[Federal Register Volume 85, Number 188 (Monday, September 28, 2020)]
[Notices]
[Pages 60795-60796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21254]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4191-N]


Medicare Program; Medicare Appeals; Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2021

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

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustment in the amount in 
controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) 
hearings and judicial review under the Medicare appeals process. The 
adjustment to the AIC threshold amounts will be effective for requests 
for ALJ hearings and judicial review filed on or after January 1, 2021. 
The calendar year 2021 AIC threshold amounts are $180 for ALJ hearings 
and $1,760 for judicial review.

DATES: This annual adjustment takes effect on January 1, 2021.

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

SUPPLEMENTARY INFORMATION:

I. Background

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

A. Medicare Part A and Part B Appeals

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

B. Medicare Part C/MA Appeals

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

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

    Section 1876(c)(5)(B) of the Act states that the annual adjustment 
to the AIC dollar amounts set forth in section 1869(b)(1)(E)(iii) of 
the Act applies to certain beneficiary appeals within the context of 
health maintenance organizations and competitive medical plans. The 
applicable implementing regulations for Medicare Part C appeals are set 
forth in 42 CFR 422, subpart M and apply to these appeals in accordance 
with 42 CFR 417.600(b). The Medicare Part C appeals rules also apply to 
health care prepayment plan appeals in accordance with 42 CFR 417.840.

D. Medicare Part D (Prescription Drug Plan) Appeals

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

[[Page 60796]]

Part D appeals can be found at 42 CFR 423, subparts M and U. More 
specifically, Sec.  423.2006 of the Part D appeals rules discusses the 
AIC threshold amounts for ALJ hearings and judicial review. Sections 
423.2002 and 423.2006 grant a Part D enrollee, who is dissatisfied with 
the independent review entity (IRE) reconsideration determination, a 
right to an ALJ hearing if, in part, the amount remaining in 
controversy after the IRE reconsideration meets the threshold amount 
established annually by the Secretary. Sections 423.2006 and 423.2136 
allow a Part D enrollee to request judicial review of an ALJ or 
Medicare Appeals Council decision if, in part, the AIC meets the 
threshold amount established annually by the Secretary.

II. Provisions of the Notice--Annual AIC Adjustments

A. AIC Adjustment Formula and AIC Adjustments

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

B. Calendar Year 2021

    The AIC threshold amount for ALJ hearings will rise to $180 and the 
AIC threshold amount for judicial review will rise to $1,760 for CY 
2021. These amounts are based on the 75.634 percent increase in the 
medical care component of the CPI, which was at 297.600 in July 2003 
and rose to 522.686 in July 2020. The AIC threshold amount for ALJ 
hearings changes to $175.63 based on the 75.634 percent increase over 
the initial threshold amount of $100 established in 2003. In accordance 
with section 1869(b)(1)(E)(iii) of the Act, the adjusted threshold 
amounts are rounded to the nearest multiple of $10. Therefore, the CY 
2021 AIC threshold amount for ALJ hearings is $180.00. The AIC 
threshold amount for judicial review changes to $1,756.34 based on the 
75.634 percent increase over the initial threshold amount of $1,000. 
This amount was rounded to the nearest multiple of $10, resulting in 
the CY 2021 AIC threshold amount of $1,760.00 for judicial review.

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In the following table we list the CYs 2017 through 2021 threshold 
amounts.

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                                                   CY 2017      CY 2018      CY 2019      CY 2020      CY 2021
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ALJ Hearing....................................         $160         $160         $160         $170         $180
Judicial Review................................        1,560        1,600        1,630        1,670        1,760
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III. Collection of Information Requirements

    This document does not impose any new or revised ``collection of 
information'' requirements or burden. Consequently, there is no need 
for review by the Office of Management and Budget under the authority 
of the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). 
With respect to the PRA and this section of the preamble, collection of 
information is defined under 5 CFR 1320.3(c) of the PRA's implementing 
regulations.
    The Administrator of the Centers for Medicare & Medicaid Services 
(CMS), Seema Verma, having reviewed and approved this document, 
authorizes Vanessa Garcia, who is the Federal Register Liaison, to 
electronically sign this document for purposes of publication in the 
Federal Register.

    Dated: September 21, 2020.
Vanessa Garcia,
Federal Register Liaison, Centers for Medicare & Medicaid Services.
[FR Doc. 2020-21254 Filed 9-25-20; 8:45 am]
BILLING CODE 4120-01-P