multiple witnesses to provide testimony; or (3) a
party wishes to present video/visual evidence. An ALJ may also find
good cause where the case presents complex, challenging, or novel
issues, such as in appeals with a high volume of claims and a high
dollar or overpayment amount. We believe our decision not to provide an
exhaustive description of the good cause standard in the regulations
would benefit parties by affording an ALJ the flexibility to grant a
VTC or an in-person hearing based on factors or circumstances that may
be relevant in a particular case, yet unforeseen at this time.
Comment: Commenters who opposed the proposal to make telephone
hearing the default method of conducting a hearing and supported
maintaining VTC as the default method of conducting a hearing argued:
(1) The face-to-face aspect of VTC hearings afford greater assurance
that ALJs will hear and understand the testimony and arguments being
presented; (2) VTC hearings assure ALJs fulfill the duty to provide a
fair hearing; and (3) VTC hearings allow an appellant to observe if the
ALJ is tired, disinterested, talking to someone else in the room,
thumbing through the file, or not referring to the file at all, which
cannot be readily observed on a telephone call.
Response: A primary function of the ALJ hearing is to allow the
parties to present arguments and testimony, and to allow the ALJ to ask
questions in order to provide the ALJ with the necessary information to
make the findings of fact and conclusions of law in rendering a
decision consistent with the applicable authorities. We do not agree
that the face-to-face aspect of VTC hearings afford greater assurance
that ALJs will hear and understand the testimony and arguments being
presented. While the commenters may prefer to see the ALJ during the
hearing, we do not believe a visual connection with the ALJ is
necessary in most cases, and in the circumstances in which it may be
necessary, the rules being finalized provide for a mechanism to request
a VTC or in-person hearing in Sec. Sec. 405.1020(i) and 423.2020(i).
Regardless of how the hearing is conducted, ALJs have a responsibility
pursuant to Sec. Sec. 405.1030(b) and 423.2030(b) to fully examine the
issues on appeal and question the parties and other witnesses, ensuring
that all necessary testimony is considered, which would continue under
these rules as finalized. An appellant can also ascertain whether the
ALJ understands the testimony and arguments being presented over
telephone, by gauging the ALJ's reaction to the testimony and
arguments, the ALJ's follow-up questions, and whether the ALJ has
lingering questions. The appellant can then provide the ALJ with the
necessary clarification to enable the ALJ to make the findings of fact
and conclusions of law. Further, the written decision will reflect the
testimony and arguments presented at the hearing, and if a party is
dissatisfied with the ALJ's decision, the party may request a review by
the Council and, if applicable, indicate what testimony or arguments
presented at the hearing were not fully considered.
In addition, we do not believe that visual interaction is necessary
to assure appellants that ALJs are fulfilling their duty to provide a
fair hearing. OMHA ALJs have a responsibility to ensure both a fully
examined and fairly administered hearing, and must fulfill their duties
with fairness and impartiality in accordance with section 205(b) of the
Act. As discussed above, we believe that all ALJ hearings currently
conducted by OMHA fully protect appellants' rights to procedural due
process, including the right to a fair hearing, and that the changes we
are finalizing do not compromise those rights. Further, we do not agree
that visual interaction is necessary to observe whether the ALJ is
tired, disinterested, or talking to someone else in the room, because
an appellant can readily observe how the ALJ is acting during a
telephone hearing by noting the ALJ's tone of voice, pauses, and
reaction to arguments or responses to questions. Moreover, we note the
visual component of the hearing is not recorded or subject to review.
However, parties have the same access to the audio hearing record when
appearing by telephone as they would have if appearing by VTC or in
person. The ALJ and his or her staff may also review the audio hearing
record after the hearing is conducted, which becomes part of the
administrative record for other reviewers. Based on the foregoing, we
believe that telephone hearings provide sufficient assurances addressed
by the commenters.
Comment: One commenter suggested that giving ALJs the discretion to
find good cause for an appearance by VTC would almost never result in a
VTC hearing, and in the commenter's opinion, the good cause provisions
for VTC or in-person hearings is ``almost meaningless.''
Response: We disagree with the commenter's assertion that the good
cause provision for VTC or in-person hearings is ``almost
meaningless.'' We believe the good cause provisions are meaningful
because, as discussed above, an ALJ could find that visual interaction
is necessary and that there is good cause for a VTC hearing where the
ALJ or appellant raises an issue with an individual's credibility, a
party presents multiple witnesses to provide testimony, or a party
wishes to present video/visual evidence. An ALJ may also find good
cause where the case presents complex, challenging, or novel issues,
such as in appeals with a high volume of claims and a high dollar or
overpayment amount. Given the volume of hearing requests and
adjudication timeframes imposed by statute, we believe it is reasonable
to use a good cause standard to determine when it is appropriate for an
ALJ to conduct a VTC hearing for all appellants except unrepresented
beneficiaries. In addition, as discussed above, we believe that
telephone hearings adequately protect appellants' rights to procedural
due process. In proposed Sec. Sec. 405.1020(b)(2) and 423.2020(b)(2),
which we are finalizing in this rule, we provide for circumstances in
which it may be appropriate for the ALJ to provide a VTC or in-person
hearing on his or her own initiative, or to grant a request under
Sec. Sec. 405.1020(i) and 423.2020(i) to change the type of hearing
scheduled and permit a VTC or in-person hearing. For appellants other
than unrepresented beneficiaries, ALJs will evaluate VTC and in-person
hearing requests using the good cause standard established in
Sec. Sec. 405.1020(b)(2) and 423.2020(b)(2), and when appropriate
grant a request for a VTC or in-person hearing. If an individual
appellant believes a request for a VTC or in-person hearing should have
been granted and disagrees with the outcome of the appeal, the
appellant can request review of the ALJ's decision by the Council and
request that the Council remand the appeal for a new hearing if it
believes that the method of conducting the hearing impacted the
[[Page 5050]]
outcome of the appeal such that a new hearing using the requested
format is necessary.
Comment: One commenter indicated the ``availability of live
testimony distinguishes the ALJ process from the prior levels of
appeal, which are limited to written arguments and evidence. The ALJ
hearing should not be just another Reconsideration.''
Response: We do not believe that Sec. 405.1020, as finalized in
this rule, changes the ability to provide live testimony during the ALJ
hearing. As discussed above, Sec. 405.1020(b)(2) provides that
telephone hearings are the default hearing method for individuals other
than unrepresented beneficiaries, but that VTC or in-person hearings
may be provided if the ALJ finds good cause. In telephone hearings, as
with VTC and in-person hearings, parties are able to provide live
testimony, present evidence, and state their positions to an ALJ, as
provided in Sec. 405.1036(a)(1), and witnesses are able to provide
live testimony as provided under Sec. 405.1036(a)(3). In a telephone
hearing, as in a VTC or in-person hearing, there is live interaction
between the ALJ and the parties and participants, which is not the case
in a reconsideration, which is a decision based solely on review of the
record. Further, Sec. Sec. 405.1030(b) and 423.2030(b), as finalized
in this rule, provide the ALJ will fully examine the issues on appeal
and question the parties and other witnesses, ensuring that all
necessary testimony is considered. We note that under Sec.
405.1020(d), a party may waive the right to a hearing and request a
decision based on written evidence in the record. The decision to waive
the right to appear at a hearing before an ALJ, which would entail a
waiver of the ability to present live testimony, is solely at the
discretion of the party. By waiving the right to appear at a hearing,
the party would be requesting that the ALJ or attorney adjudicator
issue a decision based on the written evidence in the record.
Comment: Three commenters requested that the final rule contain a
provision to allow an appellant to request rescheduling of the ALJ
hearing if the appellant's witness(es) are not available due to direct
patient care duties that may conflict with the scheduled date and time.
Response: Sections 405.1020(g)(3)(iv) and 423.2020(g)(3)(iv)
already provide that a party may request a change in time and place of
the hearing where ``a witness who will testify to facts material to a
party's case is unavailable to attend the scheduled hearing and the
evidence cannot be otherwise obtained.'' This covers the unavailability
of a witness as a direct result of patient care responsibility and
therefore provides flexibility to accommodate the needs of appellants.
Comment: One commenter opposed the proposed changes to Sec.
405.1020(i)(1) and (2), which provide that an unrepresented beneficiary
must file their objection to the hearing method in writing and must
include the reasons for their objection. The commenter suggested this
could prove difficult for many beneficiaries and unrepresented
beneficiaries should be afforded the convenience of being allowed to
call the ALJ to orally request a change in the hearing method.
Response: We disagree with the suggestion. Section Sec.
405.1020(i)(2) and (3) indicate if a party objects to the hearing
method, they ``must state the reason for the objection'' and the
objection ``must be in writing.'' These provisions are not being
changed in this final rule, and therefore, the requirement to include
the reason for the objection and to file the objection in writing in
proposed Sec. 405.1020(i)(2) and (3) would not place any additional
burden on the unrepresented beneficiary. Further, OMHA sends a
formatted ``Response to Notice of Hearing,'' to parties who are sent a
notice of hearing, to facilitate their response to the notice of
hearing, including making any objections. The parties may simply check
the boxes in the response to notice of hearing to indicate if they will
attend or if they object to the type of hearing. The response to notice
of hearing also indicates the standard for changing the type of
hearing, and provides examples of good cause for changing the type of
hearing. We believe that using the response to hearing form that is
sent with the notice of hearing makes the process of objecting to the
type of hearing and providing the reasons for the objection relatively
easy and convenient for an unrepresented beneficiary. In addition, a
contact phone number for the ALJ's staff is provided in the notice of
hearing and OMHA maintains a dedicated beneficiary help line, if a
party needs assistance. Given this process, we do not believe it is
necessary to allow oral requests to change the hearing method.
Comment: One commenter suggested CMS or a contractor should be
invited to an ALJ hearing ``when an issue in contention involves non-
adherence to or violation of a Medicare statute or policy by CMS or a
contractor,'' in order for CMS or the contractor ``to be made aware of
the appellant's concern and to be able to answer any allegations.''
Response: Under the current regulations and the regulations as
finalized in this rule, the ALJ has the discretion to make the
determination of whether the appearance of CMS or a contractor would be
beneficial to the hearing and to request that CMS or a contractor
participate, and the ALJ will make such determination when warranted
based on the facts of and the issues raised in a particular case. Under
Sec. Sec. 405.1020(c) and 423.2020(c) as finalized in this rule, a
notice of hearing is sent to CMS or a contractor ``that the ALJ
believes would be beneficial to the hearing, advising them of the
proposed time and place of the hearing.'' In addition, under Sec. Sec.
405.1010 and 405.1012, the ALJ can request (but not require) CMS or a
contractor to participate in or be a party to any proceedings before
the ALJ, including the oral hearing. Under Sec. 423.2010, the ALJ can
request (but not require) CMS, the IRE, and/or the Part D plan sponsor
to participate in any proceedings before the ALJ, including the oral
hearing. In no case is the ALJ permitted to draw any adverse inference
if CMS, its contractor, the IRE and/or the Part D plan sponsor decline
the request.
Comment: One commenter indicated that although the proposed rule
permits the ALJ to offer to conduct a telephone hearing if the request
for hearing or administrative record suggests that a telephone hearing
may be more convenient for the unrepresented beneficiary, nowhere does
the request for hearing form elicit this information from the
beneficiary. This commenter suggested OMHA should add a section or
checkboxes to that effect on the hearing request form to facilitate the
unrepresented beneficiary's preference for method of hearing.
Response: Proposed Sec. 405.2010(b)(1), which we are finalizing in
this rule, provides that the ALJ would direct that the appearance of an
unrepresented beneficiary who filed a request for hearing be conducted
by VTC, or the ALJ may also offer to conduct a telephone hearing if the
request for hearing or administrative record suggests that a telephone
hearing may be more convenient to the unrepresented beneficiary. We
recognize that an unrepresented beneficiary may have an increased
desire to visually interact with the ALJ, and therefore this section
states the ALJ will direct that the appearance be conducted by VTC.
However, this section also explicitly allows the ALJ to offer a
telephone hearing if it may be more convenient for the beneficiary. In
addition, by practice, OMHA support staff contacts an unrepresented
[[Page 5051]]
beneficiary prior to scheduling the hearing to ask for a time, place
and/or method of hearing most convenient for the unrepresented
beneficiary to facilitate determination of the beneficiary's
preference. And, as indicated previously, the form for responding to
the notice of hearing, which is sent to parties with the notice of
hearing, contains checkboxes and instructions on which boxes to check
if a party plans to attend the hearing or if a party objects to the
type of hearing, for example, because the proposed method of hearing is
not convenient for the party. The form for responding to notice of
hearing also explains the standard for changing the time, place and/or
method of the hearing, and provides examples of good cause for changing
the time, place and/or method of the hearing. Beneficiaries and
enrollees with questions or concerns, or who require additional
assistance, can call the toll free OMHA beneficiary help line at (844)
419-3358.
Comment: One commenter indicated with respect to proposed Sec.
405.1020(j) that there is no requirement that an ALJ notify the parties
if they refuse to grant a request for a change in time and/or place of
a hearing. The commenter suggested amending the language so that not
only must a request for a change to the time and place of a hearing, or
the type of hearing, be in writing but that the ALJ be required to
respond to the request in writing, even if the ALJ is refusing to
change the time and place of a hearing.
Response: We believe the original notice of hearing serves as
sufficient notice that the hearing will proceed as scheduled. If a
party requesting a change to the time and/or place of hearing does not
receive an amended notice of hearing granting the party's request, the
party can contact the ALJ's staff to confirm that the hearing will
proceed as scheduled in the original notice, but should presume that
the ALJ did not grant the request for a change to the time and/or place
of hearing. If the ALJ grants the request to change the time and/or
place of the hearing, Sec. 405.1020(j), as finalized in this rule,
provides ``an amended notice of hearing must be sent to all of the
parties who were sent a copy of the notice of hearing and CMS or its
contractors that elected to be a participant or party to the hearing in
accordance with Sec. 405.1022(a),'' which would afford the receiving
parties and participants with notice at least 20 calendar days before
the rescheduled hearing date. This will help ensure that if changes are
made to the time and/or place of the hearing, an amended notice is
issued with sufficient time before the rescheduled hearing in a
consistent manner, if waivers are not obtained.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1020 and 423.2020 as proposed, with the
following modifications. For the reasons discussed in section
II.B.3.f.i above, we are revising Sec. 405.1020(c)(1) to state that
the notice of hearing is also sent to CMS or any contractor that has
elected to participate in the proceedings in accordance with Sec.
405.1010(b). In addition, in the proposed rule (81 FR 43790, 43825), we
proposed to adopt in Sec. 423.2020(b)(2) the same revisions as in
Sec. 405.1020(b)(2). Section 405.1020(b)(2)(ii)(A), as finalized in
this rule, states ``VTC and telephone technology are not available.''
However, we inadvertently included in proposed Sec.
423.2020(b)(2)(ii)(A) the following language: ``video-teleconferencing
or telephone technology is not available.'' Consistent with our
proposal to adopt the same revisions in Sec. 423.2020(b)(2) as we
adopt in Sec. 405.1020(b)(2), we are revising Sec.
423.2020(b)(2)(ii)(A) to state ``video-teleconferencing and telephone
technology are not available.''
k. Notice of a Hearing Before an ALJ and Objections to the Issues
(Sec. Sec. 405.1022, 405.1024, 423.2022, and 423.2024)
As described below, we proposed a number of changes to Sec. Sec.
405.1022, 405.1024, 423.2022, and 423.2024, concerning notice of a
hearing before an ALJ and objections to the issues. 81 FR 43790, 43827-
43828. Current Sec. 405.1022(a) provides that a notice of hearing will
be mailed or personally served to the parties and other potential
participants, but a notice is not sent to a party who indicates in
writing that it does not wish to receive the notice. Current Sec.
423.2022(a) provides that a notice of hearing will be mailed or
otherwise transmitted, or personally served, unless the enrollee or
other potential participant indicates in writing that he or she does
not wish to receive the notice. However, currently Sec. 405.1022(a) is
limiting because it does not contemplate transmitting the notice by
means other than mail or personal service even though technologies
continue to develop and notice could be provided by secure email or a
secure portal. Also, notices must be sent in accordance with any OMHA
procedures that apply, such as procedures to protect personally
identifiable information. In addition, the exception in current Sec.
405.1022(a) does not contemplate a scenario in which a potential
participant indicates that it does not wish to receive the notice, as
is provided for in current Sec. 423.2022(a). We proposed in Sec. Sec.
405.1022(a) and 423.2022(a) to address these issues and align the
sections by providing that a notice of hearing would be mailed or
otherwise transmitted in accordance with OMHA procedures, or personally
served, except to a party or other potential participant who indicates
in writing that he or she does not wish to receive the notice.
Current Sec. Sec. 405.1022(a) and 423.2022(a) provide that a
notice of hearing does not have to be sent to a party who indicates in
writing that it does not wish to receive the notice and that the notice
is mailed or served at least 20 calendar days (for Parts A and B and
for non-expedited Part D hearings), or 3 calendar days (for expedited
Part D hearings) before the hearing. The provisions do not address the
situation where a party wishes to receive the notice, but agrees to the
notice being mailed fewer than 20 calendar days (or 3 calendar days if
expedited) before the hearing, which may be necessary to accommodate an
appellant's request to conduct a hearing in fewer than 20 or 3 calendar
days. We proposed to revise Sec. Sec. 405.1022(a) and 423.2022(a) to
address this situation by providing the notice is mailed, transmitted,
or served at least 20 calendar days (or 3 calendar days if expedited)
before the hearing unless the recipient agrees in writing to the notice
being mailed, transmitted, or served fewer than 20 calendar days (or 3
calendar days if expedited) before the hearing. However, we note that
like a recipient's waiver of receiving a notice of hearing, a
recipient's waiver of the requirement to mail, transmit, or serve the
notice at least 20 or 3 calendar days (as applicable) before the
hearing would only be effective for the waiving recipient and does not
affect the rights of other recipients.
Current Sec. 405.1022(b)(1) requires a notice of hearing to
contain a statement of the specific issues to be decided and inform the
parties that they may designate a person to represent them during the
proceedings. These statements of issues take time to develop, and
current Sec. 405.1032, which addresses the issues before an ALJ,
provides that the issues before the ALJ are all the issues brought out
in the initial determination, redetermination, or reconsideration that
were not decided entirely in a party's favor. Current Sec. 405.1032
also permits an ALJ to consider a new issue at the hearing, if notice
of the new issue is provided to all parties before the start of the
hearing. To streamline the notice of hearing,
[[Page 5052]]
rather than require the notice of hearing to contain a statement of the
specific issues to be decided, we proposed in Sec. 405.1022(b)(1) to
require the notice of hearing to include a general statement putting
the parties on notice that the issues before the ALJ include all of the
issues brought out in the initial determination, redetermination, or
reconsideration that were not decided entirely in a party's favor, for
the claims specified in the request for hearing. This is consistent
with the standard for determining the issues before the ALJ in proposed
Sec. 405.1032(a). However, we also proposed in Sec. 405.1022(b)(1)
that the notice of hearing also would contain a statement of any
specific new issues that the ALJ will consider in accordance with Sec.
405.1032 to help ensure the parties and potential participants are
provided with notice of any new issues of which the ALJ is aware at the
time the notice of hearing is sent, and can prepare for the hearing
accordingly. For example, if in the request for hearing an appellant
raises an issue with the methodology used to sample claims and
extrapolate an overpayment, and that issue had not been brought out in
the initial determination, redetermination, or reconsideration, the
issue would be a new issue and the specific issue would be identified
in the notice of hearing. To accommodate proposed Sec. 405.1022(b)(1),
we proposed that the portion of current Sec. 405.1022(b)(1) that
requires the notice of hearing to inform the parties that they may
designate a person to represent them during the proceedings would be
re-designated as Sec. 405.1022(b)(2), and current subsections (b)(2),
(b)(3), and (b)(4) would be re-designated as subsections (b)(3),
(b)(4), and (b)(5), respectively. We proposed at Sec. 423.2022(b) to
adopt corresponding revisions for notice information in part 423,
subpart U proceedings.
Current Sec. 405.1022(c)(1) provides that if the appellant, any
other party to the reconsideration to whom the notice of hearing was
sent, or their representative does not acknowledge receipt of the
notice of hearing, the ALJ hearing office attempts to contact the party
for an explanation. We proposed to replace ``ALJ hearing office'' with
``OMHA'' because OMHA is the responsible entity.
Current Sec. 405.1022(c)(2) provides that if a party states that
he or she did not receive the notice of hearing, an amended notice is
sent to him or her. The reference to an amended notice has caused
confusion, as the original notice does not need to be amended unless
the hearing is rescheduled. We proposed in Sec. 405.1022(c)(2) to
remove the reference to an ``amended'' notice of hearing and provide
that a copy of the notice of hearing is sent to the party. However, if
a party cannot attend the hearing, we proposed in new Sec.
405.1022(c)(3) that the party may request that the ALJ reschedule the
hearing in accordance with proposed Sec. 405.1020(e), which discusses
a party's objection to the time and place of hearing. We proposed at
Sec. 423.2022(c) to adopt corresponding revisions for providing a copy
of the notice of hearing if the enrollee did not acknowledge it and
states that he or she did not receive it in part 423, subpart U
proceedings.
Current Sec. 405.1022(c)(2) provides that if a party did not
receive the notice of hearing, a copy of the notice may be sent by
certified mail or email, if available. Current Sec. 423.2022(c)(2)
provides an additional option to send the copy by fax. However, use of
email to send documents that contain a beneficiary's or enrollee's
personally identifiable information is not currently permitted by OMHA
policy, and faxes must be sent in accordance with procedures to protect
personally identifiable information. We proposed in Sec. Sec.
405.1022(c)(2) and 423.2022(c)(2) to remove the references to using
email and fax, and to add that a notice may be sent by certified mail
or other means requested by the party and in accordance with OMHA
procedures. This would provide the flexibility to develop alternate
means of transmitting the request and allow OMHA to help ensure
necessary protections are in place to comply with HHS information
security policies. Finally, the parenthetical in current Sec. Sec.
405.1022(c)(2) and 423.2022(c)(2) is not applicable. We believe it was
attempting to cross-reference the provision related to requesting a
rescheduled hearing. Therefore, we proposed in Sec. Sec.
405.1022(c)(2) and 423.2022(c)(2) to remove the parenthetical. As
discussed above, proposed Sec. Sec. 405.1022(c)(3) and 423.2022(c)(3)
would address the option for a party to request a rescheduled hearing
and contain the correct cross-reference.
Current Sec. 405.1024 sets forth the provision regarding
objections by a party to the issues described in the notice of hearing.
Current Sec. 405.1024(b) requires a party to send a copy of its
objection to the issues to all other parties to the appeal. We proposed
to revise Sec. 405.1024(b) to provide that the copy is only sent to
the parties who were sent a copy of the notice of hearing, and CMS or a
contractor that elected to be a party to the hearing, because we
believe sending a copy of the objection to additional parties is
unnecessary and causes confusion for parties who were not sent a copy
of the notice of hearing. No corresponding change was proposed in Sec.
423.2024 because only the enrollee is a party.
Current Sec. 405.1024(c) states that an ALJ makes a decision on
the objection to the issues either in writing or at the hearing. We
proposed to revise Sec. 405.1024(c) to add the option for an ALJ to
make a decision on the objections at a prehearing conference, which is
conducted to facilitate the hearing, as well as at the hearing. We
believe this added flexibility would allow ALJs to discuss the
objections with the parties and make a decision on the record before
the hearing at the prehearing conference. However, we noted that the
ALJ's decision on an objection to the issues at a prehearing conference
pursuant to proposed Sec. 405.1024(c) would not be subject to the
objection process for a prehearing conference order under Sec.
405.1040(d). We stated in the proposed rule that a decision on an
objection to the issues is not an agreement or action resulting from
the prehearing conference, but rather the ALJ's decision on a
procedural matter for which the ALJ has discretion, and we do not
believe the parties should have a right of veto through the prehearing
conference order objection process. We also proposed at Sec.
423.2024(c) to adopt a corresponding revision for a decision on an
objection to the issues in part 423, subpart U proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received three comments on this proposal. One commenter
asked whether a corrected notice of hearing would be sent to all
parties who received the initial notice if a mistake, such as a
typographical error in the beneficiary's name or the appeal number, was
corrected in the response to the notice of hearing submitted by one of
the recipients.
Response: Under OMHA's current practices, if OMHA staff is made
aware of an error, such as a typographical error, in a notice of
hearing, OMHA staff will contact the parties to notify them of the
correction as soon as possible. This is generally accomplished through
a corrected notice of hearing that is sent to all parties who received
the initial notice, but may also be accomplished by contacting the
parties and any CMS contractors that have elected to be participants or
parties by telephone with appropriate documentation of the contact for
the record, so that the hearing may proceed as scheduled.
[[Page 5053]]
However, we note that if it appears that a party's ability to prepare
for the hearing was negatively affected by the error, it may be
necessary to reschedule the time and/or place of the hearing and issue
an amended notice of hearing, consistent with proposed Sec.
405.1020(j).
Comment: Another commenter indicated that the time frame for
sending notice of a hearing is too short considering the burden of
moving the hearing once it is scheduled, and suggested that OMHA
reinstitute a policy of contacting the appellant's representative prior
to sending the hearing notice.
Response: We did not propose to change the current rule that a
notice of hearing is mailed or served at least 20 calendar days before
the hearing (or 3 calendar days before the hearing for Part D expedited
appeals). These time frames are necessary for scheduling and conducting
the hearing as quickly as possible. While some ALJ teams had a practice
of contacting the appellant, or the appellant's representative if a
representative was involved, before scheduling a hearing, OMHA has not
had a policy that required them to do so. Further, we believe that
adding a requirement to contact the parties before scheduling a hearing
would add administrative burden and slow the hearing process at a time
of record workload volume. Our experience is that there are not a large
number of requests to reschedule hearings when hearings are scheduled
without contacting the appellant, or the appellant's representative if
a representative was involved, prior to scheduling the hearing.
Moreover, we believe the current standard for mailing or serving a
notice of hearing at least 20 calendar days before the hearing, or 3
calendar days before the hearing for Part D expedited appeals, provides
sufficient notice and time to prepare for the hearing, and if
necessary, request to change the time or place of the hearing if there
is good cause to do so, consistent with Sec. Sec. 405.1020(e) and
423.2020(e).
Comment: One commenter supported the proposal to include a
generalized statement of the issues, as well as any specific new issues
that the ALJ may consider, in the notice of hearing. The commenter
suggested that the notice of hearing should include the dates of
service and/or the QIC number to help identify the specific claim that
is being scheduled for hearing, as well as the name, address, telephone
number, and fax number of the OMHA point of contact for any questions.
Response: We thank the commenter for its support of our proposal to
include a generalized statement of the issues, as well as any specific
new issues that the ALJ may consider, in the notice of hearing.
However, we did not propose changing other content requirements for the
notice of hearing, and thus we do not believe that it would be
appropriate to include the suggested changes in this final rule. With
respect to the dates of service of the claims being appealed, we note
that under Sec. 405.1014, as finalized in this rule, the request for
hearing must contain the dates of service for the claims being
appealed, and a copy of the request must be sent to the other parties
who were a sent a copy of the QIC's reconsideration. The parties who
would receive a notice of hearing under Sec. 405.1020(c), as finalized
in this rule, would generally also have received a copy of the QIC's
reconsideration, and would thus be able to determine the dates of
service by comparing the notice of hearing with the request for
hearing. With respect to providing an OMHA point of contact, we note
that the notices of hearing currently issued by OMHA include a mailing
address, phone number, and fax number for the ALJ team assigned to the
appeal. We also note that an appellant can find the QIC appeal number
associated with an appeal by using AASIS, which provides public access
to appeal status information and is accessed through the OMHA Web site
(www.hhs.gov/omha).
Comment: One commenter suggested that the requirement to send a
copy of any objection to the issues to the other parties should be
waived for unrepresented beneficiaries because it adds to the cost and
burden of maintaining an appeal.
Response: Consistent with our discussion of copy requirements in
section II.B.3.g.v of this final rule above, we do not agree that
unrepresented beneficiaries should be exempt from the regulatory
requirement to send a copy of their objections to the issues to other
parties; instead, we believe that unrepresented beneficiaries should be
assisted with meeting this requirement. In the event that an
unrepresented beneficiary does not fulfill the requirement, OMHA will
forward a copy of any objections submitted by the unrepresented
beneficiary to the other parties who were sent a copy of the notice of
hearing.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1022, 405.1024, 423.2022, and 423.2024 as
proposed without modification.
l. Disqualification of the ALJ or Attorney Adjudicator (Sec. Sec.
405.1026 and 423.2026)
As described below, we proposed several changes to Sec. 405.1026,
which provides a process for a party to request that an ALJ disqualify
himself or herself from an appeal, or for an ALJ to disqualify himself
or herself from an appeal on the ALJ's own motion. 81 FR 43790, 43828.
We proposed to revise Sec. 405.1026 to replace the current references
to conducting a hearing with references to adjudicating an appeal, to
make it is clear that disqualification is not limited to ALJs or cases
where a hearing is conducted to help ensure that an attorney
adjudicator, as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above), also cannot adjudicate an appeal if
he or she is prejudiced or partial to any party, or has any interest in
the matter pending for decision. Current Sec. 405.1026(b) requires
that, if a party objects to the ALJ who will conduct the hearing, the
party must notify the ALJ within 10 calendar days of the date of the
notice of hearing. The ALJ considers the party's objections and decides
whether to proceed with the hearing or withdraw. However, the current
rule does not address appeals for which no hearing is scheduled and/or
no hearing will be conducted. Therefore, we proposed to revise Sec.
405.1026(b) to require that if a party objects to the ALJ or attorney
adjudicator assigned to adjudicate the appeal, the party must notify
the ALJ within 10 calendar days of the date of the notice of hearing if
a hearing is scheduled, or the ALJ or attorney adjudicator any time
before a decision, dismissal order, or remand order is issued if no
hearing is scheduled. We also proposed to revise Sec. 405.1026(c) to
state that an ALJ or attorney adjudicator is ``assigned'' to adjudicate
an appeal, rather than ``appointed,'' for consistency in terminology,
and to replace ``hearing decision'' with ``decision or dismissal''
because not all decisions are issued following a hearing and an
appellant may have objected in an appeal that was dismissed, for which
review may also be requested from the Council. In addition, we proposed
to add ``if applicable'' in discussing that the Council would consider
whether a new hearing is held because not all appeals may have had or
require a hearing. We proposed at Sec. 423.2026 to adopt corresponding
revisions for disqualification of an ALJ or attorney adjudicator in
part 423, subpart U proceedings.
Section 405.1026 does not address the impact of a party's objection
and adjudicator's withdrawal on an
[[Page 5054]]
adjudication time frame. We stated in the proposed rule that the
withdrawal of an adjudicator and re-assignment of an appeal will
generally cause a delay in adjudicating the appeal. We proposed in new
Sec. 405.1026(d) that if the party objects to the ALJ or attorney
adjudicator, and the ALJ or attorney adjudicator subsequently withdraws
from the appeal, any applicable adjudication time frame that applies is
extended by 14 calendar days. We stated that this would allow the
appeal to be re-assigned and for the new adjudicator to review the
appeal. We proposed at Sec. 423.2026(d) to adopt a corresponding
provision for the effect of a disqualification of an adjudicator on an
adjudication time frame in part 423, subpart U proceedings, but
proposed that if an expedited hearing is scheduled, the time frame is
extended by 2 calendar days, to balance the need for the newly assigned
adjudicator to review the appeal, and the enrollee's need to receive a
decision as quickly as possible.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
asked what recourse is available when, in the opinion of an appellant,
an ALJ has not considered arguments, evidence, or testimony to the
satisfaction of the appellant in its prior cases assigned to that ALJ.
The commenter questioned whether the regulations should allow parties
to enter a ``peremptory challenge'' to an assigned ALJ without
explanation as to the reason for requesting that the ALJ withdraw from
adjudicating an assigned appeal.
Response: Proposed Sec. Sec. 405.1026 and 423.2026, which we are
finalizing in this rule, extend the current provisions related to
disqualifying an ALJ based on bias or a conflict of interest, to
disqualifying an attorney adjudicator, to help ensure that the same
standards and process for disqualifying an adjudicator at OMHA applies
regardless of whether the adjudicator is an ALJ or attorney
adjudicator. We believe that this is a necessary change to extend the
safeguards in current Sec. Sec. 405.1026 and 423.2026 to cases
assigned to an attorney adjudicator. In response to the commenter's
question about the recourse available when an appellant believes an ALJ
has not considered arguments, evidence, or testimony to the
satisfaction of the appellant in its prior cases assigned to the ALJ,
in such a situation, to the extent the appellant believes that the ALJ
is prejudiced or partial to any party in the case at hand, the
appellant could object to the assigned ALJ and request that the ALJ
withdraw from an appeal using the procedures in Sec. Sec. 405.1026 or
423.2026, as finalized in this rule. If the ALJ does not withdraw, the
objection can be raised on appeal to the Council after the ALJ issues a
disposition of the case. Similarly, any disagreement with the ALJ's
decision, including the ALJ's consideration or analysis of the
arguments, evidence, and testimony, could be raised in requesting a
review of the decision by the Council.
With regard to the commenter's suggestion that the regulations
should allow a peremptory challenge by which a party can request
reassignment to a different adjudicator without providing a specific
objection, we disagree. We do not believe that preemptory challenges
would be appropriate or necessary at the OMHA level. A peremptory
challenge is generally a feature of a trial by jury that allows
attorneys for each side to reject a limited number of jurors without
stating a reason for the challenge and without the judge's approval.
The concept of a peremptory challenge is to allow both sides to
contribute to the jury's composition to help ensure an unbiased result.
Under 5 U.S.C. 3105, ALJs must be assigned to cases in rotation so far
as practicable, and current Sec. Sec. 405.1026 and 423.2026 help
ensure an unbiased result by requiring the ALJ to withdraw if he or she
is prejudiced or partial to any party or has any interest in the matter
pending for decision.
We believe allowing parties to request reassignment of an ALJ
without explaining the basis for objecting to the ALJ is contrary to
the principles of random rotational assignments and would be disruptive
and inefficient in processing appeals. The recommendation would add a
new administrative burden in reassigning appeals, resulting in an
overall decrease in the efficient adjudication of appeals. Furthermore,
we believe that the option of a peremptory challenge would further
increase administrative burdens and inefficiencies in cases involving
multiple parties, where the option of a preemptory challenge would need
to be extended to all parties to the appeal. In addition, permitting an
appellant to exercise a peremptory challenge in the manner suggested
may lead to abuses such as forum shopping or retaliation against an ALJ
or an attorney adjudicator for a prior decision with which the party
did not agree, even if the ALJ's decision was supported by the evidence
and affirmed on appeal to the Council. Also, peremptory challenges
potentially used for reasons that have nothing to do with bias would go
unrebutted and may undermine the public's confidence in the appeals
process. We believe that the potential for abuse, and the
administrative burdens and inefficiencies associated with allowing a
peremptory challenge outweigh any potential benefit to the adjudication
process. In addition, we believe that the disqualification process in
Sec. Sec. 405.1026 and 423.2026 as finalized in this rule, and the
opportunity to appeal to the Council any objection to an ALJ or the
decision in a case if the ALJ does not withdraw, afford appellants and
other parties with strong protections and remedies to address potential
bias. The process outlined in Sec. Sec. 405.1026 and 423.2026
contemplates that the party specify his or her reasons for objecting to
the assigned adjudicator so that the adjudicator may consider the
reasons and make an informed decision as to whether he or she is
prejudiced or partial to any party, or has any interest in the matter
pending for decision, and therefore whether to proceed with the appeal
or withdraw as the adjudicator. If the adjudicator does not withdraw,
the party may request review of the adjudicator's action by the
Council. When a reason is provided for the party's objection, even if
it is a cursory reason, it is preserved in the record and the Council's
review will therefore be better informed. Because the regulations
already provide a process by which a party can object to an assigned
adjudicator, and an opportunity to have the Council review the
objections in cases where an adjudicator does not withdraw, we do not
believe a peremptory challenge is necessary.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1026 and 423.2026 as proposed without
modification.
m. Review of Evidence Submitted by the Parties (Sec. 405.1028)
As discussed below, we proposed several revisions to Sec.
405.1028, which addresses the prehearing review of evidence submitted
to the ALJ. 81 FR 43790, 43828-43830. We proposed to revise the title
of Sec. 405.1028 to reflect that the regulation would more broadly
apply to the review of evidence submitted by the parties because a
hearing may not be conducted and an attorney adjudicator would review
evidence in deciding appeals as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 of this final rule
above).
We proposed at Sec. 405.1028(a) to incorporate current Sec.
405.1028(a) to address new evidence. Current
[[Page 5055]]
Sec. 405.1028(a) states that after a hearing is requested but before
it is held, the ALJ will examine any new evidence submitted with the
request for hearing (or within 10 calendar days of receiving the notice
of hearing) as specified in Sec. 405.1018, by a provider, supplier, or
beneficiary represented by a provider or supplier, to determine whether
there was good cause for submitting evidence for the first time at the
ALJ level. However, this provision and the other provisions in current
Sec. 405.1028 do not address the review of new evidence when no
hearing is conducted for an appeal. Therefore, we proposed to revise
Sec. 405.1028(a) to add Sec. 405.1028(a)(1), (2), (3), and (4), and
proposed in Sec. 405.1028(a)(1) that after a hearing is requested but
before it is held by an ALJ (to reinforce that hearings are only
conducted by ALJs), or a decision is issued if no hearing is held, the
ALJ or attorney adjudicator would review any new evidence. In addition,
we proposed in Sec. 405.1028(a)(1) to remove the duplicative statement
indicating the review is conducted on ``any new evidence submitted with
the request for hearing (or within 10 calendar days of receiving the
notice of hearing) as specified in Sec. 405.1018,'' because Sec.
405.1018 discusses when evidence may be submitted prior to a hearing
and, as explained in section III.A.3.i of the proposed rule and
II.B.3.i of this final rule above, proposed Sec. 405.1018 would revise
the language that is duplicated in current Sec. 405.1028. We stated in
the proposed rule that we believed that the better approach going
forward is simply to reference Sec. 405.1018 by indicating that the
review is conducted on ``any new evidence submitted in accordance with
Sec. 405.1018.'' This would remind parties that evidence must be
submitted in accordance with Sec. 405.1018, while minimizing confusion
on which section is authoritative with regard to when evidence may be
submitted.
In a 2012 OIG report on the ALJ hearing process (OEI-02-10-00340),
the OIG reported concerns regarding the acceptance of new evidence in
light of the statutory limitation at section 1869(b)(3) of the Act on
new evidence submitted by providers and suppliers. The OIG concluded
that the current regulations regarding the acceptance of new evidence
provide little guidance and only one example of good cause, and
recommended revising the regulations to provide additional examples and
factors for ALJs to consider when determining good cause.
Section 1869(b)(3) of the Act states that a provider or supplier
may not introduce evidence in any appeal that was not presented at the
QIC reconsideration unless there is good cause which precluded the
introduction of such evidence at or before that reconsideration. We
stated in the proposed rule that this section presents a Medicare-
specific limitation on submitting new evidence, and therefore limits
the authority of an ALJ to accept new evidence under the broader APA
provisions (see 5 U.S.C. 556(c)(3) (``Subject to published rules of the
agency and within its power, employees presiding at hearings may-- . .
. receive relevant evidence . . . .'')). We also stated that section
1869(b)(3) of the Act presents a clear intent by Congress to limit the
submission of new evidence after the QIC reconsideration, which must be
observed.
In light of the OIG conclusion and recommendation and to more
effectively implement section 1869(b)(3) of the Act, we proposed to
incorporate current Sec. 405.1028(b) in proposed Sec. 405.1028(a)(2)
on when an ALJ could find good cause for submitting evidence for the
first time at the OMHA level, and to establish four additional
circumstances in which good cause for submitting new evidence may be
found. We also proposed to permit an attorney adjudicator to find good
cause because attorney adjudicators would be examining new evidence in
deciding appeals on requests for an ALJ hearing as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 of this
final rule above), and we stated in the proposed rule that we believed
the same standard for considering evidence should apply.
We proposed in Sec. 405.1028(a)(2)(i) to adopt the example in
current Sec. 405.1028(b) and provide that good cause is found when the
new evidence is, in the opinion of the ALJ or attorney adjudicator,
material to an issue addressed in the QIC's reconsideration and that
issue was not identified as a material issue prior to the QIC's
reconsideration.
We proposed in Sec. 405.1028(a)(2)(ii) to provide that good cause
is found when the new evidence is, in the opinion of the ALJ, material
to a new issue identified in accordance with Sec. 405.1032(b). This
would provide parties with an opportunity to submit new evidence to
address a new issue that was identified after the QIC's
reconsideration. We stated, however, that the authority is limited to
ALJs because, as discussed in proposed Sec. 405.1032, only an ALJ may
raise a new issue on appeal.
We proposed in Sec. 405.1028(a)(2)(iii) to provide that good cause
is found when the party was unable to obtain the evidence before the
QIC issued its reconsideration and the party submits evidence that, in
the opinion of the ALJ or attorney adjudicator, demonstrates that the
party made reasonable attempts to obtain the evidence before the QIC
issued its reconsideration. For example, if specific medical records
are necessary to support a provider's or supplier's claim for items or
services furnished to a beneficiary, the provider or supplier must make
reasonable attempts to obtain the medical records, such as requesting
records from a beneficiary or the beneficiary's physician when it
became clear the records are necessary to support the claim, and
following up on the request. We stated in the proposed rule that
obtaining medical records, in some cases from another health care
professional, and submitting those records to support a claim for
services furnished to a beneficiary is a basic requirement of the
Medicare program (see sections 1815(a) and 1833(e) of the Act, and
Sec. 424.5(a)(6)), and we expect instances where records cannot be
obtained in the months leading up to a reconsideration should be rare.
We stated that if the provider or supplier was unable to obtain the
records prior to the QIC issuing its reconsideration, good cause for
submitting the evidence after the QIC's reconsideration could be found
when the ALJ or attorney adjudicator determines that the provider or
supplier submitted evidence that demonstrates the party made reasonable
attempts to obtain the evidence before the QIC issued its
reconsideration.
We proposed at Sec. 405.1028(a)(2)(iv) to provide that good cause
is found when the party asserts that the evidence was submitted to the
QIC or another contractor and the party submits evidence that, in the
opinion of the ALJ or attorney adjudicator, demonstrates that the new
evidence was indeed submitted to the QIC or another contractor before
the QIC issued the reconsideration. For example, if a provider or
supplier submitted evidence to the QIC or another contractor and,
through administrative error, the evidence was not associated with the
record that is forwarded to OMHA, good cause may be found when the ALJ
or attorney adjudicator determines that the provider or supplier
submitted evidence that demonstrates the new evidence was submitted to
the QIC or another contractor before the QIC issued the
reconsideration.
Finally, we proposed at Sec. 405.1028(a)(2)(v) to provide that in
circumstances not addressed in proposed paragraphs (i) through (iv),
the ALJ or attorney adjudicator may find good cause for new evidence
when the
[[Page 5056]]
ALJ or attorney adjudicator determines the party has demonstrated that
it could not have obtained the evidence before the QIC issued its
reconsideration. We stated in the proposed rule that we expected
proposed paragraphs (i) through (iv) to cover most circumstances in
which a provider or supplier attempts to introduce new evidence after
the QIC reconsideration, but we also stated that we believed this
additional provision is necessary to allow for a good cause finding in
any other circumstance that meets the requirements of section
1869(b)(3) of the Act. We stated that paragraph (v) helps ensure that
OMHA fulfills the statutory requirement by requiring that the ALJ or
attorney adjudicator make a determination on whether the party could
have obtained the evidence before the QIC issued its reconsideration.
To accommodate the new structure of proposed Sec. 405.1028, we
proposed that current paragraphs (c) and (d) be re-designated as
paragraphs (a)(3) and (a)(4), respectively. In addition, we proposed at
Sec. 405.1028(a)(4) that notification about whether the evidence would
be considered or excluded applies only when a hearing is conducted, and
notification of a determination regarding new evidence would be made
only to parties and participants who responded to the notice of
hearing, since all parties may not be sent a copy of the notice of
hearing or attend the hearing. We noted that if a hearing is not
conducted, whether the evidence was considered or excluded would be
discussed in the decision, pursuant to proposed Sec. 405.1046(a)(1),
as discussed in section III.A.3.v of the proposed rule and II.B.3.v of
this final rule below. We also proposed at Sec. 405.1028(a)(4) that
the ALJ would notify all parties and participants whether the new
evidence would be considered or is excluded from consideration (rather
than only whether the evidence will be excluded from the hearing) and
that this determination would be made no later than the start of the
hearing, if a hearing is conducted. We stated that if evidence is
excluded, it is excluded from consideration at all points in the
proceeding, not just the hearing, and evidence may be excluded from
consideration even when no hearing is conducted. We stated that we
believe that this would provide greater clarity to parties and
participants regarding the ALJ's determination with respect to new
evidence, and the effect of the exclusion of such evidence on the
proceedings.
Current Sec. 405.1028 does not address duplicative evidence. We
stated in the proposed rule that duplicative evidence is a significant
challenge for OMHA because appellants often submit copies of medical
records and other submissions that were filed at prior levels of appeal
and are in the record forwarded to OMHA. While we recognize that
appellants want to ensure the evidence is in the record and considered,
we are also mindful that the APA provides that as a matter of policy,
an agency shall provide for the exclusion of unduly repetitious
evidence (see 5 U.S.C 556(d)).
We proposed in Sec. 405.1028(b) that the ALJ or attorney
adjudicator may exclude from consideration any evidence submitted by a
party at the OMHA level that is duplicative of evidence already in the
record forwarded to OMHA. In addition to establishing a general policy
for the exclusion of unduly repetitious evidence, we stated that this
would reduce confusion as to which of the multiple copies of records to
review, and would reduce administrative burden.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter expressed support for allowing providers to
submit evidence that may have been unavailable at the lower levels of
appeal.
Response: We believe the commenter was referring to our proposal in
Sec. 405.1028(a)(2)(iii) to allow for the submission of new evidence
when a party was unable to obtain the evidence before the QIC issued
its reconsideration and submits evidence that, in the opinion of the
ALJ or attorney adjudicator, demonstrates the party made reasonable
attempts to obtain the evidence before the QIC issued its
reconsideration. We thank the commenter for its support.
Comment: We received a comment recommending that the proposed
language in Sec. 405.1028(a) be modified to give the ALJ or attorney
adjudicator discretion to admit new evidence, despite a party's
inability to satisfy one of the examples of ``good cause'' listed in
the regulation, when the adjudicator determines that ``review of
additional evidence is necessary in the interest of justice.''
Response: We disagree with the recommendation. Section 1869(b)(3)
of the Act establishes a specific prohibition on a provider or a
supplier submitting evidence that was not presented at the
reconsideration conducted by the QIC, unless there is good cause that
precluded the evidence from being introduced at or before the QIC's
reconsideration. This statutory provision limits the submission of new
evidence by certain appellants late in the administrative appeals
process, and provides an exception only if there is good cause which
precluded the introduction of such evidence at or before the
reconsideration. We believe that the standard suggested by the
commenter could incorporate exceptions that are inconsistent with the
good cause standard set forth in the statute. We believe that the
enumerated examples in the regulations of when an ALJ or attorney
adjudicator may find good cause for new evidence submitted by a
provider or supplier for the first time at OMHA effectively implements
section 1869(b)(3) of the Act and provides those parties with clearer
guidance as to what is permissible under section 1869(b)(3). We believe
that the enumerated good cause examples listed in Sec. 405.1028(a)(2)
balance the interests of the parties in maintaining an avenue through
which new evidence may be admitted for consideration while remaining
faithful to the statutory requirement of section 1869(b)(3) of the Act.
Comment: One commenter expressed concern with proposed Sec.
405.1028(b), noting that the new language on duplicative evidence does
not address the procedures that will be used to determine if a record
is a duplicate or how a provider can request that a record omitted in
error is placed back in the record. The commenter suggested that if
records are removed, all parties to the appeal should have the
opportunity to review the administrative record prior to a hearing to
ensure that the record is complete.
Response: Pursuant to the procedures outlined in Sec. Sec.
405.1042(b) and 423.2042(b) as finalized in this rule, parties may
request a copy of the administrative record to review at any time while
the appeal is pending at OMHA, including prior to the hearing. In
addition, parties are provided with an opportunity to reference and
discuss specific records or other evidence at the hearing, to confirm
that the exhibited portion of the administrative record contains all
the evidence that the ALJ will consider. Section 405.1028(b), as
finalized in this rule, only provides that documents that are
duplicative may be identified as such and, on that basis, are not
marked as exhibits and are excluded from consideration. This section
does not permit duplicative evidence to be removed from the
administrative record, thus the documents are preserved and may be re-
designated and placed back in the exhibited portion of the
administrative record if it is determined that the document was
identified as duplicative in error. The procedures for
[[Page 5057]]
identifying and handling duplicates are outlined in the OCPM, a
reference guide outlining the day-to-day operating instructions,
policies, and procedures of the agency. The OCPM describes OMHA case
processing procedures in greater detail and provides frequent examples
to aid understanding. This resource, which is available to the public
on the OMHA Web site (www.hhs.gov/omha), includes a detailed chapter on
the administrative record and provides instructions on identifying and
handling duplicative evidence.
Comment: Another commenter noted that the proposed changes allow
attorney adjudicators to determine if a party has good cause for
submitting evidence for the first time at the OMHA level or to exclude
duplicative evidence from consideration. In the commenter's opinion,
such judgments should be reserved for ALJs.
Response: We disagree with the commenter and believe that attorney
adjudicators will have the necessary skills and training to address
procedural determinations regarding whether there is good cause for
submitting evidence for the first time at the OMHA level, which will be
aided by the additional guidance in proposed Sec. 405.1028, and to
identify or confirm that evidence is duplicative of evidence already in
the record. As discussed in section II.A.2 of this final rule above,
well-trained attorneys can perform a review of the administrative
record, identify the issues, and make the necessary findings of fact
and conclusions of law when the regulations do not require a hearing to
issue a decision on the matter. We believe that the procedural
determinations regarding whether there is good cause for new evidence
and whether evidence is duplicative are necessary for attorney
adjudicators to establish the record upon which a decision will be
made, and the determinations are not so complex as to require an ALJ.
Moreover, allowing attorney adjudicators to make these procedural
determinations on evidence in their cases will allow for ALJs to focus
more of their time and attention on appeals that require a hearing, and
the more complex procedural issues involved in those appeals.
Comment: One commenter requested that health plans be allowed the
opportunity to respond to the submission of new evidence and indicate
whether the plan believes good cause does not exist, why the case may
require a remand for consideration of the new evidence, or why the
newly provided evidence should not be afforded any weight in the
adjudicator's decision.
Response: As discussed above (and section III.A.3.m of the proposed
rule), the requirement that providers, suppliers, and beneficiaries
represented by providers and suppliers, present any evidence for an
appeal no later than the QIC reconsideration level, unless there is
good cause for late submission, emanates from section 1869(b)(3) of the
Act and is an existing regulatory requirement at Sec. Sec. 405.1018
and 405.1028. Health plans are not parties to fee-for-service appeals
conducted under section 1869 of the Act and, as explained in section
II.A.3 of this final rule above (and section II.C of the proposed
rule), we do not believe the part 405 regulatory requirements that
implement section 1869(b)(3) of the Act are applicable to Part C MA
appeals or cost plan appeals, because there is no similar requirement
in section 1852(g) or 1876 of the Act. There is also no similar
requirement in section1860-D4 of the Act, and the Part D appeals
regulations at part 423, subparts M and U have not implemented such a
requirement. Therefore, we do not believe there would be any situations
where a party would be required to make a showing of good cause for the
introduction of new evidence in a Part C or Part D appeal in which a
health plan was also a party. We note that Sec. 423.2018(a)(2) does
require an ALJ to remand an appeal to the Part D IRE when an enrollee
wishes evidence on his or her change in condition after a coverage
determination to be considered, but this is compulsory under the
regulations and not subject to ALJ discretion. Furthermore, although
parties are permitted to respond to new evidence that is admitted into
the administrative record, making a determination of whether good cause
exists, whether a case requires a remand to the lower level, or whether
evidence submitted should or should not bear weight in the decision are
all assessments that are the responsibility of the adjudicator and are
not subject to party or participant input. We believe that adding party
or participant input to these types of adjudicator actions undermines
the adjudicator's role, and would result in unnecessary delays to an
appeal, which is contrary to our goal of streamlining the appeals
process.
Comment: One commenter urged OMHA to firmly reinforce with all
ALJs, attorney adjudicators, and other staff that the limitation on
submitting new evidence for the first time at the OMHA level does not
apply to unrepresented beneficiaries and Medicaid State agencies.
Response: We agree with the commenter and note that the current
regulation at Sec. 405.1028(a) states that the limitations apply only
when new evidence is submitted by a provider, supplier, or a
beneficiary represented by a provider or supplier. As discussed in
section II.B.3.i of this final rule above, we are amending proposed
Sec. 405.1018(d) to provide that the limitation on submitting new
evidence for the first time at the OMHA level does not apply to
evidence submitted by unrepresented beneficiaries, CMS or its
contractors, a Medicaid State agency, an applicable plan, or
beneficiaries represented by someone other than a provider or supplier.
Current Sec. 405.1018(d) already explicitly states that the
limitations on submitting evidence, including the limitations on the
submission of new evidence, do not apply to an unrepresented
beneficiary. In addition, OMHA provides training to its ALJs,
attorneys, and other staff to help ensure understanding and compliance
with all regulations applicable to processing appeals, and will provide
training on all aspects of this final rule.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. 405.1028 as proposed without modification.
n. ALJ Hearing Procedures (Sec. Sec. 405.1030 and 423.2030)
The APA provides an ALJ with the authority to regulate the course
of a hearing, subject to the rules of the agency (see 5 U.S.C.
556(c)(5)). As discussed below, we proposed several revisions to
Sec. Sec. 405.1030 and 423.2030, which address ALJ hearing procedures.
81 FR 43790, 43830-43832. We stated in the proposed rule that in rare
circumstances, OMHA ALJs have encountered a party or representative
that makes it difficult or impossible for the ALJ to regulate the
course of a hearing, or for other parties to present their side of the
dispute. This may occur when a party or representative continues to
present testimony or argument on a matter that is not relevant to the
issues before the ALJ, or on a matter for which the ALJ believes he or
she has sufficient information or on which the ALJ has already ruled.
This may also occur when a party or representative is uncooperative,
disruptive, or abusive during the course of the hearing. Sections
405.1030 and 423.2030 set forth the rules that govern ALJ hearing
procedures. We proposed to revise Sec. Sec. 405.1030(b) and
423.2030(b) to add provisions to address these circumstances in a
consistent manner that protects the interests of the parties
[[Page 5058]]
and the integrity of the hearing process. To accommodate these
proposals, we proposed to re-designate paragraph (b) in both Sec. Sec.
405.1030 and 423.2030 as paragraph (b)(1), and, to be consistent with
proposed Sec. Sec. 405.1018 and 423.2018, to replace the current
language stating that an ALJ may accept ``documents that are material
to the issues'' with ``evidence that is material to the issues,''
because not all evidence that may be submitted is documentary evidence
(for example, photographs).
We proposed in Sec. 405.1030(b)(2) to address circumstances in
which a party or representative continues with testimony and argument
that are not relevant to the issues before the ALJ or that address a
matter for which the ALJ believes he or she has sufficient information
or on which the ALJ has already ruled. In these circumstances, the ALJ
may limit testimony and/or argument at the hearing, and may, at the
ALJ's discretion, provide the party or representative with an
opportunity to submit additional written statements and affidavits on
the matter in lieu of testimony and/or argument at the hearing, within
a time frame designated by the ALJ. Proposed Sec. 405.1030(b)(2) would
allow the ALJ to effectively regulate the course of the hearing by
providing the ALJ with the clear authority to limit testimony and/or
argument during the hearing, while providing an avenue for the ALJ to
allow the testimony and/or argument to be entered into the record. We
proposed at Sec. 423.2030(b)(2) to adopt a corresponding revision for
limiting testimony and argument at a hearing, and at the ALJ's
discretion, provide an opportunity to submit additional written
statements and affidavits in part 423, subpart U proceedings.
We proposed at Sec. 405.1030(b)(3) to address circumstances in
which a party or representative is uncooperative, disruptive, or
abusive during the course of the hearing. In these circumstances, we
proposed that the ALJ would have the clear authority to excuse the
party or representative from the hearing and continue with the hearing
to provide the other parties and participants with the opportunity to
offer testimony and/or argument. However, we stated in the proposed
rule that in this circumstance, the ALJ would be required to provide
the excused party or representative with an opportunity to submit
written statements and affidavits in lieu of testimony and/or argument
at the hearing. Further, we stated that the party also would be allowed
to request a copy of the audio recording of the hearing in accordance
with Sec. 405.1042 and respond in writing to any statements made by
other parties or participants and/or testimony of the witnesses at the
hearing, within a time frame designated by the ALJ. These proposals
would allow the ALJ to effectively regulate the course of the hearing
and balance the excused party's right to present his or her case,
present rebuttal evidence, and cross-examine the witnesses of other
parties with allowing the party to submit written statements and
affidavits. We proposed at Sec. 423.2030(b)(3) to adopt a
corresponding revision for excusing an enrollee or representative who
is uncooperative, disruptive, or abusive during the hearing in part
423, subpart U proceedings.
Current Sec. 405.1030(c) addresses evidence that the ALJ
determines is missing at the hearing, and provides that if the evidence
is in the possession of the appellant, and the appellant is a provider,
supplier, or a beneficiary represented by a provider or supplier, the
ALJ must determine whether the appellant had good cause for not
producing the evidence earlier. We proposed to revise Sec. 405.1030(c)
to add that the ALJ must determine whether the appellant had good cause
in accordance with Sec. 405.1028 for not producing the evidence.
Section 1869(b)(3) of the Act applies to limit submission of all new
evidence after the QIC reconsideration by a provider or supplier absent
good cause, and the proposed addition would create consistent
application of the standards for determining whether there is good
cause to admit new evidence, regardless of when the evidence is
submitted after the QIC reconsideration. We did not propose any
corresponding changes to current Sec. 423.2030(c) because the
limitation on new evidence does not apply in part 423, subpart U
proceedings.
Current Sec. 405.1030(d) and (e) discuss what happens if an ALJ
determines there was or was not good cause for not producing the new
evidence earlier. Current Sec. 405.1030(d) provides that if the ALJ
determines that good cause exists, the ALJ considers the evidence in
deciding the case, and the adjudication period is tolled from the date
of the hearing to the date that the evidence is submitted. Current
Sec. 405.1030(e) provides that if the ALJ determines that good cause
does not exist, the evidence is excluded, with no impact on an
applicable adjudication period. We stated in the proposed rule that
current Sec. 405.1030(d) and (e) have caused confusion in light of
Sec. 405.1018, which indicates that the adjudication period will be
affected if evidence is submitted later than 10 calendar days after
receipt of the notice of hearing, unless the evidence is submitted by
an unrepresented beneficiary. We stated that it has also potentially
created an incentive for appellants to disregard Sec. 405.1018 because
current Sec. 405.1030(b) appears to allow evidence to be submitted at
the hearing without affecting the adjudication time frame; and Sec.
405.1030(c) allows the ALJ to stop a hearing temporarily if there is
material evidence missing, with the effect of tolling the adjudication
time frame (under Sec. 405.1030(d)) from the date of the hearing to
the date the evidence is submitted, if the evidence is in the
possession of an appellant who is a provider or supplier or beneficiary
represented by a provider or supplier, and the ALJ finds good cause to
admit the evidence. In addition, we stated that OMHA ALJs have
expressed concern that current Sec. 405.1030(e) does not affect the
adjudication period when an equal amount of time is spent reviewing
evidence and making a good cause determination, regardless of whether
good cause is found.
Therefore, we proposed to revise Sec. 405.1030(d) to address the
effect of an evidentiary submission on an adjudication period. We
proposed in Sec. 405.1030(d) that any applicable adjudication period
is extended in accordance with proposed Sec. 405.1018(b) if an
appellant other than an unrepresented beneficiary submits evidence
pursuant to proposed Sec. 405.1030(b), which generally allows for
submission of evidence at the hearing, or proposed Sec. 405.1030(c),
which specifically addresses evidence that the ALJ determines is
missing at the hearing. Under proposed Sec. 405.1018(b), any
adjudication period that applies to the appeal would be extended by the
number of days starting 10 calendar days after receipt of the notice of
hearing, and ending when the evidence is submitted, whether it is at
the hearing pursuant to proposed Sec. 405.1030(b)(1), or at a later
time pursuant to proposed Sec. 405.1030(c). We stated that proposed
Sec. 405.1030(d) would provide appellants with an incentive to submit
evidence they wish to have considered early in the adjudication
process, allow the ALJ to consider the evidence and effectively prepare
for the hearing, and minimize any delays in the adjudication process
resulting from the late introduction of evidence during the hearing
process. We further stated that proposed Sec. 405.1030(d) would also
remove the potential incentive to disregard Sec. 405.1018, and
reconcile any inconsistency in the effect of a late evidentiary
submission on an applicable
[[Page 5059]]
adjudication period by incorporating the Sec. 405.1018 provisions by
reference rather than establishing a different standard for evidence
submitted during the course of or after a hearing. We proposed at Sec.
423.2030(d) to adopt a corresponding provision for the effect on an
adjudication time frame when new evidence is submitted by a represented
enrollee in a standard appeal, or an unrepresented or represented
enrollee in an expedited appeal, in accordance with current Sec.
423.2018(b) or (c), as applicable.
Continuing a hearing is referenced in current Sec. 405.1030(c),
but is not otherwise addressed in part 405, subpart I. We proposed in
Sec. 405.1030(e)(1) that a hearing may be continued to a later date
and that the notice of the continued hearing would be sent in
accordance with proposed Sec. 405.1022, except that a waiver of the
notice of hearing may be made in writing or on the record, and the
notice of continued hearing would be sent to the parties and
participants who attended the hearing, and any additional parties or
potential parties or participants the ALJ determines are appropriate.
We stated in the proposed rule that the notice requirement would help
ensure that the general hearing notice requirements are met for a
continued hearing, but allow a waiver of the notice of hearing to be
made in writing or on the record. We stated that we believe the added
option of waiving the notice of hearing on the record in the context of
a continued hearing would facilitate scheduling the continued hearing
when all parties and participants who are in attendance at the hearing
agree to the continued hearing date, or alternatively agree on the
record to the notice being mailed, transmitted, or served fewer than 20
calendar days before the hearing. In addition, proposed Sec.
405.1030(e)(1) would only require that a notice of the continued
hearing be sent to the participants and parties who attended the
hearing, but would provide the ALJ with the discretion to also send the
notice to additional parties, or potential parties or participants. We
stated that we believe that a notice of the continued hearing to a
party, or potential party or participant, who did not attend the
hearing is not necessary unless the ALJ determines otherwise based on
the circumstances of the case. In the event that the appellant
requested the continuance and an adjudication period applies to the
appeal, we proposed in Sec. 405.1030(e)(2) to provide that the
adjudication period would be extended by the period between the initial
hearing date and the continued hearing date. We stated that we believe
an appellant's request for a continuance of the hearing is similar to
an appellant's request to reschedule a hearing, and if the request is
granted, the adjudication period for the appellant's request for
hearing should be adjusted accordingly. We proposed at Sec.
423.2030(e) to adopt corresponding provisions for continued hearings in
part 423, subpart U proceedings.
On occasion, after a hearing is conducted, ALJs find that
additional testimony or evidence is necessary to decide the issues on
appeal, or a procedural matter needs to be addressed. Current Sec.
405.1030(f) allows an ALJ to reopen a hearing to receive new and
material evidence pursuant to Sec. 405.986, which requires that the
evidence (1) was not available or known at the time of the hearing, and
(2) may result in a different conclusion. However, current Sec.
405.1030(f) does not provide a mechanism to address procedural matters,
or to obtain additional information through evidence or testimony that
may have been available at the time of hearing and may result in a
different outcome but the importance of which was not recognized until
after a post-hearing review of the case. We proposed in Sec.
405.1030(f)(1) to remove the ``reopen'' label and provide for a
``supplemental'' hearing rather than reopening the hearing to
distinguish it from reopening a decision and the standards for
reopening a decision. We also proposed that a supplemental hearing may
be conducted at the ALJ's discretion at any time before the ALJ mails a
notice of decision in order to receive new and material evidence,
obtain additional testimony, or address a procedural matter. We stated
in the proposed rule that the ALJ would determine whether a
supplemental hearing is necessary, and if one is held, the scope of the
supplemental hearing, including when evidence is presented and what
issues are discussed. In addition, we proposed at Sec. 405.1030(f)(1)
that a notice of the supplemental hearing be sent in accordance with
Sec. 405.1022 to the participants and parties who attended the
hearing, but would provide the ALJ with the discretion to also send the
notice to additional parties, or potential parties or participants the
ALJ determines are appropriate. Similar to the proposed notice of a
continued hearing explained above, we stated that we believe that a
notice of the supplemental hearing to a party, or potential party or
participant, who did not attend the hearing is not necessary unless the
ALJ determines otherwise based on the circumstances of the case. In the
event that the appellant requested the supplemental hearing and an
adjudication period applies to the appeal, we proposed at Sec.
405.1030(f)(2) to provide that the adjudication period would be
extended by the period between the initial hearing date and the
supplemental hearing date. We stated that we believe an appellant's
request for a supplemental hearing is similar to an appellant's request
for a continuance or to reschedule a hearing, and if the request is
granted, the adjudication period for the appellant's request for
hearing should be adjusted accordingly. We proposed at Sec.
423.2030(f) to adopt corresponding provisions for supplemental hearings
in part 423, subpart U proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received two comments opposed to the language in
proposed Sec. Sec. 405.1030(b)(2) and 423.2030(b)(2) permitting an ALJ
to limit the testimony and argument at the hearing. The commenters
believed that the proposals undercut an appellant's ability to get a
full and fair hearing, and expressed concern that the language gives
too much discretion to ALJs in allowing an ALJ to limit testimony and/
or argument if the ALJ determines that he or she has sufficient
information and in permitting the ALJ to decide whether to allow
additional written submissions. The commenters also noted that an ALJ
hearing is the first, and in some appeals only, time where an appellant
can provide oral argument, and the commenters urged that under no
circumstances should an appellant be prevented from presenting what the
appellant deems to be a full argument to the ALJ.
Response: We believe our proposal strikes a necessary balance
between protecting the interests of the parties and protecting the
integrity of the hearing process. OMHA ALJs have sometimes encountered
a party or representative that continues to present testimony or
argument at a hearing that is not relevant to the issues before the
ALJ, that is repetitive of evidence or testimony already in the record,
or that relates to an issue that has been sufficiently developed or on
which the ALJ has already ruled. When the testimony or argument is
unrelated to an issue on appeal or an ALJ determines that additional
evidence or testimony on the issue would be repetitive of evidence or
testimony already in the record, or relates to an issue that has been
sufficiently developed or on which he or she has already ruled, the
[[Page 5060]]
continued testimony or argument becomes repetitive or unnecessarily
cumulative, and adds nothing of value to the proceedings. This
continued testimony and argument is not only an inefficient use of time
and resources for the ALJ and the parties, it may have the effect of
monopolizing the time set for a hearing and causing other parties to
limit their presentations because they have only allowed for the
scheduled hearing time in their schedules.
We do not believe that limiting testimony that is unrelated,
repetitive, or related to an issue that has been sufficiently developed
or upon which the ALJ has already ruled prejudices a party's right to a
full and fair hearing. ALJs have a responsibility pursuant to current
Sec. Sec. 405.1030(b) and 423.2030(b) to fully examine the issues on
appeal, ensuring that all necessary testimony is considered, which
would continue under the these rules as finalized. The proposals at
Sec. Sec. 405.1030(b) and 423.2030(b), which we are finalizing in this
rule, would only limit the introduction of repetitive or unrelated
evidence. Moreover, the proposal is based on the APA at 5 U.S.C.
556(c)(5), which provides that subject to the published rules of the
agency, an ALJ may regulate the course of the hearing. We believe that
ALJs, who have a responsibility to ensure both a fully examined and
fairly administered hearing, will use these provisions only in the
limited situations that the proposals are intended to address.
With regard to the concern that the proposed regulations give too
much discretion to the ALJ, we believe such discretion is consistent
with and authorized by the APA. As we stated above, we believe the ALJ
needs to be able to effectively regulate the course of the hearing,
including the exercise of discretion as outlined in the Sec. Sec.
405.1030(b) and 423.2030(b), as finalized, in order to effectively
protect the interest of parties and to preserve the integrity of the
hearing process.
Comment: The same two commenters noted that limiting testimony
could negatively impact appeals to the Council since the Council limits
its review to the evidence in the record of the proceedings before the
ALJ.
Response: We disagree that the proposals at Sec. Sec.
405.1030(b)(2) and 423.2030(b)(2) will negatively impact appeals to the
Council. Although the commenters refer to the language in Sec.
405.1122(a)(1) stating that when the Council is reviewing an ALJ's
decision, the Council limits its review to the evidence contained in
the record of the proceedings before the ALJ, that regulation goes on
to say in Sec. 405.1122(a)(2) that if the Council 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 Council may remand the case to an
ALJ to obtain the evidence and issue a new decision. A party that feels
that certain evidence was not duly entered into the record because of
an ALJ's decision to limit testimony at the hearing pursuant to the
proposed regulations may appeal that issue to the Council. The hearing
is preserved on audio recording and is available for review on appeal,
and the Council may remand a case if the record shows that the party is
entitled to a new hearing.
Comment: Another commenter specifically objected to the language in
proposed Sec. Sec. 405.1030(b)(2) and 423.2030(b)(2) permitting an ALJ
to limit testimony or argument on the basis that ``the ALJ believes he
or she has sufficient information.'' The commenter stated that limiting
testimony and argument on that basis is dangerous precedent,
potentially interrupts the logical flow of an argument, precludes an
appellant from knowing what the ALJ understands and prevents the
appellant from being able to build a rational case upon a common
knowledge base. The commenter noted that some fields of medicine change
rapidly and even though an ALJ may have recently heard and decided a
similar case for a similar condition, due to the evolving information
in the field, ALJs may not come into the hearing with sufficiently up-
to-date information.
Response: We disagree with the commenter's suggestion that proposed
Sec. Sec. 405.1030(b)(2) and 423.2030(b)(2) could be used to limit
argument or testimony related to new or updated information relevant to
an issue on appeal. The language in the proposed regulations that the
commenter specifically opposes is focused on testimony or argument that
is unnecessarily repetitive because the ALJ has determined that he or
she has sufficient information to make an informed decision or has
already ruled on the issue. As we stated above, an ALJ is responsible
for fully examining the issues on appeal and therefore an ALJ cannot
limit testimony or argument in the situation described by the commenter
where a full examination requires additional updated or new
information. However, we understand that the passage stating, ``ALJ
determines he or she has sufficient information'' may not be widely
understood and may be subject to varying interpretations, and we are
therefore finalizing proposed Sec. Sec. 405.1030(b)(2) and
423.2030(b)(2) with modification to clarify the intent of the provision
as discussed above. Specifically, we are modifying Sec. Sec.
405.1030(b)(2) and 423.2030(b)(2) to provide that the ALJ may limit
testimony and/or argument at the hearing that are not relevant to an
issue before the ALJ, that are repetitive of evidence or testimony
already in the record, or that relate to an issue that has been
sufficiently developed or on which the ALJ has already ruled. We
believe this modification clarifies the intent of this provision and
will mitigate the possibility that the provision would be used to limit
argument or testimony related to new or updated information relevant to
an issue on appeal.
With regard to the commenter's concern that limiting testimony or
argument would interrupt the logical flow of an argument or make it
difficult for the party to present a coherent or rational case, we note
that these concerns appear to relate mainly to a party being able to
present its case in the manner that he or she believes is most logical,
coherent, or rational and do not adequately recognize the ALJ's role in
the process. When an ALJ limits testimony or argument at the hearing,
it is because the ALJ believes the testimony or argument was not
relevant to an issue before the ALJ, was repetitive of evidence or
testimony already in the record, or related to an issue that was
sufficiently developed, and the ALJ has heard all necessary testimony,
understands the arguments being made, and is able to logically,
rationally, and fully analyze the issue to make a decision. Moreover,
we believe these concerns about being able to present a case in the
order and manner an individual desires are outweighed by the ALJ's
broader responsibilities to protect the interests of all parties and
preserve the integrity of the hearing process. As we discuss above,
allowing a party to continue presenting testimony and argument when the
testimony or argument is not relevant to an issue before the ALJ, is
repetitive of evidence or testimony already in the record, or relates
to an issue that has been sufficiently developed, is not only an
inefficient use of time and resources, it may have the effect of
monopolizing the time set for a hearing and causing other parties to
limit their presentations because they have only allowed for the
scheduled hearing time in their schedules.
Comment: Another commenter noted that ALJs may improperly use the
discretion afforded in proposed Sec. Sec. 405.1030(b)(2) and
423.2030(b)(2) to
[[Page 5061]]
get through hearings faster or set unreasonably short periods of time
for hearings that involve large numbers of cases.
Response: While efficient use of time and resources is an important
interest, Sec. Sec. 405.1030(b)(2) and 423.2030(b)(2), as finalized,
do not provide authority to curtail hearings or limit appellants'
presentations of evidence, argument, or testimony solely for the
purpose of keeping the duration of a hearing within a specified time
parameter. Given the ALJ's responsibility to examine the issues fully
at the hearing, as discussed above, we do not believe that Sec. Sec.
405.1030(b)(2) and 423.2030(b)(2) would be abused by ALJs as suggested
by this comment, and to the extent that a party believes that
inadequate time was provided and the ALJ did not provide additional
time, that issue could be raised on appeal to the Council.
Comment: One commenter recommended modifying the proposed changes
in Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) to clarify that a party
will only be excused from a hearing after an initial admonishment of
the party's conduct by the ALJ.
Response: We agree that the recommended modification would provide
better clarity to parties regarding the expectations or concerns of an
ALJ during the course of a hearing and would provide a fair warning to
parties that they must adjust their behavior or risk being excused from
the hearing. We have therefore further modified proposed Sec. Sec.
405.1030(b)(3) and 423.2030(b)(3) to state that an ALJ may excuse the
party, enrollee, or representative from the hearing if that party,
enrollee, or representative remains uncooperative, disruptive to the
hearing, or abusive during the course of the hearing after the ALJ has
given a warning.
Comment: One commenter expressed concern that the proposed
regulations allowing an ALJ to excuse a party that is uncooperative,
disruptive, or abusive during the hearing will be misconstrued to limit
the ability of appellants to make their arguments and curtail due
process. The commenter stressed that a high bar therefore should be
imposed on the use of proposed Sec. Sec. 405.1030(b)(3) and
423.2030(b)(3). The commenter argued that proposed Sec. Sec.
405.1030(b)(3) and 423.2030(b)(3) would permit an ALJ to excuse a party
or representative when a hearing becomes ``spirited or contentious''
and that parties and representatives may refrain from objecting to
certain hearing procedures set by the ALJ because they do not want to
risk alienating the ALJ and/or being excused from the hearing. The
commenter also argued that even though proposed Sec. Sec.
405.1030(b)(3) and 423.2030(b)(3) require that the ALJ provide the
excused party or representative with an opportunity to submit written
statements in lieu of testimony and/or argument at hearing, it would be
impossible for an appellant to effectively present a case or cross
examine witnesses in writing when the hearing continues without him or
her.
Response: We anticipate that ALJs would rarely find the need to use
the rules at proposed Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) to
excuse someone from the hearing but believe that the proposals are
necessary to protect the integrity of the hearing process. An ALJ has
authority to regulate the course of the hearing, consistent with Sec.
556(c) of the APA and Sec. Sec. 405.1030 and 423.2030, which we
believe includes excusing any party or representative that is being
disruptive to the adjudication process. Especially with the additional
modification discussed above requiring an initial warning by the ALJ,
we believe Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3), as finalized,
satisfactorily balance the excused party's right to present his or her
case with the ALJ's authority to regulate the course of the hearing. As
we note above, ALJs have a responsibility under current Sec. Sec.
405.1030(b) and 423.2030(b) (and Sec. Sec. 405.1030(b)(1) and
423.2030(b)(1) as finalized in this rule) to fully examine the issues
on appeal. We believe that ALJs, who have a responsibility to ensure
both a fully examined and fairly administered hearing, will use these
provisions infrequently and only when necessary to support a full and
fair hearing.
We note that any party that is excused from the hearing pursuant to
proposed Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) would be
permitted to submit written statements and affidavits in lieu of
testimony and/or argument at the hearing. Although the commenter noted
that written statements would limit an excused party's or
representative's ability to present a case or cross examine witnesses
and other parties at the hearing, we believe that the required warning
would effectively put the excused entity or individual on notice of the
consequences of continued uncooperative, disruptive, or abusive
behavior, and therefore the excused individuals or entities would have
knowingly limited their own argument and testimony to written
statements by continuing such behavior. While the format of the
argument and testimony would be changed, we disagree with the commenter
that written statements and affidavits are necessarily less effective
or persuasive than oral argument or testimony or that they curtail due
process. The ALJ would give the same weight to argument or testimony
that is presented in writing as to argument or testimony that is
presented orally at the hearing. Moreover, any excused party would be
able to request a copy of the audio recording of the hearing in
accordance with Sec. Sec. 405.1042 and 423.2042 so that the party
could respond in writing to any statements or testimony made at the
hearing, including the submission of rebuttal argument and evidence.
Finally, we disagree with the commenter's characterization that the
type of behavior addressed in Sec. Sec. 405.1030(b)(3) and
423.2030(b)(3) is synonymous with ``spirited or contentious'' or that
parties or their representatives would refrain from objecting to
certain hearing procedures set by the ALJ because they do not want to
risk being excused from the hearing. The language used in the
regulations--uncooperative, disruptive, or abusive--was specifically
chosen to describe a certain degree of behavior that makes it difficult
or impossible for an ALJ to regulate the course of a hearing or for
other parties to present their side of the dispute. We believe that
Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) are necessary in order to
allow the ALJ to effectively regulate the course of the hearing,
including providing the other parties with their opportunity to offer
testimony and/or argument. To the extent that a party believes it was
inappropriately excused from a hearing, that issue could be raised on
appeal to the Council.
Comment: We received one comment that supported the authority given
in proposed Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) allowing an
ALJ to excuse a party or representative that is disruptive or abusive
during the course of the hearing, but requested clarification of the
term ``uncooperative'' as used in the proposed regulations. The
commenter asked if it would be seen as ``uncooperative'' if a party
disagrees with an ALJ's interpretation of the law.
Response: We thank the commenter for its support of Sec. Sec.
405.1030(b)(3) and 423.2030(b)(3) and agree that ALJs need to have
authority to excuse parties or representatives if they are being
disruptive or abusive during the course of the hearing. We also believe
that ALJs should have the authority to excuse parties or
representatives who are uncooperative because uncooperative behavior
can similarly disrupt the course of the hearing and/or negatively
[[Page 5062]]
impact the integrity of the hearing process. While uncooperative
behavior may take a range of forms, generally we believe that, in the
context of Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3),
``uncooperative'' is behavior that has risen to a level that is
impeding the ALJ's ability to regulate the hearing or the other
parties' ability to present their side of the dispute. If a party
disagrees with an ALJ, as suggested by the commenter's question, even
if the disagreement is spirited or contentious as another commenter
suggested, such behavior would not rise to the level of
``uncooperative'' if it does not impede the ALJ's ability to regulate
the hearing or the other parties' ability to present their case. We
believe that the additional modification discussed above, adding that a
party or representative may only be excused after the ALJ has warned
the party or representative to stop the disruptive, abusive, or
uncooperative behavior, will assist in providing clarity to parties
regarding the expectations or concerns of an ALJ during the course of a
hearing, and would provide a fair warning to parties and
representatives that they must adjust their behavior or risk being
excused from the hearing.
Comment: We received one request that CMS prepare basic
informational documents that may be furnished to or accessed by any
party whose testimony has been limited or who has been excused from a
hearing, explaining their rights and options under the regulations.
Response: Any party who believes that his or her testimony has been
unduly limited or who has been excused from a hearing pursuant to
proposed Sec. 405.1030(b)(2) or (3), or Sec. 423.2030(b)(2) or (3)
may appeal the issue to the Council for review after the ALJ's decision
has been issued. The hearing is preserved on audio recording and is
available for review on appeal and the Council may remand a case if the
record shows that the party is entitled to a new hearing. We intend to
issue additional sub-regulatory guidance in the OCPM, but do not
believe that a written document outlining a party's rights under Sec.
405.1030(b)(2) or (3) or an enrollee's rights under Sec.
423.2030(b)(2) or (3) is necessary because the party, enrollee, or the
party's or enrollee's representative, would be informed prior to being
excused from the hearing of the right under Sec. 405.1030(b)(3) or
Sec. 423.2030(b)(3) to submit written statements and affidavits in
lieu of testimony or argument at the hearing. Furthermore, when an ALJ
limits testimony and/or argument at the hearing under Sec.
405.1030(b)(2) or Sec. 423.2030(b)(2) because the testimony and/or
argument is not relevant to an issue before the ALJ, is repetitive of
evidence or testimony already in the record, or relates to an issue
that has been sufficiently developed or on which the ALJ has already
ruled, no additional rights or options extend to the party or enrollee
other than to appeal the ALJ's action to the Council. Rather, the ALJ
may, but is not required to, provide the party, enrollee, or
representative with an opportunity to submit additional written
statements and affidavits on the matter.
Comment: One commenter asked for additional clarification regarding
the statement that ``[w]e are not proposing any corresponding changes
to current Sec. 423.2030(c) because the limitation on new evidence
does not apply in part 423, subpart U proceedings.''
Response: Part 423, subpart U includes detailed procedures for
requesting and adjudicating a request for hearing or a request for
review of a dismissal under Medicare Part D (the Voluntary Medicare
Prescription Drug Benefit). The preamble to the final rule establishing
the Medicare Part D claims appeals process issued in the Federal
Register on December 9, 2009 (74 FR 65340) sets forth that the
provisions of part 423, subpart U generally follow the part 405,
subpart I procedures. However, there are some specific differences
between the part 405, subpart I rules governing Medicare Part A and B
appeals and the part 423, subpart U rules governing Medicare Part D
appeals, including the absence of good cause limitations for the
introduction of new evidence in Medicare Part D proceedings as
discussed in the proposed and final Part D appeals rules (73 FR 14345,
74 FR 65345). In the final Medicare Part D appeals rule (74 FR 65345),
we decided that the full and early presentation of evidence provisions
of part 405 subpart I, including Sec. 405.1028, would not apply in
Part D appeals. As discussed above, section 1869(b)(3) of the Act
states that a provider or supplier may not introduce evidence in any
appeal that was not presented at the reconsideration, unless there is
good cause which precluded the introduction of evidence at or before
the reconsideration. Part 405, subpart I extends this requirement to
beneficiaries represented by providers or suppliers in an effort to
ensure that providers or suppliers do not attempt to circumvent the
full and early presentation of evidence rules by offering to represent
beneficiaries. In the proposed and final Part D appeals rules (73 FR
14345, 74 FR 65345), we noted our desire to provide enrollees with as
much flexibility as possible concerning the evidence that may be
presented for an ALJ hearing and Council review, and stated that
because an enrollee is the only party to the appeal in Medicare Part D
cases, and because an enrollee would not be represented by a provider
or supplier attempting to circumvent this rule, we were not including
in the part 423, subpart U rules any provisions from part 405, subpart
I on the full and early presentation of evidence. This flexibility
extends to the submission of any written evidence about an enrollee's
condition at the time of the coverage determination. However, the
subpart U rules do provide that if 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 Council will remand the case to
the Part D IRE. Accordingly, although the Medicare Part A and Part B
regulations (part 405, subpart I) contain language limiting the
submission of new evidence after the QIC reconsideration (see, for
example, Sec. Sec. 405.1018, 405.1028, and 405.1030), the
corresponding Medicare Part D regulations (part 423, subpart U) do not
contain that language.
The only proposed change to Sec. 405.1030(c)--the provision
regarding procedures when an ALJ determines that there is material
evidence missing at the hearing in Medicare Part A and Part B cases--is
to add a reference to Sec. 405.1028 for consistency regarding the
application of the standards for determining whether there is good
cause to admit new evidence regardless of when the evidence is
submitted after the QIC reconsideration. No changes were proposed for
Sec. 423.2030(c)--the corresponding provision regarding procedures
when an ALJ determines that there is material evidence missing at the
hearing in Medicare Part D cases--because there is no corresponding
language requiring good cause for the admission of new evidence in the
Medicare Part D regulations as explained above.
Comment: We received one comment on proposed Sec. 405.1030(d)
requesting that Medicaid State agencies be explicitly exempted, similar
to unrepresented beneficiaries, from any extension of the adjudication
period if new evidence is submitted at the hearing.
Response: Medicaid State agencies, in addition to unrepresented
beneficiaries, CMS and its contractors, applicable plans, and
beneficiaries represented by someone other than providers or suppliers,
are not subject to the same limitations on the submission of new
[[Page 5063]]
evidence after the QIC reconsideration as providers and suppliers are
under section 1869(b)(3) of the Act. As discussed in section II.B.3.i
above, we have modified language in Sec. 405.1018(d) to provide that
those individuals and entities are exempt from the requirement to show
good cause for the late submission of evidence. We do not agree,
however, that because individuals and entities other than unrepresented
beneficiaries are not subject to the good cause requirements for the
submission of late evidence that they should also be afforded the same
treatment as unrepresented beneficiaries with respect to exemption from
extension of the adjudication period when new evidence is submitted. We
believe that individuals and entities other than unrepresented
beneficiaries are generally more familiar with the appeals process than
unrepresented beneficiaries, and are generally aware that evidence to
be considered in deciding an appeal should be submitted as early in the
process as possible (see also Sec. Sec. 405.946 and 405.966). Further
exempting individuals and entities--other than unrepresented
beneficiaries--who are already exempt from the requirement to show good
cause for the introduction of new evidence after the QIC
reconsideration from an extension of the adjudication period could
incentivize these individuals and entities to delay the submission of
evidence until after a hearing has been scheduled, and possibly
conducted. We believe this could have a detrimental effect on an ALJ's
ability to issue a timely decision. Furthermore, we note that
Sec. Sec. 405.946 and 405.966 provide for extensions to the time
frames for issuing a redetermination and reconsideration, respectively,
when a party submits additional evidence after filing the request for
redetermination or reconsideration. Our modification in Sec.
405.1018(d) makes it clear that although those entities are exempt from
the requirement of submitting a statement and demonstrating good cause
for new evidence, they are still subject to an extension on the
applicable adjudication period pursuant to Sec. 405.1018(b), as they
are under current Sec. 405.1018(b) and (d). To be consistent with the
rules in Sec. 405.1018 regarding new evidence, we decline to make the
commenter's suggested change to Sec. 405.1030(d).
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1030 and 423.2030 as proposed, with the
following modifications. We are revising Sec. Sec. 405.1030(b)(2) and
423.2030(b)(2) to provide that the ALJ may limit testimony and/or
argument at the hearing that are not relevant to an issue before the
ALJ, are repetitive of evidence or testimony already in the record, or
that relate to an issue that has been sufficiently developed or on
which the ALJ has already ruled. In addition, we are revising
Sec. Sec. 405.1030(b)(3) and 423.2030(b)(3) to add language that a
party or party's representative (or enrollee or enrollee's
representative in the context of Sec. 423.2030(b)(3)) may be excused
from a hearing if that individual remains uncooperative, disruptive to
the hearing, or abusive during the course of the hearing after the ALJ
has warned the party or representative to stop such behavior.
o. Issues Before an ALJ or Attorney Adjudicator (Sec. Sec. 405.1032,
405.1064 and 423.2032)
As described below, we proposed several changes to Sec. Sec.
405.1032 and 423.2032, which address the issues that are before the
ALJ. 81 FR 43790, 43832-43834. We proposed to revise the title of the
section to indicate that the proposed provision also would apply to
issues before an attorney adjudicator, as proposed in section II.B of
the proposed rule (and discussed in section II.A.2 of this final rule
above), if an attorney adjudicator is assigned to an appeal.
Current Sec. 405.1032(a) states that the issues before the ALJ
include all of the issues brought out in the initial determination,
redetermination, or reconsideration that were not decided entirely in a
party's favor. However, we stated in the proposed rule that when a
request for hearing involves a reconsideration of multiple claims and
the appellant does not identify one or more of the claims that were not
decided entirely in the party's favor at initial determination,
redetermination, or reconsideration, it is unclear whether the ALJ
should review all of the claims that were not decided entirely in the
party's favor at initial determination, redetermination, or
reconsideration, or just those claims specified by the appellant in the
request for hearing. An appellant is required to identify the dates of
service for the claims that it wishes to appeal in its request for
hearing under Sec. 405.1014, and some appellants have indicated that
they do not specify a denied claim in a request for hearing when they
agree that the record does not support coverage of the claim. To
address the ambiguity, and in the interest of efficiency and
consistency with Sec. 405.1014, we proposed in Sec. 405.1032(a) that
the issues before the ALJ or attorney adjudicator include all the
issues for the claims or appealed matter (for example, for appeals that
do not involve a claim for items or services furnished to a
beneficiary, such as Medicare Secondary Payer appeals and terminations
of coverage) specified in the request for hearing that were brought out
in the initial determination, redetermination, or reconsideration that
were not decided entirely in a party's favor. We proposed at Sec.
423.2032(a) to adopt a corresponding revision for issues in part 423,
subpart U proceedings, except the term claims is not used because part
423, subpart U appeals do not involve claims.
Current Sec. 405.1032(a) also notes that if evidence presented
before the hearing causes the ALJ to question a favorable portion of
the determination, the ALJ notifies the parties before the hearing and
may consider it an issue at the hearing. As explained in the 2005
Interim Final Rule (70 FR 11462), this provision relates to the
favorable portion of an appealed claim, and that the favorable issue is
a new issue that must meet the requirements of current paragraph (b).
However, in practice, this provision has been read to allow
consideration of separate claims that were decided in a party's favor
at lower appeal levels in multiple-claim appeals, and at times read
independently from paragraph (b). To address this confusion, we
proposed to move this language in Sec. 405.1032(a) to proposed Sec.
405.1032(b), with the revisions discussed below. We proposed at Sec.
423.2032(a) and (b) to adopt corresponding revisions for new issues in
part 423, subpart U proceedings.
Current Sec. 405.1032(b) allows new issues to be considered at the
hearing if: (1) The ALJ notifies the parties about the new issue before
the start of the hearing; (2) the resolution of the new issue could
have a material impact on the claim or claims that are the subject of
the request for hearing; and (3) its resolution is permissible under
the rules governing reopening of determinations and decisions. We
proposed at Sec. 405.1032(b) to incorporate these provisions, with the
revisions discussed below, as well as the language regarding
consideration of favorable issues moved from current Sec. 405.1032(a),
in a revised structure.
We proposed in Sec. 405.1032(b)(1) to address when a new issue may
be considered. Specifically, we proposed that the ALJ may only consider
the new issue, including a favorable portion of a determination on a
claim or appealed matter specified in the request for hearing, if its
resolution could have a material impact on the claim or
[[Page 5064]]
appealed matter, and (1) there is new or material evidence that was not
available or known at the time of the determination and which may
result in a different conclusion, or (2) the evidence that was
considered in making the determination clearly shows on its face that
an obvious error was made at the time of the determination. We stated
in the proposed rule that this would consolidate the current provisions
to better convey when a new issue may be considered, clarify that a new
issue relates to a claim or appealed matter specified in the request
for hearing, and provide the applicable standards from the reopening
rules referenced in current Sec. 405.1032(b)(1)(ii). We proposed in
Sec. 405.1032(b)(1) to continue to provide that the new issue may be
raised by the ALJ or any party and may include issues resulting from
the participation of CMS, but also to correct the language so that it
also references participation of CMS contractors. We proposed at Sec.
423.2032(b)(1) to adopt corresponding revisions for when new issues may
be considered in part 423, subpart U proceedings.
We proposed at Sec. 405.1032(b)(2) to continue to provide that
notice of the new issue must be provided before the start of the
hearing, but would limit the notice to the parties who were or will be
sent the notice of hearing, rather than the current standard to notice
``all of the parties.'' Because notice of the new issue may be made in
the notice of hearing or after the notice of hearing, and parties
generally have 10 calendar days after receipt of the notice of hearing
to submit evidence, we proposed at Sec. 405.1032(b)(3) to also provide
that if notice of the new issue is sent after the notice of hearing,
the parties would have at least 10 calendar days after receiving the
notice of the new issue to submit evidence regarding the issue. As
provided in proposed Sec. 405.1028(a)(2)(ii), the ALJ would then
determine whether the new evidence is material to the new issue
identified by the ALJ. We also stated in the proposed rule that if an
adjudication time frame applies to the appeal, the adjudication period
would not be affected by the submission of evidence. Further, we
proposed at Sec. 405.1032(b)(3) that if the hearing is conducted
before the time to submit evidence regarding the issue expires, the
record would remain open until the opportunity to submit evidence
expires to provide the parties sufficient time to submit evidence
regarding the issue. We proposed at Sec. 423.2032(b)(2) and (b)(3) to
adopt corresponding provisions for providing notice of new issues to
enrollees and an opportunity to submit evidence, and to add that an
enrollee will have 2 calendar days after receiving notice of the new
issue in an expedited appeal to submit evidence, which corresponds to
the length of time permitted under proposed Sec. 423.2018(c) to submit
evidence after receiving a notice of expedited hearing.
Current Sec. 405.1032(c) states that an ALJ cannot add any claim,
including one that is related to an issue that is appropriately before
an ALJ, to a pending appeal unless the claim has been adjudicated at
the lower appeal levels and all parties are notified of the new issues
before the start of the hearing. However, in practice, we are unaware
that this provision is used, and to the extent it may be used, we
believe it would be disruptive to the adjudication process, result in
filing requirements not being observed, and risk adjudication of the
same claim by multiple adjudicators. Therefore, we proposed to maintain
the topic of adding claims to a pending appeal, but replace the
language of current Sec. 405.1032(c), as explained below.
A reconsideration may be appealed for an ALJ hearing regardless of
the number of claims involved in the reconsideration. However, we
recognize that a party may not specify all of the claims from a
reconsideration that he or she wishes to appeal in the party's request
for hearing. We proposed in Sec. 405.1032(c)(1) to address this
circumstance by providing that claims that were not specified in a
request for hearing may only be added to a pending appeal if the claims
were adjudicated in the same reconsideration that is appealed in the
request for hearing, and the period to request an ALJ hearing for that
reconsideration has not expired, or an ALJ or attorney adjudicator
extends the time to request an ALJ hearing on those claims to be added
in accordance with proposed Sec. 405.1014(e). We stated in the
proposed rule that we believe that this would result in less disruption
to the adjudication process, greater adherence to filing requirements,
and reduce the risk of adjudication of the same claim by multiple
adjudicators. To help ensure that the copy requirement of proposed
Sec. 405.1014(d) is observed, we proposed at Sec. 405.1032(c)(2) to
require that before a claim may be added to a pending appeal, the
appellant must submit evidence that demonstrates that the information
that constitutes a complete request for hearing in accordance with
Sec. 405.1014(b) and other materials related to the claim that the
appellant seeks to add to the pending appeal were sent to the other
parties to the claim in accordance with Sec. 405.1014(d). We proposed
at Sec. 423.2032(c) to adopt a provision corresponding to proposed
Sec. 405.1032(c)(1), but we did not propose to adopt a provision
corresponding to Sec. 405.1032(c)(2) because there is no Sec.
423.2014 requirement for an enrollee to send a copy of his or her
request to others.
Current Sec. 405.1032 does not address issues related to an appeal
that involves a disagreement with how a statistical sample and/or
extrapolation was conducted. When an appeal involves a statistical
sample and an extrapolation and the appellant wishes to challenge how
the statistical sample and/or extrapolation was conducted, as discussed
previously, we proposed at Sec. 405.1014(a)(3)(iii) to require the
appellant to assert the reasons the appellant disagrees with how the
statistical sampling and/or extrapolation was conducted in the request
for hearing. We proposed at Sec. 405.1032(d)(1) to reinforce this
requirement by excluding issues related to how the statistical sample
and/or extrapolation were conducted if the appellant does not comply
with Sec. 405.1014(a)(3)(iii). In addition to reinforcing the proposed
requirement at Sec. 405.1014(a)(3)(iii), we stated in the proposed
rule that we believed that excluding the issue is appropriate because
an appellant should reasonably be aware of whether it disagrees with
how the statistical sampling and/or extrapolation was conducted at the
time it files a request for hearing, and raising the issue later in the
adjudication process or at the hearing can cause significant delays in
adjudicating an appeal because the ALJ may need to conduct additional
fact finding, find it necessary to request participation of CMS or one
of its contractors, and/or call expert witnesses to help address the
issue.
Related to the issues that an ALJ must consider, the 2005 Interim
Final Rule (70 FR 11466) explained that current Sec. 405.1064 was
added to set forth a general rule regarding ALJ decisions that are
based on statistical samples because a decision that is based on only a
portion of a statistical sample does not accurately reflect the entire
record. As discussed in the 2009 Final Rule (74 FR 65328), current
Sec. 405.1064 explains that when an appeal from the QIC involves an
overpayment, and the QIC used a statistical sample in reaching its
reconsideration, the ALJ must base his or her decision on a review of
all claims in the sample. However, we stated in the proposed rule that
while a review of the claims selected for the sample is necessary to
review issues related to a
[[Page 5065]]
contested sample and extrapolation, for example to determine whether
the sample claims were appropriately selected for a representative
sample of the universe, current Sec. 405.1064 has been read more
broadly to also require adjudication of each sample claim, regardless
of whether the sample claim was adjudicated favorably at lower appeal
levels. We further stated in the proposed rule that we do not believe
adjudicating sample claims that were decided favorably at lower levels
of appeal, or sample claims that are not appealed by a party, is
necessary to adjudicate broader issues with how sampling and
extrapolation was conducted, and that the broader reading of current
Sec. 405.1064 results in unnecessary adjudications of claims that were
not appealed.
To clarify what is at issue and what must be considered in appeals
involving statistical sampling and extrapolations, we proposed to
remove current Sec. 405.1064, and address the matter in Sec.
405.1032(d)(2). We proposed in Sec. 405.1032(d)(2) that if a party
asserts a disagreement with how the statistical sampling methodology
and extrapolation were conducted in the request for hearing, in
accordance with proposed Sec. 405.1014(a)(3)(iii), Sec. 405.1032(a)
through (c) would apply to the adjudication of the sample claims. The
result of applying proposed Sec. 405.1032(a) and (b) would be that
only the sample units that were specified in the request for hearing
are individually adjudicated, subject to a new issue being identified
for an appealed claim. However, proposed Sec. 405.1032(c) would permit
adding sample claims to a pending appeal if they were adjudicated in
the appealed reconsideration and the time to request a hearing on the
reconsideration has not expired, or the ALJ or attorney adjudicator
extends the time to request an ALJ hearing on those claims in
accordance with Sec. 405.1014(e). To incorporate the principle
embodied in current Sec. 405.1064, we proposed in Sec. 405.1032(d)(2)
that in deciding issues related to how a statistical sample and/or
extrapolation was conducted, the ALJ or attorney adjudicator would base
his or her decision on a review of the entire sample to the extent
appropriate to decide the issue. We stated in the proposed rule that we
believed this more clearly conveys the intent of the rule and
recognizes that an individual adjudication of each claim in the sample
is not always necessary to decide an issue related to how a statistical
sample and/or extrapolation was conducted, such as whether there is
documentation so that the sampling frame can be re-created, as required
by the Medicare Program Integrity Manual (Internet-Only Manual 100-08)
(see chapter 8, section 8.4.4.4.1). We did not propose any
corresponding changes in Sec. 423.2030 because statistical sampling
and extrapolation are not currently used for matters that are subject
to part 423, subpart U proceedings.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
noted that there were numerous changes proposed in part 405, subpart I
concerning standards for ALJs to consider new issues, notice
requirements for new issues, the submission and admissibility of
evidence related to new issues, and rules governing whether claims may
be added to a pending appeal. The commenter suggested that, if the
proposals were finalized, OMHA publish ``an expanded beneficiary
handbook (online and elsewhere) that explains these provisions in
`practical, understandable terms for the layperson.' ''
Response: We thank the commenter for the suggestion, and will
consider providing beneficiaries with enhanced or additional tools to
help them understand the appeals process in the future. Although we
proposed many revisions to the existing rules in part 405, subpart I
and other provisions that apply to benefit appeals, one of the stated
goals of this rulemaking was to streamline and improve the efficiency
of the appeals process. We believe many of the proposed changes add
clarity to the rules and resolve areas of longstanding confusion for
appellants, adjudicators, and other stakeholders in the appeals
process. Wherever possible, we have used plain language and have
defined terms that may be unfamiliar to beneficiaries or other
appellants. However, because the rules sometimes involve complex
procedures that require precise terminology (more often associated with
provider and supplier appeals), there are instances where
oversimplification of a stated rule could have the unintended
consequence of introducing further areas of ambiguity and frustrating
one of the primary purposes of this rulemaking.
In addition to existing CMS resources like the Medicare & You
Handbook, 1-800 Medicare, chapter 29 of the Medicare Claims Processing
Manual (Internet-Only Manual 100-4), and the Medicare claims appeals
Web site at www.medicare.gov/claims-and-appeals/file-an-appeal/appeals.html, OMHA is currently in the process of developing and
releasing the OCPM. The OCPM provides day-to-day operating
instructions, policies, and procedures based on statutes, regulations,
and OMHA directives. Development is ongoing, and although the OCPM is
primarily intended to be a resource used by OMHA adjudicators and
staff, chapters are made publicly available on the OMHA Web site
(www.hhs.gov/omha) soon after they are published. The instructions and
guidance in the OCPM describe many policies and procedures in greater
detail and provide frequent examples to aid understanding.
OMHA also has a toll free beneficiary help line for Medicare
beneficiaries and Part C or Part D plan enrollees who have questions
about or need assistance with a request for an ALJ hearing, as well as
a separate OMHA national toll free assistance line for other
appellants. Information about both help lines can be found on the
``Contact OMHA'' portion of the OMHA Web site (www.hhs.gov/omha).
After review and consideration of the comment received, for the
reasons discussed above and in the proposed rule, we are finalizing our
proposals to revise Sec. Sec. 405.1032 and 423.2032 and to remove
Sec. 405.1064 without modification.
p. Requesting Information From the QIC or IRE, and Remanding an Appeal
(Sec. Sec. 405.1034, 405.1056, 405.1058, 423.2034, 423.2056, and
423.2058)
Current Sec. Sec. 405.1034 and 423.2034 describe when an ALJ may
request information from, or remand a case to a QIC or IRE. When the
ALJ believes that the written record is missing information that is
essential to resolving the issues on appeal and that information can be
provided only by CMS or its contractors, including an IRE, or the Part
D plan sponsor, current Sec. Sec. 405.1034(a) and 423.2034(a) allow an
ALJ to remand the case to the QIC or IRE that issued the
reconsideration, or retain jurisdiction of the case and request that
the entity forward the missing information to the appropriate hearing
office. The 2005 Interim Final Rule (70 FR 11465) explained that in the
rare instance in which the file lacks necessary technical information
that can only be provided by CMS or its contractors, it was believed
that the most effective way of completing the record is to return the
case, via remand, to the contractor; however, the ALJ also had the
option of asking the entity to forward the missing information to the
ALJ hearing office. We stated in the proposed rule that, in practice,
stakeholders have expressed frustration and concern with the remand
provisions
[[Page 5066]]
because in accordance with the definition of a remand in Sec. 405.902,
a remand vacates the lower level appeal decision and therefore may
require a QIC or IRE to issue a new reconsideration, for which the
appellant must submit a new request for hearing, which causes
additional delay in reaching finality on the disputed claims. In
addition, current Sec. Sec. 405.1034 and 423.2034 do not address
providing notice of a remand or the effects of a remand.
To address stakeholders' concerns with the current remand
provisions, and areas not addressed in current Sec. Sec. 405.1034 and
423.2034, we proposed to revise the sections to cover obtaining
information that can be provided only by CMS or its contractors, or the
Part D plan sponsor, and establishing new Sec. Sec. 405.1056 and
405.1058 to address remands to a QIC, and new Sec. Sec. 423.2056 and
423.2058 to address remands to an IRE. 81 FR 43790, 43834-43836.
We proposed in Sec. 405.1034(a) to maintain the current standards
for requesting information that is missing from the written record when
that information can be provided only by CMS or its contractors, but
limit the action to a request for information directed to the QIC that
conducted the reconsideration or its successor (if a QIC contract has
been awarded to a new contractor). In addition, we proposed to review
Sec. 405.1034(a) to include attorney adjudicators because attorney
adjudicators would be authorized to adjudicate appeals, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2 of
this final rule above). Also, while we proposed to retain the
definition of ``can be provided only by CMS or its contractors'' in
Sec. 405.1034(a)(2), we proposed at Sec. 405.1034(a)(1) to specify
that official copies of redeterminations and reconsiderations that were
conducted on the appealed claims can be provided only by CMS or its
contractors. The redetermination and reconsideration are important
documents that establish the issues on appeal, and while the parties
often have copies of them, we stated in the proposed rule that we
believed the record should include official copies from the
contractors. In addition, we proposed at Sec. 405.1034(b) to specify
that the ALJ or attorney adjudicator would retain jurisdiction of the
case, and the case would remain pending at OMHA. We proposed at Sec.
423.2034(a) and (b) to adopt corresponding provisions for when
information may be requested from an IRE and that jurisdiction is
retained at OMHA in part 423, subpart U proceedings.
We proposed in Sec. 405.1034(c) that the QIC would have 15
calendar days after receiving the request for information to furnish
the information or otherwise respond to the request for information,
either directly or through CMS or another contractor. We stated that
this would provide the ALJ or attorney adjudicator, the QIC, and the
parties with a benchmark for obtaining the information and determining
when adjudication of the case can resume. We proposed in Sec.
405.1034(d) that, if an adjudication period applies to the appeal in
accordance with Sec. 405.1016, the adjudication period would be
extended by the period between the date of the request for information
and the date the QIC responds to the request or 20 calendar days after
the date of the request, whichever is less. We stated that we recognize
that other provisions that extend an applicable adjudication period
generally involve an appellant's action or omission that delays
adjudicating an appeal within an applicable time frame, but we stated
in the proposed rule that we believed that an extension is also
warranted to fully develop the record when the written record is
missing information that is essential to resolving the issues on
appeal, and that 20 calendar days (5 calendar days for the request to
be received by the QIC and 15 calendar days for the QIC to respond) is
a relatively modest delay in order to obtain missing information that
is essential to resolving the appeal. We proposed at Sec. 423.2034(c)
and (d) to adopt corresponding provisions for the IRE to furnish the
information or otherwise respond to the request for information, either
directly or through CMS or the Part D plan sponsor, and the effect on
any applicable adjudication time frame in part 423, subpart U
proceedings. In addition, we proposed at Sec. 423.2034(c) and (d) to
provide for an accelerated response time frame for expedited appeals
because of the urgency involved. For expedited appeals, we proposed
that the IRE would have 2 calendar days after receiving a request for
information to furnish the information or otherwise respond to the
request, and the extension to the adjudication time frame would be up
to 3 calendar days, to allow for time to transmit the request to the
IRE and for the IRE to respond.
We proposed to add new Sec. 405.1056 to describe when a request
for hearing or request for review of a QIC dismissal may be remanded,
and new Sec. 405.1058 to describe the effect of a remand. We proposed
in Sec. 405.1056(a)(1) to permit a remand if an ALJ or attorney
adjudicator requests an official copy of a missing redetermination or
reconsideration for an appealed claim in accordance with proposed Sec.
405.1034, and the QIC or another contractor does not furnish the copy
within the time frame specified in Sec. 405.1034. We also proposed in
Sec. 405.1056(a)(2) to permit a remand when the QIC does not furnish a
case file for an appealed reconsideration. The remand under both
provisions would direct the QIC or other contractor (such as a Medicare
Administrative Contractor that made the redetermination) to reconstruct
the record or initiate a new appeal adjudication. We stated in the
proposed rule that we expected this type of remand to be very rare, but
we also stated that we believed it was necessary to help ensure a
complete administrative record of the administrative adjudication of a
claim. To address the possibility that the QIC or another contractor is
able to reconstruct the record for a remanded case, we proposed in
Sec. 405.1056(a)(3) to provide that in the situation where a record is
reconstructed by the QIC, the reconstructed record would be returned to
OMHA, the case would no longer be remanded and the reconsideration
would no longer be vacated, and if an adjudication period applies to
the case, the period would be extended by the time between the date of
the remand and the date the case is returned to OMHA (because OMHA was
unable to adjudicate the appeal between when it was remanded and when
it was returned to OMHA). We stated that this would help ensure that
appellants are not required to re-start the ALJ hearing or dismissal
review process in the event that the QIC or another contractor is able
to reconstruct the record. We proposed at Sec. 423.2056(a) to adopt
corresponding provisions for remanding cases in which there is a
missing appeal determination or the IRE is unable to furnish the case
file in part 423, subpart U proceedings.
On occasion, an ALJ finds that a QIC issued a reconsideration that
addresses coverage or payment issues related to the appealed claim when
a redetermination was required and no redetermination was conducted, or
the contractor dismissed the request for redetermination and the
appellant appealed the contractor's dismissal. We stated in the
proposed rule that, in either circumstance, the reconsideration was
issued in error because the appellant did not have a right to the
reconsideration in accordance with current Sec. 405.960, which only
provides a right to a reconsideration when a redetermination is made by
a contractor.
[[Page 5067]]
We stated that we do not believe that an administrative error made by
the QIC conveys rights that are not afforded under the rules. We
proposed in Sec. 405.1056(b) to address these circumstances so that,
if an ALJ or attorney adjudicator finds that the QIC issued a
reconsideration that addressed coverage or payment issues related to
the appealed claim and no redetermination of the claim was made (if a
redetermination was required) or the request for redetermination was
dismissed (and not vacated), the reconsideration would be remanded to
the QIC that issued the reconsideration, or its successor, to re-
adjudicate the request for reconsideration. We again stated in the
proposed rule that we expected this type of remand to be rare, but
believed it was necessary to correct administrative errors in the
adjudication process. We proposed at Sec. 423.2056(b) to adopt a
corresponding provision for when an IRE issues a reconsideration that
addresses drug coverage when no redetermination was conducted or a
request for redetermination was dismissed and is appealed to OMHA under
part 423, subpart U.
OMHA ALJs sometimes receive requests for remands from CMS or a
party because the matter can be resolved by a CMS contractor if
jurisdiction of the claim is returned to the QIC. Current Sec.
405.1034 does not address this type of request. We proposed at Sec.
405.1056(c)(1) to provide a mechanism for these remands. Specifically,
we proposed that at any time prior to an ALJ or attorney adjudicator
issuing a decision or dismissal, the appellant and CMS or one of its
contractors, may jointly request a remand of the appeal to the entity
that conducted the reconsideration. We proposed that the request
include the reasons why the appeal should be remanded and indicate
whether remanding the case would likely resolve the matter in dispute.
Proposed Sec. 405.1056(c)(2) would allow the ALJ or attorney
adjudicator to determine whether to grant the request and issue the
remand, based on his or her determination of whether remanding the case
would likely resolve the matter in dispute. We stated that we believe
this added flexibility would allow appellants and CMS and its
contractors to expedite resolution of a disputed claim when there is
agreement to do so. We proposed at Sec. 423.2056(c) to adopt
corresponding provisions for requested remands in part 423, subpart U
proceedings.
Current Sec. 405.1034(b) provides that if, consistent with current
Sec. 405.1004(b), the ALJ determines that a QIC's dismissal of a
request for reconsideration was in error, the case will be remanded to
the QIC. We proposed at Sec. 405.1056(d) to incorporate this provision
and to adopt a corresponding provision in Sec. 423.2056(d) to
incorporate current Sec. 423.2034(b)(1) for remanding cases in which
an IRE's dismissal of a request for reconsideration was in error, in
part 423, subpart U proceedings. In addition, we proposed at Sec.
423.2056(e) to incorporate current Sec. 423.2034(b)(2), which provides
that if an enrollee wants evidence of a change in his or her condition
to be considered in the appeal, the appeal would be remanded to the IRE
for consideration of the evidence on the change in condition.
Current Sec. 405.1034(c) provides that the ALJ remands an appeal
to the QIC that made the reconsideration if the appellant is entitled
to relief pursuant to 42 CFR 426.460(b)(1), 426.488(b), or
426.560(b)(1), and provides that unless the appellant is entitled to
such relief, the ALJ applies the LCD or NCD in place on the date the
item or service was provided. We proposed to incorporate these
provisions at Sec. 405.1056(e). We did not propose any corresponding
provision for Sec. 423.2056 because there is not a similar current
provision for part 423, subpart U proceedings.
As noted above, current Sec. 405.1034 does not address providing a
notice of remand. We proposed at Sec. 405.1056(f) to provide that OMHA
mails or otherwise transmits a written notice of the remand of the
request for hearing or request for review to all of the parties who
were sent a copy of the request at their last known address, and CMS or
a contractor that elected to be a participant to the proceedings or a
party to the hearing. The notice would state that, as discussed below,
there is a right to request that the Chief ALJ or a designee review the
remand. We stated in the proposed rule that we believed this would help
ensure that the parties and CMS and its contractors receive notice that
the remand order has been issued. We proposed at Sec. 423.2056(f) to
adopt a corresponding provision for a notice of remand in part 423,
subpart U proceedings, except that only the enrollee receives notice
because only the enrollee is a party, and CMS, the IRE, and the Part D
plan sponsor only receive notice if they requested to participate and
the request was granted.
Stakeholders have recounted instances in which they believe a
remand was not authorized by the regulations, but were unable to take
any action to correct the perceived error because a remand is not an
appealable action and current Sec. 405.1034 does not provide a review
mechanism. We stated that we do not believe that remands should be made
appealable actions, but recognize that stakeholders need a mechanism to
address remands that they believe are not authorized by the regulation.
We proposed in Sec. 405.1056(g) to provide a mechanism to request a
review of a remand by allowing a party or CMS, or one of its
contractors, to file a request to review a remand with the Chief ALJ or
a designee within 30 calendar days of receiving a notice of remand. If
the Chief ALJ or designee determines that the remand is not authorized
by Sec. 405.1056, the remand order would be vacated. We also proposed
that the determination on a request to review a remand order is binding
and not subject to further review so adjudication of the appeal can
proceed. We proposed at Sec. 423.2056(g) to adopt a corresponding
provision for reviewing a remand in part 423, subpart U proceedings.
Current Sec. 405.1034 does not discuss the effect of a remand. We
proposed at Sec. 405.1058, similar to current Sec. Sec. 405.1048 and
405.1054 which describe the effects of a decision and dismissal,
respectively, that a remand of a request for hearing or request for
review is binding unless it is vacated by the Chief ALJ or a designee
in accordance with proposed Sec. 405.1056(g). We stated in the
proposed rule that we believed the provision would add clarity for the
parties and other stakeholders on the effect of a remand order. We
proposed at Sec. 423.2058 to adopt a corresponding provision for the
effect of a remand in part 423, subpart U proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received one comment requesting clarification on why
proposed Sec. Sec. 405.1034(a)(1) and 423.2034(a)(1) require that
official copies of redeterminations and reconsiderations that were
conducted on the appealed issues can only be provided by CMS and its
contractors or by CMS, the IRE, and/or the Part D Plan Sponsor,
respectively, when the appellant can also furnish a copy of the same
documents. The commenter believes that it is unnecessary and unfair to
extend the adjudication period 15 days or more to obtain the ``official
copy.''
Response: Because OMHA is tasked with compiling the official
administrative record, it is necessary that OMHA obtain official
versions of the redetermination decision and the reconsideration
decision directly from the contractors if they are missing on appeal.
These documents establish the
[[Page 5068]]
issues on appeal and are therefore important evidence in the
administrative record. Although parties often have copies of these
documents as well, copies may be altered or edited and there is no way
to verify their authenticity unless they come directly from the
contractor.
We do not believe that proposed Sec. Sec. 405.1034(a)(1) and
423.2034(a)(1) place any unnecessary burden on the parties or that they
will cause significant delays in the adjudication of appeals. First, we
note that in many cases the lower levels decisions are available on a
CMS case processing system that is accessible to OMHA. If the missing
lower level decision is uploaded to an official system of record
(generally the case processing system used by the contractor and
accessible to OMHA), then OMHA could accept that document as the
official copy. In these cases, no information request would be
necessary under Sec. Sec. 405.1034(a) or 423.2034(a). We are modifying
the language in Sec. Sec. 405.1034(a)(1) and 423.2034(a)(1) to clarify
that prior to submitting an information request, OMHA must first check
the system of record to confirm whether a copy of the missing lower
level decision is available there. In the extremely small number of
cases where official copies were not provided in the record and were
not uploaded by the contractor to the case processing system, then the
ALJ or attorney adjudicator would use the proposed regulations to
request an official copy of the missing lower level decision. In these
cases, the adjudication period may be extended pursuant to Sec. Sec.
405.1034(d) or 423.2034(d). However, given the ready availability of
such evidence in the contractor's system, it should take minimal time
for the contractor to produce the necessary documents, and we would
anticipate that the extension also would be minimal.
Comment: One commenter expressed support for the sections in
proposed Sec. 405.1056 and Sec. 405.1058 that describe when a request
for hearing or a request for review of a QIC dismissal may be remanded
and the effects of a remand. The commenter specifically appreciated the
revisions that state that when a record has been reconstructed by the
QIC on remand that it would be returned to OMHA, stating that this
procedure helps ensure that appellants are not required to restart the
whole review process. The commenter did have concerns, however, about
proposed Sec. 405.1056(b), which requires a remand where the QIC
issued a reconsideration decision but no redetermination decision had
been made or the request for redetermination was dismissed, because the
commenter felt that provision would result in the appellant
unnecessarily having to start over at the first level of appeal. The
commenter provided an example in which a redetermination decision was
issued upholding a technical denial and then the appellant submitted
evidence at the reconsideration level that cured the technical defect.
In the example, the commenter argued that if the QIC proceeded to issue
a reconsideration decision that addressed availability of coverage and
payment issues and the reconsideration were appealed to OMHA, it would
be a waste of time and resources for the ALJ or attorney adjudicator to
remand the matter back to the QIC under Sec. 405.1056(b) to have the
QIC remand the case back to the Medicare administrative contractor for
a redetermination decision addressing coverage and payment. The
commenter requested additional examples of how Sec. 405.1056(b) may
impact appeals brought on behalf of Medicare beneficiaries and Medicaid
State agencies.
Response: We thank the commenter for its support and agree that the
proposals streamline the process for remands and will benefit
appellants in instances when an appeal can be returned to the OMHA
level of review without having to re-file an appeal, when the QIC or a
contractor is able to reconstruct the record. We disagree, however,
that proposed Sec. 405.1056(b) would result in appellants having to
re-file appeals unnecessarily or result in a waste of time and
resources. Proposed Sec. 405.1056(b) is intended to address two
situations where a necessary redetermination was not issued but is
required before the QIC can issue a reconsideration addressing coverage
and payment issues. In the first situation, the contractor did not
issue any redetermination. Pursuant to Sec. 405.972(b)(6), the QIC
must dismiss the reconsideration request in this situation and does not
have authority to issue a reconsideration decision addressing coverage
or payment issues. In the second situation, the contractor dismissed
the redetermination request. Pursuant to Sec. 405.974(b), a party to a
contractor's dismissal of a request for redetermination has a right to
have the dismissal reviewed by the QIC. The QIC, however, does not have
authority to issue a reconsideration decision addressing coverage and
payment issues in this situation. As outlined in Sec. 405.974(b)(2)
and (3), the QIC may either determine that the dismissal was in error
and vacate the dismissal and remand the case to the contractor for a
redetermination, or the QIC may affirm the dismissal as correct and the
party is bound by that determination and has no further appeal review
options. Because the QIC does not have authority to issue a
reconsideration decision that addresses coverage and payment issues in
either of the situations, if the QIC issues such a reconsideration
decision it has done so in error. If the reconsideration decision was
issued in error, the request for hearing must be remanded to the QIC
pursuant to Sec. 405.1056(b). Although we believe that this type of
remand will be rare, we believe it is necessary to correct
administrative errors in the adjudication process. We do not believe
that an administrative error made by the QIC conveys rights that are
not afforded under the rules and, therefore, believe that proposed
Sec. 405.1056(b) is a necessary revision.
We do not believe that proposed Sec. 405.1056(b) would apply to
the facts that were outlined in the commenter's example. In the example
presented in the comment, the contractor did issue a redetermination,
albeit a denial on technical grounds. The part 405, subpart I
regulations do not make a distinction between redeterminations based on
a technical denial and redeterminations based on other reasons, such as
a denial because the item or service was not medically reasonable and
necessary. Both redeterminations would give the party a right to
request a QIC reconsideration on the coverage and payment issues. The
party would then have a right to appeal the QIC's reconsideration for
an ALJ hearing, provided the amount in controversy and other filing
requirements were met, and the remand provisions of proposed Sec.
405.1056(b) would not apply.
Further, proposed Sec. 405.1056(b) applies to any request for
hearing on a QIC reconsideration where the QIC issued a coverage and
payment decision in error as discussed above. We do not believe there
are any special considerations regarding the proposal that would apply
differently based on the party appealing the claim, and therefore do
not believe adding examples of how the proposal impacts an appeal filed
by a beneficiary or a Medicaid State agency will be helpful.
Comment: The same commenter also had reservations about proposed
Sec. 405.1056(c), which would allow the appellant and CMS or its
contractor to jointly request a remand to the QIC or IRE at any time
before the ALJ or attorney adjudicator issues a decision or dismissal.
The commenter suggested that such ``joint request'' would likely
[[Page 5069]]
be initiated and facilitated by CMS or its contractor and that those
entities would have greater knowledge and bargaining power than
appellants, especially appellants who are unrepresented beneficiaries.
The commenter suggested that ALJs should be required to hold pre-
hearing conferences to confirm both parties' understanding of the
possible ramifications if the remand is granted and requested
additional information on how beneficiaries' interests would be
protected under Sec. 405.1056(c).
Response: We disagree with the commenter that proposed Sec.
405.1056(c) would operate to place appellants, including appellants who
are unrepresented beneficiaries, into a disadvantaged position.
Proposed Sec. 405.1056(c) requires that any request for remand under
this provision must be a joint request between the appellant and CMS or
its contractors. We believe there is little incentive for an appellant
to agree to a remand unless his or her claim will be paid in part or
full or the resolution offered by CMS and its contractors on remand
would be otherwise acceptable to the appellant, such as the review of
new evidence in the appeal. We also see little advantage to CMS or its
contractors in requesting remands unless they believe that they are
able to effectively resolve a dispute in such a way that the resolution
is mutually acceptable and the appellant will not appeal again.
Although the commenter was concerned that appellants, and especially
unrepresented beneficiaries, may have insufficient knowledge or
bargaining power to protect themselves from entering joint remand
requests that are not to their benefit, we believe that the
requirements regarding a statement of the reasons for the remand, the
likely resolution of the dispute, and the ALJ's or attorney
adjudicator's review of these statements is a significant and
sufficient safeguard. We believe that the adjudicator's review of the
joint request and submitted statements will help ensure that the remand
is truly jointly requested and that all individuals and entities
involved are in agreement regarding the reasons for and likely
resolutions of the remand. Although the commenter recommended a pre-
hearing conference instead to determine that the parties understand the
ramifications of a remand, we believe that requiring written reasons
and a statement indicating whether the remand will likely resolve the
matter in dispute is sufficient. Further, under proposed Sec.
405.1056(c)(2), the ALJ or attorney adjudicator would have discretion
in granting the remand request and may only grant the request if he or
she determines that remanding the case will likely resolve the matter
in dispute. If the appellant is not going to be favorably treated on
remand, then the appellant is likely to appeal the issue again to the
OMHA level and the dispute will not be resolved. Therefore, the
requested remands will only be granted where the likely resolution is
favorable and/or unlikely to lead to subsequent appeal. We believe that
proposed Sec. 405.1056(c) provides a valuable tool to appellants that
will allow expedited resolution of a disputed claim when there is
agreement between the appellant and CMS and its contractors, and that
the regulation contains sufficient safeguards to protect the
appellants, including unrepresented beneficiaries.
Comment: We received one comment opposing the new review mechanisms
for remand orders proposed in Sec. Sec. 405.1056(g) and 423.2056(g).
The commenter believes that these proposals result in an unprecedented
authorization of power in the Chief ALJ or a designee to reverse the
decisions of ALJs, and unnecessarily raise issues of ex parte
communication and the appearance of impropriety. The commenter also
suggested that the proposed review mechanism was problematic because
the Chief ALJ's ability to delegate is not limited and the commenter
believes the proposal conflicts with the APA concepts of an ALJ's
qualified decisional independence and rotational assignment of appeals.
The commenter stated that remands are rarely issued under the current
rules, and recommended that a preferable alternative to the proposals
would be to substantially limit the ALJs' remand authority.
Response: We proposed the review mechanisms in Sec. Sec.
405.1056(g) and 423.2056(g) to give stakeholders, including appellants
and CMS contractors, a means of recourse if an appeal is remanded and
they believe the remand is outside of the scope of the remand
regulations. As we state above, although we do not believe that remands
should be made appealable actions, we believe some mechanism to
challenge remands is necessary to be responsive to stakeholders who, in
the past, believed that some remands were not authorized by the
regulations and who felt that they did not have any way to address or
correct the perceived error. Because a remand likely adds additional
adjudication time and delay to the appeals process, we believe that
providing a review mechanism to stakeholders is fair and will help
ensure that remands that are outside of the scope of the remand
regulations do not derail appeals in error.
The review mechanisms proposed in Sec. Sec. 405.1056(g) and
423.2056(g) also are intended to help ensure consistency in processing
appeals. Previously, if an appeal was remanded to the QIC or IRE and
that level of review did not agree that there was jurisdiction for the
remand under current Sec. Sec. 405.1034 or 423.2034, there was no
clear guidance on how to proceed. Some QICs or IREs would reopen the
previous decision while others would respond to the remand via a
different mechanism. When ALJs issued remand orders outside of the
scope of Sec. Sec. 405.1034 or 423.2034, it created inconsistencies
and confusion not only for CMS and its contractors regarding how to
proceed, but also for appellants regarding the status and handling of
their appeal. The proposed review mechanisms will help ensure that the
procedural remand rules are applied in a consistent manner and that the
processing of the remands at lower levels is also more uniform.
We limited the review authority to the Chief ALJ or a designee so
that limited individuals within the agency will be tasked with this new
review responsibility, which is a limited-scope review of a discrete
procedural question. In this way, we believe that the requested reviews
can be completed both consistently and efficiently. We added the
ability for the Chief ALJ to designate other individuals to assist with
the review of remands, if necessary, to ensure that there will be
adequate resources to complete the reviews as expeditiously as
possible, so the appeal can proceed as remanded, or with the ALJ.
We disagree with the commenter that the proposed review mechanisms
may be used to reverse ALJ decisions or to override the qualified
decisional independence that ALJs have when making decisions. We
believe that remands are distinct from the decisions described in
sections 554 and 556 of the APA because the permitted remands are
generally procedural mechanisms that do not resolve the issues on
appeal, but rather return the appeal to the second level of the appeals
process without a resolution of the appealed matter. The one exception
to this distinction is when the remand is issued on a request for
review of a QIC's or IRE's dismissal of a request for reconsideration.
In Sec. Sec. 405.1056(d) and 423.2056(d) as finalized in this rule, an
ALJ or attorney adjudicator issues a remand to the appropriate QIC or
IRE if the ALJ or attorney adjudicator determines that the dismissal of
a request for reconsideration was in error. We
[[Page 5070]]
recognize that remands issued on review of a QIC's or IRE's dismissal
of a request for reconsideration are more akin to a determination than
a purely procedural mechanism. Therefore, we are modifying the language
in Sec. Sec. 405.1056(g) and 423.2056(g) to specifically exempt
remands that are issued under Sec. Sec. 405.1056(d) and 423.2056(d)
from potential review by the Chief ALJ or designee. The remaining
remands, however, are issued on procedural grounds. We do not agree
that creating a review mechanism for remands issued on procedural
grounds impinges on an ALJ's qualified decisional independence with
respect to his or her decisions. Further, we do not agree that the
proposal interferes with rotational assignments of appeals because
there is no right to an ALJ hearing when a request for review of an ALJ
remand is made, thus the rotational assignment principle of 5 U.S.C
3105 does not apply.
We also do not agree with the commenter that this review mechanism
will result in ex parte communications or the appearance of
impropriety. Ex parte communications involve communications that are
not on the record between an individual involved in the decisional
process and an interested party outside of the agency about the merits
of the proceedings. See 5 U.S.C. 557(d). The proposed review mechanisms
in Sec. Sec. 405.1056(g) and 423.2056(g) permit either a party or CMS,
or one of its contractors, to file a request to review a remand within
30 calendar days of receiving the notice of remand, which would be made
part of the record. The proposed regulation provides for the same
procedure regardless of the entity or individual requesting the review.
Finally, with respect to the suggested alternative of substantially
limiting the ALJs' remand authority, we disagree with the commenter
that the stakeholders' concerns that prompted this proposal would be
sufficiently addressed by that alternative. The current regulations
already substantially limit the ALJs' authority to remand and yet there
have been instances, despite those limitations, where stakeholders
still felt that remands were issued that were not authorized by the
regulations. In addition, Sec. Sec. 405.1056 and 423.2056, as
finalized in this rule, do not expand the ALJs' remand authority
compared to the current remand regulations in Sec. Sec. 405.1034 and
423.2034, but rather they set forth the limited circumstances in which
a remand may be issued. Although Sec. Sec. 405.1056 and 423.2056 list
specific situations where a remand may be issued, these provisions are
narrower than the current provisions at Sec. Sec. 405.1034 and
423.2034 because they do not include the general language at Sec. Sec.
405.1034 and 423.2034 providing for a remand when the ALJ believes the
written record is missing information that is essential to resolving
the issues on appeal and that information can be provided only by CMS
or its contractors. Instead, Sec. Sec. 405.1034(a) and 423.2034(a), as
finalized in this rule, require that the ALJ or attorney adjudicator
first request that information from the QIC or IRE. Although the ALJ or
attorney adjudicator may still remand a case under Sec. Sec.
405.1056(a) and 423.2056(a) if the QIC or IRE fail to provide an
official copy of a missing redetermination or reconsideration or fail
to provide the case file after a request for information under
Sec. Sec. 405.1034(a) and 423.2034(a),, the specific circumstances in
which remands can occur have been narrowed as compared to the broader
remand authority set forth in current Sec. Sec. 405.1034 and 423.2034.
Because remands are only available in limited and narrowly defined
circumstances in Sec. Sec. 405.1056 and 423.2056, we anticipated that
the review mechanisms created by this proposal will be used
infrequently. We agree with the commenter that remands are rarely used
today and, therefore, believe that the use of the review mechanisms
proposed in Sec. Sec. 405.1056(g) and 423.2056(g) would be even rarer.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing
Sec. Sec. 405.1058 and 423.2058 as proposed without modification, and
we are finalizing the changes to Sec. Sec. 405.1034, 405.1056,
423.2034, and 423.2056 as proposed, with the following modifications.
We are amending Sec. Sec. 405.1034(a)(1) and 423.2034(a)(1) to provide
that prior to issuing a request for information to the QIC or IRE, OMHA
will confirm whether an electronic copy of the missing redetermination
or reconsideration is available in the official system of record, and
if so, will accept the electronic copy as an official copy. In
addition, we are amending Sec. Sec. 405.1056(g) and 423.2056(g) to add
language to specifically exempt remands that are issued under
Sec. Sec. 405.1056(d) and 423.2056(d) (on a review of a QIC's or IRE's
dismissal of a request for reconsideration) from potential review by
the Chief ALJ or designee. Finally, we are replacing ``can only be
provided by CMS, the IRE, and/or the Part D plan sponsor'' in proposed
Sec. 423.2034(a)(1), which was a drafting error, with ``can be
provided only by CMS, the IRE, and/or the Part D plan sponsor,'' for
consistency with the definition in Sec. 423.2034(a)(2).
q. Description of the ALJ Hearing Process and Discovery (Sec. Sec.
405.1036, 405.1037, and 423.2036)
As described below, we proposed a number of changes to Sec. Sec.
405.1036 and 423.2036, which describe the ALJ hearing process,
including the right to appear and present evidence, waiving the right
to appear at the hearing, presenting written statements and oral
arguments, waiver of the adjudication period, what evidence is
admissible at the hearing, subpoenas, and witnesses at a hearing. 81 FR
43790, 43836-43837. Current Sec. 405.1037 describes the discovery
process in part 405, subpart I proceedings, which is permitted when CMS
or a contractor elects to be a party to the ALJ hearing; there is no
corresponding provision for part 423, subpart U proceedings because
CMS, the IRE, and the Part D plan sponsor may not be made parties to
the hearing.
Current Sec. 405.1036(b)(1) states that a party may ``send the
ALJ'' a written statement indicating that he or she does not wish to
appear at the hearing. We proposed at Sec. 405.1036(b)(1) to revise
this provision to state that a party may ``submit to OMHA'' a written
statement indicating that he or she does not wish to appear at the
hearing. We stated in the proposed rule that while the written
statement could still be sent to an ALJ who is assigned to a request
for hearing, we proposed that the statement could be submitted to OMHA
(for example, the statement could be submitted with the request for
hearing), or to the ALJ or attorney adjudicator, as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 of this
final rule above), after the request is assigned, to provide more
flexibility and to accommodate situations where an ALJ or attorney
adjudicator has not been assigned a request for hearing. We proposed at
Sec. 423.2036(b)(1) to adopt a corresponding revision for submitting a
waiver of the right to appear in part 423, subpart U proceedings. In
addition, we proposed at Sec. 423.2036(b)(1)(ii) to revise the current
requirement for the ``ALJ hearing office'' to document oral requests to
require ``OMHA'' to document oral requests, to help ensure that
applicability of the requirement is clear regardless of whether the
oral request is received by an adjudicator in an OMHA field office
after the appeal is assigned to an ALJ or attorney adjudicator, or the
oral request is received in the OMHA central office before the appeal
is assigned to an ALJ or attorney adjudicator.
[[Page 5071]]
As discussed in section III.A.3.h of the proposed rule and II.B.3.h
of this final rule above, we proposed to move the provision for waiving
the adjudication period from current Sec. 405.1036(d) to proposed
Sec. 405.1016(d) because proposed Sec. 405.1016 addresses
adjudication time frames and we believe the section is a better place
for discussing adjudication time frame waivers. To accommodate moving
current Sec. 405.1036(d) to proposed Sec. 405.1016(d), we proposed to
re-designate current Sec. 405.1036(g), which describes witnesses at
the hearing, as Sec. 405.1036(d), because it more logically follows
the discussion of presenting witnesses and oral arguments in current
Sec. 405.1036(c). For the same reasons, we proposed to move the
provisions at Sec. 423.2036(d) to Sec. 423.2016(c), and proposed at
Sec. 423.2036(d) to re-designate current Sec. 423.2036(g) as Sec.
423.2036(d) to describe witnesses at a hearing in part 423, subpart U
proceedings.
Current Sec. 405.1036(f) discusses subpoenas. Current Sec.
405.1036(f)(5)(i) states that an ALJ ruling on a subpoena request is
not subject to immediate review by the Council and may be reviewed
solely during the course of the Council's review specified in Sec.
405.1102 (for requests for Council review when an ALJ issues a decision
or dismissal), Sec. 405.1104 (for requests for escalation to the
Council), or Sec. 405.1110 (for referrals for own motion review by the
Council). As discussed in section III.A.3.h.ii of the proposed rule and
II.B.3.h.ii of this final rule above, we proposed to remove section
Sec. 405.1104 and relocate provisions dealing with escalation to the
Council to Sec. 405.1016. Because the process for requesting
escalation to the Council is now described in proposed Sec.
405.1016(e) and (f), we proposed at Sec. 405.1036(f)(5)(i) to replace
the reference to Sec. 405.1104 with a reference to Sec. 405.1016(e)
and (f). Current Sec. 405.1036(f)(5)(ii) discusses CMS objections to a
``discovery ruling'' in the context of a paragraph on reviewability of
subpoena rulings and current Sec. 405.1037(e)(2)(i) separately
addresses CMS objections to a discovery ruling. We proposed to revise
Sec. 405.1036(f)(5)(ii) to replace the current reference to a
``discovery ruling'' with ``subpoena ruling'' so it is consistent with
the topic covered by Sec. 405.1036(f). No corresponding revisions are
necessary in Sec. 423.2036(f) because there is no reference to a
``discovery ruling.''
Current Sec. 405.1037(a)(1) provides that discovery is permissible
only when CMS or its contractors elects to participate in an ALJ
hearing as a party. We stated in the proposed rule that, while the
intent is generally clear, the use of ``participate'' is potentially
confusing given that CMS or one of its contractors can elect to be a
participant in the proceedings, including the hearing, in accordance
with current and proposed Sec. 405.1010, or elect to be a party to the
hearing in accordance with current and proposed Sec. 405.1012. We
proposed to revise Sec. 405.1037(a)(1) to state that discovery is
permissible only when CMS or its contractor elects to be a party to an
ALJ hearing, in accordance with proposed Sec. 405.1012. As noted
above, there are no provisions for discovery in part 423, subpart U
proceedings because CMS, the IRE, or the Part D plan sponsor are not
permitted to be a party to the hearing.
Current Sec. 405.1037(e)(1) states that an ALJ discovery ruling or
disclosure ruling is not subject to immediate review by the Council and
may be reviewed solely during the course of the Council's review
specified in Sec. 405.1100 (for Council review in general), Sec.
405.1102 (for requests for Council review when an ALJ issues a decision
or dismissal), Sec. 405.1104 (for requests for escalation to the
Council), or Sec. 405.1110 (for referrals for own motion review by the
Council). For the reasons discussed above with regard to similar
proposed changes in Sec. 405.1036, we proposed at Sec. 405.1037(e)(1)
to replace the reference to Sec. 405.1104 with a reference to Sec.
405.1016(e) and (f).
Current Sec. 405.1037(f) describes the effect of discovery on an
adjudication time frame, and provides that the time frame is tolled
until the discovery dispute is resolved. However, we stated in the
propose rule that it does not clearly state when the effect on an
adjudication time frame begins, and ``discovery dispute'' is not used
elsewhere in the section. In addition, we stated that current Sec.
405.1037(f) does not contemplate that an adjudication time frame may
not apply (for example, when the adjudication time frame is waived in
accordance with proposed Sec. 405.1016(d)). Therefore, we proposed to
revise Sec. 405.1037(f) to state that if an adjudication period
applies to the appeal in accordance with Sec. 405.1016, and a party
requests discovery from another party to the hearing, the adjudication
period is extended for the duration of discovery, from the date a
discovery request is granted until the date specified for ending
discovery. We stated in the proposed rule that we believed this
revision would provide a clearer standard for how an adjudication
period is affected by discovery proceedings.
We received no comments on these proposals, other than comments
discussed in section II.A.4 above related to our general proposal to
reference OMHA or an OMHA office, in place of current references to an
unspecified entity, ALJs, and ALJ hearing offices, when a reference to
OMHA or an OMHA office provides a clearer explanation of a topic.
Accordingly, for the reasons discussed above and in the proposed rule,
we are finalizing the changes to Sec. Sec. 405.1036, 405.1037, and
423.2036 as proposed without modification.
r. Deciding a Case Without a Hearing Before an ALJ (Sec. Sec. 405.1038
and 423.2038)
As described below, we proposed several changes to Sec. Sec.
405.1038 and 423.2038, concerning when a case may be decided without a
hearing before an ALJ. 81 FR 43790, 43837-43838. Current Sec.
405.1038(a) provides authority to issue a ``wholly favorable'' decision
without a hearing before an ALJ and without giving the parties prior
notice when the evidence in the hearing record supports a finding in
favor of the appellant(s) on every issue. We proposed in Sec. 405.1038
that if the evidence in the administrative record supports a finding in
favor of the appellant(s) on every issue and no other party to the
appeal is liable for claims at issue, an ALJ or attorney adjudicator,
as proposed in section II.B of the proposed rule (and discussed in
section II.A.2 above), may issue a decision without giving the parties
prior notice and without an ALJ conducting a hearing, unless CMS or a
contractor has elected to be a party to the hearing in accordance with
Sec. 405.1012. Proposed Sec. 405.1038(a) would replace ``wholly
favorable'' with ``fully favorable'' in the subsection heading to align
with language in Sec. 405.1000(g), which addresses a fully favorable
decision being made on the record, and the nomenclature used in OMHA's
day to day operations. Proposed Sec. 405.1038(a) would also replace
``hearing record'' with ``administrative record'' for consistency with
other references to the record, and replace ``hearing decision'' with
``decision,'' for consistency with other references to a decision. We
proposed at Sec. 423.2038(a) to adopt corresponding revisions to align
with language in Sec. 423.2000(g) and to make references to the record
and decisions consistent in part 423, subpart U proceedings.
Proposed Sec. 405.1038(a) would also add two new limitations on
issuing a decision without a hearing before an ALJ when the evidence in
the administrative record supports a finding in favor of the
appellant(s) on every
[[Page 5072]]
issue. First, a decision could not be issued pursuant to proposed Sec.
405.1038(a) if another party to the appeal is liable for the claims at
issue. Second, a decision could not be issued pursuant to proposed
Sec. 405.1038(a) if CMS or a contractor elected to be a party to the
hearing in accordance with Sec. 405.1012. We stated in the proposed
rule that we recognized that this may limit decisions that may be
issued pursuant to Sec. 405.1038(a); however, we also stated that we
believed only a small number of appeals would be affected, and the new
limitations would mitigate the impact of such a decision on the other
parties to the appeal and the likelihood of an appeal to, and remand
from, the Council. No corresponding changes were proposed in Sec.
423.2038(a) because only the enrollee is a party in part 423, subpart U
proceedings.
Current Sec. 405.1038(b)(1) permits the ALJ to decide a case on
the record and not conduct a hearing if: (1) All the parties indicate
in writing that they do not wish to appear before the ALJ at a hearing,
including a hearing conducted by telephone or video-teleconferencing,
if available; or (2) an appellant lives outside of the United States
and does not inform the ALJ that he or she wants to appear, and there
are no other parties who wish to appear. We proposed to retain this
structure in proposed Sec. 405.1038(b) but did propose some changes.
Current Sec. 405.1038(b)(1)(i) requires all parties to indicate in
writing that they do not wish to appear before the ALJ at a hearing,
and as indicated above, current Sec. 405.1038(b)(1)(ii) is contingent
on no other parties wishing to appeal. However, the requirement to
obtain a writing from all parties or determine the wishes of the non-
appellant parties has limited the utility of the provisions. While all
parties have a right to appear at the hearing, a notice of hearing is
not sent to parties who did not participate in the reconsideration and
were not found liable for the items or services at issue after the
initial determination, in accordance with current Sec. 405.1020(c). We
proposed at Sec. 405.1038(b)(1)(i) and (b)(1)(ii) to modify the
requirements so writings only need to be obtained from, or wishes
assessed from, parties who would be sent a notice of hearing, if a
hearing were to be conducted. We stated that using the notice of
hearing standard protects the interests of potentially liable parties,
while making the provisions a more effective option for the efficient
adjudication of appeals. In addition, proposed Sec. 405.1038(b)(1)
would reinforce that only an ALJ conducts a hearing by indicating an
ALJ or attorney adjudicator may decide a case on the record without an
ALJ conducting a hearing. Proposed Sec. 405.1038(b)(1)(ii) also would
indicate that an appellant who lives outside of the United States would
inform ``OMHA'' rather than ``the ALJ'' that he or she wants to appear
at a hearing before an ALJ, so an appellant could make that indication
before an appeal is assigned to an ALJ or attorney adjudicator. We
proposed at Sec. 423.2038(b)(1) and (b)(1)(ii) to adopt corresponding
revisions to reinforce that only an ALJ conducts a hearing and an
enrollee who lives outside of the United States would inform OMHA that
he or she wishes to appear at a hearing before an ALJ, but the other
changes in proposed Sec. 405.1038(b) were not proposed in Sec.
423.2038(b) because only the enrollee is a party in part 423, subpart U
proceedings. We also proposed in Sec. 405.1038(b)(1)(i) to replace
``videoteleconferencing,'' and in Sec. 423.2038(b)(1)(i) to replace
``video teleconferencing,'' with ``video-teleconferencing,'' for
consistency with terminology used in Sec. Sec. 405.1000, 405.1036,
423.2000, 423.2020, and 423.2036.
On occasion, CMS or one of its contractors indicates that it
believes an item or service should be covered or payment made on an
appealed claim, either before or at a hearing. However, there are no
current provisions that address this circumstance, and we stated in the
proposed rule that it is one that is ideal for a summary decision in
favor of the parties based on the statement by CMS or its contractor,
in lieu of a full decision that includes findings of fact, conclusions
of law, and other decision requirements. We proposed to add Sec.
405.1038(c) to provide a new authority for a stipulated decision, when
CMS or one of its contractors submits a written statement or makes an
oral statement at a hearing indicating the item or service should be
covered or paid. In this situation, an ALJ or attorney adjudicator may
issue a stipulated decision finding in favor of the appellant or other
liable parties on the basis of the statement, and without making
findings of fact, conclusions of law, or further explaining the reasons
for the decision. We proposed at Sec. 423.2038(c) to adopt a
corresponding authority for stipulated decisions in part 423, subpart U
proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received ten comments on the proposed limitations to
issuing a decision without a hearing before an ALJ when the evidence in
the administrative record supports a finding in favor of the
appellant(s) on every issue. Six commenters opposed adding that a
decision cannot be issued pursuant to proposed Sec. 405.1038(a) if CMS
or a contractor elects to be a party to the hearing in accordance with
Sec. 405.1012. The commenters stated that the position of CMS and its
contractors will be well established in the administrative record by
the time the appeal reaches OMHA, and the record will contain all of
the information available to the contractor at the time of its
determination. The commenters stated that CMS and its contractors
should not be allowed to delay the ALJ's or attorney adjudicator's
decision if the evidence in the administrative record supports a
finding in favor of the appellant(s) on every issue. Two of the
commenters stated that this limitation could result in CMS contractors
electing party status to force a hearing even when the record supports
a fully favorable decision.
Response: As discussed above, we believe only a small number of
appeals will be affected by the limitation in proposed Sec.
405.1038(a) on issuing fully favorable decisions without a hearing
before an ALJ when CMS or its contractor has elected to be a party to
the hearing in accordance with Sec. 405.1012. In accordance with
proposed Sec. 405.1012(a)(1), CMS or a contractor cannot elect to be a
party to a hearing if the request for hearing was filed by an
unrepresented beneficiary. Further, CMS or a contractor can only elect
to be a party to a hearing in response to the notice of hearing
pursuant to Sec. 405.1012(b), or at the ALJ's request. Currently, very
few decisions are issued under Sec. 405.1038(a) after a hearing is
scheduled and the notice of hearing is sent to the parties and
potential parties and participants. We expect that to continue to be
true, but under current Sec. 405.1038(a) there have been occasions
when an ALJ has issued a decision in an appellant's favor without
conducting a hearing, after a hearing has been scheduled and CMS or its
contractor has elected to be a party to the hearing.
If CMS or its contractor has properly elected to be a party, it has
a right to appear at an ALJ hearing. As the claims payor, CMS and its
contractors have an interest in the outcome of the case, similar to any
other party to the appeal that is or may be liable for the claims at
issue. Regardless of whether CMS's position may be apparent from the
administrative record by the time an appeal reaches the OMHA level, CMS
or a contractor that has properly elected party status has the right to
present its
[[Page 5073]]
arguments before the ALJ at the hearing. That right continues even if a
fully favorable decision is issued under Sec. 405.1038(a) as finalized
in this rule, which provides that the notice of decision informs the
parties that they have a right to a hearing. Thus, issuing a decision
in the appellant's favor after CMS or its contractor has elected to be
a party and without conducting the scheduled hearing would be an
appealable issue to the Council and possibly result in a remand to OMHA
to conduct the hearing, resulting in wasted resources at the Council to
process the appeal and remand, and further delaying finality of the
appeal for the parties. We do not agree that the proposal will result
in CMS or its contractors electing party status to ``force a hearing''
because a hearing would already have to be scheduled for CMS or its
contractors to elect party status. As noted above, very few decisions
are currently issued under Sec. 405.1038(a) after a hearing has been
scheduled and CMS and its contractors have had the opportunity to elect
party status. Therefore, we do not believe that Sec. 405.1038(a), as
finalized in this rule, will create a significant incentive for CMS or
its contractors to elect party status just to force a hearing in those
few cases where a decision might otherwise be issued on the record
after a hearing has been scheduled. For the reasons discussed above, we
believe that limiting decisions that can be issued under proposed Sec.
405.1038(a) when CMS or a contractor has elected to be a party will
only affect a small number of cases, and will reduce the number of
those cases that are appealed to, and remanded from, the Council.
Comment: Two commenters stated that limiting decisions that can be
made without a hearing will weaken the effectiveness of attorney
adjudicators by reducing the number of appeals they can decide.
Response: We do not agree that this proposal will weaken the
effectiveness of attorney adjudicators. As noted above, these
limitations will not affect a significant number of cases and will
prevent attorney adjudicators from making decisions that would likely
be subject to appeal to the Council by non-appellant parties seeking
their right to a hearing, and possible remand back to OMHA for an ALJ
to conduct the hearing.
Comment: One commenter suggested clarifying the procedure for
transferring a case from an ALJ to an attorney adjudicator when the
case is appropriate for a decision without conducting a hearing.
Response: As discussed in section II.A.2 above, OMHA's business
practice is to assign appeals to ALJs in rotation so far as
practicable, and appeals will be assigned to attorney adjudicators in
the same manner. If an appeal is initially assigned to an ALJ but is
deemed appropriate for a decision by an attorney adjudicator, the
appeal would be reassigned to an attorney adjudicator in the same
manner as a new appeal assignment to an attorney adjudicator. More
information on the appeal assignment process is available in the OCPM,
which is accessible to the public at the OMHA Web site (www.hhs.gov/omha).
Comment: One commenter requested clarification regarding the time
frame for requesting a hearing after a fully favorable decision is
issued pursuant to Sec. 405.1038(a) or Sec. 423.2038(a), as the
regulation states the parties have the right to a hearing but is silent
regarding the time frame for requesting a hearing.
Response: The language in proposed Sec. Sec. 405.1038(a) and
423.2038(a) stating that the parties have the right to a hearing is
carried over from current Sec. Sec. 405.1038(a) and 423.2038(a). As
discussed in section II.A.2 above, parties to an appeal that is decided
without a hearing may pursue their right to a hearing by requesting a
review of the decision by the Council, which can remand the case for an
ALJ to conduct a hearing and issue a new decision. The request for
review by the Council must be filed in accordance with proposed
Sec. Sec. 405.1102 and 423.2102.
Comment: One commenter stated that an ALJ should be allowed to
issue a decision that is fully favorable to the appellant without
conducting a hearing even if another party is liable for the claims at
issue, as long as the party that is liable for the claims at issue
waives its right to appear at a hearing.
Response: If all of the parties who would be sent a notice of
hearing, which under proposed Sec. 405.1020(c)(1) would include, among
others, the appellant and any other party who is or may be liable for
the claims at issue, indicate in writing that they do not wish to
appear at a hearing, an ALJ or attorney adjudicator may decide a case
on the record pursuant to Sec. 405.1038(b).
Comment: Two commenters stated that if an appellant waives the
right to a hearing before an ALJ under Sec. Sec. 405.1038 and
405.1020, and the case is decided by an attorney adjudicator rather
than an ALJ, the administrative record must demonstrate that the waiver
was valid and informed. One commenter expressed concern that appellants
may be motivated to waive a hearing in order to avoid the delay of
waiting for an ALJ hearing, and stated that appellants should be
assured that a decision will generally be made by an ALJ or attorney
adjudicator in the same time frame.
Response: As finalized in this rule, Sec. Sec. 405.1038(b) and
405.1020(d) provide that a decision may be issued by an attorney
adjudicator or an ALJ if all the parties that would be sent a notice of
hearing in accordance with Sec. 405.1020(c) waive a hearing before an
ALJ in writing. Publication of this final rule will inform appellants
of the possibility that an attorney adjudicator may decide a case if
the parties waive the right to a hearing. Accordingly, we do not
believe that any further documentation of a party's understanding is
necessary to demonstrate a valid waiver. However, we will review the
current optional HHS form for waiving an ALJ hearing (Form HHS-723,
Waiver of Right to an Administrative Law Judge (ALJ) Hearing), and
consider making changes to reinforce this provision of the rule for
those who choose to use that form.
ALJs and attorney adjudicators will be subject to the same time
frames for issuing a decision, dismissal, or remand, as discussed in
section II.B.3.h above, including when decisions are issued under
Sec. Sec. 405.1038(b) and 423.2038(b) as finalized in this rule.
However, we note that if all of the parties waive a hearing and a
decision can be issued pursuant to Sec. 405.1038(b) or Sec.
423.2038(b) without conducting a hearing, the decision may be issued
sooner than if a hearing were scheduled and conducted, regardless of
whether an ALJ or attorney adjudicator issues the decision under Sec.
405.1038(b) or Sec. 423.2038(b). Scheduling a hearing requires the ALJ
to determine an available hearing date and time and give the parties
sufficient advance notice (at least 20 calendar days under Sec.
405.1022(a) and for non-expedited Part D hearings under Sec.
423.2022(a)). Sections 405.1020(e)(4) and 423.2020(e)(4) allow for
hearings to be rescheduled if a party or the enrolle objects to the
scheduled date and/or time and the ALJ finds good cause to reschedule
the hearing, which could result in even longer delays. Appellants who
wish to avoid the additional time it takes to schedule and conduct a
hearing before a decision can be issued may choose to waive the
hearing.
Comment: Three commenters strongly supported our proposal to allow
stipulated decisions in favor of the parties based on a statement by
CMS or its contractor that an item or service should be covered or
payment made on an appealed claim. One commenter questioned whether
there may be
[[Page 5074]]
circumstances in which it may be in a party's interest to obtain a full
decision with findings of fact or conclusions of law regarding a
specific policy, eligibility, or coverage issue, instead of a
stipulated decision.
Response: We thank the commenters for their support. If CMS or its
contractor agrees that an item or service should be covered or payment
made on an appealed claim and an ALJ or attorney adjudicator issues a
decision in accordance with proposed Sec. 405.1038(c), we do not
believe that the decision will be detrimental to the parties' interests
given that an ALJ's or attorney adjudicator's decision is limited to
the appealed claims and binding only on the parties to the appeal, and
is not precedential. However, we note that proposed Sec. 405.1038(c)
does not require the ALJ or attorney adjudicator to issue a stipulated
decision, but rather makes it an option. If a party believes that it
has an interest in a full decision that includes findings of fact,
conclusions of law, and the reasons for the decision, the party could
express its desire for a full decision to the ALJ during the hearing if
CMS or the contractor makes an oral statement at the hearing; to the
assigned ALJ or attorney adjudicator if CMS or the contractor files a
written statement and provides a copy to the parties; or in a request
for review to the Council if a stipulated decision has already been
issued.
Comment: One commenter stated that it would be insufficient to
issue a stipulated decision based on a statement from CMS that the item
or service would be covered, without first disclosing the amount of
payment that would be made on the claim and allowing the appellant to
accept or reject the payment, because often the amounts paid by CMS
contractors for certain items of durable medical equipment do not
accurately reflect the cost of the items.
Response: We do not believe adding a requirement for all cases in
which a stipulated decision may be issued that CMS disclose the amount
of payment that would be made, and that the appellant be allowed to
accept or reject the payment before a stipulated decision could be
issued, would be necessary, and we believe it would waste resources and
negate the intended efficiency of the proposal when CMS or a contractor
believes an item or service should be covered or payment may be made.
Section 405.1046(a)(3), as finalized in this rule, incorporates current
Sec. 405.1046(c), which provides that an ALJ or attorney adjudicator
may make a finding as to the amount of payment due for an item or
service when the payment amount is at issue. However, under these
regulations, such a finding is not binding on a CMS contractor for
purposes of determining the amount of payment due and the amount of
payment determined by the contractor in effectuating an ALJ's or
attorney adjudicator's decision is a new initial determination under
Sec. 405.924, which may be appealed. These rules would apply to a
stipulated decision, and as such, if a payment amount is included in a
stipulated decision, it does not guarantee that amount will be paid.
Further, allowing an appellant to veto a stipulated decision by
rejecting the payment that would be made on the claim would require the
ALJ or attorney adjudicator to issue a full decision, including
findings of fact, and conclusions of law, and comply with other
decision requirements in Sec. 405.1046, which would be subject to the
same limitations of proposed Sec. 405.1046(a)(3) regarding payment
amounts.
However, we agree that it would not be appropriate for an ALJ or
attorney adjudicator to issue a stipulated decision when the amount of
payment is specifically at issue before the ALJ or attorney
adjudicator, if the statement from CMS or its contractor does not agree
to the amount of payment the party believes should be made. If the
amount of payment on a claim is at issue before the ALJ or attorney
adjudicator, a general statement from CMS or its contractor that the
item or service should be covered or payment may be made would not
address the issue on appeal. We are therefore amending Sec.
405.1038(c) to provide that if the amount of payment is an issue before
the ALJ or attorney adjudicator, a stipulated decision may be made if
the statement from CMS or its contractor agrees to the amount of
payment the party believes should be made. We are making a
corresponding change to Sec. 423.2038(c) for stipulated decisions in
part 423, subpart U proceedings.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1038 and 423.2038 as proposed with the
following modification. We are amending Sec. Sec. 405.1038(c) and
423.2038(c) to provide that if the amount of payment is an issue before
an ALJ or attorney adjudicator, the statement upon which a stipulated
decision is based must agree to the amount of payment the parties
believe should be made.
s. Prehearing and Posthearing Conferences (Sec. Sec. 405.1040 and
423.2040)
As described below, we proposed a number of changes to Sec. Sec.
405.1040 and 423.2040 with respect to prehearing and posthearing
conferences. 81 FR 43790, 43838-43839. Current Sec. 405.1040 discusses
prehearing and posthearing conferences and permits the ALJ to hold
these conferences to facilitate the hearing or hearing decision.
Current Sec. 405.1040(b) requires an ALJ to inform ``the parties'' of
the time, place, and purpose of the prehearing or posthearing
conference, unless a party indicates in writing that it does not wish
to receive a written notice of the conference. In accordance with
current Sec. 405.1020(c), the notice of hearing is not sent to a party
who did not participate in the reconsideration and was not found liable
for the services at issue after the initial determination. Therefore,
we proposed to modify Sec. 405.1040(b) to state that the ALJ would
inform parties who would be or were sent a notice of hearing in
accordance with Sec. 405.1020(c). In addition, current Sec.
405.1040(b) does not provide for conference notice to be sent to CMS or
a contractor that elected to be a participant in the proceedings or a
party to the hearing at the time the conference notice is sent, which
has caused confusion when CMS or a contractor has made an election
before or after a conference. Therefore, we proposed at Sec.
405.1040(b) that a conference notice be sent to CMS or a contractor
that has elected to be a participant in the proceedings or a party to
the hearing at the time the conference notice is sent. We stated in the
proposed rule that we believed these changes would help ensure the
appropriate parties and participants are provided with notice of, and
have an opportunity to attend, a conference. We proposed at Sec.
423.2040(b) and (c) to adopt corresponding revisions for prehearing
conference notices in non-expedited and expedited hearings respectively
to state that a conference notice is sent to CMS, the IRE, and/or the
Part D plan sponsor if the ALJ has granted their request(s) to be a
participant in the hearing, but we did not propose to make other
changes in proposed Sec. 405.1040(b) to Sec. 423.2040 because only
the enrollee is a party in part 423, subpart U proceedings. In
addition, because an oral request not to receive a notice of the
conference is permitted for expedited hearings, we proposed at Sec.
423.2040(d) to revise the requirement for an ``ALJ hearing office'' to
document such an oral request to provide more generally that oral
requests must be documented,
[[Page 5075]]
which is generally done by the ALJ's support staff, rather than other
office staff. In addition, we proposed at Sec. 423.2040(d) that
documentation of an oral request not to receive written notice of the
conference must be added to the administrative record for consistency
in how the record is referenced.
Current Sec. 405.1040(c) states that, at the conference, the ALJ
may consider matters in addition to those stated in the notice of
hearing, if the parties consent in writing. However, OMHA ALJs have
indicated that providing them with the discretion to delegate
conducting a conference to an attorney would add efficiency to the
process. OMHA attorneys are licensed attorneys who support ALJs in
evaluating appeals and preparing appeals for hearing, as well as
drafting decisions, and are well versed in Medicare coverage and
payment policy, as well as administrative procedure. Therefore, we
proposed at Sec. 405.1040(c)(1) that, at the conference, the ALJ or an
OMHA attorney designated by the ALJ may conduct the conference, but
only the ALJ conducting a conference may consider matters in addition
to those stated in the conference notice if the parties consent to
consideration of the additional matters in writing. We stated in the
proposed rule that this revision would allow an OMHA attorney
designated by the ALJ assigned to an appeal to conduct a conference,
but would only allow an ALJ conducting the conference to consider
matters in addition to those stated in the conference notice. We stated
that we believe allowing ALJs to delegate the task of conducting a
conference (consistent with the conference notice stating the purpose
of the conference, in accordance with Sec. 405.1040(b)) would provide
ALJs with the flexibility to use OMHA attorneys and provide ALJs with
more time to devote to hearings and decisions. We also stated that we
believe using attorneys to conduct conferences is appropriate because
conferences are informal proceedings to facilitate a hearing or
decision, and do not involve taking testimony or receiving evidence,
both of which occur at the hearing. We also noted that the results of
the conference embodied in a conference order are subject to review and
approval by the ALJ, and ultimately subject to an objection by the
parties, under the provisions of current Sec. 405.1040, which are
carried over in proposed Sec. 405.1040. We proposed at Sec.
423.2040(e)(1) to adopt corresponding revisions for allowing an ALJ to
delegate conducting a conference to an OMHA attorney in part 423,
subpart U proceedings.
Current Sec. 405.1040(c) references the notice of hearing in
discussing the matters that are considered at a conference. However, a
notice of hearing may not have been issued at the time a prehearing
conference is scheduled, and the matters being addressed in the appeal
may have evolved since a notice of hearing was issued by the time a
posthearing conference is scheduled, resulting in confusion on the
permissible scope of the matters discussed at a conference. Therefore,
Sec. 405.1040(c)(1) would state that the matters that are considered
at a conference are those stated in the conference notice (that is, the
purpose of the conference, as discussed in current Sec. 405.1040(b)).
Current Sec. 405.1040(c) states that a record of the conference is
made. However, that requirement has been read and applied differently
by adjudicators. We proposed at Sec. 405.1040(c)(2) to require that an
audio recording of the conference be made to establish a consistent
standard and because the audio recording is the most administratively
efficient way to make a record of the conference. We proposed at Sec.
423.2040(e)(1) and (e)(2) to adopt corresponding revisions to reference
a conference notice and clarify that an audio recording of the
conference is made in part 423, subpart U proceedings.
Current Sec. 405.1040(d) requires the ALJ to issue an order
stating all agreements and actions resulting from the conference. If
the parties do not object, the agreements and actions become part of
the hearing record and are binding on all parties. It does not state to
whom a conference order is issued, and again broadly references parties
in indicating who may object to the order. In addition, current Sec.
405.1040(d) does not establish a time period within which an objection
must be made before the order becomes part of the record and binding on
the parties. Therefore, we proposed to revise Sec. 405.1040(d) to
state that the ALJ issues an order to all parties and participants who
attended the conference stating all agreements and actions resulting
from the conference. We proposed that if a party does not object within
10 calendar days of receiving the order, or any additional time granted
by the ALJ, the agreements and actions become part of the
administrative record and are binding on all parties. Proposed Sec.
405.1040(d) would provide that the order is issued to the parties and
participants who attended the conference to help ensure the appropriate
parties and participants receive the order, but as in current Sec.
405.1040(d), only a party could object to the order. Proposed Sec.
405.1040(d) would also establish that an objection must be made within
10 calendar days of receiving the order to establish a consistent
minimum standard for making an objection to a conference order, but
would also provide the ALJ with the discretion to grant additional
time. In addition, proposed Sec. 405.1040(d) would replace ``hearing
record'' with ``administrative record'' for consistency with other
references to the record. Further, proposed Sec. 405.1040(d) would
continue to only allow the ALJ to issue a conference order, because we
believe the ALJ should review and approve the actions and agreements
resulting from the conference, and only an ALJ should issue an order
that would be binding on the parties, if no objection is made. We
proposed at Sec. 423.2040(f) to adopt corresponding revisions to
clarify to whom a conference order is sent and the time frame to object
to the order, and to specify that agreements and actions resulting from
the conference become part of the ``administrative record'' (rather
than ``hearing record'') in part 423, subpart U proceedings. However,
we proposed to add that an enrollee must object to a conference order
within 1 calendar day of receiving the order for expedited hearings
because of the abbreviated time frame under which an expedited hearing
and decision must be completed.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter stated that audio recordings, while
administratively efficient, may be incompatible with a party's playback
equipment, and transcription costs are prohibitively expensive. The
commenter recommended that the format and medium of the recorded file
be restricted and a typed transcript be provided on request if the file
is incompatible with a party's equipment.
Response: While we acknowledge that there may be playback
compatibility concerns when dealing with any digital medium, we do not
believe that it would be appropriate to constrain the audio recording
of the oral proceedings to a particular format by regulation. OMHA
makes audio recordings of conferences and hearings using electronic
audio file formats that can be played using widely available and free
software. If a party is unable to play the audio recording using his or
her own equipment, OMHA will work with the party to help ensure that he
or she has adequate access to the administrative record, and possibly
provide the recording in a different format.
[[Page 5076]]
However, we believe that this process is more appropriate for sub-
regulatory guidance and the audio recordings should not be restricted
to a specific format by regulation, as technology standards and
software changes rapidly. We believe that the more general reference to
audio recordings will accommodate future changes in recording formats
and allow for more flexibility in responding to appellants' requests.
Comment: Another commenter questioned whether it was an acceptable
practice for an ALJ to substitute a prehearing conference for a full
hearing as long as the other parties had already waived their
appearances, no taking of testimony or receiving of additional evidence
was required, only argument would be presented, and the conference was
being recorded. The commenter expressed concern that this approach may
catch unrepresented beneficiaries unprepared, and suggested publishing
a handbook or other guidance for beneficiaries on what to expect at a
conference.
Response: The purpose of a prehearing conference is to facilitate
the hearing and it is not a substitute for a full hearing. If, after
conducting a prehearing conference, the ALJ determines that a hearing
is no longer necessary because a decision can be issued without
conducting a hearing in accordance with Sec. Sec. 405.1038 or
423.2038, the ALJ may issue the decision on the record without
conducting a subsequent hearing, or may issue a dismissal or remand in
accordance with applicable authorities. However, a prehearing
conference is not a substitute for a full ALJ hearing and the rules do
not provide for taking testimony or evidence at a conference, or for
the ALJ to fully examine the issues and to question the parties and
witnesses, as is done at a hearing in accordance with Sec. Sec.
405.1030 and 423.2030. In addition, we note that the notice of a pre-
hearing conference does not contain the same information as a notice of
hearing, and does not have to be sent in the same time frame. With
respect to what an appellant can expect at the conference, proposed
Sec. Sec. 405.1040(b) and 423.2040(b) provide that a conference notice
will explain the matters to be discussed at the conference. There are
also a number of resources available to provide beneficiaries with
information and guidance regarding what to expect throughout the
appeals process, as discussed in section II.B.3.o of this final rule
above, including existing CMS resources like the Medicare & You
Handbook, 1-800 Medicare, chapter 29 of the Medicare Claims Processing
Manual (Internet-Only Manual 100-4), and the Medicare claims appeals
Web site at www.medicare.gov/claims-and-appeals/file-an-appeal/appeals.html. OMHA is also currently in the process of developing and
releasing the OCPM. The OCPM provides day-to-day operating
instructions, policies, and procedures based on statutes, regulations,
and OMHA directives. Development is ongoing, and although the OCPM is
primarily intended to be a resource used by OMHA adjudicators and
staff, chapters are made publicly available on the OMHA Web site
(www.hhs.gov/omha) soon after they are published. The instructions and
guidance in the OCPM describe many policies and procedures in greater
detail and provide frequent examples to aid understanding. We plan to
address prehearing and posthearing conference procedures in a future
OCPM chapter.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1040 and 423.2040 as proposed without
modification.
t. The Administrative Record (Sec. Sec. 405.1042 and 423.2042)
The administrative record is HHS's record of the administrative
proceedings, and is initially established by OMHA ALJs and built from
the records of CMS contractors that adjudicated the claim, or from
records maintained by SSA in certain circumstances. After adjudication
by OMHA, the Council may include more documents in the administrative
record, if a request for Council review is filed or a referral to the
Council is made. If a party then seeks judicial review, the
administrative record is certified and presented to the Court as the
official agency record of the administrative proceedings. The record is
returned to the custody of CMS contractors or SSA after any
administrative and judicial review is complete. We stated in the
proposed rule that current practices in creating the administrative
record in accordance with current Sec. Sec. 405.1042 and 423.2042 vary
widely. Given the importance of the administrative record, we proposed
to revise Sec. Sec. 405.1042 and 423.2042 to provide for more
consistency and to clarify its contents and other administrative
matters. 81 FR 43790, 43839-43841.
Current Sec. 405.1042(a)(1) provides that the ALJ makes a complete
record of the evidence, including the hearing proceedings, if any.
However, we stated in the proposed rule that this provision has been
limiting and causes confusion in developing procedures to ensure the
completeness of the record and in bringing consistency to how the
record is structured because individual adjudicators organize the
record differently. We proposed to revise Sec. 405.1042(a)(1) to
require OMHA to make a complete record of the evidence and
administrative proceedings on the appealed matter, including any
prehearing and posthearing conferences, and hearing proceedings that
were conducted. Proposed Sec. 405.1042(a)(1) would vest OMHA, rather
than the ALJ, with the responsibility of making a complete record of
the evidence and administrative proceedings in the appealed matter,
including any prehearing and posthearing conferences and hearing
proceedings. We stated that this would provide OMHA with more
discretion to develop polices and uniform procedures for constructing
the administrative record, while preserving the role of the ALJ or
attorney adjudicator, as proposed in section II.B of the proposed rule
(and discussed in section II.A.2 of this final rule above), to identify
the evidence that was used in making the determinations below and the
evidence that was used in making his or her decision. We proposed at
Sec. 423.2042(a)(1) to also adopt corresponding revisions to indicate
OMHA makes a complete record of the evidence and administrative
proceedings in the appealed matter in part 423, subpart U proceedings.
Current Sec. 405.1042(a)(2) discusses which documents in the
record are marked as exhibits, and provides a non-exhaustive list of
documents that are marked to indicate that they were considered in
making the decisions under review or the ALJ's decision. It further
states that in the record, the ALJ also must discuss any evidence
excluded under Sec. 405.1028 and include a justification for excluding
the evidence. We proposed to revise Sec. 405.1042(a)(2) to state that
the record would include marked as exhibits, the appealed
determinations, and documents and other evidence used in making the
appealed determinations and the ALJ's or attorney adjudicator's
decision, including, but not limited to, claims, medical records,
written statements, certificates, reports, affidavits, and any other
evidence the ALJ or attorney admits. We proposed that attorney
adjudicators could mark exhibits because as proposed in section II.B of
the proposed rule (and discussed in section II.A.2 of this final rule
above), attorney adjudicators would be adjudicating requests for
hearing and requests for review of a QIC dismissal,
[[Page 5077]]
and should indicate the portions of the record that he or she
considered in making the decision in the same manner as an ALJ.
Proposed Sec. 405.1042(a)(2) would continue to require certain
evidence to be marked as exhibits, but would clarify what would be
marked, replacing ``the documents used in making the decision under
review,'' with ``the appealed determinations, and documents and other
evidence used in making the appealed determinations and the ALJ's or
attorney adjudicator's decision.'' We stated in the proposed rule that
we believed this would clarify that the exhibited portion of the record
includes, at minimum, the appealed determinations, documents and other
evidence used in making the appealed determinations, and documents and
other evidence used in making the ALJ's or attorney adjudicator's
decision. The illustrative list of documents that may be marked as
exhibits pursuant to the rule in current Sec. 405.1042(a)(2) would be
incorporated in proposed Sec. 405.1042(a)(2) without change. We also
proposed to clarify at Sec. 405.1042(a)(2) that the record would
include any evidence excluded or not considered by the ALJ or attorney
adjudicator, including, but not limited to, new evidence submitted by a
provider or supplier, or beneficiary represented by a provider or
supplier, for which no good cause was established, and duplicative
evidence submitted by a party. We stated in the proposed rule that all
evidence presented should be included in the record, even if excluded
from consideration, in order to help ensure a complete record of the
evidence. However, we stated that such excluded evidence would not be
marked as an exhibit because the evidence was not considered in making
the ALJ's or attorney adjudicator's decision. We proposed at Sec.
423.2042(a)(2) to adopt corresponding revisions to clarify what would
be exhibited in part 423, subpart U proceedings, except the reference
to new evidence submitted by a provider or supplier, or beneficiary
represented by a provider or supplier, for which no good cause was
established as an example of evidence excluded or not considered by the
ALJ or attorney adjudicator, because there is no such limitation on new
evidence in part 423, subpart U proceedings.
As stated previously, current Sec. 405.1042(a)(2) includes
requirements to discuss any evidence excluded under current Sec.
405.1028 and include a justification for excluding the evidence. We
proposed in Sec. 405.1042(a)(2) to remove these requirements. We
stated in the proposed rule that we believed the requirement to justify
excluding the evidence is not necessary and is in tension with the
requirement for a provider or supplier, or beneficiary represented by a
provider or supplier, to establish good cause for submitting new
evidence before it may be considered. Section 1869(b)(3) of the Act
establishes a general prohibition on new evidence that must be
overcome, and proposed Sec. 405.1028 would implement the statute by
requiring the party to explain why the evidence was not submitted prior
to the QIC reconsideration, and the ALJ or attorney adjudicator to make
a finding of good cause to admit the evidence. In place of the current
Sec. 405.1042(a)(2) requirement, as we discuss later, we proposed at
Sec. 405.1046(a)(2)(ii) to require that if new evidence is submitted
for the first time at the OMHA level and subject to a good cause
determination pursuant to proposed Sec. 405.1028, the new evidence and
good cause determination would be discussed in the decision. We also
stated in the proposed rule that we believed the decision is the
appropriate place to discuss the new evidence and document the good
cause determination, and the discussion should focus on the good cause
determination required by proposed Sec. 405.1028, regardless of
whether good cause was found. We did not propose any corresponding
changes to Sec. 423.2042 because there is no provision equivalent to
the current Sec. 405.1042(a)(2) requirement to discuss any excluded
evidence.
Current Sec. 405.1042(a)(3) provides that a party 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. However, this is rarely
done in practice. More often, a party requests a copy of the record
prior to the hearing, in accordance with current Sec. 405.1042(b). We
proposed to revise Sec. 405.1042(a)(3) to state that a party may
request and review the record prior to or at the hearing, or if a
hearing is not held, at any time before the notice of decision is
issued. This revision would allow a party to request and review a copy
of the record ``prior to or at the hearing'' to more accurately reflect
the practices of parties. In addition, proposed Sec. 405.1042(a)(3)
would remove the reference to an ``ALJ's'' decision in explaining that
if a hearing is not held, a party may request and review the record at
any time before the notice of decision is issued, because in that
circumstance an ALJ or attorney adjudicator, as proposed in section
II.B of the proposed rule (and discussed in section II.A.2 of this
final rule above), may issue the decision. We proposed at Sec.
423.2042(a)(3) to adopt corresponding revisions for part 423, subpart U
proceedings.
Current Sec. 405.1042(a)(4) provides for the complete record,
including any recording of the hearing, to be forwarded to the Council
when a request for review is filed or the case is escalated to the
Council. However, in noting that the record includes recordings, only a
recording of the hearing is mentioned. We proposed at Sec.
405.1042(a)(4) to add that the record includes recordings of prehearing
and posthearing conferences in addition to the hearing recordings, to
reinforce that recordings of conferences are part of the complete
record. We proposed at Sec. 423.2042(a)(4) to adopt corresponding
revisions for part 423, subpart U proceedings.
Current Sec. 405.1042(b)(1) describes how a party may request and
receive copies of the record from the ALJ. However, after a case is
adjudicated, OMHA releases custody of the record and forwards it to a
CMS contractor or SSA, and the record may go on to the Council for
another administrative proceeding. We stated in the proposed rule that
this results in confusion for parties when they request a copy of the
record and OMHA is unable to provide it. We proposed at Sec.
405.1042(b)(1) that a party may request and receive a copy of the
record from OMHA while an appeal is pending at OMHA. We also proposed
at Sec. 405.1042(b)(1) to replace the reference to an ``exhibit list''
with a reference to ``any index of the administrative record'' to
provide greater flexibility in developing a consistent structure for
the administrative record. We also proposed to change the parallel
reference to ``the exhibits list'' in Sec. 405.1118 to ``any index of
the administrative record.'' In addition, proposed Sec. 405.1042(b)(1)
would replace the reference to a ``tape'' of the oral proceeding with
an ``audio recording'' of the oral proceeding because tapes are no
longer used and a more general reference would accommodate future
changes in recording formats. We also proposed to replace a parallel
reference at Sec. 405.1118 to a copy of the ``tape'' of the oral
proceedings with a copy of the ``audio recording'' of the oral
proceedings. We proposed at Sec. Sec. 423.2042(b)(1) and 423.2118 to
adopt corresponding revisions for part 423, subpart U proceedings, but
note that current Sec. 423.2118 refers to a ``CD'' of the oral
proceedings.
Current Sec. 405.1042(b)(2) provides that if a party requests all
or part of the record from an ALJ and an opportunity
[[Page 5078]]
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 party's
response does not count toward the 90 calendar day adjudication period.
We proposed to revise Sec. 405.1042(b)(2) to state, if a party
requests a copy of all or part of the record from OMHA or the ALJ or
attorney adjudicator and an opportunity to comment on the record, any
adjudication period that applies in accordance with Sec. 405.1016 is
extended by the time beginning with the receipt of the request through
the expiration of the time granted for the party's response. This
proposed revision would clarify that a party may request a ``copy of''
all or part of the record, and would add that the request may be made
to OMHA, or the ALJ or attorney adjudicator, because a party may
request a copy of the record before it is assigned to an ALJ or
attorney adjudicator. In addition, proposed Sec. 405.1042(b)(2) would
revise the discussion of the effect of requesting an opportunity to
comment on the record on an adjudication period to remove the specific
reference to a 90 calendar day adjudication period, because in
accordance with proposed Sec. 405.1016, an adjudication period may be
90 or 180 calendar days, or alternatively may be waived by the
appellant and therefore not apply. We proposed at Sec. 423.2042(b)(2)
to adopt corresponding revisions for part 423, subpart U proceedings.
Current Sec. 405.1042 does not address the circumstance in which a
party requests a copy of the record but is not entitled to receive some
of the documents in the record. For example, when an appeal involves
multiple beneficiaries and one beneficiary requests a copy of the
record, the records related to other beneficiaries may not be released
to the requesting beneficiary unless he or she obtains consent from the
other beneficiaries to release the records that pertain to them.
Proposed Sec. 405.1042(b)(3) would address the possibility that a
party requesting a copy of the record is not entitled to receive the
entire record. Specifically, we proposed in Sec. 405.1042(b)(3) that
if a party requests a copy of all or part of the record and the record,
including any audio recordings, contains information pertaining to an
individual that the requesting party is not entitled to receive (for
example, personally identifiable information or protected health
information), those portions of the record would not be furnished
unless the requesting party obtains consent from the individual. For
example, if a beneficiary requests a copy of the record for an appeal
involving multiple beneficiaries, the portions of the record pertaining
to the other beneficiaries would not be furnished to the requesting
beneficiary unless he or she obtains consent from the other
beneficiaries. We stated in the proposed rule that we believed proposed
Sec. 405.1042(b)(3) would help ensure that parties are aware that they
may not be entitled to receive all portions of the record. We proposed
at Sec. 423.2042(b)(3) to adopt corresponding revisions for part 423,
subpart U proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received several comments requesting that parties be
provided with a mechanism to request a copy of the administrative
record after a notice of decision or dismissal is issued at the OMHA
level but prior to requesting review of that determination by the
Council. The commenters noted that parties may need to review the
record after a decision or dismissal is issued to determine whether to
pursue a subsequent appeal.
Response: After a case is adjudicated, OMHA releases custody of the
administrative record and forwards it to a CMS contractor or SSA, at
which time OMHA no longer has possession of the record to provide
copies. If a request for review is filed with the Council, the
regulations at Sec. Sec. 405.1118 and 423.2118 address requesting and
receiving a copy of the record from the Council. If a party wishes to
request a copy of the record after a decision or dismissal is issued by
an ALJ or attorney adjudicator and prior to filing a request for review
with the Council, however, the requesting party may contact CMS or SSA
to obtain a copy of the record.
Comment: We received one comment that expressed general support for
the proposed changes, but requested that the agency clarify in the
regulation that marking evidence as an exhibit does not create a legal
presumption that the adjudicator actually considered it in rendering a
decision. The commenter also requested that the agency reinforce that
the good cause requirement for the submission of new evidence for the
first time at the OMHA level does not apply to new evidence submitted
by unrepresented beneficiaries and Medicaid state agencies.
Response: We thank the commenter for its support, but disagree that
the regulation should incorporate the language suggested by the
commenter, that marking evidence as an exhibit does not create a legal
presumption that the adjudicator considered it. The rules that we are
finalizing require that evidence in the administrative record that the
ALJ or the attorney adjudicator considers in making a decision is
marked as an exhibit, and specifies certain evidence that is considered
and therefore is marked as an exhibit. Because the rules already convey
certain evidence will be considered, and in accordance with Sec. Sec.
405.1046 and 423.2046, the notice of decision contains a summary of the
clinical or scientific evidence used in making the determination, we
believe what the ALJ or attorney adjudicator considered or did not
consider will be evident from the record and decision. Further, adding
the suggested language could cause confusion given that the rules
prescribe that certain evidence will be considered and marked as
evidence. In addition, if a party believes that certain evidence was
marked as an exhibit but not appropriately considered by the ALJ or
attorney adjudicator, or was not given appropriate weight in the
decision or dismissal, the matter may be appealed to the Council and
the Council will undertake a de novo review of the record. Under de
novo review, the Council is not bound by the findings of the lower
levels of adjudication and does not give deference to the
determinations of the prior adjudicators. Given this standard of review
and the clarification above, we do not believe that it is necessary or
appropriate to specify in the regulations that marking an exhibit does
not create a legal presumption that it was considered.
With respect to the commenter's second suggestion, as discussed in
section II.B.3.i above, we are amending the language in Sec.
405.1018(d) to clarify that the limitation on submitting new evidence
for the first time at the OMHA level (as set forth in Sec.
405.1018(c)) does not apply to evidence submitted by an unrepresented
beneficiary, CMS or its contractors, a Medicaid State agency, an
applicable plan, or a beneficiary represented by someone other than a
provider or supplier.
Comment: One commenter requested clarification on the form that an
individual's consent should take, and clarification on where the
consent should be sent, under proposed Sec. Sec. 405.1042(b)(3) and
423.2042(b)(3), regarding situations in which the party requesting a
copy of the record is not entitled to receive some of the documents or
information in the record because they pertain to another individual,
and the requirement to obtain consent from the individual before OMHA
will furnish a copy of the requested information.
[[Page 5079]]
Response: The proposed language does not specify a required form of
individual consent; however, we recommend that parties use Form HHS-721
(Individual Appellant's Consent to Third-Party for Copies of the
Individual Appellant's Record(s)), which is available on the HHS Web
site at www.hhs.gov. Any individual consents obtained may be sent to
OMHA, the assigned ALJ, or the assigned attorney adjudicator along with
the party's request for a copy of the record consistent with Sec. Sec.
405.1042(b) or 423.2042(b).
Comment: We received two comments suggesting that the proposed
regulations did not sufficiently address the level of detail required
in the index of the administrative record. One commenter noted that the
lack of detail results in confusion about what evidence is actually
before the adjudicator. The commenter recommended that seven days prior
to a hearing OMHA should provide all parties with a detailed exhibit
list identifying the following elements: The exhibit number, the
exhibit range of pages, the subject of each exhibit, the author of each
exhibit, the total number of pages in each exhibit, and the date(s)
appearing on each exhibit. Another commenter stated that because the
regulations provide no requirements on the level of detail to be used
in the index of the administrative record, parties that want to request
only a part of a record are unable to do so due to the general nature
of the indexes.
Response: One of the proposed revisions to Sec. Sec. 405.1042 and
423.2042 is to vest OMHA, rather than the ALJ, with the responsibility
of making a complete record of the evidence and administrative
proceedings in the appealed matter. This change would allow OMHA to
develop and implement agency-wide policies and uniform procedures for
constructing the administrative record, including preparing and
distributing the index of the administrative record, which we believe
will help address both commenters' concerns.
We do not agree with the commenters that the regulations are the
appropriate place for specific agency instructions on creating the
index of the administrative record. OMHA is in the process of
developing the OCPM, a reference guide outlining the day-to-day
operating instructions, policies, and procedures of the agency. The
OCPM describes OMHA case processing procedures in greater detail than
generally is included in regulation and provides frequent examples to
aid understanding. This resource, which is available to the public on
the OMHA Web site (www.hhs.gov/omha), includes a detailed chapter on
the administrative record and guidance on creating and distributing an
index of the administrative record, which the OCPM currently refers to
as exhibit lists. Current policy, as outlined in the OCPM, requires
that a typed exhibit list be created. This standardized form is
organized by categories of evidence and each exhibit number contains
required minimum descriptions for some of the information recommended
by the first commenter, including an exhibit number for each category,
a description of the subject of each exhibit number, and the range of
pages within each exhibit number. The OCPM does not require that the
exhibit list contain a specific description of each document within a
category or detailed information about individual exhibits within a
category such as the dates of each exhibit or the author of each
exhibit. It would be a significant burden on the staff assembling the
record and creating the exhibit list to review each document and index
information to the level of specificity suggested by the commenter. We
believe that this administrative burden outweighs the limited potential
benefits to the parties of having more specific information such as
dates and authors of individual exhibits listed on an index. We also
believe that by using standard categories for exhibits we are providing
parties with useful information about the documents that will be
considered by the adjudicator. For example, by placing all medical
records in one exhibit category and providing a range of pages for that
category, a party has information on the volume of records received to
determine if it is likely that the record contains all of the necessary
medical record evidence. While we understand that providing more
specific descriptions, such as individual dates and authors for each
exhibit, may further assist parties in confirming that certain evidence
is in the record, we believe that there are other ways for parties to
confirm that information, such as reviewing the total number of pages
in each category, or by discussing the specific evidence at a hearing,
or, if there are specific concerns regarding the evidence, by
requesting a copy of all or any part of the record pursuant to
Sec. Sec. 405.1042(b) and 423.2042(b).
We are also not adopting the commenter's recommendation that OMHA
send the exhibit list to all the parties seven days prior to the
hearing. The OCPM already requires that an initial copy of the exhibit
list be provided with the notice of hearing to the parties and
potential parties and participants who receive the notice, or at the
first available opportunity before the hearing to the parties and
potential parties and participants who responded to the notice of
hearing. Under Sec. Sec. 405.1022(a)(1) and 423.2022(a)(2), as
finalized in this rule, the notice of hearing is mailed, transmitted,
or served at least 20 calendar days before the hearing (except for
expedited part D hearings, where notice is mailed, transmitted, or
served at least 3 calendar days before the hearing), unless a party or
participant agrees to fewer than 20 calendar days' or 3 calendar days'
notice, as applicable. Therefore, the OCPM already requires that
parties and potential parties and participants receive the exhibit list
earlier than the commenter's recommendation of seven days prior to the
hearing, or at the first available opportunity. (After the effective
date of this final rule, we anticipate that revisions will be made to
the OCPM to refer to an index of the administrative record, rather than
an exhibit list.) In addition, proposed Sec. Sec. 405.1042(b)(1) and
423.2042(b)(1) state that at any time while an appeal is pending at
OMHA, a party may request and receive a copy of all or part of the
record, including a copy of the index of the administrative record.
Finally, with regard to the second comment, we believe that if the
exhibit lists are consistent across adjudicators, there will be
improved clarity as to the types of documents within the specific
exhibit categories. While it is not administratively possible given
OMHA's docket and staffing constraints to create exhaustive lists of
each document or item on an exhibit list, the implementation of uniform
exhibiting procedures by OMHA, including the use of consistent exhibit
categories, should make it easier for parties who only require certain
documents or portions of a record to determine which exhibit number to
request.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1042 and 423.2042 as proposed without
modification.
u. Consolidated Proceedings (Sec. Sec. 405.1044 and 423.2044)
Current Sec. Sec. 405.1044 and 423.2044 explain that a
consolidated hearing may be held at the request of an appellant or on
the ALJ's own motion, 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, and CMS is
notified of an ALJ's
[[Page 5080]]
intention to conduct a consolidated hearing. If a consolidated hearing
is conducted, current Sec. Sec. 405.1044 and 423.2044 further provide
that the ALJ may make a consolidated decision and record for the claims
involved in the consolidated hearing, or may make a separate decision
and record for each claim involved in the consolidated hearing. We
stated in the proposed rule that this authority is useful in allowing
an ALJ and the appellant to conduct a single proceeding on multiple
appealed claims or other determinations that are before the ALJ,
reducing time and expense for the appellant and the government to
resolve the appealed matter. However, we stated that the current
provisions have caused confusion, and have been limiting in
circumstances in which no hearing is conducted, and proposed a number
of revisions. 81 FR 43790, 43841-43842.
Current Sec. 405.1044 uses the terms ``requests for hearing,''
``cases,'' and ``claims'' interchangeably, and we stated in the
proposed rule that this has resulted in confusion because an appeal, or
``case,'' before an ALJ may involve multiple requests for hearing if an
appellant's requests were combined into one appeal for administrative
efficiency prior to being assigned to the ALJ. In addition, a request
for hearing may involve one or more claims. We proposed in Sec.
405.1044 to use the term ``appeal'' to specify that appeals may be
consolidated for hearing, and a single decision and record may be made
for consolidated appeals. We proposed to use ``appeal'' because an
appeal is assigned a unique ALJ appeal number, for which a unique
decision and record is made. We also proposed to move current Sec.
405.1044(b) to new subsection (a)(2), and to also replace the term
``combined'' with ``consolidated'' for consistent use in terminology.
Further, we proposed at Sec. 423.2044 to adopt corresponding revisions
to use consistent terminology in part 423, subpart U proceedings.
Current Sec. 405.1044(a) through (d) describes when a consolidated
hearing may be conducted, the effect on an adjudication period that
applies to the appeal, and providing notice of the consolidated hearing
to CMS. Proposed Sec. 405.1044(a) would incorporate current Sec.
405.1044(a) through (c) to combine the provisions related to a
consolidated hearing. In addition, proposed Sec. 405.1044(a)(4) would
replace the current requirement to notify CMS that a consolidated
hearing will be conducted in current Sec. 405.1044(d) with a
requirement to include notice of the consolidated hearing in the notice
of hearing issued in accordance with Sec. Sec. 405.1020 and 405.1022.
We stated that this would help ensure notice is provided to the parties
and CMS, as well as its contractors, in a consistent manner, and reduce
administrative burden on ALJs and their staff by combining that notice
into the existing notice of hearing. We proposed at Sec. 423.2044(a)
to adopt corresponding revisions for part 423, subpart U proceedings.
Current Sec. 405.1044(e) explains that when a consolidated hearing
is conducted, the ALJ may consolidate the record and issue a
consolidated decision, or the ALJ may maintain separate records and
issue separate decisions on each claim. It also states that the ALJ
ensures that any evidence that is common to all claims and material to
the common issue to be decided is included in the consolidated record
or each individual record, as applicable. However, there has been
confusion on whether separate records may be maintained and a
consolidated decision can be issued, as well as what must be included
with the records when separate records are maintained. Proposed Sec.
405.1044(b) would incorporate some of current Sec. 405.1044(e) and add
provisions for making a consolidated record and decision. We proposed
at Sec. 405.1044(b)(1) that 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 appeal. This proposed
revision would maintain the current option to make a consolidated
record and decision, or maintain separate records and issue separate
decisions, but restructures the provision to highlight that these are
two mutually exclusive options. This proposal is important because
issuing a consolidated decision without also consolidating the record,
or issuing separate decisions when a record has been consolidated,
complicates effectuating a decision and further reviews of the
appeal(s). We proposed in Sec. 405.1044(b)(2) that, if a separate
decision and record on each appeal is made, the ALJ is responsible for
making sure that any evidence that is common to all appeals and
material to the common issue to be decided, and audio recordings of any
conferences that were conducted and the consolidated hearing, are
included in each individual administrative record. We stated that
proposed Sec. 405.1044(b)(2) would address the confusion that
sometimes results in a copy of the audio recording of a consolidated
hearing not being included in the administrative records of each
constituent appeal when separate records are maintained, by clarifying
that if a separate decision and record is made, audio recordings of any
conferences that were conducted and the consolidated hearing are
included in each individual record. We stated that this proposal is
important because the record for each individual appeal must be
complete. We proposed at Sec. 423.2044(b)(1) and (b)(2) to adopt
corresponding revisions for part 423, subpart U proceedings.
Current Sec. 405.1044 does not contemplate a consolidated record
and decision unless a consolidated hearing was conducted, which is
limiting when multiple appeals for an appellant can be consolidated in
a decision issued on the record without a hearing. We proposed to add
Sec. 405.1044(b)(3), which would provide that, if a hearing would not
be conducted for multiple appeals that are before the same ALJ or
attorney adjudicator as proposed in section II.B of the proposed rule
(and discussed in section II.A.2 above), and the appeals involve one or
more of the same issues, the ALJ or attorney adjudicator may make a
consolidated decision and record at the request of the appellant or on
the ALJ's or attorney adjudicator's own motion. We stated that this
would provide authority for an ALJ or attorney adjudicator to make a
consolidated decision and record on the same basis that a consolidated
hearing may be conducted. We stated in the proposed rule that we
believed this authority would add efficiency to the adjudication
process when multiple appeals pending before the same adjudicator can
be decided without conducting a hearing. We proposed at Sec.
423.2044(b)(3) to adopt a corresponding provision for part 423, subpart
U proceedings.
Current Sec. 405.1044 also does not clearly address consolidating
hearings for multiple appellants, including situations in which a
beneficiary files a request for hearing on the same claim appealed by a
provider or supplier, and the provider or supplier has other pending
appeals that could be consolidated pursuant to current Sec. 405.1044.
We stated that the general practice is that a consolidated hearing is
conducted for the appeals of a single appellant. This is supported by
the reference to ``an'' appellant in current Sec. 405.1044(b), and
helps ensure the hearing and record is limited to protected information
that the appellant is authorized to receive. Therefore, we proposed to
add Sec. 405.1044(c) to provide that consolidated proceedings may only
be conducted for appeals filed by the same appellant, unless multiple
appellants aggregated claims to meet the
[[Page 5081]]
amount in controversy requirement in accordance with Sec. 405.1006,
and the beneficiaries whose claims are at issue have all authorized
disclosure of their protected information to the other parties and any
participants. We stated that this would help ensure that beneficiary
information is protected from disclosure to parties who are not
authorized to receive it, including when a beneficiary requests a
hearing for the same claim that has been appealed by a provider or
supplier, and appeals of other beneficiaries' claims filed by the
provider or supplier are also pending before the same ALJ or attorney
adjudicator. We proposed at Sec. 423.2044(c) to adopt a corresponding
provision for part 423, subpart U proceedings.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received one comment asking whether a decision by
OMHA's central docket to combine appeals prior to assignment to an ALJ
can be challenged by the appellant if the appeals involve different
disputed items, different bases for denial, and different issues, and,
if so, what the process for that challenge is. The commenter had
multiple questions about tracking the status and progress of individual
appeals throughout the appeals process, the ability to separately
appeal one or more of the individual claims, and rules regarding the
administrative record in combined cases.
Response: Proposed Sec. 405.1044 addresses the circumstances under
which the proceedings for multiple ALJ appeals may be consolidated into
one hearing, as well as the option for an ALJ or attorney adjudicator
to make a consolidated decision and record, whether or not a hearing
was conducted. Both of these actions would occur after assignment of
the individual appeals to an ALJ or attorney adjudicator, either at the
request of the appellant with the ALJ's or attorney adjudicator's
approval or on the ALJ's or attorney adjudicator's own motion. However,
we believe the commenter's question relates to the combination--not
consolidation--of appealed reconsiderations under one ALJ appeal number
prior to assignment to an ALJ or attorney adjudicator. OMHA internal
case processing guidance permits the combination of appealed
reconsiderations under a single ALJ appeal number prior to assignment
for administrative efficiency when certain criteria are met. The
commenter may review Chapter II-2 of the OCPM, which is available to
the public on the OMHA Web site (www.hhs.gov/omha), for more
information on docketing and assignment of appeals, including combining
appeals prior to assignment. Because the proposed changes to Sec.
405.1044 relate to consolidation rather than combination of appeals
prior to assignment, the commenters specific questions regarding the
combination of appeals are outside of the scope of the proposed rule.
Comment: We received two comments suggesting that the proposals go
further and permit consolidation of all of an appellant's pending
appeals at OMHA on the same issue, at the appellant's request,
regardless of whether they are assigned to the same ALJ.
Response: We believe that proposed Sec. Sec. 405.1044 and
423.2044, which we are finalizing in this rule, strike the appropriate
balance between promoting administrative efficiency and maintaining
rotational assignments, as well as allowing OMHA to balance workload
among its ALJs and attorney adjudicators. Sections 405.1044 and
423.2044 contemplate that consolidation of proceedings is only
available with respect to appeals pending before the same ALJ. We
believe that allowing parties to request consolidation of proceedings
that have been assigned to multiple adjudicators would be contrary to
the concept of rotational assignment, disrupt the workflow of
adjudicators, cause delays for other appellants, and add inefficiency
to the process by requiring additional administrative resources to
process such requests and reassign the appeals. However, as discussed
previously, an appellant may request combination of multiple appealed
reconsiderations on its request for hearing and, if the criteria for
combination are met, OMHA accommodates such a request to the extent
feasible by combining the appealed reconsiderations under a single ALJ
appeal number. If OMHA is unable to accommodate the request and
multiple appeals are established and assigned to a single adjudicator,
the adjudicator can then consider consolidation of the appeals.
Comment: We received multiple comments that discussed the desire
for uniform procedures for creating records in consolidated
proceedings, conducting consolidated hearings, and creating audio
recordings of consolidated appeals, as well as requested additional
guidance for adjudicators on issuing consolidated decisions that
contain separate factual findings, legal authorities, and legal
analysis for each appeal at issue. One commenter urged the agency to
provide additional training and oversight on consolidated proceedings
and requested that the agency make available a public resource
regarding consolidated proceedings.
Response: The proposed revisions to Sec. Sec. 405.1044 and
423.2044 were intended to reduce confusion and provide more consistent
procedures for conducting consolidated hearings, and creating and
maintaining records for consolidated appeals. OMHA is also in the
process of developing the OCPM, a reference guide outlining the day-to-
day operating instructions, policies, and procedures of the agency for
adjudicating appeals under the rules. The OCPM describes OMHA case
processing procedures in greater detail and provides frequent examples
to aid understanding. This resource, which is available to the public
on the OMHA Web site (www.hhs.gov/omha), includes detailed information
on creating the administrative record both when an ALJ decides to make
a consolidated decision and record, and when the ALJ decides to issue
separate decisions and records. OMHA provides training to its ALJs,
attorneys, and other staff to help ensure understanding and compliance
with all regulations applicable to processing appeals, and will provide
training on all aspects of this final rule.
Comment: One commenter expressed concern that the proposed language
in Sec. 405.1044(c) would complicate the consolidation of proceedings
involving multiple appellants. The commenter noted that a provider's
ability to consolidate proceedings will be hindered if it is unable to
secure the necessary permissions from beneficiaries and asked for
clarification on whether one of the HIPAA exceptions permitting
providers to release protected health information in certain
circumstances, even absent consent, may apply in this situation.
Finally, the commenter recommended that the proposed regulation be
revised to require only that a provider take ``reasonable'' steps to
obtain such consent but that if consent cannot be obtained, that the
parties will enter into a protective order to prohibit the unauthorized
release of information and to require that the records be redacted as
much as possible by removing, for example, the beneficiary's name,
address, date of birth, and social security number. The commenter
argued that by modifying Sec. 405.1044(c) to allow for consolidation
in proceedings involving multiple appellants subject to protective
orders and redacted documentation, if necessary, the appeals process
would be even more efficient while still ensuring beneficiary
[[Page 5082]]
information is as protected as possible in those circumstances.
Response: We believe the commenter is confusing an ``appellant''
with a ``party'' and we do not agree that Sec. 405.1044(c) places
unnecessary limits on the ability to consolidate proceedings for
appeals filed by multiple appellants. An appellant is the party that
files a request for hearing or request for review of a dismissal. For
example, a provider that is a party may file a request for hearing for
a service that it furnished to the beneficiary, who is also a party; in
that instance, the provider is then also the appellant. In addition, if
the provider files multiple requests for hearing for services that it
furnished to different beneficiaries, the provider is the appellant in
those appeals and proposed Sec. 405.1044(c) would not apply because a
single appellant is involved. However, proposed Sec. 405.1044(c) would
apply if multiple providers filed requests for hearing that were being
consolidated because, in this case, there would be multiple appellants.
In this situation, the providers may not have the necessary permissions
from the beneficiaries to whom an individual provider did not furnish a
service. We have a responsibility to protect individuals' personally
identifiable information and protected health information, and that
responsibility takes priority over any potential gains in
administrative efficiency. As we note in the summary above, the purpose
of the consolidation rules is to reduce time and expense for appellants
and the government. While the commenter suggests that there would be
even greater administrative efficiencies gained if appeals from
multiple appellants were also subject to consolidation without the
limitations of Sec. 405.1044(c), we believe that the limitations of
Sec. 405.1044(c) are necessary in order to protect personally
identifiable information and protected health information. Moreover, we
believe that the commenter's alternative suggestions for safeguarding
protected health information--entering protective orders and redacting
certain information--would require additional administrative time and
energy and, therefore, are contrary to the stated goal of
administrative efficiency.
Although there may be rare and unusual circumstances where it may
be permissible to release the protected health information of an
individual to other parties (for example, a court order expressly
authorizing such disclosure to litigants), we do not believe there are
any generally applicable exceptions to the HIPAA privacy rules that
would apply or be appropriate in this case to permit the consolidation
of proceedings involving multiple appellants where the appellants are
unable to obtain authorization from the beneficiaries whose claims are
at issue to disclose their protected information to the other parties
and any participants. Consolidation of proceedings where multiple
appellants are involved may result in disclosure of an individual's
protected health information to other individuals, including other
involved beneficiaries, who do not have a right to receive the
information and have no use for the information.
Comment: We received one comment in support of proposed Sec.
405.1044(c) and the language that limits consolidated proceedings to
appeals filed by the same appellant, unless multiple appellants have
aggregated claims to meet the amount in controversy and the
beneficiaries whose claims are at issue have authorized disclosure of
protected information to other parties and any participants.
Response: We thank the commenter for its support.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1044 and 423.2044 as proposed without
modification.
v. Notice of Decision and Effect of an ALJ's or Attorney Adjudicator's
Decision (Sec. Sec. 405.1046, 405.1048, 423.2046, and 423.2048)
Current Sec. Sec. 405.1046 and 423.2046 describe the requirements
for a decision and providing notice of the decision, the content of the
notice, the limitation on a decision that addresses the amount of
payment for an item or a service, the timing of the decision, and
recommended decisions. Current Sec. Sec. 405.1048 and 423.2048
describe the effects of an ALJ's decision. However, the current
sections only apply to a decision on a request for hearing, leaving
ambiguities when issuing a decision on a request for review of a QIC or
IRE dismissal. We proposed to consolidate the provisions of each
section that apply to a decision on a request for hearing under
proposed Sec. Sec. 405.1046(a), 405.1048(a), 423.2046(a) and
423.2048(a), with further revisions discussed below, and introduce new
Sec. Sec. 405.1046(b), 405.1048(b), 423.2046(b) and 423.2048(b) to
address a decision on a request for review of a QIC or IRE dismissal,
as well as to revise the titles and provisions of the sections to
expand their coverage to include decisions by attorney adjudicators, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 above). We also proposed to remove current Sec. 405.1046(d),
which addresses the timing of a decision on a request for hearing
because it is redundant with Sec. 405.1016 and could lead to confusion
if a different adjudication period applies, such as a 180-calendar day
period for an escalated request for QIC reconsideration, or if no
adjudication period applies, such as when the period is waived by the
appellant. Similarly, we proposed to remove current Sec. Sec.
423.2046(a)(1) and (d) because the adjudication time frames discussed
in the provisions are redundant with provisions in proposed Sec.
423.2016. In addition, we proposed to re-designate current Sec. Sec.
405.1046(e) and 423.2046(e), as proposed Sec. Sec. 405.1046(c) and
423.2046(c) respectively, to reflect the revised structure of proposed
Sec. Sec. 405.1046 and 423.2046. 81 FR 43790, 43842-43843.
Current Sec. 405.1046 states that an ALJ will issue a decision
unless a request for hearing is dismissed. We proposed to revise Sec.
405.1046(a) to state that an ALJ or attorney adjudicator would issue a
decision unless the request for hearing is dismissed or remanded in
order to accommodate those situations where the ALJ or attorney
adjudicator remands a case to the QIC. We stated in the proposed rule
that there has been confusion regarding the content requirements of the
decision itself, as well as whether the findings or conclusions in a
QIC reconsideration or the arguments of the parties may be referenced
or adopted in the decision by reference. We stated that we believe that
while the issues that are addressed in a decision are guided by the
reconsideration, as well as the initial determination and
redetermination, and a party may present arguments in a framework that
reflects recommended findings and conclusions, the concept of a de novo
review requires an ALJ or attorney adjudicator to make independent
findings and conclusions. To address this confusion, we proposed in
Sec. 405.1046(a) to require that the decision include independent
findings and conclusions to clarify that the ALJ or attorney
adjudicator must make independent findings and conclusions, and may not
merely incorporate the findings and conclusions offered by others,
though the ALJ or attorney adjudicator may ultimately make the same
findings and conclusions. As discussed in and for the reasons stated in
section III.A.3.t of the proposed rule and II.B.3.t of this final rule
above, proposed Sec. 405.1046(a)(2)(ii) would also require that if new
evidence was submitted for the first time at the
[[Page 5083]]
OMHA level and subject to a good cause determination pursuant to
proposed Sec. 405.1028, the new evidence and good cause determination
would be discussed in the decision. We proposed at Sec. 423.2046(a) to
adopt corresponding revisions for decisions on requests for hearing
under part 423, subpart U, except the proposals related to discussing
new evidence and good cause determinations related to new evidence
because there are no current requirements to establish good cause for
submitting new evidence in part 423, subpart U proceedings.
Current Sec. 405.1046(a) requires that a decision be mailed. As
OMHA transitions to a fully electronic case processing and adjudication
environment, new options for transmitting a decision to the parties and
CMS contractors may become available, such as through secure portals
for parties or through inter-system transfers for CMS contractors. We
proposed in Sec. 405.1046(a) to revise the requirement that a decision
be mailed to state that OMHA ``mails or otherwise transmits a copy of
the decision,'' to allow for additional options to transmit the
decision as technologies develop. We proposed to revise Sec.
423.2046(a) to adopt a corresponding revision for sending a decision
under part 423, subpart U.
Current Sec. 405.1046(a) also requires that a copy of the decision
be sent to the QIC that issued the reconsideration. However, if the
decision is issued pursuant to escalation of a request for a
reconsideration, no reconsideration was issued. To address this
circumstance, we proposed in Sec. 405.1046(a) that the decision would
be issued to the QIC that issued the reconsideration or from which the
appeal was escalated. In addition, we proposed in Sec. 405.1046(a) to
replace ``reconsideration determination'' with ``reconsideration'' for
consistency in referencing the QIC's action. Current Sec. 405.1046(a)
also requires that a copy of the decision be sent to the contractor
that made the initial determination. However, this requirement adds to
the administrative burden on OMHA and we stated in the proposed rule we
believed it was unnecessary in light of the requirement that a copy of
the decision be sent to the QIC and the original decision is forwarded
as part of the administrative record to another CMS contractor to
effectuate the decision. Thus, we proposed in Sec. 405.1046(a) to
remove the requirement to send a copy of the decision to the contractor
that issued the initial determination. In addition, we proposed in
Sec. 423.2046(a) to replace ``reconsideration determination'' with
``reconsideration'' for consistency in referencing the IRE's action in
part 423, subpart U proceedings, but we did not propose to incorporate
other changes proposed for Sec. 405.1046(a) in proposed Sec.
423.2046(a) because: (1) Escalation is not available in part 423,
subpart U proceedings; and (2) the Part D plan sponsor, which makes the
initial coverage determination, has an interest in receiving and
reviewing ALJ and attorney adjudicator decisions related to an
enrollee's appeal of drug coverage.
As discussed above, we proposed to revise Sec. 405.1046(b) to
explain the process for making a decision on a request for review of a
QIC dismissal. In accordance with proposed Sec. 405.1004, we proposed
in Sec. 405.1046(b)(1) that unless the ALJ or attorney adjudicator
dismisses the request for review of a QIC's dismissal or the QIC's
dismissal is vacated and remanded, the ALJ or attorney adjudicator
issues a written decision affirming the QIC's dismissal. We proposed in
Sec. 405.1046(b)(1) that OMHA would mail or otherwise transmit a copy
of the decision to all the parties that received a copy of the QIC's
dismissal because, as we stated in the proposed rule, we believe that
the QIC would appropriately identify the parties who have an interest
in the dismissal, and that notice of the decision on a request for
review of a QIC dismissal to any additional parties is unnecessary. We
also stated that we believe that notice to the QIC is not necessary
when its dismissal is affirmed because it has no further obligation to
take action on the request for reconsideration that it dismissed. We
proposed in Sec. 405.1046(b)(2)(i) that the decision affirming a QIC
dismissal must describe the specific reasons for the determination,
including a summary of the evidence considered and applicable
authorities, but did not propose to require a summary of clinical or
scientific evidence because such evidence is not used in making a
decision on a request for a review of a QIC dismissal. In addition, we
proposed that Sec. 405.1046(b)(2)(ii) and (iii) would explain that the
notice of decision would describe the procedures for obtaining
additional information concerning the decision, and would provide
notification that the decision is binding and not subject to further
review unless the decision is reopened and revised by the ALJ or
attorney adjudicator. We proposed to revise Sec. 423.2046(b) to adopt
corresponding provisions for a decision on requests for review of an
IRE dismissal under part 423, subpart U, except that the notice of
decision will only be sent to the enrollee because only the enrollee is
a party.
We proposed to revise the title of current Sec. 405.1048 to read
``The effect of an ALJ's or attorney adjudicator's decision'' and to
replace the current introductory statement in Sec. 405.1048(a) that
``The decision of the ALJ is binding on all parties to the hearing''
with ``The decision of the ALJ or attorney adjudicator is binding on
all parties'' to make the subsection applicable to decisions by
attorney adjudicators and because the parties are parties to the
decision regardless of whether a hearing was conducted. We also
proposed in Sec. 405.1048(b) that the decision of the ALJ or attorney
adjudicator on a request for review of a QIC dismissal is binding on
all parties unless the decision is reopened and revised by the ALJ or
attorney adjudicator under the procedures explained in Sec. 405.980.
We proposed to revise Sec. 423.2048 to adopt corresponding provisions
for the effects of ALJ and attorney adjudicator decisions under part
423, subpart U.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter suggested that the contents of the notice of
decision should include an explanation of why any evidence was excluded
from the record, especially in the absence of any contradictory
evidence. The commenter also suggested that OMHA should continue to
send the notice of decision to the CMS contractor that made the initial
determination because the decision provides feedback that can assist
the contractor in making quality claim decisions.
Response: As discussed above and as provided for in proposed Sec.
405.1046(a)(2)(ii), any new evidence submitted for the first time at
the OMHA level and subject to a good cause determination pursuant to
proposed Sec. 405.1028 will be discussed in the ALJ's or attorney
adjudicator's decision. The decision will include a discussion of the
good cause determination, regardless of whether good cause was found.
We disagree that the presence or absence of contradictory evidence in
the record would have any bearing on the ALJ's or attorney
adjudicator's decision as to whether the party had good cause to submit
evidence for the first time at the OMHA level. The absence of
contradictory evidence would not explain why a party was unable to
obtain and submit the evidence before the QIC issued its
reconsideration, and would not fall under any of the other situations
specified in Sec. 405.1028(a)(2) for when an ALJ may find good cause
[[Page 5084]]
for the submission of evidence for the first time at the OMHA level.
With respect to sending a copy of the decision to the contractor
that made the initial determination, as stated above and in the
proposed rule, we believe that sending the ALJ's or attorney
adjudicator's decision to a CMS contractor to effectuate the decision
and a copy to the QIC will be sufficient to inform CMS and its
contractors of the decision. We believe that in the majority of cases
the benefit of sending an additional copy to the contractor that made
the initial determination is outweighed by the administrative burden
and costs, and CMS is in the best position to determine how decisions
are shared among its contractors and whether or how those decisions
should be used by its contractors.
Comment: Two commenters recommended explicitly prohibiting ALJs and
attorney adjudicators from incorporating findings or conclusions
offered by others in their decisions.
Response: We appreciate the commenters' support for our effort to
clarify that the ALJ or attorney adjudicator must make independent
findings and conclusions, and may not merely incorporate the findings
and conclusions offered by others. However, we do not believe it is
necessary to rephrase this provision as a prohibition on incorporating
the findings or conclusions of others. We believe that our proposal, to
require that the decision include independent findings and conclusions,
adequately expresses the requirement for de novo review, and are
concerned that the language suggested by the commenter would
unnecessarily preclude an ALJ or attorney adjudicator from including
discussion of others' findings and conclusions in his or her decision
for the purpose of discussing or analyzing them in the process of
making his or her independent findings and conclusions. We believe the
proposed language at Sec. 405.1046(a), which we are finalizing in this
rule, would preclude an ALJ or attorney adjudicator from merely
adopting findings and conclusions offered by others, while providing
the ALJ or attorney adjudicator with the flexibility to discuss or
analyze the findings and conclusions offered by others, if appropriate
in a specific appeal, in the process of making his or her independent
findings and conclusions.
Comment: Two commenters urged HHS to ensure that beneficiaries
always receive a written decision by regular mail, even when other
methods of transmittal are available.
Response: The proposal to revise the current requirement in
Sec. Sec. 405.1046(a) and 423.2046(a)(3) that a decision be mailed, to
require that OMHA ``mails or otherwise transmits a copy of the
decision,'' will help ensure that OMHA has the flexibility to work with
appellants to take advantage of developing technologies. However, these
added flexibilities will be based on appellants, including
beneficiaries, opting into receiving notices and correspondences by
means other than regular mail. For example, if a beneficiary
affirmatively chooses to receive a decision via a secure internet
portal instead of by mail, it would waste resources and be inefficient
to require OMHA to also send a paper copy of the decision to the
beneficiary by mail. The flexibility to work with developing
technologies will allow OMHA to increase efficiency as we transition to
a fully electronic case processing and adjudication environment, and
provide all appellants with new options for receiving notices and other
correspondence.
Comment: One commenter suggested adding a provision to Sec. Sec.
405.1046(b)(2) and 423.2046(b)(2) explaining that appellants have the
right to appeal a decision affirming a QIC or IRE dismissal to the
Council, including instructions on how to initiate an appeal under this
section and how to request a copy of the administrative record.
Response: We do not believe that it is appropriate to add a
provision to Sec. Sec. 405.1046(b)(2) and 423.2046(b)(2) explaining
how to appeal a decision affirming a QIC or IRE dismissal to the
Council because a decision affirming a QIC or IRE dismissal is not
appealable to the Council. Incorporating provisions from current
Sec. Sec. 405.1004(c) and 423.2004(c) that make a decision on a QIC or
IRE dismissal not subject to further review, proposed Sec. Sec.
405.1046(b)(2)(iii) and 423.2046(b)(2)(iii) explain that a decision
affirming a QIC or IRE dismissal is binding and not subject to further
review, unless the decision is reopened and revised by the ALJ or
attorney adjudicator. We explained in the preamble to the 2005 Interim
Final Rule implementing current Sec. 405.1004(c) that limiting review
of dismissals to one level of appeal balances the need for review with
the need for finality. 70 FR 11420, 11444. Because dismissals are based
on procedural circumstances involved with the appeal request rather
than the merits of whether the claim is payable, we determined that
further review was not necessary, and we did not propose any changes to
the limitation on review of dismissals in this final rule.
With respect to the commenter's suggestion to include instructions
on how to obtain a copy of the administrative record in a notice of
decision, we note that Sec. Sec. 405.1046(a)(2)(iii), (b)(2)(ii),
423.2046(a)(2)(ii), and (b)(2)(ii), as finalized, require that a notice
of decision must include the procedures for obtaining additional
information concerning the decision, which would include information on
how to obtain a copy of the administrative record. As discussed in
section II.B.3.t of this final rule above, after a case is adjudicated,
OMHA releases custody of the administrative record and forwards it to a
CMS contractor or SSA. We will explore the possibility of adding
contact information for the CMS contractor or SSA to the notice of
decision; however, we believe that this would best be managed through
internal policy at OMHA and not as part of this final rule.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1046, 405.1048, 423.2046, and 423.2048 as
proposed without modification.
w. Removal of a Hearing Request From an ALJ to the Council (Sec. Sec.
405.1050 and 423.2050)
Current Sec. Sec. 405.1050 and 423.2050 explain the process for
the Council to assume responsibility for holding a hearing if a request
for hearing is pending before an ALJ. We proposed to replace ``an ALJ''
with ``OMHA'' in the section title, and to replace ``pending before an
ALJ'' with ``pending before OMHA,'' and ``the ALJ send'' with ``OMHA
send'' in the section text. In accordance with section II.B of the
proposed rule and II.A.2 of this final rule above, these proposed
revisions would provide that a request for hearing may be removed to
the Council regardless of whether the request is pending before an ALJ
or an attorney adjudicator. We did not propose to replace the last
instance of ``ALJ'' in the section text because it refers specifically
to hearings conducted by an ALJ. 81 FR 43790, 43843.
We received no comments on these proposals, other than: (1)
Comments discussed in section II.A.2 of this final rule above related
to our general proposals to provide authority for attorney adjudicators
to issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or
[[Page 5085]]
appealed in the same manner as equivalent decisions and dismissals
issued by ALJs; and (2) comments discussed in section II.A.4 of this
final rule above related to our general proposal to reference OMHA or
an OMHA office, in place of current references to an unspecified
entity, ALJs, and ALJ hearing offices, when a reference to OMHA or an
OMHA office provides a clearer explanation of a topic. Accordingly, for
the reasons discussed above and in the proposed rule, we are finalizing
the changes to Sec. Sec. 405.1050 and 423.2050 as proposed without
modification.
x. Dismissal of a Request for Hearing or Request for Review and Effect
of a Dismissal of a Request for Hearing or Request for Review
(Sec. Sec. 405.1052, 405.1054, 423.2052 and 423.2054)
Current Sec. Sec. 405.1052 and 423.2052 describe the circumstances
in which a request for hearing may be dismissed and the requirements
for a notice of dismissal, and current Sec. Sec. 405.1054 and 423.2054
describe the effect of a dismissal of a request for hearing. However,
both current sections apply to a dismissal of a request for hearing,
leaving ambiguities when issuing a dismissal of a request for review of
a QIC or IRE dismissal. We proposed to maintain the provisions of each
section that apply to a dismissal of a request for hearing in proposed
Sec. Sec. 405.1052(a), 405.1054(a), 423.2052(a) and 423.2054(a), with
further revisions discussed below. 81 FR 43790, 43843-43845. We
proposed to introduce new Sec. Sec. 405.1052(b), 405.1054(b),
423.2052(b) and 423.2054(b) to address a dismissal of a request for
review of a QIC or IRE dismissal. However, we proposed to re-designate
and revise Sec. Sec. 405.1052(a)(1) and 423.2052(a)(1), as discussed
below, and re-designate the remaining paragraphs in Sec. Sec.
405.1052(a) and 423.2052(a) accordingly. We also proposed to remove the
introductory language to current Sec. Sec. 405.1052 and 423.2052
because it is unnecessary to state that a dismissal of a request for
hearing is in accordance with the provisions of the section, as the
provisions are themselves binding authority and state in full when a
request for hearing may be dismissed. In addition, we proposed to
revise the titles of the sections to expand their coverage to include
dismissals of requests to review a QIC or IRE dismissal. Furthermore,
we proposed to re-designate and revise current Sec. Sec. 405.1052(b)
and 423.2052(b), which describe notices of dismissal, as proposed
Sec. Sec. 405.1052(d) and 423.2052(d) respectively, to reflect the
revised structure of proposed Sec. Sec. 405.1052 and 423.2052. We also
proposed to remove current Sec. 423.2052(a)(8) and (c) because current
Sec. 423.2052(a)(8) restates current Sec. 423.1972(c)(1), which
already provides that a request for hearing will be dismissed if the
request itself shows that the amount in controversy is not met, and
current Sec. 423.2052(c) restates current Sec. 423.1972(c)(2), which
already provides that if after a hearing is initiated, the ALJ finds
that the amount in controversy is not met, the ALJ discontinues the
hearing and does not rule on the substantive issues raised in the
appeal. We noted that a dismissal would be warranted in these
circumstances pursuant to current Sec. 423.2052(a)(3), which is
carried over as proposed Sec. 423.2052(a)(2) because the enrollee does
not have a right to a hearing if the amount in controversy is not met.
We proposed to re-designate and revise current Sec. Sec.
405.1052(a)(1) and 423.2052(a)(1) as proposed Sec. Sec. 405.1052(c)
and 423.2052(c) to separately address dismissals based on a party's
withdrawal. We proposed in Sec. Sec. 405.1052(c) and 423.2052(c) to
include withdrawals of requests to review a QIC dismissal because we
also proposed to add provisions to address other dismissals of those
requests at Sec. Sec. 405.1052(b) and 423.2052(b). We also proposed
that an ALJ or attorney adjudicator may dismiss a request for review of
a QIC dismissal based on a party's withdrawal of his or her request
because as proposed in section II.B of the proposed rule (and discussed
in section II.A.2 above), both ALJs and attorney adjudicators would be
able to adjudicate requests to review a QIC dismissal. In addition, we
proposed that an ALJ or attorney adjudicator may dismiss a request for
hearing based on a party's withdrawal of his or her request. As
discussed in section II.B of the proposed rule and II.A.2 of this final
rule above, we believe that well-trained attorneys can efficiently
perform a review of these requests and issue dismissals. We stated in
the proposed rule that we believe using attorney adjudicators to the
maximum extent possible would help OMHA be more responsive to
appellants and allow ALJs to focus on conducting hearings and issuing
decisions. We also proposed to revise the language in current
Sec. Sec. 405.1052(a)(1) and 423.2052(a)(1) (as re-designated in
proposed Sec. Sec. 405.1052(c) and 423.2052(c)) to (1) replace
``notice of the hearing decision'' with ``notice of the decision,
dismissal or remand'' to reflect that a decision may be issued without
a hearing, and to reflect other possible outcomes of the proceeding
(dismissal and remand), and (2) clarify that a request to withdraw a
request for hearing may be made orally at a hearing before the ALJ
because only an ALJ may conduct a hearing.
Current Sec. 405.1052(a)(2) describes three possible alternatives
for dismissing a request for hearing when the party that requested the
hearing, or the party's representative, does not appear at the time and
place set for the hearing. We stated in the proposed rule that the
current alternatives have caused confusion for appellants in
understanding whether they are required to submit a statement
explaining a failure to appear. Further, current provisions do not
require evidence in the record to document an appellant was aware of
the time and place of the hearing, and we stated that this has resulted
in remands from the Council. We proposed to simplify the provision to
provide two alternatives, and to require that contact has been made
with an appellant and documented, or an opportunity to provide an
explanation for failing to appear has been provided before a request
for hearing is dismissed for failing to appear at the hearing. We
proposed at Sec. 405.1052(a)(1)(i) to set forth the first alternative
which would provide that a request for hearing may be dismissed if the
party that filed the request was notified before the time set for
hearing that the request for hearing might be dismissed for failure to
appear, the record contains documentation that the party acknowledged
the notice of hearing, and the party does not contact the ALJ within 10
calendar days after the hearing or does contact the ALJ but does not
provide good cause for not appearing. We proposed at Sec.
405.1052(a)(1)(ii) to set forth the second alternative which would
provide that a request for hearing may be dismissed if the record does
not contain documentation that the party acknowledged the notice of
hearing, but the ALJ sends a notice to the party at his or her last
known address asking why the party did not appear, and the party does
not respond to the ALJ's notice within 10 calendar days after receiving
the notice or does respond but does not provide good cause for not
appearing. In either circumstance, we proposed to maintain in Sec.
405.1052(a)(1) the current standard that in determining whether good
cause exists, the ALJ considers any physical, mental, educational, or
linguistic limitations that the party may have identified. We stated in
the proposed rule that we believed
[[Page 5086]]
proposed Sec. 405.1052(a)(1) would help ensure that appellants have
consistent notice of a possible dismissal for failure to appear and an
opportunity to provide a statement explaining why they did not appear
before a dismissal is issued. We proposed to revise Sec.
423.2052(a)(1) to adopt corresponding revisions for dismissing a
request for hearing under part 423, subpart U.
Current OMHA policy provides that a request for hearing that does
not meet the requirements of current Sec. 405.1014 may be dismissed by
an ALJ after an opportunity is provided to the appellant to cure an
identified defect (OCPM, division 2, chapter 3, section II-3-6 D and
E). We stated that a dismissal is appropriate because as an
administrative matter, the proceedings on the request do not begin
until the information necessary to adjudicate the request is provided
and the appellant sends a copy of the request to the other parties.
Additionally, a request cannot remain pending indefinitely once an
appellant has demonstrated that he or she is unwilling to provide the
necessary information or to send a copy of the request to the other
parties. Therefore, we proposed at Sec. 405.1052(a)(7) to explain that
a request for hearing may be dismissed if the request is not complete
in accordance with proposed Sec. 405.1014(a)(1) or the appellant did
not send copies of its request to the other parties in accordance with
proposed Sec. 405.1014(d), after the appellant is provided with an
opportunity to complete the request and/or send copies of the request
to the other parties. We stated in the proposed rule that we believed
adding this provision would emphasize the importance of following the
requirements for filing a request for hearing, and clarify the outcome
if the requirements are not met and the appellant does not cure
identified defects after being provided with an opportunity to do so.
We proposed at Sec. 423.2052(a)(7) to adopt a corresponding provision
for dismissing a request for hearing under part 423, subpart U.
As discussed above, we proposed to add Sec. 405.1052(b) to explain
when a request for review of a QIC dismissal would be dismissed. Under
proposed Sec. 405.1052(b), a request for review could be dismissed in
the following circumstances: (1) The person or entity requesting the
review has no right to the review of the QIC dismissal under proposed
Sec. 405.1004; (2) the party did not request a review within the
stated time period and the ALJ or attorney adjudicator has not found
good cause for extending the deadline; (3) a beneficiary or
beneficiary's representative filed the request for review and the
beneficiary passed away while the request for review is pending and all
of the following criteria apply: (i) a surviving spouse or estate has
no remaining financial interest in the case, (ii) no other individuals
or entities have a financial interest in the case and wish to pursue an
appeal, and (iii) no other individual or entity filed a valid and
timely request for a review of the QIC dismissal; and (4) the
appellant's request for review is not complete in accordance with
proposed Sec. 405.1014(a)(1) or the appellant does not send a copy of
the request to the other parties in accordance with proposed Sec.
405.1014(d), after being provided with an opportunity to complete the
request and/or send a copy of the request to the other parties. We
stated in the proposed rule that we believed these provisions would
encompass the reasons for dismissing a request for a review of a QIC
dismissal, and are necessarily differentiated from dismissing a request
for hearing because, as explained in section III.A.3.c of the proposed
rule and II.B.3.c of this final rule above, we also stated that we did
not believe there is a right to a hearing for requests for a review of
a QIC dismissal. We proposed at Sec. 423.2052(b) to adopt
corresponding provisions for dismissing requests for a review of an IRE
dismissal under part 423, subpart U proceedings.
As discussed above, current Sec. 405.1052(b) describes the
requirements for providing notice of the dismissal and we proposed to
re-designate the paragraph as proposed Sec. 405.1052(d). For the same
reasons discussed in section III.A.3.v of the proposed rule and
II.B.3.v of this final rule above for allowing a notice of a decision
to be provided by means other than mail, we proposed in Sec.
405.1052(d) that OMHA may mail or ``otherwise transmit'' notice of a
dismissal. We proposed to revise Sec. 423.2052(d) to adopt a
corresponding revision for notices of dismissal under part 423, subpart
U.
Current Sec. 405.1052(b) requires notice of the dismissal to be
sent to all parties at their last known address. However, we stated in
the proposed rule that we believed that requirement is overly inclusive
and causes confusion by requiring notice of a dismissal to be sent to
parties who have not received a copy of the request for hearing or
request for review that is being dismissed. Thus, we proposed to revise
Sec. 405.1052(d) to state that the notice of dismissal is sent to the
parties who received a copy of the request for hearing or request for
review because only those parties are on notice that a request was
pending. In addition, we proposed at Sec. 405.1052(d) that if a
party's request for hearing or request for review is dismissed, the
appeal would proceed with respect to any other parties who also filed a
valid request for hearing or review regarding the same claim or
disputed matter. This would address the rare circumstance in which more
than one party submits a request, but the request of one party is
dismissed. In that circumstance, the appeal proceeds on the request
that was not dismissed, and the party whose request was dismissed
remains a party to the proceedings but does not have any rights
associated with a party that filed a request, such as the right to
escalate a request for hearing. We did not propose a corresponding
revision to Sec. 423.2052(c) because only the enrollee is a party to
an appeal under part 423, subpart U.
Current Sec. 405.1052 does not include authority for an ALJ to
vacate his or her own dismissal, and instead requires an appellant to
request the Council review an ALJ's dismissal. As explained in the 2005
Interim Final Rule (70 FR 11465), the authority for an ALJ to vacate
his or her own dismissal was not regarded as an effective remedy
because the record was no longer in the ALJ hearing office, and the
resolution was complicated when appellants simultaneously asked the ALJ
to vacate the dismissal order and asked the Council to review the
dismissal. However, we stated that in practice, the lack of the
authority for an ALJ to vacate his or her own dismissal has constrained
ALJs' ability to correct erroneous dismissals that can be easily
remedied by the ALJ, and has caused unnecessary work for the Council.
We proposed to add Sec. 405.1052(e) to provide the authority for an
ALJ or an attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), to vacate his or
her own dismissal within 6 months of the date of the notice of
dismissal, in the same manner as a QIC can vacate its own dismissal. We
stated in the proposed rule that we believed that this authority would
reduce unnecessary appeals to the Council and provide a more timely
resolution of dismissals for appellants, whether the dismissal was
issued by an ALJ or attorney adjudicator. We also noted that the
coordination for obtaining the administrative record and addressing
instances in which an appellant also requests a review of the dismissal
by the Council can be addressed through operational coordination among
CMS, OMHA, and the DAB. We proposed in
[[Page 5087]]
Sec. 423.2052(e) to adopt a corresponding provision for vacating a
dismissal under part 423, subpart U.
To align the effects of a dismissal with proposed Sec.
405.1052(e), we proposed to add Sec. 405.1054(a) to state that the
dismissal of a request for hearing is binding unless it is vacated by
the ALJ or attorney adjudicator under Sec. 405.1052(e), in addition to
the current provision that allows the dismissal to be vacated by the
Council under Sec. 405.1108(b). To explain the effect of a dismissal
of a request for review of a QIC dismissal, consistent with Sec.
405.1004, we proposed in Sec. 405.1054(b) to provide that the
dismissal of a request for review of a QIC dismissal of a request for
reconsideration is binding and not subject to further review unless it
is vacated by the ALJ or attorney adjudicator under Sec. 405.1052(e).
We proposed in Sec. 423.2054 to adopt corresponding revisions for the
effect of dismissals of request for hearing and requests for review of
an IRE dismissal under part 423, subpart U.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on this proposal. The commenter
suggested that additional leeway should be allowed for unrepresented
beneficiaries to complete a request for hearing and/or send copies of
the request to the other parties before the request is dismissed, and
dismissals for failing to meet these requirements should be used
sparingly. The commenter also stated that the notice of dismissal
should always be provided to beneficiaries by regular mail in addition
to any other method of transmission that is used.
Response: As discussed above and in the proposed rule, we believe
that the provision allowing for dismissal of an incomplete request for
hearing or review of a QIC or IRE dismissal is necessary to emphasize
the importance of the information required for filing a complete
request, and to clarify the outcome if the required information is not
provided after an opportunity to complete the request is provided. This
provision will bring efficiencies to the appeals process by helping to
ensure that appellants furnish all information necessary to adjudicate
the request to the adjudicator and the other parties as early in the
process as possible and preventing appeals from remaining pending
indefinitely if an appellant has demonstrated an unwillingness to
complete the request. If there is information missing in a
beneficiary's request for hearing or review of a QIC or IRE dismissal,
the beneficiary will receive a letter explaining what information is
missing, and providing the address and phone number of the OMHA field
office to contact with any questions. In addition, OMHA maintains a
dedicated beneficiary help line to assist beneficiaries with questions
they may have about the appeals process at OMHA, including helping them
to understand what information is necessary to complete the request.
However, as discussed in section II.B.3.g.v of this final rule
above, we agree that unrepresented beneficiaries may have difficulty
meeting the copy requirement of proposed Sec. 405.1014(d), and should
be exempt from the consequence of failing to provide a copy of a
request for hearing or review of a dismissal to the other parties.
Consequently, we are revising Sec. 405.1052(a)(7) and (b)(4) to
provide that a request filed by an unrepresented beneficiary will not
be dismissed if the appellant fails to send a copy of the request to
the other parties in accordance with proposed Sec. 405.1014(d).
With respect to the commenter's suggestion to always provide
beneficiaries with the notice of dismissal by regular mail, we refer
the commenter to our response to a similar comment in section II.B.3.v
of this final rule above, where we explain why we do not believe a
notice of decision sent to a beneficiary under Sec. 405.1046(a) and
Sec. 423.2046(a) should always be sent by mail in addition to any
other method of transmission that is used. We believe this explanation
responds to the commenter's same suggestion with regard to a notice of
dismissal.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1052, 405.1054, 423.2052 and 423.2054 as
proposed, with the following modification. We are amending Sec.
405.1052(a)(7) and (b)(4) to state that a request filed by an
unrepresented beneficiary will not be subject to dismissal if the
appellant fails to send a copy of the request to the other parties in
accordance with Sec. 405.1014(d).
4. Applicability of Medicare Coverage Policies (Sec. Sec. 405.1060,
405.1062, 405.1063, 423.2062, and 423.2063)
Current Sec. 405.1060 addresses the applicability of national
coverage determinations (NCDs) to claim appeals brought under part 405,
subpart I and provides that an ALJ and the Council may not disregard,
set aside, or otherwise review an NCD, but may review the facts of a
particular case to determine whether an NCD applies to a specific claim
for benefits and, if so, whether the NCD was applied correctly to the
claim. Current Sec. 405.1062 addresses the applicability of local
coverage determinations (LCDs) and other policies, and specifies that
ALJs and the Council are not bound by LCDs, local medical review
policies (LMRPs), or 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, and if an ALJ or
the Council declines to follow a policy in a particular case, the ALJ
or the Council must explain the reasons why the policy was not
followed. Similarly, current Sec. 423.2062 states that ALJs and the
Council are not bound by CMS program guidance but will give substantial
deference to these policies if they are applicable to a particular
case, and if an ALJ or the Council declines to follow a policy in a
particular case, the ALJ or the Council must explain the reasons why
the policy was not followed. Current Sec. Sec. 405.1062 and 423.2062
also provide that an ALJ or Council decision to disregard a policy
applies only to the specific claim being considered and does not have
precedential effect. Further, Sec. 405.1062 states that an ALJ or the
Council may not set aside or review the validity of an LMRP or LCD for
purposes of a claim appeal. Current Sec. Sec. 405.1063 and 423.2063
address the applicability of laws, regulations, and CMS Rulings, and
provide that all laws and regulations pertaining to the Medicare
program (and for Sec. 405.1063 the Medicaid program as well),
including but not limited to Titles XI, XVIII, and XIX of the Act and
applicable implementing regulations, are binding on ALJs and the
Council, and consistent with Sec. 401.108, CMS Rulings are binding on
all HHS components that adjudicate matters under the jurisdiction of
CMS.
We proposed to revise Sec. Sec. 405.1060, 405.1062, 405.1063,
423.2062, and 405.2063 to replace ``ALJ'' or ``ALJs'' with ``ALJ or
attorney adjudicator'' or ``ALJs or attorney adjudicators'' except in
the second sentence of Sec. 405.1062(c). 81 FR 43790, 43846. We stated
that an attorney adjudicator would issue certain decisions and
dismissals and therefore would apply the authorities addressed by these
sections. We stated in the proposed rule that requiring the attorney
adjudicators to apply the authorities in the same manner as an ALJ
would provide consistency in the adjudication process, regardless of
who
[[Page 5088]]
is assigned to adjudicate a request for an ALJ hearing or request for
review of a QIC or IRE dismissal. We did not propose to revise the
second sentence in current Sec. 405.1062(c) because attorney
adjudicators would not review or set aside an LCD (or any part of an
LMRP that constitutes an LCD) in accordance with part 426 (part 426
appeals are currently heard by ALJs in the Civil Remedies Division of
the DAB).
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1060, 405.1062, 405.1063, 423.2062, and 423.2063 as
proposed without modification.
5. Council Review and Judicial Review
a. Council Review: General (Sec. Sec. 405.1100, 423.1974 and 423.2100)
As described below, we proposed a number of changes to Sec. Sec.
405.1100, 423.1974 and 423.2100 with respect to Council review,
generally. 81 FR 43790, 43846-43847. Current Sec. 405.1100 discusses
the Council review process. Current Sec. 405.1100(a) states that the
appellant or any other party to the hearing may request that the
Council review an ALJ's decision or dismissal. We proposed to revise
Sec. 405.1100(a) to replace ``the hearing'' with ``an ALJ's or
attorney adjudicator's decision or dismissal,'' and ``an ALJ's decision
or dismissal,'' with ``the ALJ's or attorney adjudicator's decision or
dismissal'' because the parties are parties to the proceedings and the
resulting decision or dismissal regardless of whether a hearing is
conducted, and as proposed in section II.B of the proposed rule (and
discussed in section II.A.2 above), an attorney adjudicator would be
able to issue certain decisions or dismissals for which Council review
may be requested.
Current Sec. 423.1974 states that an enrollee who is dissatisfied
with an ALJ hearing decision may request that the Council review the
ALJ's decision or dismissal as provided in Sec. 423.2102, and current
Sec. 423.2100(a) states that consistent with Sec. 423.1974, the
enrollee may request that the Council review an ALJ's decision or
dismissal. We proposed to revise Sec. 423.1974 to replace ``ALJ
hearing decision'' with ``an ALJ's or attorney adjudicator's decision
or dismissal,'' and to revise Sec. Sec. 423.1974 and 423.2100(a) to
replace ``ALJ's decision or dismissal'' with ``an ALJ's or attorney
adjudicator's decision or dismissal'' because the parties are parties
to the proceedings and resulting decision or dismissal regardless of
whether a hearing is conducted, and as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), an attorney
adjudicator may issue a decision or dismissal for which Council review
may be requested.
Current Sec. 405.1100(b) provides that under the circumstances set
forth in Sec. Sec. 405.1104 and 405.1108, an appellant may request
escalation of a case to the Council for a decision even if the ALJ has
not issued a decision or dismissal in his or her case. We proposed to
revise Sec. 405.1100(b) to provide that under circumstances set forth
in Sec. Sec. 405.1016 and 405.1108, the appellant may request that a
case be escalated to the Council for a decision even if the ALJ or
attorney adjudicator has not issued a decision, dismissal, or remand in
his or her case. We stated in the proposed rule that these revisions
would reference Sec. 405.1016, which, as discussed in section
III.A.3.h of the proposed rule and II.B.3.h of this final rule above,
would replace the current Sec. 405.1104 provisions for escalating a
case from the OMHA level to the Council. We stated that they would also
provide that in addition to potentially issuing a decision or
dismissal, an ALJ or attorney adjudicator, as proposed in section II.B
of the proposed rule (and discussed in section II.A.2 above), may issue
a remand--this would present a complete list of the actions that an ALJ
or attorney adjudicator could take on an appeal.
Current Sec. Sec. 405.1100(c) and 423.2100(b) and (c) state in
part that when the Council reviews an ALJ's decision, it undertakes a
de novo review, and the Council issues a final decision or dismissal
order or remands a case to the ALJ. We proposed to revise Sec. Sec.
405.1100(c) and 423.2100(b) and (c) to state that when the Council
reviews an ALJ's or attorney adjudicator's decision, it undertakes a de
novo review and may remand a case to an ALJ or attorney adjudicator, so
that the same standard for review is applied to ALJ and attorney
adjudicator decisions. We also proposed to revise Sec. Sec.
405.1100(c) and 423.2100(c) to state that the Council may remand an
attorney adjudicator's decision to the attorney adjudicator so that
like an ALJ, the attorney adjudicator can take the appropriate action
ordered by the Council (however, if the Council were to order that a
hearing must be conducted, the case would be transferred to an ALJ upon
remand to the attorney adjudicator because only an ALJ may conduct a
hearing).
Current Sec. 423.2100(c) and (d) provide that the Council issues a
final decision, dismissal order, or remand no later than the period of
time specified in the respective paragraph, beginning on the date that
the request for review is received by the entity specified in the ALJ's
written notice of decision. We proposed to revise Sec. 423.2100(c) and
(d) to state that the period of time begins on the date that the
request for review is received by the entity specified in the ALJ's or
attorney adjudicator's written notice of decision because an attorney
adjudicator may also issue a decision, as proposed in section II.B of
the proposed rule (and discussed in section II.A.2 above). We also
proposed to revise Sec. 423.2100(c) to correct a typographical error
by inserting ``day'' into the current ``90 calendar period,'' so it is
clear to enrollees that the period of time being referenced is the 90
calendar day period.
Current Sec. 405.1100(d) states in part that when deciding an
appeal that was escalated from the ALJ level to the Council, the
Council will issue a final decision or dismissal order or remand order
within 180 calendar days of receipt of the appellant's request for
escalation. A remand from the Council after an appeal is escalated to
it is exceedingly rare and done in circumstances in which the Council
must remand to an ALJ so that the ALJ may obtain information under
current Sec. 405.1034 that is missing from the written record and
essential to resolving the issues on appeal, and that information can
only be provided by CMS or its contractors, because the Council does
not have independent authority to obtain the information from CMS or
its contractors. In addition, an appeal may have not yet have been
assigned to an ALJ, or could be assigned to an attorney adjudicator as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 above), when the appeal was escalated by the appellant. We
proposed to revise Sec. 405.1100(d) to state that if the Council
remands an escalated appeal, the remand is to the OMHA Chief ALJ
because the rare and unique circumstances in which an escalated appeal
is remanded by the Council require immediate attention that the OMHA
Chief ALJ is positioned to provide to minimize delay for the appellant,
and to minimize confusion if the case was not assigned to an ALJ or
[[Page 5089]]
attorney adjudicator when it was escalated.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received one comment that supported the proposal that
the Council remand escalated appeals to the Chief ALJ to minimize
confusion and delay for appellants. The commenter also requested that
language be added to the regulation requiring the Council to
acknowledge receipt of an appellant's request for review due to the
Council's considerable backlog and delay in issuing decisions.
Response: We thank the commenter for its support and agree that the
Council should acknowledge receipt of an appellant's request for
review. Since 2009, it has been and will continue to be, the practice
of the Council to issue acknowledgment letters to appellants when a
request for review is received and docketed. In addition, the Council
has started accepting electronically filed requests for review, using
the Medicare Operations Divisions Electronic Filing (MOD E-File)
system, located at https://dab.E-File.hhs.gov/mod. An appellant that
electronically files a request for review will receive an automated
email response that acknowledges receipt of the request for review as
well as provides the docket number assigned to the case. Finally,
appellants may also use MOD E-File to check the status of appeals,
regardless of whether the request for review was electronically filed.
Appellants can check the status of an appeal by the docket number
stated in the acknowledgment letter or email or by the ALJ appeal
number. Because of the Council's continued commitment to issuing
acknowledgments, as well as electronic enhancements that allow parties
to check the status of appeals pending before the Council, we find it
unnecessary to modify the proposed regulation.
Comment: One commenter questioned the current rule granting the
Council, which is comprised of Administrative Appeals Judges (AAJs),
the authority to conduct de novo reviews of ALJ decisions. The
commenter was concerned that AAJs lack the independence of ALJs and are
beholden to the agency for their positions and, therefore, AAJs are not
best suited to review ALJ decisions. Accordingly, the commenter
suggested various revisions to the current rule to address this concern
that are unrelated to the proposed rule.
Response: We appreciate the commenter's opinion and suggestion, but
its comment is beyond the scope of the proposed rule, and thus we are
not addressing it in this final rule.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1100, 423.1974 and 423.2100 as proposed
without modification.
b. Request for Council Review When ALJ Issues Decision or Dismissal
(Sec. Sec. 405.1102 and 423.2102)
As described below, we proposed a number of changes to Sec. Sec.
405.1102 and 423.2102, which discuss requests for Council review when
an ALJ issues a decision or dismissal. 81 FR 43790, 43847. Current
Sec. Sec. 405.1102(a)(1) and 423.2102(a)(1) provide that a party or
enrollee, respectively, to ``the ALJ hearing'' may request a Council
review if the party or enrollee files a written request for a Council
review within 60 calendar days after receipt of the ALJ's decision or
dismissal, which is in accordance with the criteria specified in
current Sec. Sec. 405.1102 and 423.2102. However, we stated in the
proposed rule that a party or enrollee is a party to the proceedings
and resulting decision or dismissal, and may appeal the decision or
dismissal regardless of whether a hearing was conducted in the appeal,
and as proposed in section II.B of the proposed rule (and discussed in
section II.A.2 of this final rule above), an attorney adjudicator may
issue a decision or dismissal for which Council review may be
requested. To help ensure there is no confusion that a party or
enrollee may seek Council review even if a hearing before an ALJ is not
conducted or if an attorney adjudicator issues the decision or
dismissal, we proposed to revise Sec. Sec. 405.1102(a)(1) and
423.2102(a)(1) to state a party or enrollee to a decision or dismissal
issued by an ALJ or attorney adjudicator may request Council review if
the party or enrollee files a written request for a Council review
within 60 calendar days after receipt of the ALJ's or attorney
adjudicator's decision or dismissal.
Current Sec. Sec. 405.1102(c) and 423.2102(c) provide that a party
or enrollee, respectively, does not have a right to seek Council review
of an ALJ's remand to a QIC or IRE, or an ALJ's affirmation of a QIC's
or IRE's dismissal of a request for reconsideration. However, under
current Sec. Sec. 405.1004(c) and 423.2004(c), a party or enrollee,
respectively, may currently seek Council review of a dismissal of a
request for review of a QIC or IRE dismissal because, as discussed in
section III.A.3.x of the proposed rule and II.B.3.x of this final rule
above, an ALJ does not currently have the authority to vacate his or
her own dismissal. As proposed in section II.B of the proposed rule
(and discussed in section II.A.2 of this final rule above), an attorney
adjudicator could adjudicate requests for a review of a QIC or IRE
dismissal. In addition, proposed Sec. Sec. 405.1052(e) and 423.2052(e)
would establish the authority for an ALJ or attorney adjudicator to
vacate his or her own dismissal, and in accordance with the policy that
a review of a dismissal is only reviewable at the next level of appeal,
as discussed in section III.A.3.c of the proposed rule and II.B.3.c of
this final rule above, proposed Sec. Sec. 405.1102(c) and 423.2102(c)
would be revised to indicate that a party does not have the right to
seek Council review of an ALJ's or attorney adjudicator's dismissal of
a request for review of a QIC dismissal. Therefore, we proposed at
Sec. Sec. 405.1102(c) and 423.2102(c) to add that a party does not
have the right to seek Council review of an ALJ's or attorney
adjudicator's remand to a QIC or IRE, affirmation of a QIC's or IRE's
dismissal of a request for reconsideration, or dismissal of a request
for review of a QIC or IRE dismissal.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment supporting the revised language
that Council review may be sought even if a hearing before an ALJ is
not conducted or if an attorney adjudicator issues the decision or
dismissal.
Response: We thank the commenter for its support.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1102 and 423.2102 as proposed without
modification.
c. Where a Request for Review or Escalation May Be Filed (Sec. Sec.
405.1106 and 423.2106)
As discussed below, we proposed a number of changes to Sec. Sec.
405.1106 and 423.2106 with respect to where a request for review or
escalation may be filed. 81 FR 43790, 43847-43848. Current Sec. Sec.
405.1106(a) and 423.2106 provide that when a request for a Council
review is filed after an ALJ has issued a decision or dismissal, the
request for review must be filed with the entity specified in the
notice of the ALJ's action, and under Sec. 405.1106, the appellant
must also send a copy of the request for review to the other parties to
the ALJ decision or dismissal who received a copy of the hearing
decision or notice of dismissal. The sections also
[[Page 5090]]
explain that 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
Council'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, and upon receipt of a request for review
from an entity other than the entity specified in the notice of the
ALJ's action, the Council sends written notice to the appellant of the
date of receipt of the request and commencement of the adjudication
time frame. In addition, current Sec. 405.1106(b) discusses that if an
appellant files a request to escalate an appeal to the Council because
the ALJ has not completed his or her action on the request for hearing
within the adjudication deadline under Sec. 405.1016, the request for
escalation must be filed with both the ALJ and the Council, and the
appellant must also send a copy of the request for escalation to the
other parties and failure to copy the other parties tolls the Council's
adjudication deadline set forth in Sec. 405.1100 until all parties to
the hearing receive notice of the request for Council review.
We proposed in Sec. Sec. 405.1106 and 423.2106 to replace all
instances of ``ALJ'' with ``ALJ or attorney adjudicator,'' and ``ALJ's
action'' with ``ALJ's or attorney adjudicator's action,'' to provide
that the sections apply to decisions and dismissals issued by an
attorney adjudicator as well, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), and therefore
appellants would have the same right to seek Council review of the
attorney adjudicator's decision or dismissal, and the Council would
have the authority to take the same actions in reviewing an attorney
adjudicator's decision or dismissal. We also proposed to replace ``a
copy of the hearing decision under Sec. 405.1046(a) or a copy of the
notice of dismissal under Sec. 405.1052(b)'' in Sec. 405.1106(a) with
``notice of the decision or dismissal,'' because Sec. Sec. 405.1046
and 405.1052 provide for notice of a decision or dismissal,
respectively, to be sent, and a decision or dismissal may be issued by
an ALJ or attorney adjudicator without conducting a hearing. In
addition, in describing the consequences of failing to send a copy of
the request for review to the other parties, we proposed to replace
``until all parties to the hearing'' in Sec. 405.1106(a) to ``until
all parties to the ALJ or attorney adjudicator decision or dismissal,''
to align the language with the preceding sentences.
We proposed to revise Sec. 405.1106(b) to align the paragraph with
the revised escalation process proposed at Sec. 405.1016 (see section
III.A.3.h.i of the proposed rule and II.B.3.h.i of this final rule
above). Specifically, we proposed to revise Sec. 405.1106(b) to state
that if an appellant files a request to escalate an appeal to the
Council level because the ALJ or attorney adjudicator has not completed
his or her action on the request for hearing within an applicable
adjudication period under Sec. 405.1016, the request for escalation
must be filed with OMHA and the appellant must also send a copy of the
request for escalation to the other parties who were sent a copy of the
QIC reconsideration. This proposed revision would align this section
with the revised process in proposed Sec. 405.1016 by specifying that
the request for escalation is filed with OMHA and removing the
requirement for an appellant to also file the request with the Council.
In addition, proposed Sec. 405.1106(b) would specify that the request
for escalation must be sent to the other parties who were sent a copy
of the QIC reconsideration, which would align with the parties to whom
the appellant is required to send a copy of its request for hearing.
Proposed Sec. 405.1106(b) would also refer to ``an applicable
adjudication period'' under Sec. 405.1016, to align the terminology
and because an adjudication period may not apply to a specific case
(for example, if the appellant waived an applicable adjudication time
frame). Finally, proposed Sec. 405.1106(b) would provide that failing
to copy the other parties would toll the Council's adjudication
deadline until all parties who were sent a copy of the QIC
reconsideration receive notice of the request for escalation, rather
than notice of the request for Council review as is currently required,
because the revised escalation process proposed at Sec. 405.1016 would
remove the requirement to file a request for Council review when
escalation is requested from the OMHA to the Council level.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1106 and 423.2106 as proposed without modification.
d. Council Actions When Request for Review or Escalation Is Filed
(Sec. Sec. 405.1108 and 423.2108)
As described below, we proposed a number of changes to Sec. Sec.
405.1108 and 423.2108, which describe the actions the Council may take
upon receipt of a request for review or, for Sec. 405.1108, a request
for escalation. 81 FR 43790, 43848. We proposed at Sec. 405.1108(d)
introductory text to replace ``ALJ level'' with ``OMHA level'' to
provide that the Council's actions with respect to a request for
escalation are the same regardless of whether the case was pending
before an ALJ or attorney adjudicator, or unassigned at the time of
escalation. We also proposed at Sec. 405.1108(d)(3) to replace
``remand to an ALJ for further proceedings, including a hearing'' with
``remand to OMHA for further proceedings, including a hearing'' because
we stated in the proposed rule that we believed the Council could
remand an escalated case to an ALJ or attorney adjudicator for further
proceedings, but if the Council ordered that a hearing be conducted,
the case would need to be remanded to an ALJ. We did not propose any
corresponding changes to Sec. 423.2108 because escalation is not
available for Part D coverage appeals.
We also proposed in Sec. Sec. 405.1108(b) and 423.2108(b), to
provide that the dismissal for which Council review may be requested is
a dismissal of a request for a hearing, because as discussed in section
III.A.3.x of the proposed rule and II.B.3.x of this final rule above,
proposed Sec. Sec. 405.1054(b) and 423.2054(b) would provide that a
dismissal of a request for a review of a QIC or IRE dismissal of a
request for reconsideration is binding and not subject to further
review. Finally, we proposed to replace all remaining references in
Sec. Sec. 405.1108 and 423.2108 to ``ALJ'' with ``ALJ or attorney
adjudicator'' and ``ALJ's'' with ``ALJ's or attorney adjudicator's'' to
further provide that the Council's actions with respect to a request
for review or escalation are the same for cases that were decided by or
pending before an ALJ or an attorney adjudicator.
We received no comments on these proposals, other than: (1)
Comments discussed in section II.A.2 of this final rule above related
to our general proposals to provide authority for attorney adjudicators
to issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals
[[Page 5091]]
issued by ALJs; and (2) comments discussed in section II.A.4 of this
final rule above related to our general proposal to reference OMHA or
an OMHA office, in place of current references to an unspecified
entity, ALJs, and ALJ hearing offices, when a reference to OMHA or an
OMHA office provides a clearer explanation of a topic. Accordingly, for
the reasons discussed above and in the proposed rule, we are finalizing
the changes to Sec. Sec. 405.1108 and 423.2108 as proposed without
modification.
e. Council Reviews on Its Own Motion (Sec. Sec. 405.1110 and 423.2110)
As described below, we proposed several changes to Sec. Sec.
405.1110 and 423.2110, which discuss Council reviews on its own motion.
81 FR 43790, 43848-43849. Current Sec. Sec. 405.1110(a) and
423.2110(a) state the general rule that the Council may decide on its
own motion to review a decision or dismissal issued by an ALJ, and CMS
or its contractor, including the IRE, may refer a case to the Council
within 60 calendar days after the date of the ALJ's decision or
dismissal (for Sec. 405.1110(a)) or after the ALJ's written decision
or dismissal is issued (for Sec. 423.2110(a)). Current Sec. Sec.
405.1110(b) and 423.2110(b) provide the standards for CMS or its
contractors to refer ALJ decisions and dismissals to the Council for
potential review under the Council's authority to review ALJ decisions
and dismissals on the Council's own motion, and require that a copy of
a referral to the Council be sent to the ALJ whose decision or
dismissal was referred, among others. Current Sec. Sec. 405.1110(c)
and 423.2110(c) explain the standards of review used by the Council in
reviewing the ALJ's action. Current Sec. Sec. 405.1110(d) and
423.2110(d) explain the actions the Council may take, including
remanding the case to the ALJ for further proceedings, and state that
if the Council does not act on a referral within 90 calendar days after
receipt of the referral (unless the 90 calendar day period has been
extended as provided in the respective subpart), the ALJ's decision or
dismissal is binding (Sec. 405.1110(d) further specifies that the
decision or dismissal is binding on the parties to the decision).
We proposed at Sec. Sec. 405.1110 and 423.2110 to replace each
instance of ``at the ALJ level'' with ``at the OMHA level'' and ``ALJ
proceedings'' with ``OMHA proceedings.'' We stated in the proposed rule
that we believe the standards for referral to the Council by CMS or its
contractor would be the same regardless of whether the case was decided
by an ALJ or an attorney adjudicator, and that ``at the OMHA level''
and ``OMHA proceedings'' would reduce confusion in situations where the
case was decided by an attorney adjudicator. We proposed at Sec.
405.1110(b)(2) to replace the references to current Sec. 405.1052(b)
with references to Sec. 405.1052(d) to reflect the structure of
proposed Sec. 405.1052, and also proposed to revise Sec. Sec.
405.1110(b)(2) and 423.2110(b)(2)(ii) to state that CMS (in Sec.
405.1110(b)(2)) or CMS or the IRE (in Sec. 423.2110(b)(2)(ii)) sends a
copy of its referral to the OMHA Chief ALJ. We stated that the current
requirement to send a copy of the referral to the ALJ is helpful in
allowing OMHA ALJs to review the positions that CMS is advocating
before the Council, but at times has caused confusion as to whether the
ALJ should respond to the referral (there is no current provision that
allows the Council to consider a statement in response to the
referral). In addition, we stated that the proposed revision would
allow OMHA to collect information on referrals, assess whether training
or policy clarifications for OMHA adjudicators are necessary, and
disseminate the referral to the appropriate ALJ or attorney adjudicator
for his or her information. We also proposed at Sec. 405.1110(b)(2) to
replace ``all other parties to the ALJ's decision'' with ``all other
parties to the ALJ's or attorney adjudicator's action'' and at Sec.
405.1110(d) to replace ``ALJ decision'' with ``ALJ or attorney
adjudicator action'' to encompass both decisions and dismissals issued
by an ALJ or an attorney adjudicator, as proposed in section II.B of
the proposed rule (and discussed in section II.A.2 above). We stated in
the proposed rule that we believe that parties to an ALJ's dismissal or
an attorney adjudicator's decision or dismissal have the same right to
receive a copy of another party's written exceptions to an agency
referral as the parties to an ALJ's decision, and that an ALJ's or
attorney adjudicator's decision or dismissal is binding on the parties
to the action. We proposed to replace each remaining instance in
Sec. Sec. 405.1110 and 423.2110 of ``ALJ'' with ``ALJ or attorney
adjudicator,'' ``ALJ's decision or dismissal'' with ``ALJ's or attorney
adjudicator's decision or dismissal,'' ``ALJ's decision'' with ``ALJ's
or attorney adjudicator's decision or dismissal,'' and ``ALJ's action''
with ``ALJ's or attorney adjudicator's action.'' We stated that these
proposed revisions would provide that the sections apply to decisions
and dismissals issued by an attorney adjudicator, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2
above), and therefore CMS and its contractors would have the same right
to refer attorney adjudicator decisions and dismissals to the Council,
and the Council would have the authority to take the same actions and
have the same obligations in deciding whether to review an attorney
adjudicator's decision or dismissal on its own motion.
Finally, we proposed at Sec. 423.2110(b)(1) to replace ``material
to the outcome of the claim'' with ``material to the outcome of the
appeal'' because unlike Part A and Part B, no ``claim'' is submitted
for drug coverage under Part D.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received two comments on these proposals. The
commenters both objected to the proposal to revise Sec. Sec.
405.1110(b)(2) and 423.2110(b)(2)(ii) to state that CMS (in Sec.
405.1110(b)(2)) or CMS or the IRE (in Sec. 423.2110(b)(2)(ii)) sends a
copy of its referral for own motion review by the Council to the OMHA
Chief ALJ, rather than the ALJ who issued the decision, as provided
under current Sec. Sec. 405.1110(b)(2) and 423.2110(b)(2)(ii). The
commenters felt it would be more appropriate for notice of the
Council's action to be provided to the Chief ALJ, as the Council may
not accept the referral for own motion review, or may not agree with
the reason(s) for the referral, and therefore the referral itself is
not necessarily evidence of a training or policy clarification need.
Response: Current Sec. Sec. 405.1110(b)(2) and 423.2110(b)(2)(ii)
contain a requirement for CMS, or CMS or the IRE, to send a copy of its
referral to the ALJ. As we explained above (and in section III.A.5.e of
the proposed rule), we proposed to instead require that the copy of the
referral be sent to the Chief ALJ because the current requirement has
at times caused confusion about whether a response is required from the
ALJ. The current requirement also makes it difficult to identify trends
and training opportunities, because copies of the referrals are sent to
individual ALJs rather than to one individual at OMHA or a centralized
location. We stated in the proposed rule that sending copies of the
referrals to the Chief ALJ would allow OMHA to collect information on
referrals, assess whether training or policy clarifications for OMHA
adjudicators are necessary, and disseminate the referral to the
appropriate ALJ or attorney adjudicator for his or her information. We
also believe sending a copy of the referral to the Chief ALJ would be
administratively simpler for CMS or the IRE.
[[Page 5092]]
We understand the commenter's suggestion that the notice of the
Council's action is a better measure to assess the need for possible
training or policy clarifications. In practice, OMHA has a process in
place to receive and review copies of all Council actions, such as
decisions remanding, reversing, modifying, or affirming ALJ decisions
and dismissals, and dismissals of requests for review and declinations
of referrals for own motion review, and OMHA makes those available to
all staff. However, due to the time lag between when a request for own
motion review is filed and when the Council issues its action (which
may be up to 90 days), we believe requiring CMS (under Sec. 405.1110),
or CMS or the IRE (under Sec. 423.2110), to send a copy of its
referral to OMHA, and specifically to the Chief ALJ, will help ensure
OMHA is aware of any trends that may necessitate action or further
research for possible training or policy clarifications as early as
possible, with the understood caveat that a referral in and of itself
is not a basis for training or policy clarification because, as the
commenter suggests, the Council's action on the referral is needed to
fully assess any needed training or policy clarifications.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. 405.908 as proposed with the following modification.
We are correcting a drafting error in proposed Sec. 405.1110(b)(2) by
removing two references to a ``hearing decision'' issued under Sec.
405.1046(a) and replacing them with ``decision,'' because Sec.
405.1046(a) as finalized in this rule also addresses decisions issued
by an ALJ or attorney adjudicator when a hearing is not held.
f. Content of Request for Review (Sec. Sec. 405.1112 and 423.2112)
As described below, we proposed a number of changes to Sec. Sec.
405.1112 and 423.2112, which discuss the content of a request for
Council review. 81 FR 43790, 43849. Current Sec. 405.1112(a) requires
a request for Council review to contain the date of the ALJ's decision
or dismissal order, if any, among other information. Current Sec.
423.2112(a)(1) states that the request for Council review must be filed
with the entity specified in the notice of the ALJ's action. Current
Sec. Sec. 405.1112(b) and 423.2112(b) state that the request for
review must identify the parts of the ALJ action with which the party
or enrollee, respectively, requesting review disagrees and explain why
he or she disagrees with the ALJ's decision, dismissal, or other
determination being appealed. Current Sec. 405.1112(b) provides an
example that if the party requesting review believes that the ALJ's
action is inconsistent with a statute, regulation, CMS Ruling, or other
authority, the request for review should explain why the appellant
believes the action is inconsistent with that authority. Current
Sec. Sec. 405.1112(c) and 423.2112(c) state that the Council will
limit its review of an ALJ's action to those exceptions raised by the
party or enrollee, respectively, in the request for review, unless the
appellant is an unrepresented beneficiary or the enrollee is
unrepresented.
We proposed at Sec. Sec. 405.1112 and 423.2112 to replace ``ALJ's
decision or dismissal'' with ``ALJ's or attorney adjudicator's decision
or dismissal,'' ``ALJ action'' with ``ALJ's or attorney adjudicator's
action,'' and ``ALJ's action'' with ``ALJ's or attorney adjudicator's
action.'' These revisions would provide that the sections apply to
decisions and dismissals issued by an attorney adjudicator, as proposed
in section II.B of the proposed rule (and discussed in section II.A.2
above), and therefore information on the attorney adjudicator's
decision and dismissal must be included in the request for Council
review, and the scope of the Council's review would be the same as for
an ALJ's decision or dismissal.
Current Sec. 405.1112(a) states that a request for Council review
must be filed with the Council or appropriate ALJ hearing office.
However, we stated in the proposed rule that this provision may cause
confusion when read with current Sec. 405.1106(a), which states that a
request for review must be filed with the entity specified in the
notice of the ALJ's action. In practice, OMHA notices of decision and
dismissal provide comprehensive appeal instructions directing requests
for Council review to be filed directly with the Council, and provide
address and other contact information for the Council. Therefore, we
proposed to revise Sec. 405.1112(a) to state that the request for
Council review must be filed with the entity specified in the notice of
the ALJ's or attorney adjudicator's action, which would align Sec.
405.1112(a) with current Sec. 405.1106(a), and reaffirm that a request
for Council review must be filed with the entity specified in the
notice of the ALJ's or attorney adjudicator's action.
Current Sec. 405.1112(a) also states that the written request for
review must include the hearing office in which the appellant's request
for hearing is pending if a party is requesting escalation from an ALJ
to the Council. In light of the proposed revisions to the escalation
process discussed in section III.A.3.h.i of the proposed rule and
II.B.3.h.i of this final rule above, we proposed to remove this
requirement from Sec. 405.1112(a) because proposed Sec. 405.1016
would provide that a request for escalation is filed with OMHA. In
accordance with proposed Sec. 405.1016, if the request for escalation
meets the requirements of Sec. 405.1016(f)(1) and a decision,
dismissal, or remand cannot be issued within 5 calendar days after OMHA
receives the request, the appeal would be forwarded to the Council.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
requested clarification as to whether the criteria specified in Sec.
405.1110 for agency referrals are also appropriate bases for requests
for review.
Response: We clarify that appellants may file requests for Council
review for any reason they disagree with the ALJ's decision or
dismissal, including if they believe that the ALJ abused his or her
discretion or that the decision or dismissal is not supported by the
evidence. On the other hand, CMS or its contractors may refer cases to
the Council only for the reasons specified in Sec. 405.1110(b) and
Sec. 423.2110(b) (if CMS or a contractor believes that the ALJ's or
attorney adjudicator's 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 public interest; or, where CMS or
its contractor participated (or requested to participate, for Part D
appeals) in the appeal at the OMHA level, then CMS is also permitted to
refer cases to the Council on the additional bases that it believes the
ALJ's or attorney adjudicator's decision or dismissal is not supported
by the preponderance of the evidence or the ALJ or attorney adjudicator
abused his or her discretion).
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1112 and 423.2112 as proposed without
modification.
g. Dismissal of Request for Review (Sec. Sec. 405.1114 and 423.2114)
We proposed at Sec. 405.1114(c)(3) to replace ``ALJ hearing'' with
``ALJ's or attorney adjudicator's action.'' This proposed revision
would provide that the paragraph applies to decisions and dismissals
issued by an attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), and therefore a
[[Page 5093]]
valid and timely request for Council review filed by another party to
an attorney adjudicator's decision or dismissal would preclude
dismissal of a request for Council review under Sec. 405.1114(c). We
did not propose any corresponding changes to Sec. 423.2114 (which we
inadvertently referenced as Sec. 423.1114 in the proposed rule)
because there is no provision equivalent to current Sec.
405.1114(c)(3). 81 FR 43790, 43849.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 405.1114 as proposed without modification.
h. Effect of Dismissal of Request for Council Review or Request for
Hearing (Sec. Sec. 405.1116 and 423.2116)
Current Sec. Sec. 405.1116 and 423.2116 describe the effect of a
dismissal by the Council of a request for Council review or a request
for hearing. We proposed to replace ``ALJ'' with ``ALJ or attorney
adjudicator'' to provide that the denial of a request for Council
review of a dismissal issued by an attorney adjudicator is binding and
not subject to judicial review in the same manner as the denial of a
request for Council review of a dismissal issued by an ALJ. We stated
in the proposed rule that we believe the Council's denial of a request
to review an attorney adjudicator's dismissal would be subject to the
same general rules described in sections III.A.3.c and III.A.3.x of the
proposed rule and sections II.B.3.c and II.B.3.x of this final rule
above pertaining to reviews of dismissals at the next adjudicative
level, and that further review of the attorney adjudicator's dismissal
in Federal district court would be unavailable. 81 FR 43790, 43849-
43850.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1116 and 423.2116 as proposed without modification.
i. Obtaining Evidence From the Council (Sec. Sec. 405.1118 and
423.2118)
As described below, we proposed several changes to Sec. Sec.
405.1118 and 423.2118, which provide that a party or an enrollee,
respectively, may request and receive a copy of all or part of the
record of the ALJ hearing. 81 FR 43790, 43850. We proposed to replace
``ALJ hearing'' with ``ALJ's or attorney adjudicator's action.'' We
stated in the proposed rule that this proposed revision would provide
that a party to an attorney adjudicator action, or to an ALJ decision
that was issued without a hearing, may request and receive a copy of
all or part of the record to the same extent as a party to an ALJ
hearing. We also proposed to replace the reference to an ``exhibits
list'' with a reference to ``any index of the administrative record''
to provide greater flexibility in developing a consistent structure for
the administrative record. In addition, we proposed at Sec. 405.1118
to replace the reference to a ``tape'' of the oral proceeding with an
``audio recording'' of the oral proceeding because tapes are no longer
used and a more general reference would accommodate future changes in
recording formats. We proposed a parallel revision to Sec. 423.2118 to
replace the reference to a ``CD'' of the oral proceeding with an
``audio recording'' of the oral proceeding.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: One commenter asked that Sec. 405.1118 be revised to
clarify exactly where parties should direct their requests for a copy
of all or part of the record of the ALJ hearing. The commenter stated
that it has had difficulty obtaining copies of the record from the ALJ
who conducted the hearing once OMHA had released custody of the record.
The commenter thought it would be helpful if the notice of decision
issued by OMHA contained language that informed the appellant where to
send such requests.
Response: Proposed Sec. 405.1118 is titled ``Obtaining evidence
from the Council,'' and deals with requests for copies of all or part
of the record of the ALJ hearing. After a party requests review by the
Council, the entire administrative record, including audio recordings,
documentary evidence, and any index of the administrative record, is
transferred to the Council. Thus, parties who are requesting a copy of
all or part of the record of the ALJ hearing after a request for review
has been filed with the Council may direct their requests directly to
the Council. For requests that are made prior to a request for review
being filed with the Council, see the discussion in section II.B.3.t of
this final rule above. With respect to the commenter's suggestion
regarding including language in the notice of an ALJ's decision, we may
consider the suggestion in future revisions to the standard notice.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. Sec. 405.1118 and 423.2118 as proposed without
modification.
j. What Evidence May Be Submitted to the Council (Sec. Sec. 405.1122
and 423.2122)
As described below, we proposed several changes to Sec. Sec.
405.1122 and 423.2122, which describe the evidence that may be
submitted to and considered by the Council, the process the Council
follows in issuing subpoenas, the reviewability of Council subpoena
rulings, and the process for seeking enforcement of subpoenas. 81 FR
43790, 43850. Current Sec. 405.1122(a)(1) provides that the Council
will limit its review of the evidence to the evidence contained in the
record of the proceedings before the ALJ, unless the hearing decision
decides a new issue that the parties were not afforded an opportunity
to address at the ALJ level. We proposed at Sec. 405.1122(a)
introductory text and (a)(1) to replace each instance of ``ALJ's
decision'' with ``ALJ's or attorney adjudicator's decision,'' ``before
the ALJ'' with ``before the ALJ or attorney adjudicator,'' and ``the
ALJ level'' with ``the OMHA level.'' We stated in the proposed rule
that we believe the standard for review of evidence at the Council
level would be the same regardless of whether the case was decided by
an ALJ or attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), at the OMHA
level. We also proposed corresponding revisions to Sec. 423.2122(a)
introductory text and (a)(1). Also, to help ensure it is clear that the
exception for evidence related to new issues raised at the OMHA level
is not limited to proceedings in which a hearing before an ALJ was
conducted, we proposed at Sec. Sec. 405.1122(a)(1) and Sec.
423.2122(a)(1) to replace ``hearing decision'' with ``ALJ's or attorney
adjudicator's decision.''
[[Page 5094]]
Current Sec. 405.1122(a)(2) provides that if the Council 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 Council may remand the case
to an ALJ to obtain the evidence and issue a new decision. For the
reasons described above, we proposed at Sec. 405.1122(a)(2) to replace
``ALJ'' with ``ALJ or attorney adjudicator'' and ``hearing record''
with ``administrative record,'' along with corresponding revisions to
Sec. 423.2122(a)(2). Current Sec. 405.1122(b)(1) describes the
evidence that may be considered by the Council when a case is escalated
from the ALJ level. For the reasons described above, we proposed to
replace ``ALJ level'' with ``OMHA level.'' We did not propose any
corresponding changes to Sec. 423.2122 because escalation is not
available for Part D coverage appeals. Finally, we proposed to replace
all remaining instances of ``ALJ'' in Sec. 405.1122(b)(1), (b)(2),
(c)(2), (c)(3) introductory text, (c)(3)(i), and (c)(3)(ii) with ``ALJ
or attorney adjudicator,'' as we believe the Council's authority to
consider evidence entered in the record by an attorney adjudicator and
to remand a case to an attorney adjudicator for consideration of new
evidence would be the same as the Council's current authority to
consider evidence entered in the record by an ALJ and remand a case to
an ALJ. We did not propose any corresponding changes to Sec. 423.2122
because there are no remaining references to ``ALJ.''
We received no comments on these proposals, other than: (1)
Comments discussed in section II.A.2 of this final rule above related
to our general proposals to provide authority for attorney adjudicators
to issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs; and (2) comments discussed in
section II.A.4 of this final rule above related to our general proposal
to reference OMHA or an OMHA office, in place of current references to
an unspecified entity, ALJs, and ALJ hearing offices, when a reference
to OMHA or an OMHA office provides a clearer explanation of a topic.
Accordingly, for the reasons discussed above and in the proposed rule,
we are finalizing the changes to Sec. Sec. 405.1122 and 423.2122 as
proposed without modification.
k. Case Remanded by the Council (Sec. Sec. 405.1126 and 423.2126)
As described below, we proposed a number of changes to the
regulations at Sec. Sec. 405.1126 and 423.2126 concerning cases that
are remanded by the Council. 81 FR 43790, 43850-43851. Current
Sec. Sec. 405.1126(a) and (b) explain the Council's remand authority.
We proposed to replace each instance of ``ALJ'' with ``ALJ or attorney
adjudicator'' to provide that the Council may remand a case in which
additional evidence is needed or additional action is required by the
ALJ or attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 of this final rule
above). Proposed Sec. 405.1126(b) would also provide that an ALJ or
attorney adjudicator would take any action that is ordered by the
Council, and may take any additional action that is not inconsistent
with the Council's remand order. We stated in the proposed rule that we
believe it is necessary for the Council to have the same authority to
remand an attorney adjudicator's decision to the attorney adjudicator
as the Council currently has to remand an ALJ's decision to the ALJ,
and that the attorney adjudicator's actions with respect to the
remanded case should be subject to the same requirements as an ALJ's
actions under the current provisions. We also proposed corresponding
revisions to Sec. 423.2126(a)(1) and (a)(2). Current Sec. Sec.
405.1126(c) and (d) describe the procedures that apply when the Council
receives a recommended decision from the ALJ, including the right of
the parties to file briefs or other written statements with the
Council. Because we proposed in Sec. 405.1126(a) for the Council to
have the same authority to order an attorney adjudicator to issue a
recommended decision on remand as the Council currently has to order an
ALJ to issue a recommended decision, we also proposed at Sec.
405.1126(c) and (d) to replace ``ALJ'' with ``ALJ or attorney
adjudicator'' to provide that the provisions apply to attorney
adjudicators to the same extent as the provisions apply to ALJs, along
with corresponding revisions to Sec. 423.2126(a)(3) and (a)(4).
Finally, current Sec. 405.1126(e)(2) provides that if the Council
determines more evidence is required after receiving a recommended
decision, the Council may again remand the case to an ALJ for further
development and another decision or recommended decision. Because we
believe the Council should have the same authority to remand a case to
an attorney adjudicator following receipt of a recommended decision, we
proposed at Sec. 405.1126(e)(2) to replace ``ALJ'' with ``ALJ or
attorney adjudicator,'' along with a corresponding revision to Sec.
423.2126(a)(5)(ii), and to insert ``if applicable'' after rehearing
because a rehearing may not be applicable in every circumstance (for
example, where an attorney adjudicator issued a recommended decision
and the Council does not remand with instructions to transfer the
appeal to an ALJ for a hearing).
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1126 and 423.2126 as proposed without modification.
l. Action of the Council (Sec. Sec. 405.1128 and 423.2128)
Current Sec. Sec. 405.1128 and 423.2128 explain the actions the
Council may take after reviewing the administrative record and any
additional evidence (subject to the limitations on Council
consideration of additional evidence). We proposed at Sec. Sec.
405.1128(a) and 423.2128(a) to replace ``ALJ'' with ``ALJ or attorney
adjudicator,'' which would provide that the Council may make a decision
or remand a case to an ALJ or to an attorney adjudicator, as proposed
in section II.B of the proposed rule (and discussed in section II.A.2
of this final rule above). We stated in the proposed rule that we
believe the Council should have the same authority to remand a case to
an attorney adjudicator as the Council currently has to remand a case
to an ALJ. Also, to help ensure there is no confusion that Council
actions are not limited to proceedings in which a hearing before an ALJ
was conducted, we proposed at Sec. Sec. 405.1128(b) and 423.2128(b) to
replace ``the ALJ hearing decision'' with ``the ALJ's or attorney
adjudicator's decision.'' 81 FR 43790, 43851.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and
[[Page 5095]]
to revise the rules so that decisions and dismissals issued by attorney
adjudicators may be reopened and/or appealed in the same manner as
equivalent decisions and dismissals issued by ALJs. Accordingly, for
the reasons discussed above and in the proposed rule, we are finalizing
the changes to Sec. Sec. 405.1128 and 423.2128 as proposed without
modification.
m. Request for Escalation to Federal Court (Sec. 405.1132)
Current Sec. 405.1132 explains the process for an appellant to
seek escalation of an appeal (other than an appeal of an ALJ dismissal)
from the Council to Federal district court if the Council does not
issue a decision or dismissal or remand the case to an ALJ within the
adjudication time frame specified in Sec. 405.1100, or as extended as
provided in subpart I. We proposed at Sec. 405.1132 to replace each
instance of ``ALJ'' with ``ALJ or attorney adjudicator.'' We stated in
the proposed rule that these revisions would provide that the appellant
may request that escalation of a case, other than a dismissal issued by
an ALJ or attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 of this final rule
above), to Federal district court if the Council is unable to issue a
decision or dismissal or remand the case to an ALJ or attorney
adjudicator within an applicable adjudication time frame, and that
appellants may file an action in Federal district court if the Council
is not able to issue a decision, dismissal, or remand to the ALJ or
attorney adjudicator within 5 calendar days of receipt of the request
for escalation or 5 calendar days from the end of the applicable
adjudication time period. We did not propose any corresponding changes
to part 423, subpart U, as there is no equivalent provision because
there are no escalation rights for Part D coverage appeals. 81 FR
43790, 43851.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 405.1132 as proposed without modification.
n. Judicial Review (Sec. Sec. 405.1136, 423.1976, and 423.2136)
Current Sec. Sec. 405.1136, 423.1976, and 423.2136 set forth the
right to file a request for judicial review in Federal district court
of a Council decision (or of an ALJ's decision if the Council declines
review as provided in Sec. 423.1976(a)(1)). Current Sec. 405.1136
also provides that judicial review in Federal district court may be
requested if the Council is unable to issue a decision, dismissal, or
remand within the applicable time frame following an appellant's
request for escalation. In addition, current Sec. Sec. 405.1136 and
423.2136 specify the requirements and procedures for filing a request
for judicial review, the Federal district court in which such actions
must be filed, and describe the standard of review. We proposed at
Sec. Sec. 405.1136, 423.1976, and 423.2136 to replace each instance of
``ALJ'' with ``ALJ or attorney adjudicator,'' and ``ALJ's'' with
``ALJ's or attorney adjudicator's'' to help ensure that there is no
confusion that appellants may file a request for judicial review in
Federal district court of actions made by an attorney adjudicator, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 of this final rule above) (or by the Council following an action
by an attorney adjudicator), to the same extent that judicial review is
available for ALJ actions (or Council actions following an action by an
ALJ). 81 FR 43790, 43851.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1136, 423.1976, and 423.2136 as proposed without
modification.
o. Case Remanded by a Federal Court (Sec. Sec. 405.1138 and 423.2138)
Current Sec. Sec. 405.1138 and 423.2138 set forth the actions the
Council may take when a Federal district court remands a case to the
Secretary for further consideration. We proposed at Sec. Sec. 405.1138
and 423.2138 to replace ``ALJ'' with ``ALJ or attorney adjudicator'' to
provide that when a case is remanded by a Federal district court for
further consideration by the Secretary, the Council may remand the case
to an ALJ or attorney adjudicator, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 of this final rule
above), to issue a decision, take other action, or return the case to
the Council with a recommended decision. 81 FR 43790, 43851.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1138 and 423.2138 as proposed without modification.
p. Council Review of ALJ Decision in a Case Remanded by a Federal
District Court (Sec. Sec. 405.1140 and 423.2140)
Current Sec. Sec. 405.1140 and 423.2140 set forth the procedures
that apply when a case is remanded to the Secretary for further
consideration, and the Council subsequently remands the case to an ALJ,
including the procedures for the Council to assume jurisdiction
following the decision of the ALJ on its own initiative or upon receipt
of written exceptions from a party or the enrollee. We proposed to
replace each instance of ``ALJ'' throughout Sec. Sec. 405.1140 and
423.2140 with ``ALJ or attorney adjudicator'' and to replace the
reference to ``ALJ's'' at Sec. Sec. 405.1140(d) and 423.2140(d) with
``ALJ's or attorney adjudicator's.'' We stated in the proposed rule
that these revisions would provide that the Council may remand these
cases to the ALJ or attorney adjudicator, as proposed in section II.B
of the proposed rule (and discussed in section II.A.2 above), following
remand from a Federal district court, and that the decision of the ALJ
or attorney adjudicator becomes the final decision of the Secretary
after remand unless the Council assumes jurisdiction. We stated that
these revisions would further apply the rules set forth in this section
to cases reviewed by an attorney adjudicator as well as an ALJ. As
described above in relation to the Council's general remand authority
under Sec. Sec. 405.1126 and 423.2126, we stated that we believe it is
necessary for the Council to have the same authority to remand an
attorney
[[Page 5096]]
adjudicator's decision to the attorney adjudicator as the Council
currently has to remand an ALJ's decision to the ALJ, and that would
include cases that are remanded by a Federal district court to the
Secretary for further consideration. 81 FR 43790, 43851-43852.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 405.1140 and 423.2140 as proposed without modification.
C. Specific Provisions of Part 405, Subpart J Expedited
Reconsiderations
In accordance with section 1869(b)(1)(F) of the Act, current Sec.
405.1204 provides for expedited QIC reconsiderations of certain QIO
determinations related to provider-initiated terminations of Medicare-
covered services and beneficiary discharges from a provider's facility.
Current Sec. 405.1204(c)(4)(iii) explains that the QIC's initial
notification may be done by telephone followed by a written notice that
includes information about the beneficiary's right to appeal the QIC's
reconsideration decision to an ALJ, and current Sec. 405.1204(c)(5)
provides that if the QIC does not issue a decision within 72 hours of
receipt of the request for a reconsideration, the case can be escalated
to the ``ALJ hearing level.'' For consistency with part 405, subpart I,
and to explain the rules that apply to an ALJ hearing, we proposed at
Sec. 405.1204(c)(4)(iii) and (c)(5) to amend these references to
convey that a QIC reconsideration can be appealed to, or a request for
a QIC reconsideration can be escalated to OMHA for an ALJ hearing in
accordance with part 405, subpart I. We stated in the proposed rule
that we believed these revisions would explain where a request for an
ALJ hearing is directed from a subpart J proceeding, and the rules that
would be applied to the request for an ALJ hearing following the QIC's
reconsideration or escalation of the request for a QIC reconsideration.
81 FR 43790, 43852.
Current Sec. 405.1204(c)(5) states that the beneficiary has a
right to escalate a request for a QIC reconsideration if the amount
remaining in controversy after the QIO determination is $100 or more.
However, this is inconsistent with the amount in controversy specified
in section 1869(b)(1)(E) of the Act. We proposed to revise Sec.
405.1204(c)(5) to provide that there is a right to escalate a request
for a QIC reconsideration if the amount remaining in controversy after
the QIO determination meets the requirements for an ALJ hearing under
Sec. 405.1006. We stated in the proposed rule that we believed that
this is more consistent with section 1869(b)(1)(E) of the Act, which
provides that a hearing by the Secretary shall not be available to an
individual if the amount in controversy is less than $100, as adjusted
annually after 2004, which is implemented in Sec. 405.1006, and would
bring consistency to the amounts in controversy required for an
escalation under subpart J and subpart I. 81 FR 43790, 43852.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on this proposal The commenter
supported the revision of Sec. 405.1204(c)(5) to align the amount in
controversy with section 1869(b)(1)(E) of the Act and Sec. 405.1006.
Response: We thank the commenter for its support.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. 405.1204 as proposed without modification.
D. Specific Provisions of Part 422, Subpart M
1. General Provisions (Sec. 422.562)
Current Sec. 422.562(c)(1)(ii) states that if an enrollee receives
immediate QIO review of a determination of non-coverage of inpatient
hospital care, the QIO review decision is subject only to the appeal
procedures set forth in parts 476 and 478 of title 42, chapter IV.
However, we stated in the proposed rule that we believe this provision
is an outdated reference that has been superseded by current Sec.
422.622, which provides for requesting immediate QIO review of the
decision to discharge an enrollee from an inpatient hospital setting
and appeals of that review as described under part 422, subpart M. The
regulatory provisions at Sec. 422.622 describe the processes for QIO
review of the decision to discharge an MA enrollee from the inpatient
hospital setting. Section 422.622 also explains the availability of
other appeals processes if the enrollee does not meet the deadline for
an immediate QIO review of the discharge decision. These part 422,
subpart M provisions govern the review processes for MA enrollees
disputing discharge from an inpatient hospital setting. As noted above,
we stated in the proposed rule that we believe the references to the
procedures in parts 476 and 478 at Sec. 422.562(c)(1)(ii) are
obsolete. Therefore, we proposed to delete Sec. 422.562(c)(1) to
remove the outdated reference in current Sec. 422.562(c)(1)(ii) and
consolidate current (c)(1) and (c)(1)(i) into proposed (c)(1). 81 FR
43790, 43852.
We received no comments on these proposals. Accordingly, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. 422.562 as proposed above without modification.
In addition to the revisions discussed above, as discussed in
section II.A.3 of this final rule, we are also finalizing revisions to
Sec. 422.562(d). In section II.A.3 of this final rule above, we
discuss our proposal to revise Sec. 422.562(d), the comments we
received related to this proposal, and the revisions we are finalizing
to Sec. 422.562(d) in this rule.
2. Notice of Reconsidered Determination by the Independent Entity
(Sec. 422.594)
Current Sec. 422.594(b)(2) requires the notice of the
reconsideration determination by an IRE to inform the parties of their
right to an ALJ hearing if the amount in controversy is $100 or more,
if the determination is adverse (does not completely reverse the MAO's
adverse organization determination). We proposed at Sec. 422.594(b)(2)
to amend this requirement so that the notice informs the parties of
their right to an ALJ hearing if the amount in controversy meets the
requirements of Sec. 422.600, which in turn refers to the part 405
computation of the amount in controversy. We stated in the proposed
rule that we believed this would increase accuracy in conveying when a
party has a right to an ALJ hearing, and would be more consistent with
section 1852(g)(5) of the Act, which provides that a hearing by the
Secretary shall not be available to an individual if the amount in
controversy is less than $100, as adjusted annually in accordance with
section 1869(b)(1)(E)(iii) of the Act, which is implemented in part 405
at Sec. 405.1006. 81 FR 43790, 43852.We discuss our proposed changes
to Sec. 405.1006 in section III.A.3.d of the proposed rule and
II.B.3.d of this final rule above.
We received no comments on these proposals. Accordingly, for the
reasons discussed above and in the proposed
[[Page 5097]]
rule, we are finalizing the changes to Sec. 422.594 as proposed
without modification.
3. Request for an ALJ Hearing (Sec. 422.602)
Current Sec. 422.602(b) provides that a party must file a request
for an ALJ hearing within 60 days of the date of the notice of the
IRE's reconsidered determination. However, in similar appeals brought
under Medicare Part A and Part B at Sec. 405.1002, and Part D at Sec.
423.2002, a request for an ALJ hearing must be filed within 60 calendar
days of receipt of a notice of reconsideration. We proposed at Sec.
422.602(b)(1) to align the part 422 time frame for filing a request for
an ALJ hearing with provisions for similar appeals under Medicare Part
A and Part B, and Part D. We proposed that a request for an ALJ hearing
would be required to be filed within 60 calendar days of receiving the
notice of a reconsidered determination, except when the time frame is
extended by an ALJ or, as proposed, attorney adjudicator, as provided
in part 405. To provide consistency for when a notice of a reconsidered
determination is presumed to have been received, we proposed at Sec.
422.602(b)(2) that the date of receipt of the reconsideration is
presumed to be 5 calendar days after the date of the notice of the
reconsidered determination, unless there is evidence to the contrary,
which is the same presumption that is applied to similar appeals under
Medicare Part A and Part B at Sec. 405.1002, and Part D at Sec.
423.2002. 81 FR 43790, 43852-43853.
Provided below are summaries of the specific comments received and
responses to these comments:
Comment: We received two comments on this proposal. One commenter
supported revising Sec. 422.602(b) to state in paragraph (b)(1) that a
request for hearing must be filed within 60 calendar days of receipt of
the notice of a reconsidered determination, rather than 60 calendar
days of the date of the notice. The other commenter also supported this
proposed revision, as well as the proposal to create a presumption at
Sec. 422.602(b)(2) that the date of receipt of the reconsideration is
5 calendar days after the date of the notice of the reconsidered
determination, unless there is evidence to the contrary. The commenter
expressed that the current inconsistency between Sec. 422.602(b) and
the part 405, subpart I rules has caused problems for beneficiaries,
providers, and ALJs, and supported our efforts to standardize the time
frames for requesting an ALJ hearing.
Response: We thank both commenters for their support.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. 422.602 as proposed without modification.
4. Medicare Appeals Council (Council) Review (Sec. 422.608)
Current Sec. 422.608 provides that any party to the hearing,
including the MAO, who is dissatisfied with the ALJ hearing decision
may request that the Council review the ALJ's decision or dismissal. We
stated in the proposed rule that we believed that the reference to a
``hearing'' or ``hearing decision,'' in the first instance, then
``decision or dismissal'' in the second instance, may cause confusion
regarding a party's right to request Council review. We proposed at
Sec. 422.608 that any party (including the MAO) to the ALJ's or, as
proposed in section II.B of the proposed rule (and discussed in section
II.A.2 of this final rule above), attorney adjudicator's decision or
dismissal, who is dissatisfied with the decision or dismissal, may
request that the Council review that decision or dismissal. We stated
in the proposed rule that we believed this would resolve any potential
confusion regarding a party's right to request Council review of a
decision when a hearing was not conducted and a dismissal of a request
for hearing, and further provide that the section applies to decisions
and dismissals issued by an attorney adjudicator. Therefore, we
proposed to revise Sec. 422.608 to provide that a request for Council
review may be filed by a party (including the MAO) if he or she is
dissatisfied with an ALJ's or attorney adjudicator's decision or
dismissal. 81 FR 43790, 43853.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing these
changes to Sec. 422.608 as proposed above without modification.
In addition to the revisions discussed above, as discussed in
section II.A.3 of this final rule, we also are revising Sec. 422.608
to include a cross reference to Sec. 422.562(d)(2).
5. Judicial Review (Sec. 422.612)
Current Sec. 422.612 provides the circumstances under which a
party may request judicial review of an ALJ or Council decision, and
directs appellants to the procedures in part 405 for filing a request
for judicial review. We proposed at Sec. 422.612(a) to replace each
instance of ``ALJ's'' with ``ALJ's or attorney adjudicator's''. Thus,
we proposed in Sec. 422.612(a) that appellants would be able to file a
request for judicial review in Federal district court of actions made
by an attorney adjudicator, as proposed in section II.B of the proposed
rule (and discussed in section II.A.2 above) (or by the Council
following an action by an attorney adjudicator), to the same extent
that judicial review is available under Sec. 412.622(a) for ALJ
actions (or Council actions following an action by an ALJ). 81 FR
43790, 43853.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 422.612 as proposed without modification.
6. Reopening and Revising Determinations and Decisions (Sec. 422.616)
Current Sec. 422.616(a) provides that the determination or
decision of an MA organization, independent entity, ALJ, or the Council
that is otherwise final and binding may be reopened and revised by the
entity that made the determination or decision, subject to the rules in
part 405. We proposed at Sec. 422.616(a) to replace ``ALJ'' with ``ALJ
or attorney adjudicator.'' As described in section III.A.2.l of the
proposed rule and II.B.2.l of this final rule above with respect to
Sec. Sec. 405.980, 405.982, 405.984, 423.1980, 423.1982, and 423.1984,
we believe it is necessary for an attorney adjudicator to have the
authority to reopen the attorney adjudicator's decision on the same
bases as an ALJ may reopen the ALJ's decision under the current rules,
and the action should be subject to the same limitations and
requirements, and have the same effects
[[Page 5098]]
as an ALJ's action under these provisions. 81 FR 43790, 43853.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 422.616 as proposed without modification.
7. How an MA Organization Must Effectuate Standard Reconsideration
Determinations and Decisions, and Expedited Reconsidered Determinations
(Sec. Sec. 422.618 and 422.619)
Current Sec. 422.618(c)(1) and (c)(2) provide instructions for
effectuation of decisions issued by an ALJ, or at a higher level of
appeal, that reverse an IRE's decision on a standard reconsidered
determination or decision. We proposed to replace ``ALJ'' with ``ALJ or
attorney adjudicator'' at Sec. 422.618(c)(1) and to make corresponding
changes to Sec. 422.619(c)(1) for decisions that reverse an IRE's
decision on an expedited reconsidered determination or decision. We
stated in the proposed rule that we believe the process for
effectuating the decision of an attorney adjudicator, as proposed in
section II.B of the proposed rule (and discussed in section II.A.2 of
this final rule above), should be the same as the process for
effectuating the decision of an ALJ. 81 FR 43790, 43853.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. Sec. 422.618 and 422.619 as proposed without modification.
8. Requesting Immediate QIO Review of the Decision To Discharge From
the Inpatient Hospital and Fast-Track Appeals of Service Terminations
to Independent Review Entities (IREs) (Sec. Sec. 422.622 and 422.626)
In accordance with section 1852(g)(3) and (g)(4) of the Act,
current Sec. Sec. 422.622 and 422.626 provide for reviews of QIO
determinations and expedited IRE reconsiderations of certain QIO
determinations related to terminations of covered provider services
furnished by home health agencies (HHAs), skilled nursing facilities
(SNFs), and comprehensive outpatient rehabilitation facilities (CORFs)
to an MA enrollee, and MA enrollee discharges from an inpatient
hospital. Current Sec. 422.622(g) provides that if an enrollee is
still an inpatient in the hospital after a QIO determination reviewing
a provider discharge from a hospital, the enrollee may request an IRE
reconsideration of the QIO determination in accordance with Sec.
422.626(g); and if an enrollee is no longer an inpatient in the
hospital, the enrollee may appeal the QIO determination to an ALJ.
Current Sec. 422.626(g)(3) provides that if the IRE reaffirms its
decision to terminate covered provider services furnished by an HHA,
SNF, or CORF in whole or in part, the enrollee may appeal the IRE's
reconsidered determination to an ALJ. We proposed at Sec. Sec.
422.622(g)(2) and 422.626(g)(3) to amend these references to provide
that the appeal is made to OMHA for an ALJ hearing. We stated in the
proposed rule that we believed these revisions would clarify where a
request for an ALJ hearing is directed. 81 FR 43790, 43853.
We received no comments on these proposals, other than comments
discussed in section II.A.4 of this final rule above related to our
general proposal to reference OMHA or an OMHA office, in place of
current references to an unspecified entity, ALJs, and ALJ hearing
offices, when a reference to OMHA or an OMHA office provides a clearer
explanation of a topic. Accordingly, for the reasons discussed above
and in the proposed rule, we are finalizing the changes to Sec. Sec.
422.622 and 422.626 as proposed without modification.
E. Specific Provisions of Part 478, Subpart B
1. Applicability and Beneficiary's Right to a Hearing (Sec. Sec.
478.14 and 478.40)
Current Sec. 478.14(c)(2) explains that for the purposes of part
478 reconsideration and appeals, limitation of liability determinations
on excluded coverage of certain services are made under section 1879 of
the Act, and initial determinations under section 1879 of the Act and
further appeals are governed by the reconsideration and appeal
procedures in part 405, subpart G for determinations under Medicare
Part A, and part 405, subpart H for determinations under Medicare Part
B. In addition, current Sec. 478.40 states that an ALJ hearing may be
obtained from the SSA Office of Hearings and Appeals, and the
provisions of subpart G of 42 CFR part 405 apply unless they are
inconsistent with the specific provisions of subpart B of 42 CFR part
478. We stated in the proposed rule that these references are outdated.
Since Sec. Sec. 478.14 and 478.40 were last updated in 1999, section
931 of the MMA transferred responsibility for the ALJ hearing function
from SSA to HHS, and HHS established OMHA in 2005, to administer the
ALJ hearing function, including ALJ hearings conducted under titles XI
and XVIII of the Act (see 70 FR 36386). In addition, BIPA and the MMA
established new appeal procedures that were implemented in 2005, at 42
CFR part 405, subpart I (70 FR 11420), and the portions of subparts G
and H that previously applied to part 478, subpart B appeals were
removed in 2012 (77 FR 29002). We proposed in Sec. Sec. 478.14 and
478.40 to replace the current outdated references to part 405, subparts
G and H, with references to part 405, subpart I. We also proposed in
Sec. 478.40 to update the reference to the entity with responsibility
for the ALJ hearing function by replacing the SSA Office of Hearings
and Appeals with OMHA. 81 FR 43790, 43854.
We received no comments on these proposals. Accordingly, for the
reasons discussed above and in the proposed rule, we are finalizing
these changes to Sec. Sec. 478.14 and 478.40 as proposed above without
modification.
In addition to the revisions discussed above, as discussed in
section II.A.3 of this final rule, we are also finalizing revisions to
Sec. 478.40(c). In section II.A.3 of this final rule above, we discuss
our proposal to revise Sec. 478.40(c), the comments we received
related to this proposal, and the revisions we are finalizing to Sec.
478.40(c) in this rule.
2. Submitting a Request for a Hearing (Sec. 478.42)
Similar to current Sec. 478.40, as discussed above, current Sec.
478.42(a) has outdated references to SSA offices that are no longer
involved in the Medicare claim appeals process. In addition, current
Sec. 478.42(a) permits beneficiaries to file requests for an ALJ
hearing with other entities, which could cause significant delays in
obtaining a hearing
[[Page 5099]]
before an OMHA ALJ. We proposed in Sec. 478.42(a) to direct
beneficiaries to file a request for an ALJ hearing with the OMHA office
identified in the QIO's notice of reconsidered determination. This
revision would be clearer for beneficiaries, who are provided with
appeal instructions by the QIOs, and reduce delays in obtaining a
hearing by an OMHA ALJ. 81 FR 43790, 43854.
Current Sec. 478.42(b) requires that a request for hearing is
filed within 60 calendar days of receipt of the notice of the QIO
reconsidered determination and the date of receipt is assumed to be 5
days after the date on the notice unless there is a reasonable showing
to the contrary. Current Sec. 478.42(b) also provides that a request
is considered filed on the date it is postmarked. To align part 478,
subpart B with procedures for requesting an ALJ hearing under part 405,
subpart I; part 422, subpart M; and part 423, subpart U, we proposed in
Sec. 478.42(b) to provide that the request for hearing must be filed
within 60 ``calendar'' days of receiving notice of the QIO reconsidered
determination and that the notice is presumed to be received 5
``calendar'' days after the date of the notice. In addition, to further
align the part 478, subpart B procedures for requesting an ALJ hearing
with the other parts, we proposed in Sec. 478.42(c) to amend the
standard to demonstrate that notice of QIO reconsidered determination
was not received within 5 calendar days by requiring ``evidence''
rather than the current ``reasonable showing,'' and also to revise when
a request is considered filed, from the date it is postmarked to the
date it is received by OMHA. These changes would create parity with
requests for hearing filed by beneficiaries and enrollees for similar
services but under other parts of title 42, chapter IV. 81 FR 43790,
43854.
Provided below is a summary of the specific comment received and
our response to this comment:
Comment: We received one comment on these proposals. The commenter
asked whether there was an inconsistency in calculating time for
transport of mail from the QIO to the appellant, as compared to mail
from the appellant to OMHA. The commenter questioned why five calendar
days were allowed for transport from the date on the QIO notice, while
zero days were allowed on top of the statutory 60-day filing period for
transport of the request for hearing from the appellant.
Response: Proposed Sec. 478.42(b) revises when a request is
considered filed, from the date it is postmarked to the date it is
received by OMHA, to create parity with requests for hearing and
reviews of dismissals filed by beneficiaries and enrollees for similar
services but under part 405, subpart I; part 422, subpart M; and part
423, subpart U, all of which consider a request to be filed on the date
it is received by OMHA. For notices sent from the QIO to the appellant,
the regulation presumes a mailing time of five calendar days to account
for the time it takes to receive the notice through regular mail.
However, as is currently required for appellants under part 405,
subpart I; part 422, subpart M; and part 423, subpart U, we proposed
that appellants filing requests for hearing and reviews of dismissals
under part 478, subpart B would now be required to mail requests with
sufficient time for the requests to be received by OMHA no later than
the 60th day after receiving the QIO's reconsidered determination.
After review and consideration of the comments received, for the
reasons discussed above and in the proposed rule, we are finalizing the
changes to Sec. 478.42 as proposed without modification.
3. Determining the Amount in Controversy (Sec. 478.44)
Current Sec. 478.44(a) explains how the amount in controversy for
an ALJ hearing is determined in part 478, subpart B hearings. Current
Sec. 478.44(a) has outdated references to Sec. Sec. 405.740 and
405.817 from part 405, subparts G and H respectively, for calculating
the amount in controversy for an individual appellant or multiple
appellants. In 2012, subpart G was removed and subpart H was
significantly revised and no longer applies to Medicare claim appeals
(77 FR 29002). To update these reference to the current part 405 rules,
we proposed in Sec. 478.44(a) to replace the outdated cross-references
for calculating the amount in controversy with references to Sec.
405.1006(d) and (e), which describe the calculation for determining the
amount in controversy and the standards for aggregating claims by an
individual appellant or multiple appellants. 81 FR 43790, 43854. We
discuss our proposed changes to Sec. 405.1006 in section III.A.3.d of
the proposed rule and II.B.3.d of this final rule above.
Current Sec. 478.44(b) and (c) explain that if an ALJ determines
the amount in controversy is less than $200, the ALJ, without holding a
hearing, notifies the parties to the hearing, and if a request for
hearing is dismissed because the amount in controversy is not met, a
notice will be sent to the parties to the hearing. However, when a
request for hearing is dismissed because the amount in controversy is
not met, no hearing is conducted and the parties to the proceedings are
the same regardless of whether a hearing was conducted. To prevent
potential confusion, we proposed in Sec. 478.44(b) and (c) to replace
``parties to the hearing'' with ``parties'' so it is understood that
they are parties regardless of whether a hearing is conducted. Because
an attorney adjudicator would have to determine whether appeals
assigned to him or her, as proposed in section II.B of the proposed
rule (and discussed in section II.A.2 of this final rule above), meet
the amount in controversy requirement, we also proposed at Sec.
478.44(a) and (b) that an attorney adjudicator may determine the amount
in controversy, and may determine that the amount in controversy is
less than $200 and notify the parties to submit additional evidence to
prove that the amount in controversy is at least $200. However, because
we did not propose authority for an attorney adjudicator to dismiss a
request for an ALJ hearing because the amount in controversy is not
met, we proposed in Sec. 478.44(c) that in cases where an attorney
adjudicator has requested that the parties submit additional evidence
related to the amount in controversy, an ALJ would dismiss the request
for hearing if at the end of the 15-day period to submit additional
evidence to prove that the amount in controversy is at least $200, the
ALJ determines that the amount in controversy is less than $200. 81 FR
43790, 43854.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 478.44 as proposed without modification.
4. Medicare Appeals Council and Judicial Review (Sec. 478.46)
Current Sec. 478.46(a) states that the Council will review an
ALJ's hearing decision or dismissal under the same circumstances as
those set forth at 20 CFR 404.970, which is now an outdated reference
to SSA Appeals Council procedures for Council review. We proposed at
Sec. 478.46(a) to replace the outdated reference to 20 CFR 404.970
[[Page 5100]]
with references to current Sec. Sec. 405.1102 (``Request for Council
review when ALJ or attorney adjudicator issued a decision or
dismissal'') and 405.1110 (``Council reviews on its own motion''). In
addition, we proposed in Sec. 478.46(a) and (b) to replace ``hearing
decision'' with ``decision,'' and ``ALJ'' with ``ALJ or attorney
adjudicator'' because hearings are not always conducted and a decision
can generally be appealed regardless of whether a hearing was
conducted, and attorney adjudicators may issue decisions or dismissals
for which Council review may be requested, as proposed in section II.B
of the proposed rule (and discussed in section II.A.2 above). 81 FR
43790, 43855.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 478.46 as proposed without modification.
5. Reopening and Revision of a Reconsidered Determination or a Decision
(Sec. 478.48)
The title of current Sec. 478.48 references reopenings and
revisions of reconsidered determinations and hearing decisions, and
current Sec. 478.48 has an outdated reference to subpart G of 42 CFR
part 405 for the procedures for reopening a decision by an ALJ or the
DAB.
We proposed to revise the title of Sec. 478.48 to replace
``hearing decision'' with ``decision,'' and in proposed paragraphs (b)
and (c) to replace ``ALJ'' with ``ALJ or attorney adjudicator'' so the
provision is understood to apply to decisions by ALJs, regardless of
whether a hearing was conducted, or, as proposed in section II.B of the
proposed rule (and discussed in section II.A.2 above), attorney
adjudicators, as well as review decisions, which are conducted by the
Council at the DAB. We also proposed at Sec. 478.48(b) to replace the
outdated reference to Sec. 405.750(b), which was part of the now
removed part 405, subpart G (77 FR 29016 through 29018), with Sec.
405.980, which is the current part 405, subpart I reopening provision.
81 FR 43790, 43855.
We received no comments on these proposals, other than comments
discussed in section II.A.2 of this final rule above related to our
general proposals to provide authority for attorney adjudicators to
issue certain decisions, dismissals and remands, and to revise the
rules so that decisions and dismissals issued by attorney adjudicators
may be reopened and/or appealed in the same manner as equivalent
decisions and dismissals issued by ALJs. Accordingly, for the reasons
discussed above and in the proposed rule, we are finalizing the changes
to Sec. 478.48 as proposed without modification.
F. Effective Date and Applicability of the Provisions of the Final Rule
In accordance with 5 U.S.C. 553(d) and section 1871 of the Act,
publication of a final rule may be made not less than 30 days before
its effective date. We are making this final rule effective 60 days
after publication in the Federal Register to provide appellants, other
parties and potential parties and participants, and those who
adjudicate appeals with additional time to make any necessary changes
to comply with the provisions of the final rule.
Although we did not solicit comment on the effective date of the
final rule, we did receive one comment on the subject. Provided below
is a summary of that comment, along with our response to the comment
and further details about the effective date and applicability of the
final appeals provisions.
Comment: One commenter requested that the final rule not be made
effective for Part D plan sponsors prior to the next contract year that
is at least six months after the published effective date of the final
rule. The commenter believed this additional time would be necessary to
allow time for CMS to issue implementation guidance and for plans and
pharmacy benefit managers to revise policies and documentation to
describe the revised appeals procedures to enrollees.
Response: We do not believe further delaying the effective date of
this rule for Part D plan sponsors is necessary. Part D plan sponsors
will have 60 days from publication before the provisions of the final
rule become effective. In addition, the changes we are finalizing
relate primarily to the OMHA level of appeal. We proposed no changes to
the part 423, subpart M rules governing Part D plan sponsor coverage
determinations, redeterminations, or reconsiderations by an IRE, other
than minor conforming edits associated with our attorney adjudicator
proposal and the proposal to replace references to ``MAC'' with
``Council.'' We expect that enrollees will continue to receive
information about the OMHA level of appeal in the notice of the IRE's
reconsideration, and therefore we believe it is unnecessary to allow
additional time for Part D plan policies and documentation to be
updated to inform beneficiaries of the changes in the final rule.
While the provisions of this final rule are effective with the
effective date of this final rule, we recognize that there is currently
a large volume of pending appeals at the OMHA and Council levels that
were filed before the effective date of the final rule and are at
various stages of the adjudication process, and it may be unclear how
these final provisions will apply in those instances--and in a manner
that avoids retroactive application. The provisions of this final rule
will apply prospectively to all appeals, but specific provisions will
not be applied to pending appeals filed before the effective date of
the final rule in which certain actions or stages of the appeals
process have already taken place prior to the effective date. For
example, a revised requirement regarding the contents of a request for
hearing is effective with the effective date of this final rule, but
the requirement would not be applicable in a pending appeal if the
hearing request was already filed prior to the effective date of this
final rule (that is, the hearing request would not have to be re-filed
to include the new contents of the request finalized in this rule). But
for other appeals that are pending prior to the effective date of this
final rule, provisions of this final rule may be applicable if a
particular action or procedural step in those appeals has not yet taken
place (for example, a revised final requirement regarding scheduling
and sending notice of a hearing would apply if the hearing has not yet
been scheduled and the notice of hearing has not yet been sent in a
pending appeal).
Accordingly, the revised appeal procedures of this final rule are
effective on the effective date of the final rule for all appeals filed
on or after the effective date of the final rule, and appeals that were
filed, but not decided, dismissed or remanded, prior to the effective
date of the final rule. However, with regard to appeals that were
filed, but not decided, dismissed or remanded, prior to the effective
date of the final rule, we have provided a list of provisions in the
table below as examples to help clarify how the revised rules will
apply depending upon whether certain actions or procedures in such
appeals have taken place as of the effective date of the
[[Page 5101]]
final rule. This guidance clarifying the application of certain
provisions will help ensure pending appeals continue to move forward in
the appeals process, and avoid retroactive application of the revised
appeal provisions when certain actions or stages of the appeals process
took place prior to the effective date of this final rule. We will
provide additional guidance in the future, as necessary, to assist
appellants and other parties, as well as OMHA and the Council, in
regards to the application of the revised appeals procedures for
appeals that were pending prior to the effective date of the final
rule.
Application of Certain Final Appeals Provisions for Appeals That Were
Filed But Not Decided, Dismissed, or Remanded Prior to the Effective
Date of Final Rule
------------------------------------------------------------------------
Section(s) Applicability
------------------------------------------------------------------------
Sec. 405.910(d)(3)...................... Not applicable (any
applicable time frame will
not be impacted if an
appointment of
representative is
defective).
Sec. 405.910(l)......................... Applicable to delegations of
an appointment of
representation that are
made on or after the
effective date of the final
rule.
Sec. 405.990............................ Applicable to requests for
expedited access to
judicial review filed on or
after the effective date of
the final rule.
Sec. 405.1000(e)........................ Applicable to for waivers of
the right to appear filed
on or after the effective
date of the final rule.
Sec. 405.1006(e)........................ Not applicable (the
provisions of the rules
related to aggregating
claims to meet the amount
in controversy in effect at
the time the request for
hearing or request for
review of a QIC dismissal
was filed (current Sec.
405.1006(e)) continue to
apply).
Sec. 405.1010, Sec. 405.1012.......... Applicable to elections to
participate in the
proceedings on a request
for an ALJ hearing and
elections for party status
made on or after the
effective date of the final
rule.
Sec. 405.1014(a)........................ Not applicable (the
provisions of the rules
related to the content of
the request in effect at
the time the request for
hearing was filed (current
Sec. 405.1014(a))
continue to apply).
Sec. 405.1016(f)........................ Applicable to requests for
escalation filed on or
after the effective date of
the final rule.
Sec. 405.1020-Sec. 405.1024........... Applicable to hearings that
are scheduled or re-
scheduled on or after the
effective date of the final
rule, regardless of when
the hearing is scheduled to
occur.
Sec. 405.1028........................... Applicable to reviews of
evidence submitted by
parties that occur on or
after the effective date of
the final rule.
Sec. 405.1030........................... Applicable to hearings that
occur on or after the
effective date of the final
rule.
Sec. 405.1032(a)-(c).................... Applicable unless a hearing
was scheduled or re-
scheduled before the
effective date of the final
rule, regardless of when
the hearing is scheduled to
occur.
Sec. 405.1032(d)........................ Not applicable (the
provisions of the rules
related to appeals
involving statistical
sampling and extrapolations
in effect at the time the
request for hearing was
filed (current Sec.
405.1064) continue to
apply).
Sec. 405.1038(b)(1)(i).................. Applicable to waivers of the
right to appear filed on or
after the effective date of
the final rule.
Sec. 405.1038(b)(1)(ii)................. Not applicable (the
provisions of the rules
related to whether the ALJ
may decide a case on the
record and not conduct a
hearing when the appellant
lives outside of the United
States in effect at the
time the request for
hearing was filed (current
Sec. 405.1038(b)(1)(ii))
continue to apply).
Sec. 405.1040........................... Applicable to conferences
scheduled on or after the
effective date of the final
rule, regardless of when
the conferences are
scheduled to occur.
Sec. 405.1042(a)........................ Applicable to requests for
an ALJ hearing assigned to
an ALJ or attorney
adjudicator on or after the
effective date of the final
rule.
Sec. 405.1056(g)........................ Applicable to remands issued
on or after the effective
date of the final rule.
Sec. 405.1104........................... Applicable to requests for
escalation filed on or
after the effective date of
the final rule.
Sec. 423.1970(c)........................ Not applicable (the
provisions of the rules
related to aggregating
claims to meet the amount
in controversy in effect at
the time the request for
hearing or request for
review of a QIC dismissal
was filed (current Sec.
423.1970(c)) continue to
apply).
Sec. 423.1990........................... Applicable to requests for
expedited access to
judicial review filed on or
after the effective date of
the final rule.
Sec. 423.2000(e)........................ Applicable to waivers of the
right to appear filed on or
after the effective date of
the final rule.
Sec. 423.2010........................... Applicable to requests to
participate in the
proceedings on a request
for an ALJ hearing made on
or after the effective date
of the final rule.
Sec. 423.2014(a)........................ Not applicable (the
provisions of the rules
related to the content of
the request in effect at
the time the request for
hearing was filed (current
Sec. 423.2014(a))
continue to apply).
Sec. 423.2020-Sec. 423.2024........... Applicable to hearings that
are scheduled or re-
scheduled on or after the
effective date of the final
rule, regardless of when
the hearing is scheduled to
occur.
Sec. 423.2030........................... Applicable to hearings that
occur on or after the
effective date of the final
rule.
Sec. 423.2032........................... Applicable unless a hearing
was scheduled or re-
scheduled before the
effective date of the final
rule, regardless of when
the hearing is scheduled to
occur.
Sec. 423.2038(b)(1)(i).................. Applicable to waivers of the
right to appear filed on or
after the effective date of
the final rule.
Sec. 423.2038(b)(1)(ii)................. Not applicable (the
provisions of the rules
related to whether the ALJ
may decide a case on the
record and not conduct a
hearing when the appellant
lives outside of the United
States in effect at the
time the request for
hearing was filed (current
Sec. 423.2038(b)(1)(ii))
continue to apply).
Sec. 423.2040........................... Applicable to conferences
scheduled on or after the
effective date of the final
rule, regardless of when
the conferences are
scheduled to occur.
Sec. 423.2042(a)........................ Applicable to requests for
an ALJ hearing assigned to
an ALJ or an attorney
adjudicator on or after the
effective date of the final
rule.
Sec. 423.2056(g)........................ Applicable to remands issued
on or after the effective
date of the final rule.
Sec. 478.40(a).......................... Applicable to requests for
an ALJ hearing filed on or
after the effective date of
the final rule.
Sec. 478.42............................. Applicable to requests for
an ALJ hearing filed on or
after the effective date of
the final rule.
------------------------------------------------------------------------
[[Page 5102]]
III. 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 generally 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. In a few instances, commenters
captioned their comments indicating they were submitted in response to
a particular proposal, but the comment was nevertheless outside the
scope of the proposed rule. In these instances, we briefly summarized
the comments in section II of this final rule above, in the appropriate
subsection addressing the particular proposal.
IV. Provisions of the Final Rule
For the most part, this final rule incorporates the provisions of
the proposed rule. The provisions of this final rule that differ from
the proposed rule are as follows:
In response to public comment, we added the following
language to Sec. 401.109(a) to include the general criteria the DAB
Chair may consider when selecting a Council decision as precedential:
``In determining which decisions should be designated as precedential,
the DAB Chair may take into consideration decisions that address,
resolve, or clarify recurring legal issues, rules or policies, or that
may have broad application or impact, or involve issues of public
interest.'' We also added a parenthetical to indicate that the term
``DAB Chair'' is short for the Chair of the Department of Health and
Human Services Departmental Appeals Board.
For consistency with the rest of part 405, subpart I, and
because the terms ``ALJ'' and ``Council'' are already defined in Sec.
405.902, we removed ``Administrative Law Judge (ALJ)'' and ``Medicare
Appeals Council (Council)'' from Sec. 405.904(a)(1) and added ``ALJ''
and ``Council'' in their place, respectively.
For consistency with Sec. 405.1038, we removed language
that we inadvertently included in Sec. 405.1000(g) that is not
consistent with the language in Sec. 405.1038(a) as finalized in this
rule. We revised Sec. 405.1000(g) to state that ``An ALJ or attorney
adjudicator may also issue a decision on the record on his or her own
initiative if the evidence in the administrative record supports a
fully favorable finding for the appellant, and no other party to the
appeal is liable for the claims at issue, unless CMS or a contractor
has elected to be a party to the hearing in accordance with Sec.
405.1012.''
In response to public comment, we did not finalize our
proposal at Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable
amount to calculate the amount in controversy for items and services
that are priced based on a published Medicare fee schedule or published
contractor-priced amount. In addition, we did not finalize Sec.
405.1006(d)(2)(i)(B) because, given that we did not finalize Sec.
405.1006(d)(2)(i)(A), there was no longer a need to distinguish between
items and services with and without a published Medicare fee schedule
or contractor-priced amount. We also did not finalize proposed Sec.
405.1006(d)(2) and (d)(2)(i) introductory text or proposed Sec.
405.1006(d)(1) introductory text. Accordingly, we maintained the text
of current Sec. 405.1006(d)(1), except that we: (1) Added ``In
general'' as a paragraph heading, as proposed; (2) replaced ``for the
items and services in question'' with ``for the items and services in
the disputed claim'' in Sec. 405.1006(d)(1) introductory text, as
proposed; and (3) replaced ``Any deductible and coinsurance amounts
applicable in the particular case'' in current Sec. 405.1006(d)(1)(ii)
with ``Any deductible and/or coinsurance amounts that may be collected
for the items or services,'' as proposed. In addition, we also did not
finalize our proposal to revise and re-designate current Sec.
405.1006(d)(2) as Sec. 405.1006(d)(3), except for the proposal to add
``Limitation on liability'' as a paragraph heading. However, for
consistency with paragraph (d)(1)(ii), as finalized, we replaced ``any
deductible and coinsurance amounts applicable in the particular case''
in current Sec. 405.1006(d)(2) with ``any deductible and/or
coinsurance amounts that may be collected for the items or services.''
We also did not finalize proposed Sec. 405.1006(d)(2)(ii) and (iii).
We finalized proposed Sec. 405.1006 paragraphs (d)(4),
(5), (6), and (7) with the modifications discussed below, but re-
designated them as paragraphs (d)(3), (4), (5), and (6), respectively,
because we did not finalize proposed Sec. 405.1006(d)(2) or re-
designate current Sec. 405.1006(d)(2) as Sec. 405.1006(d)(3). We
replaced ``in accordance with paragraphs (d)(1) and (d)(2)(ii) of this
section, except that the basis for the amount in controversy'' in
paragraph (d)(3) (proposed paragraph (d)(4)) with ``in accordance with
paragraph (d)(1) of this section, except that the amount charged to the
individual.'' In addition, we replaced ``Notwithstanding paragraphs
(d)(1) and (2) of this section'' in paragraphs (d)(4), (5), and (6)
(proposed paragraphs (d)(5), (6), and (7)) with ``Notwithstanding
paragraph (d)(1) of this section.''
We corrected a drafting error in the text of proposed
Sec. 405.1010(c)(3)(i) by replacing ``by within 14 calendar days''
with ``within 14 calendar days.''
In response to public comment, we added a requirement in
Sec. Sec. 405.1010(c)(3)(ii), 405.1012(c)(2)(ii) and
423.2010(d)(3)(ii) that copies of position papers and/or written
testimony (and for purposes of Sec. 405.1012(c)(2)(ii), any evidence)
submitted to OMHA must be sent to the other parties within the same
time frames that apply to the submissions to OMHA.
We added language to Sec. 405.1010(d)(3) to provide that
CMS or a contractor that is precluded from participating in the oral
hearing may still be called as a witness by CMS or a contractor that is
a party to the hearing in accordance with Sec. 405.1012. In light of
this change, we also made a corresponding revision to Sec.
405.1010(c)(2) to state that when CMS or its contractor participates in
an ALJ hearing, CMS or its contractor may not be called as a witness
during the hearing and is not subject to examination or cross-
examination by the parties, except as provided in Sec. 405.1010(d)(3).
We clarified in Sec. 405.1012(a)(2) that an ALJ may not
request that CMS and/or one or more of its contractors be a party to
the hearing if the request for hearing was filed by an unrepresented
beneficiary.
In response to public comment, we did not finalize our
proposals at Sec. Sec. 405.1014(a)(1)(vii) and 423.2014(a)(1)(vii),
which would have required that the request for hearing contain a
statement of whether the filing party is aware that it or the claim is
the subject of an investigation or proceeding by OIG or other law
enforcement agencies.
In response to public comment, we did not finalize our
proposal at Sec. 405.1014(a)(1)(viii), which would have required that,
for requests filed by providers, suppliers, Medicaid State agencies,
applicable plans, or a beneficiary who is represented by a provider,
supplier or Medicaid State agency, the request for hearing must include
the amount in controversy applicable to the disputed claim determined
in accordance with Sec. 405.1006, unless the matter involves a
provider or supplier termination of
[[Page 5103]]
Medicare-covered items or services that is disputed by a beneficiary,
and the beneficiary did not elect to continue receiving the items or
services.
We removed the term ``entity office,'' which was a
drafting error, from proposed Sec. 405.1014(c)(2) and added ``office''
in its place.
We clarified Sec. Sec. 405.1014(c)(2) and
423.2014(d)(2)(i) to state that if the request for hearing is timely
filed with an office other than the office specified in the QIC's
reconsideration, the request is not treated as untimely.
We revised 405.1014(d)(3) to state that unrepresented
beneficiaries are exempt from the potential consequences of failing to
send a copy of the request, materials, and/or evidence or summary
thereof to the other parties.
We corrected a drafting error by adding a missing comma to
Sec. 423.2018(b)(1) and (c)(1) for consistency with Sec. 405.1018(a)
and to clarify that there are three time frames when a represented
enrollee may submit written or other evidence he or she wishes to have
considered: (1) With the request for hearing; (2) by the date specified
in the request for hearing in accordance with Sec. 423.2014(a)(2); or
(3) if a hearing is scheduled, within 10 calendar days (or 3 calendar
days for expedited Part D appeals) of receiving the notice of hearing.
We revised Sec. 405.1018(d) to provide in paragraph
(d)(1) that the requirements in paragraphs (a) and (b) do not apply to
oral testimony given at a hearing or to evidence submitted by
unrepresented beneficiaries, and in (d)(2) that the requirement in
paragraph (c) to support new evidence with a statement of good cause
does not apply to oral testimony given at a hearing or to evidence
submitted by an unrepresented beneficiary, CMS or any of its
contractors, a Medicaid State agency, an applicable plan, or a
beneficiary represented by someone other than a provider or supplier.
We revised Sec. 405.1020(c)(1) to state that the notice
of hearing is also sent to CMS or any contractor that has elected to
participate in the proceedings in accordance with Sec. 405.1010(b).
Because we proposed to adopt in Sec. 423.2020(b)(2) the
same revisions as in Sec. 405.1020(b)(2), we revised Sec.
423.2020(b)(2)(ii)(A) to state ``video-teleconferencing and telephone
technology are not available,'' rather than ``video-teleconferencing or
telephone technology is not available,'' for consistency with Sec.
405.1020(b)(2)(ii)(A) as finalized.
In response to public comment, we revised Sec. Sec.
405.1030(b)(2) and 423.2030(b)(2) to provide that the ALJ may limit
testimony and/or argument at the hearing that are not relevant to an
issue before the ALJ, that are repetitive of evidence or testimony
already in the record, or that relate to an issue that has been
sufficiently developed or on which the ALJ has already ruled.
In response to public comment, we revised Sec. Sec.
405.1030(b)(3) and 423.2030(b)(3) to clarify that a party or party's
representative (or enrollee or enrollee's representative in the context
of Sec. 423.2030(b)(3)) may be excused from a hearing if that
individual remains uncooperative, disruptive to the hearing, or abusive
during the course of the hearing after the ALJ has warned the party or
representative to stop such behavior.
We revised Sec. Sec. 405.1034(a)(1) and 423.2034(a)(1) to
provide that OMHA will confirm whether an electronic copy of the
redetermination or reconsideration is available in the official system
of record prior to issuing a request for that information to the QIC or
IRE and if so, will accept the electronic copy as the official copy. We
also replaced ``can only be provided by CMS, the IRE, and/or the Part D
plan sponsor'' in proposed Sec. 423.2034(a)(1), which was a drafting
error, with ``can be provided only by CMS, the IRE, and/or the Part D
plan sponsor,'' for consistency with the definition in Sec.
423.2034(a)(2).
We revised Sec. 405.1038(c) to provide that if the amount
of payment is an issue before the ALJ or attorney adjudicator, a
stipulated decision may be made if the statement from CMS or its
contractor agrees to the amount of payment the party believes should be
made. We made a corresponding change to Sec. 423.2038(c) for
stipulated decisions in part 423, subpart U proceedings.
We revised Sec. 405.1052(a)(7) and (b)(4) to provide that
a request for hearing or a request for review of a QIC dismissal filed
by an unrepresented beneficiary will not be dismissed if the appellant
fails to send a copy of the request to the other parties in accordance
with proposed Sec. 405.1014(d).
We revised Sec. Sec. 405.1056(g) and 423.2056(g) to add
language to specifically exempt remands that are issued on a review of
a QIC's or IRE's dismissal of a request for reconsideration from
potential review by the Chief ALJ or designee.
We corrected a drafting error in proposed Sec.
405.1110(b)(2) by removing two references to a ``hearing decision''
under Sec. 405.1046(a) and replacing them with ``decision,'' because
Sec. 405.1046(a) as finalized in this rule also addresses decisions
issued by an ALJ or attorney adjudicator when a hearing is not held.
We revised Sec. Sec. 422.562(d) and 478.40(c) to specify
in greater detail those part 405 provisions that implement specific
sections of section 1869 of the Act that are not also included in
sections 1852 and 1155 of the Act, and that we do not believe apply to
part 422, subpart M or part 478, subpart B adjudications. Specifically,
we are revising these regulations to provide that the following
regulations in part 405, and any references thereto, do not apply to
proceedings under part 422, subpart M or part 478, subpart B: (1) Sec.
405.950 (time frames for making a redetermination); (2) Sec. 405.970
(time frames for making a reconsideration following a contractor
redetermination, including the option to escalate an appeal to the OMHA
level); (3) Sec. 405.1016 (time frames for deciding an appeal of a QIC
reconsideration or escalated request for a QIC reconsideration,
including the option to escalate an appeal to the Council); (4) The
option to request that an appeal be escalated from the OMHA level to
the Council as provided in Sec. 405.1100(b) and the time frame for the
Council to decide an appeal of an ALJ's or attorney adjudicator's
decision or an appeal that is escalated from the OMHA level to the
Council as provided in Sec. 405.1100(c) and (d); (5) Sec. 405.1132
(request for escalation to Federal court); and (6) Sec. Sec.
405.956(b)(8), 405.966(a)(2), 405.976(b)(5)(ii), 405.1018(c),
405.1028(a), and 405.1122(c), and any other references to requiring a
determination of good cause for the introduction of new evidence by a
provider, supplier, or a beneficiary represented by a provider or
supplier.
We revised the second sentence of Sec. 422.608 to
reference Sec. 422.562(d), such that this sentence states, ``The
regulations under part 405 of this chapter regarding Council review
apply to matters addressed by this subpart to the extent they are
appropriate, except as provided in Sec. 422.562(d)(2).''
For consistency with the title of part 423, subpart U as
finalized, the revisions finalized related to attorney adjudicator
reviews, and the revisions finalized to replace references to ``MAC''
with ``Council,'', we made technical conforming revisions to Sec.
423.558(b) replace the reference to ``MAC'' with ``Council'' and the
reference to ``ALJ hearings'' with ``ALJ hearings and ALJ and attorney
adjudicator decisions.'' We also made a technical edit to replace
``Judicial review'' with ``judicial review.''
[[Page 5104]]
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We solicited public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
The PRA exempts most of the information collection activities
referenced in this final rule. In particular, the implementing
regulations of the PRA at 5 CFR 1320.4 exclude collection activities
during the conduct of a civil action to which the United States or any
official or agency thereof is a party. Civil actions include
administrative actions such as redeterminations, reconsiderations, and/
or appeals. Specifically, these actions are taken after the initial
determination or a denial of payment, or MAO organization determination
or Part D plan sponsor coverage determination. However, one requirement
contained in this final rule is subject to the PRA because the burden
is imposed prior to an administrative action or denial of payment. This
requirement is discussed below.
In summary, Sec. 405.910 requires that when a provider or supplier
is the party appointing a representative, the appointment of
representation would include the Medicare National Provider Identifier
(NPI) of the provider or supplier that furnished the item of service.
Although this is a new regulatory requirement, the current Medicare
Claims Processing Manual already states that the NPI should be included
when a provider or supplier appoints a representative. The standardized
form for appointing a representative, Form CMS-1696, currently provides
a space for the information in question. Importantly, this form is
currently approved under OMB control number 0938-0950 and expires June
30, 2018.
The burden associated with this requirement is the time and effort
of an individual or entity who is a provider or supplier to prepare an
appointment of representation containing the NPI. As stated earlier,
this requirement and the related burden are subject to the PRA;
however, because we believe that this information is already routinely
being collected, we estimate there would be no additional burden for
completing an appointment of representative in accordance with Sec.
405.910.
If you wish to view the standardized form and the supporting
documentation, you can download a copy from the CMS Web site at https://www.cms.gov/medicare/cms-forms/cms-forms/cms-forms-list.html.
We have submitted a copy of this final rule to OMB for its review
of the information collection requirements described above.
If you wish to comment on these information collection, that is,
reporting, recordkeeping or third-party disclosure requirements, please
submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
HHS-2016-79, Fax: (202) 395-6974; or Email:
[email protected].
VI. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), Executive Order 13563 on Improving Regulation and Regulatory
Review (January 18, 2011), the Regulatory Flexibility Act (RFA)
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct 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).
We have determined that the effect of this final rule does not reach
this economic threshold and thus is not considered a major rule. As
detailed above, this final rule would only make minimal changes to the
existing Medicare appeals procedures for claims for benefits under or
entitlement to the original Medicare programs, and coverage of items,
services, and drugs under the MA and voluntary Medicare prescription
drug programs. Thus, this final rule would have negligible financial
impact on beneficiaries and enrollees, providers or suppliers, Medicare
contractors, MAOs, and Part D plan sponsors, but would derive benefits
to the program and appellants.
HHS recognizes that the current appeals backlog is a matter of
great significance, and it has made it a priority to adopt measures
that are designed to reduce the backlog and improve the overall
Medicare appeals process. To that end, HHS has initiated a series of
measures, including this final regulation, that are aimed at both
reducing the backlog and creating a more efficient Medicare appeals
system.
We believe the changes in this regulation will help address the
Medicare appeals backlog and create efficiencies at the ALJ level of
appeal by allowing OMHA to reassign a portion of workload to non-ALJ
adjudicators and reduce procedural ambiguities that result in
unproductive efforts at OMHA and unnecessary appeals to the Medicare
Appeals Council. In addition, the other changes, including precedential
decisions and generally limiting CMS and CMS contractor participation
or party status at the OMHA level unless the ALJ determines
participation by additional entities is necessary for a full
examination of the matters at issue (as provided in proposed Sec. Sec.
405.1010(d) and 405.1012(d)), will collectively make the ALJ hearing
process more efficient through streamlined and standardized procedures
and more consistent decisions, and reduce appeals to the Medicare
Appeals Council.
In particular, we are able to estimate the impact from one of the
changes--the expansion of the pool of adjudicators. Based on FY 2016,
and an assumption that future years are similar to FY 2016, we estimate
that the expansion of the pool of adjudicators at OMHA could redirect
approximately 24,500 appeals per year to attorney adjudicators who
would be able to process these appeals at a lower cost than would be
required if only ALJs were used to address the same workload. If in
future years the number of requests for hearing, waivers of oral
hearing, requests for review of a contractor dismissal, or appellant
[[Page 5105]]
withdrawals of requests for hearing vary from FY 2016 data, then the
number of appeals potentially addressed by attorney adjudicators would
likely also vary.
In the proposed rule, we also estimated that the proposed
modifications to calculating the amount in controversy required for an
ALJ hearing could potentially remove appeals related to over 2,600 Part
B low-value claims per year from the ALJ hearing process, after
accounting for the likelihood of appellants aggregating claims to meet
the AIC. 81 FR 43790, 43856. However, as discussed in section II.B.3.d
of this final rule above, we are not finalizing our proposal under
Sec. 405.1006(d)(2)(i)(A) to use the Medicare allowable amount as the
basis for the amount in controversy for items and services that are
priced based on a published Medicare fee schedule or published
contractor-priced amount. Although we are finalizing separate
calculations of the amount in controversy to address the situations in
proposed Sec. 405.1006(d)(3) through (7), we do not expect these
provisions will have a meaningful effect on the number of appeals
eligible for an ALJ hearing.
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA)
requires agencies to prepare a final regulatory flexibility analysis to
describe the impact of the proposed rule on small entities, unless the
head of the agency can certify that the rule would not have a
significant economic impact on a substantial number of small entities.
The RFA generally defines a ``small entity'' as: (1) A proprietary firm
meeting the size standards of the Small Business Administration (SBA);
(2) a not-for-profit organization that is not dominant in its field; or
(3) a small government jurisdiction with a population of less than
50,000. States and individuals are not included in the definition of
``small entity.'' HHS uses as its measure of significant economic
impact on a substantial number of small entities a change in revenues
of more than 3 to 5 percent.
For purposes of the RFA, most providers and suppliers are small
entities, either by nonprofit status or by having revenues of less than
$7.5 million to $38.5 million in any one year. In addition, a number of
MAOs and Part D plan sponsors (insurers) are small entities due to
their nonprofit status; however, few if any meet the SBA size standard
for a small insurance firm by having revenues of $38.5 million or less
in any one year. Individuals and States are not included in the
definition of a small entity. We have determined and we certify that
this final rule would not have a significant economic impact on a
substantial number of small entities because as noted above, this final
rule makes only minimal changes to the existing appeals procedures.
Therefore, we did not prepare an analysis for the RFA.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis (RIA) if a rule may have a significant
impact on the operations of a substantial number of small rural
hospitals. For final rules, this analysis must conform to the
provisions of section 604 of the RFA. For purposes of section 1102(b)
of the Act, we define a small rural hospital as a hospital that is
located outside of a Metropolitan Statistical Area for Medicare payment
regulations and has fewer than 100 beds. We have determined that this
final rule would not have a significant effect on the operations of a
substantial number of small rural hospitals. As noted above, this final
rule makes only minimal changes to the existing appeals procedures and
thus, would not have a significant impact on small entities or the
operations of a substantial number of small rural hospitals. Therefore,
we did not prepare an analysis for section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that would include any Federal mandate that may result
in expenditure in any one year by State, local, or Tribal governments,
in the aggregate, or by the private sector, of $100 million in 1995
dollars, updated annually for inflation. Currently, that threshold is
approximately $146 million. This final rule would not impose spending
costs on State, local, or tribal governments in the aggregate, or on
the private sector in the amount of $146 million in any one year,
because as noted above, this final rule makes only minimal changes to
the existing appeals procedures.
VII. Federal Analysis
Executive Order 13132 on Federalism establishes certain
requirements that an agency must meet when it publishes 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 rule does not impose
substantial direct requirement costs on State or local governments,
preempt State law, or otherwise implicate Federalism.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 401
Claims, Freedom of information, Health facilities, Medicare,
Privacy.
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medical devices, Medicare, Reporting and
recordkeeping requirements, Rural areas, X-rays.
42 CFR Part 422
Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Medicare, Penalties, Privacy, and
Reporting and recordkeeping requirements.
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.
42 CFR Part 478
Administrative practice and procedure, Health care, Health
professions, Peer Review Organizations (PRO), Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Department of Health
and Human Services amends 42 CFR chapter IV as set forth below:
PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS
0
1. The authority citation for part 401 continues to read as follows:
Authority: Secs. 1102, 1871, and 1874(e) of the Social Security
Act (42 U.S.C. 1302, 1395hh, and 1395w-5).
0
2. Section 401.109 is added to read as follows:
Sec. 401.109 Precedential Final Decisions of the Secretary.
(a) The Chair of the Department of Health and Human Services
Departmental Appeals Board (DAB Chair) may designate a final decision
of the Secretary issued by the Medicare Appeals Council in accordance
with part 405, subpart I; part 422, subpart M; part 423, subpart U; or
part 478, subpart B, of this chapter as precedential. In determining
which decisions should be designated as precedential, the DAB Chair may
take into consideration
[[Page 5106]]
decisions that address, resolve, or clarify recurring legal issues,
rules or policies, or that may have broad application or impact, or
involve issues of public interest.
(b) Precedential decisions are made available to the public, with
personally identifiable information of the beneficiary removed, and
have precedential effect from the date they are made available to the
public. Notice of precedential decisions is published in the Federal
Register.
(c) Medicare Appeals Council decisions designated in accordance
with paragraph (a) of this section have precedential effect and are
binding on all CMS components, on all HHS components that adjudicate
matters under the jurisdiction of CMS, and on the Social Security
Administration to the extent that components of the Social Security
Administration adjudicate matters under the jurisdiction of CMS.
(d) Precedential effect, as used in this section, means that the
Medicare Appeals Council's--
(1) Legal analysis and interpretation of a Medicare authority or
provision is binding and must be followed in future determinations and
appeals in which the same authority or provision applies and is still
in effect; and
(2) Factual findings are binding and must be applied to future
determinations and appeals involving the same parties if the relevant
facts are the same and evidence is presented that the underlying
factual circumstances have not changed since the issuance of the
precedential final decision.
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
3. The authority citation for part 405 continues to read as follows:
Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874,
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a),
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
0
4. Section 405.902 is amended by adding the definitions of ``Attorney
Adjudicator'', ``Council'', and ``OMHA'' in alphabetical order and
removing the definition of ``MAC''
The additions read as follows:
Sec. 405.902 Definitions.
* * * * *
Attorney Adjudicator means a licensed attorney employed by OMHA
with knowledge of Medicare coverage and payment laws and guidance, and
authorized to take the actions provided for in this subpart on requests
for ALJ hearing and requests for reviews of QIC dismissals.
* * * * *
Council stands for the Medicare Appeals Council within the
Departmental Appeals Board of the U.S. Department of Health and Human
Services.
* * * * *
OMHA stands for the Office of Medicare Hearings and Appeals within
the U.S. Department of Health and Human Services, which administers the
ALJ hearing process in accordance with section 1869(b)(1) of the Act.
* * * * *
0
5. Section 405.904 is amended by revising paragraphs (a)(1) and (2) to
read as follows:
Sec. 405.904 Medicare initial determinations, redeterminations and
appeals: General description.
(a) * * *
(1) Entitlement appeals. The SSA makes an initial determination on
an application for Medicare benefits and/or entitlement of an
individual to receive Medicare benefits. A beneficiary who is
dissatisfied with the initial determination may request, and SSA will
perform, a reconsideration in accordance with 20 CFR part 404, subpart
J if the requirements for obtaining a reconsideration are met.
Following the reconsideration, the beneficiary may request a hearing
before an ALJ under this subpart (42 CFR part 405, subpart I). If the
beneficiary obtains a hearing before an ALJ and is dissatisfied with
the decision of the ALJ, or if the beneficiary requests a hearing and
no hearing is conducted, and the beneficiary is dissatisfied with the
decision of an ALJ or an attorney adjudicator, he or she may request
the Council to review the case. Following the action of the Council,
the beneficiary may be entitled to file suit in Federal district court.
(2) Claim appeals. The Medicare contractor makes an initial
determination when a claim for Medicare benefits under Part A or Part B
is submitted. A beneficiary who is dissatisfied with the initial
determination may request that the contractor perform a redetermination
of the claim if the requirements for obtaining a redetermination are
met. Following the contractor's redetermination, the beneficiary may
request, and the Qualified Independent Contractor (QIC) will perform, a
reconsideration of the claim if the requirements for obtaining a
reconsideration are met. Following the reconsideration, the beneficiary
may request a hearing before an ALJ. If the beneficiary obtains a
hearing before the ALJ and is dissatisfied with the decision of the
ALJ, or if the beneficiary requests a hearing and no hearing is
conducted, and the beneficiary is dissatisfied with the decision of an
ALJ or attorney adjudicator, he or she may request the Council to
review the case. If the Council reviews the case and issues a decision,
and the beneficiary is dissatisfied with the decision, the beneficiary
may file suit in Federal district court if the amount remaining in
controversy and the other requirements for judicial review are met.
* * * * *
Sec. 405.906 [Amended]
0
6. Section 405.906(b) introductory text is amended by--
0
a. Removing from the paragraph heading the phrase ``hearing and MAC''
and adding ``proceedings on a request for hearing, and Council review''
in its place.
0
b. Removing the phrase ``hearing, and MAC review'' and adding
``proceedings on a request for hearing, and Council review'' in its
place.
Sec. 405.908 [Amended]
0
7. Section 405.908 is amended by removing the term ``ALJ'' and adding
``OMHA'' in its place and by removing the term ``MAC'' and adding
``Council'' in its place.
0
8. Section 405.910 is amended by--
0
a. Revising paragraph (c)(5).
0
b. Adding paragraph (d)(3).
0
c. Revising paragraphs (f)(1) and (i)(2) and (3).
0
d. Revising paragraph (l).
0
e. Adding paragraph (m)(4).
The additions and revisions read as follows:
Sec. 405.910 Appointed representatives.
* * * * *
(c) * * *
(5) Identify the beneficiary's Medicare health insurance claim
number when the beneficiary is the party appointing a representative,
or identify the Medicare National Provider Identifier number of the
provider or supplier that furnished the item or service when the
provider or supplier is the party appointing a representative;
* * * * *
(d) * * *
(3) If an adjudication time frame applies, the time from the later
of the date that a defective appointment of representative was filed or
the current appeal request was filed by the prospective appointed
representative, to
[[Page 5107]]
the date when the defect was cured or the party notifies the
adjudicator that he or she will proceed with the appeal without a
representative does not count towards the adjudication time frame.
* * * * *
(f) * * *
(1) General rule. An appointed representative for a beneficiary who
wishes to charge a fee for services rendered in connection with an
appeal before the Secretary must obtain approval of the fee from the
Secretary. Services rendered below the OMHA level are not considered
proceedings before the Secretary.
* * * * *
(i) * * *
(2) Appeals. When a contractor, QIC, ALJ or attorney adjudicator,
or the Council takes an action or issues a redetermination,
reconsideration, or appeal decision, in connection with an initial
determination, it sends notice of the action to the appointed
representative.
(3) The contractor, QIC, ALJ or attorney adjudicator, or Council
sends any requests for information or evidence regarding a claim that
is appealed to the appointed representative. The contractor sends any
requests for information or evidence regarding an initial determination
to the party.
* * * * *
(l) Delegation of appointment by appointed representative. (1) An
appointed representative may not designate another individual to act as
the appointed representative of the party unless--
(i) The appointed representative provides written notice to the
party of the appointed representative's intent to delegate to another
individual, which contains the name of the designee and the designee's
acceptance to be obligated by and comply with the requirements of
representation under this subpart; and
(ii) The party accepts the designation as evidenced by a written
statement signed by the party. The written statement signed by the
party is not required when the appointed representative and designee
are attorneys in the same law firm or organization and the notice
described in paragraph (l)(1)(i) of this section so indicates.
(2) A delegation is not effective until the adjudicator receives a
copy of the acceptance described in paragraph (l)(1)(ii) of this
section, unless the appointed representative and designee are attorneys
in the same law firm or organization, in which case the notice
described in paragraph (l)(1)(i) of this section may be submitted even
though the acceptance described in paragraph (l)(1)(ii) of this section
is not required.
(3) A party's or representative's failure to notify the adjudicator
that an appointment of representative has been delegated is not good
cause for missing a deadline or not appearing at a hearing.
(m) * * *
(4) A party's or representative's failure to notify the adjudicator
that an appointment of representative has been revoked is not good
cause for missing a deadline or not appearing at a hearing.
0
9. Section 405.926 is amended by revising paragraphs (l) and (m) to
read as follows:
Sec. 405.926 Actions that are not initial determinations.
* * * * *
(l) A contractor's, QIC's, ALJ's or attorney adjudicator's, or
Council's determination or decision to reopen or not to reopen an
initial determination, redetermination, reconsideration, decision, or
review decision.
(m) Determinations that CMS or its contractors may participate in
the proceedings on a request for an ALJ hearing or act as parties in an
ALJ hearing or Council review.
* * * * *
Sec. 405.956 [Amended]
0
10. Section 405.956(b)(8) is amended by removing the phrase ``an ALJ
hearing'' and adding ``the OMHA level'' in its place.
0
11. Section 405.968 is amended by revising paragraph (b)(1) to read as
follows:
Sec. 405.968 Conduct of a reconsideration.
* * * * *
(b) * * *
(1) National coverage determinations (NCDs), CMS Rulings, Council
decisions designated by the Chair of the Departmental Appeals Board as
having precedential effect under Sec. 401.109 of this chapter, and
applicable laws and regulations are binding on the QIC.
* * * * *
0
12. Section 405.970 is amended by revising the section heading and
paragraphs (a) introductory text, (b), (c) introductory text, (e)(1),
(e)(2)(i) and (ii) to read as follows:
Sec. 405.970 Timeframe for making a reconsideration following a
contractor redetermination.
(a) General rule. Within 60 calendar days of the date the QIC
receives a timely filed request for reconsideration following a
contractor redetermination or any additional time provided by paragraph
(b) of this section, the QIC mails, or otherwise transmits to the
parties at their last known addresses, written notice of--
* * * * *
(b) Exceptions. (1) If a QIC grants an appellant's request for an
extension of the 180 calendar day filing deadline made in accordance
with Sec. 405.962(b), the QIC's 60 calendar day decision-making
timeframe begins on the date the QIC receives the late filed request
for reconsideration following a contractor redetermination, or when the
request for an extension that meets the requirements of Sec.
405.962(b) is granted, whichever is later.
(2) If a QIC receives timely requests for reconsideration following
a contractor redetermination from multiple parties, consistent with
Sec. 405.964(c), the QIC must issue a reconsideration, notice that it
cannot complete its review, or dismissal within 60 calendar days for
each submission of the latest filed request.
(3) Each time a party submits additional evidence after the request
for reconsideration following a contractor redetermination is filed,
the QIC's 60 calendar day decisionmaking timeframe is extended by up to
14 calendar days for each submission, consistent with Sec. 405.966(b).
(c) Responsibilities of the QIC. Within 60 calendar days of
receiving a request for a reconsideration following a contractor
redetermination, or any additional time provided for under paragraph
(b) of this section, a QIC must take one of the following actions:
* * * * *
(e) * * *
(1) If the appellant fails to notify the QIC, or notifies the QIC
that the appellant does not choose to escalate the case, the QIC
completes its reconsideration following a contractor redetermination
and notifies the appellant of its action consistent with Sec. 405.972
or Sec. 405.976.
(2) * * *
(i) Complete its reconsideration following a contractor
redetermination and notify all parties of its decision consistent with
Sec. 405.972 or Sec. 405.976.
(ii) Acknowledge the escalation notice in writing and forward the
case file to OMHA.
0
13. Section 405.972 is amended--
0
a. By revising the section heading.
0
b. In paragraph (b)(3) by removing the phrase ``reconsideration of a
contractor's dismissal'' and adding ``review of a contractor's
dismissal'' in its place.
0
c. In paragraph (e) by adding the phrase ``or attorney adjudicator''
after the phrase ``modified or reversed by an ALJ'' and removing the
phrase
[[Page 5108]]
``reconsideration of a contractor's dismissal'' and adding ``review of
a contractor's dismissal'' in its place.
The revision reads as follows:
Sec. 405.972 Withdrawal or dismissal of a request for reconsideration
or review of a contractor's dismissal of a request for redetermination.
* * * * *
0
14. Section 405.974 is amended by revising the section heading, the
heading to paragraph (b), and paragraph (b)(3) to read as follows:
Sec. 405.974 Reconsideration and review of a contractor's dismissal
of a request for redetermination.
* * * * *
(b) Review of a contractor's dismissal of a redetermination
request.
* * * * *
(3) A QIC's review of a contractor's dismissal of a redetermination
request is binding and not subject to further review.
0
15. Section 405.976 is amended--
0
a. In paragraph (b)(5)(ii) by removing the phrase ``at an ALJ level, or
made part of the administrative record'' and adding ``at the OMHA
level'' in its place.
0
b. By revising paragraph (b)(7).
The revision reads as follows:
Sec. 405.976 Notice of a reconsideration.
* * * * *
(b) * * *
(7) A statement of whether the amount in controversy is estimated
to meet or not meet the amount required for an ALJ hearing, if--
(i) The request for reconsideration was filed by a beneficiary who
is not represented by a provider, supplier, or Medicaid State agency;
and
(ii) The reconsideration decision is partially or fully
unfavorable.
* * * * *
Sec. 405.978 [Amended]
0
16. Section 405.978(a) is amended by removing the phrase ``An ALJ
decision'' and adding ``An ALJ or attorney adjudicator decision'' in
its place.
0
17. Section 405.980 is amended by revising the section heading and
paragraphs (a)(1)(iii) and (iv), (a)(4) and (5), (d) paragraph heading,
(d)(2) and (3), (e) paragraph heading, and (e)(2) and (3) to read as
follows:
Sec. 405.980 Reopening of initial determinations, redeterminations,
reconsiderations, decisions, and reviews.
(a) * * *
(1) * * *
(iii) An ALJ or attorney adjudicator to revise his or her decision;
or
(iv) The Council to revise the ALJ or attorney adjudicator
decision, or its review decision.
* * * * *
(4) When a party has filed a valid request for an appeal of an
initial determination, redetermination, reconsideration, ALJ or
attorney adjudicator decision, or Council review, no adjudicator has
jurisdiction to reopen an issue on a claim that is under appeal until
all appeal rights for that issue are exhausted. Once the appeal rights
for the issue have been exhausted, the contractor, QIC, ALJ or attorney
adjudicator, or Council may reopen as set forth in this section.
(5) The contractor's, QIC's, ALJ's or attorney adjudicator's, or
Council's decision on whether to reopen is binding and not subject to
appeal.
* * * * *
(d) Time frame and requirements for reopening reconsiderations,
decisions and reviews initiated by a QIC, ALJ or attorney adjudicator,
or the Council.
* * * * *
(2) An ALJ or attorney adjudicator may reopen his or her decision,
or the Council may reopen an ALJ or attorney adjudicator decision on
its own motion within 180 calendar days from the date of the decision
for good cause in accordance with Sec. 405.986. If the decision was
procured by fraud or similar fault, then the ALJ or attorney
adjudicator may reopen his or her decision, or the Council may reopen
an ALJ or attorney adjudicator decision, at any time.
(3) The Council 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. 405.986. If the Council's decision was
procured by fraud or similar fault, then the Council may reopen at any
time.
(e) Time frames and requirements for reopening reconsiderations,
decisions, and reviews requested by a party.
* * * * *
(2) A party to an ALJ or attorney adjudicator decision may request
that an ALJ or attorney adjudicator reopen his or her decision, or the
Council reopen an ALJ or attorney adjudicator decision, within 180
calendar days from the date of the decision for good cause in
accordance with Sec. 405.986.
(3) A party to a Council review may request that the Council reopen
its decision within 180 calendar days from the date of the review
decision for good cause in accordance with Sec. 405.986.
Sec. 405.982 [Amended]
0
18. Section 405.982(a) and (b) are amended by removing the phrase
``ALJ, or the MAC'' and adding the phrase ``ALJ or attorney
adjudicator, or the Council'' in its place.
0
19. Section 405.984 is amended--
0
a. In paragraph (c) by removing the phrase ``in accordance with Sec.
405.1000 through Sec. 405.1064'' and adding ``in accordance with Sec.
405.1000 through Sec. 405.1063'' in its place.
0
b. By revising paragraphs (d) and (e).
The revisions read as follows:
Sec. 405.984 Effect of a revised determination or decision.
* * * * *
(d) ALJ or attorney adjudicator decisions. The revision of an ALJ
or attorney adjudicator decision is binding upon all parties unless a
party files a written request for a Council review that is accepted and
processed in accordance with Sec. 405.1100 through Sec. 405.1130.
(e) Council review. The revision of a Council review is binding
upon all parties unless a party files a civil action in which a Federal
district court accepts jurisdiction and issues a decision.
* * * * *
0
20. Section 405.990 is amended--
0
a. In paragraph (a)(2) by removing the phrase ``Medicare Appeals
Council (MAC)'' and adding the term ``Council'' in its place.
0
b. In paragraphs (b)(1) introductory text, (b)(1)(i)(B), (b)(4), and
(d)(2)(ii) by removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
c. In paragraph (b)(1)(i)(A) by removing the phrase ``the ALJ has'' and
adding ``the ALJ or attorney adjudicator has'' in its place.
0
d. In paragraph (b)(1)(ii) by removing the phrase ``to the ALJ level''
and adding ``to OMHA for an ALJ hearing'' in its place.
0
e. In paragraphs (c)(3), (4), and (5) by removing the term ``ALJ
hearing decision'' and adding ``ALJ or attorney adjudicator decision''
in its place.
0
f. By revising paragraph (d)(1).
0
g. In paragraph (d)(2)(i) by removing the term ``ALJ's'' and adding
``ALJ's or attorney adjudicator's'' in its place.
0
h. In paragraph (d)(2)(ii) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
i. By revising paragraphs (i)(1) and (2).
The revisions read as follows:
Sec. 405.990 Expedited access to judicial review.
* * * * *
(d) * * *
(1) Method and place for filing request. The requestor may--
[[Page 5109]]
(i) If a request for ALJ hearing or Council review is not pending,
file a written EAJR request with the HHS Departmental Appeals Board
with his or her request for an ALJ hearing or Council review; or
(ii) If an appeal is already pending for an ALJ hearing or
otherwise before OMHA, or the Council, file a written EAJR request with
the HHS Departmental Appeals Board.
* * * * *
(i) * * *
(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 in
writing all parties that the request has been denied, and forwards the
request to OMHA or the Council, which will treat it as a request for
hearing or for Council review, as appropriate.
(2) Whenever a review entity forwards a rejected EAJR request to
OMHA or the Council, the appeal is considered timely filed, and if an
adjudication time frame applies to the appeal, the adjudication time
frame begins on the day the request is received by OMHA or the Council
from the review entity.
* * * * *
0
21. Section 405.1000 is revised to read as follows:
Sec. 405.1000 Hearing before an ALJ and decision by an ALJ or
attorney adjudicator: General rule.
(a) If a party is dissatisfied with a QIC's reconsideration, or if
the adjudication period specified in Sec. 405.970 for the QIC to
complete its reconsideration has elapsed, the party may request a
hearing before an ALJ.
(b) A hearing before an ALJ may be conducted in-person, by video-
teleconference (VTC), or by telephone. At the hearing, the parties may
submit evidence (subject to the restrictions in Sec. 405.1018 and
Sec. 405.1028), examine the evidence used in making the determination
under review, and present and/or question witnesses.
(c) In some circumstances, CMS or its contractor may participate in
the proceedings under Sec. 405.1010, or join the hearing before an ALJ
as a party under Sec. 405.1012.
(d) The ALJ or attorney adjudicator conducts a de novo review and
issues a decision based on the administrative record, including, for an
ALJ, any hearing record.
(e) If all parties who are due a notice of hearing in accordance
with Sec. 405.1020(c) waive their right to appear at the hearing in
person or by telephone or video-teleconference, the ALJ or an attorney
adjudicator 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 parties 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 non-party, he or she may hold a
hearing to obtain that testimony, even if all of the parties who are
entitled to a notice of hearing in accordance with Sec. 405.1020(c)
have waived the right to appear. In that event, however, the ALJ will
give the parties the opportunity to appear when the testimony is given,
but may hold the hearing even if none of the parties decide to appear.
(g) An ALJ or attorney adjudicator may also issue a decision on the
record on his or her own initiative if the evidence in the
administrative record supports a fully favorable finding for the
appellant, and no other party to the appeal is liable for the claims at
issue, unless CMS or a contractor has elected to be a party to the
hearing in accordance with Sec. 405.1012.
(h) If more than one party timely files a request for hearing on
the same claim before a decision is made on the first timely filed
request, the requests are consolidated into one proceeding and record,
and one decision, dismissal, or remand is issued.
Sec. 405.1002 [Amended]
0
22. Section 405.1002 is amended--
0
a. In paragraph (a) introductory text by removing the phrase ``may
request'' and adding ``has a right to'' in its place.
0
b. In paragraph (a)(4) by removing the word ``entity'' and adding
``office'' in its place.
0
c. In paragraph (b)(1) by removing the phrase ``to the ALJ level'' and
adding ``for a hearing before an ALJ'' in its place.
0
23. Section 405.1004 is amended by revising the section heading and
paragraphs (a) introductory text, (a)(1) and (4), (b), and (c) and
adding paragraph (d) to read as follows:
Sec. 405.1004 Right to a review of QIC notice of dismissal.
(a) A party to a QIC's dismissal of a request for reconsideration
has a right to have the dismissal reviewed by an ALJ or attorney
adjudicator if--
(1) The party files a written request for review within 60 calendar
days after receipt of the notice of the QIC's dismissal.
* * * * *
(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
office specified in the QIC's dismissal.
(b) If the ALJ or attorney adjudicator determines that the QIC's
dismissal was in error, he or she vacates the dismissal and remands the
case to the QIC for a reconsideration in accordance with Sec.
405.1056.
(c) If the ALJ or attorney adjudicator affirms the QIC's dismissal
of a reconsideration request, he or she issues a notice of decision
affirming the QIC dismissal in accordance with Sec. 405.1046(b).
(d) The ALJ or attorney adjudicator may dismiss the request for
review of a QIC's dismissal in accordance with Sec. 405.1052(b).
0
24. Section 405.1006 is amended by--
0
a. Revising the section heading and paragraphs (d)(1) introductory
text, (d)(1)(ii), and (d)(2).
0
b. Adding paragraphs (d)(3) through (6).
0
c. Revising paragraphs (e)(1) introductory text, (e)(1)(ii) and (iii),
(e)(2) introductory text, and (e)(2)(ii) and (iii).
The revisions and additions read as follows:
Sec. 405.1006 Amount in controversy required for an ALJ hearing and
judicial review.
* * * * *
(d) * * *
(1) In general. The amount remaining in controversy is computed as
the actual amount charged the individual for the items and services in
the disputed claim, reduced by--
* * * * *
(ii) Any deductible and/or coinsurance amounts that may be
collected for the items or services.
(2) Limitation on liability. Notwithstanding paragraph (d)(1) of
this section, when payment is made for items or services under section
1879 of the Act or Sec. 411.400 of this chapter, or the liability of
the beneficiary for those services is limited under Sec. 411.402 of
this chapter, the amount in controversy is computed as the amount the
beneficiary would have been charged for the items or services in
question if those expenses were not paid under Sec. 411.400 of this
chapter or if that liability was not limited under Sec. 411.402 of
this chapter, reduced by any deductible and/or coinsurance amounts that
may be collected for the items or services.
(3) Item or service terminations. When a matter involves a provider
or supplier termination of Medicare-covered items or services that is
disputed by a beneficiary, and the beneficiary did not elect to
continue receiving the items or services, the amount in controversy is
calculated in accordance with paragraph (d)(1) of this section, except
that the
[[Page 5110]]
amount charged to the individual and any deductible and coinsurance
that may be collected for the items or services are calculated using
the amount the beneficiary would have been charged if the beneficiary
had received the items or services the beneficiary asserts should have
been covered based on the beneficiary's current condition, and Medicare
payment were not made for the items or services.
(4) Overpayments. Notwithstanding paragraph (d)(1) of this section,
when an appeal involves an identified overpayment, the amount in
controversy is the amount of the overpayment specified in the demand
letter for the items or services in the disputed claim. When an appeal
involves an estimated overpayment amount determined through the use of
statistical sampling and extrapolation, the amount in controversy is
the total amount of the estimated overpayment determined through
extrapolation, as specified in the demand letter.
(5) Coinsurance and deductible challenges. Notwithstanding
paragraph (d)(1) of this section, for appeals filed by beneficiaries
challenging only the computation of a coinsurance amount or the amount
of a remaining deductible, the amount in controversy is the difference
between the amount of the coinsurance or remaining deductible, as
determined by the contractor, and the amount of the coinsurance or
remaining deductible the beneficiary believes is correct.
(6) Fee schedule or contractor price challenges. Notwithstanding
paragraph (d)(1) of this section, for appeals of claims where the
allowable amount has been paid in full and the appellant is challenging
only the validity of the allowable amount, as reflected on the
published fee schedule or in the published contractor-priced amount
applicable to the items or services in the disputed claim, the amount
in controversy is the difference between the amount the appellant
argues should have been the allowable amount for the items or services
in the disputed claim in the applicable jurisdiction and place of
service, and the published allowable amount for the items or services.
(e) * * *
(1) Aggregating claims in appeals of QIC reconsiderations for an
ALJ hearing. Either an individual appellant or multiple appellants may
aggregate two or more claims to meet the amount in controversy for an
ALJ hearing if--
* * * * *
(ii) The appellant(s) requests aggregation of claims appealed in
the same request for ALJ hearing, or in multiple requests for an ALJ
hearing filed with the same request for aggregation, and the request is
filed within 60 calendar days after receipt of all of the
reconsiderations being appealed; and
(iii) The claims that a single appellant seeks to aggregate involve
the delivery of similar or related services, or the claims that
multiple appellants seek to aggregate involve common issues of law and
fact, as determined by an ALJ or attorney adjudicator. Only an ALJ may
determine the claims that a single appellant seeks to aggregate do not
involve the delivery of similar or related services, or the claims that
multiple appellants seek to aggregate do not involve common issues of
law and fact. Part A and Part B claims may be combined to meet the
amount in controversy requirements.
(2) Aggregating claims that are escalated from the QIC level for an
ALJ hearing. Either an individual appellant or multiple appellants may
aggregate two or more claims to meet the amount in controversy for an
ALJ hearing if--
* * * * *
(ii) The appellant(s) requests aggregation of the claims for an ALJ
hearing in the same request for escalation; and
(iii) The claims that a single appellant seeks to aggregate involve
the delivery of similar or related services, or the claims that
multiple appellants seek to aggregate involve common issues of law and
fact, as determined by an ALJ or attorney adjudicator. Only an ALJ may
determine the claims that a single appellant seeks to aggregate do not
involve the delivery of similar or related services, or the claims that
multiple appellants seek to aggregate do not involve common issues of
law and fact. Part A and Part B claims may be combined to meet the
amount in controversy requirements.
* * * * *
0
25. Section 405.1008 is revised to read as follows:
Sec. 405.1008 Parties to the proceedings on a request for an ALJ
hearing.
The party who filed the request for hearing and all other parties
to the reconsideration are parties to the proceedings on a request for
an ALJ hearing. In addition, a representative of CMS or its contractor
may be a party under the circumstances described in Sec. 405.1012.
0
26. Section 405.1010 is revised to read as follows:
Sec. 405.1010 When CMS or its contractors may participate in the
proceedings on a request for an ALJ hearing.
(a) When CMS or a contractor can participate. (1) CMS or its
contractors may elect to participate in the proceedings on a request
for an ALJ hearing upon filing a notice of intent to participate in
accordance with paragraph (b) of this section.
(2) An ALJ may request, but may not require, CMS and/or one or more
of its contractors to participate in any proceedings before the ALJ,
including the oral hearing, if any. The ALJ cannot draw any adverse
inferences if CMS or the contractor decides not to participate in any
proceedings before the ALJ, including the hearing.
(b) How an election is made--(1) No notice of hearing. If CMS or a
contractor elects to participate before receipt of a notice of hearing,
or when a notice of hearing is not required, it must send written
notice of its intent to participate to the assigned ALJ or attorney
adjudicator, or a designee of the Chief ALJ if the request for hearing
is not yet assigned to an ALJ or attorney adjudicator, and the parties
who were sent a copy of the notice of reconsideration.
(2) Notice of hearing. If CMS or a contractor elects to participate
after receipt of a notice of hearing, it must send written notice of
its intent to participate to the ALJ and the parties who were sent a
copy of the notice of hearing.
(3) Timing of election. CMS or a contractor must send its notice of
intent to participate--
(i) If no hearing is scheduled, no later than 30 calendar days
after notification that a request for hearing was filed; or
(ii) If a hearing is scheduled, no later than 10 calendar days
after receiving the notice of hearing.
(c) Roles and responsibilities of CMS or a contractor as a
participant. (1) Subject to paragraphs (d)(1) through (3) of this
section, participation may include filing position papers and/or
providing testimony to clarify factual or policy issues in a case, but
it does not include calling witnesses or cross-examining the witnesses
of a party to the hearing.
(2) When CMS or its contractor participates in an ALJ hearing, CMS
or its contractor may not be called as a witness during the hearing and
is not subject to examination or cross-examination by the parties,
except as provided in paragraph (d)(3) of this section. However, the
parties may provide testimony to rebut factual or policy statements
made by a participant
[[Page 5111]]
and the ALJ may question the participant about its testimony.
(3) CMS or contractor position papers and written testimony are
subject to the following:
(i) A position paper or written testimony must be submitted within
14 calendar days of an election to participate if no hearing has been
scheduled, or no later than 5 calendar days prior to the hearing if a
hearing is scheduled unless the ALJ grants additional time to submit
the position paper or written testimony.
(ii) A copy of any position paper or written testimony it submits
to OMHA must be sent within the same time frame specified in paragraph
(c)(3)(i) of this section to--
(A) The parties who were sent a copy of the notice of
reconsideration, if the position paper or written testimony is being
submitted before receipt of a notice of hearing for the appeal; or
(B) The parties who were sent a copy of the notice of hearing, if
the position paper or written testimony is being submitted after
receipt of a notice of hearing for the appeal.
(iii) If CMS or a contractor fails to send a copy of its position
paper or written testimony to the parties or fails to submit its
position paper or written testimony within the time frames described in
this paragraph, the position paper or written testimony will not be
considered in deciding the appeal.
(d) Limitation on participating in a hearing. (1) If CMS or a
contractor has been made a party to a hearing in accordance with Sec.
405.1012, no entity that elected to be a participant in the proceedings
in accordance with this section (or that elected to be a party to the
hearing but was made a participant in accordance with Sec.
405.1012(d)(1)) may participate in the oral hearing, but such entity
may file a position paper and/or written testimony to clarify factual
or policy issues in the case.
(2) If CMS or a contractor did not elect to be a party to a hearing
in accordance with Sec. 405.1012 and more than one entity elected to
be a participant in the proceedings in accordance with this section,
only the first entity to file a response to the notice of hearing as
provided under Sec. 405.1020(c) may participate in the oral hearing.
Entities that filed a subsequent response to the notice of hearing may
not participate in the oral hearing, but may file a position paper and/
or written testimony to clarify factual or policy issues in the case.
(3) If CMS or a contractor is precluded from participating in the
oral hearing under paragraph (d)(1) or (2) of this section, the ALJ may
grant leave to the precluded entity to participate in the oral hearing
if the ALJ determines that the entity's participation is necessary for
a full examination of the matters at issue. If the ALJ does not grant
leave to the precluded entity to participate in the oral hearing, the
precluded entity may still be called as a witness by CMS or a
contractor that is a party to the hearing in accordance with Sec.
405.1012.
(e) Invalid election. (1) An ALJ or attorney adjudicator may
determine that a CMS or contractor election is invalid under this
section if the election was not timely filed or the election was not
sent to the correct parties.
(2) If an election is determined to be invalid, a written notice
must be sent to the entity that submitted the election and the parties
who are entitled to receive notice of the election in accordance with
this section.
(i) If no hearing is scheduled or the election was submitted after
the hearing occurred, the written notice of invalid election must be
sent no later than the date the notice of decision, dismissal, or
remand is mailed.
(ii) If a hearing is scheduled, the written notice of invalid
election must be sent prior to the hearing. If the notice would be sent
fewer than 5 calendar days before the hearing is scheduled to occur,
oral notice must be provided to the entity that submitted the election,
and the written notice must be sent as soon as possible after the oral
notice is provided.
0
27. Section 405.1012 is revised to read as follows:
Sec. 405.1012 When CMS or its contractors may be a party to a
hearing.
(a) When CMS or a contractor can elect to be a party to a hearing.
(1) Unless the request for hearing is filed by an unrepresented
beneficiary, and unless otherwise provided in this section, CMS or one
of its contractors may elect to be a party to the hearing upon filing a
notice of intent to be a party to the hearing in accordance with
paragraph (b) of this section no later than 10 calendar days after the
QIC receives the notice of hearing.
(2) Unless the request for hearing is filed by an unrepresented
beneficiary, an ALJ may request, but may not require, CMS and/or one or
more of its contractors to be a party to the hearing. The ALJ cannot
draw any adverse inferences if CMS or the contractor decides not to be
a party to the hearing.
(b) How an election is made. If CMS or a contractor elects to be a
party to the hearing, it must send written notice to the ALJ and the
parties identified in the notice of hearing of its intent to be a party
to the hearing.
(c) Roles and responsibilities of CMS or a contractor as a party.
(1) As a party, CMS or a contractor may file position papers, submit
evidence, provide testimony to clarify factual or policy issues, call
witnesses or cross-examine the witnesses of other parties.
(2) CMS or contractor position papers, written testimony, and
evidentiary submissions are subject to the following:
(i) Any position paper, written testimony, and/or evidence must be
submitted no later than 5 calendar days prior to the hearing unless the
ALJ grants additional time to submit the position paper, written
testimony, and/or evidence.
(ii) A copy of any position paper, written testimony, and/or
evidence it submits to OMHA must be sent within the same time frame
specified in paragraph (c)(2)(i) of this section to the parties who
were sent a copy of the notice of hearing.
(iii) If CMS or a contractor fails to send a copy of its position
paper, written testimony, and/or evidence to the parties or fails to
submit its position paper, written testimony, and/or evidence within
the time frames described in this section, the position paper, written
testimony, and/or evidence will not be considered in deciding the
appeal.
(d) Limitation on participating in a hearing. (1) If CMS and one or
more contractors, or multiple contractors, file an election to be a
party to the hearing, the first entity to file its election after the
notice of hearing is issued is made a party to the hearing and the
other entities are made participants in the proceedings under Sec.
405.1010, subject to Sec. 405.1010(d)(1) and (3), unless the ALJ
grants leave to an entity to also be a party to the hearing in
accordance with paragraph (d)(2) of this section.
(2) If CMS or a contractor filed an election to be a party in
accordance with this section but is precluded from being made a party
under paragraph (d)(1) of this section, the ALJ may grant leave to be a
party to the hearing if the ALJ determines that the entity's
participation as a party is necessary for a full examination of the
matters at issue.
(e) Invalid election. (1) An ALJ or attorney adjudicator may
determine that a CMS or contractor election is invalid under this
section if the request for hearing was filed by an unrepresented
beneficiary, the election was not timely, the election was not sent to
the correct parties, or CMS or a contractor had already filed an
election to be a party to the hearing and the ALJ did not determine
that the entity's participation
[[Page 5112]]
as a party is necessary for a full examination of the matters at issue.
(2) If an election is determined to be invalid, a written notice
must be sent to the entity that submitted the election and the parties
who were sent the notice of hearing.
(i) If the election was submitted after the hearing occurred, the
written notice of invalid election must be sent no later than the date
the decision, dismissal, or remand notice is mailed.
(ii) If the election was submitted before the hearing occurs, the
written notice of invalid election must be sent prior to the hearing.
If the notice would be sent fewer than 5 calendar days before the
hearing is scheduled to occur, oral notice must be provided to the
entity that submitted the election, and the written notice to the
entity and the parties who were sent the notice of hearing must be sent
as soon as possible after the oral notice is provided.
0
28. Section 405.1014 is revised to read as follows:
Sec. 405.1014 Request for an ALJ hearing or a review of a QIC
dismissal.
(a) Content of the request. (1) The request for an ALJ hearing or a
review of a QIC dismissal must be made in writing. The request must
include all of the following--
(i) The name, address, and Medicare health insurance claim number
of the beneficiary whose claim is being appealed, and the beneficiary's
telephone number if the beneficiary is the appealing party and not
represented.
(ii) The name, address, and telephone number, of the appellant,
when the appellant is not the beneficiary.
(iii) The name, address, and telephone number, of the designated
representative, if any.
(iv) The Medicare appeal number or document control number, if any,
assigned to the QIC reconsideration or dismissal notice being appealed.
(v) The dates of service of the claim(s) being appealed, if
applicable.
(vi) The reasons the appellant disagrees with the QIC's
reconsideration or other determination being appealed.
(2) The appellant must submit a statement of any additional
evidence to be submitted and the date it will be submitted.
(3) Special rule for appealing statistical sample and/or
extrapolation. If the appellant disagrees with how a statistical sample
and/or extrapolation was conducted, the appellant must--
(i) Include the information in paragraphs (a)(1) and (2) of this
section for each sample claim that the appellant wishes to appeal;
(ii) File the request for hearing for all sampled claims that the
appellant wishes to appeal within 60 calendar days of the date the
party receives the last reconsideration for the sample claims, if they
were not all addressed in a single reconsideration; and
(iii) Assert the reasons the appellant disagrees with how the
statistical sample and/or extrapolation was conducted in the request
for hearing.
(b) Complete request required. (1) A request must contain the
information in paragraph (a)(1) of this section to the extent the
information is applicable, to be considered complete. If a request is
not complete, the appellant will be provided with an opportunity to
complete the request, and if an adjudication time frame applies, it
does not begin until the request is complete. If the appellant fails to
provide the information necessary to complete the request within the
time frame provided, the appellant's request for hearing or review will
be dismissed.
(2) If supporting materials submitted with a request clearly
provide information required for a complete request, the materials will
be considered in determining whether the request is complete.
(c) When and where to file. The request for an ALJ hearing or
request for review of a QIC dismissal must be filed--
(1) Within 60 calendar days from the date the party receives notice
of the QIC's reconsideration or dismissal, except as provided in
paragraph (a)(3)(ii) of this section for appeals of extrapolations;
(2) With the office specified in the QIC's reconsideration or
dismissal. If the request for hearing is timely filed with an office
other than the office specified in the QIC's reconsideration, the
request is not treated as untimely, and any applicable time frame
specified in Sec. 405.1016 for deciding the appeal begins on the date
the office specified in the QIC's reconsideration or dismissal receives
the request for hearing. If the request for hearing is filed with an
office, other than the office specified in the QIC's reconsideration or
dismissal, OMHA must notify the appellant of the date the request was
received in the correct office and the commencement of any applicable
adjudication time frame.
(d) Copy requirement. (1) The appellant must send a copy of the
request for hearing or request for review of a QIC dismissal to the
other parties who were sent a copy of the QIC's reconsideration or
dismissal. If additional materials submitted with the request are
necessary to provide the information required for a complete request in
accordance with paragraph (b) of this section, copies of the materials
must be sent to the parties as well (subject to authorities that apply
to disclosing the personal information of other parties). If additional
evidence is submitted with the request for hearing, the appellant may
send a copy of the evidence, or briefly describe the evidence pertinent
to the party and offer to provide copies of the evidence to the party
at the party's request (subject to authorities that apply to disclosing
the evidence).
(2) Evidence that a copy of the request for hearing or request for
review of a QIC dismissal, or a copy of submitted evidence or a summary
thereof, was sent in accordance with paragraph (d)(1) of this section
includes--
(i) Certification on the standard form for requesting an ALJ
hearing or requesting a review of a QIC dismissal that a copy of the
request is being sent to the other parties;
(ii) An indication, such as a copy or ``cc'' line, on a request for
hearing or request for review of a QIC dismissal that a copy of the
request and any applicable attachments or enclosures are being sent to
the other parties, including the name and address of the recipient;
(iii) An affidavit or certificate of service that identifies the
name and address of the recipient, and what was sent to the recipient;
or
(iv) A mailing or shipping receipt that identifies the name and
address of the recipient, and what was sent to the recipient.
(3) If the appellant, other than an unrepresented beneficiary,
fails to send a copy of the request for hearing or request for review
of a QIC dismissal, any additional materials, or a copy of submitted
evidence or a summary thereof, as described in paragraph (d)(1) of this
section, the appellant will be provided with an additional opportunity
to send the request, materials, and/or evidence or summary thereof, and
if an adjudication time frame applies, it begins upon receipt of
evidence that the request, materials, and/or evidence or summary
thereof were sent. If the appellant, other than an unrepresented
beneficiary, again fails to provide evidence that the request,
materials, and/or evidence or summary thereof were sent within the
additional time frame provided to send the request, materials, and/or
evidence or summary thereof, the appellant's request for hearing or
request for review of a QIC dismissal will be dismissed.
(e) Extension of time to request a hearing or review. (1) If the
request for hearing or review of a QIC dismissal is not filed within 60
calendar days of receipt of the QIC's reconsideration or dismissal, an
appellant may request an
[[Page 5113]]
extension for good cause (See Sec. 405.942(b)(2) and (3)).
(2) Any request for an extension of time must be in writing, give
the reasons why the request for a hearing or review was not filed
within the stated time period, and must be filed with the request for
hearing or request for review of a QIC dismissal with the office
specified in the notice of reconsideration or dismissal.
(3) An ALJ or attorney adjudicator may find there is good cause for
missing the deadline to file a request for an ALJ hearing or request
for review of a QIC dismissal, or there is no good cause for missing
the deadline to file a request for a review of a QIC dismissal, but
only an ALJ may find there is no good cause for missing the deadline to
file a request for an ALJ hearing. If good cause is found for missing
the deadline, the time period for filing the request for hearing or
request for review of a QIC dismissal will be extended. To determine
whether good cause for late filing exists, the ALJ or attorney
adjudicator uses the standards set forth in Sec. 405.942(b)(2) and
(3).
(4) If a request for hearing is not timely filed, any applicable
adjudication period in Sec. 405.1016 begins the date the ALJ or
attorney adjudicator grants the request to extend the filing deadline.
(5) A determination granting a request to extend the filing
deadline is not subject to further review.
0
29. Section 405.1016 is revised to read as follows:
Sec. 405.1016 Time frames for deciding an appeal of a QIC
reconsideration or escalated request for a QIC reconsideration.
(a) Adjudication period for appeals of QIC reconsiderations. When a
request for an ALJ hearing is filed after a QIC has issued a
reconsideration, an ALJ or attorney adjudicator issues a decision,
dismissal order, or remand to the QIC, 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 office specified in the QIC's notice of
reconsideration, unless the 90 calendar day period has been extended as
provided in this subpart.
(b) When the adjudication period begins. (1) Unless otherwise
specified in this subpart, 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 office specified in the QIC's
reconsideration, or, if it is not timely filed, the date that the ALJ
or attorney adjudicator grants any extension to the filing deadline.
(2) If the Council remands a case and the case was subject to an
adjudication time frame under paragraph (a) or (c) of this section, the
remanded appeal will be subject to the adjudication time frame of
paragraph (a) of this section beginning on the date that OMHA receives
the Council remand.
(c) Adjudication period for escalated requests for QIC
reconsiderations. When an appeal is escalated to OMHA because the QIC
has not issued a reconsideration determination within the period
specified in Sec. 405.970, an ALJ or attorney adjudicator issues a
decision, dismissal order, or remand to the QIC, as appropriate, no
later than the end of the 180 calendar day period beginning on the date
that the request for escalation is received by OMHA in accordance with
Sec. 405.970, unless the 180 calendar day period is extended as
provided in this subpart.
(d) Waivers and extensions of adjudication period. (1) At any time
during the adjudication process, the appellant may waive the
adjudication period specified in paragraphs (a) and (c) of this
section. The waiver may be for a specific period of time agreed upon by
the ALJ or attorney adjudicator and the appellant.
(2) The adjudication periods specified in paragraphs (a) and (c) of
this section are extended as otherwise specified in this subpart, and
for the following events--
(i) The duration of a stay of action on adjudicating the claims or
matters at issue ordered by a court or tribunal of competent
jurisdiction; or
(ii) The duration of a stay of proceedings granted by an ALJ or
attorney adjudicator on a motion by an appellant, provided no other
party also filed a request for hearing on the same claim at issue.
(e) Effect of exceeding adjudication period. If an ALJ or attorney
adjudicator fails to issue a decision, dismissal order, or remand to
the QIC within an adjudication period specified in this section,
subject to paragraphs (b) and (d) of this section, the party that filed
the request for hearing may escalate the appeal in accordance with
paragraph (f) of this section. If the party that filed the request for
hearing does not elect to escalate the appeal, the appeal remains
pending with OMHA for a decision, dismissal order, or remand.
(f) Requesting escalation--(1) When and how to request escalation.
An appellant who files a timely request for hearing before an ALJ and
whose appeal continues to be pending with OMHA at the end of the
applicable adjudication period under paragraph (a) or (c) of this
section, subject to paragraphs (b) and (d) of this section, may
exercise the option of escalating the appeal to the Council by filing a
written request with OMHA to escalate the appeal to the Council and
sending a copy of the request to escalate to the other parties who were
sent a copy of the QIC reconsideration.
(2) Escalation. If the request for escalation meets the
requirements of paragraph (f)(1) of this section and an ALJ or attorney
adjudicator is not able to issue a decision, dismissal order, or remand
order within the later of 5 calendar days of receiving the request for
escalation, or 5 calendar days from the end of the applicable
adjudication period set forth in paragraph (a) or (c) of this section,
subject to paragraphs (b) and (d) of this section, OMHA will take the
following actions--
(i) Send a notice to the appellant stating that an ALJ or attorney
adjudicator is not able to issue a decision, dismissal order, or remand
order within the adjudication period set forth in paragraph (a) or (c)
of this section, the QIC reconsideration will be the decision that is
subject to Council review consistent with Sec. 405.1102(a), and the
appeal will be escalated to the Council for a review in accordance with
Sec. 405.1108; and
(ii) Forward the case file to the Council.
(3) Invalid escalation request. If an ALJ or attorney adjudicator
determines the request for escalation does not meet the requirements of
paragraph (f)(1) of this section, OMHA will send a notice to the
appellant explaining why the request is invalid within 5 calendar days
of receiving the request for escalation.
0
30. Section 405.1018 is revised to read as follows:
Sec. 405.1018 Submitting evidence.
(a) When evidence may be submitted. Except as provided in this
section, parties must submit all written or other evidence they wish to
have considered with the request for hearing, by the date specified in
the request for hearing in accordance with Sec. 405.1014(a)(2), or if
a hearing is scheduled, within 10 calendar days of receiving the notice
of hearing.
(b) Effect on adjudication period. If a party submits written or
other evidence later than 10 calendar days after receiving the notice
of hearing, any applicable adjudication period specified in Sec.
405.1016 is extended by the number of calendar days in the period
between 10 calendar days after receipt of the notice of hearing and the
day the evidence is received.
(c) New evidence. (1) Any evidence submitted by a provider,
supplier, or beneficiary represented by a provider or supplier that is
not submitted prior to
[[Page 5114]]
the issuance of the QIC's reconsideration determination must be
accompanied by a statement explaining why the evidence was not
previously submitted to the QIC, or a prior decision-maker (see Sec.
405.1028).
(2) If a statement explaining why the evidence was not previously
submitted to the QIC or a prior decision-maker is not included with the
evidence, the evidence will not be considered.
(d) When this section does not apply. (1) The requirements in
paragraphs (a) and (b) of this section do not apply to oral testimony
given at a hearing, or to evidence submitted by an unrepresented
beneficiary.
(2) The requirements in paragraph (c) of this section do not apply
to oral testimony given at a hearing, or to evidence submitted by an
unrepresented beneficiary, CMS or any of its contractors, a Medicaid
State agency, an applicable plan, or a beneficiary represented by
someone other than a provider or supplier.
0
31. Section 405.1020 is amended by--
0
a, Revising paragraphs (b), (c), (d), and (e)(3) and (4).
0
b. Adding paragraphs (g)(3)(vii) and (viii).
0
c. Revising paragraphs (h), (i) paragraph heading, and (i)(1), (2),
(4), and (5).
0
d. Adding paragraph (j).
The revisions and additions read as follows:
Sec. 405.1020 Time and place for a hearing before an ALJ.
* * * * *
(b) Determining how appearances are made--(1) Appearances by
unrepresented beneficiaries. The ALJ will direct that the appearance of
an unrepresented beneficiary who filed a request for hearing be
conducted by video-teleconferencing (VTC) if the ALJ finds that VTC
technology is available to conduct the appearance, unless the ALJ find
good cause for an in-person appearance.
(i) 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 unrepresented beneficiary.
(ii) The ALJ, with the concurrence of the Chief ALJ or designee,
may find good cause that an in-person hearing should be conducted if--
(A) VTC or telephone technology is not available; or
(B) Special or extraordinary circumstances exist.
(2) Appearances by individuals other than unrepresented
beneficiaries. The ALJ will direct that the appearance of an
individual, other than an unrepresented beneficiary who filed a request
for hearing, be conducted by telephone, unless the ALJ finds good cause
for an appearance by other means.
(i) The ALJ may find good cause for an appearance by VTC if he or
she determines that VTC is necessary to examine the facts or issues
involved in the appeal.
(ii) The ALJ, with the concurrence of the Chief ALJ or designee,
also may find good cause that an in-person hearing should be conducted
if--
(A) VTC and telephone technology are not available; or
(B) Special or extraordinary circumstances exist.
(c) Notice of hearing. (1) A notice of hearing is sent to all
parties that filed an appeal or participated in the reconsideration,
any party who was found liable for the services at issue subsequent to
the initial determination or may be found liable based on a review of
the record, the QIC that issued the reconsideration, and CMS or a
contractor that elected to participate in the proceedings in accordance
with Sec. 405.1010(b) or that the ALJ believes would be beneficial to
the hearing, advising them of the proposed time and place of the
hearing.
(2) The notice of hearing will require all parties to the ALJ
hearing 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 whether they
object to the proposed time and/or place of the hearing;
(ii) If the party or representative is an entity or organization,
specifying who from the entity or organization plans to attend the
hearing, if anyone, and in what capacity, in addition to the individual
who filed the request for hearing; and
(iii) Listing the witnesses who will be providing testimony at the
hearing.
(3) The notice of hearing will require CMS or a contractor that
wishes to attend the hearing as a participant to reply to the notice
by:
(i) Acknowledging whether it plans to attend the hearing at the
time and place proposed in the notice of hearing; and
(ii) Specifying who from the entity plans to attend the hearing.
(d) A party's right to waive a hearing. A party may also waive the
right to a hearing and request a decision based on the written evidence
in the record in accordance with Sec. 405.1038(b). As provided in
Sec. 405.1000, an ALJ may require the parties to attend a hearing if
it is necessary to decide the case. If an ALJ determines that it is
necessary to obtain testimony from a non-party, he or she may still
hold a hearing to obtain that testimony, even if all of the parties
have waived the right to appear. In those cases, the ALJ will give the
parties the opportunity to appear when the testimony is given but may
hold the hearing even if none of the parties decide to appear.
(e) * * *
(3) The request must be in writing, except that a party may orally
request that a hearing be rescheduled in an emergency circumstance the
day prior to or day of the hearing. The ALJ must document all oral
requests for a rescheduled hearing in writing and maintain the
documentation in the administrative record.
(4) The ALJ may change the time or place of the hearing if the
party has good cause.
* * * * *
(g) * * *
(3) * * *
(vii) The party or representative has a prior commitment that
cannot be changed without significant expense.
(viii) The party or representative asserts that he or she did not
receive the notice of hearing and is unable to appear at the scheduled
time and place.
(h) Effect of rescheduling hearing. If a hearing is postponed at
the request of the appellant 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 period specified in Sec.
405.1016.
(i) A party's request for an in-person or VTC hearing. (1) If an
unrepresented beneficiary who filed the request for hearing objects to
a VTC hearing or to the ALJ's offer to conduct a hearing by telephone,
or if a party other than an unrepresented beneficiary who filed the
request for hearing objects to a telephone or VTC hearing, the party
must notify the ALJ at the earliest possible opportunity before the
time set for the hearing and request a VTC or an in-person hearing.
(2) The party must state the reason for the objection and state the
time and/or place he or she wants an in-person or VTC hearing to be
held.
* * * * *
(4) When a party's request for an in-person or VTC hearing as
specified under paragraph (i)(1) of this section is granted and an
adjudication time frame applies in accordance with Sec. 405.1016, the
ALJ issues a decision, dismissal, or remand to the QIC within the
adjudication time frame specified in Sec. 405.1016 (including any
applicable extensions provided in this subpart) unless the party
requesting the hearing
[[Page 5115]]
agrees to waive such adjudication time frame in writing.
(5) The ALJ may grant the request, with the concurrence of the
Chief ALJ or designee, upon a finding of good cause and will reschedule
the hearing for a time and place when the party may appear in person or
by VTC before the ALJ.
(j) Amended notice of hearing. If the ALJ changes or will change
the time and/or place of the hearing, an amended notice of hearing must
be sent to all of the parties who were sent a copy of the notice of
hearing and CMS or its contractors that elected to be a participant or
party to the hearing in accordance with Sec. 405.1022(a).
0
32. Section 405.1022 is revised to read as follows:
Sec. 405.1022 Notice of a hearing before an ALJ.
(a) Issuing the notice. After the ALJ sets the time and place of
the hearing, notice of the hearing will be mailed or otherwise
transmitted in accordance with OMHA procedures to the parties and other
potential participants, as provided in Sec. 405.1020(c) at their last
known address, or given by personal service, except to a party or
potential participant who indicates in writing that it does not wish to
receive this notice. The notice is mailed, transmitted, or served at
least 20 calendar days before the hearing unless the recipient agrees
in writing to the notice being mailed, transmitted, or served fewer
than 20 calendar days before the hearing.
(b) Notice information. (1) The notice of hearing contains--
(i) A statement that the issues before the ALJ include all of the
issues brought out in the initial determination, redetermination, or
reconsideration that were not decided entirely in a party's favor, for
the claims specified in the request for hearing; and
(ii) A statement of any specific new issues the ALJ will consider
in accordance with Sec. 405.1032.
(2) The notice will inform the parties that they may designate a
person to represent them during the proceedings.
(3) The notice must include an explanation of the procedures for
requesting a change in the time or place of the hearing, a reminder
that the ALJ may dismiss the hearing request if the appellant fails to
appear at the scheduled hearing without good cause, and other
information about the scheduling and conduct of the hearing.
(4) The appellant will also be told if his or her appearance or
that of any other party or witness is scheduled by VTC, telephone, or
in person. If the ALJ has scheduled the appellant or other party to
appear at the hearing by VTC, the notice of hearing will advise that
the scheduled place for the hearing is a VTC site and explain what it
means to appear at the hearing by VTC.
(5) The notice advises the appellant or other parties that if they
object to appearing by VTC or telephone, and wish instead to have their
hearing at a time and place where they may appear in person before the
ALJ, they must follow the procedures set forth at Sec. 405.1020(i) for
notifying the ALJ of their objections and for requesting an in-person
hearing.
(c) Acknowledging the notice of hearing. (1) If the appellant, any
other party to the reconsideration to whom the notice of hearing was
sent, or their representative does not acknowledge receipt of the
notice of hearing, OMHA attempts to contact the party for an
explanation.
(2) If the party states that he or she did not receive the notice
of hearing, a copy of the notice is sent to him or her by certified
mail or other means requested by the party and in accordance with OMHA
procedures.
(3) The party may request that the ALJ reschedule the hearing in
accordance with Sec. 405.1020(e).
0
33. Section 405.1024 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 405.1024 Objections to the issues.
* * * * *
(b) The party must state the reasons for his or her objections and
send a copy of the objections to all other parties who were sent a copy
of the notice of hearing, and CMS or a contractor that elected to be a
party to the hearing.
(c) The ALJ makes a decision on the objections either in writing,
at a prehearing conference, or at the hearing.
0
34. Section 405.1026 is revised to read as follows:
Sec. 405.1026 Disqualification of the ALJ or attorney adjudicator.
(a) An ALJ or attorney adjudicator cannot adjudicate an appeal if
he or she is prejudiced or partial to any party or has any interest in
the matter pending for decision.
(b) If a party objects to the ALJ or attorney adjudicator assigned
to adjudicate the appeal, the party must notify the ALJ within 10
calendar days of the date of the notice of hearing if a hearing is
scheduled, or the ALJ or attorney adjudicator at any time before a
decision, dismissal order, or remand order is issued if no hearing is
scheduled. The ALJ or attorney adjudicator considers the party's
objections and decides whether to proceed with the appeal or withdraw.
(c) If the ALJ or attorney adjudicator withdraws, another ALJ or
attorney adjudicator will be assigned to adjudicate the appeal. If the
ALJ or attorney adjudicator does not withdraw, the party may, after the
ALJ or attorney adjudicator has issued an action in the case, present
his or her objections to the Council in accordance with Sec. 405.1100
through Sec. 405.1130. The Council will then consider whether the
decision or dismissal should be revised or if applicable, a new hearing
held before another ALJ. If the case is escalated to the Council after
a hearing is held but before the ALJ issues a decision, the Council
considers the reasons the party objected to the ALJ during its review
of the case and, if the Council deems it necessary, may remand the case
to another ALJ for a hearing and decision.
(d) If the party objects to the ALJ or attorney adjudicator and the
ALJ or attorney adjudicator subsequently withdraws from the appeal, any
adjudication time frame that applies to the appeal in accordance with
Sec. 405.1016 is extended by 14 calendar days.
0
35. Section 405.1028 is revised to read as follows:
Sec. 405.1028 Review of evidence submitted by parties.
(a) New evidence--(1) Examination of any new evidence. After a
hearing is requested but before a hearing is held by an ALJ or a
decision is issued if no hearing is held, the ALJ or attorney
adjudicator will examine any new evidence submitted in accordance with
Sec. 405.1018, by a provider, supplier, or beneficiary represented by
a provider or supplier to determine whether the provider, supplier, or
beneficiary represented by a provider or supplier had good cause for
submitting the evidence for the first time at the OMHA level.
(2) Determining if good cause exists. An ALJ or attorney
adjudicator finds good cause when--
(i) The new evidence is, in the opinion of the ALJ or attorney
adjudicator, material to an issue addressed in the QIC's
reconsideration and that issue was not identified as a material issue
prior to the QIC's reconsideration;
(ii) The new evidence is, in the opinion of the ALJ, material to a
new issue identified in accordance with Sec. 405.1032(b)(1);
(iii) The party was unable to obtain the evidence before the QIC
issued its reconsideration and submits evidence that, in the opinion of
the ALJ or attorney adjudicator, demonstrates the party made reasonable
attempts to
[[Page 5116]]
obtain the evidence before the QIC issued its reconsideration;
(iv) The party asserts that the evidence was submitted to the QIC
or another contractor and submits evidence that, in the opinion of the
ALJ or attorney adjudicator, demonstrates the new evidence was
submitted to the QIC or another contractor before the QIC issued the
reconsideration; or
(v) In circumstances not addressed in paragraphs (a)(2)(i) through
(iv) of this section, the ALJ or attorney adjudicator determines that
the party has demonstrated that it could not have obtained the evidence
before the QIC issued its reconsideration.
(3) If good cause does not exist. If the ALJ or attorney
adjudicator determines that there was not good cause for submitting the
evidence for the first time at the OMHA level, the ALJ or attorney
adjudicator must exclude the evidence from the proceeding and may not
consider it in reaching a decision.
(4) Notification to parties. If a hearing is conducted, as soon as
possible, but no later than the start of the hearing, the ALJ must
notify all parties and participants who responded to the notice of
hearing whether the evidence will be considered or is excluded from
consideration.
(b) Duplicative evidence. The ALJ or attorney adjudicator may
exclude from consideration any evidence submitted by a party at the
OMHA level that is duplicative of evidence already in the record
forwarded to OMHA.
0
36. Section 405.1030 is revised to read as follows:
Sec. 405.1030 ALJ hearing procedures.
(a) General rule. A hearing is open to the parties and to other
persons the ALJ considers necessary and proper.
(b) At the hearing. (1) At the hearing, the ALJ fully examines the
issues, questions the parties and other witnesses, and may accept
evidence that is material to the issues consistent with Sec. Sec.
405.1018 and 405.1028.
(2) The ALJ may limit testimony and/or argument at the hearing that
are not relevant to an issue before the ALJ, that are repetitive of
evidence or testimony already in the record, or that relate to an issue
that has been sufficiently developed or on which the ALJ has already
ruled. The ALJ may, but is not required to, provide the party or
representative with an opportunity to submit additional written
statements and affidavits on the matter, in lieu of testimony and/or
argument at the hearing. The written statements and affidavits must be
submitted within the time frame designated by the ALJ.
(3) If the ALJ determines that a party or party's representative is
uncooperative, disruptive to the hearing, or abusive during the course
of the hearing after the ALJ has warned the party or representative to
stop such behavior, the ALJ may excuse the party or representative from
the hearing and continue with the hearing to provide the other parties
and participants with an opportunity to offer testimony and/or
argument. If a party or representative was excused from the hearing,
the ALJ will provide the party or representative with an opportunity to
submit written statements and affidavits in lieu of testimony and/or
argument at the hearing, and the party or representative may request a
recording of the hearing in accordance with Sec. 405.1042 and respond
in writing to any statements made by other parties or participants and/
or testimony of the witnesses at the hearing. The written statements
and affidavits must be submitted within the time frame designated by
the ALJ.
(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. If the missing evidence is in
the possession of the appellant, and the appellant is a provider,
supplier, or a beneficiary represented by a provider or supplier, the
ALJ must determine if the appellant had good cause in accordance with
Sec. 405.1028 for not producing the evidence earlier.
(d) Effect of new evidence on adjudication period. If an appellant,
other than an unrepresented beneficiary, submits evidence pursuant to
paragraph (b) or (c) of this section, and an adjudication period
applies to the appeal, the adjudication period specified in Sec.
405.1016 is extended in accordance with Sec. 405.1018(b).
(e) Continued hearing. (1) A hearing may be continued to a later
date. Notice of the continued hearing must be sent in accordance with
Sec. 405.1022, except that a waiver of notice of the hearing may be
made in writing or on the record, and the notice is sent to the parties
and participants who attended the hearing, and any additional parties
or potential parties or participants the ALJ determines are
appropriate.
(2) If the appellant requests the continuance and an adjudication
period applies to the appeal in accordance with Sec. 405.1016, the
adjudication period is extended by the period between the initial
hearing date and the continued hearing date.
(f) Supplemental hearing. (1) The ALJ may conduct a supplemental
hearing at any time before he or she mails a notice of the decision in
order to receive new and material evidence, obtain additional
testimony, or address a procedural matter. The ALJ determines whether a
supplemental hearing is necessary and if one is held, the scope of the
hearing, including when evidence is presented and what issues are
discussed. Notice of the supplemental hearing must be sent in
accordance with Sec. 405.1022, except that the notice is sent to the
parties and participants who attended the hearing, and any additional
parties or potential parties or participants the ALJ determines are
appropriate.
(2) If the appellant requests the supplemental hearing and an
adjudication period applies to the appeal in accordance with Sec.
405.1016, the adjudication period is extended by the period between the
initial hearing date and the supplemental hearing date.
0
37. Section 405.1032 is revised to read as follows:
Sec. 405.1032 Issues before an ALJ or attorney adjudicator.
(a) General rule. The issues before the ALJ or attorney adjudicator
include all the issues for the claims or appealed matter specified in
the request for hearing that were brought out in the initial
determination, redetermination, or reconsideration that were not
decided entirely in a party's favor. (For purposes of this provision,
the term ``party'' does not include a representative of CMS or one of
its contractors that may be participating in the hearing.)
(b) New issues--(1) When a new issue may be considered. A new issue
may include issues resulting from the participation of CMS or its
contractor at the OMHA level of adjudication and from any evidence and
position papers submitted by CMS or its contractor for the first time
to the ALJ. The ALJ or any party may raise a new issue relating to a
claim or appealed matter specified in the request for hearing; however,
the ALJ may only consider a new issue, including a favorable portion of
a determination on a claim or appealed matter specified in the request
for hearing, if its resolution could have a material impact on the
claim or appealed matter and--
(i) There is new and material evidence that was not available or
known at the time of the determination and that may result in a
different conclusion; or
(ii) The evidence that was considered in making the determination
clearly shows on its face that an obvious error was made at the time of
the determination.
(2) Notice of the new issue. The ALJ may consider a new issue at
the hearing if he or she notifies the parties that were
[[Page 5117]]
or will be sent the notice of hearing about the new issue before the
start of the hearing.
(3) Opportunity to submit evidence. If notice of the new issue is
sent after the notice of hearing, the parties will have at least 10
calendar days after receiving notice of the new issue to submit
evidence regarding the issue, and without affecting any applicable
adjudication period. If a hearing is conducted before the time to
submit evidence regarding the issue expires, the record will remain
open until the opportunity to submit evidence expires.
(c) Adding claims to a pending appeal. (1) Claims that were not
specified in a request for hearing may only be added to a pending
appeal if the claims were adjudicated in the same reconsideration that
is appealed, and the period to request an ALJ hearing for that
reconsideration has not expired, or an ALJ or attorney adjudicator
extends the time to request an ALJ hearing on those claims in
accordance with Sec. 405.1014(e).
(2) Before a claim may be added to a pending appeal, the appellant
must submit evidence that demonstrates the information that constitutes
a complete request for hearing in accordance with Sec. 405.1014(b) and
other materials related to the claim that the appellant seeks to add to
the pending appeal were sent to the other parties to the claim in
accordance with Sec. 405.1014(d).
(d) Appeals involving statistical sampling and extrapolations--(1)
Generally. If the appellant does not assert the reasons the appellant
disagrees with how a statistical sample and/or extrapolation was
conducted in the request for hearing, in accordance with Sec.
405.1014(a)(3)(iii), issues related to how the statistical sample and
extrapolation were conducted shall not be considered or decided.
(2) Consideration of sample claims. If a party asserts a
disagreement with how a statistical sample and/or extrapolation was
conducted in the request for hearing, in accordance with Sec.
405.1014(a)(3)(iii), paragraphs (a) through (c) of this section apply
to the adjudication of the sample claims but, in deciding issues
related to how a statistical sample and/or extrapolation was conducted
the ALJ or attorney adjudicator must base his or her decision on a
review of the entire sample to the extent appropriate to decide the
issue.
0
38. Section 405.1034 is revised to read as follows:
Sec. 405.1034 Requesting information from the QIC.
(a) If an ALJ or attorney adjudicator believes that the written
record is missing information that is essential to resolving the issues
on appeal and that information can be provided only by CMS or its
contractors, the information may be requested from the QIC that
conducted the reconsideration or its successor.
(1) Official copies of redeterminations and reconsiderations that
were conducted on the appealed claims can be provided only by CMS or
its contractors. Prior to issuing a request for information to the QIC,
OMHA will confirm whether an electronic copy of the redetermination or
reconsideration is available in the official system of record, and if
so will accept the electronic copy as an official copy.
(2) ``Can be provided only by CMS or its contractors'' means the
information is not publicly available, is not in the possession of, and
cannot be requested and obtained by one of the parties. Information
that is publicly available is information that is available to the
general public via the Internet or in a printed publication.
Information that is publicly available includes, but is not limited to,
information available on a CMS or contractor Web site or information in
an official CMS or DHHS publication (including, but not limited to,
provisions of NCDs or LCDs, procedure code or modifier descriptions,
fee schedule data, and contractor operating manual instructions).
(b) The ALJ or attorney adjudicator retains jurisdiction of the
case, and the case remains pending at OMHA.
(c) The QIC has 15 calendar days after receiving the request for
information to furnish the information or otherwise respond to the
information request directly or through CMS or another contractor.
(d) If an adjudication period applies to the appeal in accordance
with Sec. 405.1016, the adjudication period is extended by the period
between the date of the request for information and the date the QIC
responds to the request or 20 calendar days after the date of the
request, whichever occurs first.
Sec. 405.1036 [Amended]
0
39. Section 405.1036 is amended--
0
a. In paragraph (b)(1) by removing the phrase ``send the ALJ'' and
adding ``submit to OMHA'' in its place.
0
b. By removing paragraph (d).
0
c. By redesignating paragraph (g) as new paragraph (d).
0
d. In paragraphs (f)(5)(i), (ii), (iii), (iv), (v), and (vi) by
removing the term ``MAC'' each time it appears and adding ``Council''
in its place.
0
e. In paragraphs (f)(5)(i) and (ii) by removing the term ``MAC's'' and
adding ``Council's'' in its place.
0
f. In paragraph (f)(5)(i) by removing the phrase ``specified in Sec.
405.1102, Sec. 405.1104, or Sec. 405.1110'' and adding ``specified in
Sec. 405.1016(e) and (f), Sec. 405.1102, or Sec. 405.1110'' in its
place.
0
g. In paragraph (f)(5)(ii) by removing the phrase ``discovery ruling''
each time it appears and adding ``subpoena ruling'' in its place.
0
40. Section 405.1037 is amended--
0
a. By revising paragraph (a)(1).
0
b. In paragraph (e)(1) by removing the phrase ``specified in Sec.
405.1100, Sec. 405.1102, Sec. 405.1104, or Sec. 405.1110'' and
adding ``specified in Sec. 405.1016(e) and (f), Sec. 405.1100, Sec.
405.1102, or Sec. 405.1110'' in its place.
0
c. In paragraphs (e)(1), (e)(2) introductory text, (e)(2)(i), (ii),
(iii), (iv), and (v) by removing the term ``MAC'' each time it appears
and adding ``Council'' in its place.
0
d. In paragraphs (e)(1) and (e)(2)(i) by removing the term ``MAC's''
and adding ``Council's'' in its place.
0
e. By revising paragraph (f).
The revisions read as follows:
Sec. 405.1037 Discovery.
(a) * * *
(1) Discovery is permissible only when CMS or its contractor elects
to be a party to an ALJ hearing, in accordance with Sec. 405.1012.
* * * * *
(f) Adjudication period. If an adjudication period applies to the
appeal in accordance with Sec. 405.1016, and a party requests
discovery from another party to the hearing, the adjudication period is
extended for the duration of discovery, from the date a discovery
request is granted until the date specified for ending discovery.
0
41. Section 405.1038 is revised to read as follows:
Sec. 405.1038 Deciding a case without a hearing before an ALJ.
(a) Decision fully favorable. If the evidence in the administrative
record supports a finding fully in favor of the appellant(s) on every
issue and no other party to the appeal is liable for claims at issue,
an ALJ or attorney adjudicator may issue a decision without giving the
parties prior notice and without an ALJ conducting a hearing, unless
CMS or a contractor has elected to be a party to the hearing in
accordance with Sec. 405.1012. The notice of the decision informs the
parties that they have the right to a hearing and a right to examine
the evidence on which the decision is based.
[[Page 5118]]
(b) Parties do not wish to appear. (1) An ALJ or attorney
adjudicator may decide a case on the record and without an ALJ
conducting a hearing if--
(i) All the parties who would be sent a notice of hearing in
accordance with Sec. 405.1020(c) indicate in writing that they do not
wish to appear before an ALJ at a hearing, including a hearing
conducted by telephone or video-teleconferencing, if available; or
(ii) The appellant lives outside the United States and does not
inform OMHA that he or she wants to appear at a hearing before an ALJ,
and there are no other parties who would be sent a notice of hearing in
accordance with Sec. 405.1020(c) and who wish to appear.
(2) When a hearing is not held, the decision of the ALJ or attorney
adjudicator must refer to the evidence in the record on which the
decision was based.
(c) Stipulated decision. If CMS or one of its contractors submits a
written statement or makes an oral statement at a hearing indicating
the item or service should be covered or payment may be made, and the
written or oral statement agrees to the amount of payment the parties
believe should be made if the amount of payment is an issue before the
ALJ or attorney adjudicator, an ALJ or attorney adjudicator may issue a
stipulated decision finding in favor of the appellant or other liable
parties on the basis of the statement, and without making findings of
fact, conclusions of law, or further explaining the reasons for the
decision.
0
42. Section 405.1040 is revised to read as follows:
Sec. 405.1040 Prehearing and posthearing conferences.
(a) The ALJ may decide on his or her own, or at the request of any
party to the hearing, to hold a prehearing or posthearing conference to
facilitate the hearing or the hearing decision.
(b) The ALJ informs the parties who will be or were sent a notice
of hearing in accordance with Sec. 405.1020(c), and CMS or a
contractor that has elected to be a participant in the proceedings or
party to the hearing at the time the notice of conference is sent, of
the time, place, and purpose of the conference at least 7 calendar days
before the conference date, unless a party indicates in writing that it
does not wish to receive a written notice of the conference.
(c) At the conference--
(1) The ALJ or an OMHA attorney designated by the ALJ conducts the
conference, but only the ALJ conducting a conference may consider
matters in addition to those stated in the conference notice if the
parties consent to consideration of the additional matters in writing.
(2) An audio recording of the conference is made.
(d) The ALJ issues an order to all parties and participants who
attended the conference stating all agreements and actions resulting
from the conference. If a party does not object within 10 calendar days
of receiving the order, or any additional time granted by the ALJ, the
agreements and actions become part of the administrative record and are
binding on all parties.
0
43. Section 405.1042 is revised to read as follows:
Sec. 405.1042 The administrative record.
(a) Creating the record. (1) OMHA makes a complete record of the
evidence and administrative proceedings on the appealed matter,
including any prehearing and posthearing conferences, and hearing
proceedings that were conducted.
(2) The record will include marked as exhibits, the appealed
determinations, and documents and other evidence used in making the
appealed determinations and the ALJ's or attorney adjudicator's
decision, including, but not limited to, claims, medical records,
written statements, certificates, reports, affidavits, and any other
evidence the ALJ or attorney adjudicator admits. The record will also
include any evidence excluded or not considered by the ALJ or attorney
adjudicator, including, but not limited to, new evidence submitted by a
provider or supplier, or beneficiary represented by a provider or
supplier, for which no good cause was established, and duplicative
evidence submitted by a party.
(3) A party may request and review a copy of the record prior to or
at the hearing, or, if a hearing is not held, at any time before the
notice of decision is issued.
(4) If a request for review is filed or the case is escalated to
the Council, the complete record, including any prehearing and
posthearing conference and hearing recordings, is forwarded to the
Council.
(5) A typed transcription of the hearing is prepared if a party
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) While an
appeal is pending at OMHA, a party may request and receive a copy of
all or part of the record from OMHA, including any index of the
administrative record, documentary evidence, and a copy of the audio
recording of the oral proceedings. The party may be asked to pay the
costs of providing these items.
(2) If a party requests a copy of all or part of the record from
OMHA or the ALJ or attorney adjudicator and an opportunity to comment
on the record, any adjudication period that applies in accordance with
Sec. 405.1016 is extended by the time beginning with the receipt of
the request through the expiration of the time granted for the party's
response.
(3) If a party requests a copy of all or part of the record and the
record, including any audio recordings, contains information pertaining
to an individual that the requesting party is not entitled to receive,
such as personally identifiable information or protected health
information, such portions of the record will not be furnished unless
the requesting party obtains consent from the individual.
0
44. Section 405.1044 is revised to read as follows:
Sec. 405.1044 Consolidated proceedings.
(a) Consolidated hearing. (1) 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 one or more other appeals pending before
the same ALJ.
(2) It is within the discretion of the ALJ to grant or deny an
appellant's request for consolidation. In considering an appellant's
request, the ALJ may consider factors such as whether the claims at
issue may be more efficiently decided if the appeals are consolidated
for hearing. In considering the appellant's request for consolidation,
the ALJ must take into account any adjudication deadlines for each
appeal and may require an appellant to waive the adjudication deadline
associated with one or more appeals if consolidation otherwise prevents
the ALJ from deciding all of the appeals at issue within their
respective deadlines.
(3) The ALJ may also propose on his or her own motion to
consolidate two or more appeals in one hearing for administrative
efficiency, but may not require an appellant to waive the adjudication
deadline for any of the consolidated cases.
(4) Notice of a consolidated hearing must be included in the notice
of hearing issued in accordance with Sec. Sec. 405.1020 and 405.1022.
(b) Consolidated or separate decision and record. (1) If the ALJ
decides to hold a consolidated hearing, he or she may make either--
[[Page 5119]]
(i) A consolidated decision and record; or
(ii) A separate decision and record on each appeal.
(2) If a separate decision and record on each appeal is made, the
ALJ is responsible for making sure that any evidence that is common to
all appeals and material to the common issue to be decided, and audio
recordings of any conferences that were conducted and the consolidated
hearing are included in each individual administrative record, as
applicable.
(3) If a hearing will not be conducted for multiple appeals that
are before the same ALJ or attorney adjudicator, and the appeals
involve one or more of the same issues, the ALJ or attorney adjudicator
may make a consolidated decision and record at the request of the
appellant or on the ALJ's or attorney adjudicator's own motion.
(c) Limitation on consolidated proceedings. Consolidated
proceedings may only be conducted for appeals filed by the same
appellant, unless multiple appellants aggregated claims to meet the
amount in controversy requirement in accordance with Sec. 405.1006 and
the beneficiaries whose claims are at issue have all authorized
disclosure of their protected information to the other parties and any
participants.
0
45. Section 405.1046 is revised to read as follows:
Sec. 405.1046 Notice of an ALJ or attorney adjudicator decision.
(a) Decisions on requests for hearing--(1) General rule. Unless the
ALJ or attorney adjudicator dismisses or remands the request for
hearing, the ALJ or attorney adjudicator will issue a written decision
that gives the findings of fact, conclusions of law, and the reasons
for the decision. The decision must be based on evidence offered at the
hearing or otherwise admitted into the record, and shall include
independent findings and conclusions. OMHA mails or otherwise transmits
a copy of the decision to all the parties at their last known address
and the QIC that issued the reconsideration or from which the appeal
was escalated. For overpayment cases involving multiple beneficiaries,
where there is no beneficiary liability, the ALJ or attorney
adjudicator may choose to send written notice only to the appellant. In
the event a payment will be made to a provider or supplier in
conjunction with the ALJ's or attorney adjudicator's decision, the
contractor must also issue a revised electronic or paper remittance
advice to that provider or supplier.
(2) Content of the notice. The decision must be written in a manner
calculated to be understood by a beneficiary and must include--
(i) The specific reasons for the determination, including, to the
extent appropriate, a summary of any clinical or scientific evidence
used in making the determination;
(ii) For any new evidence that was submitted for the first time at
the OMHA level and subject to a good cause determination pursuant to
Sec. 405.1028, a discussion of the new evidence and the good cause
determination that was made.
(iii) The procedures for obtaining additional information
concerning the decision; and
(iv) Notification of the right to appeal the decision to the
Council, including instructions on how to initiate an appeal under this
section.
(3) Limitation on decision. When the amount of payment for an item
or service is an issue before the ALJ or attorney adjudicator, the ALJ
or attorney adjudicator may make a finding as to the amount of payment
due. If the ALJ or attorney adjudicator makes a finding concerning
payment when the amount of payment was not an issue before the ALJ or
attorney adjudicator, the contractor may independently determine the
payment amount. In either of the aforementioned situations, an ALJ's or
attorney adjudicator's decision is not binding on the contractor for
purposes of determining the amount of payment due. The amount of
payment determined by the contractor in effectuating the ALJ's or
attorney adjudicator's decision is a new initial determination under
Sec. 405.924.
(b) Decisions on requests for review of a QIC dismissal--(1)
General rule. Unless the ALJ or attorney adjudicator dismisses the
request for review of a QIC dismissal, or the QIC's dismissal is
vacated and remanded, the ALJ or attorney adjudicator will issue a
written decision affirming the QIC's dismissal. OMHA mails or otherwise
transmits a copy of the decision to all the parties that received a
copy of the QIC's dismissal.
(2) Content of the notice. The decision must be written in a manner
calculated to be understood by a beneficiary and must include--
(i) The specific reasons for the determination, including a summary
of the evidence considered and applicable authorities;
(ii) The procedures for obtaining additional information concerning
the decision; and
(iii) Notification that the decision is binding and is not subject
to further review, unless reopened and revised by the ALJ or attorney
adjudicator.
(c) Recommended decision. An ALJ or attorney adjudicator issues a
recommended decision if he or she is directed to do so in the Council's
remand order. An ALJ or attorney adjudicator may not issue a
recommended decision on his or her own motion. The ALJ or attorney
adjudicator mails a copy of the recommended decision to all the parties
at their last known address.
0
46. Section 405.1048 is revised to read as follows:
Sec. 405.1048 The effect of an ALJ's or attorney adjudicator's
decision.
(a) The decision of the ALJ or attorney adjudicator on a request
for hearing is binding on all parties unless--
(1) A party requests a review of the decision by the Council within
the stated time period or the Council reviews the decision issued by an
ALJ or attorney adjudicator under the procedures set forth in Sec.
405.1110, and the Council issues a final decision or remand order or
the appeal is escalated to Federal district court under the provisions
at Sec. 405.1132 and the Federal district court issues a decision.
(2) The decision is reopened and revised by an ALJ or attorney
adjudicator or the Council under the procedures explained in Sec.
405.980;
(3) The expedited access to judicial review process at Sec.
405.990 is used;
(4) The ALJ's or attorney adjudicator's decision is a recommended
decision directed to the Council and the Council issues a decision; or
(5) In a case remanded by a Federal district court, the Council
assumes jurisdiction under the procedures in Sec. 405.1138 and the
Council issues a decision.
(b) The decision of the ALJ or attorney adjudicator on a request
for review of a QIC dismissal is binding on all parties unless the
decision is reopened and revised by the ALJ or attorney adjudicator
under the procedures in Sec. 405.980.
Sec. 405.1050 [Amended]
0
47. Section 405.1050 is amended--
0
a. In the section heading by removing the phrase ``an ALJ'' and adding
``OMHA'' in its place.
0
b. In the text of the section by removing the phrase ``pending before
an ALJ'' and adding ``pending before OMHA'' in its place, and by
removing the term ``the ALJ'' and adding ``OMHA'' in its place.
0
c. By removing the term ``MAC'' each time it appears and adding
``Council'' in its place wherever it appears.
0
48. Section 405.1052 is revised to read as follows:
[[Page 5120]]
Sec. 405.1052 Dismissal of a request for a hearing before an ALJ or
request for review of a QIC dismissal.
(a) Dismissal of request for hearing. An ALJ dismisses a request
for a hearing under any of the following conditions:
(1) Neither the party that requested the hearing nor the party's
representative appears at the time and place set for the hearing, if--
(i) The party was notified before the time set for the hearing that
the request for hearing might be dismissed for failure to appear, the
record contains documentation that the party acknowledged the notice of
hearing, and the party does not contact the ALJ within 10 calendar days
after the hearing, or does contact the ALJ but the ALJ determines the
party did not demonstrate good cause for not appearing; or
(ii) The record does not contain documentation that the party
acknowledged the notice of hearing, the ALJ sends a notice to the party
at the last known address asking why the party did not appear, and the
party does not respond to the ALJ's notice within 10 calendar days
after receiving the notice or does contact the ALJ but the ALJ
determines the party did not demonstrate good cause for not appearing.
(iii) In determining whether good cause exists under paragraphs
(a)(1)(i) and (ii) of this section, the ALJ considers any physical,
mental, educational, or linguistic limitations (including any lack of
facility with the English language), that the party may have.
(2) The person or entity requesting a hearing has no right to it
under Sec. 405.1002.
(3) The party did not request a hearing within the stated time
period and the ALJ or attorney adjudicator has not found good cause for
extending the deadline, as provided in Sec. 405.1014(e).
(4) The beneficiary whose claim is being appealed died while the
request for hearing is pending and all of the following criteria apply:
(i) The request for hearing was filed by the beneficiary or the
beneficiary's representative, and the beneficiary's surviving spouse or
estate has no remaining financial interest in the case. In deciding
this issue, the ALJ or attorney adjudicator considers if the surviving
spouse or estate remains liable for the services that were denied or a
Medicare contractor held the beneficiary liable for subsequent similar
services under the limitation of liability provisions based on the
denial of the services at issue.
(ii) No other individuals or entities that have a financial
interest in the case wish to pursue an appeal under Sec. 405.1002.
(iii) No other individual or entity filed a valid and timely
request for an ALJ hearing in accordance to Sec. 405.1014.
(5) The ALJ or attorney adjudicator dismisses a hearing request
entirely or refuses to consider any one or more of the issues because a
QIC, an ALJ or attorney adjudicator, or the Council has made a previous
determination or decision under this subpart about the appellant's
rights on the same facts and on the same issue(s) or claim(s), and this
previous determination or decision has become binding by either
administrative or judicial action.
(6) The appellant abandons the request for hearing. An ALJ or
attorney adjudicator may conclude that an appellant has abandoned a
request for hearing when OMHA attempts to schedule a hearing and is
unable to contact the appellant after making reasonable efforts to do
so.
(7) The appellant's request is not complete in accordance with
Sec. 405.1014(a)(1) or the appellant, other than an unrepresented
beneficiary, did not send a copy of its request to the other parties in
accordance with Sec. 405.1014(d), after the appellant is provided with
an opportunity to complete the request and/or send a copy of the
request to the other parties.
(b) Dismissal of request for review of a QIC dismissal. An ALJ or
attorney adjudicator dismisses a request for review of a QIC dismissal
under any of the following conditions:
(1) The person or entity requesting a review of a dismissal has no
right to it under Sec. 405.1004.
(2) The party did not request a review within the stated time
period and the ALJ or attorney adjudicator has not found good cause for
extending the deadline, as provided in Sec. 405.1014(e).
(3) The beneficiary whose claim is being appealed died while the
request for review is pending and all of the following criteria apply:
(i) The request for review was filed by the beneficiary or the
beneficiary's representative, and the beneficiary's surviving spouse or
estate has no remaining financial interest in the case. In deciding
this issue, the ALJ or attorney adjudicator considers if the surviving
spouse or estate remains liable for the services that were denied or a
Medicare contractor held the beneficiary liable for subsequent similar
services under the limitation of liability provisions based on the
denial of the services at issue.
(ii) No other individuals or entities that have a financial
interest in the case wish to pursue an appeal under Sec. 405.1004.
(iii) No other individual or entity filed a valid and timely
request for a review of the QIC dismissal in accordance to Sec.
405.1014.
(4) The appellant's request is not complete in accordance with
Sec. 405.1014(a)(1) or the appellant, other than an unrepresented
beneficiary, did not send a copy of its request to the other parties in
accordance with Sec. 405.1014(d), after the appellant is provided with
an opportunity to complete the request and/or send a copy of the
request to the other parties.
(c) Withdrawal of request. At any time before notice of the
decision, dismissal, or remand is mailed, if only one party requested
the hearing or review of the QIC dismissal and that party asks to
withdraw the request, an ALJ or attorney adjudicator may dismiss the
request for hearing or request for review of a QIC dismissal. This
request for withdrawal may be submitted in writing, or a request to
withdraw a request for hearing may be made orally at a hearing before
the ALJ. The request for withdrawal must include a clear statement that
the appellant is withdrawing the request for hearing or review of the
QIC dismissal and does not intend to further proceed with the appeal.
If an attorney or other legal professional on behalf of a beneficiary
or other appellant files the request for withdrawal, the ALJ or
attorney adjudicator may presume that the representative has advised
the appellant of the consequences of the withdrawal and dismissal.
(d) Notice of dismissal. OMHA mails or otherwise transmits a
written notice of the dismissal of the hearing or review request to all
parties who were sent a copy of the request for hearing or review at
their last known address. The notice states that there is a right to
request that the ALJ or attorney adjudicator vacate the dismissal
action. The appeal will proceed with respect to any other parties who
filed a valid request for hearing or review regarding the same claim or
disputed matter.
(e) Vacating a dismissal. If good and sufficient cause is
established, the ALJ or attorney adjudicator may vacate his or her
dismissal of a request for hearing or review within 6 months of the
date of the notice of dismissal.
0
49. Section 405.1054 is revised to read as follows:
[[Page 5121]]
Sec. 405.1054 Effect of dismissal of a request for a hearing or
request for review of QIC dismissal.
(a) The dismissal of a request for a hearing is binding, unless it
is vacated by the Council under Sec. 405.1108(b), or vacated by the
ALJ or attorney adjudicator under Sec. 405.1052(e).
(b) The dismissal of a request for review of a QIC dismissal of a
request for reconsideration is binding and not subject to further
review unless it is vacated by the ALJ or attorney adjudicator under
Sec. 405.1052(e).
0
50. Section 405.1056 is added before the undesignated center heading
``Applicability of Medicare Coverage Policies'' to read as follows:
Sec. 405.1056 Remands of requests for hearing and requests for
review.
(a) Missing appeal determination or case record. (1) If an ALJ or
attorney adjudicator requests an official copy of a missing
redetermination or reconsideration for an appealed claim in accordance
with Sec. 405.1034, and the QIC or another contractor does not furnish
the copy within the time frame specified in Sec. 405.1034, the ALJ or
attorney adjudicator may issue a remand directing the QIC or other
contractor to reconstruct the record or, if it is not able to do so,
initiate a new appeal adjudication.
(2) If the QIC does not furnish the case file for an appealed
reconsideration, an ALJ or attorney adjudicator may issue a remand
directing the QIC to reconstruct the record or, if it is not able to do
so, initiate a new appeal adjudication.
(3) If the QIC or another contractor is able to reconstruct the
record for a remanded case and returns the case to OMHA, the case is no
longer remanded and the reconsideration is no longer vacated, and any
adjudication period that applies to the appeal in accordance with Sec.
405.1016 is extended by the period between the date of the remand and
the date that case is returned to OMHA.
(b) No redetermination. If an ALJ or attorney adjudicator finds
that the QIC issued a reconsideration that addressed coverage or
payment issues related to the appealed claim and no redetermination of
the claim was made (if a redetermination was required under this
subpart) or the request for redetermination was dismissed, the
reconsideration will be remanded to the QIC, or its successor to re-
adjudicate the request for reconsideration.
(c) Requested remand--(1) Request contents and timing. At any time
prior to an ALJ or attorney adjudicator issuing a decision or
dismissal, the appellant and CMS or one of its contractors may jointly
request a remand of the appeal to the entity that conducted the
reconsideration. The request must include the reasons why the appeal
should be remanded and indicate whether remanding the case will likely
resolve the matter in dispute.
(2) Granting the request. An ALJ or attorney adjudicator may grant
the request and issue a remand if he or she determines that remanding
the case will likely resolve the matter in dispute.
(d) Remanding a QIC's dismissal of a request for reconsideration.
Consistent with Sec. 405.1004(b), an ALJ or attorney adjudicator will
remand a case to the appropriate QIC if the ALJ or attorney adjudicator
determines that a QIC's dismissal of a request for reconsideration was
in error.
(e) Relationship to local and national coverage determination
appeals process. (1) An ALJ or attorney adjudicator remands an appeal
to the QIC that made the reconsideration if the appellant is entitled
to relief pursuant to Sec. 426.460(b)(1), Sec. 426.488(b), or Sec.
426.560(b)(1) of this chapter.
(2) Unless the appellant is entitled to relief pursuant to Sec.
426.460(b)(1), Sec. 426.488(b), or Sec. 426.560(b)(1) of this
chapter, the ALJ or attorney adjudicator applies the LCD or NCD in
place on the date the item or service was provided.
(f) Notice of a remand. OMHA mails or otherwise transmits a written
notice of the remand of the request for hearing or request for review
to all of the parties who were sent a copy of the request at their last
known address, and CMS or a contractor that elected to be a participant
in the proceedings or party to the hearing. The notice states that
there is a right to request that the Chief ALJ or a designee review the
remand.
(g) Review of remand. Upon a request by a party or CMS or one of
its contractors filed within 30 calendar days of receiving a notice of
remand, the Chief ALJ or designee will review the remand, and if the
remand is not authorized by this section, vacate the remand order. The
determination on a request to review a remand order is binding and not
subject to further review. The review of remand procedures provided for
in this paragraph are not available for and do not apply to remands
that are issued under paragraph (d) of this section.
0
51. Section 405.1058 is added before the undesignated center heading
``Applicability of Medicare Coverage Policies'' to read as follows:
Sec. 405.1058 Effect of a remand.
A remand of a request for hearing or request for review is binding
unless vacated by the Chief ALJ or a designee in accordance with Sec.
405.1056(g).
Sec. 405.1060 [Amended]
0
52. Section 405.1060 is amended--
0
a. In paragraph (a)(4) by removing the term ``ALJs'' and adding ``ALJs
and attorney adjudicators'' in its place and removing the term ``MAC''
and adding ``Council'' in its place.
0
b. In paragraph (b) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place wherever it appears.
0
c. In paragraph (c) by removing the term ``MAC'' and adding ``Council''
in its place wherever it appears.
Sec. 405.1062 [Amended]
0
53. Section 405.1062 is amended--
0
a. In the section heading and paragraphs (a) and (b) by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
0
b. In paragraph (a) by removing the term ``ALJs'' and adding ``ALJs and
attorney adjudicators'' in its place.
0
c. In the section heading and paragraph (b) by removing the term
``ALJ'' each time it appears and adding ``ALJ or attorney adjudicator''
in its place.
0
d. In paragraph (c) by removing the phrase ``An ALJ or MAC'' and adding
``An ALJ or attorney adjudicator or the Council'' in its place.
0
54. Section 405.1063 is revised to read as follows:
Sec. 405.1063 Applicability of laws, regulations, CMS Rulings, and
precedential decisions.
(a) All laws and regulations pertaining to the Medicare and
Medicaid programs, including, but not limited to Titles XI, XVIII, and
XIX of the Social Security Act and applicable implementing regulations,
are binding on ALJs and attorney adjudicators, and the Council.
(b) CMS Rulings are published under the authority of the
Administrator, CMS. Consistent with Sec. 401.108 of this chapter,
rulings are binding on all CMS components, on all HHS components that
adjudicate matters under the jurisdiction of CMS, and on the Social
Security Administration to the extent that components of the Social
Security Administration adjudicate matters under the jurisdiction of
CMS.
(c) Precedential decisions designated by the Chair of the
Departmental Appeals Board in accordance with Sec. 401.109 of this
chapter, are binding on all CMS components, all HHS components that
adjudicate matters under the jurisdiction of CMS, and on the Social
Security Administration to the extent that components of the Social
[[Page 5122]]
Security Administration adjudicate matters under the jurisdiction of
CMS.
Sec. 405.1064 [Removed]
0
55. Section 405.1064 is removed.
0
56. Section 405.1100 is revised to read as follows:
Sec. 405.1100 Medicare Appeals Council review: General.
(a) The appellant or any other party to an ALJ's or attorney
adjudicator's decision or dismissal may request that the Council review
the ALJ's or attorney adjudicator's decision or dismissal.
(b) Under circumstances set forth in Sec. Sec. 405.1016 and
405.1108, the appellant may request that a case be escalated to the
Council for a decision even if the ALJ or attorney adjudicator has not
issued a decision, dismissal, or remand in his or her case.
(c) When the Council reviews an ALJ's or attorney adjudicator's
decision, it undertakes a de novo review. The Council issues a final
decision or dismissal order or remands a case to the ALJ or attorney
adjudicator within 90 calendar days of receipt of the appellant's
request for review, unless the 90 calendar day period is extended as
provided in this subpart.
(d) When deciding an appeal that was escalated from the OMHA level
to the Council, the Council will issue a final decision or dismissal
order or remand the case to the OMHA Chief ALJ within 180 calendar days
of receipt of the appellant's request for escalation, unless the 180
calendar day period is extended as provided in this subpart.
0
57. Section 405.1102 is revised to read as follows:
Sec. 405.1102 Request for Council review when ALJ or attorney
adjudicator issues decision or dismissal.
(a)(1) A party to a decision or dismissal issued by an ALJ or
attorney adjudicator may request a Council review if the party files a
written request for a Council review within 60 calendar days after
receipt of the ALJ's or attorney adjudicator's decision or dismissal.
(2) For purposes of this section, the date of receipt of the ALJ's
or attorney adjudicator's 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.
(3) The request is considered as filed on the date it is received
by the entity specified in the notice of the ALJ's or attorney
adjudicator's action.
(b) A party requesting a review may ask that the time for filing a
request for Council review be extended if--
(1) The request for an extension of time is in writing;
(2) It is filed with the Council; and
(3) It explains why the request for review was not filed within the
stated time period. If the Council finds that there is good cause for
missing the deadline, the time period will be extended. To determine
whether good cause exists, the Council uses the standards outlined at
Sec. 405.942(b)(2) and (3).
(c) A party does not have the right to seek Council review of an
ALJ's or attorney adjudicator's remand to a QIC, affirmation of a QIC's
dismissal of a request for reconsideration, or dismissal of a request
for review of a QIC dismissal.
(d) For purposes of requesting Council review (Sec. Sec. 405.1100
through 405.1140), unless specifically excepted, the term ``party'',
includes CMS where CMS has entered into a case as a party according to
Sec. 405.1012. The term, ``appellant,'' does not include CMS, where
CMS has entered into a case as a party according to Sec. 405.1012.
Sec. 405.1104 [Removed]
0
58. Section 405.1104 is removed.
0
59. Section 405.1106 is revised to read as follows:
Sec. 405.1106 Where a request for review or escalation may be filed.
(a) When a request for a Council review is filed after an ALJ or
attorney adjudicator has issued a decision or dismissal, the request
for review must be filed with the entity specified in the notice of the
ALJ's or attorney adjudicator's action. The appellant must also send a
copy of the request for review to the other parties to the ALJ or
attorney adjudicator decision or dismissal who received notice of the
decision or dismissal. Failure to copy the other parties tolls the
Council's adjudication deadline set forth in Sec. 405.1100 until all
parties to the ALJ or attorney adjudicator decision or dismissal
receive notice of the request for Council review. If the request for
review is timely filed with an entity other than the entity specified
in the notice of the ALJ's or attorney adjudicator's action, the
Council'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 or attorney adjudicator's action. Upon receipt of a
request for review from an entity other than the entity specified in
the notice of the ALJ's or attorney adjudicator's action, the Council
sends written notice to the appellant of the date of receipt of the
request and commencement of the adjudication timeframe.
(b) If an appellant files a request to escalate an appeal to the
Council level because the ALJ or attorney adjudicator has not completed
his or her action on the request for hearing within an applicable
adjudication period under Sec. 405.1016, the request for escalation
must be filed with OMHA and the appellant must also send a copy of the
request for escalation to the other parties who were sent a copy of the
QIC reconsideration. Failure to copy the other parties tolls the
Council's adjudication deadline set forth in Sec. 405.1100 until all
parties who were sent a copy of the QIC reconsideration receive notice
of the request for escalation. In a case that has been escalated from
OMHA, the Council's 180 calendar day period to issue a final decision,
dismissal order, or remand order begins on the date the request for
escalation is received by the Council.
Sec. 405.1108 [Amended]
0
60. Section 405.1108 is amended--
0
a. In the section heading and paragraphs (a), (b), (c), (d)
introductory text, (d)(2), and (4) by removing the term ``MAC'' each
time it appears and adding ``Council'' in its place.
0
b. In paragraphs (a), (b), (c), (d)(1), and (5) by removing the term
``ALJ'' each time it appears and adding ``ALJ or attorney adjudicator''
in its place.
0
c. In paragraphs (a) and (b) by removing the term ``ALJ's'' each time
it appears and adding ``ALJ's or attorney adjudicator's'' in its place.
0
d. In paragraph (b) by removing the first use of ``dismissal'' in the
paragraph and adding ``dismissal of a request for a hearing'' in its
place.
0
e. In paragraph (d) introductory text by removing the term ``ALJ
level'' and adding ``OMHA level'' in its place.
0
f. In paragraph (d)(3) by removing the phrase ``to an ALJ'' and adding
``to OMHA'' in its place.
0
61. Section 405.1110 is revised to read as follows:
Sec. 405.1110 Council reviews on its own motion.
(a) General rule. The Council may decide on its own motion to
review a decision or dismissal issued by an ALJ or attorney
adjudicator. CMS or any of its contractors may refer a case to the
Council for it to consider reviewing under this authority anytime
within 60 calendar days after the date of an ALJ's or attorney
adjudicator's decision or dismissal.
(b) Referral of cases. (1) CMS or any of its contractors may refer
a case to the Council if, in their view, the decision or
[[Page 5123]]
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 may also request that the Council take own motion
review of a case if--
(i) CMS or its contractor participated in the appeal at the OMHA
level; and
(ii) In CMS' view, the ALJ's or attorney adjudicator's decision or
dismissal is not supported by the preponderance of evidence in the
record or the ALJ or attorney adjudicator abused his or her discretion.
(2) CMS' referral to the Council is made in writing and must be
filed with the Council no later than 60 calendar days after the ALJ's
or attorney adjudicator's decision or dismissal is issued. The written
referral will state the reasons why CMS believes the Council must
review the case on its own motion. CMS will send a copy of its referral
to all parties to the ALJ's or attorney adjudicator's action who
received a copy of the decision under Sec. 405.1046(a) or the notice
of dismissal under Sec. 405.1052(d), and to the OMHA Chief ALJ.
Parties to the ALJ's or attorney adjudicator's action may file
exceptions to the referral by submitting written comments to the
Council within 20 calendar days of the referral notice. A party
submitting comments to the Council must send such comments to CMS and
all other parties to the ALJ's or attorney adjudicator's action who
received a copy of the decision under Sec. 405.1046(a) or the notice
of dismissal under Sec. 405.1052(d).
(c) Standard of review--(1) Referral by CMS after participation at
the OMHA level. If CMS or its contractor participated in an appeal at
the OMHA level, the Council 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 or attorney adjudicator, 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 Council will limit its consideration of the ALJ's or
attorney adjudicator's action to those exceptions raised by CMS.
(2) Referral by CMS when CMS did not participate in the OMHA
proceedings or appear as a party. The Council 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 Council will limit its consideration of the ALJ's or
attorney adjudicator's action to those exceptions raised by CMS.
(d) Council's action. If the Council decides to review a decision
or dismissal on its own motion, it will mail the results of its action
to all the parties to the hearing and to CMS if it is not already a
party to the hearing. The Council may adopt, modify, or reverse the
decision or dismissal, may remand the case to an ALJ or attorney
adjudicator for further proceedings or may dismiss a hearing request.
The Council must issue its action no later than 90 calendar days after
receipt of the CMS referral, unless the 90 calendar day period has been
extended as provided in this subpart. The Council may not, however,
issue its action before the 20 calendar day comment period has expired,
unless it determines that the agency's referral does not provide a
basis for reviewing the case. If the Council does not act within the
applicable adjudication deadline, the ALJ's or attorney adjudicator's
decision or dismissal is binding on the parties to the ALJ's or
attorney adjudicator's action.
0
62. Section 405.1112 is revised to read as follows:
Sec. 405.1112 Content of request for review.
(a) The request for Council review must be filed with the entity
specified in the notice of the ALJ's or attorney adjudicator's action.
The request for review must be in writing and may be made on a standard
form. A written request that is not made on a standard form is accepted
if it contains the beneficiary's name; Medicare health insurance claim
number; the specific service(s) or item(s) for which the review is
requested; the specific date(s) of service; the date of the ALJ's or
attorney adjudicator's decision or dismissal order, if any; and the
name and signature of the party or the representative of the party; and
any other information CMS may decide.
(b) The request for review must identify the parts of the ALJ's or
attorney adjudicator's action with which the party requesting review
disagrees and explain why he or she disagrees with the ALJ's or
attorney adjudicator's decision, dismissal, or other determination
being appealed. For example, if the party requesting review believes
that the ALJ's or attorney adjudicator's action is inconsistent with a
statute, regulation, CMS Ruling, or other authority, the request for
review should explain why the appellant believes the action is
inconsistent with that authority.
(c) The Council will limit its review of an ALJ's or attorney
adjudicator's actions to those exceptions raised by the party in the
request for review, unless the appellant is an unrepresented
beneficiary. For purposes of this section only, we define a
representative as anyone who has accepted an appointment as the
beneficiary's representative, except a member of the beneficiary's
family, a legal guardian, or an individual who routinely acts on behalf
of the beneficiary, such as a family member or friend who has a power
of attorney.
Sec. 405.1114 [Amended]
0
63. Section 405.1114 is amended--
0
a. In the introductory text and paragraphs (b) and (c)(1) by removing
the term ``MAC'' each time it appears and adding ``Council'' in its
place.
0
b. In paragraph (c)(3) by removing the phrase ``ALJ hearing'' and
adding ``ALJ's or attorney adjudicator's action'' in its place.
Sec. 405.1116 [Amended]
0
64. Section 405.1116 is amended by--
0
a. Removing the term ``MAC'' each time it appears in the heading and
text and adding ``Council'' in its place.
0
b. Removing the term ``MAC's'' and adding ``Council's'' in its place.
0
c. Removing the term ``ALJ'' and adding ``ALJ or attorney adjudicator''
in its place.
Sec. 405.1118 [Amended]
0
65. Section 405.1118 is amended by--
0
a. Removing the term ``MAC'' each time it appears in the heading and
text and adding ``Council'' in its place.
0
b. Removing the phrase ``ALJ hearing'' and adding ``ALJ's or attorney
adjudicator's action'' in its place.
0
c. Removing the phrase ``the exhibits list'' and adding ``any index of
the administrative record'' in its place.
0
d. Removing the term ``tape'' and adding ``audio recording'' in its
place.
0
e. Removing the term ``MAC's'' and adding ``Council's'' in its place.
Sec. 405.1120 [Amended]
0
66. Section 405.1120 is amended in the heading and text by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
Sec. 405.1122 [Amended]
0
67. Section 405.1122 is amended--
0
a. In the section heading and paragraphs (a) paragraph heading, (a)(1)
and (2), (b) paragraph heading, (b)(1) and (2), (c)(1), (2), and (3)
introductory text, (c)(3)(ii), (d)(1) and (3), (e)(1), (2), (3), and
(4), and (f)(1), (2), and (3) by removing the term ``MAC'' each time it
appears and adding ``Council'' in its place.
[[Page 5124]]
0
b. In paragraphs (e)(5) and (6), and (f)(2) by removing the term
``MAC's'' and adding ``Council's'' in its place.
0
c. In paragraph (a)(1) by removing the term ``hearing decision'' and
adding ``ALJ's or attorney adjudicator's decision'' in its place.
0
d. Amending paragraphs (a)(1) and (b)(1) by removing the term ``ALJ
level'' and adding ``OMHA level'' in its place.
0
e. In paragraphs (a)(1) and (2), (b)(1) and (2), (c)(2), (c)(3)
introductory text, and (c)(3)(i) and (ii) by removing the term ``ALJ''
each time it appears and adding ``ALJ or attorney adjudicator'' in its
place.
0
f. In paragraph (a) heading and paragraph (a)(1) by removing the term
``ALJ's'' and adding ``ALJ's or attorney adjudicator's'' in its place.
0
g. In paragraph (a)(2) by removing the term ``hearing record'' and
adding ``administrative record'' in its place.
Sec. 405.1124 [Amended]
0
68. Section 405.1124 is amended by removing the term ``MAC'' each time
it appears and adding ``Council'' in its place.
Sec. 405.1126 [Amended]
0
69. Section 405.1126 is amended--
0
a. In the section heading and paragraphs (a), (b), (c), (d) paragraph
heading, (d)(1) and (2), (e) paragraph heading, and (e)(1) and (2) by
removing the term ``MAC'' each time it appears and adding ``Council''
in its place.
0
b. In paragraph (b) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
c. In paragraphs (a), (b), (c), (d) paragraph heading, and (e)(2) by
removing the term ``ALJ'' each time it appears and adding ``ALJ or
attorney adjudicator'' in its place.
0
d. In paragraph (e)(2) by adding ``if applicable'' after the word
``rehearing''.
Sec. 405.1128 [Amended]
0
70. Section 405.1128 is amended--
0
a. In the section heading and paragraphs (a), (b), and (c) by removing
the term ``MAC'' each time it appears and adding ``Council'' in its
place.
0
b. In paragraph (a) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
0
c. In paragraph (b) by removing the term ``ALJ hearing decision'' and
adding ``ALJ's or attorney adjudicator's decision'' in its place.
Sec. 405.1130 [Amended]
0
71. Section 405.1130 is amended by removing the term ``MAC's'' each
time it appears and adding ``Council's'' in its place.
Sec. 405.1132 [Amended]
0
72. Section 405.1132 is amended--
0
a. In paragraphs (a) introductory text, (a)(2), and (b) by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
0
b. In paragraph (b) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
c. In paragraphs (a) introductory text, (a)(1), and (b) by removing the
term ``ALJ'' each time it appears and adding ``ALJ or attorney
adjudicator'' in its place.
Sec. 405.1134 [Amended]
0
73. Section 405.1134 is amended--
0
a. In paragraph (a) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
b. In paragraphs (b)(3) and (c) by removing the term ``MAC'' and adding
``Council'' in its place.
Sec. 405.1136 [Amended]
0
74. Section 405.1136 is amended--
0
a. In paragraphs (a)(1) and (2), and (c)(3) by removing the term
``MAC'' each time it appears and adding ``Council'' in its place.
0
b. In paragraph (a)(1) by removing the term ``ALJ's'' and adding
``ALJ's or attorney adjudicator's'' in its place.
0
c. In paragraphs (a)(2) and (c)(2) by removing the term ``MAC's'' each
time it appears and adding ``Council's'' in its place.
0
d. In paragraph (c)(3) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
Sec. 405.1138 [Amended]
0
75. Section 405.1138 is amended by--
0
a. Removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
b. Removing the term ``ALJ'' and adding ``ALJ or attorney adjudicator''
in its place.
Sec. 405.1140 [Amended]
0
76. Section 405.1140 is amended--
0
a. In the section heading and paragraphs (a)(1) through (3), (b)(1)
through (3), (c) heading, (c)(1), (3), and (4), and (d) by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
0
b. In the section heading and paragraphs (a)(1) through (3), (b)
heading, (b)(1) through (3), (c)(1) and (4), and (d) by removing the
term ``ALJ'' each time it appears and adding ``ALJ or attorney
adjudicator'' in its place.
0
c. In paragraph (d) by removing the term ``ALJ's'' and adding ``ALJ's
or attorney adjudicator's'' in its place.
0
77. Section 405.1204 is amended by revising paragraphs (c)(4)(iii) and
(c)(5) to read as follows:
Sec. 405.1204 Expedited reconsiderations.
* * * * *
(c) * * *
(4) * * *
(iii) Information about the beneficiary's right to appeal the QIC's
reconsideration decision to OMHA for an ALJ hearing in accordance with
subpart I of this part, including how to request an appeal and the time
period for doing so.
(5) Unless the beneficiary requests an extension in accordance with
paragraph (c)(6) of this section, if the QIC does not issue a decision
within 72 hours of receipt of the request, the QIC must notify the
beneficiary of his or her right to have the case escalated to OMHA for
an ALJ hearing in accordance with subpart I of this part, if the amount
remaining in controversy after the QIO determination meets the
requirements for an ALJ hearing under Sec. 405.1006.
* * * * *
PART 422--MEDICARE ADVANTAGE PROGRAM
0
78. The authority citation for part 422 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 422.561 [Amended]
0
79. Section 422.561 is amended in the definition of ``Appeal'' by
removing the phrase ``Medicare Appeals Council (MAC)'' and adding
``Medicare Appeals Council (Council)'' in its place.
0
80. Section 422.562 is amended in paragraph (b)(4)(v) by removing the
term ``MAC'' and adding ``Council'' in its place and by revising
paragraphs (c)(1) and (d) to read as follows:
Sec. 422.562 General provisions.
* * * * *
(c) * * *
(1) If an enrollee receives immediate QIO review (as provided in
Sec. 422.622) of a determination of noncoverage of inpatient hospital
care the enrollee is not entitled to review of that issue by the MA
organization.
* * * * *
(d) When other regulations apply. (1) Unless this subpart provides
otherwise and subject to paragraph (d)(2) of this section, 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.
(2) The following regulations in part 405 of this chapter, and any
references thereto, specifically do not apply under this subpart:
(i) Section 405.950 (time frames for making a redetermination).
[[Page 5125]]
(ii) Section 405.970 (time frames for making a reconsideration
following a contractor redetermination, including the option to
escalate an appeal to the OMHA level).
(iii) Section 405.1016 (time frames for deciding an appeal of a QIC
reconsideration, or escalated request for a QIC reconsideration,
including the option to escalate an appeal to the Council).
(iv) The option to request that an appeal be escalated from the
OMHA level to the Council as provided in Sec. 405.1100(b), and time
frames for the Council to decide an appeal of an ALJ's or attorney
adjudicator's decision or an appeal that is escalated from the OMHA
level to the Council as provided in Sec. 405.1100(c) and (d).
(v) Section 405.1132 (request for escalation to Federal court).
(vi) Sections 405.956(b)(8), 405.966(a)(2), 405.976(b)(5)(ii),
405.1018(c), 405.1028(a), and 405.1122(c), and any other reference to
requiring a determination of good cause for the introduction of new
evidence by a provider, supplier, or a beneficiary represented by a
provider or supplier.
0
81. Section 422.594 is amended by revising paragraph (b)(2) to read as
follows:
Sec. 422.594 Notice of reconsidered determination by the independent
entity.
* * * * *
(b) * * *
(2) If the reconsidered determination is adverse (that is, does not
completely reverse the MA organization's adverse organization
determination), inform the parties of their right to an ALJ hearing if
the amount in controversy meets the requirements of Sec. 422.600;
* * * * *
0
82. Section 422.602 is amended by revising paragraph (b) to read as
follows:
Sec. 422.602 Request for an ALJ hearing.
* * * * *
(b) When to file a request. (1) Except when an ALJ or attorney
adjudicator extends the time frame as provided in part 405 of this
chapter, a party must file a request for a hearing within 60 calendar
days of receipt of the notice of a reconsidered determination. The time
and place for a hearing before an ALJ will be set in accordance with
Sec. 405.1020 of this chapter.
(2) For purposes of this section, the date of receipt of the
reconsideration is presumed to be 5 calendar days after the date of the
notice of the reconsidered determination, unless there is evidence to
the contrary.
* * * * *
0
83. Section 422.608 is revised to read as follows:
Sec. 422.608 Medicare Appeals Council (Council) review.
Any party to the ALJ's or attorney adjudicator's decision or
dismissal, including the MA organization, who is dissatisfied with the
decision or dismissal, may request that the Council review the decision
or dismissal. The regulations under part 405 of this chapter regarding
Council review apply to matters addressed by this subpart to the extent
that they are appropriate, except as provided in Sec. 422.562(d)(2).
Sec. 422.612 [Amended]
0
84. Section 422.612 is amended--
0
a. In the paragraph (a) heading and paragraph (a) introductory text by
removing the term ``ALJ's'' and adding ``ALJ's or attorney
adjudicator's'' in its place.
0
b. In paragraph (a)(1) by removing the term ``Board'' and adding
``Council'' in its place.
0
c. In paragraph (b) by removing the term ``MAC'' each time it appears
and adding ``Council'' in its place.
Sec. 422.616 [Amended]
0
85. Section 422.616 is amended in paragraph (a) by removing the terms
``ALJ'' and ``MAC'' and adding in their place ``ALJ or attorney
adjudicator'' and ``Council'' respectively.
Sec. 422.618 [Amended]
0
86. Section 422.618 is amended--
0
a. In paragraph (c)(1) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
0
b. In paragraph (c)(2) by removing the terms ``Medicare Appeals
Council'', ``Medicare Appeals Council (the Board)'', and ``Board'' and
adding ``Council'' in their place.
Sec. 422.619 [Amended]
0
87. Section 422.619 is amended--
0
a. In paragraph (c)(1) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
0
b. In paragraph (c)(2) by removing the terms ``Medicare Appeals
Council'', ``Medicare Appeals Council (the Board)'', and ``Board'' and
adding ``Council'' in their place.
Sec. 422.622 [Amended]
0
88. In Sec. 422.622, paragraph (g)(2) is amended by removing the
phrase ``may appeal to an ALJ, the MAC, or a federal court'' and adding
``may appeal to OMHA for an ALJ hearing, the Council, or a Federal
court'' in its place.
Sec. 422.626 [Amended]
0
89. In Sec. 422.626, paragraph (g)(3) is amended by removing the
phrase ``to an ALJ, the MAC, or a Federal court'' and adding ``to OMHA
for an ALJ hearing, the Council, or a Federal court'' in its place.
PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
0
90. The authority citation for part 423 continues to read as follows:
Authority: Sections 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).
0
91. Section 423.558 is amended by revising paragraph (b) to read as
follows:
Sec. 423.558 Scope.
* * * * *
(b) The requirements regarding reopenings, ALJ hearings and ALJ and
attorney adjudicator decisions, Council review, and judicial review are
set forth in subpart U of this chapter.
Sec. 423.560 [Amended]
0
92. Section 423.560 is amended in the definition of ``Appeal'' by
removing the term ``Medicare Appeals Council (MAC)'' and adding
``Medicare Appeals Council (Council) in its place.
0
93. Section 423.562 is amended by revising paragraphs (b)(4)(v) and
(vi) to read as follows:
Sec. 423.562 General provisions.
* * * * *
(b) * * *
(4) * * *
(v) If the ALJ or attorney adjudicator affirms the IRE's adverse
coverage determination, in whole or in part, the right to request
Council review of the ALJ's or attorney adjudicator's decision, as
specified in Sec. 423.1974.
(vi) If the Council affirms the ALJ's or attorney adjudicator's
adverse coverage determination, in whole or in part, the right to
judicial review of the decision if the amount in controversy meets the
requirements in Sec. 423.1976.
* * * * *
Subpart U--Reopening, ALJ Hearings and ALJ and Attorney Adjudicator
Decisions, Council Review, and Judicial Review
0
94. The heading of subpart U is revised to read as set forth above.
0
95. Section 423.1968 is revised to read as follows:
Sec. 423.1968 Scope.
This subpart sets forth the requirements relating to the following:
(a) Part D sponsors, the Part D IRE, ALJs and attorney
adjudicators, and the Council with respect to reopenings.
[[Page 5126]]
(b) ALJs with respect to hearings and decisions or decisions of
attorney adjudicators if no hearing is conducted.
(c) The Council with respect to review of Part D appeals.
(d) Part D enrollees' rights with respect to reopenings, ALJ
hearings and ALJ or attorney adjudicator reviews, Council reviews, and
judicial review by a Federal District Court.
0
96. Section 423.1970 is amended by revising paragraphs (c)(1)(ii) and
(iii) and (c)(2)(ii) and (iii) to read as follows:
Sec. 423.1970 Right to an ALJ hearing.
* * * * *
(c) * * *
(1) * * *
(ii) The enrollee requests aggregation at the same time the
requests for hearing are filed, and the request for aggregation and
requests for hearing are filed within 60 calendar days after receipt of
the notice of reconsideration for each of the reconsiderations being
appealed, unless the deadline to file one or more of the requests for
hearing has been extended in accordance with Sec. 423.2014(d); and
(iii) The appeals the enrollee seeks to aggregate involve the
delivery of prescription drugs to a single enrollee, as determined by
an ALJ or attorney adjudicator. Only an ALJ may determine the appeals
the enrollee seeks to aggregate do not involve the delivery of
prescription drugs to a single enrollee.
(2) * * *
(ii) The enrollees request aggregation at the same time the
requests for hearing are filed, and the request for aggregation and
requests for hearing are filed within 60 calendar days after receipt of
the notice of reconsideration for each of the reconsiderations being
appealed, unless the deadline to file one or more of the requests for
hearing has been extended in accordance with Sec. 423.2014(d); and
(iii) The appeals the enrollees seek to aggregate involve the same
prescription drugs, as determined by an ALJ or attorney adjudicator.
Only an ALJ may determine the appeals the enrollees seek to aggregate
do not involve the same prescription drugs.
0
97. Section 423.1972 is amended by revising paragraphs (a), (b), and
(c)(1) to read as follows:
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 OMHA office specified in the
IRE's reconsideration notice.
(b) When to file a request. (1) Except when an ALJ or attorney
adjudicator extends the timeframe as provided in Sec. 423.2014(d), the
enrollee must file a request for a hearing within 60 calendar days of
receipt 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.
(2) For purposes of this section, the date of receipt of the
reconsideration determination is presumed to be 5 calendar days after
the date of the written reconsideration determination, unless there is
evidence to the contrary.
(c) * * *
(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 or
attorney adjudicator dismisses the request.
* * * * *
0
98. Section 423.1974 is revised to read as follows:
Sec. 423.1974 Council review.
An enrollee who is dissatisfied with an ALJ's or attorney
adjudicator's decision or dismissal may request that the Council review
the ALJ's or attorney adjudicator's decision or dismissal as provided
in Sec. 423.2102.
Sec. 423.1976 [Amended]
0
99. Section 423.1976 is amended--
0
a. In the (a) paragraph heading and paragraph (a) introductory text by
removing the term ``ALJ's'' and adding ``ALJ's or attorney
adjudicator's'' in its place.
0
b. In paragraphs (a)(1) and (b) by removing the term ``MAC'' each time
it appears and adding ``Council'' in its place.
Sec. 423.1978 [Amended]
0
100. In Sec. 423.1978, paragraph (a) is amended by removing the phrase
``ALJ or the MAC'' and adding ``ALJ or attorney adjudicator or the
Council'' in its place.
0
101. Section 423.1980 is amended by revising the section heading and
paragraphs (a)(1)(iii) and (iv), (a)(2) and (4), (d) heading, (d)(2)
and (3), (e) heading, and (e)(2) and (3) to read as follows:
Sec. 423.1980 Reopening of coverage determinations,
redeterminations, reconsiderations, decisions, and reviews.
(a) * * *
(1) * * *
(iii) An ALJ or attorney adjudicator to revise his or her decision;
or
(iv) The Council to revise the ALJ or attorney adjudicator
decision, or its review decision.
(2) When an enrollee has filed a valid request for an appeal of a
coverage determination, redetermination, reconsideration, ALJ or
attorney adjudicator decision, or Council 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
attorney adjudicator, or Council may reopen as set forth in this
section.
* * * * *
(4) Consistent with Sec. 423.1978(d), the Part D plan sponsor's,
IRE's, ALJ's or attorney adjudicator's, or Council's decision on
whether to reopen is binding and not subject to appeal.
* * * * *
(d) Time frame and requirements for reopening reconsiderations,
decisions and reviews initiated by an IRE, ALJ or attorney adjudicator,
or the Council.
* * * * *
(2) An ALJ or attorney adjudicator may reopen his or her decision,
or the Council may reopen an ALJ or attorney adjudicator 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 decision was
procured by fraud or similar fault, then the ALJ or attorney
adjudicator may reopen his or her decision, or the Council may reopen
an ALJ or attorney adjudicator decision at any time.
(3) The Council 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 Council's decision was
procured by fraud or similar fault, then the Council may reopen at any
time.
(e) Time frames and requirements for reopening reconsiderations,
decisions, and reviews requested by an enrollee or a Part D plan
sponsor.
* * * * *
(2) An enrollee who received an ALJ's or attorney adjudicator's
decision or a Part D plan sponsor may request that an ALJ or attorney
adjudicator reopen his or her decision, or the Council reopen an ALJ or
attorney adjudicator decision, within 180 calendar days from the date
of the decision for good cause in accordance with Sec. 423.1986.
(3) An enrollee who received a Council decision or a Part D plan
sponsor may request that the Council 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 [Amended]
0
102. Section 423.1982 is amended--
0
a. In paragraphs (a)(1) and (2) and (b)(1) and (2) by removing the term
[[Page 5127]]
``ALJ'' and adding ``ALJ or attorney adjudicator'' in its place.
0
b. In paragraphs (a)(1) and (2) and (b)(1) and (2) by removing the term
``MAC'' and adding ``Council'' in its place.
0
103. Section 423.1984 is amended by revising paragraphs (d) and (e) to
read as follows:
Sec. 423.1984 Effect of a revised determination or decision.
* * * * *
(d) ALJ or attorney adjudicator decisions. The revision of an ALJ
or attorney adjudicator decision is binding unless an enrollee submits
a request for a Council review that is accepted and processed as
specified in Sec. 423.1974 and Sec. 423.2100 through Sec. 423.2130.
(e) Council review. The revision of a Council determination or
decision is binding unless an enrollee files a civil action in which a
Federal District Court accepts jurisdiction and issues a decision.
* * * * *
0
104. Section 423.1990 is amended--
0
a. In paragraphs (a)(2), (b)(1) introductory text, (b)(1)(ii), and
(b)(4) by removing the term ``MAC'' each time it appears and adding
``Council'' in its place
0
b. In paragraph (d)(2)(ii) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
c. In paragraph (b)(1)(i) by removing the phrase ``final decision'' and
adding ``decision'' in its place and by removing the phrase ``order of
the ALJ'' and adding ``order of the ALJ or an attorney adjudicator'' in
its place.
0
d. In paragraph (b)(1)(ii) by removing the term ``ALJ'' and adding
``ALJ or attorney adjudicator'' in its place.
0
e. In paragraphs (c)(3), (4), and (5) by removing the term ``ALJ
hearing decision'' and adding ``ALJ or attorney adjudicator decision''
in its place.
0
f. By revising paragraph (d)(1).
0
g. In paragraph (d)(2)(i) by removing the term ``ALJ's'' and adding
``ALJ's or attorney adjudicator's'' in its place.
0
h. By revising paragraph (h).
The revisions read as follows:
Sec. 423.1990 Expedited access to judicial review.
* * * * *
(d) * * *
(1) Method and place for filing request. The enrollee may--
(i) If a request for ALJ hearing or Council review is not pending,
file a written EAJR request with the HHS Departmental Appeals Board,
with his or her request for an ALJ hearing or Council review; or
(ii) If an appeal is already pending for an ALJ hearing or
otherwise before OMHA or the Council, file a written EAJR request with
the HHS Departmental Appeals Board.
* * * * *
(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 forwards the request to OMHA or the Council, which will
treat it as a request for hearing or for Council review, as
appropriate.
(2) Whenever a review entity forwards a rejected EAJR request to
OMHA or the Council, the appeal is considered timely filed and, if an
adjudication time frame applies to the appeal, the adjudication time
frame begins on the day the request is received by OMHA or the Council
from the review entity.
0
105. Section 423.2000 is amended by revising the section heading and
paragraphs (a), (b) through (e), and (g) to read as follows:
Sec. 423.2000 Hearing before an ALJ and decision by an ALJ or
attorney adjudicator: General rule.
(a) If an enrollee is dissatisfied with an IRE's reconsideration,
the enrollee may request a hearing before an ALJ.
(b) A hearing before an ALJ 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, CMS, or the IRE
may participate in the proceedings on a request for an ALJ hearing as
specified in Sec. 423.2010.
(d) The ALJ or attorney adjudicator conducts a de novo review and
issues a decision based on the administrative record, including, for an
ALJ, any 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 or an
attorney adjudicator may make a decision based on the evidence that is
in the file and any new evidence that is submitted for consideration.
* * * * *
(g) An ALJ or attorney adjudicator may also issue a decision on the
record on his or her own initiative if the evidence in the
administrative record supports a fully favorable finding.
Sec. 423.2002 [Amended]
0
106. Section 423.2002 is amended--
0
a. In paragraph (a) introductory text by removing the phrase ``may
request'' and adding ``has a right to'' in its place.
0
b. In paragraph (c) by removing the phrase ``The ALJ'' and adding
``OMHA'' in its place.
0
c. In paragraph (e) by removing the word ``entity'' and adding
``office'' in its place.
0
107. Section 423.2004 is amended by revising the section heading and
paragraphs (a) introductory text, (a)(1) and (4), (b), and (c) and
adding paragraph (d) to read as follows:
Sec. 423.2004 Right to a 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 or attorney adjudicator if--
(1) The enrollee files a written request for review within 60
calendar days after receipt of the notice of the IRE's dismissal.
* * * * *
(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
office specified in the IRE's dismissal.
(b) If the ALJ or attorney adjudicator 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 in accordance with Sec.
423.2056.
(c) If the ALJ or attorney adjudicator affirms the IRE's dismissal
of a reconsideration request, he or she issues a notice of decision
affirming the IRE's dismissal in accordance with Sec. 423.2046(b).
(d) The ALJ or attorney adjudicator may dismiss the request for
review of an IRE's dismissal in accordance with Sec. 423.2052(b).
0
108. Section 423.2008 is revised to read as follows:
Sec. 423.2008 Parties to the proceedings on a request for an ALJ
hearing.
The enrollee (or the enrollee's representative) who filed the
request for hearing is the only party to the proceedings on a request
for an ALJ hearing.
0
109. Section 423.2010 is revised to read as follows:
Sec. 423.2010 When CMS, the IRE, or Part D plan sponsors may
participate in the proceedings on a request for an ALJ hearing.
(a) When CMS, the IRE, or the Part D plan sponsor may participate.
(1) CMS, the IRE, and/or the Part D plan sponsor may request to
participate in the proceedings on a request for an ALJ hearing upon
filing a request to
[[Page 5128]]
participate in accordance with paragraph (b) of this section.
(2) 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. 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.
(b) How a request to participate is made--(1) No notice of hearing.
If CMS, the IRE, and/or the Part D plan sponsor requests participation
before it receives a notice of hearing, or when no notice is required,
it must send written notice of its request to participate to the
assigned ALJ or attorney adjudicator, or a designee of the Chief ALJ if
the request is not yet assigned to an ALJ or attorney adjudicator, and
the enrollee, except that the request may be made orally if a request
for an expedited hearing was filed and OMHA will notify the enrollee of
the request to participate.
(2) Notice of hearing. If CMS, the IRE, and/or the Part D plan
sponsor requests participation after the IRE and Part D plan sponsor
receive a notice of hearing, it must send written notice of its request
to participate to the ALJ and the enrollee, except that the request to
participate may be made orally for an expedited hearing and OMHA will
notify the enrollee of the request to participate.
(3) Timing of request. CMS, the IRE, and/or the Part D plan sponsor
must send its request to participate--
(i) If a standard request for hearing was filed, if no hearing is
scheduled, within 30 calendar days after notification that a standard
request for hearing was filed;
(ii) If an expedited hearing is requested, but no hearing has been
scheduled, within 2 calendar days after notification that a request for
an expedited hearing was filed.
(iii) If a non-expedited hearing is scheduled, within 5 calendar
days after receiving the notice of hearing; or
(iv) If an expedited hearing is scheduled, within 1 calendar day
after receiving the notice of hearing. Requests may be made orally or
submitted by facsimile to the hearing office.
(c) The ALJ's or attorney adjudicator's decision on a request to
participate. The assigned ALJ or attorney adjudicator has discretion
not to allow CMS, the IRE, and/or the Part D plan sponsor to
participate. The ALJ or attorney adjudicator must notify the entity
requesting participation, the Part D plan sponsor, if applicable, and
the enrollee of his or her decision on the request to participate
within the following time frames--
(1) If no hearing is scheduled, at least 20 calendar days before
the ALJ or attorney adjudicator issues a decision, dismissal, or
remand;
(2) If a non-expedited hearing is scheduled, within 5 calendar days
of receipt of a request to participate; or
(3) If an expedited hearing is scheduled, within 1 calendar of
receipt of a request to participate.
(d) Roles and responsibilities of CMS, the IRE, and/or the Part D
plan sponsor as a participant. (1) Participation may include filing
position papers and/or providing 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.
(2) 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 and is not subject to
examination or cross-examination by the enrollee, but the enrollee may
provide testimony to rebut factual or policy statements made by a
participant and the ALJ may question the participant about its
testimony.
(3) CMS, IRE, and/or Part D plan sponsor positon papers and written
testimony are subject to the following:
(i) Unless the ALJ or attorney adjudicator grants additional time
to submit a position paper or written testimony, a position paper and
written testimony must be submitted--
(A) Within 14 calendar days for a standard appeal, or 1 calendar
day for an expedited appeal, after receipt of the ALJ's or attorney
adjudicator's decision on a request to participate if no hearing has
been scheduled; or
(B) No later than 5 calendar days prior to the hearing if a non-
expedited hearing is scheduled, or 1 calendar day prior to the hearing
if an expedited hearing is scheduled.
(ii) A copy of any position paper and written testimony that CMS,
the IRE, or the Part D plan sponsor submits to OMHA must be sent within
the same time frames specified in paragraph (d)(3)(i)(A) and (B) of
this section to the enrollee.
(iii) If CMS, the IRE, and/or the Part D plan sponsor fails to send
a copy of its position paper or written testimony to the enrollee or
fails to submit its position paper or written testimony within the time
frames described in this section, the position paper or written
testimony will not be considered in deciding the appeal.
(e) Invalid requests to participate. (1) An ALJ or attorney
adjudicator may determine that a CMS, IRE, and/or Part D plan sponsor
request to participate is invalid under this section if the request to
participate was not timely filed or the request to participate was not
sent to the enrollee.
(2) If the request to participate is determined to be invalid, the
written notice of an invalid request to participate must be sent to the
entity that made the request to participate and the enrollee.
(i) If no hearing is scheduled or the request to participate was
made after the hearing occurred, the written notice of an invalid
request to participate must be sent no later than the date the notice
of decision, dismissal, or remand is mailed.
(ii) If a non-expedited hearing is scheduled, the written notice of
an invalid request to participate must be sent prior to the hearing. If
the notice would be sent fewer than 5 calendar days before the hearing
is scheduled to occur, oral notice must be provided to the entity that
submitted the request, and the written notice must be sent as soon as
possible after the oral notice is provided.
(iii) If an expedited hearing is scheduled, oral notice of an
invalid request to participate must be provided to the entity that
submitted the request, and the written notice must be sent as soon as
possible after the oral notice is provided.
0
110. Section 423.2014 is revised to read as follows:
Sec. 423.2014 Request for an ALJ hearing or a review of an IRE
dismissal.
(a) Content of the request. (1) The request for an ALJ hearing or a
review of an IRE dismissal 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--
(i) The name, address, telephone number, and Medicare health
insurance claim number of the enrollee.
(ii) The name, address, and telephone number of the appointed
representative, as defined at Sec. 423.560, if any.
(iii) The Medicare appeal number, if any, assigned to the IRE
reconsideration or dismissal being appealed.
(iv) The prescription drug in dispute.
(v) The plan name.
(vi) The reasons the enrollee disagrees with the IRE's
reconsideration or dismissal being appealed.
(2) The enrollee must submit a statement of any additional evidence
to be submitted and the date it will be submitted.
(3) The enrollee must submit a statement that the enrollee is
requesting an expedited hearing, if applicable.
[[Page 5129]]
(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. OMHA 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) Complete request required. (1) A request must contain the
information in paragraph (a)(1) of this section to the extent the
information is applicable, to be considered complete. If a request is
not complete, the enrollee will be provided with an opportunity to
complete the request, and if an adjudication time frame applies it does
not begin until the request is complete. If the enrollee fails to
provide the information necessary to complete the request within the
time frame provided, the enrollee's request for hearing or review will
be dismissed.
(2) If supporting materials submitted with a request clearly
provide information required for a complete request, the materials will
be considered in determining whether the request is complete.
(d) When and where to file. Consistent with Sec. 423.1972(a) and
(b), the request for an ALJ hearing after an IRE reconsideration or
request for review of an IRE dismissal must be filed:
(1) Within 60 calendar days from the date the enrollee receives
written notice of the IRE's reconsideration or dismissal being
appealed.
(2) With the office specified in the IRE's reconsideration or
dismissal.
(i) If the request for hearing is timely filed with an office other
than the office specified in the IRE's reconsideration, the request is
not treated as untimely, and any applicable time frame specified in
Sec. 423.2016 for deciding the appeal begins on the date the office
specified in the IRE's reconsideration or dismissal receives the
request for hearing.
(ii) If the request for hearing is filed with an office, other than
the office specified in the IRE's reconsideration or dismissal, OMHA
must notify the enrollee of the date the request was received in the
correct office and the commencement of any applicable adjudication
timeframe.
(e) Extension of time to request a hearing or review. (1)
Consistent with Sec. 423.1972(b), if the request for hearing or review
is not filed within 60 calendar days of receipt of the written IRE's
reconsideration or dismissal, 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. OMHA 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
or review was not filed within the stated time period, and must be
filed with the request for hearing or review of an IRE dismissal with
the office specified in the notice of reconsideration or dismissal.
(4) An ALJ or attorney adjudicator may find there is good cause for
missing the deadline to file a request for an ALJ hearing or request
for review of an IRE dismissal, or there is no good cause for missing
the deadline to file a request for a review of an IRE dismissal, but
only an ALJ may find there is no good cause for missing the deadline to
file a request for an ALJ hearing. If good cause is found for missing
the deadline, the time period for filing the request for hearing or
request for review of an IRE dismissal will be extended. To determine
whether good cause for late filing exists, the ALJ or attorney
adjudicator uses the standards set forth in Sec. 405.942(b)(2) and (3)
of this chapter.
(5) If a request for hearing is not timely filed, any applicable
adjudication period in Sec. 423.2016 begins the date the ALJ or
attorney adjudicator grants the request to extend the filing deadline.
(6) A determination granting a request to extend the filing
deadline is not subject to further review.
0
111. Section 423.2016 is revised to read as follows:
Sec. 423.2016 Timeframes for deciding an appeal of an IRE
reconsideration.
(a) Standard appeals. (1) When a request for an ALJ hearing is
filed after an IRE has issued a written reconsideration, an ALJ or
attorney adjudicator issues 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 office
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)(1) of this
section begins on the date that a timely filed request for hearing is
received by the office specified in the IRE's reconsideration, or, if
it is not timely filed, the date that the ALJ or attorney adjudicator
grants any extension to the filing deadline.
(3) If the Council remands a case and the case was subject to an
adjudication time frame under paragraph (a)(1) of this section, the
remanded appeal will be subject to the same adjudication time frame
beginning on the date that OMHA receives the Council remand.
(b) Expedited appeals--(1) Standard for expedited appeal. An ALJ or
attorney adjudicator issues an expedited 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 an
ALJ or attorney adjudicator determines that applying the standard
timeframe for making a decision may seriously jeopardize the enrollee's
life, health or ability to regain maximum function. An ALJ or attorney
adjudicator 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 an ALJ or attorney adjudicator grants a
request for expedited hearing, an ALJ or attorney adjudicator must--
(i) Make the decision to grant an expedited appeal within 5
calendar days of receipt of the request for an 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 an ALJ or attorney adjudicator denies a
request for expedited hearing, an ALJ or attorney adjudicator 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 an ALJ or attorney
adjudicator will process the enrollee's request using the 90 calendar
day timeframe for non-expedited appeals; 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) Decision not appealable. A decision on a request for expedited
hearing may not be appealed.
(5) Time frame for adjudication. (i) If an ALJ or attorney
adjudicator accepts a request for expedited hearing, an ALJ or attorney
adjudicator issues 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
[[Page 5130]]
beginning on the date the request for hearing is received by the office
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 provided request for
hearing is received by the office specified in the IRE's
reconsideration, or, if it is not timely provided, the date that an ALJ
or attorney adjudicator grants any extension to the filing deadline.
(6) Time frame for Council remands. If the Council remands a case
and the case was subject to an adjudication time frame under paragraph
(b)(5) of this section, the remanded appeal will be subject to the same
adjudication timeframe beginning on the date that OMHA receives the
Council remand, if the standards for an expedited appeal continue to be
met. If the standards for an expedited appeal are no longer met, the
appeal will be subject to the adjudication time frame for a standard
appeal.
(c) Waivers and extensions of adjudication period. (1) At any time
during the adjudication process, the enrollee may waive the
adjudication period specified in paragraphs (a)(1) and (b)(5) of this
section. The waiver may be for a specific period of time agreed upon by
the ALJ or attorney adjudicator and the enrollee.
(2) The adjudication periods specified in paragraphs (a)(1) and
(b)(5) of this section are extended as otherwise specified in this
subpart, and for the following events--
(i) The duration of a stay of action on adjudicating the matters at
issue ordered by a court or tribunal of competent jurisdiction;
(ii) The duration of a stay of proceedings granted by an ALJ or
attorney adjudicator on a motion by an enrollee.
0
112. Section 423.2018 is revised to read as follows:
Sec. 423.2018 Submitting evidence.
(a) All appeals. An enrollee must submit any written or other
evidence that he or she wishes to have considered.
(1) An ALJ or attorney adjudicator will not consider any evidence
submitted regarding a change in condition of an enrollee after the
appealed coverage determination was made.
(2) An ALJ or attorney adjudicator 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 appeals. (1) Except as provided in this
paragraph, a represented enrollee must submit all written or other
evidence he or she wishes to have considered with the request for
hearing, by the date specified in the request for hearing in accordance
with Sec. 423.2014(a)(2), or, if a hearing is scheduled, within 10
calendar days of receiving the notice of hearing.
(2) If a represented enrollee submits written or other evidence
later than 10 calendar days after receiving the notice of hearing, any
applicable adjudication period specified in Sec. 423.2016 is extended
by the number of calendar days in the period between 10 calendar days
after receipt of the notice of hearing and the day the evidence is
received.
(3) The requirements of paragraph (b) of this section do not apply
to unrepresented enrollees.
(c) Expedited appeals. (1) Except as provided in this section, an
enrollee must submit all written or other evidence he or she wishes to
have considered with the request for hearing, by the date specified in
the request for hearing pursuant to Sec. 423.2014(a)(2), or, if an
expedited hearing is scheduled, within 2 calendar days of receiving the
notice of the expedited hearing.
(2) If an enrollee submits written or other evidence later than 2
calendar days after receiving the notice of expedited hearing, any
applicable adjudication period specified in Sec. 423.2016 is extended
by the number of calendar days in the period between 2 calendar days
after receipt of the notice of expedited hearing and the day the
evidence is received.
(d) When this section does not apply. The requirements of
paragraphs (b) and (c) of this section do not apply to oral testimony
given at a hearing.
0
113. Section 423.2020 is amended by--
0
a. Revising paragraphs (b), (c), (d), and (e)(3) and (4).
0
b. Adding paragraphs (g)(3)(vii) and (viii).
0
c. Revising paragraphs (h), (i) heading, and (i)(1), (2), (4), and (5).
0
d. Adding paragraph (j).
The revisions and additions read as follows:
Sec. 423.2020 Time and place for a hearing before an ALJ.
* * * * *
(b) Determining how appearances are made. (1) Appearances by
unrepresented enrollees. The ALJ will direct that the appearance of an
unrepresented enrollee who filed a request for hearing be conducted by
video-teleconferencing if the ALJ finds that video-teleconferencing
technology is available to conduct the appearance, unless the ALJ finds
good cause for an in-person appearance.
(i) 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 unrepresented enrollee.
(ii) The ALJ, with the concurrence of the Chief ALJ or designee,
may find good cause that an in-person hearing should be conducted if--
(A) The video-teleconferencing or telephone technology is not
available; or
(B) Special or extraordinary circumstances exist.
(2) Appearances by represented enrollees. The ALJ will direct that
the appearance of an individual, other than an unrepresented enrollee
who filed a request for hearing, be conducted by telephone, unless the
ALJ finds good cause for an appearance by other means.
(i) The ALJ may find good cause for an appearance by video-
teleconferencing if he or she determines that video-teleconferencing is
necessary to examine the facts or issues involved in the appeal.
(ii) The ALJ, with the concurrence of the Chief ALJ or designee,
may find good cause that an in-person hearing should be conducted if--
(A) The video-teleconferencing and telephone technology are not
available; or
(B) Special or extraordinary circumstances exist.
(c) Notice of hearing. (1) A notice of hearing is sent 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 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 whether they
object to the proposed time and/or place of the hearing;
(ii) If the representative is an entity or organization, specifying
who from the entity or organization plans to attend the hearing, if
anyone, and in what capacity, in addition to the individual who filed
the request for hearing; and
(iii) Listing the witnesses who will be providing testimony at the
hearing.
(3) The notice of hearing will require CMS, the IRE, or the Part D
plan sponsor that requests to attend the hearing as a participant to
reply to the notice by:
[[Page 5131]]
(i) Acknowledging whether it plans to attend the hearing at the
time and place proposed in the notice of hearing; and
(ii) Specifying who from the entity plans to attend the hearing,
(d) An enrollee's right to waive a hearing. An enrollee may also
waive the right to a hearing and request a decision based on the
written evidence in the record in accordance with Sec. 423.2038(b).
(1) As specified in Sec. 423.2000, an ALJ may require the enrollee
to attend a hearing if it is necessary to decide the case.
(2) If an 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) * * *
(3) The objection must be in writing except for an expedited
hearing when the objection may be provided orally, and except that the
enrollee may orally request that a non-expedited hearing be rescheduled
in an emergency circumstance the day prior to or day of the hearing.
The ALJ must document all oral objections to the time and place of a
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.
* * * * *
(g) * * *
(3) * * *
(vii) The enrollee or enrollee's representative has a prior
commitment that cannot be changed without significant expense.
(viii) The enrollee or enrollee's representative asserts he or she
did not receive the notice of hearing and is unable to appear at the
scheduled time and place.
(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 period specified in Sec.
423.2016.
(i) An enrollee's request for an in-person or video-
teleconferencing hearing. (1) If an unrepresented enrollee objects to a
video-teleconferencing hearing or to the ALJ's offer to conduct a
hearing by telephone, or a represented enrollee who filed the request
for hearing objects to a telephone or video-teleconferencing hearing,
the enrollee or the enrollee's representative must notify the ALJ at
the earliest possible opportunity before the time set for the hearing
and request a video-teleconferencing or an in-person hearing.
(2) The enrollee must state the reason for the objection and state
the time and/or place he or she wants an in-person or video-
teleconferencing hearing to be held.
* * * * *
(4) When an enrollee's request for an in-person or video-
teleconferencing hearing is granted and an adjudication time frame
applies in accordance with Sec. 423.2016, the ALJ issues a decision,
dismissal, or remand to the IRE within the adjudication time frame
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
Chief ALJ or designee, upon a finding of good cause and will reschedule
the hearing for a time and place when the enrollee may appear in person
or by video-teleconference before the ALJ.
(j) Amended notice of hearing. If the ALJ changes or will change
the time and/or place of the hearing, an amended notice of hearing must
be sent to the enrollee and CMS, the IRE, and/or the Part D plan
sponsor in accordance with Sec. 423.2022(a)(2).
0
114. Section 423.2022 is revised to read as follows:
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 in accordance with OMHA procedures to the enrollee and
other potential participants, as provided in Sec. 423.2020(c) at their
last known addresses, or given by personal service, except to an
enrollee or other potential participant who indicates in writing that
he or she does not wish to receive this notice.
(2) The notice is mailed, transmitted, or served at least 20
calendar days before the hearing, except for expedited hearings where
written notice is mailed, transmitted, or served at least 3 calendar
days before the hearing, unless the enrollee or other potential
participant agrees in writing to the notice being mailed, transmitted,
or served fewer than 20 calendar days before the non-expedited hearing
or 3 calendar days before the expedited 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--
(b) Notice information. (1) The notice of hearing contains--
(i) A statement that the issues before the ALJ include all of the
issues brought out in the coverage determination, redetermination, or
reconsideration that were not decided entirely in the enrollee's favor
and that were specified in the request for hearing; and
(ii) A statement of any specific new issues the ALJ will consider
in accordance with Sec. 423.2032.
(2) The notice will inform the enrollee that he or she may
designate a person to represent him or her during the proceedings.
(3) The notice must include an explanation of the procedures for
requesting a change in the time or place of the hearing, a reminder
that the ALJ may dismiss the hearing request if the enrollee fails to
appear at the scheduled hearing without good cause, and other
information about the scheduling and conduct of the hearing.
(4) 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.
(5) 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, OMHA attempts to contact the enrollee for an explanation.
(2) If the enrollee states that he or she did not receive the
notice of hearing, a copy of the notice is sent to him or her by
certified mail or other means requested by the enrollee and in
accordance with OMHA procedures.
(3) The enrollee may request that the ALJ reschedule the hearing in
accordance with Sec. 423.2020(e).
[[Page 5132]]
0
115. Section 423.2024 is amended in paragraph (a) by removing the
phrase ``The ALJ hearing office'' and adding ``OMHA'' in its place and
revising paragraph (c) to read as follows:
Sec. 423.2024 Objections to the issues.
* * * * *
(c) The ALJ makes a decision on the objections either in writing,
at a prehearing conference, or at the hearing.
0
116. Section 423.2026 is revised to read as follows:
Sec. 423.2026 Disqualification of the ALJ or attorney adjudicator.
(a) An ALJ or attorney adjudicator may not adjudicate an appeal 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 or attorney adjudicator
assigned to adjudicate the appeal, the enrollee must notify the ALJ
within 10 calendar days of the date of the notice of hearing if a non-
expedited hearing is scheduled, 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, or the ALJ or
attorney adjudicator at any time before a decision, dismissal order, or
remand order is issued if no hearing is scheduled. The ALJ or attorney
adjudicator must document all oral objections in writing and maintain
the documentation in the case files. The ALJ or attorney adjudicator
considers the enrollee's objections and decides whether to proceed with
the appeal or withdraw.
(c) If the ALJ or attorney adjudicator withdraws, another ALJ or
attorney adjudicator will be assigned to adjudicate the appeal. If the
ALJ or attorney adjudicator does not withdraw, the enrollee may, after
the ALJ or attorney adjudicator has issued an action in the case,
present his or her objections to the Council in accordance with Sec.
423.2100 through Sec. 423.2130. The Council will then consider whether
the decision or dismissal should be revised or, if applicable, a new
hearing held before another ALJ.
(d) If the enrollee objects to the ALJ or attorney adjudicator and
the ALJ or attorney adjudicator subsequently withdraws from the appeal,
any adjudication period that applies to the appeal in accordance with
Sec. 423.2016 is extended by 14 calendar days for a standard appeal,
or 2 calendar days for an expedited appeal.
0
117. Section 423.2030 is revised to read as follows:
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. (1) The ALJ fully examines the issues,
questions the enrollee and other witnesses, and may accept evidence
that is material to the issues consistent with Sec. 423.2018.
(2) The ALJ may limit testimony and argument at the hearing that
are not relevant to an issue before the ALJ, that are repetitive of
evidence or testimony already in the record, or that relate to an issue
that has been sufficiently developed or on which the ALJ has already
ruled. The ALJ may, but is not required to, provide the enrollee or
representative with an opportunity to submit additional written
statements and affidavits on the matter in lieu of testimony and/or
argument at the hearing. The written statements and affidavits must be
submitted within the time frame designated by the ALJ.
(3) If the ALJ determines that the enrollee or enrollee's
representative is uncooperative, disruptive to the hearing, or abusive
during the course of the hearing after the ALJ has warned the enrollee
or representative to stop such behavior, the ALJ may excuse the
enrollee or representative from the hearing and continue with the
hearing to provide the participants with an opportunity to offer
testimony and/or argument. If an enrollee or representative was excused
from the hearing, the ALJ will provide the enrollee or representative
with an opportunity to submit written statements and affidavits in lieu
of testimony and/or argument at the hearing, and the enrollee or
representative may request a recording of the hearing in accordance
with Sec. 423.2042 and respond in writing to any statements made by
participants and/or testimony of the witnesses at the hearing. The
written statements and affidavits must be submitted within the time
frame designated by the ALJ.
(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) Effect of new evidence on adjudication period. If an enrollee,
other than an unrepresented enrollee in a standard appeal, submits
evidence pursuant to paragraph (b) or (c) of this section, and an
adjudication period applies to the appeal, the adjudication period
specified in Sec. 423.2016 is extended in accordance with Sec.
423.2018(b) or (c), as applicable.
(e) Continued hearing. (1) A hearing may be continued to a later
date. Notice of the continued hearing must be sent in accordance with
Sec. 423.2022, except that a waiver of notice of the hearing may be
made in writing or on the record, and the notice is sent to the
enrollee and participants who attended the hearing, and any additional
potential participants the ALJ determines are appropriate.
(2) If the enrollee requests the continuance and an adjudication
time frame applies to the appeal in accordance with Sec. 423.2016, the
adjudication period is extended by the period between the initial
hearing date and the continued hearing date.
(f) Supplemental hearing. (1) The ALJ may conduct a supplemental
hearing at any time before he or she mails a notice of the decision in
order to receive new and material evidence, obtain additional
testimony, or address a procedural matter. The ALJ determines whether a
supplemental hearing is necessary and if one is held, the scope of the
hearing, including when evidence is presented and what issues are
discussed. Notice of the supplemental hearing must be sent in
accordance with Sec. 423.2022, except that the notice is sent to the
enrollee and participants who attended the hearing, and any additional
potential participants the ALJ determines are appropriate.
(2) If the enrollee requests the supplemental hearing and an
adjudication period applies to the appeal in accordance with Sec.
423.2016, the adjudication period is extended by the period between the
initial hearing date and the supplemental hearing date.
0
118. Section 423.2032 is revised to read as follows:
Sec. 423.2032 Issues before an ALJ or attorney adjudicator.
(a) General rule. The issues before the ALJ or attorney adjudicator
include all the issues for the appealed matter specified in the request
for hearing that were brought out in the coverage determination,
redetermination, or reconsideration that were not decided entirely in
an enrollee's favor.
(b) New issues--(1) When a new issue may be considered. A new issue
may include issues resulting from the participation of CMS, the IRE, or
the Part D plan sponsor at the OMHA level of adjudication and from any
evidence and position papers submitted by CMS, the IRE, or the Part D
plan sponsor for the first time to the ALJ. The ALJ or the enrollee may
raise a new issue; however, the ALJ may only consider a new issue
relating to a determination or appealed matter specified in the request
for hearing, including a favorable portion of a determination or
appealed
[[Page 5133]]
matter specified in the request for hearing, if its resolution could
have a material impact on the appealed matter and--
(i) There is new and material evidence that was not available or
known at the time of the determination and that may result in a
different conclusion; or
(ii) The evidence that was considered in making the determination
clearly shows on its face that an obvious error was made at the time of
the determination.
(2) Notice of the new issue. The ALJ may consider a new issue at
the hearing if he or she notifies the enrollee about the new issue
before the start of the hearing.
(3) Opportunity to submit evidence. If notice of the new issue is
sent after the notice of hearing, the enrollee will have at least 10
calendar days in standard appeals or 2 calendar days in expedited
appeals after receiving notice of the new issue to submit evidence
regarding the issue, and without affecting any applicable adjudication
period. If a hearing is conducted before the time to submit evidence
regarding the issue expires, the record will remain open until the
opportunity to submit evidence expires.
(c) Adding coverage determinations to a pending appeal. A coverage
determination on a drug that was not specified in a request for hearing
may only be added to pending appeal if the coverage determination was
adjudicated in the same reconsideration that is appealed, and the
period to request an ALJ hearing for that reconsideration has not
expired, or an ALJ or attorney adjudicator extends the time to request
an ALJ hearing on the reconsideration in accordance with Sec.
423.2014(e).
0
119. Section 423.2034 is revised to read as follows:
Sec. 423.2034 Requesting information from the IRE.
(a) If an ALJ or attorney adjudicator 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, the information may be requested from
the IRE that conducted the reconsideration or its successor.
(1) Official copies of redeterminations and reconsiderations that
were conducted on the appealed issues can be provided only by CMS, the
IRE, and/or the Part D plan sponsor. Prior to issuing a request for
information to the IRE, OMHA will confirm whether an electronic copy of
the missing redetermination or reconsideration is available in the
official system of record, and if so will accept the electronic copy as
an official copy.
(2) ``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. Information that is publicly available includes,
but is not limited to, information available on a CMS, IRE or Part D
Plan sponsor Web site or information in an official CMS or HHS
publication.
(b) The ALJ or attorney adjudicator retains jurisdiction of the
case, and the case remains pending at OMHA.
(c) The IRE has 15 calendar days for standard appeals, or 2
calendar days for expedited appeals, after receiving the request for
information to furnish the information or otherwise respond to the
information request directly or through CMS or the Part D plan sponsor.
(d) If an adjudication period applies to the appeal in accordance
with Sec. 423.2016, the adjudication period is extended by the period
between the date of the request for information and the date the IRE
responds to the request or 20 calendar days after the date of the
request for standard appeals, or 3 calendar days after the date of the
request for expedited appeals, whichever occurs first.
Sec. 423.2036 [Amended]
0
120. Section 423.2036 is amended--
0
a. In paragraph (b)(1) introductory text by removing the phrase ``send
the ALJ'' and adding ``submit to OMHA'' in its place.
0
b. In paragraph (b)(1)(ii) by removing the phrase ``The ALJ hearing
office'' and adding ``OMHA'' in its place.
0
c. By removing paragraph (d).
0
d. By redesignating paragraph (g) as new paragraph (d).
0
e. In paragraphs (f)(2), (f)(3) introductory text, and (f)(3)(i), (ii),
and (iii) by removing the term ``MAC'' and adding ``Council'' in its
place.
0
f. In paragraph (f)(2) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
121. Section 423.2038 is revised to read as follows:
Sec. 423.2038 Deciding a case without a hearing before an ALJ.
(a) Decision fully favorable. If the evidence in the administrative
record supports a finding fully in favor of the enrollee(s) on every
issue, the ALJ or attorney adjudicator may issue a decision without
giving the enrollee(s) prior notice and without an ALJ conducting 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 or attorney
adjudicator may decide a case on the record and without an ALJ
conducting 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 an
ALJ at a hearing, including a hearing conducted by telephone or video-
teleconferencing, if available. OMHA 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 OMHA that he or she wants to appear at a hearing before an ALJ.
(2) When a hearing is not held, the decision of the ALJ or attorney
adjudicator must refer to the evidence in the record on which the
decision was based.
(c) Stipulated decision. If CMS, the IRE, and/or the Part D plan
sponsor submits a written statement or makes an oral statement at a
hearing indicating the drug should be covered or payment may be made,
and the written or oral statement agrees to the amount of payment the
parties believe should be made if the amount of payment is an issue
before the ALJ or attorney adjudicator, an ALJ or attorney adjudicator
may issue a stipulated decision finding in favor of the enrollee on the
basis of the statement, and without making findings of fact,
conclusions of law, or further explaining the reasons for the decision.
0
122. Section 423.2040 is revised to read as follows:
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, and
CMS, the IRE, and/or the Part D plan sponsor if the ALJ has granted
their request(s) to be a participant to the hearing at the time the
notice of conference is sent, 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.
[[Page 5134]]
(c) For expedited hearings, the ALJ informs the enrollee, and CMS,
the IRE, and/or the Part D plan sponsor if the ALJ has granted their
request(s) to be a participant to the hearing, 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) All oral requests not to receive written notice of the
conference must be documented in writing and the documentation must be
made part of the administrative record.
(e) At the conference--
(1) The ALJ or an OMHA attorney designated by the ALJ conducts the
conference, but only the ALJ conducting a conference may consider
matters in addition to those stated in the conference notice, if the
enrollee consents to consideration of the additional matters in
writing.
(2) An audio recording of the conference is made.
(f) The ALJ issues an order to the enrollee and all participants
who attended the conference stating all agreements and actions
resulting from the conference. If the enrollee does not object within
10 calendar days of receiving the order for non-expedited hearings or 1
calendar day for expedited hearings, or any additional time granted by
the ALJ, the agreements and actions become part of the administrative
record and are binding on the enrollee.
0
123. Section 423.2042 is revised to read as follows:
Sec. 423.2042 The administrative record.
(a) Creating the record. (1) OMHA makes a complete record of the
evidence and administrative proceedings on the appealed matter,
including any prehearing and posthearing conference and hearing
proceedings that were conducted.
(2) The record will include marked as exhibits, the appealed
determinations and documents and other evidence used in making the
appealed determinations and the ALJ's or attorney adjudicator's
decision, including, but not limited to, medical records, written
statements, certificates, reports, affidavits, and any other evidence
the ALJ or attorney adjudicator admits. The record will also include
any evidence excluded or not considered by the ALJ or attorney
adjudicator, including but not limited to duplicative evidence
submitted by the enrollee.
(3) An enrollee may request and receive a copy of the record prior
to or at the hearing, or, if a hearing is not held, at any time before
the notice of decision is issued.
(4) If a request for review is filed, the complete record,
including any prehearing and posthearing conference and hearing
recordings, is forwarded to the Council.
(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) While an
appeal is pending at OMHA, an enrollee may request and receive a copy
of all or part of the record from OMHA, including any index of the
administrative record, documentary evidence, and a copy of the audio
recording of the oral proceedings. The enrollee may be asked to pay the
costs of providing these items.
(2) If an enrollee requests a copy of all or part of the record
from OMHA or the ALJ or attorney adjudicator and an opportunity to
comment on the record, any adjudication period that applies in
accordance with Sec. 423.2016 is extended by the time beginning with
the receipt of the request through the expiration of the time granted
for the enrollee's response.
(3) If the enrollee requests a copy of all or part of the record
and the record, including any audio recordings, contains information
pertaining to an individual that the enrollee is not entitled to
receive, such as personally identifiable information or protected
health information, such portions of the record will not be furnished
unless the enrollee obtains consent from the individual.
0
124. Section 423.2044 is revised to read as follows:
Sec. 423.2044 Consolidated proceedings.
(a) Consolidated hearing. (1) 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 one or more other appeals pending before
the same ALJ.
(2) 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 appeals are consolidated for
hearing. In considering the enrollee's request for consolidation, the
ALJ must take into account any adjudication deadlines for each appeal
and may require an enrollee to waive the adjudication deadline
associated with one or more appeals if consolidation otherwise prevents
the ALJ from deciding all of the appeals at issue within their
respective deadlines.
(3) The ALJ may also propose on his or her own motion to
consolidate two or more appeals in one hearing for administrative
efficiency, but may not require an enrollee to waive the adjudication
deadline for any of the consolidated cases.
(4) Notice of a consolidated hearing must be included in the notice
of hearing issued in accordance with Sec. Sec. 423.2020 and 423.2022.
(b) Consolidated decision and record. (1) If the ALJ decides to
hold a consolidated hearing, he or she may make either--
(i) A consolidated decision and record; or
(ii) A separate decision and record on each appeal.
(2) If a separate decision and record on each appeal is made, the
ALJ is responsible for making sure that any evidence that is common to
all appeals and material to the common issue to be decided, and audio
recordings of any conferences that were conducted and the consolidated
hearing are included in each individual administrative record, as
applicable.
(3) If a hearing will not be conducted for multiple appeals that
are before the same ALJ or attorney adjudicator, and the appeals
involve one or more of the same issues, the ALJ or attorney adjudicator
may make a consolidated decision and record at the request of the
enrollee or on the ALJ's or attorney adjudicator's own motion.
(c) Limitation on consolidated proceedings. Consolidated
proceedings may only be conducted for appeals filed by the same
enrollee, unless multiple enrollees aggregated appeals to meet the
amount in controversy requirement in accordance with Sec. 423.1970 and
the enrollees have all authorized disclosure of information to the
other enrollees.
0
125. Section 423.2046 is revised to read as follows:
Sec. 423.2046 Notice of an ALJ or attorney adjudicator decision.
(a) Decisions on requests for hearing--(1) General rule. Unless the
ALJ or attorney adjudicator dismisses or remands the request for
hearing, the ALJ or attorney adjudicator will issue a written decision
that gives the findings of fact, conclusions of law, and the reasons
for the decision.
(i) The decision must be based on evidence offered at the hearing
or otherwise admitted into the record, and
[[Page 5135]]
shall include independent findings and conclusions.
(ii) A copy of the decision should be mailed or otherwise
transmitted to the enrollee at his or her last known address.
(iii) 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.
(2) Content of the notice. The decision must be provided in a
manner calculated to be understood by an enrollee and must include--
(i) The specific reasons for the determination, including, to the
extent appropriate, a summary of any clinical or scientific evidence
used in making the determination;
(ii) The procedures for obtaining additional information concerning
the decision; and
(iii) Notification of the right to appeal the decision to the
Council, including instructions on how to initiate an appeal under this
section.
(3) Limitation on decision. When the amount of payment for the Part
D drug is an issue before the ALJ or attorney adjudicator, the ALJ or
attorney adjudicator may make a finding as to the amount of payment
due. If the ALJ or attorney adjudicator makes a finding concerning
payment when the amount of payment was not an issue before the ALJ or
attorney adjudicator, the Part D plan sponsor may independently
determine the payment amount. In either of the aforementioned
situations, an ALJ's or attorney adjudicator'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 or attorney adjudicator's decision is
a new coverage determination under Sec. 423.566.
(b) Decisions on requests for review of an IRE dismissal--(1)
General rule. Unless the ALJ or attorney adjudicator dismisses the
request for review of an IRE dismissal, or the dismissal is vacated and
remanded, the ALJ or attorney adjudicator will issue a written decision
affirming the IRE's dismissal. OMHA mails or otherwise transmits a copy
of the decision to the enrollee.
(2) Content of the notice. The decision must be written in a manner
calculated to be understood by an enrollee and must include--
(i) The specific reasons for the determination, including a summary
of the evidence considered and applicable authorities;
(ii) The procedures for obtaining additional information concerning
the decision; and
(iii) Notification that the decision is binding and is not subject
to further review, unless reopened and revised by the ALJ or attorney
adjudicator.
(c) Recommended decision. An ALJ or attorney adjudicator issues a
recommended decision if he or she is directed to do so in the Council's
remand order. An ALJ or attorney adjudicator may not issue a
recommended decision on his or her own motion. The ALJ or attorney
adjudicator mails a copy of the recommended decision to the enrollee at
his or her last known address.
0
126. Section 423.2048 is revised to read as follows:
Sec. 423.2048 The effect of an ALJ's or attorney adjudicator's
decision.
(a) The decision of the ALJ or attorney adjudicator on a request
for hearing is binding unless--
(1) An enrollee requests a review of the decision by the Council
within the stated time period or the Council reviews the decision
issued by an ALJ or attorney adjudicator under the procedures set forth
in Sec. 423.2110, and the Council issues a final decision or remand
order;
(2) The decision is reopened and revised by an ALJ or attorney
adjudicator or the Council under the procedures explained in Sec.
423.1980;
(3) The expedited access to judicial review process at Sec.
423.1990 is used;
(4) The ALJ's or attorney adjudicator's decision is a recommended
decision directed to the Council and the Council issues a decision; or
(5) In a case remanded by a Federal district court, the Council
assumes jurisdiction under the procedures in Sec. 423.2138 and the
Council issues a decision.
(b) The decision of the ALJ or attorney adjudicator on a request
for review of an IRE dismissal is binding on the enrollee unless the
decision is reopened and revised by the ALJ or attorney adjudicator
under the procedures explained in Sec. 423.1980.
Sec. 423.2050 [Amended]
0
127. Section 423.2050 is amended--
0
a. In the section heading by removing the phrase ``an ALJ'' and adding
``OMHA'' in its place.
0
b. In the text of the section by removing the phrase ``pending before
an ALJ'' and adding ``pending before OMHA'' in its place, and by
removing the term ``the ALJ'' and adding ``OMHA'' in its place.
0
c. In the section heading and the text of the section by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
0
128. Section 423.2052 is revised to read as follows:
Sec. 423.2052 Dismissal of a request for a hearing before an ALJ or
request for review of an IRE dismissal.
(a) Dismissal of request for hearing. An ALJ dismisses a request
for a hearing under any of the following conditions:
(1) 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 for failure to appear,
the record contains documentation that the enrollee acknowledged the
notice of hearing, and the enrollee does not contact the ALJ within 10
calendar days after the hearing for non-expedited hearings and 2
calendar days after the hearing for expedited hearings, or does contact
the ALJ but the ALJ determines the enrollee did not demonstrate good
cause for not appearing; or
(ii) The record does not contain documentation that the enrollee
acknowledged the notice of hearing, the ALJ sends a notice to the
enrollee at his or her last known address asking why the enrollee did
not appear, and the enrollee does not respond to the ALJ's notice
within 10 calendar days for non-expedited hearings or within 2 calendar
days for expedited hearings after receiving the notice, or does contact
the ALJ but the ALJ determines the enrollee did not demonstrate good
cause for not appearing. For expedited hearings, an enrollee may submit
his or her response orally to the ALJ.
(iii) In determining whether good cause exists under paragraphs
(a)(1)(i) and (ii) of this section, the ALJ considers any physical,
mental, educational, or linguistic limitations (including any lack of
facility with the English language) the enrollee may have.
(2) The person requesting a hearing has no right to it under Sec.
423.2002.
(3) The enrollee did not request a hearing within the stated time
period and the ALJ or attorney adjudicator has not found good cause for
extending the deadline, as provided in Sec. 423.2014(e).
(4) 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 wish to continue the appeal.
[[Page 5136]]
(5) The ALJ or attorney adjudicator dismisses a hearing request
entirely or refuses to consider any one or more of the issues because
an IRE, an ALJ or attorney adjudicator, or the Council 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.
(6) The enrollee abandons the request for hearing. An ALJ or
attorney adjudicator may conclude that an enrollee has abandoned a
request for hearing when OMHA attempts to schedule a hearing and is
unable to contact the enrollee after making reasonable efforts to do
so.
(7) The enrollee's request is not complete in accordance with Sec.
423.2014(a)(1), even after the enrollee is provided with an opportunity
to complete the request.
(b) Dismissal of request for review of IRE dismissal. An ALJ or
attorney adjudicator dismisses a request for review of an IRE dismissal
under any of the following conditions:
(1) The enrollee has no right to a review of the IRE dismissal
under Sec. 423.2004.
(2) The enrollee did not request a review within the stated time
period and the ALJ or attorney adjudicator has not found good cause for
extending the deadline, as provided in Sec. 423.2014(e).
(3) The enrollee died while the request for review was pending and
the request 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 wish to continue the appeal.
(4) The enrollee's request is not complete in accordance with Sec.
423.2014(a)(1), even after the enrollee is provided with an opportunity
to complete the request.
(c) Withdrawal of request. At any time before notice of the
decision, dismissal, or remand is mailed, if the enrollee asks to
withdraw the request, an ALJ or attorney adjudicator may dismiss the
request for hearing or request for review of an IRE dismissal. This
request for withdrawal may be submitted in writing, or a request to
withdraw a request for hearing may be made orally at a hearing before
the ALJ. The request for withdrawal must include a clear statement that
the enrollee is withdrawing the request for hearing or review of the
IRE dismissal 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 or attorney adjudicator may
presume that the representative has advised the enrollee of the
consequences of the withdrawal and dismissal.
(d) Notice of dismissal. OMHA mails or otherwise transmits a
written notice of the dismissal of the hearing or review request to the
enrollee at his or her last known address. The written notice provides
that there is a right to request that the ALJ or attorney adjudicator
vacate the dismissal action.
(e) Vacating a dismissal. If good and sufficient cause is
established, the ALJ or attorney adjudicator may vacate his or her
dismissal of a request for hearing or review within 6 months of the
date of the notice of dismissal.
0
129. Section 423.2054 is revised to read as follows:
Sec. 423.2054 Effect of dismissal of a request for a hearing or
request for review of an IRE's dismissal.
(a) The dismissal of a request for a hearing is binding, unless it
is vacated by the Council under Sec. 423.2108(b), or vacated by the
ALJ or attorney adjudicator under Sec. 423.2052(e).
(b) The dismissal of a request for review of an IRE dismissal of a
request for reconsideration is binding and not subject to further
review unless vacated by the ALJ or attorney adjudicator under Sec.
423.2052(e).
0
130. Section 423.2056 is added to read as follows:
Sec. 423.2056 Remands of requests for hearing and requests for
review.
(a) Missing appeal determination or case record. (1) If an ALJ or
attorney adjudicator requests an official copy of a missing
redetermination or reconsideration for an appealed coverage
determination in accordance with Sec. 423.2034, and the IRE, CMS, or
Part D plan sponsor does not furnish the copy within the time frame
specified in Sec. 423.2034, an ALJ or attorney adjudicator may issue a
remand directing the IRE or Part D plan sponsor to reconstruct the
record or, if it is not able to do so, initiate a new appeal
adjudication.
(2) If the IRE does not furnish the case file for an appealed
reconsideration, an ALJ or attorney adjudicator may issue a remand
directing the IRE to reconstruct the record or, if it is not able to do
so, initiate a new appeal adjudication.
(3) If the IRE or Part D plan sponsor is able to reconstruct the
record for a remanded case and returns the case to OMHA, the case is no
longer remanded and the reconsideration is no longer vacated, and any
adjudication period that applies to the appeal in accordance with Sec.
423.2016 is extended by the period between the date of the remand and
the date that case is returned to OMHA.
(b) No redetermination. If an ALJ or attorney adjudicator finds
that the IRE issued a reconsideration and no redetermination was made
with respect to the issue under appeal or the request for
redetermination was dismissed, the reconsideration will be remanded to
the IRE, or its successor, to re-adjudicate the request for
reconsideration.
(c) Requested remand--(1) Request contents and timing. At any time
prior to an ALJ or attorney adjudicator issuing a decision or
dismissal, the enrollee and CMS, the IRE, or the Part D plan sponsor
may jointly request a remand of the appeal to the IRE. The request must
include the reasons why the appeal should be remanded, and indicate
whether remanding the case will likely resolve the matter in dispute.
(2) Granting the request. An ALJ or attorney adjudicator may grant
the request and issue a remand if he or she determines that remanding
the case will likely resolve the matter in dispute.
(d) Remanding an IRE's dismissal of a request for reconsideration.
Consistent with Sec. 423.2004(b), an ALJ or attorney adjudicator will
remand a case to the appropriate IRE if the ALJ or attorney adjudicator
determines that an IRE's dismissal of a request for reconsideration was
in error.
(e) Consideration of change in condition. The ALJ or attorney
adjudicator will remand a case to the appropriate IRE if the ALJ or
attorney adjudicator determines that the enrollee wants evidence on his
or her change in condition after the coverage determination to be
considered in the appeal.
(f) Notice of a remand. OMHA mails or otherwise transmits a written
notice of the remand of the request for hearing or request for review
to the enrollee at his or her last known address, and CMS, the IRE,
and/or the Part D plan sponsor if a request to be a participant was
granted by the ALJ or attorney adjudicator. The notice states that
there is a right to request that the Chief ALJ or a designee review the
remand.
(g) Review of remand. Upon a request by the enrollee or CMS, the
IRE, or the Part D plan sponsor filed within 30 calendar days of
receiving a notice of remand, the Chief ALJ or designee will review the
remand, and if the remand is not authorized by this section, vacate the
remand order. The determination on a request to review a remand order
is binding and not subject to further review. The review of remand
[[Page 5137]]
procedures provided for in this paragraph are not available for and do
not apply to remands that are issued under paragraph (d) of this
section.
0
131. Section 423.2058 is added to read as follows:
Sec. 423.2058 Effect of a remand.
A remand of a request for hearing or request for review is binding
unless vacated by the Chief ALJ or a designee in accordance with Sec.
423.2056(g).
Sec. 423.2062 [Amended]
0
132. Section 423.2062 is amended--
0
a. In the section heading and paragraphs (a) and (b) by removing the
term ``MAC'' each time it appears and adding ``Council'' in its place.
0
b. In paragraph (a) by removing the term ``ALJs'' and adding ``ALJs and
attorney adjudicators'' in its place.
0
c. In paragraph (b) by removing the term ``ALJ'' each time it appears
and adding ``ALJ or attorney adjudicator'' in its place.
0
133. Section 423.2063 is revised to read as follows:
Sec. 423.2063 Applicability of laws, regulations, CMS Rulings, and
precedential decisions.
(a) All laws and regulations pertaining to the Medicare program,
including, but not limited to Titles XI, XVIII, and XIX of the Social
Security Act and applicable implementing regulations, are binding on
ALJs and attorney adjudicators, and the Council.
(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.
(c) Precedential decisions designated by the Chair of the
Departmental Appeals Board in accordance with Sec. 401.109 of this
chapter are binding on all CMS components, and all HHS components that
adjudicate matters under the jurisdiction of CMS.
0
134. Section 423.2100 is revised to read as follows:
Sec. 423.2100 Medicare Appeals Council review: general.
(a) Consistent with Sec. 423.1974, the enrollee may request that
the Council review an ALJ's or attorney adjudicator's decision or
dismissal.
(b) When the Council reviews an ALJ's or attorney adjudicator's
written decision, it undertakes a de novo review.
(c) The Council issues a final decision, dismissal order, or
remands a case to the ALJ or attorney adjudicator no later than the end
of the 90 calendar day period beginning on the date the request for
review is received (by the entity specified in the ALJ's or attorney
adjudicator's written notice of decision), unless the 90 calendar day
period is extended as provided in this subpart or the enrollee requests
expedited Council review.
(d) If an enrollee requests expedited Council review, the Council
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 or attorney
adjudicator's written notice of decision), unless the 10 calendar day
period is extended as provided in this subpart.
0
135. Section 423.2102 is revised to read as follows:
Sec. 423.2102 Request for Council review when ALJ or attorney
adjudicator issues decision or dismissal.
(a)(1) An enrollee may request Council review of a decision or
dismissal issued by an ALJ or attorney adjudicator if the enrollee
files a written request for a Council review within 60 calendar days
after receipt of the ALJ's or attorney adjudicator's written decision
or dismissal.
(2) An enrollee may request that Council 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 Council review be
expedited, the enrollee submits an oral or written request within 60
calendar days after the receipt of the ALJ's or attorney adjudicator'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 Council 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
or attorney adjudicator'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 or attorney
adjudicator's action.
(b) An enrollee requesting a review may ask that the time for
filing a request for Council review be extended if--
(1) The request for an extension of time is in writing or, for
expedited reviews, in writing or oral. The Council 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 Council finds that there is good
cause for missing the deadline, the time period will be extended. To
determine whether good cause exists, the Council uses the standards
outlined at Sec. 405.942(b)(2) and (3) of this chapter.
(c) An enrollee does not have the right to seek Council review of
an ALJ's or attorney adjudicator's remand to an IRE, or an ALJ's or
attorney adjudicator's affirmation of an IRE's dismissal of a request
for reconsideration, or dismissal of a request to review an IRE
dismissal.
Sec. 423.2106 [Amended]
0
136. Section 423.2106 is amended by--
0
a. Removing the term ``ALJ'' and adding ``ALJ or attorney adjudicator''
in its place.
0
b. Removing the term ``ALJ's'' each time it appears and adding ``ALJ's
or attorney adjudicator's'' in its place.
0
c. Removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
d. Removing the term ``MAC's'' and adding ``Council's'' in its place.
Sec. 423.2108 [Amended]
0
137. Section 423.2108 is amended by--
0
a. In paragraphs (a) through (c) by removing the term ``ALJ'' and
adding ``ALJ or attorney adjudicator'' in its place.
0
b. In paragraphs (a) and (d)(2)(iii) by removing the term ``ALJ's''
each time it appears and adding ``ALJ's or attorney adjudicator's'' in
its place.
0
c. In the section heading and paragraphs (a) through (c), (d)(1),
(d)(2) introductory text, (d)(3) introductory text, and (d)(3)(ii) by
removing the term ``MAC'' each time it appears and adding ``Council''
in its place.
0
d. In paragraph (a) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
e. In the heading and text of paragraph (b) by removing the phrase
``ALJ's dismissal'' and adding ``ALJ's or attorney adjudicator's
dismissal of a request for a hearing'' in its place.
0
138. Section 423.2110 is revised to read as follows:
Sec. 423.2110 Council reviews on its own motion.
(a) General rule. The Council may decide on its own motion to
review a
[[Page 5138]]
decision or dismissal issued by an ALJ or attorney adjudicator. CMS or
the IRE may refer a case to the Council for it to consider reviewing
under this authority any time within 60 calendar days after the date of
an ALJ's or attorney adjudicator's written decision or dismissal.
(b) Referral of cases. (1) CMS or the IRE may refer a case to the
Council if, in the view of CMS or the IRE, the decision or dismissal
contains an error of law material to the outcome of the appeal or
presents a broad policy or procedural issue that may affect the public
interest. CMS or the IRE may also request that the Council take own
motion review of a case if--
(i) CMS or the IRE participated or requested to participate in the
appeal at the OMHA level; and
(ii) In CMS' or the IRE's view, the ALJ's or attorney adjudicator's
decision or dismissal is not supported by the preponderance of evidence
in the record or the ALJ or attorney adjudicator abused his or her
discretion.
(2) CMS' or the IRE's referral to the Council is made in writing
and must be filed with the Council no later than 60 calendar days after
the ALJ's or attorney adjudicator's written decision or dismissal is
issued.
(i) The written referral will state the reasons why CMS or the IRE
believes that the Council 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 OMHA Chief ALJ.
(iii) The enrollee may file exceptions to the referral by
submitting written comments to the Council within 20 calendar days of
the referral notice.
(iv) An enrollee submitting comments to the Council 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 OMHA level. If
CMS or the IRE participated or requested to participate in an appeal at
the OMHA level, the Council 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 or attorney adjudicator, 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 Council will limit its consideration of the ALJ's or
attorney adjudicator'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 OMHA proceedings. The
Council 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 Council will limit its
consideration of the ALJ's or attorney adjudicator's action to those
exceptions raised by CMS or the IRE.
(d) Council's action. (1) If the Council 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 Council may adopt, modify, or reverse the decision or
dismissal, may remand the case to an ALJ or attorney adjudicator for
further proceedings, or may dismiss a hearing request.
(3) The Council 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 Council 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 Council declines to review a decision or dismissal on
its own motion, the ALJ's or attorney adjudicator's decision or
dismissal is binding.
Sec. 423.2112 [Amended]
0
139. Section 423.2112 is amended--
0
a. In paragraphs (a)(1), (b), and (c) by removing the term ``ALJ's''
and adding ``ALJ's or attorney adjudicator's'' in its place.
0
b. In paragraph (b) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
0
c. In paragraphs (a)(1) and (3) and (c) by removing the term ``MAC''
and adding ``Council'' in its place.
Sec. 423.2114 [Amended]
0
140. Section 423.2114 is amended in the introductory text and paragraph
(b) by removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
Sec. 423.2116 [Amended]
0
141. Section 423.2116 is amended by--
0
a. Removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
b. Removing the term ``MAC's'' and adding ``Council's'' in its place.
0
c. Removing the term ``ALJ'' and adding ``ALJ or attorney adjudicator''
in its place.
Sec. 423.2118 [Amended]
0
142. Section 423.2118 is amended by--
0
a. Removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
b. Removing the term ``MAC's'' and adding ``Council's'' in its place.
0
c. Removing the phrase ``ALJ hearing'' and adding ``ALJ's or attorney
adjudicator's action'' in its place.
0
d. Removing the phrase ``the exhibits list'' and adding ``any index of
the administrative record'' in its place.
0
e. Removing the term ``CD'' and adding ``audio recording'' in its
place.
Sec. 423.2120 [Amended]
0
143. Section 423.2120 is amended by removing the term ``MAC'' each time
it appears and adding ``Council'' in its place.
Sec. 423.2122 [Amended]
0
144. Section 423.2122 is amended--
0
a. In the section heading and paragraphs (a) paragraph heading, (a)(1)
through (3), (b) introductory text, (b)(1) and (2), and (c)(1) through
(4) by removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
b. In paragraphs (a) heading and (a)(1) by removing the term ``ALJ's''
and adding ``ALJ's or attorney adjudicator's'' in its place.
0
c. In paragraph (a)(1) by removing the term ``ALJ level'' and adding
``OMHA level'' in its place.
0
d. In paragraph (a)(1) by removing the term ``hearing decision'' and
adding ``ALJ's or attorney adjudicator's decision'' in its place.
0
e. In paragraphs (a)(1) and (2) by removing the term ``ALJ'' and adding
``ALJ or attorney adjudicator'' in its place.
0
f. In paragraph (a)(2) by removing the term ``hearing record'' and
adding ``administrative record'' in its place.
0
g. In paragraph (c)(3) by removing the term ``MAC's'' and adding
``Council's'' in its place.
Sec. 423.2124 [Amended]
0
145. Section 423.2124 is amended by removing the term ``MAC'' each time
it appears and adding ``Council'' in its place.
Sec. 423.2126 [Amended]
0
146. Section 423.2126 is amended--
0
a. Amending the section heading and paragraphs (a) heading, (a)(1)
through (3), (a)(4) heading, (a)(4)(i) and (ii), (a)(5) heading,
(a)(5)(i) and (ii), and (b) by
[[Page 5139]]
removing the term ``MAC'' each time it appears and adding ``Council''
in its place.
0
b. In paragraphs (a) heading, (a)(1) through (3), (a)(4) heading, and
(a)(5)(ii) by removing the term ``ALJ'' each time it appears and adding
``ALJ or attorney adjudicator'' in its place.
0
c. In paragraph (a)(2) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
d. In paragraph (a)(5)(ii) by adding ``if applicable'' after the word
``rehearing''.
Sec. 423.2128 [Amended]
0
147. Section 423.2128 is amended--
0
a. In the section heading and paragraphs (a), (b), and (c) by removing
the term ``MAC'' each time it appears and adding ``Council'' in its
place.
0
b. In paragraph (a) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
0
c. In paragraph (b) by removing the phrase ``ALJ hearing decision'' and
adding ``ALJ or attorney adjudicator decision'' in its place.
Sec. 423.2130 [Amended]
0
148. Section 423.2130 is amended by removing the term ``MAC's'' each
time it appears and adding ``Council's'' in its place.
Sec. 423.2134 [Amended]
0
149. Section 423.2134 is amended in paragraphs (b)(3) and (c) by
removing the term ``MAC'' and adding ``Council'' in its place.
Sec. 423.2136 [Amended]
0
150. Section 423.2136 is amended--
0
a. In paragraphs (a) and (c)(3) by removing the term ``MAC'' and adding
``Council'' in its place.
0
b. In paragraph (c)(2) by removing the term ``MAC's'' and adding
``Council's'' in its place.
0
c. In paragraph (c)(3) by removing the term ``ALJ'' and adding ``ALJ or
attorney adjudicator'' in its place.
Sec. 423.2138 [Amended]
0
151. Section 423.2138 is amended by--
0
a. Removing the term ``MAC'' each time it appears and adding
``Council'' in its place.
0
b. Removing the term ``ALJ'' and adding ``ALJ or attorney adjudicator''
in its place.
Sec. 423.2140 [Amended]
0
152. Section 423.2140 is amended--
0
a. In the section heading and paragraphs (a)(1) through (3), (b)(1),
(b)(2) introductory text, (b)(2)(ii), (b)(3) and (4), (c) heading,
(c)(1), (3), and (4), and (d) by removing the term ``MAC'' each time it
appears and adding ``Council'' in its place.
0
b. In the section heading and paragraphs (a)(1) through (3), (b)
heading, (b)(1), (b)(2) introductory text, (b)(2)(i), (b)(3) and (4),
(c)(1) and (4), and (d) by removing the term ``ALJ'' each time it
appears and adding ``ALJ or attorney adjudicator'' in its place.
0
c. In paragraph (d) by removing the term ``ALJ's'' and adding ``ALJ's
or attorney adjudicator's'' in its place.
PART 478--RECONSIDERATIONS AND APPEALS
0
153. The authority citation for part 478 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 478.40 [Amended]
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154. In Sec. 478.14, paragraph (c)(2) is amended by removing the
phrase ``part 405, subpart G of this chapter for determinations under
Medicare Part A, and part 405, subpart H of this chapter for
determinations under Medicare Part B'' and adding ``part 405, subpart I
of this chapter for determinations under Medicare Part A and Part B''
in its place.
0
155. Section 478.40 is amended by revising paragraphs (a) and (c) to
read as follows:
Sec. 478.40 Beneficiary's right to a hearing.
(a) Amount in controversy. If the amount in controversy is at least
$200, a beneficiary (but not a provider or practitioner) who is
dissatisfied with a QIO reconsidered determination may request a
hearing by an administrative law judge (ALJ) of the Office of Medicare
Hearings and Appeals (OMHA).
* * * * *
(c) Governing provisions. (1) The provisions of subpart I of part
405 of this chapter apply to hearings and appeals under this subpart
unless they are inconsistent with specific provisions in this subpart
or specified in paragraph (c)(2) of this section. Except as provided in
paragraph (c)(2) of this section, references in subpart I to initial
determinations made by a Medicare contractor and reconsiderations made
by a QIC should be read to mean initial determinations and reconsidered
determinations made by a QIO.
(2) The following part 405 regulations, and any references thereto,
specifically do not apply under this subpart:
(i) Section 405.950 (time frames for making a redetermination).
(ii) Section 405.970 (time frames for making a reconsideration
following a contractor redetermination, including the option to
escalate an appeal to the OMHA level).
(iii) Section 405.1016 (time frames for deciding an appeal of a QIC
reconsideration, or escalated request for a QIC reconsideration,
including the option to escalate an appeal to the Council).
(iv) The option to request that an appeal be escalated from the
OMHA level to the Council as provided in Sec. 405.1100(b), and time
frames for the Council to decide an appeal of an ALJ's or attorney
adjudicator's decision or an appeal that is escalated from the OMHA
level to the Council as provided in Sec. 405.1100(c) and (d).
(v) Section 405.1132 (request for escalation to Federal court).
(vi) Sections 405.956(b)(8), 405.966(a)(2), 405.976(b)(5)(ii),
405.1018(c), 405.1028(a), and 405.1122(c), and any other reference to
requiring a determination of good cause for the introduction of new
evidence by a provider, supplier, or a beneficiary represented by a
provider or supplier.
0
156. Section 478.42 is revised to read as follows:
Sec. 478.42 Submitting a request for a hearing.
(a) Where to submit the written request. A beneficiary who wants to
obtain a hearing under Sec. 478.40 must submit a written request to
the OMHA office identified in the notice of the QIO reconsidered
determination.
(b) Time limit for submitting a request for a hearing. (1) The
request for a hearing must be filed within 60 calendar days of receipt
of the notice of the QIO reconsidered determination, unless the time is
extended for good cause as provided in Sec. 478.22.
(2) The date of receipt of the notice of the reconsidered
determination is presumed to be 5 calendar days after the date on the
notice, unless there is evidence to the contrary.
(3) A request is considered filed on the date it is received by
OMHA.
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157. Section 478.44 is revised to read as follows:
Sec. 478.44 Determining the amount in controversy for a hearing.
(a) After an individual appellant has submitted a request for a
hearing, the ALJ or attorney adjudicator determines the amount in
controversy in accordance with Sec. 405.1006(d) and (e) of this
chapter. When two or more appellants submit a request for hearing, the
ALJ or attorney adjudicator determines the amount in controversy in
accordance with Sec. 405.1006(d) and (e) of this chapter.
(b) If the ALJ or attorney adjudicator determines that the amount
in controversy is less than $200, the ALJ,
[[Page 5140]]
without holding a hearing, or attorney adjudicator notifies the parties
that the parties have 15 calendar days to submit additional evidence to
prove that the amount in controversy is at least $200.
(c) At the end of the 15-day period, if an ALJ determines that the
amount in controversy is less than $200, the ALJ, without holding a
hearing dismisses the request for a hearing without ruling on the
substantive issues involved in the appeal and notifies the parties and
the QIO that the QIO reconsidered determination is conclusive for
Medicare payment purposes.
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158. Section 478.46 is revised to read as follows:
Sec. 478.46 Medicare Appeals Council and judicial review.
(a) The circumstances under which the Medicare Appeals Council
(Council) will review an ALJ's or attorney adjudicator's decision or
dismissal are the same as those set forth at Sec. Sec. 405.1102
(``Request for Council review when ALJ or attorney adjudicator issues
decision or dismissal'') and 405.1110 (``Council reviews on its own
motion'') of this chapter.
(b) If $2,000 or more is in controversy, a party may obtain
judicial review of a Council decision, or an ALJ's or attorney
adjudicator's decision if a request for review by the Council was
denied, by filing a civil action under the Federal Rules of Civil
Procedure within 60 days after the date the party received notice of
the Council decision or denial.
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159. Section 478.48 is amended by revising the section heading and
paragraphs (b) and (c) to read as follows:
Sec. 478.48 Reopening and revision of a reconsidered determination or
a decision.
* * * * *
(b) ALJ or attorney adjudicator and Council Reopening--Applicable
procedures. The ALJ or attorney adjudicator, or the Council, whichever
made the decision, may reopen and revise the decision in accordance
with the procedures set forth in Sec. 405.980 of this chapter, which
concerns reopenings and revised decisions under subpart I of part 405
of this chapter.
(c) Fraud or similar abusive practice. A reconsidered
determination, a review of a DRG change, or a decision of an ALJ or
attorney adjudicator, or the Council may be reopened and revised at any
time, if the reconsidered determination, review, or decision was
obtained through fraud or a similar abusive practice that does not
support a formal finding of fraud.
Approved: December 22, 2016.
Sylvia Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-32058 Filed 1-13-17; 8:45 am]
BILLING CODE 4150-46-P