[Federal Register Volume 86, Number 223 (Tuesday, November 23, 2021)]
[Proposed Rules]
[Pages 66488-66491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25364]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 418

[Docket No. SSA-2021-0006]
RIN 0960-AI55


Addressing Certain Types of Fraud Affecting Medicare Income 
Related Monthly Adjusted Amounts (IRMAA)

AGENCY: Social Security Administration.

ACTION: Advance notice of proposed rulemaking (ANPRM).

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SUMMARY: Certain Medicare beneficiaries may have their taxable income 
affected by fraudulent activity, which in turn could affect the amount

[[Page 66489]]

of and their ability to afford their Medicare Part B (medical 
insurance) and Medicare Part D (prescription drug coverage) premiums. 
We are seeking information from the public on the type of information 
we should consider relating to evidence of life changing events (LCE) 
resulting from criminal fraud or theft. Information from the public 
will help us determine whether and how we should revise our rules to 
provide relief to beneficiaries affected by fraud.

DATES: To be sure that we consider your comments, we must receive them 
no later than January 24, 2022.

ADDRESSES: You may submit comments by any one of three methods--
internet, fax, or mail. Do not submit the same comments multiple times 
or by more than one method. Regardless of which method you choose, 
please state that your comments refer to Docket No. SSA-2021-0006 so 
that we may associate your comments with the ANPRM.
    CAUTION: You should be careful to include in your comments only 
information that you wish to make publicly available. We strongly urge 
you not to include in your comments any personal information, such as 
Social Security numbers, financial account numbers, or medical 
information.
    1. Internet: We strongly recommend that you submit your comments 
via the internet. Please visit the Federal eRulemaking portal at 
https://www.regulations.gov. Use the Search function to find docket 
number SSA-2021-0006. Once you submit your comment, the system will 
issue a tracking number to confirm your submission. You will not be 
able to view your comment immediately because we must post each comment 
manually. It may take up to a week for your comment to be viewable.
    2. Fax: Fax comments to (410) 966-2830.
    3. Mail: Address your comments to the Office of Regulations and 
Reports Clearance, Social Security Administration, 3100 West High Rise 
Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401.
    Comments are available for public viewing on the Federal 
eRulemaking portal at https://www.regulations.gov or in person, during 
regular business hours, by arranging with the contact person identified 
below.

FOR FURTHER INFORMATION CONTACT: Monica Nolan, Social Security 
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-2075. For information on eligibility or filing for benefits, 
call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-
0778, or visit our internet site, Social Security Online, at 
www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

    Medicare Part B as set forth in Title XVIII, Part B of the Social 
Security Act (Act) \1\ and explained in 42 CFR part 407, is a voluntary 
supplemental medical insurance program that provides coverage for 
services such as physician's care, diagnostic services, and medical 
supplies. Medicare Part D established by Title XVIII of the Act, Part D 
\2\ and explained in 42 CFR part 423 is a voluntary program that covers 
certain prescription drug costs.
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    \1\ See 42 U.S.C. 1395j.
    \2\ See 42 U.S.C. 1395w-101.
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    Many beneficiaries enrolled in Part B and Part D pay deductibles, 
co-insurances associated with covered services, and monthly premiums. 
The Part B and Part D premiums are periodic payments that an enrolled 
beneficiary makes to Medicare or a participating health care or 
prescription drug plan in exchange for medical insurance and 
prescription drug cost coverage.\3\ The Federal Government subsidizes 
the Part B and Part D programs, and most enrollees pay a monthly 
premium representing about roughly 25 percent of the estimated actual 
cost for Part B and the cost of basic prescription drug coverage for 
Part D.\4\ The Centers for Medicare & Medicaid Services (CMS) 
administers the Medicare program and sets the standard and base monthly 
premiums. The Social Security Administration in turn determines and 
deducts the amount of certain Part B and Part D premiums from 
beneficiaries' Social Security benefits.
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    \3\ See 20 CFR 418.1010(b)(9), 418.2010(b)(7), and 42 CFR 408.20 
through 408.28.
    \4\ See 42 U.S.C. 1395r(a), 1395w-115(a).
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    Beneficiaries with modified adjusted gross incomes (MAGI) \5\ above 
a specified threshold \6\ must pay a higher percentage of the Medicare 
Part B and Part D costs based on where their MAGI falls within certain 
income ranges.\7\ CMS sets and publishes all MAGI threshold and range 
amounts each year based on changes in the Consumer Price Index.\8\ We 
refer to this subsidy reduction as the Income Related Monthly 
Adjustment Amount (IRMAA), which is the amount of additional premiums 
these beneficiaries must pay based on their income.\9\
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    \5\ Modified Adjusted Gross Income is your adjusted gross income 
as defined by the Internal Revenue Code, plus certain forms of tax-
exempt income set out in the regulations. See 20 CFR 418.1010(b)(6) 
and 418.2010(b)(6).
    \6\ See 20 CFR 418.1105 and 418.2105.
    \7\ See 20 CFR 418.1115 and 418.2115.
    \8\ See 20 CFR 418.1105(c), 418.1115(e), 418.2105(c), and 
418.2115(e).
    \9\ See 20 CFR 418.1101 and 418.2101.
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    The Internal Revenue Service (IRS) provides us with MAGI 
information each year. We use an individual's MAGI and Federal income 
tax filing status for the tax year two years before the effective 
year--the calendar year for which we make an IRMAA determination \10\--
to determine whether a beneficiary must pay an IRMAA, and if so, how 
much.\11\ If information is not yet available for the tax year two 
years before the effective year, we will use information from the tax 
year three years before the effective year until the later information 
becomes available to us.\12\
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    \10\ See 20 CFR 418.1010(b)(2) and 418.2010(b)(2).
    \11\ See 20 CFR 418.1120 and 418.2120.
    \12\ See 20 CFR 418.1135(b) and 418.2135.
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    As an example, we would use 2019 MAGI and Federal income tax filing 
status information when making a determination for a beneficiary who 
must pay an IRMAA beginning in January 2021 (2021 being the effective 
year). This is because we use the most current tax data available from 
the IRS, which is usually two years before the effective year. The 
determination is generally made prior to the effective year, and thus 
tax data from the prior year (2020 in this example) will generally not 
be available to the Social Security Administration (SSA) at the time of 
the determination. Consequently, we must use the latest tax data 
available to us to make an IRMAA determination.
    Beneficiaries who experience a major life-changing event may 
request that we use information from a more recent tax year to make a 
new IRMAA determination by completing an SSA-44 (Office of Management 
and Budget (OMB) No. 0960-0784).\13\ Major life-changing events include 
marriage, divorce or annulment, death of a spouse, work reduction or 
stoppage, loss of income-producing property, loss of employer pension 
or receipt of settlement payment from a current or former employer.\14\ 
If a beneficiary provides evidence that a qualifying major life-
changing event caused a significant reduction in MAGI, we will 
determine the IRMAA based on data from a more recent tax year.\15\ 
During the annual verification process, SSA will verify MAGI for 
beneficiaries for

[[Page 66490]]

whom SSA has been temporarily using MAGI from the tax year 3 years 
prior to the effective year, beneficiaries whom we are using a copy of 
their 2 years prior or 1 year prior to the effective year tax return, 
beneficiaries who supplied estimates for their MAGI in connection with 
a life changing event, and for beneficiaries who attested to not 
needing to file a tax return.\16\ We define a significant reduction in 
MAGI as any change that results in a reduction or elimination of 
IRMAA.\17\
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    \13\ See 20 CFR 418.1201, 418.1205, 418.2201, and 418.2205.
    \14\ See 42 U.S.C. 1395r (i)(4)(C)(ii)(II); 20 CFR 418.1205, and 
418.2205.
    \15\ See 20 CFR 418.1201; 418.1205, 418.2201, and 418.2205.
    \16\ See 20 CFR 418.1140 and HI 01130.001.
    \17\ See 20 CFR 418.1215 and 418.2215.
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Increase in Fraudulent Activities

    Fraud impacts a greater number of Americans each year and to a 
greater economic extent. The Federal Trade Commission (FTC) reported 
receiving more than 2.2 million reports of fraud from consumers, who 
reported losses of more than $3.3 billion in 2020 (an increase from 
$1.8 billion in 2019). Just over a third of all consumers who filed a 
fraud report with the FTC--34 percent--reported losing money, up from 
23 percent in 2019.\18\ For example, among the increasing reports of 
fraud, the FTC cites imposter fraud as the number one category of fraud 
by loss amount.\19\ The ``imposter fraud'' category includes ``. . . 
romance scams, people falsely claiming to be the government, a relative 
in distress, a well-known business, or a technical support expert, to 
get a consumer's money.'' \20\ Additionally, as the COVID-19 pandemic 
continues to impact the United States, the Federal Communications 
Commission has learned of new scam text-message campaigns and robocalls 
that prey on virus-related fears,\21\ and the FTC has warned against 
scammers attempting to cash in on confusion relating to COVID-19 
vaccines.\22\
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    \18\ Id.
    \19\ The Federal Trade Commission's Consumer Sentinel Network: 
Data Book 2020, page 8, available at: https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf.
    \20\ Id. at page 4.
    \21\ Coronavirus Scams--Consumer Resources https://www.fcc.gov/covid-scams.
    \22\ Scammers cash in on COVID-19 vaccination confusion (January 
27, 2021) available at: https://www.consumer.ftc.gov/blog/2021/01/scammers-cash-covid-19-vaccination-confusion.
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    In addition to the above noted new and increased types of fraud, we 
have also become aware of a significant increase in Social Security 
number (SSN)-related fraud, and scammers who pose as government 
employees to defraud unsuspecting victims of their personal information 
and money.\23\ In January 2020, our Inspector General appeared before 
Congress to address this matter. The Inspector General gave testimony 
about a significant increase in complaints of callers impersonating 
Social Security employees or alleging an SSN-related problem. She noted 
that, in fiscal year (FY) 2018, our Office of the Inspector General 
(SSA OIG) recorded about 15,000 related complaints, while in FY 2019, 
the number of such complaints grew to over 478,000.\24\ For FY 2020, 
SSA OIG recorded over 718,000 complaints related to Social Security 
telephone scams,\25\ and in its most recent semiannual report to 
Congress (for the period of October 1, 2020 through March 31, 2021), 
SSA OIG reports having received more than 400,000 such complaints 
during that 6-month period, which would exceed the rate for FY 
2020.\26\ The FTC reports that Social Security-related phone scams are 
the most common type of government imposter fraud targeting the 
public.\27\ Recently, the U.S. Attorney's Office for the Northern 
District of Georgia helped shut down a criminal ring that defrauded the 
public of over $20 million by impersonating Social Security or IRS 
employees.\28\ We note, however, that Social Security impersonation 
scams are only one among many types of fraud that could result in 
income changes that ultimately affect IRMAA amounts.
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    \23\ That's Not the Government Calling: Protecting Seniors from 
the Social Security Impersonation Scam: Hearing Before the Special 
Committee on Aging, U.S. Senate, 116th Cong., 2nd Sess. (2020) 
(Statement of Gail S. Ennis, Inspector General, Social Security 
Administration) (https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security).
    \24\ Id. at 2 and Exhibit 1.
    \25\ SSA OIG, Semiannual Report to Congress, October 1, 2019-
March, 31, 2020, at 10 (May 29, 2020) (https://oig.ssa.gov/sites/default/files/semiannual/SAR-Spring-2020.pdf); SSA OIG Semiannual 
Report to Congress, April 1, 2020-September 30, 2020, at 11 
(November 23, 2020) (https://oig.ssa.gov/sites/default/files/Fall_2020_SAR_1.pdf).
    \26\ SSA OIG, Semiannual Report to Congress, October 1, 2020-
March 31, 2021, at 12 (May 28, 2021) SPRING 2021 SAR_FINAL_0.pdf 
(ssa.gov).
    \27\ Federal Trade Commission: Consumer Protection Data 
Spotlight, available at: https://www.ftc.gov/news-events/blogs/data-spotlight/2019/07/government-imposter-scams-top-list-reported-frauds.
    \28\ SSA OIG India-Based VOIP Provider and Its Director Indicted 
for Facilitating Millions of Scam Robocalls to Americans available 
at: https://oig.ssa.gov/audits-and-investigations/investigations/nov17-ga-india-based-voip-provider-fraud-scam-robocalls (November 
17, 2020).
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    During the January 2020 congressional hearing, the Inspector 
General testified that scammers typically ``spoof'' or mimic legitimate 
government telephone numbers, so those numbers appear on a victim's 
caller ID, providing a veil of legitimacy. Scammers seek to deceive and 
frighten victims by telling them that their SSNs have been linked to 
crimes, or that their accounts are subject to a fine or debt which the 
number holder needs to pay to receive or continue to receive their 
Social Security benefits, or avoid legal action, including arrest. Some 
scammers have even emailed fake letters and reports that appear to come 
from Social Security, to further intimidate and convince potential 
victims of their legitimacy. The scammers then demand payment in the 
form of cash, retail gift cards, or pre-paid debit cards, wire 
transfers, or digital currency, all of which are difficult for 
authorities to trace.\29\
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    \29\ That's Not the Government Calling: Protecting Seniors from 
the Social Security Impersonation Scam: Hearing Before the Special 
Committee on Aging, U.S. Senate, 116th Cong., 2nd Sess. (2020) 
(Statement of Gail S. Ennis, Inspector General, Social Security 
Administration) (https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security).
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    Scams, regardless of whether they involve impersonation of SSA 
employees, may severely harm our beneficiaries in numerous ways, 
including with respect to our determinations regarding IRMAA. For 
example, a beneficiary may be defrauded out of a significant amount of 
money. In addition to losing money, the victim may engage in financial 
transactions to pay scammers--such as withdrawing funds from tax-
advantaged retirement accounts or liquidating stock--that increase 
their MAGI for the year in question. The higher reported income 
appearing on the victim's tax return can result in an IRMAA assessment 
or IRMAA increase two years later.

Our Existing Regulations

    Under our current regulations, a significant reduction in income 
due to a loss of income-producing property--including a loss due to 
criminal fraud or theft--can qualify as an LCE.\30\ All beneficiaries 
who seek to qualify for an LCE based on a loss of income-producing 
property must provide evidence documenting the loss, such as an 
insurance claim.\31\
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    \30\ See 20 CFR 418.1205(e) and 418.2205.
    \31\ See 20 CFR 418.1255(e) and 418.2255.
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    The current regulations require victims of criminal fraud or theft 
who have lost income-producing property to submit proof that a court 
has convicted the perpetrator of a crime.\32\ While this requirement is 
necessary to safeguard

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against unfounded or unproven allegations, convictions may be more 
difficult to obtain in these types of fraud cases. Perpetrators of 
these increasingly prevalent fraud schemes are employing new 
technological means, and, as noted above, are seeking new forms of 
payment which make them difficult to identify and convict. As Calvin A. 
Shivers, the Assistant Director, Criminal Investigative Division, 
Federal Bureau of Investigation noted in his June 2020 testimony before 
the U.S. Senate Judiciary Committee:
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    \32\ Id.

    With the rise in the use of virtual assets and encrypted devices 
and applications, the interconnectivity of communication platforms 
and the ever-changing landscape of emerging payment systems, the 
world is more connected today than ever. This also means it has 
become increasingly difficult to track illicit finance flows and 
identify the criminal actors behind them.\33\
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    \33\ COVID-19 Fraud: Law Enforcement's Response to Those 
Exploiting the Pandemic U.S. Senate Judiciary Committee (Statement 
of Calvin A. Shivers, Assistant Director, Criminal Investigative 
Division, Federal Bureau of Investigation June 9, 2020) available 
at: https://www.fbi.gov/news/testimony/covid-19-fraud-law-enforcements-response-to-those-exploiting-the-pandemic.

    Consequently, we are exploring whether and how we might change the 
evidentiary standard in our regulations for showing a loss of income-
producing property due to criminal fraud or theft by a third party.

What is the purpose of this ANPRM?

    We are seeking information on whether and how we should update our 
regulations to provide for relief in cases where beneficiaries are 
victims of criminal fraud or theft and their incomes are affected, but 
no criminal convictions (or arrest) may have taken place.
    We seek to aid beneficiaries adversely affected by fraud that has 
affected their IRMAA status, while maintaining our commitment to 
safeguard the public funds in our trust. Our current regulations 
safeguard against unfounded or unproven allegations by requiring 
evidence of fraud or loss, but may not address all situations. We are 
seeking input from the public to more fully understand the new forms of 
fraudulent activity affecting beneficiaries, to better understand the 
types of evidence of fraudulent activities such victims can present, to 
learn more about the types of financial transactions beneficiaries have 
engaged in as a result of fraud, and to determine how we might revise 
our rules to better assist victim-beneficiaries.

What We Will Consider When We Decide Whether To Propose Revisions to 
Our Rules

    We will consider the public comments and any research or data 
identified in response to this solicitation. We will also consider any 
information we obtain through research or other activities intended to 
inform our policy decisions in this area.

What should the public comment about?

    We are specifically asking the public to provide us with comments 
on the following topics related to this ANPRM:
     Types of fraud that can affect IRMAA status--We seek to 
learn more about the types of scams the public is experiencing, 
including how affected persons were contacted; what was the technique 
employed by the scammer; what kinds of property were targeted; what 
kinds of financial transactions did affected persons engage in as a 
result of the fraud; whether affected persons experienced an increase 
in taxable income as a result; how much of a monetary loss if any did 
affected persons sustain; were there any arrests or convictions; what 
was the experience with law enforcement; etc.). As noted above, please 
be certain not to include any personally identifiable information in 
your comments;
     Types of evidence--What types of evidence should we seek 
from affected beneficiaries to demonstrate that the loss was due to 
criminal fraud or theft? How can we best balance evidentiary needs with 
the burden evidence requirements impose on affected beneficiaries? We 
are seeking information about forms of convincing evidence that would 
be common among such victims.
    How should we determine whether a loss of income-producing property 
due to alleged criminal fraud or theft is ``a result of the ordinary 
risk of investment,'' and thus may not be considered under existing 
regulations [20 CFR 418.1205(e).]

Consideration of and Response to Public Comments

    We will consider all relevant public comment we receive in response 
to this ANPRM. If we decide to propose specific revisions to our rules, 
we will publish a notice of proposed rulemaking in the Federal 
Register, and you will have a chance to comment on any revisions we 
propose.

List of Subjects in 20 CFR Part 418

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Medicare subsidies, Public assistance programs, Reporting and 
recordkeeping requirements, Supplemental Security Income (SSI).
    The Acting Commissioner of Social Security, Kilolo Kijakazi, having 
reviewed and approved this document, is delegating the authority to 
electronically sign this document to Faye I. Lipsky, who is the primary 
Federal Register Liaison for the Social Security Administration, for 
purposes of publication in the Federal Register.

Faye I. Lipsky,
Federal Register Liaison, Office of Legislative and Congressional 
Affairs, Social Security Administration.
[FR Doc. 2021-25364 Filed 11-22-21; 8:45 am]
BILLING CODE 4191-02-P