[Federal Register: November 15, 2002 (Volume 67, Number 221)]
[Proposed Rules]
[Page 69311-69363]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15no02-27]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 405
Medicare Program; Changes to the Medicare Claims Appeal Procedures;
Proposed Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 405
[CMS-4004-P]
RIN 0938-AL67
Medicare Program: Changes to the Medicare Claims Appeal
Procedures
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: Under sections 1869 and 1879 of the Social Security Act (the
Act), Medicare beneficiaries and, under certain circumstances,
providers and suppliers of health care services, may appeal adverse
determinations regarding claims for benefits under Medicare Part A and
Part B. Section 521 of the Medicare, Medicaid and SCHIP Benefits
Improvement and Protection Act of 2000 amends section 1869 of the Act
to substantially revise the Medicare claim appeals process. The statute
mandates a series of structural and procedural changes to the existing
appeals process, including: The establishment of a uniform process for
handling all Medicare Part A and Part B appeals; revised time limits
for filing appeals; reduced decision-making time frames throughout all
levels of the Medicare administrative appeals system; the introduction
of new entities known as qualified independent contractors (QICs) to
conduct reconsiderations of contractors' initial determinations or
redeterminations; and the establishment of the right to an expedited
determination when an individual disagrees with a provider's decision
to discharge the individual or terminate services.
This proposed rule sets forth the regulations that would be needed
to implement the new statutory provisions.
DATES: We will consider comments if we receive them at the appropriate
address, as provided below, no later than 5 p.m. on January 14, 2003.
ADDRESSES: In commenting, please refer to file code CMS-4004-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission or e-mail. Mail written comments (one
original and three copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-4004-P, P.O. Box 8017, Baltimore, MD 21244-8017.
Please allow sufficient time for mailed comments to be timely
received in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written
comments (one original and three copies) to one of the following
addresses:
Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-16-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for commenters wishing to retain a proof of filing by
stamping in and retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section below.
FOR FURTHER INFORMATION CONTACT: Michele Edmondson (410) 786-6478 (for
issues relating to appeal rights). Jennifer Eichhorn (410) 786-9531
(for issues relating to initial determinations and redeterminations).
Arrah Tabe (410) 786-7129 (for issues relating to QIC
reconsiderations). Jennifer Collins (410) 786-1404 (for issues relating
to ALJ hearings and DAB reviews). Rhonda Greene-Bruce (410) 786-7579
(for issues relating to expedited determinations).
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Timely
comments will be available for public inspection as they are received,
generally beginning approximately 3 weeks after publication of a
document, at the headquarters of the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an
appointment to view public comments, phone (410) 786-7197.
To order copies of the Federal Register containing this document,
send your request to: New Orders, Superintendent of Documents, P.O. Box
371954, Pittsburgh, PA 15250-7954. Specify the date of the issue
requested and enclose a check or money order payable to the
Superintendent of Documents, or enclose your Visa or Master Card number
and expiration date. Credit card orders can also be placed by calling
the order desk at (202) 512-1800 (or toll-free at 1-888-293-6498) or by
faxing to (202) 512-2250. The cost for each copy is $9. As an
alternative, you can view and photocopy the Federal Register document
at most libraries designated as Federal Depository Libraries and at
many other public and academic libraries throughout the country that
receive the Federal Register.
This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. The Web site address is http://
www.access.gpo.gov/nara/index.html.
Note: The former name of the Centers for Medicare & Medicaid
Services (CMS) was the Health Care Financing Administration (HCFA).
The terms CMS and HCFA can be used interchangeably.
Since the Social Security Administration (SSA) became an
independent agency in 1995 pursuant to Public Law 103-296, it has
continued to provide CMS with support for the administration of the
Medicare Parts A and B programs pursuant to a Memorandum of
Understanding between SSA and DHHS. That support has involved, among
other duties, continuing to provide hearings and decisions in Medicare
appeals using SSA administrative law judges (ALJs) as well as utilizing
SSA offices to forward various Medicare-related paperwork to CMS. While
CMS has greatly appreciated SSA's assistance over the years in these
areas, at this time CMS is considering taking over these Medicare
responsibilities. Our hope is to have this in place on or before
October 1, 2003. Until such time as CMS may take over the function, SSA
will continue to provide Medicare claimants with the valuable
assistance that it has traditionally provided. Thereafter, CMS will
assume such responsibilities. CMS will provide appropriate notice to
the public as to when such responsibilities will be assumed and also as
to the procedures Medicare claimants will follow in dealing with CMS
rather than SSA. Therefore, references in this NPRM to SSA, including
SSA, ALJs, and field offices, should be read as references to SSA
assistance to CMS up to the point in time when CMS takes over the SSA
responsibilities.
I. Background
A. Overview of Existing Medicare Program
The original Medicare program consists of two parts. Part A, known
as the hospital insurance program, covers
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certain care provided to inpatients in hospitals, critical access
hospitals, skilled nursing facilities (SNFs), as well as hospice care
and some home health care. Part B, the supplementary medical insurance
program, covers certain physicians' services, outpatient hospital care,
and other medical services that are not covered under Part A. In
addition to the original Medicare program, beneficiaries may elect to
receive health care coverage under Part C of Medicare, the
Medicare+Choice (M+C) program. Under the M+C program, an individual is
entitled to those items and services (other than hospice care) for
which benefits are available under Part A and Part B. An M+C plan may
provide additional health care items and services that are not covered
under the original Medicare program.
Under the original Medicare program, a beneficiary may generally
obtain health services from any institution, agency, or person
qualified to participate in the Medicare program that undertakes to
provide the service to the individual. After the care is provided, the
provider or supplier (or, in some cases, a beneficiary) would submit a
claim for benefits under the Medicare program to the appropriate
government contractor, either a fiscal intermediary (for all Part A
claims and certain Part B claims) or a carrier (for most claims under
Part B). If the claim is for an item or service that falls within a
Medicare benefit category, is reasonable and necessary for the
individual, and is not otherwise excluded by statute or regulation,
then the contractor would pay the claim. However, the Medicare program
does not cover all health care expenses. If the Medicare contractor
determines that the medical care is not covered under the Medicare
program, it denies the claim. In fiscal year 2001, Medicare contractors
adjudicated over 930 million initial claims and approximately 6.7
million claim appeals.
When a contractor denies a claim, it notifies the provider,
supplier and/or beneficiary of the denial and offers the opportunity to
appeal this decision. The existing appeals procedures for original
Medicare are set forth in regulations at 42 CFR part 405, subparts G
and H. Separate procedures for appealing determinations made under the
M+C program are set forth at subpart M of part 422. After an appellant
has exhausted the administrative appeals procedures offered under the
Medicare program, the Medicare statute provides the opportunity for a
dissatisfied individual to seek review in Federal court.
The regulations in part 405 subpart G, beginning at Sec. 405.700,
describe reconsiderations and appeals under Medicare Part A. When a
Medicare contractor makes a determination with respect to a Part A
claim, the beneficiary, or the provider, in some circumstances, may
appeal the determination. (Consistent with section 1861(u) of the Act
and 400.202, the term ``provider'' generally includes hospitals, SNFs,
home health agencies (HHAs), comprehensive outpatient rehabilitation
facilities (CORFs), and hospices.) The contractor then reconsiders the
initial determination. If the contractor upholds the original
determination, the appellant may request a hearing before an
Administrative Law Judge (ALJ), provided that the amount in controversy
is at least $100. (ALJs are employed by the Social Security
Administration (SSA), but they adjudicate Medicare appeals under a
Memorandum of Understanding between SSA and the Department of Health
and Human Services (DHHS.) If the appellant is dissatisfied with the
ALJ's decision, he or she may request review by the Departmental
Appeals Board (DAB). The component within the DAB that is responsible
for Medicare claim appeals is the Medicare Appeals Council (MAC). (Note
that although the Medicare appeals regulations in part 405 contain some
limited provisions regarding ALJ and MAC proceedings, these proceedings
are generally governed by existing SSA regulations at 20 CFR part 404,
subparts J.) MAC decisions constitute the final decision of the
Secretary of DHHS (the Secretary) and may be appealed to Federal court.
In each case, the lower level of appeal must be exhausted before the
appeal can be elevated to the next level.
Medicare Part B appeal procedures are set forth in part 405 subpart
H (Sec. 405.800 et seq.). Under these regulations, beneficiaries and
suppliers that accept assignment for Medicare claims may appeal to a
Medicare contractor for a review of the contractor's initial
determination that a claim should not be paid, either in full or in
part. (The term ``supplier'' is also defined at Sec. 400.202 and means
a physician or other practitioner, or an entity other than a
``provider,'' that furnished health care services under Medicare.) If
the contractor's review results in a continued denial of the claim, and
the amount in controversy is at least $100, the appellant may request a
2nd level appeal known as a ``fair hearing.'' If the hearing officer
upholds the denial, the appellant may request a hearing before an ALJ,
provided that the amount in controversy is at least $500. Subsequent
aspects of the appeals process for a Part B claim are identical to
those described above for a Part A claim.
Quality improvement organizations (QIOs), formerly known as peer
review organizations, also make certain types of Medicare
determinations, mostly involving inpatient hospital discharges under
sections 1154 and 1155 of the Act. These decisions are also subject to
ALJ hearings, if the amount in controversy is at least $200. Judicial
review is also available if the amount in controversy is $2000.
Regulations for these appeals are currently found at 42 CFR part 478.
Finally, note that appeals under Medicare Part C are also subject to
adjudication by ALJs and the MAC, although these appeals follow an
entirely separate path before the ALJ level.
B. Changes to the Appeals Process Under BIPA 2000
Section 521 of the Medicare, Medicaid and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA), Public Law 106-554,
amends section 1869 of the Act to require revisions to the Medicare
appeals process. Among the major changes required by the BIPA
amendments are--
[sbull] Establishing a uniform process for handling Medicare Part A
and B appeals, including the introduction of a new level of appeal for
Part A claims.
[sbull] Revising the time frames for filing a request for a Part A
and Part B appeal.
[sbull] Imposing a 30-day timeframe for certain
``redeterminations'' made by the contractors who made the initial
determination.
[sbull] Requiring the establishment of a new appeals entity, the
qualified independent contractor (QIC), to conduct ``reconsiderations''
of contractors' initial determinations (including redeterminations) and
allowing appellants to escalate cases to an ALJ hearing, if
reconsiderations are not completed within 30 days.
[sbull] Establishing a uniform amount in controversy threshold of
$100 for appeals at the ALJ Level.
[sbull] Imposing 90-day time limits for conducting ALJ and MAC
appeals and allowing appellants to escalate a case to the next level of
appeal if ALJs or the MAC do not meet their deadlines.
[sbull] Imposing ``de novo'' review when the MAC reviews an ALJ
decision made after a hearing.
Revised section 1869 also requires that the Secretary establish a
process by which an individual may obtain an expedited determination if
he/she
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receives a notice from a provider of services that the provider plans
to terminate services or discharge the individual from the provider.
Currently, this right to an expedited review only exists with respect
to hospital discharges (under sections 1154 and 1155 of the Act).
The statute specifies that the new appeals provisions are effective
for initial determinations made on or after October 1, 2002. As this
proposed rule demonstrates, we are making significant efforts to ensure
that the public has an opportunity to comment on the procedures used to
implement section 521 and to ensure that a rule is in place for
implementing section 521. However, as noted in the CMS ruling published
October 7, 2002 (67 FR 62478-62482) on this subject, this rulemaking
effort is greatly complicated by the possibility of further changes to
the statutory appeals provisions. We need to ensure that this statutory
mandate will not risk disruptions to other fundamental functions of the
Medicare program, such as processing and payment of Medicare claims.
Thus, we seek comments on this proposed rule so that we can be in the
best possible position for implementation.
Rather than listing here all the detailed provisions of section 521
of BIPA, we will discuss the individual provisions in detail below in
the context of the proposed implementing regulations. However, for the
convenience of the reader, we are providing below a detailed chart
illustrating the current appeals procedures for both Part A and B
claims and the new procedures that are required by BIPA:
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP15NO02.000
BILLING CODE 4120-01-P
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C. Codification of Regulations
As noted above, the current regulations governing Medicare
administrative appeals are set forth in 42 CFR part 405, subparts G and
H. These regulations will continue to be needed for an indefinite
transition period until all appeals resulting from initial
determinations before the implementation of the new procedures required
under BIPA are completed. We are considering what rules should apply
during the transition period and whether it would be possible or
prudent to operate dual appeals systems depending on the date of an
initial claim determination. Clearly, the new BIPA provisions make
possible a largely uniform set of appeals procedures that can be
applied both for part A and B of Medicare. Therefore, this proposed
rule would establish a new subpart I of part 405 that will set forth in
one location the administrative appeals requirements for Medicare
carriers, Fiscal Intermediaries (FIs) and QICs. We note that BIPA
section 521 (see 1869(a)(1)(C)) also requires that certain
determinations made by QIOs under section 1154(a)(2) be subject to the
revised appeals process under section 1869, therefore, we anticipate
publishing a separate proposed rule to accommodate needed changes to
the existing regulations at 42 CFR parts 476 and 478 regarding QIO
determinations and appeals. (In addition, we note that the changes set
forth here do not apply for purposes of Part C of Medicare, that is,
the Medicare+Choice program. We also intend to address necessary
changes to 42 CFR part 422 in future rulemaking.)
We are also proposing to include in new subpart I the provisions
needed to govern Medicare claims appeals to ALJs and the MAC. The
existing ALJ regulations are quite voluminous and are intended
primarily to apply to appeals of SSA disability cases, rather than to
Medicare appeals. The need for the Medicare program to establish its
own regulations for these upper level appeals has been recognized by
many parties, including, most recently, the Office of the Inspector
General in its January 2002 report: ``Medicare Administrative Appeals--
The Potential Impact of BIPA,'' OEI-04-01-00290. Many of these
provisions will effectively carry over the existing requirements with
respect to appeals to the ALJ and the MAC, rather than implementing
substantive changes. However, both the firm time frames for ALJ and DAB
decisions and the opportunity for escalation of cases are provisions
that apply only to Medicare claims, and not to SSA disability cases--
presenting another compelling argument to take this opportunity to
codify the ALJ and MAC requirements for Medicare administrative appeals
within the Medicare regulations at Title 42 of the Code of Federal
Regulations. Thus, the new subpart I will codify in one location key
regulations governing all aspects of Medicare claim appeals, beginning
with the statutory requirements that apply to initial determinations
and proceeding through all four levels of the administrative appeals
process. For the convenience of the reader, regulations contained in
existing subparts G and H of part 405 that have not been affected by
the changes mandated in section 521 of BIPA generally will be repeated
in the new subpart. However, we note that we are not carrying over
regulations that deal with challenges to coverage policy (such as
Sec. Sec. 405.732 or 405.860 concerning the review of national
coverage decisions), which instead will be dealt with in the
regulations implementing section 522 of BIPA concerning the new
procedures for appealing coverage policies to ALJs and the DAB. Since
we are not eliminating regulations contained in existing subparts G and
H, we also will not reflect provisions in subpart I that deal with
appeals of carrier decisions that supplier standards are not met, or
appeals of a categorization of a device as experimental or
investigational (see Sec. Sec. 405.874-75 and 405.753).
II. General Provisions of the Proposed Rule
A. Overview
Clearly, the changes introduced by section 521 of BIPA are aimed at
introducing greater efficiency and accuracy into the Medicare appeals
system. The Secretary is equally committed to these goals. However, the
introduction of QICs and the establishment of drastically reduced
mandatory time frames for appeals decisions do not in themselves
provide remedies to the longstanding problems that Congress intended to
address in the new BIPA appeals provisions. To make these changes work,
we need to examine carefully how the effects of changes at a given
level of the appeals process may affect the entire appeals system, as
well as to determine how to allocate the limited Medicare resources
available to effectuate the changes to the appeals system.
In developing the proposals below, we have carefully considered how
best to achieve these goals within the BIPA construct, keeping in mind
the limited resources likely available for appeals system changes. We
are also acutely aware of the possibility that the volume of appeals
could increase significantly with the implementation of BIPA. (The OIG
pointed out three reasons that such increases are likely, including the
attractiveness of a speedier system, with drastically reduced time
frames, the increased control given to appellants through the new
escalation provisions, and the reductions in the required amounts in
controversy to appeal a denied claim.) We also needed to consider the
fact that, although the existing appeals provisions were designed
primarily for beneficiary appeals, the overwhelming majority of appeals
are now filed by providers and suppliers. We have attempted to reflect
this reality by proposing changes that will work efficiently for
appellants with some knowledge and experience of the Medicare appeals
procedures, while at times incorporating exceptions for beneficiary
appellants.
Outlined below are the proposed changes to the Medicare appeals
regulations needed to implement section 521 of BIPA. Our general
approach is to explain briefly the new statutory provisions, and to
point out significant differences with the law or regulations that have
been in effect prior to BIPA. For proposed regulations that are
substantively unchanged from existing requirements, we have merely
consolidated the current regulatory requirements into unified
provisions that apply for both Medicare Part A and Part B appeals,
consistent with the BIPA approach. In doing so, we have made some
editorial changes to increase the clarity and simplicity of the
regulations, to the extent that this is possible given the inherent
complexity of appeals regulations. The discussion that follows touches
only briefly, if at all, on sections of the proposed regulations that
do not set forth substantive changes to the existing appeals
procedures.
B. Statutory Basis, Definitions, and General Procedures (Sec. Sec.
405.900-405.902)
Proposed subpart I begins with a brief section (Sec. 405.900) that
sets forth the general statutory authority for the ensuing provisions
and establishes that the scope of the subpart is to establish the
regulations needed to implement the provisions of section 1869 of the
Act concerning initial determinations and appeals. Consistent with
section 1869(a)(1) of the Act, Sec. 405.900 (b) specifies that the
Secretary shall make initial determinations with respect to whether an
individual is entitled to benefits under Medicare Part A or B and with
respect to the amount of benefits
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available under those parts. Section 405.902 would set forth the
definitions for terms used in subpart I that we believe may need
clarification. These definitions provide the generally applied meaning
for terms that are used throughout the subpart.
For the most part, the definitions presented here are taken
directly from the statute, or from existing subparts G or H of part
405, or are essentially self-explanatory. We have not restated in
subpart I definitions of terms that are already defined in part 400 of
the Medicare regulations, such as ``provider'' or ``supplier'' (see
Sec. 400.202) and that have the same meaning in the appeals context.
Thus, the term ``supplier'' encompasses physicians, other
practitioners, and various entities (such as laboratories or durable
medical equipment (DME) suppliers) other than providers that furnish
Medicare services. Discussed below are two terms that we believe may
need further clarification.
1. Assignment of Appeal Rights
Section 1869(b)(1)(C) provides that an individual's appeal rights
may be assigned to the provider or supplier that furnishes the item or
service in question. Our proposed definition states that ``assignment
of appeal rights'' means the transfer by a beneficiary (the
``assignor'') of his or her right to appeal an initial determination to
a provider or supplier (the ``assignee''). Although this definition is
relatively straightforward, it is important that this term not be
confused with the term ``assignment,'' as defined under existing Sec.
405.802. In that context, assignment refers to the transfer of a claim
for payment under Part B of Medicare from a beneficiary to a physician
or other supplier. For purposes of Subpart I, the terms ``assignment,''
``assignor,'' and assignee'' are used to refer only to the transfer of
appeal rights, rather than in the more traditional context of payment
on an assignment-related basis. A full discussion of our proposals
regarding appeal rights is presented below.
2. Party
The meaning of the term ``party'' also has important implications,
mainly for purposes of appeal rights and notification requirements. We
would simply define party as an individual or entity with standing to
appeal an initial determination or subsequent administrative appeal
determination. Then, we list in Sec. 405.906(a) who would be
considered a party to an initial determination. Beneficiaries are
considered parties. Also, in keeping with our previous regulations,
physicians or suppliers who have accepted a valid assignment executed
by a beneficiary to transfer his or her claim for payment to the
physician or supplier, in return for the physician or supplier's
promise not to charge more for his or her services than a carrier finds
to be a reasonable charge or other approved amount, would also be
considered a party. A party also includes a physician liable for refund
under section 1842(l) of the Act, a supplier liable for refund under
sections 1834(a)(18) and 1834(j)(4) of the Act, or a provider.
Additionally, Sec. 405.906(b) identifies parties for purposes of an
appeal. A provider or supplier taking assignment of appeal rights under
section 1869(b)(1)(C) would be considered a party to an appeal. Also,
in accordance with Sec. 405.908, we note that for dually entitled
beneficiaries, States have the right to file appeals on behalf of the
beneficiary pursuant to Title XIX of the Act.
Proposed Sec. 405.904 provides a general description of the post-
BIPA appeals process, much as existing Sec. 405.801 does for the pre-
BIPA, part B process. In addition, Sec. 405.904(b) establishes the
general rule that the same appeals procedures that are available to
beneficiaries, and to individuals acting as representatives of
beneficiaries, are also available to a provider and supplier that is a
party to a given determination. This section also explains that in some
circumstances, a provider's rights to judicial review are limited,
unless the beneficiary has formally assigned his or her appeal rights
to the provider. Note that although beneficiary appeals and provider
and supplier appeals follow identical paths, we are proposing slightly
more lenient evidentiary rules for unrepresented beneficiaries or
beneficiaries represented by family or friends, given their likely lack
of familiarity with Medicare coverage rules and appeals procedures. We
would hold State agencies, providers, suppliers, and attorneys to a
higher standard based on their presumed knowledge and experience with
the Medicare program. We believe that these individuals and entities
are essentially ``businesses'' and can be held to a reasonableness
standard. These proposals are discussed in detail below.
C. Appeal Rights (Sec. Sec. 405.906-405.912)
Historically, providers have had limited rights to appeal Medicare
initial determinations. Consistent with section 1879(d) of the Act,
providers may appeal Medicare determinations only when the
determination involves a finding that (i) the item or service was not
covered because it constituted custodial care, was not reasonable and
necessary, or for certain other reasons; and (ii) the provider knew or
could reasonably be expected to know that the service in question was
not covered under Medicare (that is, a finding with respect to the
limitation of liability provision under section 1879 of the Act).
Despite these restrictions, providers have routinely accessed the
appeals process in situations where they would otherwise not have
appeal rights by acting as a beneficiary's appointed representative.
Another underlying principle of BIPA was the establishment of
uniform appeal procedures for providers and suppliers. In keeping with
this approach we believe the interests of the appeals process would be
best served by ensuring that providers are afforded an equal
opportunity to be heard with regard to all Medicare initial
determinations. In BIPA, we believe it was the intent of the Congress
to ensure that Medicare providers, physicians, and other suppliers had
easier access to the Medicare administrative appeals system. As
discussed below, Congress expanded the appeal rights of providers,
physicians and other suppliers with regard to Medicare appeals by
authorizing the assignment of appeal rights.
Therefore, in this rulemaking we are proposing to end the
distinction limiting the appeal rights of providers to determinations
involving the knowledge aspect of the limitation on liability
provision. We propose to allow providers to file for administrative
appeal of Medicare initial determinations to the same extent as
beneficiaries. With this change, we would achieve consistency in our
approach to appeals standing under Parts A and B.
We also would continue to maintain current appeals policies with
respect to non-participating providers, physicians and other suppliers.
We considered extending appeal rights to non-participating physicians
and other suppliers to the same extent as providers. However, we
believe that such a change would result in a negative impact on
Medicare participation rates and, potentially, a contraction of
beneficiary access to care. Also, we note that non-participating
physicians and other suppliers may attain party status by securing an
assignment of appeal rights from beneficiaries as provided in new
section 1869(b)(1)(C).
In this proposed rule, we also clarify our policy with regard to
the continuation of an appeal when a beneficiary-appellant dies while
an appeal is in progress. Under our current
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rules, a substitute entity may be entitled to receive or obligated to
make payment for Medicare claims. See 42 CFR part 424 subpart E. If a
person becomes financially responsible for Medicare claims under our
rules, we are proposing that such person or entity may be made a party
to the initial determination and have the right to continue the appeal.
We are proposing to implement these expanded appeal rights in
proposed Sec. 405.906, which would clearly identify all individuals or
entities that may be a party to an initial determination. This approach
identifies parties explicitly and replaces current regulations where
party status is conferred to ``* * * any other party whose rights with
respect to the particular claim being reviewed may be affected by such
review.'' See 42 CFR 405.808. This standard has occasionally led to
questions being raised about who should be a party to appeal. In this
proposed rule we have attempted to address this issue by generally
listing as a party, the individual or entity listed in Sec. 405.906
that has standing to appeal an initial determination and/or a
subsequent administrative appeal determination. We believe the list of
parties is exhaustive, but welcome comments to rectify any omissions.
Proposed Sec. 405.908 pertains to the right of a Medicaid State
agency, which acts as a subrogee, to pursue an appeal on behalf of a
beneficiary entitled to benefits under both Medicare and Medicaid. We
do not consider a Medicaid State agency to be a party, unless the
agency actually pursues a redetermination on behalf of a dually
eligible beneficiary. In other words, a Medicaid State agency will not
automatically be sent notices on determinations made during the
administrative appeals process, nor will the agency be permitted to
request reconsiderations or hearings by ALJs or the MAC, unless the
agency actually files a request for redetermination for a beneficiary.
If a Medicaid State agency files a redetermination it retains party
status for the claim throughout the rest of the appeals process. Also,
a Medicaid State agency automatically has authorization to file an
appeal of a denied claim without following the process prescribed at
Sec. 405.910. Section 1912(a) of the Act provides that as a condition
of eligibility for medical assistance, an individual must assign the
State any rights to payment for medical care from any third party.
Thus, to avoid confusion, we have drafted a separate provision
acknowledging the right of a Medicaid State agency to pursue an appeal
on behalf of a dually eligible individual.
Sections 1869(b)(1)(B) and (C) address provider and supplier
representation and assignment issues. To the extent that these
provisions represent departures from existing requirements, we believe
that they warrant notice and comment rulemaking before they can be
implemented. As discussed below, the new statutory provisions include
several changes in the existing appointment of representative
procedures, which are currently set forth at 20 CFR part 404, subpart R
(the provisions that govern SSA disability insurance claims).
Proposed Sec. 405.910 incorporates and modifies several of the
current provisions in 20 CFR part 404, subpart R, and 42 CFR part 405,
subparts G and H, as they relate to the representation of parties. The
proposed provisions would eliminate the need for incorporation of the
existing SSA regulations as they apply to appeals. Note that under our
existing regulations at Sec. Sec. 405.701 and 405.801, the appointment
of representative provisions set forth in 20 CFR part 404 also apply
for purposes of initial determinations. This proposed rule would not
change the applicability of those provisions with respect to initial
determinations; however, we are considering the extent to which the new
provisions should also apply to initial determinations and welcome
comments on whether we should apply these provisions uniformly.
Since entities or individuals other than beneficiaries may wish to
have someone represent their interests in the appeals process, we have
defined a representative as an individual authorized by a party, or
under State law, to act on the party's behalf in dealing with any
levels of the appeals process. Representatives do not have independent
party status and may only take action on behalf of the individual or
entity they represent. We note that a party may not designate, as an
authorized representative, any individual or entity that has been
suspended, or otherwise prohibited by law, from participating in the
Medicare program.
We have received numerous requests for clarification on how
individuals or entities must make out valid appointments consistent
with the Privacy Act. An agency that maintains a system of records must
``establish appropriate administrative * * * safeguards to ensure the *
* * confidentiality of records and to protect against any anticipated
threats or hazards to their security or integrity * * * which could
result in substantial harm, embarrassment, inconvenience, or unfairness
to any individual on whom the information is maintained.'' The Privacy
Act of 1974, as amended, 5 U.S.C. 552a(e)(10). As is the case under
existing procedures, we want to emphasize that in order to be valid, an
appointment must be in writing, and signed by both the party making the
appointment and the individual agreeing to accept such appointment.
However, to ensure consistency in these proposed provisions, we also
would make a change in the case of attorney representatives. Under
current regulations, only the party making the appointment needs to
sign a statement authorizing the representation. In the case of an
attorney representative, the attorney does not have to sign a notice of
appointment. Instead, in the absence of information to the contrary, an
attorney's assertion that he or she has such authority is accepted as
evidence of the attorney's authority to represent the party. In
establishing procedures that comply with the Privacy Act, we would now
require that attorneys also sign a statement to represent a party.
We appreciate that the signature requirements might be perceived as
burdensome; however, we believe that a representative's signature is
important because it ensures that adjudicators are sharing and
disseminating confidential medical information with the appropriate
individuals. In addition, it indicates that the individual whom the
party has appointed does in fact accept the role and responsibilities
associated with being a representative.
We propose to establish a time frame governing the duration of
representation. Even under the BIPA time frames, we recognize that
there may be substantial lapses in time between a party's request for
an appeal at any given stage of this multi-tiered appeals process, and
receipt of a final decision. Thus, we propose that under Sec.
405.910(e) the appointment (1) shall be valid for the life of an
individual appeal, and (2) for purposes of appeals of other initial
determinations, the authorization shall be considered valid for one
year from its original effectuation. For example, if a party makes a
valid appointment on January 1, 2003, the representative would be
authorized to request multiple appeals on the party's behalf until
January 1, 2004. Suppose that a representative requests a
redetermination of a denied claim on November 1, 2003 and the
contractor affirms the denial on November 30, 2003. Since a party has
up to 180 days to file a request for a reconsideration, if the
representative files an appeal on March 15, 2004, the appointment of
representation would still be valid for purposes of this individual
appeal because the rights
[[Page 69319]]
associated with it have not expired. However, the representative would
not be able to initiate any new appeals on other claims because the
appointment would have been valid only through January 1, 2004.
We believe that it would be too burdensome to require
representatives to renew representation documentation once an appeal
has been undertaken; however, we also believe that a representative's
ability to file appeals of future claims should continue for an
indefinite period of time. While we propose that representation
documentation shall be renewed at least annually (for purposes of
filing new appeals), we welcome comments on whether another time frame
would be more appropriate.
Prior to its amendment by BIPA, section 1869(b)(1)(D) required the
Secretary to apply the provisions of section 206(a) governing the
representation of beneficiaries. New section 1869(b)(1)(B)(iv) removes
section 206(a)(4), which permits the award of attorney fees (not to
exceed 25 percent) from a claimant's entitlement to past-due disability
benefits. Therefore, in Sec. 405.910(f), we make explicit that no
award of attorney fees may be made against the Medicare trust fund. We
recognize that section 1869(b)(1)(B)(iv) requires CMS to apply Sec.
205(j) and 206 provisions to the Medicare appeals process; therefore we
welcome comments on those provisions. Specifically, we request comments
on petitions to ALJs to review and approve attorney fees. We believe
that we should not establish such a process since we do not have
authority to award attorney fees. We also welcome comments on
procedures to govern the conduct of representatives.
Proposed Sec. Sec. 405.910(g)-(l) are self-explanatory provisions
concerning the responsibilities and rights of a representative. For
example, a representative must ensure that a party receives information
about appeal decisions, and disclose to a beneficiary any financial
risk or liability associated with a non-assigned claim. In the past,
there has been some confusion about whether the representative or the
party should receive information about the appeal, including the
decision. We believe that a representative should have the right to
obtain any information applicable to the claim at issue since the
representative acts on behalf of the party. Section 405.910(i)-(j)
would require adjudicators to send notices of their decisions and
otherwise communicate with representatives rather than parties. We
considered whether beneficiaries that are represented also should
receive copies of decision letters, but decided to maintain the
existing provision at 20 CFR Sec. 404.1715. Therefore, any
communication with a representative would have the same force and
effect as if it had been sent to the party.
Proposed section Sec. 405.910(m) deals with the extent to which a
representative may delegate responsibilities. A representative may not
designate another individual to act as the representative unless the
representative notifies the party of the name of the designee, and the
designee's acceptance to comply with the requirements of authorized
representation. Also, the represented party must evidence its
acceptance of this arrangement by a signed, written consent. We believe
that these provisions are necessary to protect the privacy and
confidentiality of medical records. They would also provide
adjudicators with an effective way to resolve any conflicting
information as to who has authority to proceed in an appeal.
The decision on whether to have a representative is left with the
party, and we neither encourage nor discourage representation.
Therefore, proposed Sec. 405.910(n) gives a party the ability to
revoke an appointment for any reason, at any time. To ensure a seamless
process, a revocation of an appointment is not effective until the
entity processing the appeal receives a signed, written statement from
the party. We also propose that the death of a party will terminate the
authority of the representative. However, when a party dies, we do not
intend to terminate an appeal that is in progress since another
individual or entity may be entitled to receive or obligated to make
payment for Medicare claims.
In section 1869(b)(1)(C) of the Act, Congress added a new provision
that permits Medicare beneficiaries to assign their appeal rights to a
provider or supplier of services, pursuant to a written agreement using
a form developed by the Secretary. This provision appears similar to
the provisions that allow a party to an appeal to appoint a person,
including the provider or supplier of services, as a representative for
the appeal. Under our current rules, though, in acting as the
representative, the provider or supplier does not achieve party status
to the appeal; the representative simply acts on behalf of the party.
With the new assignment provision, we believe the Congress intended the
arrangement to differ from the provision enabling a party to appoint a
representative.
Proposed Sec. 405.912 creates new regulatory procedures for the
assignment of appeal rights by a beneficiary to a supplier or provider
of service. Provider/supplier representation rules impose certain
limits'the provider/supplier cannot charge a representation fee for
actions in connection with services it furnished, and the provider/
supplier must waive any right to payment from the beneficiary for the
services at issue if the representation involves a claim where
limitation of liability, under section 1879 of the Act, is an issue.
Similarly, we believe that a provider or supplier wishing to take
assignment of a beneficiary's appeal rights for a particular claim must
waive any right to payment from the beneficiary in order to fully
protect beneficiaries when their appeal rights are assigned. We do not
intend, however, to prohibit the provider/supplier from recovery of any
coinsurance or deductible, or where the beneficiary signed an advance
beneficiary notice accepting responsibility for payment. The nature of
assignment means that beneficiaries must relinquish their party status
in an appeal, as well as any further rights to appeal on their own
behalf. Additionally, BIPA expressly requires us to develop the form
that will be used to make an assignment valid, thereby giving us the
discretion to determine the requirements of a valid assignment. Thus,
the proposed waiver provision is necessary to protect beneficiaries
from potential liability in the event the supplier or provider is
unsuccessful in the appeals process.
As noted above, an appointment of representation would be valid for
one year for any appeal by the individual, and for the duration of the
administrative review process for an appeal related to specific items
or services. Note that a different standard would apply for assignment
purposes. Section 1869(b)(1)(c) clearly indicates that the assignment
of appeal rights applies with ``respect to an item or service.''
Accordingly, we are proposing that an assignment would be valid for the
duration of the appeals process, but only for the items or services
listed on the assignment form. Thus, a supplier or provider of service
would need to perfect a valid assignment for subsequent appeals of
other items or services.
Like in the representation provisions, we also are proposing rules
for the revocation of an assignment. We are soliciting comments on
whether an assignment should be irrevocable, particularly since it only
applies on a per item or service basis, and thus does
[[Page 69320]]
not have any effect on other appeal rights. However, we are concerned
about reinstating a beneficiary's appeal rights in the event of
abandonment by a provider or supplier. We have proposed that if a
beneficiary revokes an assignment, the appeal rights on the item or
service at issue would revert to the beneficiary.
D. Initial Determinations (Sec. Sec. 405.920-405.926)
As noted above, section 1869(a)(1) of the Act continues to provide
that the Secretary shall make initial determinations with respect to
whether an individual is entitled to benefits under part A or part B
and to the amount of benefits available to an individual under those
parts. However, section 1869(a)(2)(A) of the Act establishes that, on
all claims other than clean claims, the initial determination shall be
concluded and a notice of such determination must be mailed by no later
than 45 days after receiving the claim, in contrast to the existing 60-
day deadline for such non-clean claims. Section 1869(a)(2)(B) currently
requires that interest will accrue if clean claims are not processed
within 30 days. This standard remains unchanged (as specified in
sections 1816(c)(2) and 1842(c)(2) of the Act). Nothing in BIPA,
however, requires that interest would accrue on non-clean claims,
regardless of whether they are adjudicated within 45 days. The proposed
regulations to implement these statutory provisions regarding the
timing and notice requirements pursuant to an initial determination are
contained in Sec. Sec. 405.920 and 405.922.
In Sec. 405.920, we require that claims must be filed in the
manner and form described in 42 CFR part 424 subpart C, which continues
our current policies for filing claims. When a claim is filed with the
appropriate carrier or FI, the carrier or FI will determine whether the
items and/or services are covered under Part A or Part B of title
XVIII. The contractor will then determine any amounts due and make
payment accordingly. The parties to the initial determination, as
specified in Sec. 405.906, will be notified of the initial
determination in writing by the contractor. This notice will also
contain the basis for the determination and information on how to
request a redetermination. As with our current policy, the Remittance
Advice and Medicare Summary Notice will be used as a notice of initial
determination.
In accordance with section 1869(a)(2) of the Act, proposed Sec.
405.922 sets forth the time frames for initial Medicare claims
determinations. That is, a contractor shall issue initial
determinations on clean claims (as defined in Sec. 405.901) within 30
days of receipt and, on all other claims, the contractor shall issue
initial determinations within 45 days of receipt.
Our proposed regulations at Sec. 405.922 currently state that all
other claims, other than clean claims, must be processed within 45 days
of receipt. While we plan to monitor contractors on their compliance
with the 45-day standard, we also recognize that 45 days may not be
achievable in every case. By definition, non-clean claims are often
claims that require additional documentation, and therefore take time
to process. Under the current process, providers or suppliers are given
45 days to produce additional medical documentation. Thus, the
imposition of a 45-day decision-making time frame on non-clean claims
could jeopardize effective medical review. Currently, our plans are to
monitor, on average, contractors' compliance with the 45-day standard.
However, we do not propose escalation or other remedies when the 45-day
deadline is missed.
In existing section 1842(b)(3)(C) of the Act, the Congress provided
a special appeals rule in cases where a Part B Medicare claim was not
acted upon promptly, defined previously as 60 days following the
submission of the claim. The rule provides for an appeal directly to a
carrier-hearing officer, bypassing the first level of appeal, the
review determination. In BIPA, Congress reduced the time period within
which contractors must make initial determinations on claims to 45
days. However, section 1842(b)(3)(C) of the statute was not amended to
reflect the change in the appeals process, that is, that the carrier
hearing officer appeal was eliminated and effectively replaced by an
appeal to the QIC. Our opinion is that the Congress, by implication,
repealed this provision as the remedy specified in the statute will no
longer exist since the Congress eliminated the carrier fair hearing
level of appeal. We considered providing for a reconsideration by the
QIC when a claim is not acted upon with reasonable promptness (that is,
an initial determination is not issued within 45 days following the
date the claim was received by the contractor). However we believe that
this is not an economically feasible approach since the QIC will, in
essence, simply direct the contractor to process the claim. We also
considered the fact that this rule only applies to Part B claims and
concluded that it would be confusing and contrary to the general
approach mandated by BIPA to have two separate processes. Therefore, we
are not carrying over this rule.
Proposed Sec. Sec. 405.924 and 405.926 list the types of actions
that are, and are not, considered initial determinations. In these
sections, we have generally maintained current policies concerning
initial determinations, although we have unified the existing part A
and part B rules. In Sec. 405.924(a) we maintain our longstanding
policy that, through a memorandum of understanding with the Secretary,
SSA makes initial Part A and Part B entitlement determinations and
initial determinations on applications for entitlement. In Sec.
405.924(b), we provide an extensive, but not necessarily exhaustive,
list of actions that constitute initial determinations and thus are
subject to the administrative appeals rules that follow.
We are proposing to clarify the circumstances under which an appeal
may be filed when a beneficiary disputes the computation of coinsurance
amounts. Previously our rules stated that beneficiaries could appeal
Medicare determinations regarding the ``application of the coinsurance
feature.'' We are clarifying this provision to state that the
contractor's ``computation of coinsurance'' is considered an initial
determination and, thus, may be appealed. In making this proposal we
considered that for most Part B services, beneficiaries are responsible
for a 20 percent coinsurance payment and, since the 20 percent is
calculated by the contractor, a beneficiary may appeal the contractor's
computation of the coinsurance amount to be paid by the beneficiary. In
instances where the coinsurance amount is not computed by the
contractor, but rather it is an amount prescribed by regulation, for
example, outpatient services, the issue of whether the coinsurance
amount is appropriate is not appealable since it is not an amount
computed by the contractor. Also, we are proposing clarifying language
specifying that determinations regarding the timeliness of claims
submission are initial determinations. We are also clarifying which
Medicare secondary payer (MSP) determinations are initial
determinations for purposes of this subpart. A determination regarding
the applicability of the MSP provisions to a particular claim is an
initial determination. A determination that Medicare has a recovery
claim against a provider/supplier or beneficiary with respect to items
or services that have already been paid by the Medicare program is also
an initial determination except where the recovery claim against the
provider/supplier is based upon a failure to file
[[Page 69321]]
a proper claim as defined in 42 CFR part 411. Finally, under proposed
Sec. 405.924(c), we would state that expedited determinations by QIOs
under new section 1869(b)(1)(F) are also considered initial
determinations.
In proposed Sec. 405.926, we list examples of determinations that
are not initial determinations, and therefore not subject to the
administrative appeal procedures of this subpart. Again, we continue
our longstanding policies in this area, subject to several minor
clarifications. First, for certain aspects of initial determinations,
there are no administrative appeal rights available. For example, under
section 1833(t) of the Social Security Act, administrative appeals are
prohibited for issues involving the calculation of coinsurance amounts
for outpatient services subject to prospective payment rules, and under
1848(i) of the Act, the values used to calculate allowable amounts
under the physician fee schedule may not be the subject of an
administrative appeal. In addition, here, too, we have proposed new
examples of MSP-related determinations that do not constitute initial
determinations for purposes of section 1869 of the Act. We have also
clarified that decisions by contractors or QICs with respect to
reopenings are not considered initial determinations.
Section 405.928 describes the effects of an initial determination.
In proposed Sec. 405.928(a), we would clarify that initial
determinations by SSA with respect to an individual's entitlement are
binding upon the individual or the individual's estate unless revised
or reconsidered under SSA's regulations at 20 CFR 404.907. Then, under
Sec. 405.928(b), we would state the general rule that other initial
determinations shall be binding upon all parties to the initial
determination unless a redetermination is completed in accordance with
Sec. 405.940 through Sec. Sec. 405-950 or the initial determination
is revised as a result of a reopening in accordance with proposed Sec.
405.980. Please refer to our discussions on the redetermination and
reopenings process below.
E. Redeterminations (Sec. Sec. 405.940-405.958)
1. Overview of Statute
Section 1869(a)(3) contains certain requirements for
redeterminations that are specific to fiscal intermediaries and
carriers, and do not apply to the initial determinations made by other
entities, such as SSA or QIOs. Section 1869(a)(3) of the Act mandates
that FIs and carriers make redeterminations, upon request, with respect
to claims for benefits that are denied in whole or in part. Section
1869(a)(3)(B) specifies that an initial determination may not be
reconsidered or appealed unless the contractor has made a
redetermination of that initial determination and that no
redetermination may be made by an individual involved in the initial
determination, two requirements that essentially mirror existing
policy. The time frames for requesting and carrying out
redeterminations are set forth under section 1869(a)(3)(C). A request
for a redetermination must be made within 120 days from the date the
individual receives the initial determination. The carrier or FI then
must make a redetermination decision and notify the parties of the
decision within 30 days of receiving the request for redetermination.
Under section 1869(a)(3)(D), for purposes of subsequent appeals, a
redetermination is considered part of the initial determination. For
purposes of contractor performance evaluation, we plan to monitor how
effectively fiscal intermediaries and carriers meet the 30-day
deadline, on average, for redeterminations. However, we do not propose
escalation or other remedies if the carrier or fiscal intermediary does
not complete a redetermination within the 30-day time frame.
A critical feature of the new statutory language with respect to
redeterminations is that the same provisions apply for these first
level appeals of both Part A and Part B claim determinations. Thus,
parties wishing to appeal initial determinations will need to meet
identical time frames for filing requests for redeterminations and the
time frame for redetermination decisions is significantly shorter than
the previous time frames for either Part B reviews or Part A
reconsiderations. This means, for example, that CMS' contractors must
complete all redeterminations within 30 days, even though the cases in
need of redetermination may differ considerably in terms of complexity
and dollar amounts. (Currently, under sections 1816(f)(2) and
1842(b)(2) of the Act, respectively, contractors now must complete 75
percent of part A reconsiderations within 60 days, and 90 percent
within 90 days, while 95 percent of part B reviews must be completed
within 45 days.) In developing the proposed regulations needed to
implement the new system, we have attempted to construct procedural
requirements that can work for all types of redeterminations, while
still permitting contractors the flexibility needed to conduct
redeterminations using methods that are both efficient and fair to
appellants.
2. Redetermination Requests (Sec. Sec. 405.940-405.946)
Proposed Sec. 405.940 establishes the general rule that any party
to an initial determination that is dissatisfied with that
determination may request a redetermination. Sections 405.942 and
405.944 then set forth the proposed requirements concerning the time
frames and procedures for filing a redetermination request. Consistent
with section 1869(a)(3)(C) of the Act, a request for redetermination
must be filed within 120 days from the date an individual receives the
notice of initial determination. In Sec. 405.942(a)(1), we would
establish that the date of receipt of the initial determination is
presumed to be 5 days after the date of such notice, unless there is
evidence to the contrary. This is consistent with our longstanding
policy that we allow 5 days for the individual to receive the notice of
initial determination.
Under proposed Sec. Sec. 405.942(a)(2) and 405.944(a), we propose
to continue the current policy of permitting parties to file their
requests for a redetermination not only with the appropriate CMS
contractor, as indicated on the notice of initial determination, but
also at a local SSA or CMS office. In view of the requirement that a
contractor must issue a written notice of the redetermination decision
within 30 days of a request for redetermination, we strongly considered
requiring that all redetermination requests be filed directly with the
contractor indicated on the notice of initial determination. Clearly,
such a policy would eliminate confusion about where to file appeal
requests and promote efficiency--we have often experienced lengthy
delays in receiving requests filed with SSA offices, for example.
However, we recognize that local SSA offices provide a valuable service
to individuals who would like assistance in filing requests for
redeterminations. In maintaining this policy for filing requests, we
thus propose that the date the redetermination request is considered to
be filed means the date the contractor, SSA, or CMS receives the
request. As discussed below, however, we also propose under Sec.
405.950 that for purposes of issuing a redetermination decision, the
date of timely filing will be considered as the date that the
contractor responsible for the redetermination receives the
redetermination request. This proposed policy would benefit appellants
by promoting flexible access to the appeals system without unfairly
reducing the
[[Page 69322]]
time a contractor would have to issue a redetermination decision.
Section 405.942(b) contains the proposed rules concerning request
for extensions to the time frames for redetermination requests. In
general, a contractor may extend the time frame for requesting a
redetermination if a party shows good cause for missing the 120-day
deadline. In order to request an extension, the party must file a
request for the extension with the contractor. The request for
extension and request for redetermination must be in writing and state
why the request for redetermination was not filed within the required
time frame. In order to determine whether a party has shown good cause
for missing the deadline, the contractor considers: The circumstances
that kept the party from making the request on time; whether the
contractor's actions misled the party; and whether the party had any
physical, mental, educational, or language limitations that prevented
the party from filing a timely request or from understanding or knowing
about the need to file a timely request for redetermination. Proposed
Sec. 405.942(b)(3) sets forth examples of ``good cause,'' including
serious illness, death or serious illness in the party's immediate
family, the destruction or damage of important records due to fire or
other accidental cause, incomplete or incorrect information supplied to
the party about how or when to request a redetermination from the
contractor, lack of notice of initial determination, and evidence of
requests made with another Government agency in good faith, within the
time limit, where the request did not reach the contractor until after
the time period to file a redetermination had expired.
Proposed Sec. 405.944(b) specifies that the request for a
redetermination must be in writing and describes the content of the
redetermination request. Under our existing regulations, requests for
reconsiderations of Part A initial claim determinations have been
required to be made in writing (Sec. 405.711) but request for reviews
of Part B initial determinations have been accepted both in writing and
orally. However, even for Part B reviews, this policy has never been
well understood and has proven very difficult to administer for a
number of reasons. First, it is important to recognize that in
practice, an oral request for a review generally implied that the
review itself would take place over the telephone, usually at the same
time as the request. Moreover, although some very simple reviews could
be carried out orally, many reviews did not lend themselves to this
approach, although the regulations did not limit the availability of
oral requests for review. (For example, many cases, such as reviews of
DME claims, frequently involve issues that are either too complex to
handle in a brief telephone call or require the submission and review
of medical documentation and records that are too voluminous to provide
over facsimile.) Requests for oral reviews of more complex cases could
result in repeated requests for documentation and extended delays in
review decisions, even under the longer time frames that were in effect
for appeals of Part B initial claim determinations before the
implementation of new section 1869 of the Act.
Therefore, in implementing the BIPA provisions, we would require
that requests for redeterminations be accepted only in writing. We
believe that the best method of accepting requests for redetermination
is in writing because it provides a reliable record of the request and
promotes the submission of evidence to support the request. (As
discussed below, under Sec. 405.946, we propose that parties should
present evidence related to the issue in dispute with the request for a
redetermination.) This position is consistent with our general belief
that an efficient and accurate appeals system will necessitate better
notices from CMS concerning the reasons for denials of claims and their
appeals and by subsequently encouraging parties to submit relevant
evidence as early as possible in the appeals process. Although we
recognize that it may be efficient to take some requests by telephone,
it would be extremely difficult to offer such a process and still meet
the 30-day redetermination decision deadline without severely
restricting the types of redeterminations that can be requested over
the telephone.
We welcome comments on alternative approaches that are convenient
and easy for appellants. We note that providers, suppliers, and
beneficiaries can still make inquiries and some adjustments to a claim
over the phone, using the telephone number indicated on the Remittance
Advice or Medicare Summary Notice. In addition, we are continuing to
work with contractors to identify the best methods for conducting
redeterminations, such as permitting call back responses to requests
for redeterminations. Again, our goals here are to improve the accuracy
and efficiency of the appeals process, to make the procedures as
accessible and user friendly as possible for appellants, and to avoid
causing confusion and dissatisfaction as to the available procedures.
Section 405.944(b) also specifies the required elements of a
redetermination request. Requests are to be made on a standard CMS form
and when not made on a CMS form must contain the beneficiary's name,
the insurance claim (HIC) number, the specific date of service and
identification of the item or service with which the party is
requesting the redetermination, and the name and signature of the party
or appointed representative filing the request. These required elements
mirror the requirements contained on the current standard CMS forms to
request a review or reconsideration and correspond to the requirements
detailed on the Medicare Summary Notice (MSN) that beneficiaries
receive. Thus, a beneficiary or beneficiary representative may continue
to file a request for an appeal using the instructions on the MSN--that
is, he or she could satisfy the requirements by circling an item on the
MSN, signing the bottom of the MSN, and returning the MSN to the
contractor.
Under proposed Sec. 405.944(c), we would specify that if more than
one party files a request for redetermination on the same initial
determination, the contractor shall consolidate the separate requests
into one proceeding. To the extent that two or more entities may have
appeal rights on a single request for payment, there is potential for a
duplicate administrative process and differing resolution of the
appeal. To prevent this occurrence, we are codifying the longstanding
practice that when multiple parties request a redetermination, the
requests are to be joined into a single administrative action.
As noted above, proposed Sec. 405.946 specifies that when filing a
redetermination request, a party should explain why he or she disagrees
with the contractor's initial determination and include any evidence
that the party believes should be considered by the contractor in
making its redetermination. Although we are not proposing to make
presentation of evidence a prerequisite to filing an appeal, we believe
that encouraging parties to present evidence to support the
redetermination request will facilitate the correction of erroneous
initial determinations at the earliest possible stage of the appeals
system.
Even when appellants are unable to submit relevant documentation
along with the request for redetermination, we still wish to encourage
appellants to submit documents and make their case at the earliest
possible level. Therefore,
[[Page 69323]]
proposed Sec. 405.946(b) permits later submission of documentation to
be considered as part of the redetermination. However, since it would
be difficult to process redeterminations within 30 days when documents
are submitted after the request, we propose an automatic 14-day
extension of the redetermination decision time frame when an appellant
submits evidence after the request.
3. Conduct of Redeterminations (Sec. Sec. 405.940-405.958)
Section 1869 of the Act provides little or no guidance with respect
to the conduct of redeterminations, with the exception of establishing
the filing and decision making time frames as noted above. Thus, with
few exceptions, we are not proposing major changes to the existing
procedures for first level appeals of claim determinations. Proposed
Sec. 405.948 simply specifies that in conducting a redetermination the
contractor would examine the evidence and findings upon which the
initial determination was based and any additional evidence submitted
by the parties or obtained by the contractor on its own. As with our
current process, the individual who makes the redetermination decision
must not have been involved in making the initial determination.
Consistent with section 1869 (a)(3)(C)(ii) of the Act, proposed
Sec. 405.950(a) would require contractors to issue a written notice of
the redetermination decision to the parties within 30 days of receiving
a request for redetermination. In general, we will maintain our current
policy in calculating the 30-day time frame for decision-making based
on the date the request for redetermination is actually received at the
contractor. As discussed above, however, if the request is made to an
entity other than the contractor (such as an SSA office), we would use
the date the request is actually received by the contractor as the date
of the request for a redetermination for purposes of calculating the
30-day decision making time frame.
Proposed Sec. 405.952 contains provisions relating to the
withdrawal or dismissal of a request for a redetermination. Under Sec.
405.952(a), a party may withdraw a request for redetermination within
14 days of the original request. The withdrawal request must be made in
writing to the redetermination contractor. Currently, a withdrawal
request may be made at any time before a contractor mails an appeals
decision, but we are proposing the 14-day time frame in order to avoid
the confusion and uncertainty that can result from decisions and
withdrawal requests crossing in the mail. However, a contractor has the
option of accepting a late withdrawal request if it has not issued a
redetermination decision. For example, a contractor may accept a
withdrawal request at any time when the withdrawal is based upon a
party entering into an agreement with CMS to compromise the amount of a
debt.
Section 405.952(b) would set forth the reasons a contractor will
dismiss a request for a redetermination, including:
[sbull] If a person or entity who is not a party to an initial
determination files a request for redetermination.
[sbull] If a request for redetermination does not contain the
minimum elements for a redetermination request set forth in proposed
Sec. 405.944.
[sbull] If a party to an initial determination files a request for
a redetermination more than 120 days following receipt of the initial
determination from the contractor and does not establish good cause for
late filing in accordance with Sec. 405.942(c).
[sbull] If the party filing the request dies and there is no
information in the record to determine whether there is another party
who may be prejudiced by the determination.
[sbull] If the party filing the request submits a request for
withdrawal.
[sbull] If the contractor has not issued an initial determination
on the claim for which a redetermination is requested.
Section 405.942(c) specifies that when a request for
redetermination is dismissed, the contractor will mail a written notice
to the parties at their last known addresses. Under proposed Sec.
405.952(d), a dismissal may be vacated at any time within 6 months from
the date of the notice of dismissal if good and sufficient cause is
shown. An appellant may request QIC reconsideration of a
redetermination dismissal. The request for a QIC reconsideration of the
decision must be made within 180 days of the redetermination dismissal
notice. A dismissal is binding unless it is vacated in accordance with
Sec. 405.952(d), or is subject to a reconsideration by a QIC.
Proposed Sec. Sec. 405.954 and 405.956 address redetermination
decisions and notification rules. When the contractor concludes its
redetermination, it is responsible for issuing a decision that affirms
or reverses, in whole or in part, the initial determination in
question. When a decision fully reverses the initial determination, we
propose to maintain our current policy that proper notification is
achieved through the MSN or the remittance advice notices that are sent
to beneficiaries, and providers and suppliers, respectively. We welcome
comments on maintaining this policy for decisions that are fully
favorable to the appellant.
Under proposed Sec. 405.956(b), for decisions that affirm the
initial determination either in whole or in part, a redetermination
decision notice must contain: (1) A clear statement indicating the
extent to which the redetermination is favorable or unfavorable; (2) a
summary of the facts; (3) an explanation of how the pertinent laws,
regulations, coverage rules, and CMS policies apply to the facts of the
case; (4) a summary of the rationale for the decision; (5) notification
to the parties of their right to a reconsideration, the procedures that
a party must follow in order to request a reconsideration, and the time
limit for requesting a reconsideration; (6) a statement of the specific
supporting documentation that must be submitted with a request for a
reconsideration; (7) an explanation that if the specific supporting
documentation indicated in the notice is not submitted with the request
for a reconsideration, this evidence will not be considered at an ALJ
hearing, unless the appellant demonstrates good cause as to why the
evidence was not provided previously; and (8) any other requirements
specified by CMS.
To a large extent, these requirements are similar to the current
instructions concerning the content of contractor appeals decision (for
example, Medicare Carriers Manual, section 12002). However, these
policies add more detail to the required elements. They also include
one major substantive addition--the requirement that notifications
identify any specific supporting documentation that must be submitted
with a request for a reconsideration. By setting forth clear, detailed
requirements for redetermination notices in the regulations, in concert
with the proposed requirement for more information about specific
supporting documentation that resulted in an unfavorable determination
and redetermination, we believe we are setting the stage for the most
accurate and efficient reconsideration process possible. In concert
with these changes, we believe that placing a requirement for full and
early presentation of evidence at the QIC level is fair to appellants
and can stem the volume of cases that are now appealed to ALJs and the
MAC. As discussed in further detail below, if available supporting
documentation that is identified as needed in the redetermination
denial notice is not submitted at the QIC level, an appellant who is
dissatisfied with a QIC reconsideration decision and
[[Page 69324]]
desires an ALJ hearing generally would not be able to introduce such
evidence at an ALJ hearing, absent good cause for not submitting the
evidence to the QIC.
The proposed redetermination provisions end with the
straightforward requirement under Sec. 405.958 that the
redetermination decision is binding on all parties unless there is a
subsequent QIC reconsideration or a reopening by the contractor
consistent with Sec. 405.980.
F. QIC Reconsiderations (Sec. Sec. 405.960-978)
1. Introduction
Section 1869(b)(1) of the Act entitles any individual dissatisfied
with an initial determination of a Part A or Part B claim denial, to
file a request, within 180 days, for reconsideration of the initial
determination, including the redetermination. In accordance with Sec.
1869(c), reconsiderations are to be processed, generally within 30
days, by entities called qualified independent contractors (QICs).
Section 1869(c)(4) requires CMS to contract with no fewer than twelve
QICs. The introduction of QICs creates an additional appeals level for
Part A claim determinations and replaces the Part B carrier hearing
level of appeal. We believe that the QIC process, which will entail
reviews of medical necessity determinations by health care
professionals, routine participation in ALJ hearings, and mandatory
development of an appeals-specific database, can result in significant
improvements in the Medicare fee-for-service appeals system. The
statute gives CMS a great deal of latitude in designing the
reconsideration component of the Medicare appeals process, and we have
attempted to use this discretion to design a process that will prove to
be impartial, efficient, and accurate.
2. Reconsideration Requests (Sec. Sec. 405.960-405.966)
Section 1869(a)(3)(B)(i) states that initial determinations made by
fiscal intermediaries and carriers may be reconsidered only after the
fiscal intermediary or carrier has performed a redetermination of the
initial determination. Thus, proposed Sec. 405.960 states that any
person or entity who is a party to a redetermination, and is
dissatisfied with the determination, may file a request for
reconsideration of the redetermination in accordance with the
requirements set out in Sec. Sec. 405.962-966.
Consistent with section 1869(b)(1)(D) of the Act, Sec. 405.962(a)
specifies that appellants who wish to file a request for
reconsideration must do so within 180 days of the date on which they
receive the notice of the redetermination, or within such additional
time as CMS may allow. For good cause, the QIC may extend the time
frame for filing a reconsideration request. Section 405.942(b)(2)
describes the process QICs are to use in determining if good cause for
late filing exists. Examples of good cause, as provided in Sec.
405.942(b)(3), would include: Circumstances beyond the appellant's
control, including mental or physical impairment that prevented timely
filing of the reconsideration request; significant communication
difficulties; receipt of incorrect or incomplete information about the
subject reconsideration from official sources (for example, CMS, the
contractor, QIC or SSA); delay in filing caused by destruction of or
damage to the appellant's records; and unusual or unavoidable
circumstances, the nature of which demonstrate that the appellant could
not reasonably be expected to have been able to file timely. The
request for an extension of the reconsideration filing deadline must be
in writing, signed by the party requesting the appeal, and state the
reason(s) why the appellant did not file the request within 180 days.
In addition, the appellant's request for reconsideration must accompany
the request for an extension, so that if the QIC grants the extension,
it may begin a substantive review of the appeal without further delay.
The QICs' 30-day decision-making deadline, to a large extent,
dictates the procedural parameters that need to apply to the
reconsideration process. Because of the equally challenging time frames
for concluding ALJ and DAB appeals (combined with the provision that
unresolved appeals can be escalated to the next level of administrative
review, including Federal court), it is essential that the QIC
procedures be designed to facilitate timely, accurate decision-making
by these new administrative review bodies. As we developed the proposed
QIC procedures, we have been careful to balance these efficiency
concerns with the need to ensure a consistent, fair process for
appellants.
We set forth the place and method for filing a request for
reconsideration in Sec. 405.964(a). Existing regulations give
appellants wide discretion in terms of where an appeal may be filed.
For example, under Sec. 405.964, requests for carrier fair hearings
may be filed with not only the carrier, but also at any CMS or SSA
office. We recognize that some appellants, especially beneficiaries,
rely on SSA offices to assist them in filing an appeal request. While
we do not want to create a process that might make it difficult for
appellants to file appeals, we cannot ignore the stringent decision-
making time frames imposed by the statute. Thus, as an accommodation to
appellants, we propose in Sec. 405.964 that in addition to filing
reconsideration requests with the QICs, parties be permitted to file
their requests with the CMS and SSA offices as well (just as they may
now for carrier fair hearings). For purposes of establishing whether an
appellant has timely filed a request for reconsideration, a request
will be considered filed on the date it is received by the QIC, SSA, or
CMS. However, to ensure that QICs have adequate time to adjudicate
reconsiderations that they do not receive directly, we subsequently
propose under Sec. 405.970(b)(1) that for reconsideration requests
submitted to CMS or SSA offices, the QIC's 30-day decision-making
period would begin on the date such request is received by the QIC.
This policy will allow appellants to continue receiving assistance in
filing reconsideration requests, without shortening the QIC's decision-
making time frame.
Since multiple parties may request reconsideration of the same
claim (for example, a beneficiary and a physician, or a beneficiary and
a provider), we propose in Sec. Sec. 405.964(c) and 405.970(b)(3) that
QICs consolidate multiple requests for reconsideration into a single
proceeding and issue one reconsideration determination to all parties
within 30 days of the latest reconsideration request.
Under our existing regulations, a party's request for a Part A
reconsideration or Part B fair hearing must be in writing (see
Sec. Sec. 405.711 and 405.821), but we do not require use of a
standard form for making the appeal request. In practice, appellants
now use a CMS form, a contractor's form, or submit written requests of
their own design. In implementing the BIPA provisions, CMS will develop
and make available a standard filing form for reconsideration requests
and we considered making use of this form mandatory. However, in Sec.
405.964, we are proposing that reconsideration requests either be made
on the standard CMS form, or must contain the key elements captured by
that form (for example, name, HIC number, date(s) of service and
service(s) at issue). We believe that these requirements are not
onerous, as they are the same as those listed on existing forms (Form
HCFA-2649 and Form HCFA-1965) used to request Part A reconsiderations
and Part B hearings. If the reconsideration request does not contain
any one of
[[Page 69325]]
these essential elements referenced above, we propose that the QIC
dismiss the reconsideration on the basis that the party failed to make
out a valid request.
In addition to the basic information required by Sec. 405.964(a),
we believe that it is in the appellant's best interest for a
reconsideration request to include additional information, including a
statement of evidence and allegations of fact or law related to the
issue(s) in dispute and an explanation of why the contractor's
determination should be reversed. Therefore, proposed Sec. 405.966(a)
describes the type of evidence that should accompany reconsideration
requests. Although such documentation is not mandatory, we note that
proposed Sec. 405.966(a)(2) specifies that failure to submit
documentation that was specified as necessary in a redetermination
notice generally would preclude the introduction of such evidence for
consideration at subsequent appeal levels. We strongly believe that
this requirement for the full and early presentation of relevant
evidence is critical for accurate QIC decisions and for avoiding
backlogs of appeals at the ALJ level that could have been
satisfactorily resolved by QICs. Submission of such evidence should not
only lead to a more efficient appeal system, but should also facilitate
QIC decisions that pertain directly to the concerns of appellants, as
opposed to decisions on reconsideration requests that simply state ``I
appeal,'' without elaboration.
In the current appeals process, appellants may continually
supplement their initial appeal request with additional evidence.
Although we agree that appellants should have an opportunity to provide
supplementary evidence to support their initial filing of
reconsideration requests, allowing appellants multiple opportunities to
submit documentation would make it impossible to adjudicate a case
within the 30-day decision-making period. In general, we believe that
the 180-day reconsideration filing time frame provides parties with
sufficient opportunity to gather the information that they need to
complete their requests. However, if appellants need to submit
additional documentation after their request for reconsideration has
been filed we are proposing under Sec. 405.966(b) that such late
submission of evidence would result in an automatic 14-day extension of
the QIC's 30-day decision-making time frame.
3. Reconsideration Process (Sec. Sec. 405.968-405.970)
For existing second level appeals of Part B determinations (the
fair hearing level), appellants may request one of three types of
hearings: In-person, telephone, or on-the-record. We considered
applying this concept to QIC proceedings. However, we concluded that
such a system was both impractical and unnecessary under the
requirements of new section 1869 of the Act. Instead, we believe that
only through on-the-record proceedings could QICs be expected to meet
the requirements, under section 1869(c)(3)(C), that reconsideration
decisions be issued within 30 days of receipt of a timely filed
reconsideration request. In addition, nothing in section 1869 requires
a hearing at the QIC level. Also, we note that the requirement for a
panel of physicians or other qualified health care professionals to
conduct reconsiderations of Sec. 1862(a)(1)(A) denials, makes QIC
reconsiderations less like the traditional fee-for-service fair
hearings, and more like the independent review process that now applies
to Medicare+Choice (M+C) appeals. M+C appeals primarily involve reviews
by a physician or other qualified health care professional and are
currently conducted within 30 days. Therefore, we elected to apply the
existing M+C model to QIC reconsiderations and propose making
reconsiderations on-the-record reviews. Thus in Sec. 405.968, we
define a reconsideration as ``an independent, on-the-record review of
an initial determination, including the redetermination, performed by a
QIC.'' In conducting reconsiderations, QICs would be required to review
the evidence and findings upon which the initial determination was
based and any other evidence the parties submit, or the QIC obtains.
The QIC then must make an independent determination affirming or
reversing, in whole or in part the initial determination in question.
We also specify that if an initial determination involves a finding on
whether an item or service is reasonable and necessary for the
diagnosis or treatment of illness or injury (under section
1862(a)(1)(A)), a QIC's reconsideration must be based on clinical
experience and medical, technical, and scientific evidence, to the
extent applicable.
Section 405.968 would also reflect the statutory requirements
regarding the relevance of national and local coverage determinations,
and who conducts reconsiderations. Section 1869(c)(3)(B)(ii)(I) of the
Act states that national coverage determinations (NCDs) shall bind the
QIC with respect to issuing reconsiderations. However, unlike
intermediaries and carriers (including carrier fair hearing officers)
QICs would not be required to follow local coverage determinations
(LCDs) in making their determinations. Instead, QICs, like ALJs, would
be bound only by law, regulations, CMS Rulings, and NCDs. This
constitutes an important change from the current appeals system, which
has been marked by high reversal rates at the ALJ level. Often these
reversals stem from the different criteria applied by Medicare
contractors and ALJs in ruling on Medicare payment and coverage issues.
Section 1869(c)(3)(B)(ii)(II) does require that QICs ``shall consider''
LCDs in issuing reconsideration decisions, but it provides no guidance
on the extent to which QICs are bound by CMS manuals or other
instructions. Under Sec. 405.968(b)(3), we propose that QICs be
required to ``give deference'' to LCDs, local medical review policies
(LMRPs), and CMS program guidance, including manual instructions (for
example, the Medicare Coverage Issues Manual, the Medicare Intermediary
Manual, the Medicare Carriers Manual). A QIC's decision must explain
why it agrees or disagrees with the appellant's reasoning. Although
QICs would not be bound by these types of policies, we would require
that QIC reconsiderations follow these policies unless the appellant
questions the policy and provides a reason that the QIC finds
persuasive as to why the policy should not be followed. (See 66 FR
54536 for a detailed explanation of the distinction between LCDs and
LMRPs.) We believe that the use of consistent review criteria and the
establishment of strong standards to ensure sufficiency of a QIC's
rationale for its decisions will serve several important purposes,
including better explaining QIC decisions, identifying recurrent
problems with CMS policies, and potentially reducing both ALJ appeals
volume and the ALJ reversal rate.
Consistent with section 1869(c)(3)(D) of the Act, no physician or
health care professional employed by a QIC may review a determination
regarding the health care services furnished to a beneficiary if the
physician or health care professional was directly responsible for
furnishing such services or items. Also, a physician or health care
professional may not review a redetermination if the physician or
health care professional or a family member of the physician or health
care professional has a significant financial
[[Page 69326]]
interest in the institution, organization, or agency that provided the
health care services. Family is defined in section 1869(c)(1)(ii) as
the spouse (other than a spouse who is legally separated from the
physician or health care professional under a decree of divorce or
separate maintenance), children (including stepchildren and legally
adopted children), grandchildren, parents, and grandparents of the
physician or health care professional. Section 405.968(c) would also
implement the statutory requirement that reconsiderations involving a
determination as to whether an item or service is reasonable and
necessary under section 1862(a)(1)(A) of the Act, shall include
consideration by a panel of physicians or other appropriate health care
professionals. Under proposed Sec. 405.968(c)(2), a QIC would be
required to designate a panel to consider the facts and circumstances
of any case involving a ``reasonable and necessary determination.'' We
note that the estimated workload for QICs is expected to be close to 1
million cases per year, the majority of which we believe will involve
medical necessity determinations. Given the prohibitively expensive
nature of requiring a sitting panel to review each of these million
cases, we plan to define what will constitute a panel. One option we
are considering is that, rather than requiring that a panel be made up
of at least two physicians or health care professionals simultaneously
reviewing the issue, we would allow the physicians or health care
professionals to review the issue sequentially. This would allow one
professional to propose a determination on the matter and a second
professional to then review the proposed reconsideration determination.
Section 405.970 sets forth the general requirement that QICs
complete their reconsiderations within 30 days of receiving a timely
filed request. Proposed Sec. 405.970(c) specifies that, by no later
than the close of the 30-day decision-making period, a QIC must issue
the parties either a reconsideration decision or a notice stating that
the QIC will not be able to complete its review by the decision-making
deadline. This notice must also advise the appellant of the right,
pursuant to Sec. 1869(c) of the Act, to request escalation of his or
her appeal to an ALJ. Under Sec. 405.970(d), appellants must submit a
written request directing the QIC to escalate their appeal. Appellants
who are anxious to have their cases escalated clearly could make this
request before receiving notice of a delay, that is, on their own,
rather than in response to a QIC notice. In all instances, while
awaiting the appellant's response, the QIC must continue processing the
reconsideration ``unless and until it receives a written request from
the appellant to escalate the case to an ALJ.'' Section
1869(c)(3)(C)(ii) makes clear that when a QIC fails to meet its
reconsideration deadline, an appellant may request an ALJ hearing.
Under any system where escalation is at the appellant's option, we
believe it is possible that in some instances, the QIC will complete
its reconsideration before receiving an escalation request from an
appellant. To avoid confusion and establish an efficient system for
processing reconsiderations, we propose that whenever a QIC receives an
escalation request, the QIC must take one of two actions within 5 days:
(1) Complete its reconsideration and notify the parties of its
decision; or (2) acknowledge the escalation request in writing and
forward the case file to the ALJ. This provision should lend
administrative finality to the QIC process and avoid any uncertainty in
the inevitable situations where escalation requests and QIC
reconsideration decisions cross in the mail. In cases where such QIC
decisions are favorable to appellants, this process will eliminate
unnecessary additional delays and administrative burden that appellants
would face in ALJ hearings. See the ALJ and DAB portions of this
preamble for further discussion of the escalation provisions.
4. Withdrawal or Dismissal of Reconsideration Requests (Sec. 405.972)
Section 405.972 sets forth provisions for withdrawing and
dismissing requests for reconsideration. We are proposing that
appellants be able to withdraw their reconsideration request by filing
a written request for withdrawal with the QIC within 14 calendar days
of filing the reconsideration request. A QIC, however, may accept a
withdrawal request at any time when the withdrawal is based upon a
party entering into an agreement with CMS to compromise the amount of a
debt. A QIC will dismiss a reconsideration request, either entirely or
as to any stated issue, pursuant to a timely filed request for
withdrawal, or on its own motion. For example, if the person or entity
filing for reconsideration does not meet the proper definition of a
party, or does not otherwise have a right to reconsideration under
Sec. 1869(b) of the Act, the QIC will dismiss the request. The QIC
also may dismiss a request for reconsideration where the party fails to
file the reconsideration request within 180 days of receipt of the
redetermination notice, or if the party fails to make out a valid
request consistent with the essential reconsideration requirements
identified in Sec. 405.964. In addition, if the party who filed the
request dies before the adjudicator renders a decision, and the record
does not reflect that some other party may be prejudiced by the
redetermination, the QIC will dismiss the reconsideration.
An appellant may request ALJ review of a QIC's dismissal of a
request for reconsideration. The request for ALJ review must be filed
with an ALJ within 60 days of the date of the QIC's notice of
dismissal. Additionally, at any time within 6 months of the date of the
QIC's dismissal notice, the QIC may vacate its dismissal of a request
for reconsideration if good and sufficient cause is shown.
5. Content and Effect of the Reconsideration Decision (Sec. Sec.
405.976-978)
With regard to the content of the reconsideration decision notice,
we propose in Sec. 405.976 that these decisions be in writing and
contain several substantive elements, including: (1) A clear statement
as to whether the reconsideration decision is favorable or unfavorable;
(2) a summary of the facts; (3) an application of the pertinent laws,
regulations, coverage rules, and CMS policies to the facts; (4) an
explanation of the medical and scientific rationale for the decision,
when the case involves determining whether an item or service is
reasonable or necessary for the diagnosis or treatment of an illness or
injury; and (5) a clear statement of the QIC's rationale for its
decision. Consistent with proposed Sec. 405.968(b)(3), as discussed
above, if the QIC's decision conflicts with an LCD, LMRP, or with
program guidance, such as a CMS manual instruction, the notice must
include the QIC's rationale for doing so. Similarly, consistent with
the proposed Sec. 405.976(b)(5), the reconsideration notice must
address how any missing documentation affected the reconsideration
decision and the evidence limitations at the ALJ hearing level. The
notice must also contain key procedural information such as advice to
the parties of the right to an ALJ hearing; if appropriate, advice
regarding the requirements for use of the expedited appeals process;
and a description of the procedure that a party must follow in order to
obtain an ALJ hearing or expedited appeal.
Finally, Sec. 405.678 establishes that reconsiderations are final
and binding on all parties unless a timely appeal is filed and a higher
adjudicative body
[[Page 69327]]
overturns the reconsideration decision, or unless the reconsideration
is reopened and revised by the QIC.
G. Reopenings of Initial Determinations, Redeterminations,
Reconsiderations, Hearings and Reviews (Sec. Sec. 405.980-405.986)
Section 1869(b)(1)(G) of the Act provides for the reopening and
revision of any initial determination or reconsidered determination
according to guidelines prescribed by the Secretary. These provisions
are needed not only for BIPA purposes but to deal with longstanding
concerns over the reopening rules for Medicare claim determinations.
Over the years these provisions (existing Sec. Sec. 405.750(b),
405.841, 405.842, and 405.850) have concerned providers, suppliers,
physicians, and contractors. Providers have been vocal about the need
for reopening for purposes of recovering underpayments at any point
beyond 60 days or the initial timely billing period of 15-27 months.
Some providers have commented that some contractors do not grant
requests to reopen claims for underpayments and clerical errors. We
believe that the goal of the Medicare payment system should be to pay
the correct amount. Thus, we believe that the purpose for conducting a
reopening should be to change the determinations or decisions that
result in either overpayments or underpayments. The proposed provisions
below are intended to establish clear and concise rules to enable
contractors to reopen claims and appeals in a fair and consistent
manner.
Proposed Sec. 405.980(a) establishes that a reopening is a
remedial action taken by a carrier, intermediary, QIC, ALJ, or MAC to
change a final determination or decision made with respect to an
initial determination, redetermination, reconsideration, hearing, or
review, even though the determination or decision may have been correct
based upon the evidence of record. (Note that in this section of the
proposed rule, we use the term ``contractors'' to signify carriers,
intermediaries, and program safeguard contractors.)
Reopenings often have been misconstrued as a level of the appeals
process, so we clarify the conditions for when to use the reopening
process instead of the appeals process. We believe that in order to
give meaning to the reopening process, we should identify well-defined
parameters for how parties must proceed, and how contractors, QICs,
ALJs, and the MAC will conduct reopenings. First, unlike the appeals
process, a party must establish that good cause exists in order for an
adjudicator to grant a request for a reopening. We discuss in detail
below the ways that good cause may be established. Because some of the
same types of issues may be raised in either process, we believe that a
party's appeal rights must be exhausted, or the time limit for
appealing must have expired, in order for an adjudicator to grant a
request for a reopening and take jurisdiction. A decision on whether to
grant a request for reopening is at the sole discretion of the
adjudicator and is not subject to appeal.
We also draw the distinction that requests for adjustments to
claims resulting from clerical errors must be handled through the
reopening process. Therefore, when a contractor makes an adjustment to
a claim, the contractor is not processing an appeal, but instead,
conducting a reopening. Nevertheless, the revised initial determination
that results from the adjustment may be appealed. Finally, some
providers argue that contractors will only initiate a reopening for
clerical errors when the error can be attributed to the contractor, but
not the provider. We make clear in this proposed rule that the clerical
error may be that of the contractor or party. We also define clerical
error as human and mechanical mistakes such as mathematical,
computational, or inaccurate data entry. We welcome comments on other
types of mistakes that would warrant reopenings on the basis of
clerical errors.
Proposed Sec. 405.980(b)-(e) sets forth the time frames and
requirements for reopening initial determinations, redeterminations,
reconsiderations, hearing decisions, and reviews, both for those
initiated by contractors, QICs, ALJs, the MAC, and those requested by
parties. An adjudicator's notice of intent to reopen preserves the time
frame by which it is required to initiate a reopening. Either a party
may request a reopening, or a contractor may reopen on its own motion,
within one year from the date of the notice of the initial
determination or redetermination for any reason. We believe that one
year is a reasonable time frame for a party to bring issues to the
contractor's attention, considering that it is the party's
responsibility and obligation to bill and code correctly, discover
errors timely, and respond to documentation requests in order to
facilitate appropriate payment determinations by the contractors.
A party and a contractor have the same 4-year time frame for
initiating reopenings for good cause, but although a party may request
a reopening, the contractor may find that there is not adequate reason
to reopen the case. A contractor's decision on whether good cause
exists is final.
A contractor may reopen within 5 years from the date of the initial
determination or redetermination if the contractor discovers a pattern
of billing errors or identifies an overpayment. In protecting the
Medicare Trust Fund, CMS grants contractors the authority to reopen and
revise initial determinations on claims that have been procured through
similar fault and/or are believed to have been procured through fraud.
Under proposed Sec. 405.980, we are proposing significant revisions to
existing rules concerning reopening initial determinations procured
through similar fault or fraud.
We are proposing a definition for the term similar fault and
outline its evidentiary requirements. Similar fault is intended to
cover instances where Medicare payment is obtained by those with no
legal rights to the funds, but falls short of outright fraud. In order
for the initial determination to be procured by similar fault, Medicare
funds must have been obtained, retained, converted, or received by a
person who knows, or reasonably should be expected to know, that the
person has no legal entitlement to those funds. This covers instances
where a provider has been paid twice for the same claim (such as
through different payors); where the contractor erroneously pays for
codes that should not be paid, and the provider does not refund the
money; or manipulation of legitimate codes contrary to Medicare policy
to obtain a higher reimbursement. Examples of how knowledge can be
shown include: Provider bulletins and educational efforts, standard
practices in the community, and previous errors that have been brought
to the provider's attention.
A contractor may reopen at any time if reliable evidence shows
fraud or similar fault. Evidence is reliable if it is relevant,
credible, and material. Since a reopening of an initial determination
is an administrative action to correct erroneous payments, there is no
requirement for a burden of proof. The contractor only must show that
its evidence is reliable. If the reopening results in a revised
determination that is unfavorable, the affected party has the right to
use the administrative appeals process to rebut the contractor's
evidence. In the appeals process, however, the contractor's evidence
must satisfy the burden of proof placed upon it.
Proposed Sec. Sec. 405.980(d)(1) and (e)(3) provide 180 days from
the date of a reconsideration decision for either a party to request,
or a QIC to initiate, a
[[Page 69328]]
reopening. Similarly, both the parties and adjudicators at the ALJ and
MAC levels also would have 180 days from the date of a hearing or
review decision to request or initiate a reopening. The party, QIC,
ALJ, or the MAC must establish good cause for a reopening. We
considered whether a QIC, ALJ, or the MAC should have to establish good
cause like parties in order to reopen matters that did not pertain to
overpayments, investigations, or fraud. However, in an effort to
propose a more equitable process, we believe that a QIC, ALJ, or the
MAC should be held to the same standards as a party and should not be
able to arbitrarily reopen its decision. We believe that a party should
be able to rely on the finality of an appeal decision without undue
concern that an adjudicator may reopen and revise its decision.
Proposed Sec. 405.982-.984 would require contractors, QICs, ALJs,
or the MAC to mail notices of revisions based on reopened
determinations, reconsiderations, or decisions to the appropriate
parties at their last known addresses. The notice must state the
rationale and basis for the revision, and the parties' right to appeal.
The revision of an initial determination, redetermination, or
reconsideration shall be binding upon all parties unless a party files
a written request for a subsequent appeal. Where a contractor reopens
an initial determination, we considered whether it might be more
efficient to allow a party to request a reconsideration by a QIC.
However, since a redetermination is the first level of the appeals
process, we have proposed that a revised initial determination is final
unless a party files a written request for a redetermination.
Proposed Sec. 405.986 creates a section on how a party,
contractor, QIC, ALJ, or the MAC must establish good cause for a
reopening. We modified and incorporated some of the provisions at
Sec. Sec. 405.750(b) and 405.841 of 42 CFR, and Sec. 404.989 of 20
CFR to establish guidelines on what constitutes good cause for a
reopening, such as ``new and material evidence'' and ``error on the
face of the evidence.'' The existing provisions have been viewed by
some to be ambiguous as to the meaning or context of these terms.
New and material evidence means information that was not available
or known at the time the determination or decision was furnished,
which, had it been available or known, may have resulted in a different
conclusion. Error on the face of the evidence means an obvious mistake
in the determination or decision.
We believe that we have exhausted the full range of circumstances
that should give rise to good cause, but welcome comments on whether
other provisions should be added to apply to good cause. Finally, we
would also incorporate the longstanding rule that a change resulting
from a judicial decision, legal interpretation, or administrative
ruling upon which a determination or decision was made should not
constitute a good cause for reopening.
H. Expedited Appeals Process (Sec. 405.990 Through Sec. 405.992)
We are incorporating the current regulations governing expedited
review at Sec. Sec. 405.718 and 405.853 with only two changes. First,
since under BIPA the appeals process is the same for both Part A and B
claims, there will be one regulation governing expedited review of
cases involving those claims. Second, under BIPA, ALJs are bound by all
NCDs rather than only by NCDs based on section 1862(a)(1) of the Act.
Therefore, the regulations will no longer limit expedited review to
cases involving NCDs based on section 1862(a)(1)(A) of the Act.
In addition, we would establish under proposed Sec. 405.992 the
standards that would apply to ALJs and the MAC for policies that are
not subject to the expedited appeals process. We are proposing that in
general ALJs and the MAC should consider and give deference to an LCD,
LMRP, or CMS manual instruction. An ALJ or the MAC may disregard such a
policy at a party's request, if the ALJ or the MAC finds the party's
explanation of why the policy should be disregarded to be persuasive,
finds that the policy has been applied incorrectly, or finds for other
reason that the policy is invalid for purposes of the party's appeal. A
decision of the ALJ or the MAC would include its rationale for
disregarding such a policy. We believe that these provisions will not
only lend greater consistency to the appeal decisions, but also ensure
that CMS is aware of policies that are being repeatedly overturned by
adjudicators.
I. ALJ Hearings
1. Introduction
Consistent with new section 1869 of the Act, this proposed rule
contains a series of changes to the existing procedures for ALJ
hearings and DAB reviews. In addition, as discussed above, we are
proposing in this rule to codify in the Medicare regulations at 42 CFR
part 405, subpart I, all the requirements that apply to these
proceedings. Most of these regulations have previously been set forth
in 20 CFR part 404 of SSA's regulations, which focuses on SSA's
disability procedures. These voluminous regulations contain many
provisions that are not applicable for Medicare purposes. For the most
part, the proposed regulations that are being carried over from part
404 simply incorporate relevant provisions of those rules and do not
involve substantive changes. To the extent that the new regulations do
make substantive changes, the changes are discussed below.
One of the changes required under section 521 of BIPA is the
introduction of an appellant's right to escalate a case to an ALJ if a
QIC fails to make a timely reconsideration, or to the DAB if an ALJ
hearing does not produce a timely decision on an appeal of a QIC
reconsideration. How escalation is implemented will affect all aspects
of the ALJ and MAC proceedings discussed below. Therefore, before
presenting a detailed discussion of our proposals with respect to ALJ
and MAC procedures, we believe it is important to first discuss the
issues associated with the new escalation requirements.
2. Escalation
a. General Principles
Section 1869(a)(3)(B)(I) provides that ``[n]o initial determination
may be reconsidered or appealed under subsection (b) unless the fiscal
intermediary or carrier has made a redetermination of that initial
determination under [section 1869(a)(3)].'' Section 1869(a)(3)(D)
provides that for purposes of pursuing appeals beyond the fiscal
intermediary or carrier levels, the redetermination is considered an
initial determination. Given the above provisions, it is clear that an
appellant may not proceed beyond the initial contractor level until he
or she has received a redetermination from that contractor, even if the
contractor does not issue the initial determination or redetermination
within the statutory time frames. This is consistent with the current
regulations, which require an appellant to complete all steps of the
appeals process in sequence, except when an appellant invokes the
expedited review process described at Sec. Sec. 405.718 [Part A
appeals] and 405.853 [Part B appeals].
After the initial contractor has made its redetermination, however,
a case may be advanced to the next level of appeal if an adjudicator
does not act on the appeal within the statutory deadline. We call this
movement of a case to the next level of appeal ``escalation.'' In this
section, we
[[Page 69329]]
describe how escalation will affect the procedures the adjudicator will
conduct at the next level of appeal.
Sections 1869(c) and (d) provide deadlines for QICs, ALJs, and the
MAC within the DAB to issue their decisions. If the adjudicator does
not meet the specified deadline, the party requesting the appeal (the
appellant) ``may request'' an appeal at the next level without
completing the appeal level below. Specifically, the statute allows an
appellant to escalate an appeal by (1) requesting an ALJ hearing if the
QIC does not decide the appeal within 30 or 44 days (depending on
whether the appellant requested additional time to submit evidence to
the QIC); (2) requesting a review by the MAC if the ALJ does not decide
the appeal within 90 days; and; (3) requesting judicial review in
federal district court if the MAC does not complete its review within
90 days. (At the ALJ and MAC levels, the statutory time period for
completing the action begins on the date the appeal is timely filed.)
If an appellant does not request escalation to the next level, the
case will remain with the current adjudicator until a final action is
issued. Because there are different procedures at each of the appeals
steps, appellants must carefully consider the type of review that is
best to resolve their case before deciding to escalate an appeal. For
example, appellants who escalate a case from the QIC level to an ALJ
will not have the benefit of a review by health care professionals that
the QIC provides before they proceed to a hearing. Similarly, when a
case is escalated from the ALJ level to the MAC, an appellant will lose
the right to present his or her case during an oral hearing; rather, in
most circumstances the MAC will issue its action after reviewing the
written record. Therefore, appellants who consider escalating their
appeals must carefully weigh whether their case will be better served
by completing a particular level of appeal or proceeding to the next
level.
In addition, appellants who escalate their appeals will, in
essence, be waiving their right to obtain a decision within the
statutory deadline at the next level. For example, section
1869(d)(1)(A) provides that unless the appellant waives the statutory
adjudication deadline, the ALJ ``shall conduct and conclude a hearing
on a decision of a [QIC]'' and issue a decision by the 90th day from
the date a request for hearing is timely filed. (Emphasis added.) We
interpret this as requiring an ALJ to decide a case within 90 days when
the QIC has issued a final action in a case, but not when the appellant
has escalated the case to the ALJ level before the QIC issues a
decision. A similar distinction is found in the provisions governing
MAC review, which provide that the MAC must complete its ``review of a
decision'' within 90 days. Therefore, when an appellant escalates an
appeal from the QIC to the ALJ level or from the ALJ level to the MAC,
the proceedings before the ALJ or MAC are not subject to the 90-day
limit.
We believe this interpretation is not only consistent with the
statute, but highlights other factors appellants will have to consider
when deciding whether escalation is to their advantage. In our
experience, ALJs and the MAC are able to decide cases more quickly and
completely when the record below has been fully developed and the
determination or decision issued below fully addresses the issues that
were considered during the appeal. Because appeals that are escalated
to the next level will not include a written determination or decision
by the adjudicator below, the ALJ, the MAC, and the courts, as
applicable, will require more time to determine what issues are
properly before them and how they should be resolved.
As we discuss later in this preamble, we are proposing that CMS or
its contractors may enter a case as a party at the ALJ level and be
accorded the same rights as any other party to an ALJ decision.
However, since we do not believe that the 90-day deadlines for the ALJ
or the MAC to adjudicate appeals would apply to CMS, we have
specifically noted in the regulation text that CMS would not be
permitted to escalate a case, for example, from the ALJ to the MAC
level, if the ALJ did not meet its adjudication deadline.
As noted above, section 1869(d)(1)(A) of the statute indicates that
the 90-day deadline for an ALJ decision is premised on the existence of
a QIC decision, and section 1869(d)(2)(A) specifies that the DAB has 90
days to ``conduct and conclude a review of the decision on the
hearing'' by an ALJ. Neither the statute nor the legislative history
provides any guidance with respect to the appropriate processing time
frames for ALJ decisions on cases that have not been reconsidered by a
QIC, or for DAB decisions on cases that have not been heard by an ALJ.
Although the statute is silent in this respect, we recognize that
appellants should not have to wait indefinitely for decisions on their
appeals in these situations. We have proposed procedures that we
believe will enable adjudicators to meet the statutory decision-making
time frames in the vast majority of cases, thus minimizing the
likelihood that an appellant would have the option of escalation.
However, to the extent that such situations do arise, we believe that
it may be appropriate to establish in the final rule specific decision-
making time frames for both ALJ hearings and DAB reviews for those
cases where there was no previous QIC reconsideration decision, or ALJ
hearing decision, respectively. We encourage comments on whether the
final rule should include such time frames and, if so, the most
appropriate adjudication time frames for these cases.
b. Specific Provisions Affected by Escalation--From the QIC to the ALJ
Level
Section 1869(c) provides that a QIC must complete its
reconsideration within 30 days or 44 days if the appellant requests an
extension. The statute also provides that an appellant may escalate the
appeal to the ALJ level if the QIC does not complete the
reconsideration within the requisite period. The statute does not
specify, however, that appeals will automatically be referred from the
QIC to the ALJ level once the 30 or 44-day period expires. Rather, the
statute leaves it to the appellant to request escalation to the next
level. The statute is silent concerning when the appellant must make
this request or the precise effect the request will have on any case
development or other adjudication efforts that the QIC may be
conducting on the appeal when the escalation request is received.
We considered various options for effectuating this provision,
including requiring that the QIC immediately cease its consideration of
the appeal as soon as the request for escalation is received. As
discussed above, we concluded that this option would be
counterproductive for both the appellant requesting escalation and for
the appeals system as a whole, including appellants whose claims remain
at the QIC level and those whose appeals are already pending at the ALJ
level. Specifically, because we expect that QICs will make every effort
to issue determinations within the 30 or 44-day time frame, we would
expect that many of the cases that are not decided by those deadlines
will nonetheless be very close to completion. It would not benefit
either the appellant who is requesting escalation or those appellants
whose appeals are pending at the ALJ level if we require the QIC to
cease deciding a case as soon as a request for escalation is received,
particularly if the QIC is close to issuing a determination that will
be fully favorable to the appellant.
[[Page 69330]]
Therefore, we are proposing that when a QIC receives a request for
escalation, the QIC will defer sending the case to the ALJ level for 5
days. If possible, the QIC will complete its adjudication of the case,
including issuing a written reconsideration, within the 5-day period.
If the determination is fully favorable to all parties, the case will
be forwarded to the initial contractor for effectuation. If not, the
appellant or another party to the appeal may file a request for ALJ
hearing within the 60-day period provided in these regulations. If the
QIC is not able to decide the case within the 5-day period, it will
notify the appellant and forward the case record to the hearing office
that has jurisdiction of the case. The appeal will then be processed
according to the rules described in proposed sections 405.1000 et. seq.
c. Specific Provisions Affected by Escalation--Escalation at the ALJ
and MAC Levels
We are proposing similar procedures when an appellant requests
escalation from the ALJ to the MAC level and from the MAC level to
federal district court described below.
ALJ Level to the MAC (Sec. 405.1104)
The appellant must file the request for escalation directly with
the ALJ/hearing office assigned to the appeal as well as with the MAC.
(The notice that the hearing office issues acknowledging the request
for hearing will provide sufficient information for the appellant to
direct the escalation request to the appropriate office or ALJ.) Upon
receipt of the request for escalation, the ALJ may, if feasible, issue
a decision, dismissal or remand if it can be issued within 5 days of
the receipt of the request for escalation. (Note: a request for
escalation to the MAC will be deemed as a waiver of any oral hearing an
appellant has requested but not yet received.) If the ALJ's action is
fully favorable to all parties to the appeal, the ALJ will forward the
case record to the appropriate contractor for effectuation. If the
ALJ's action is not fully favorable to all parties, the appellant or
another party to the appeal may file a request for MAC review within 60
days of receipt of the ALJ's action.
If the ALJ does not issue an action within the 5-day period, the
case record, including the recording of the oral hearing, if any, will
be sent to the MAC.
MAC to Federal District Court (Sec. 405.1132)
Finally, if the MAC does not issue a final action or remand the
case to an ALJ for further proceedings within the 90-day adjudication
period, the appellant may request that the case be escalated to federal
district court if the amount in controversy is $1,000 or more. Similar
to the above procedures, the MAC may, if feasible, issue a final
action, if it can be issued within 5 days of the request for
escalation.
d. Calculating the 90-Day Adjudication Period
Historically, Medicare appeals were conducted using the ALJ and
Appeals Council procedures that were devised for appeals of Social
Security claims. Those procedures do not mandate any time frames within
which either an ALJ or SSA's Appeals Council must complete their
actions on an appeal. However, they also provide generous time periods
(or none at all) for scheduling or rescheduling hearings at the
convenience of the appellant and the adjudicator, opportunities for
both prehearing and posthearing conferences, and no limitations on when
additional evidence may be submitted to the ALJ, as long as it is
received before the decision is issued.
Congress, through BIPA, has now directed us to complete
adjudication within specified time frames and, when such time frames
are not met, give appellants the option to escalate their cases to the
next level of appeal. To provide this level of service to all
appellants, we are proposing the following changes to our appeals
procedures. First, we are establishing time limits for submission of
evidence. Appellants who submit evidence within these limits and comply
with other deadlines described elsewhere in this document, will have
the right to have their case adjudicated within the specified time
period or to escalate it if the time limit is not met. Conversely, we
propose to toll the 90-day adjudication period if appellants submit
evidence after those specified time periods. For example, the
regulations provide that an appellant must submit any additional
evidence within 10 days of receiving the notice of hearing. If an
appellant submits the evidence on the 20th day, the ALJ may still
accept the evidence, but will have an additional 10 days to decide the
case. (See Sec. 405.1018)
We believe that this proposal is consistent with the statute and
Congressional intent. Congress has clearly indicated that adjudicators
must devise procedures compatible with meeting the statutory deadlines.
Moreover, we do not believe that Congress meant to allow appellants to
escalate appeals if it is the appellant who has delayed the
administrative process. We note that such delays, in particular
requests for postponement of scheduled hearings, affect the timely
resolution of not only the appellant's own case, but our ability to
provide timely hearings and decisions for other appellants as well. We
believe that by tolling the 90-day adjudication period in those
instances in which the appellant causes the delay, we will provide an
incentive for more appellants to appear at scheduled hearings and
otherwise comply with hearing procedures.
For the same reason, the proposed regulations contain changes to
the current process that we anticipate will streamline the hearings and
appeals process, thus providing quicker and more focused adjudication.
For example, we are proposing to offer appellants at the ALJ level not
only in-person hearings, but hearings via telephone and
videoconferencing, where available. We are also restricting submission
of additional evidence after an oral hearing to the following:
(1) With the permission of the ALJ, provided that the request is
made before or during the hearing.
(2) On the ALJ's own motion, if he or she concludes that the
evidence is necessary to resolve a material issue in the case.
We are also continuing the current requirement that the notice of
hearing must identify the issues to be decided in the case. Although we
are requiring appellants to file any objections to the issues within 5
days of the hearing, we encourage parties to alert ALJs as soon as
possible if the notice of hearing does not accurately describe the
issue to be decided or does not include an issue material to the
resolution of the case (see Sec. 405.1024). Similarly, as explained in
more detail elsewhere in this preamble, we are proposing to require
appellants seeking MAC review to identify those aspects of the ALJ's
decision with which they disagree. (We are not proposing this
requirement for beneficiaries who are proceeding pro se.) We believe
that this requirement will enable the MAC to resolve requests for
review more expeditiously. In addition, the MAC will issue final
actions after considering the request for review, rather than first
advising appellants of a proposed action and providing a comment
period. We do not consider it feasible to provide both a proposed and
final action within the designated time frame. In addition, because the
MAC will now be conducting a de novo review, appellants are on notice
that the MAC may alter the ALJ's decision even if it would have been
sustained under the pre-BIPA substantial evidence standard (see Sec.
405.1112).
[[Page 69331]]
3. Conduct of ALJ Hearing--General Rules ( Sec. 405.1000)
Section 1869(b)(1)(A) of the Social Security Act as amended by BIPA
provides that any individual dissatisfied with any initial
determination shall be entitled to a reconsideration and, assuming the
request for hearing is timely filed and the amount in controversy
requirements are met, a hearing to the same extent as is provided in
section 205(b) of the Act. Traditionally, the Secretary has granted
individuals entitled to a 205(b) hearing an in-person hearing. In
addition, current regulations allow an appellant to waive an in-person
hearing and request a decision based on the written record. We would
continue that policy in this proposed rule. However, given recent
technological advances, we will also offer appellants an opportunity
for a hearing via telephone or videoconference, as available.
(Currently, videoconferencing is only available at selected hearing
sites throughout the country. 66 FR 61310 (January 5, 2001)). Recent
experience shows that hearings conducted via telephone and
videoconferencing advantage both the adjudicator and the appellant,
particularly beneficiaries who have difficulty traveling even short
distances or providers and suppliers for whom a telephone hearing or a
videoconference may be more convenient than a hearing scheduled at a
more distant hearing office. We believe that offering these options,
where available, will also enable ALJs to complete more cases within
the 90-day adjudication period. It may also afford some appellants an
opportunity to present their case orally who currently request on-the-
record hearings because of transportation or scheduling difficulties.
4. What Actions Are Reviewable by an ALJ? (Sec. 405.1004)
We have interpreted the current regulations governing the Part A
and Part B appeals process as affording a party the right to an ALJ
hearing only if the intermediary or carrier hearing officer (CHO), as
applicable, has issued a determination or decision on the merits.
Consistent with this interpretation, ALJs have dismissed requests for
an ALJ hearing when the contractor or CHO has dismissed a request for a
reconsideration or carrier hearing.
We propose to revise this policy for appeals filed under BIPA.
Specifically, we would give ALJs the authority to decide or review all
final actions issued by a QIC including dismissals for untimely filing,
failure to exhaust administrative remedies, or res judicata. (We expect
that res judicata will most often occur when a party asks for another
adjudication of a claim for the same service, that is, the same
instance of receiving a service.) However, the proposed regulations
also specify that if an ALJ decides that a QIC's dismissal was
improper, the ALJ will remand to the QIC for a substantive decision.
5. What Authorities Are Binding on an ALJ?
In our May 12, 1997 final rule, we stated that ALJs are bound by
the Medicare statute, CMS regulations, CMS Rulings and NCDs based on
section 1862(a)(1) of the Act. Under BIPA, all NCDs, based on section
1862(a)(1) or other grounds, are binding on ALJs. We are revising our
regulations, including those governing the expedited appeals process,
accordingly.
6. Aggregating Claims To Meet the Amount in Controversy (Sec.
405.1006)
Prior to the enactment of section 521 of BIPA, the statute and
regulations provided different amounts in controversy for Part A and
Part B hearings and appeals. Under Part A, an appellant could receive a
reconsideration of the initial determination regardless of the monetary
value of the claim, but had to meet a $100 threshold to receive a
hearing before an ALJ. Similarly, an appellant contesting an initial
determination issued on a Part B claim could receive a review
determination regardless of the amount in controversy. However, there
was a $100 amount in controversy requirement for a Part B carrier
hearing and a $500 threshold for an ALJ hearing with respect to a Part
B claim determination.
The pre-BIPA aggregations provisions found at former section
1869(b)(2) directed the Secretary to devise a system for allowing
appellants to combine claims to meet the amount in controversy as
follows: In determining the amount in controversy, the Secretary, under
regulations, shall allow two or more claims to be aggregated if the
claims involve the delivery of similar or related services to the same
individual or involve common issues of law and fact arising from
services furnished to two or more individuals. The Secretary
implemented the above provision in a final regulation published March
16, 1994. The regulation established two methods of aggregation, one
for individual appellants and one for multiple appellants. Individual
appellants appealing either Part A and Part B claims were allowed to
aggregate two or more claims (within a specified time period),
regardless of issue, to meet the jurisdictional minimums for a carrier
hearing and ALJ hearing. (Prior to OBRA 1986, this method for
aggregating claims had been available to appellants requesting a Part B
hearing before a carrier hearing officer.) Multiple appellants,
however, were allowed to aggregate their claims only under the
statutory requirements, that is, if the claims involved the delivery of
similar or related services to the same individual or common issues of
law and fact arising from services furnished to two or more
individuals.
BIPA 521 changed the amount in controversy requirements. Section
1869(b)(1)(E) provides that the amount in controversy for an ALJ
hearing will be $100 for appeals of both Part A and Part B claims. In
addition, the aggregation provisions have been altered as follows:
(ii) Aggregation of claims. In determining the amount in
controversy, the Secretary, under regulations, shall allow two or more
appeals to be aggregated if the appeals involve--
(I) the delivery of similar or related services to the same
individual by one or more providers of services or suppliers, or
(II) common issues of law and fact arising from services furnished
to two or more individuals by one or more providers of services or
suppliers.
We are proposing to limit aggregation of claims under BIPA to those
that meet the statutory requirements for aggregation, that is, those
that involve the delivery of similar or related services to the same
individual or common issues of law and fact. Accordingly, we would no
longer allow appellants to aggregate all timely filed claims regardless
of issue. We are proposing this change for several reasons. Under the
current system, appellants can only appeal beyond the intermediary or
carrier levels if their appeal meets the minimum amount in controversy
requirements described above. With the creation of the QICs, however,
appellants will have access to a review by an independent contractor
regardless of a claim's monetary value. We believe that this will
provide sufficient due process for those claims that are below the $100
threshold.
Moreover, BIPA has reduced the amount in controversy for a Part B
ALJ hearing from $500 to $100. Our experience suggests that the
majority of Part A and B appeals that are decided by the QICs will
equal or exceed the $100 amount in controversy requirement. Thus, we do
not believe that eliminating the more liberal rules
[[Page 69332]]
that individual appellants have used to aggregate claims will alter
significantly an appellant's access to an ALJ hearing. We believe that
continuing to apply the current aggregation rules would hinder ALJs and
the MAC from meeting BIPA's 90-day deadlines for completing appeals.
The current system, which allows aggregation of claims regardless of
issue, has led to cumbersome and lengthy proceedings at both the ALJ
and MAC levels. Adjudication is often delayed when an appellant seeks
to aggregate a claim with another previously filed appeal; continuing
this practice will impair our ability to meet the statutory deadline
for the earlier appeal. Moreover, some of the current inefficiencies in
the appeals system are caused by cases in which appellants seek to
aggregate numerous claims that concern a variety of unrelated services
or supplies, each of which has been denied for a different reason.
Based on this experience, we believe that allowing appellants to
aggregate claims regardless of issue will make it extremely difficult
to provide a meaningful review of each issue within the statutory
deadlines.
Therefore, we are proposing to limit aggregation for both
individual and multiple appellants to the clear language of the
statutory provisions. In order to allow individual beneficiaries,
providers and suppliers, as well as multiple appellants to aggregate
claims, we will allow appellants to aggregate claims to meet the amount
in controversy if the claims involve common issues of law and fact or
delivery of similar or related services, regardless of whether the
services pertain to just one beneficiary or a number of beneficiaries
and regardless of how many providers or suppliers provided the
services. We will continue our policy, however, of restricting the
claims that may be aggregated to those that are appealed within a
limited period; to do otherwise would in essence extend the time to
file a request for hearing beyond the 60-day time limit. We are also
proposing separate rules for claims that are escalated from the QIC to
the ALJ level to ensure that only appeals that clearly meet the amount
in controversy requirements are escalated to the ALJ level. Finally,
given the reduced amount in controversy threshold and the new
adjudication deadlines, which will require adjudicators to resolve
issues more quickly, we believe it is reasonable to require appellants
to explain in their request for aggregation why they believe the claims
involve common issues of law and fact or delivery of similar or related
services.
7. When CMS or Its Contractors May Participate in an ALJ hearing
(Sec. Sec. 405.1010 and 405.1012)
Existing regulations do not address whether CMS and its contractors
could participate in ALJ hearings. Occasions have arisen, however, in
which a contractor or an ALJ has determined that an issue in a case
could not be resolved without some input from CMS or the contractor. In
some cases, ALJs have requested position papers, testimony, or other
evidence from CMS or a contractor, but such proceedings have been
cumbersome, because the regulations did not provide specific procedures
for such input. After reviewing the outcome of other cases, CMS has
concluded that the case might have been more appropriately resolved if
CMS or the contractor had been parties to the appeal.
New section 1869(c)(3)(J) provides that the QIC will not only
prepare the record of the reconsideration when a hearing before an ALJ
is requested, but also will ``participate in such hearings as required
by the Secretary.'' Consistent with this provision, we are proposing to
revise our regulations concerning the conduct of an ALJ hearing to
allow participation of a representative of CMS, or another CMS
contractor, either at the request of an ALJ or upon the request of the
QIC or CMS. Such participation may include filing position papers or
providing testimony to clarify factual or policy issues in a case, but
will not include those aspects of full party status such as the right
to call witnesses or cross-examine the witnesses of another party.
Because the role of a participant is non-adversarial, we would allow
participation of the QIC, CMS, or CMS's contractors in cases brought by
all appellants, including beneficiaries.
An ALJ will not have the authority to require CMS or a contractor
to participate in a case. Nor may the ALJ draw any adverse inferences
if CMS or a contractor decides not to participate. For example, an ALJ
could not consider a party's allegations as accepted as true if CMS or
a contractor decides not to participate and counter such allegations.
We anticipate, however, that there will be other cases in which CMS or
its contractor will want and need to be a full party in a case in order
to ensure that the record before the ALJ is fully developed.
Accordingly, we are also revising the current regulations to allow CMS
or its contractor to enter an appeal at the ALJ level as a party,
unless the appeal is brought by an unrepresented beneficiary. When CMS
or its contractor enters the case as a party, it will have all the
rights of a party, including the right to call witnesses or cross-
examine the witnesses of other parties, as well as the right to seek
MAC review of an adverse decision. CMS and the contractor, when acting
as parties, may also submit additional evidence to the ALJ. An ALJ
would not have the authority to require CMS or a contractor to enter a
case as a party, nor would an ALJ be able to draw any inferences if CMS
does not participate in the case. We believe that these proposed
changes will enable adjudicators at the ALJ and, thereafter, the MAC
level to resolve issues of fact and law more quickly and reduce the
need for remands for additional development.
8. Filing Requests for ALJ Hearing and MAC Review--Time and Place
(Sec. Sec. 405.1014, 405.1016, 405.1106)
Section 1869(b)(1)(D)(ii) provides that ``the Secretary shall
establish in regulations time limits for the filing of a request for
hearing by the Secretary in accordance with provisions in sections 205
and 206.'' In addition, section 1869(d)(1)(A) provides that ``except as
provided in subparagraph (B), an administrative law judge shall conduct
and conclude a hearing on a decision of a qualified independent
contractor under subsection (c) and render a decision on such hearing
by not later than the end of the 90-day period beginning on the date a
request for hearing has been timely filed.'' (Emphasis added.)
Similarly, section 1869(d)(2)(A) of the Act provides that the MAC
``shall conduct and conclude a review of [an ALJ decision] and make a
decision or remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day period
beginning on the date a request for review has been timely filed.''
Section 205 of the Act gives an appellant 60 days to request a
hearing. The current regulations governing appeals of Medicare claims
provide the same 60-day period for appealing Medicare cases from the
contractor's determination or decision to an ALJ and, thereafter, from
the ALJ level to the MAC. We are proposing to continue to require
parties to file their appeals to the ALJ level and the MAC within 60
days. As discussed above, for purposes of determining an appellant's
right to appeal, we will also continue to use the general principles
currently found in 20 CFR 404.933 and 42 CFR 405.722. These regulations
provide that an appeal is considered filed on the day it is received by
a Social Security office,
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CMS, including its contractors, an ALJ, or, in the case of a request
for MAC review, the MAC. We will also continue to calculate the 60-day
period based on the date the appeal is actually received by one of the
above offices.
As noted above, ALJs and the MAC must issue their decisions no
later than the end of the 90-day period beginning on the date the
appeal has been timely filed. Therefore we must determine not only
whether an appeal has been timely filed to establish the party
requesting review's right to an ALJ hearing or MAC review, but also
when the appeal is considered timely filed in order to calculate the
90-day adjudication period. Given these deadlines, we considered
requiring all requests for ALJ hearing to be filed directly with the
hearing office, and all requests for review to be filed directly with
the MAC. This requirement would advantage most parties, since we have
experienced significant delays in receiving appeals filed with Social
Security and other offices. Again, we recognize that local Social
Security offices provide a valuable service to many individuals who
want or require assistance in filing their appeals. Similarly,
providers and suppliers are accustomed to filing requests for an ALJ
hearing or, more rarely, MAC review with CMS's contractors.
Therefore, as with requests for redeterminations and
reconsiderations, we are proposing to allow parties to file their
appeals with these offices. For purposes of establishing whether the
party has filed a timely request, the appeal will be considered filed
on the date it is received in one of these offices. However, for
purposes of establishing the start date for the 90-day adjudication
period, we will define the date that an appeal is timely filed as the
date the appeal is received by the ALJ or MAC, as applicable. We
believe that this policy will give the parties requesting review access
to assistance if needed while not reducing the time the ALJ or MAC will
have to decide the case.
In addition, both ALJs and the MAC often receive appeals that have
not been filed within the 60-day limit. The current regulations allow
parties to ask for an extension of time to file their appeal for ``good
cause.'' The regulations further provide examples of circumstances that
may establish good cause for late filing, such as a serious illness or
death of an immediate family member. In our experience, some parties do
not acknowledge that they have filed an appeal after the 60-day period
has expired or explain why the appeal is late. In the event that the
party requesting review subsequently provides information that
establishes good cause for late filing, we will calculate the date the
appeal is ``timely filed'' for purposes of beginning the 90-day
adjudication period as the date the ALJ or MAC, as applicable, receives
the good cause explanation, assuming the ALJ or MAC determines that the
explanation provides good cause for filing the appeal late.
9. Adjudication Deadlines--ALJ Level (Sec. 405.1016)
Section 1869(d)(1)(A) provides that unless the appellant waives the
statutory adjudication deadline, the ALJ ``shall conduct and conclude a
hearing on a decision of a [QIC]'' and issue a decision within 90 days
from the date a request for hearing is timely filed. (Emphasis added.)
We interpret this as requiring an ALJ to decide a case within 90 days
only when the QIC has issued a final action in a case. Therefore, when
an appellant escalates an appeal from the QIC to the ALJ level, the
proceedings before the ALJ are not subject to the 90-day limit.
We are also proposing to toll the 90-day adjudication deadline when
an appellant's actions, including delays in submitting evidence or
requests for postponement of a hearing, rather than the ALJ's actions,
extend the length of the proceedings.
10. Remand Authority (Sec. 405.1034)
Currently, the regulations governing Medicare appeals do not
provide clear guidance concerning if and when an ALJ may remand a case
to a contractor for further proceedings. We are proposing including
regulations that would require or allow ALJs to remand to the QIC under
certain circumstances. First, the regulations would allow an ALJ to
review whether or not the QIC erred in dismissing a request for
reconsideration and to remand the case to the QIC for a reconsideration
determination if the dismissal was improper. The regulations would also
require an ALJ to remand a case to the QIC for a new decision if the
appellant submits new evidence to the ALJ without providing a good
reason for not providing it at the QIC level. (If the ALJ determines
that there is good cause for submitting the evidence to the ALJ, the
ALJ will include the evidence in the administrative record and decide
the case on that record.) As discussed previously, we believe that this
requirement will encourage appellants to resolve appeals, if possible,
at earlier and less costly steps of the appeals process. Moreover,
since most Part A and B appeals pertain to services that have already
been provided, most medical and other records relevant to the case
should be available during the initial stages in the appeals process.
Requiring earlier submission of evidence will also assist ALJs and the
MAC to meet their adjudication deadlines, since it will reduce time
consuming development of the record. However, because we recognize that
the reason for denying a claim may be different at various steps of the
appeals process, we would not require an ALJ to remand a case when an
appellant submits evidence relevant to an issue that is first
identified in the QIC's reconsideration determination.
We would also permit an ALJ to remand the case to a QIC when the
record lacks technical information material to resolution of the case
that only the contractor, rather than a party, can provide. For
example, it may be necessary to examine a contractor's payment history
records in order to determine whether a supplier has filed a claim for
durable medical equipment that has already been billed for by another
supplier. Since such records would not ordinarily be in the possession
of a party to the appeal, it may be necessary for the ALJ to remand the
case to the QIC, if the initial contractor or the QIC has not included
this information in the record submitted to the ALJ.
11. When May an ALJ Consolidate a Hearing? (Sec. 405.1044)
This proposed rule does not alter the ALJ's ability to consolidate
a hearing. However, we have added a provision requiring an ALJ to
notify CMS of his or her intent to consolidate hearings (see Sec.
405.1044(c)). We believe that that the consolidation of hearings may
affect our decision on whether to participate or invoke party status.
12. When May an ALJ Dismiss a Request for Hearing? (Sec. 405.1052)
CMS's current regulations do not address this issue; rather, ALJs
follow the regulations at 20 CFR 404.957. These regulations were
designed to resolve appeals filed by applicants for Social Security
retirement and disability benefits. We are proposing new regulations
that will address the specific procedural issues that arise in Medicare
claims appeals.
a. Effect of the Death of the Beneficiary
The current regulations do not give specific guidance to appellants
or adjudicators concerning the effect of the death of a beneficiary on
an appeal. We believe that the regulations should provide notice to
appellants concerning what will happen to an appeal if the
[[Page 69334]]
beneficiary dies either before it is filed or while it is pending. The
proposed provisions would identify those circumstances in which the
appeal will continue to be adjudicated on the merits versus those that
will be dismissed because there is no longer an interested party who
may obtain relief.
We are proposing to continue deciding appeals on the merits under
the following circumstances.
The appeal involves a claim for benefits under Part A or B in which
the beneficiary obtained the service at issue and the beneficiary
either paid for the service or has a spouse or estate who continues to
be financially liable for the service. In this circumstance, the
beneficiary's spouse or estate may continue to pursue the appeal.
The appeal is filed by another party, including a provider of
services or supplier, who continues to have a financial interest in the
outcome of the appeal.
The appeal involved a service (such as a skilled nursing facility
stay) for which payment was made under waiver of liability, but for
which the determination was construed as a notice of noncoverage to
deny payment to the beneficiary for subsequent dates of service.
The ALJ would dismiss, upon the beneficiary's death, other requests
for hearing that do not meet the above criteria. For example, the ALJ
could dismiss if the beneficiary or the beneficiary's representative
filed the request for hearing but the beneficiary died before the
hearing was held, and the beneficiary was not held liable for the
services at issue in the QIC's reconsideration. The ALJ would not be
required to inquire whether other potentially affected parties wish to
continue the appeal unless they participated in the QIC review below.
Similarly, a dismissal would occur if the supplier filed the request
for hearing as the representative of the beneficiary, but did not have
appeal rights on its own (because, for example, it did not take
assignment) and the beneficiary died before the request for hearing was
filed.
b. Requests for Withdrawal of a Request for Hearing
SSA's regulations at 20 CFR 404.957 now provide that an ALJ may
dismiss a request for hearing if the party that requested the hearing
asks to withdraw the request. The request may be submitted in writing
or made orally at the hearing. Guidelines issued by SSA's Office of
Hearings and Appeals further instruct ALJs that the request must
indicate that the party withdrawing the request for hearing is aware of
the consequences of the withdrawal. Experience shows that some
appellants are in fact unaware of the consequences; for example they
may equate a request for withdrawal with a request for postponement of
the case. In order to avoid unnecessary remands of these cases, we are
adding a requirement that the request for withdrawal must contain a
clear statement that the appellant is withdrawing the appeal and does
not intend to further proceed with the appeal. If the request for
withdrawal is filed by an attorney, or other legal professional on
behalf of a beneficiary or other appellant, the ALJ may presume that
the representative has advised the appellant of the consequences of the
withdrawal and dismissal. (We note that most local rules governing the
professional responsibility of attorneys would require that an attorney
advise a client of the effects of withdrawing an appeal.)
c. Res Judicata
SSA regulations at 20 CFR 404.957(c)(1) provide that an ALJ may
dismiss a request for hearing based on the doctrine of res judicata. We
are including this provision in our new regulations but clarifying that
in the Medicare context the issue will most often occur when a party
asks for another adjudication of a claim for the same date of service
based on the same facts and evidence and the previous decision on the
claim is either administratively or judicially final.
d. Abandonment
Currently, an ALJ may dismiss a request for hearing if the
appellant does not have a good reason for failing to appear at a
scheduled hearing. We will continue to allow ALJs to dismiss a request
for hearing for this reason. In addition, if the hearing is rescheduled
because the ALJ finds that the appellant had a good reason for failing
to appear, the number of days that expire between the first and second
scheduled hearing will not be counted toward the 90-day time limit for
deciding the case.
J. Review by the Medicare Appeals Council and Judicial Review
(Sec. Sec. 405.1100-405.1140)
1. Introduction
The component of the DAB that decides cases brought under section
521 of BIPA is called the Medicare Appeals Council (MAC). Prior to this
rulemaking, the MAC has considered requests for review of Medicare
cases under the procedures used by the SSA's Appeals Council. Those
regulations are found at 20 CFR 404.966 through 404.982. As with the
ALJ regulations discussed above, we are now proposing to incorporate
these procedures into 42 CFR of the Medicare regulations. These
proposed regulations will incorporate the BIPA provisions governing MAC
review and establish procedures that will meet the particular needs of
the Medicare appeals process.
2. MAC Review of an ALJ's Action/De Novo Review (Sec. 405.1100)
Under the current regulations, the MAC may deny or dismiss a
request for review, or it may grant the request for review and either
issue a decision or remand the case to an ALJ. The MAC may also review
an ALJ's action in order to dismiss a request for hearing for any
reason for which it could have been dismissed by the ALJ. (See Social
Security Ruling 95-2c, 60 FR 31753 (June 16, 1985)).
The MAC also has the authority to review an ALJ's action on its own
motion, provided that it takes review of the case within 60 days after
the date of the hearing decision or dismissal.
In deciding whether to grant a request for review, the MAC
considers whether: (1) There appears to be an abuse of discretion by
the ALJ; (2) there is an error of law; (3) the actions, findings or
conclusions of the ALJ are not supported by substantial evidence; or
(4) there is a broad policy or procedural issue that may affect the
general public interest. In addition, if new and material evidence is
submitted that relates to the period on or before the date of the
administrative law judge hearing decision the MAC will review the case
if it finds that the administrative law judge's action, findings, or
conclusion is contrary to the weight of the evidence currently of
record. If the MAC denies review of an ALJ's decision, the ALJ's
action, not the denial of review, is the final decision of the
Secretary and is reviewable in federal district court on a substantial
evidence standard.
BIPA directs the MAC to apply a different standard when reviewing
an ALJ's action. Section 1869(d)(2)(B) directs the MAC to conduct a de
novo review of an ALJ's decision on a hearing. In addition, section
1869(d)(3)(A) allows parties to request review by the MAC if an ALJ
does not issue a decision within the 90-day adjudication period
``notwithstanding any requirements for a hearing for purposes of the
party's right to such a review.''
We are proposing to effectuate the MAC's new review process as
follows. The MAC may no longer consider ALJ decisions under a
substantial evidence standard nor may it ``deny'' review.
[[Page 69335]]
Rather, it will review the ALJ's decision de novo. If a case requires
additional development or proceedings at the ALJ level, the MAC will
remand the case to the ALJ for further action. Otherwise, the MAC will
communicate its final action on the case by issuing a final decision or
order that adopts, modifies or reverses the ALJ's action, as
appropriate.
In addition to requiring any MAC review of an ALJ decision to be de
novo, BIPA requires the MAC to complete its action on an ALJ decision
within 90 days from the date the request for review is timely filed. In
a previous section of this preamble, we have discussed the effect of
these provisions on such questions as where and when a request for MAC
review may be filed. We believe that the changes in the standard of
review and the adjudication deadlines will require the following
additional changes to the MAC's current procedures as well.
3. Escalation of an Appeal From the ALJ Level to the MAC (Sec. Sec.
405.1104, 405.1106, and 405.1108)
Section 1869(d)(3)(A) of the Act, as amended by BIPA, provides that
if an ALJ does not issue a decision within the 90-day adjudication
period, ``the party requesting the hearing may request a review by [the
MAC], notwithstanding any requirements for a hearing for purposes of
the [appellant's] right to such review.'' As we have explained
elsewhere in this preamble, the MAC's consideration of an appeal when
it is escalated from the ALJ to the MAC level is not subject to the 90-
day adjudication deadline. In addition, we interpret section
1869(d)(3)(A) to mean that only the person or entity who requested the
ALJ hearing may escalate the appeal to the MAC if the ALJ does not meet
the 90-day adjudication deadline. Where CMS has entered into the case
as a party, it may not seek escalation.
Because the statute allows escalation for a MAC review
``notwithstanding any requirements for a hearing,'' the MAC is not
required to hold a hearing if the case is escalated to its level. The
statute does not describe the type of review that the MAC will conduct
when an appeal is escalated before an ALJ action is issued, or what
actions the MAC may take upon its review in such circumstances. Because
it is possible that the MAC will receive cases escalated both before
and after an ALJ hearing has been scheduled or conducted, we believe
that the MAC will need the same options for disposing of a case that it
would have if in reviewing an ALJ's decision or dismissal order.
Therefore, we are proposing that when the MAC reviews a case that is
escalated from the ALJ level it may issue a decision, dismiss either
the request for hearing or request for review on procedural grounds,
or, if the administrative record is insufficient to take any of the
above actions, remand the case to the ALJ for specific development and
a decision. (We will also continue to allow the MAC to hold a hearing,
if warranted.)
4. Own Motion Provisions (Sec. 405.1110)
Under the current regulations, neither CMS nor its contractors are
parties to appeals brought under 42 CFR 405, Subparts G and H. However,
the regulations provide that in addition to deciding a case appealed by
a beneficiary or other party, the MAC may decide on its own motion to
review an ALJ's decision or dismissal anytime within 60 days after the
date of the action (20 CFR 404.969). We refer to this as the MAC's own
motion authority. The cases that the MAC reviews on its own motion are
generally referred to it by CMS and its contractors.
We believe that the MAC's own motion authority should be revised to
better accommodate the other changes to the appeals process required by
BIPA. Moreover, as discussed above, CMS and its contractors, including
the QICs, will now have an opportunity to participate in the hearings
and appeals process either as parties or not as parties. In keeping
with our proposed policy, that when CMS acts as a party it has the same
rights as any other party, CMS would have the right to MAC review,
using the same procedures that any other party would use. However, we
recognize that the statute's adjudication deadlines could impose
significant challenges to the MAC to complete all of the cases appealed
to them by beneficiaries, providers, suppliers, and other affected
third parties in a timely manner. Therefore, we are proposing that when
CMS is not acting as a party to the case, the MAC's own motion
authority would be limited as follows.
CMS and its contractors (hereafter: CMS) may refer ALJ decisions
and dismissals to the MAC for own motion review when they participated
(but did not act as a party) in the ALJ proceedings. When a case is
referred in this circumstance, the MAC will accept the case for review
if there is an error of law, an abuse of discretion, the decision is
not consistent with the preponderance of the evidence or record, or
there is a broad policy or procedural issue that may affect the general
public interest. In deciding whether to accept review, the MAC will
limit its consideration of the ALJ's action to those exceptions raised
by CMS.
CMS may also refer ALJ decisions and dismissals to the MAC for own
motion review when it did not participate and did not act as a party in
the proceedings below. When a case is referred in this circumstance,
the MAC will accept the case for review if the decision or dismissal
contains a clear error of law or presents a broad policy or procedural
issue that may affect the general public interest. In deciding whether
to accept review, the MAC will limit its consideration of the ALJ's
action to those exceptions raised by CMS.
Cases reviewed under the own motion authority would also be subject
to the 90-day adjudication deadline. The deadline will begin when the
MAC receives the referral from CMS or its contractors, unless the party
who requested the ALJ hearing or another party to the hearing asks for
an extension of time to respond to CMS's referral. The regulations will
require that CMS send a copy of its own motion referral to all parties
to the ALJ's action, as well as the ALJ.
5. New Requirement for Review Requests (Sec. 405.1112)
The current regulations do not require appellants to include in
their requests for review the specific reasons that they disagree with
an ALJ's decision or dismissal. As a result, many of the requests for
review state only general reasons for appealing, such as ``I disagree
with the ALJ's decision'' or ``The decision is not supported by the
evidence and is inconsistent with the law.'' Because these appeals do
not identify any specific flaw in the decision, the MAC's consideration
of the case is very time and labor intensive, including examination of
aspects of the decision with which the party may not actually disagree.
For example, if an ALJ's decision rules unfavorably on five claims, the
party may only believe that the decision is wrong with respect to one
claim rather than all five. However, because the current regulations do
not require the party to state the reasons for appealing all claims
that it believes were incorrectly decided, the MAC is obligated to
consider whether all five claims were property decided.
We believe that the MAC will not be able to conduct a de novo
review of an ALJ's action within 90 days of the date the request for
review is received unless parties requesting review provide more
specific reasons for their disagreement with the ALJ's action. Because
many beneficiaries have limited experience with the rules governing
Medicare
[[Page 69336]]
coverage and payment policies, we do not propose requiring them to file
specific exceptions with their requests for review unless they are
represented by an attorney or other legal professional. Providers,
suppliers, and CMS (when it has entered the case as a party) however,
must not only be aware of Medicare coverage and payment policies in
order to support their claims, but, by regulation, are presumed to have
constructive notice of CMS notices, including manual issuances,
bulletins, or other written guides and directives from Medicare
contractors, as well as Federal Register publications containing notice
of NCDs. See 42 CFR 411.406(e)(1) and (2). Therefore, we believe it is
reasonable to require providers, suppliers, and CMS, as well as third-
party appellants such as Medicaid State agencies, to include in their
request for review the specific reasons they disagree with an ALJ's
action. In addition, we believe it is appropriate to extend this
requirement to requests for review filed by attorneys or other legal
professionals on behalf of a beneficiary or when a provider, supplier
or third party files a request for review as the beneficiary's
representative.
In proposing this requirement, we wish to reassure parties that the
purpose of requiring the exceptions is to enable the MAC to provide an
efficient and focused review of those aspects of an ALJ's action with
which the party disagrees. Because the MAC is concerned with the
content rather than the form of the appeal, we would not require
parties to file formal briefs or other pleadings. However, given the
statutory limits, we believe that it is reasonable to require parties
to state the basis for their disagreement with an ALJ's action and for
the MAC to review de novo only those aspects of an ALJ's action with
which the party disagrees. If a party other than an unrepresented
beneficiary does not file any exceptions, the MAC will adopt the ALJ's
action without comment, unless the ALJ's decision or dismissal contains
on its face a clear error of law.
6. Discontinuation of Notice to Parties (Sec. 405.1128)
The current regulations at 20 CFR 404.973 require that when the MAC
decides to review a case, it sends a notice to all parties stating the
reasons for review and the issues to be considered. In the context of
Social Security appeals this regulation has been interpreted as
requiring SSA's Appeals Council to give appellants advance notice and
opportunity to comment on any proposed action that is not fully
favorable to all appellants. The MAC presently follows this regulation
as well.
We do not believe, however, that it is possible or necessary to
continue this practice under BIPA. When a party requests the MAC to
review a case under BIPA, it is requesting the MAC to review the ALJ's
action de novo; therefore, parties are on notice that the MAC's action,
whether favorable or unfavorable, may differ considerably from the
action being appealed. Since this regulation will also require CMS and
its contractors to send a copy of own motion referrals to all parties,
the parties to an own motion review will also be on notice that the MAC
will be reviewing de novo those aspects of the case challenged by CMS,
where CMS in not acting as a party, as applicable and will have the
opportunity to file a reply with the MAC. We believe these procedures
will satisfy due process while maintaining the MAC's ability to
adjudicate appeals within 90 days. Therefore, the proposed regulations
allow the MAC to adopt, modify, or reverse an ALJ's action without
first providing notice and opportunity to comment on its proposed
action (see Sec. 405.1128).
7. Judicial Review (Sec. Sec. 405.1136-405.1140)
These actions of the proposed rule consolidate and generally mirror
the existing regulations with respect to judicial review, now found in
42 CFR 405.857, 20 CFR 404.983-404.984, and 20 CFR 422.210. The only
substantive change is to provide that an appellant may request
escalation to Federal district court if the MAC does not complete its
review of an ALJ decision within the 90-day adjudication period,
consistent with section 1869(d)(3)(B) of the Act.
J. Expedited Proceedings (Sec. Sec. 405.1200-405.1206)
1. Overview of the Statute
Section 1869(b)(1)(F) provides for an expedited appeals process
when a beneficiary receives notice from a provider of services that
such provider plans to: (1) Terminate services provided to an
individual and a physician certifies that failure to continue services
is likely to place the beneficiary's health at risk; or (2) plans to
discharge the individual from the provider of services. The statute
mandates that the beneficiary who receives such notice may request an
expedited determination. If he or she is dissatisfied with that
determination, that beneficiary may request an expedited
reconsideration determination by a QIC. Pursuant to sections
1869(c)(3)(C)(iii) and 1869(c)(3)(C)(iv), the QIC must render a
decision within 72 hours unless a beneficiary requests an extension.
Section 1869(c)(3)(C)(iii)(III) also mandates that a reconsideration of
a discharge from a hospital be conducted in accordance with section
1154(e)(2)-(4).
Historically, Medicare beneficiaries have had a right to an
expedited review by a Quality Improvement Organization (QIO, formerly a
Peer Review Organization) in situations where they disagreed with a
hospital's decision to discharge them. However, in the other provider
settings, in order for a beneficiary to access the Medicare appeals
process, the individual must: (1) Continue to receive the services up
to the date in which he or she believed his or her services should be
covered; (2) request the provider of such disputed services to file the
claim for payment; and (3) have that claim adjudicated by the Medicare
contractor, that is, have the Medicare contractor issue its initial
determination. Upon receipt, a beneficiary who was dissatisfied with
the contractor's determination then could access the appeals process by
requesting a ``Reconsideration'' within 60 days.
Thus, the new BIPA provisions represent a significant change in the
existing procedures available to beneficiaries to contest provider
decisions to terminate care. Our proposals for implementing these
changes are discussed below.
2. Expedited QIO Reviews (Sec. Sec. 405.1200(a)-(g))
In Sec. 405.1200(a)(1), consistent with the traditional definition
of provider at section 1861 of the Act, we propose that the term
``providers'' used in Sec. Sec. 405.1200 and 405.1202 applies to the
following: hospitals, critical access hospitals, home health agencies
(HHAs), skilled nursing facilities (SNFs), and comprehensive outpatient
rehabilitation facilities (CORFs). In proposed Sec. 405.1200(a)(2), we
would establish that the scope of these provisions includes
terminations of services furnished by a non-residential provider and
the discharge of a beneficiary from a residential provider of services.
This definition would not include reductions in an ongoing course of
services.
Consistent with the statute, proposed Sec. 405.1200(b) stipulates
that in order for a beneficiary to request an expedited review: the
beneficiary must have received notice that a provider intends to
terminate services and a physician
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must certify that termination of services is likely to place the
beneficiary's health at significant risk; or the provider intends to
discharge the beneficiary from a provider setting.
We reviewed current notices provided to beneficiaries upon
termination of services to determine if existing notices would serve
the purposes of this section. We determined that the Advance
Beneficiary Notice (ABNs) would meet this need. Before a provider may
charge a beneficiary for services that could be covered under Medicare
but are not covered in the beneficiary's instant case, CMS regulations
implementing section 1879 of the Act require that a provider issue an
advance written notice to the beneficiary that the provider does not
expect Medicare to pay for those services (see Sec. 411.406). Such an
advanced written notice explains that the provider does not expect that
Medicare will pay and the provider's reason for that expectation. To
comply with this existing section 1879 requirement, HHAs are issuing
the HHABN (Home Health Advance Beneficiary Notice, form CMS-R-296);
CORFs and hospices are issuing the ABN (Advance Beneficiary Notice,
form CMS-R-131); and SNFs are using the SNF NONC (Skilled Nursing
Facility Notice Of Non-Coverage). There is a similar notice requirement
for inpatient hospitals.
We believe that these existing ABNs are the appropriate vehicles to
trigger expedited determination under section 1869 of the Act, because
the provider may not charge the beneficiary for services for which
Medicare does not pay unless an ABN was provided in advance of
furnishing those services, and because an ABN, in the case of an
impending termination of provider services, must include a termination
date. We will revisit the content of these existing notices to conform
with the requirements of this proposed rule and submit such notices for
clearance to the Office of Management and Budget through the Paperwork
Reduction Act process.
We are not proposing any change in the timing of delivery of these
existing notices. Although the inpatient hospital notice of noncoverage
is already provided in a way that supports the unique beneficiary
liability protections included in the current QIO process, the statute
provides no parallel liability protections in the other provider
settings. Therefore, we believe that the provision of the current
advance beneficiary notices prior to termination will fulfill the
intent of the statute. Note, however, that a provider's failure to
issue an ABN does not eliminate a beneficiary's right to access the
expedited appeals process. If, for example, a beneficiary files a
request for an expedited determination following a verbal notification
from a provider, the QIO must conduct its review as if a written notice
had been given. In such a case, the beneficiary would not be
responsible for the cost of care provided prior to the delivery of a
valid advance beneficiary notice.
Section 405.1200(b)(2) provides that if a beneficiary does not file
a timely request for an expedited determination, the beneficiary may
not later access this expedited review process. (Note that the
regulations assume that QIOs would likely conduct these determinations.
We believe QIOs are the appropriate entity to conduct these expedited
reviews of provider terminations, given that they already have the
professional medical capabilities to review such medical necessity
cases and they are located in every State.) Proposed Sec. 405.1200(c)
then establishes the procedures a beneficiary must follow in order to
make a valid request for an expedited determination. In this section we
give beneficiaries the option of making their request either in writing
or by telephone no later than noon of the next day after receipt of the
provider's notice. To be consistent with the deadline that QIOs are
already familiar with, in regards to the current QIO review of
inpatient hospital determinations (beneficiaries must request review of
the hospital's decision no later than noon of the next working day), we
have established that beneficiaries in these provider settings must
request a review by noon. In order to facilitate a quick, accurate
determination, we propose under Sec. 405.1200(c) that the requesting
beneficiary or representative must be available to answer questions by
the QIO, upon request.
Section 405.1200(d) sets forth the procedures that the QIO must
follow when it receives a beneficiary's request for an expedited
review. Under this section, the QIOs must: notify the provider of the
disputed services that a expedited review request has been made;
request information such as medical records from the provider; examine
the requested necessary medical information; solicit the views of the
provider and the beneficiary; and make a decision within 72 hours after
receipt of the request for the QIO expedited review and of the
information requested from the provider. We would require that the
provider submit the information requested by the QIO, no later than
close of business on the day after the beneficiary request an expedited
determination. Proposed Sec. 405.1200(e) then sets forth the
notification requirements when a QIO has made its expedited
determination. We are proposing that the QIO immediately notify the
beneficiary, physician and provider of its expedited determination,
first by telephone and then following up with a written notice that
would explain the decision and inform the beneficiary of his or her
appeal rights.
Proposed Sec. 405.1200(f) provides that the QIO's expedited
determination is binding upon the beneficiary and the provider of the
disputed services or stay, absent a beneficiary's request for a QIC
reconsideration. If a beneficiary misses the deadline for filing a
request for an expedited QIC reconsideration, the beneficiary may
request a QIC reconsideration under the general QIC Reconsideration
process at Sec. 405.960 et. seq.
Section 405.1200(g) discusses the financial liability aspects of
the QIO expedited review process. In the inpatient hospital setting,
when a beneficiary files for an immediate QIO review by noon of the
next working day following receipt of the notice of termination, that
beneficiary is not responsible for the additional costs of his or her
stay while the review takes place. (See section 1154(e) of the Act.)
This financial protection does not exist under the expedited review
process for other providers. However, proposed Sec. 405.1200(g)
provides that a provider cannot bill a beneficiary for the disputed
stay or services until the beneficiary has received an expedited QIO
determination; or if an expedited QIC reconsideration determination, if
requested. In such situation, if the QIO determines that the services
or stay in dispute were medically necessary, the beneficiary is not
responsible for the services or stay, as stipulated by the QIO.
However, if the QIO determines that the services or stay in dispute
were not medically necessary, the beneficiary is responsible for
services that extend beyond the appropriate covered services or stay,
or as otherwise stated by the QIO.
3. Expedited QIC Reconsiderations (Sec. 405.1202)
Proposed Sec. 405.1202(a) describes the appeals process for an
expedited determination--the expedited QIC reconsideration. Under this
section, we propose that, upon receipt of a QIO decision, if the
beneficiary is dissatisfied and wants to appeal and receive a decision
rendered expeditiously, that beneficiary may request an expedited QIC
reconsideration. Section 405.1202(b)
[[Page 69338]]
provides that a beneficiary who desires an expedited QIC
reconsideration must make that request no later than noon of the next
calendar day following receipt of the QIO expedited determination.
Consistent with the statute, this section also provides that a
beneficiary or representative must be available to talk with the QIC
about his or her case when the QIC calls to solicit the beneficiary's
views.
Section 405.1202(c) would set forth the procedures that the QIC
must follow when conducting its expedited reconsideration. The steps
that the QIC must follow are identical to those followed by the QIO
except as noted below. Consistent with section 1869(c)(3)(iii), we have
established that the QIC render a decision within 72 hours from receipt
of the request for an expedited reconsideration and the requested
information. In conjunction with this time frame, we would require that
if a QIC does not render its decision 72 hours from receipt of the
request and information, the QIC must inform the beneficiary of his or
her right to have their case escalated to an ALJ; and we set forth the
procedures that the beneficiary must follow. In such case, the QIC must
immediately notify the provider that such action has been taken. At
this point that provider may bill the beneficiary for the services or
stay in dispute.
Section 405.1202(d) proposes that the QIC issues a notice of its
expedited reconsideration determination after it has notified the
beneficiary, provider, and physician responsible for the beneficiary's
care of its decision via telephone. The telephone notification must be
followed by a written notice that includes the detailed rationale for
the decision, a statement that explains the beneficiary's subsequent
appeal rights (an ALJ Hearing), and the timeframe for filing for the
ALJ hearing request. Section 405.1202(e) would establish that the QIC's
reconsideration determination is binding in the beneficiary, subject to
an ALJ hearing if the beneficiary is dissatisfied with the QIC's
decision. There is no expedited ALJ Hearing. Therefore, such
dissatisfied beneficiary will have to request an appeal in accordance
with the normal ALJ hearing procedures.
Proposed Sec. 405.1202(f) sets forth the coverage rules for
beneficiaries during this review. The beneficiary may not be billed for
the disputed services or stay until that beneficiary receives an
expedited determination by the QIC. However, if the QIC does not render
a decision within 72 hours of receipt of the information and the
request, the provider may bill the beneficiary for the services or stay
in dispute.
4. Special Rules for Inpatient Hospital Discharges (Sec. Sec. 405.1204
and 405.1206)
The proposed regulations for these sections are identical to the
existing inpatient hospital rules for appealing inpatient hospital
determinations with one exception. Upon receipt of a QIO determination,
the next level of the appeals process would now be the expedited QIC
reconsideration, if the beneficiary makes a timely request for
expedited reconsideration and remains in the hospital. If the
beneficiary is no longer an inpatient in the hospital, or fails to make
a timely request for an expedited reconsideration, but is still
dissatisfied with the QIO's determination, he or she retains the right
to subsequently appeal that determination under the general QIC
reconsideration rules.
III. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the major comments in the preamble to that
document.
IV. Information Collection Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 60-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:
[sbull] The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
[sbull] The accuracy of our estimate of the information collection
burden.
[sbull] The quality, utility, and clarity of the information to be
collected.
[sbull] Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
The PRA exempts the majority of the information collection
activities referenced in this proposed rule. In particular, 5 CFR
1320.4 excludes collection activities during the conduct of
administrative actions such as redeterminations, reconsiderations, and/
or appeals. However, the information collection requirement associated
with the initial request to seek a redetermination is subject to the
PRA. Current supporting regulations set forth at Sec. Sec. 405.711 and
405.807 outlining a request for redetermination are currently approved
under the PRA. However, due to the revision/consolidation of the
current redetermination regulations, we are requesting comment on the
proposed requirement referenced below.
Section 405.940 Right to a Redetermination
A person or entity that is a party to an initial determination as
described under Sec. 405.920 et seq. and is dissatisfied with that
determination may request a redetermination in accordance with Sec.
405.942 through Sec. 405.946.
The burden associated with this requirement is the time and effort
necessary to request a redetermination that is in accordance with the
requirements referenced in Sec. 405.942 through Sec. 405.946. Based
upon current data, we estimate that contractors will process 6,800,000
requests for Part B redeterminations and 60,000 for Part A on an annual
basis and that it will require an average of 15 minutes to submit a
request for a total burden of 1,715,000 annual burden hours.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Attn.: John Burke, Attn: CMS-4004-P,
Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Brenda Aguilar, CMS Desk Officer Attn: CMS-4004-P.
V. Regulatory Impact Analysis
A. Introduction
We have examined the impact of this rule under the criteria of
Executive Order 12866 (September 1993, Regulatory Planning and Review),
section 1102(b) of the Social Security Act, the Regulatory Flexibility
Act (RFA), Public Law 96-354, the Unfunded Mandates Reform Act of 1995,
Public Law 104-4, and Executive Order 13132. Executive Order 12866
[[Page 69339]]
directs 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 annually). Because Federal costs to implement this rule
would exceed the $100 million threshold, this is a major rule. In
compliance with Executive Order 12866, we have prepared the RIA below.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
The RFA requires agencies, in issuing certain proposed rules, to
analyze options for regulatory relief of small businesses. For purposes
of the RFA, small entities include small businesses, nonprofit
organizations and government agencies. Most hospitals and most other
providers and suppliers are small entities, either by nonprofit status
or by having revenues of $25 million or less annually. For purposes of
the RFA, all providers and suppliers affected by this regulation are
considered to be small entities. Individuals and States are not
included in the definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis for a proposed rule that may, if adopted,
have a significant impact on the operations of a substantial number of
small rural hospitals. This analysis must conform to the provisions of
section 603 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 and has fewer than 100 beds.
We are not preparing analyses for either the RFA or section 1102(b)
of the Act. We are uncertain how many small entities will be affected
by this rule. The design and purpose of the proposed rule is to improve
the accuracy and efficiency of the claims review and appeals process,
we are confident that it will reduce rather than add burden on small
entities. The impact on small rural hospitals is likely to be
negligible or slightly positive. Therefore, we are certifying that the
proposed rule will not have a significant impact on a substantial
number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any proposed 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 $110
million. This rule would not have such an effect on State, local, or
tribal governments, or on the private sector.
B. Scope of the Proposed Changes
As discussed in detail above in section II of this preamble, this
proposed rule would establish new regulations concerning appeals
procedures for Medicare claims determinations, consistent with section
1869 of the Act as amended by section 521 of BIPA 2000. Among the
significant changes required by the BIPA amendments are:
[sbull] Establishing a uniform process for handling Medicare Part A
and B appeals, including the introduction of a new level of appeal for
Part A claims.
[sbull] Revising the time frames for filing a request for a Part A
and Part B appeal.
[sbull] Imposing a 30-day time frame for redeterminations made by
fiscal intermediaries and carriers.
[sbull] Requiring the establishment of a new appeals entity, the
qualified independent contractor (QIC), to conduct ``reconsiderations''
of contractors' initial determination or redeterminations, and allowing
appellants to escalate the case to an ALJ hearing, if reconsiderations
are not completed within 30 days.
[sbull] Establishing a uniform amount in controversy threshold of
$100 for appeals at the ALJ level.
[sbull] Imposing 90-day time limits for conducting ALJ and DAB
appeals and allowing appellants to escalate a case to the next level of
appeal if ALJs or the MAC do not meet their deadlines.
[sbull] Imposing ``de novo'' review when the MAC reviews an ALJ
decision made after a hearing.
[sbull] Requiring that the Secretary establish a process by which
an individual may obtain an expedited determination if he/she receives
a notice from a provider of services that the provider plans to
terminate services or discharge the individual from the provider.
The proposed rule would not establish new rules, or alter existing
rules, with respect to the substantive standards for determining
whether a Medicare claim is payable. Claims that enter the
administrative appeals process represent an extremely small portion of
the total number of claims that Medicare processes each year. In FY
2001, for example, Medicare contractors processed almost 932 million
claims; of these only about 6 million were appealed. Thus, the number
of Medicare claims that enter the administrative appeals system
represents only about 0.6 percent of the total number of claims filed
with Medicare. Moreover, the 6 million figure represents the total
number of claims appealed, not the number of appellants. From our
experience, the vast majority of appeal requests are filed by a
relatively limited group of appellants. Therefore, the number of
providers, physicians and other suppliers, as well as beneficiaries who
enter the appeals process is far fewer than the 6 million claims that
are appealed. Given the small percentage of claims and appellants
involved in the administrative appeals process, we believe that this
proposed rule would have little or no effect on most Medicare providers
and suppliers. The changes set forth are even less likely to affect
beneficiaries, whose appeals are estimated to constitute no more than 3
to 5 percent of total appeals. As discussed in detail below, however,
for those providers, suppliers, and beneficiaries who do file appeals
of Medicare claim determinations, the effects of this proposed rule
should be overwhelmingly positive.
C. Anticipated Effects on Providers, Physicians and Other Suppliers,
and Beneficiaries
We expect that the changes set forth in this proposed rule would
produce substantial improvements in the accuracy and efficiency of the
claims appeal process. For the most part, the anticipated positive
impact of the proposed rule on providers, physicians and other
suppliers would be similar to the anticipated effects on beneficiary
appellants, although again the impact on the provider and supplier
communities would be more pronounced due to their much greater
likelihood to appeal a claim determination. We include a brief
discussion of the anticipated impact of major changes below.
In general, we do not anticipate that the introduction of these new
appeals procedures would have a substantive impact on the actual
results of claims appeals. That is, there is no reason to believe that
the use of QICs, or other changes required by BIPA, would result in any
change in the proportion of appeals that result in favorable decisions
for providers, suppliers, or beneficiaries. We do believe though that
the implementation of requirements that ensure appellants of both the
fairness of the decision-making process and the accuracy and
consistency of the decisions reached can eventually lead to
[[Page 69340]]
major reductions in the need for the elevation of appeals to the
slower, more costly levels of the appeals system, such as ALJ hearings
and DAB or Federal court review. We welcome comments on all aspects of
this impact analysis.
Most of the major changes set forth in this rule, such as the new
time frames for appeals decisions, are mandated by the statute and thus
not subject to the Secretary's discretion. To the extent that we have
exercised discretion, such as in establishing procedures for conducting
appeals, we have attempted to balance the need for accurate,
expeditious appeals decisions with our responsibilities to implement
these changes in a cost-effective manner.
A discussion of the anticipated impacts of key provisions follows.
1. Decision Making Time Frames and Escalation
Perhaps the most significant change set forth here is the reduction
in mandatory time frames for issuing a decision on appeals at all
levels. In general, this would mean faster receipt of decisions and,
for favorable decisions, faster payment. For example, a provider who
appealed a Part A claim determination in FY 2001 waited an average of
64 days for an intermediary to make a decision on a reconsideration
request, where under the proposed rule a decision on a Part A
redetermination request must be made within 30 days of receipt of the
request. If the decision is favorable (that is, the appeal results in a
reversal of an initial determination that a claim could not be paid),
effectuation of the favorable decision would be initiated as soon as a
decision is reached. Given the reduced decision-making time frames,
payments would be received substantially sooner than under the current
system. Similarly, the time frame for a Part B fair hearing decision
would be reduced from 120 days to 30 days, with concomitant fiscal
advantages to successful appellants. These benefits to appellants would
extend to all levels of the Medicare administrative appeals process.
In addition to the new time frames for making decisions, the
proposed rule would allow appellants the option of escalating an appeal
to an ALJ if the QIC fails to make a decision timely. Escalation also
would be available at the appellants' option from the ALJ level to the
DAB if an ALJ fails to issue a hearing decision on a QIC decision
within 90 days of a request for an appeal of a QIC reconsideration (or
similarly from the DAB to Federal court). Clearly, these options would
be a positive change for appellants, who have greater control of their
appeals and a viable recourse during the appeals process if, during one
stage of the appeals process, their appeal is not decided timely.
2. Review of Claims by a Panel of Health Care Professionals
Another important change included in this proposed rule is the
requirement that a QIC panel of physicians or other qualified health
care professionals conduct reconsiderations when the initial
determination being appealed involved a medical necessity issue. BIPA
mandates that when an initial determination involves a finding on
whether an item or service is reasonable and necessary for the
diagnosis or treatment of an illness or injury, a QIC's reconsideration
must be based on clinical experience and medical, technical, and
scientific evidence to the extent applicable. We believe that this
change would give appellants more confidence that a fair decision has
been reached, potentially reducing their need to pursue subsequent
appeals. We believe the introduction of physicians and other health
care professionals into the appeals process would produce
administrative finality at an earlier level of the process and benefit
both appellants and the Medicare program.
3. Decision Letters and Documentation Requirements
An important discretionary aspect of the proposed rule concerns the
content of the notices sent to parties when a contractor upholds its
initial determination. These requirements include a written summary of
the rationale for the redetermination decision and the identification
of any specific missing documentation that contributed to the decision
to deny the claim in question. (Note that the statute establishes
specific requirements for notices following QIC reconsiderations, but
does not address the content of redetermination notices.) We believe
that the proposed policies for more detailed decision notices would
provide appellants with the information they need to build their case
early in the appeals process. We believe the impact of this requirement
would result in more accurate decisions at the QIC reconsideration
level, based on all the appropriate medical information, rather than
appeals often needing to be raised to an ALJ before needed
documentation is produced. This will give beneficiaries, providers, and
suppliers more detail about why their claim was denied and allow them
to fashion their appeal accordingly.
Since the appellant would be informed about specific documentation
that is necessary to make a decision, the proposed rule also requires
that such identified information be submitted with the next level
appeal request. If the information is not submitted to the QIC, but
instead surfaces later in the appeals process, the appellant would need
to demonstrate good cause why the information was not submitted to the
QIC. We believe the end result of these provisions would be that
appeals are resolved at the earliest possible administrative level,
which is a positive result for all appellants. As discussed in detail
in section II.I.10 of the preamble, ALJs would have the authority to
remand cases to a QIC when available evidence is not submitted timely.
4. Party Status
In the current regulations, providers may appeal only in limited
circumstances. In order to appeal in other circumstances, providers
must act as an appointed representative of a beneficiary.
In the proposed rule, we would permit participating providers to
appeal to the same extent as beneficiaries or suppliers who take
assignment. We believe this change would have several positive impacts
on appellants. For example, it would eliminate any confusion providers
may have in determining whether they have standing to appeal an initial
determination, and it would remove the burden for the provider of
obtaining an appointment of representative from a beneficiary. This
should also eliminate confusion beneficiaries had in the past about why
providers have sought to represent beneficiaries.
D. Effects on the Medicare Program
In the final analysis, the primary financial impact of implementing
these changes falls upon the government agencies responsible for
conducting appeals, that is, CMS, SSA, and DHHS. Deciding appeals
within shorter time frames and establishing new independent review
entities to conduct these appeals entail significant new costs, as does
the development of an appeals-specific data system to track the results
of these appeals. Section 521 of BIPA not only mandated shorter
decision-making time frames and other costly improvements to the
already taxed Medicare appeals system, it also created additional
opportunities and incentives for providers, suppliers, and
beneficiaries to request appeals. Most significantly, the statute no
longer provides for any minimum amount in controversy (AIC) below the
ALJ level, and lowers the AIC from $500 to $100 for appealing a Part B
claim determination to an ALJ. In addition, we
[[Page 69341]]
anticipate that the new decision-making time frames could make the
appeals process more attractive to potential appellants who previously
may have been dissuaded from appealing by the potential delays involved
in obtaining a decision on their appeal. Thus, in order to forestall
large increases in appeals volume at the higher levels of appeal, we
have attempted to craft appeals rules that would ensure not only that
appellants receive consistent and accurate decisions at the lowest
possible appeals level, but also that appellants are made aware of the
reasons for these decisions.
Finally, we note that although the impact of these changes would be
positive for the provider, physician, supplier, and beneficiary
communities, implementing these procedures would generate substantial
costs to the Medicare program. Our most recent estimate is that the
changes required at the contractor and QIC level would cost at least
$100 million, with additional costs to implement the necessary changes
at the ALJ and DAB appeals level.
E. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates 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 rule would not have a substantial effect on State or
local governments.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV, part 405 as
set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
1. The authority citation for part 405 continues to read as
follows:
Authority: Secs. 1102, 1861, 1862(a), 1869, 1871, 1874, 1881,
and 1886(k) of the Social Security Act (42 U.S.C. 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).
2. Add a new subpart I, consisting of Sec. 405.900 through Sec.
405.1206, to part 405 to read as follows:
Subpart I--Determinations, Redeterminations, Reconsiderations, and
Appeals Under Original Medicare (Parts A and B)
Sec.
405.900 Basis and scope.
405.902 Definitions.
405.904 Medicare initial determinations, redeterminations and
appeals: General description.
405.906 Parties to the initial determinations, redeterminations, and
reconsiderations.
405.908 Medicaid State Agencies.
405.910 Appointed representatives.
405.912 Assignment of appeal rights.
Initial Determinations
405.920 Initial determinations and notice of initial determination.
405.922 Time frame for processing initial determinations.
405.924 Actions that are initial determinations.
405.926 Actions that are not initial determinations.
405.928 Effect of the initial determination.
Redeterminations
405.940 Right to a redetermination.
405.942 Time frame for filing a request for a redetermination.
405.944 Place and method of filing a request for a redetermination.
405.946 Evidence to be submitted with the redetermination request.
405.948 Conduct of a redetermination.
405.950 Time frame for making a redetermination decision.
405.952 Withdrawal or dismissal of a request for a redetermination.
405.954 Redetermination decision.
405.956 Notice of a redetermination decision.
405.958 Effect of a redetermination decision.
Reconsiderations
405.960 Right to a reconsideration.
405.962 Time frame for filing a request for a reconsideration.
405.964 Place and method of filing a request for a reconsideration.
405.966 Evidence to be submitted with the reconsideration request.
405.968 Conduct of a reconsideration.
405.970 Time frame for making a reconsideration decision.
405.972 Withdrawal or dismissal of a request for a reconsideration.
405.974 Reconsideration decision.
405.976 Notice of a reconsideration decision.
405.978 Effect of a reconsideration decision.
Reopenings
405.980 Reopenings of initial determinations, redeterminations, and
reconsiderations, hearings and reviews.
405.982 Notice of a revised determination or decision.
405.984 Effect of a revised determination or decision.
405.986 Good cause for reopening.
Expedited Appeals Process
405.990 Expedited appeals process.
405.992 ALJ and MAC deference to policies not subject to the
expedited appeals process.
ALJ Hearings
405.1000 Hearing before an ALJ: General rule.
405.1002 Right to ALJ hearing.
405.1004 Right to ALJ review of QIC dismissal.
405.1006 Amount in controversy required to request an ALJ hearing
and judicial review.
405.1008 Parties to an ALJ hearing.
405.1010 When CMS or its contractors may participate in an ALJ
hearing.
405.1012 When CMS or its contractors may be a party to a hearing.
405.1014 Request for an ALJ hearing.
405.1016 Requirement to decide appeal in 90 days.
405.1018 Submitting evidence before the ALJ hearing.
405.1020 Time and place for a hearing before an ALJ.
405.1022 Notice of a hearing before an ALJ.
405.1024 Objections to the issues.
405.1026 Disqualification of the ALJ.
405.1028 Prehearing case review of evidence submitted to the ALJ by
the appellant.
405.1030 ALJ hearing procedures--General.
405.1032 Issues before an ALJ.
405.1034 When ALJ will remand to the QIC.
405.1036 Description of ALJ hearing process.
405.1038 Deciding a case without an oral hearing before an ALJ.
405.1040 Prehearing and posthearing conferences.
405.1042 When a record of a hearing before an ALJ is made.
405.1044 Consolidated hearing before an ALJ.
405.1046 The decision of an ALJ.
405.1048 The effect of an ALJ's decision.
405.1050 Removal of a hearing request from an ALJ to the MAC.
405.1052 Dismissal of a request for a hearing before an ALJ.
405.1054 Effect of dismissal of a request for a hearing before an
ALJ.
Medicare Appeals Council Review
405.1100 Medicare Appeals Council review: General rule.
405.1102 Right to MAC review when ALJ issues decision.
405.1104 Right to MAC review when an ALJ does not issue a decision
timely.
405.1106 Where a request for review or escalation may be filed.
405.1108 MAC actions when request for review or escalation is filed.
405.1110 MAC reviews on its own motion.
405.1112 Content of request for review.
405.1114 Dismissal of request for review.
405.1116 Effect of dismissal of request for MAC review or request
for hearing.
405.1118 Obtaining evidence from MAC.
405.1120 Filing briefs with the MAC.
405.1122 What evidence may be submitted to the MAC.
405.1124 Oral argument.
405.1126 Case remanded by the MAC.
405.1128 Decision of the MAC.
405.1130 Effect of the MAC's decision.
405.1132 Request for escalation to Federal court.
405.1134 Extension of time to file action in Federal district court.
405.1136 Judicial review.
405.1138 Case remanded by a Federal court.
[[Page 69342]]
405.1140 MAC review of ALJ decision in a case remanded by a Federal
court.
Expedited Determinations and Reconsiderations
405.1200 A beneficiary's right to an expedited determination.
405.1202 Right to an expedited reconsideration by a QIC.
405.1204 Expedited appeals of inpatient hospital discharges.
405.1206 Hospital requests expedited QIO review.
Subpart I--Determinations, Redeterminations, Reconsiderations, and
Appeals Under Original Medicare (Parts A and B)
Sec. 405.900 Basis and scope.
(a) Statutory basis. This subpart is based on the provisions of
sections 1869(a) through (e) of the Act.
(b) Scope. This subpart establishes the requirements for appeals of
initial determinations with respect to benefits under Part A or Part B
of Medicare, including the following:
(1) The initial determination of whether an individual is entitled
to benefits under Part A or Part B. (Regulations governing appeals of
these initial determinations are found at 20 CFR part 404, subparts J
and R).
(2) The initial determination of the amount of benefits available
to an individual under Part A or Part B.
(3) Any other initial determination with respect to a claim for
benefits under Part A or Part B, including an initial determination
made by a qualified improvement organization under section 1154(a)(2)
of the Act or by an entity under contract with the Secretary (other
than a contract under section 1852 of the Act) to administer provisions
of titles XVIII or XI.
Sec. 405.902 Definitions.
For the purposes of this subpart, the term--
ALJ stands for an Administrative Law Judge.
Appellant means the beneficiary, assignee or other person or entity
that has filed an appeal concerning a particular initial determination.
Designation as an appellant does not in itself convey standing to
appeal the determination in question.
Assignee means a provider, physician, or other supplier who
furnishes items or services to a beneficiary and who has accepted a
valid assignment of appeal rights executed by the beneficiary.
Assignment of appeal rights means the transfer by the assignor of
his or her right to appeal an initial determination to the assignee.
Assignor means a beneficiary whose provider of services, physician,
or supplier has taken assignment of the right to appeal a claim.
Clean claim means a claim that has no defect or impropriety
(including any lack of required substantiating documentation) or
particular circumstance requiring special treatment that prevents
payment from being made on the claim under title XVIII of the Act.
MAC stands for the Medicare Appeals Council within the Departmental
Appeals Board of the Department of Health and Human Services.
Party means an individual or entity listed in Sec. 405.906 that
has standing to appeal an initial determination and/or a subsequent
administrative appeal determination.
Qualified Improvement Organization (QIO) means an entity that
contracts with the Secretary in accordance with sections 1152 and 1153
of the Act and 42 CFR chapter IV, subchapter F, to perform the
functions described in section 1154 of the Act and 42 CFR chapter IV,
subchapter F, including expedited determinations as described in Sec.
405.1200 through Sec. 405.1206.
Qualified Independent Contractor (QIC) means an entity that
contracts with the Secretary in accordance with section 1869 of the Act
to perform reconsiderations under Sec. 405.960 through Sec. 405.978.
Remand means to vacate a lower level appeal decision and return the
case to that level for a new decision.
Vacate means to set aside a previous action.
Sec. 405.904 Medicare initial determinations, redeterminations and
appeals: General description.
(a) General overview. 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, and the contractor will perform, a
redetermination of the claim. Following the contractor's
redetermination, the beneficiary may obtain a reconsideration from the
Qualified Independent Contractor (QIC). Following the reconsideration,
the beneficiary may obtain a hearing before an Administrative Law Judge
(ALJ) if the amount remaining in controversy is at least $100. If the
beneficiary is dissatisfied with the decision of the ALJ, he or she may
request the Medicare Appeals Council (MAC) to review the case.
Following the action of the MAC, the beneficiary may file suit in
Federal district court if the amount remaining in controversy is at
least $1,000.
(b) Non-beneficiary appellants. In general, the procedures
described in paragraph (a) of this section are also available to an
individual representing beneficiaries and to parties other than
beneficiaries or their representatives, consistent with the
requirements of this subpart I. However, a provider generally has the
right to judicial review only as provided under section 1879(d) of the
Act, that is, when a determination involves a finding that services are
not covered because--
(1) They were custodial care (Sec. 411.15(g) of this chapter);
they were not reasonable and necessary (Sec. 411.14(k) of this
chapter); they did not qualify as covered home health services because
the beneficiary was not confined to the home or did not need skilled
nursing care on an intermittent basis (Sec. 409.42(a) and (c)(1) of
this chapter); or they were hospice services provided to a non-
terminally ill individual (Sec. 418.22 of this chapter); and
(2) Either the provider or the beneficiary, or both, knew or could
reasonably have been expected to know that those services were not
covered under Medicare.
Sec. 405.906 Parties to the initial determinations, redeterminations,
and reconsiderations.
(a) The parties to the initial determination are the following
individuals and entities:
(1) A beneficiary who has filed a claim for payment or has had a
claim for payment filed on his or her behalf, or in the case of a
deceased beneficiary, or when there is no estate, any person obligated
to make or entitled to receive payment in accordance with part 424,
subpart E of this chapter. However, payment by a third party payer does
not entitle that entity to party status.
(2) A participating physician or other supplier who has filed a
claim for items or services furnished to a beneficiary.
(3) A provider of services who has filed a claim for items or
services furnished to a beneficiary.
(b) The parties to the redetermination, reconsideration, hearing,
and MAC review are'
(1) The parties to the initial determination in accordance with
paragraph (a) of this section;
(2) A Medicaid State Agency in accordance with Sec. 405.908; and
(3) An assignee who has accepted an assignment of appeal rights
from the beneficiary according to Sec. 405.912.
(4) A non-participating physician or other supplier who has
accepted assignment in accordance with Sec. 424.55 of this chapter.
[[Page 69343]]
(5) A non-participating physician not billing on an assigned basis
who, in accordance with section 1842(l) of the Act, is liable to refund
monies collected for services furnished to the beneficiary because
those services were denied on the basis of section 1862(a)(1) of the
Act; and
(6) A non-participating supplier not billing on an assigned basis
who, in accordance with sections 1834(a)(18) and 1834(j)(4) of the Act,
is liable to refund monies collected for items furnished to the
beneficiary.
Sec. 405.908 Medicaid State Agencies.
When a beneficiary is dually eligible for Medicare and Medicaid,
the Medicaid State Agency may file a request for an appeal on behalf of
the beneficiary. A Medicaid State Agency will only be considered a
party when it files a timely redetermination request on behalf of a
beneficiary in accordance with 42 CFR parts 940 through 958. If a
Medicaid State Agency files a redetermination, it retains party status
at the QIC, ALJ, MAC, and judicial review levels.
Sec. 405.910 Appointed representatives.
The requirements of this section apply for purposes of all
administrative actions described in this subpart, subsequent to an
initial determination.
(a) Representative defined. A representative means an individual
authorized by a party, or under State law, to act on the party's behalf
in dealing with any of the levels of the appeals process under this
subpart. Representatives do not have party status and may only take
action on behalf of the individual or entity they represent.
(b) Persons authorized by a party. A party to an initial
determination, redetermination, reconsideration, or hearing may appoint
another individual to act on the party's behalf in exercising the right
to appeal. A representative may be any individual, or individual
associated with an entity, that is competent to act on behalf of the
party.
(c) Persons unauthorized. A party may not name as a representative
an individual or entity that has been disqualified, suspended, or
otherwise prohibited by law, from participating in the Medicare
program.
(d) Making out a valid appointment. For purposes of this subpart,
an appointment of representation must--
(1) Be in writing and signed by both the party and individual
agreeing to the representation.
(2) Provide a statement authorizing the representative to act on
behalf of the party;
(3) Include a written explanation of the purpose and scope of the
representation;
(4) Contain both the party's and representative's name, phone
number, and address;
(5) Identify the beneficiary's health insurance claim number;
(6) Include the representative's professional status or
relationship to the party; and
(7) Be filed with the entity processing the party's appeal.
(e) Duration of appointment. (1) Unless revoked, an appointment is
valid for the life of an individual's appeal of an initial
determination.
(2) For purposes of initiation of appeals of other initial
determinations, the authorization will be considered valid for 1 year
from its original effectuation.
(f) Representative fees.
(1) Attorneys. No award of attorney fees may be made against the
Medicare trust fund.
(2) Providers and suppliers. A provider or supplier that furnished
items or services to a beneficiary may represent that beneficiary in an
appeal under this subpart. That provider or supplier may not charge the
beneficiary any fee associated with the representation. In addition,
where a provider or supplier furnishes services or items to a
beneficiary, the provider or supplier may not represent the beneficiary
with respect to the issue described in section 1879(a)(2) of the Act
(that is, whether the beneficiary or the provider or supplier, or both,
knew or could reasonably have been expected to know that payment would
not be made for the items or services), unless the provider or supplier
waives the right to payment from the beneficiary with respect to` the
services or items involved in the appeal.
(g) Responsibilities of a representative. (1) A representative has
an affirmative duty to--
(i) Inform the party of how the duty is served;
(ii) Inform the party of the status of the appeal and the results
of actions taken on behalf of the party, including, but not limited to,
notification of appeal determinations, decisions, and further appeal
rights;
(iii) Disclose any beneficiary financial risk and liability of a
non-assigned claim;
(iv) Not act contrary to the interest of the party; and
(v) Comply with all CMS regulations, rules, and instructions.
(2) An appeal request filed by a provider or supplier acting as a
representative of a beneficiary will also include a statement signed by
the provider or supplier stating that no financial liability will be
imposed on the beneficiary in connection with that representation.
(h) Authority of a representative. A representative may, on behalf
of the party--
(1) Obtain information about the claim to the same extent as the
party;
(2) Submit evidence;
(3) Make statements about facts and law; and
(4) Make any request, or give, or receive, any notice about the
appeal proceedings.
(i) Notice or request to a representative. A contractor, QIC, ALJ,
or the MAC will send the representative--
(i) Notice and a copy of any administrative action, determination,
or decision; and
(ii) Requests for information or evidence.
(j) Effect of notice or request to a representative. A notice or
request sent to the representative will have the same force and effect
as if it had been sent to the party.
(k) Representative payee. An appointed representative may not serve
as a representative payee unless the appointed representative has
satisfied the requirements under title II of the Act.
(l) Information available to the representative. The appointed
representative may obtain any and all information that is available to
the party, applicable to the claim at issue. The representative may not
disclose to any one unaffiliated with the appeals process any
information about a claim without the party's written consent, except
as may be required by law, ordered by a court, or other such authority.
(m) Delegation of appointment by representative. An appointed
representative may not designate another individual to act as the
representative of the party unless--
(1) The representative provides written notice to the party of the
representative's intent to delegate to another individual. The notice
must include--
(i) The name of the designee; and
(ii) The designee's acceptance to be obligated and comply with the
requirements of authorized representation.
(2) The beneficiary accepts the designation as evidenced by a
signed, written statement.
(n) Revoking the appointment of representative. (1) A party may
revoke an appointment of representative without cause at any time.
[[Page 69344]]
(2) Revocation is not effective until the entity processing the
appeal receives a signed, written statement from the party.
(3) The death of the party will terminate the authority of the
representative. A party's death does not terminate an appeal that is in
progress where another individual or entity may be entitled to receive
or obligated to make payment for Medicare claims.
Sec. 405.912 Assignment of appeal rights.
(a) Assignment of appeal rights defined. Assignment of appeal
rights means the transfer by a beneficiary of his or her right to
appeal an initial determination to a provider or supplier.
(b) Who may be an assignee. A provider of service, physician, or
other supplier who is not considered a party to the initial
determination as defined in Sec. 405.906 and who furnished an item or
service to a beneficiary may seek assignment from the beneficiary for
that item or service.
(c) Who may not be an assignee. An individual or entity who is not
a provider of service, physician, or other supplier may not be an
assignee. A provider of service, physician, or other supplier who
furnishes an item or service to a beneficiary may not seek assignment
for that item or service when considered a party to the initial
determination as defined in Sec. 405.906.
(d) Requirements for a valid assignment of appeal right. The
assignment of appeal rights must--
(1) Be executed using a CMS standard form;
(2) Be in writing and signed by both the beneficiary assigning his
or her appeal rights and by the assignee;
(3) Indicate the item or service for which the assignment of appeal
rights is authorized;
(4) Contain a waiver of the assignee's right to collect payment
from the assignor; and
(5) Be submitted at the same time the request for redetermination
or appeal is filed.
(e) Waiver of right to collect payment. (1) The assignee must waive
the right to collect payment for the item or service for which the
assignment is made. If the assignment is revoked under paragraph (h)(2)
of this section, then the waiver of the right to collect payment
remains valid.
(2) The assignee is not prohibited from recovering payment
associated with coinsurance or deductibles or when an advance
beneficiary notice has been properly executed.
(f) Duration of a valid assignment of appeal rights. The assignment
of appeal rights is valid for all administrative and judicial review
associated with the item or service as indicated on the standard CMS
form, unless the assignment is revoked.
(g) Rights of the assignee. When a valid assignment of appeal
rights is executed, the assignor transfers all appeal rights to the
assignee. These include, but are not limited to--
(1) Obtaining information about the claim to the same extent as the
assignor;
(2) Submitting evidence;
(3) Making statements about facts or law; and
(4) Making any request, or giving, or receiving any notice about
appeal proceedings.
(h) Revocation of assignment. When an assignment of appeal rights
is revoked, the rights to appeal revert to the beneficiary. An
assignment of appeal rights may be revoked in any of the following
ways:
(1) In writing by the assignor.
(2) By abandonment if the assignee does not file an appeal of an
unfavorable decision.
(3) By act or omission that is determined by an adjudicator to be
contrary to the financial interests of the beneficiary.
Initial Determinations
Sec. 405.920 Initial determinations and notice of initial
determination.
After a claim is filed with the appropriate contractor in the
manner and form described in part 424, subpart C of this chapter, the
contractor--
(a) Determines whether the items and services furnished are covered
under title XVIII of the Act;
(b) Determines any amounts payable and makes payment accordingly;
and
(c) Notifies the parties to the initial determination of the
determination.
(1) The notice must be in writing and sent to the last known
address of all parties.
(2) The notice will state the basis for the determination and
inform the parties of their right to a redetermination if they are
dissatisfied with the outcome of the initial determination.
Sec. 405.922 Time frame for processing initial determinations.
The contractor will issue initial determinations on clean claims
within 30 days of receipt if they are submitted by or on behalf of the
individual who received the items and/or services; otherwise, interest
must be paid at the rate used for purposes of 31 U.S.C. 3902(a)
(relating to interest penalties for failure to make prompt payments)
for the period beginning on the day after the required payment date and
ending on the date payment is made. The contractor will issue initial
determinations on all other claims within 45 days of receipt.
Sec. 405.924 Actions that are initial determinations.
(a) Applications and entitlement of individuals. The SSA makes an
initial determination with respect to an individual on the following:
(1) A determination with respect to entitlement to hospital
insurance or supplementary medical insurance under Medicare.
(2) A disallowance of an individual's application for entitlement
to hospital or supplementary medical insurance, if the individual fails
to submit evidence requested by SSA to support the application. (SSA
will specify in the initial determination the conditions of entitlement
that the applicant failed to establish by not submitting the requested
evidence).
(3) A denial of a request for withdrawal of an application for
hospital or supplementary medical insurance.
(4) A denial of a request for cancellation of a ``request for
withdrawal.''
(5) A determination as to whether an individual, previously
determined to be entitled to hospital or supplementary medical
insurance, is no longer entitled to those benefits, including a
determination based on nonpayment of premiums.
(b) Claims made by beneficiaries by or on behalf of beneficiaries.
The contractor makes an initial determination regarding claims for
benefits under Medicare Part A and Part B. The contractor does not make
an initial determination on requests for payment that do not meet the
requirements of a claim. An initial determination for purposes of this
subpart includes, but is not limited to, determinations with respect
to--
(1) Whether the items and/or services furnished are covered under
title XVIII of the Act;
(2) In the case of determinations on the basis of section 1879(b)
or (c) of the Act, whether the beneficiary, provider, physician, or
supplier who accepts assignment under Sec. 424.55 of this chapter
knew, or could reasonably have been expected to know at the time the
services were furnished, that the services were not covered;
(3) In the case of determinations on the basis of section
1842(l)(1) of the Act, whether the beneficiary or physician knew, or
could reasonably have been expected to know at the time the
[[Page 69345]]
services were furnished, that the services were not covered;
(4) Whether the deductible has been met;
(5) The computation of the coinsurance amount;
(6) The number of days used for inpatient hospital, psychiatric
hospital, or post-hospital extended care;
(7) The number of home health visits used;
(8) Periods of hospice care used;
(9) Requirements for certification and plan of treatment for
physician services, durable medical equipment, therapies, inpatient
hospitalization, skilled nursing care, home health, hospice, and
partial hospitalization services;
(10) The beginning and ending of a spell of illness, including a
determination made under the presumptions established under Sec.
409.60(c)(2) of this chapter, and as specified in Sec. 409.60(c)(4) of
this chapter;
(11) Determinations regarding the medical necessity of services, or
the reasonableness or appropriateness of placement of an individual at
an acute level of patient care made by the Qualified Improvement
Organization (QIO) on behalf of the contractor in accordance with Sec.
476.86(c)(1) of this chapter;
(12) Determinations regarding whether a claim was timely filed;
(13) Any other issues having a present or potential effect on the
amount of benefits to be paid under Part A or Part B of Medicare,
including a determination as to whether there has been an overpayment
or underpayment of benefits paid under Part A or Part B, and if so, the
amount thereof;
(14) Whether a waiver of adjustment or recovery under sections
1870(b) and (c) of the Act is appropriate when an overpayment of
hospital insurance benefits or supplementary medical insurance benefits
(including a payment under section 1814(e) of the Act) has been made
with respect to an individual.
(15) Determinations that a particular claim is not payable by
Medicare based upon the application of the Medicare Secondary Payer
provisions of section 1862(b) of the Act.
(16) Determinations under the Medicare Secondary Payer provisions
of sections 1862(b) of the Act that Medicare has a recovery claim
against a provider, physician, supplier, or beneficiary with respect to
services or items that have already been paid by the Medicare program
except when the recovery claim against the provider, physician, or
supplier is based upon its failure to file a proper claim as defined in
part 411 of this chapter.
(c) Determinations by QIOs. An initial determination for purposes
of this subpart also includes a determination made by a QIO that:
(1) A provider can terminate services provided to an individual
when a physician certified that failure to continue the provision of
those services is likely to place the individual's health at
significant risk; or
(2) A provider can discharge an individual from the provider of
services.
Sec. 405.926 Actions that are not initial determinations.
Actions that are not initial determinations and are not appealable
under this subpart include, but are not limited to--
(a) Any determination for which CMS has sole responsibility, for
example, whether an entity meets the conditions for participation in
the program, whether an independent laboratory meets the conditions for
coverage of services;
(b) The coinsurance amounts prescribed by regulation for outpatient
services under the prospective payment system;
(c) Any issue regarding amount of program reimbursement or cost
report settlement process under Part A of Medicare;
(d) Whether an individual's appeal meets the qualifications for an
expedited appeal provided in Sec. 405.990;
(e) Any determination regarding whether a Medicare overpayment
claim should be compromised, or collection action terminated or
suspended under the Federal Claims Collection Act of 1966;
(f) Determinations regarding the transfer or discharge of residents
of skilled nursing facilities in accordance with Sec. 483.12 of this
chapter;
(g) Determinations regarding the readmission screening and annual
resident review processes required by part 483, subparts C and E of
this chapter;
(h) Determinations with respect to a waiver of Medicare Secondary
Payer recovery under section 1862(b) of the Act, because that recovery
would defeat the purposes of the Act, or would be against equity and
good conscience under section 1870(c) of the Act.
(i) Determinations with respect to a waiver of interest;
(j) Determinations with respect to a finding regarding Medicare
Secondary Payer applicability other than with respect to a specific
claim when the initial determination on that claim for beneficiary or
Medicare's recovery claim is being appealed;
(k) Determinations under the Medicare Secondary Payer provisions of
section 1862(b) of the Act that Medicare has a recovery claim against a
third party payer with respect to services or items that have already
been paid by the Medicare program; and
(l) A contractor's, QIC's, ALJ's, or MAC's decision not to reopen
an initial determination, redetermination, reconsideration hearing
decision, or review decision.
(m) Determinations that CMS or its contractors may participate in
or act as parties in an ALJ hearing or MAC review.
Sec. 405.928 Effect of the initial determination.
(a) An initial determination under Sec. 405.924(a) involving
applications and entitlement of individuals to supplementary medical
insurance under Part B or hospital insurance under Part A will be
binding upon the individual (or the representative of the estate of a
deceased beneficiary) unless it is revised or reconsidered in
accordance with 20 CFR 404.907.
(b) The initial determination under Sec. 405.924(b) will be
binding upon all parties to the initial determination unless--
(1) A redetermination is completed in accordance with Sec. 405.940
through Sec. 405.958; or
(2) The initial determination is revised as a result of a reopening
in accordance with Sec. 405.980.
Redeterminations
Sec. 405.940 Right to a redetermination.
A person or entity that is a party to an initial determination made
by a contractor as described under Sec. 405.920 through Sec. 405.928
and is dissatisfied with that determination may request a
redetermination by a contractor in accordance with Sec. 405.940
through Sec. 405.958, regardless of the amount in controversy.
Sec. 405.942 Time frame for filing a request for a redetermination.
(a) Time frame for filing a request. Except as provided in
paragraph (b) of this section, a party to an initial determination must
file a request for redetermination that meets the requirements of Sec.
405.944 within 120 calendar days from the date the party receives the
notice of the initial determination.
(1) For the purposes of this section, the date of receipt of the
initial determination will be presumed to be 5 days after the date of
the notice of initial determination, unless there is evidence to the
contrary.
[[Page 69346]]
(2) The request is considered as filed on the date it is received
by the contractor, SSA office, or CMS.
(b) Extending the time frame for filing a request: General rule. If
the 120-day period in which to file a request for a redetermination has
expired and a party shows good cause, the contractor may extend the
time frame for filing a request for redetermination.
(1) How to request an extension. A party to the initial
determination may file a request for an extension of time for filing
the redetermination with the contractor. The request for
redetermination extension must--
(i) Be in writing;
(ii) State why the request for redetermination was not filed within
the required time frame; and
(iii) Meet the requirements of Sec. 405.944.
(2) How the contractor determines whether good cause exists. In
determining whether a party has good cause for missing a deadline to
request a redetermination or reconsideration the contractor considers--
(i) What circumstances kept the party from making the request on
time;
(ii) Whether the contractor's action(s) misled the party; and
(iii) Whether the party had any physical, mental, educational, or
linguistic limitations, including any lack of facility with the English
language, that prevented the party from filing a timely request or from
understanding or knowing about the need to file a timely request for
redetermination.
(3) Examples of good cause. Examples of circumstances when good
cause may be found to exist include, but are not limited to, the
following situations:
(i) The party was prevented by serious illness from contacting the
contractor in person, in writing, or through a friend, relative, or
other person; or
(ii) The party had a death or serious illness in his or her
immediate family; or
(iii) Important records of the party were destroyed or damaged by
fire or other accidental cause; or
(iv) The contractor gave the party incorrect or incomplete
information about when and how to request a redetermination; or
(v) The party did not receive notice of the determination or
decision; or
(vi) The party sent the request to another Government agency in
good faith within the time limit, and the request did not reach the
appropriate contractor until after the time period to file a
redetermination expired.
Sec. 405.944 Place and method of filing a request for a
redetermination.
(a) Filing location. The request for redetermination must be filed
with the contractor indicated on the notice of initial determination.
Appellants may also file requests for redetermination with SSA offices
or CMS.
(b) Content of redetermination request. The request for
redetermination must be in writing on a standard CMS form. A written
request that is not made on a standard CMS form will be accepted if it
contains the same required elements as follows:
(1) The beneficiary's name;
(2) The health insurance claim number;
(3) The specific service(s) and/or item(s) for which the
redetermination is being requested and the specific date(s) of the
service; and
(4) The name and signature of the party or the appointed
representative of the party.
(c) Requests for redetermination by more than one party. If more
than one party timely files a request for redetermination on the same
claim, the contractor will consolidate the separate requests into one
proceeding and issue one redetermination decision.
Sec. 405.946 Evidence to be submitted with the redetermination
request.
(a) Evidence submitted with the request. When filing the request
for redetermination, a party must explain why it disagrees with the
contractor's determination and include any evidence that the party
believes should be considered by the contractor in making its
redetermination.
(b) Evidence submitted after the request. When a party submits
additional evidence after filing the request for redetermination, the
contractor's 30-day decision-making time frame will automatically be
extended for 14 calendar days.
Sec. 405.948 Conduct of a redetermination.
A redetermination consists of an independent review of an initial
determination. In conducting a redetermination, the contractor will
review the evidence and findings upon which the initial determination
was based, and any additional evidence the parties submit or the
contractor obtains on its own. A redetermination must be made by an
individual who was not involved in making the initial determination.
Sec. 405.950 Time frame for making a redetermination decision.
(a) General rule. The contractor will mail, or otherwise transmit,
written notice of the redetermination decision or dismissal to the
parties at their last known addresses within 30 calendar days of the
date the contractor receives a timely filed request for
redetermination.
(b) Exceptions. (1) If a timely request for redetermination is
filed with an entity other than the contractor, then the 30-day
decision-making time frame begins on the date that request is received
by the contractor.
(2) If a contractor grants an appellant's request for an extension
of the 120-day filing deadline made in accordance with Sec.
405.942(b), the 30-day decision-making time frame begins on the date
the contractor receives the late-filed request for redetermination, or
the extension, whichever is later
(3) If a contractor receives from multiple parties timely requests
for redetermination of a claim determination, consistent with Sec.
405.944(c), the contractor must issue a redetermination decision or
dismissal within 30 days of the latest filed request.
(4) If a party submits additional evidence after the request for
redetermination has been filed, the contractor's 30-day decision-making
time frame will be extended for 14 days, consistent with Sec.
405.946(b).
Sec. 405.952 Withdrawal or dismissal of a request for a
redetermination.
(a) Withdrawing a request. A party that files a request for
redetermination may withdraw his or her request by filing a written and
signed request for withdrawal. The request must be filed with the
contractor, within 14 calendar days of the filing of the
redetermination request.
(b) Dismissing a request. A contractor will dismiss a
redetermination request, either entirely or as to any stated issue,
under any of the following circumstances:
(1) When the person or entity requesting a redetermination is not a
proper party under Sec. 405.906 or does not otherwise have a right to
a redetermination under section 1869(a) of the Act;
(2) When the contractor determines the party failed to make out a
valid request for redetermination that substantially complies with
Sec. 405.944;
(3) When the party fails to file the redetermination request within
the proper filing timeframe in accordance with Sec. 405.942;
(4) When the party that filed the request for redetermination dies
and there is no information in the record to determine whether there is
another
[[Page 69347]]
party that may be prejudiced by the determination;
(5) When the party filing for the redetermination submits a timely
written request of withdrawal with the contractor; or
(6) When the contractor has not issued an initial determination on
the claim for which a redetermination is sought.
(c) Notice of dismissal. A contractor will mail or otherwise
transmit a written notice of the dismissal of the redetermination
request to the parties at their last known addresses.
(d) Vacating a dismissal. If good and sufficient cause is
established, a contractor may vacate a dismissal of a request for
redetermination within 6 months from the date of the notice of
dismissal.
(e) Effect of dismissal. The dismissal of a request for
redetermination is binding, unless it is appealed to a QIC under Sec.
405.974(b) or vacated under paragraph (d) of this section.
Sec. 405.954 Redetermination decision.
Upon the basis of the evidence of record, the contractor will make
a decision on the claim(s), and/or issue(s), in dispute and, issue a
redetermination decision affirming or reversing, in whole or in part,
the initial determination in question.
Sec. 405.956 Notice of a redetermination decision.
(a) Notification to parties. Written notice of the redetermination
decision must be mailed or otherwise transmitted to all parties at
their last known addresses in accordance with the timeframes
established in Sec. 405.950.
(b) Content of the notice. For decisions that are affirmations, in
whole or in part, of the initial determination, the redetermination
must be in writing and contain--
(1) A clear statement indicating the extent to which the
redetermination decision is favorable or unfavorable;
(2) A summary of the facts;
(3) An explanation of how pertinent laws, regulations, coverage
rules, and CMS policies apply to the facts of the case;
(4) A summary of the rationale for the redetermination decision in
clear, understandable language;
(5) Notification to the parties of their right to a reconsideration
and a description of the procedures that a party must follow in order
to request a reconsideration, including the time frame within which a
reconsideration must be requested;
(6) A statement of any specific missing documentation that must be
submitted with a request for a reconsideration, if applicable;
(7) A statement that if the specific documentation indicated under
paragraph (b)(6) of this section is not submitted with the request for
a reconsideration, this evidence will not be considered at an ALJ
hearing, unless the appellant demonstrates good cause as to why that
evidence was not provided previously; and
(8) Any other requirements specified by CMS.
Sec. 405.958 Effect of a redetermination decision.
Once a redetermination decision is issued, it becomes part of the
initial determination. The redetermination decision is final and
binding upon all parties unless--
(a) A reconsideration decision is issued under a request for
reconsideration in accordance with Sec. 405.962 and Sec. 405.964; or
(b) The redetermination decision is revised as a result of a
reopening in accordance with Sec. 405.980.
Reconsiderations
Sec. 405.960 Right to a reconsideration.
A person or entity that is a party to a redetermination made by a
contractor as described under Sec. 405.940 through Sec. 405.958 and
is dissatisfied with that determination may request a reconsideration
by a QIC in accordance with Sec. 405.962 through Sec. 405.966,
regardless of the amount in controversy.
Sec. 405.962 Time frame for filing a request for a reconsideration.
(a) Time frame for filing a request. Except as provided in
paragraph (b) of this section, a party to a redetermination must file a
request for a reconsideration that meets the requirements of Sec.
405.964 within 180 calendar days from the date the party receives the
notice of the redetermination decision.
(1) For the purposes of this section, the date of receipt of the
notice of the redetermination decision will be presumed to be 5 days
after the date of the notice of redetermination, unless there is
evidence to the contrary.
(2) The request is considered as filed on the date it is received
by the QIC, or by an SSA office, or CMS.
(b) Extending the time for filing a request.--General rule. If the
180-day period in which to file a request for a reconsideration has
expired and a party shows good cause, the QIC may extend the time frame
for filing a request for reconsideration.
(1) How to request an extension. A party to the redetermination may
file a request for an extension of the time for filing the
reconsideration with the QIC. The request for reconsideration and
request for extension must--
(i) Be in writing;
(ii) State why the request for reconsideration was not filed within
the required time frame; and
(iii) Meet the requirements of Sec. 405.964.
(2) How the QIC determines whether good cause exists. In
determining whether a party has good cause for missing a deadline to
request a reconsideration, the QIC will apply the good cause provisions
contained in Sec. 405.942(b)(2) and (b)(3).
Sec. 405.964 Place and method of filing a request for a
reconsideration.
(a) Filing location. The request for reconsideration must be filed
with the QIC indicated on the notice of redetermination. Appellants may
also file requests for reconsideration with SSA offices or CMS.
(b) Content of reconsideration request. The request for
reconsideration must be in writing on a standard CMS form. A request
that is not made on a standard CMS form will be accepted if it contains
the same required elements, as follows:
(1) The beneficiary's name;
(2) Health insurance claim number;
(3) The specific service(s) and/or item(s) for which the
reconsideration is being requested and the specific date(s) of service;
and
(4) The name and signature of the party or the appointed
representative of the party.
(c) Requests for reconsideration by more than one party. If more
than one party timely files a request for reconsideration on the same
claim, the QIC will consolidate the separate requests into one
proceeding and issue one reconsideration decision.
Sec. 405.966 Evidence to be submitted with the reconsideration
request.
(a) Evidence submitted with the request. When filing a request for
reconsideration, a party should present evidence and allegations of
fact or law related to the issue in dispute and explain why it
disagrees with the redetermination decision.
(1) This evidence must include any missing documentation identified
in the notice of redetermination, consistent with Sec. 405.956(b)(6).
(2) Absent good cause, failure to submit documentation requested in
the notice of the redetermination precludes consideration of that
evidence at the subsequent appeal level.
(b) Evidence submitted after the request. When a party submits
additional evidence after filing the
[[Page 69348]]
request for reconsideration, the QIC's 30-day decision-making time
frame will automatically be extended for 14 calendar days.
Sec. 405.968 Conduct of a reconsideration.
(a) General rule. A reconsideration consists of an independent, on-
the-record review of an initial determination, including the
redetermination. In conducting a reconsideration, the QIC will review
the evidence and findings upon which the initial determination,
including the redetermination, was based, and any additional evidence
the parties submit, or the QIC obtains on its own. If the initial
determination involves a finding on whether an item or service is
reasonable and necessary for the diagnosis or treatment of illness or
injury (under section 1862(a)(1)(A) of the Act), a QIC's
reconsideration must be based on the clinical experience, and medical,
technical, and scientific evidence of record to the extent applicable.
(b) Authority of the QIC. (1) National coverage determinations
(NCDs) will bind the QIC with respect to issuing reconsiderations.
(2) Local coverage determinations (LCDs) and local medical review
policies (LMRPs) will not bind the QIC with respect to issuing
reconsiderations.
(3) A QIC must follow LCDs, LMRPs, and CMS program guidance, such
as program memoranda and manual instructions unless the appellant
questions the policy and provides a reason why the policy should not be
followed that the QIC finds persuasive. A QIC's decision must explain
why it agrees or disagrees with the appellant's rationale for not
following the policy in question.
(c) Qualifications of the QIC's reviewers. (1) Members of a QIC's
panel who conduct reconsiderations must have sufficient training and
expertise in medical science and/or legal matters.
(2) When a redetermination is made with respect to whether an item
or service is reasonable and necessary for the diagnosis or treatment
of an illness or injury (section 1862(a)(1)(A) of the Act), the QIC
designates a panel of physicians or other appropriate health care
professionals to consider the facts and circumstances of the
redetermination.
(d) Disqualification of a QIC reviewer. No physician or health care
professional employed by a QIC may review determinations regarding--
(1) Health care services furnished to a patient if the physician or
health care professional was directly responsible for furnishing those
services; or
(2) Health care services provided in or by an institution,
organization, or agency, if the physician or health care professional
or any member of the physician's family or health care professional's
family has, directly, or indirectly, a significant financial interest
in that institution, organization, or agency. Family means the spouse
(other than a spouse who is legally separated from the physician or
health care professional under a decree of divorce or separate
maintenance), children (including stepchildren and legally adopted
children), grandchildren, parents, and grandparents of the physician or
health care professional.
Sec. 405.970 Time frame for making a reconsideration decision.
(a) General rule. Within 30 calendar days of the date the QIC
receives a timely filed request for reconsideration, the QIC will mail
to the parties at their last know addresses, or otherwise transmit,
written notice of--
(1) The reconsideration decision;
(2) Its inability to complete its review within 30 days in
accordance with paragraphs (c) through (e) of this section; or
(3) Dismissal.
(b) Exceptions. (1) If a timely request for reconsideration is
filed with an entity other than the QIC, then the 30-day decision-
making time frame begins on the date the request is received by the
QIC.
(2) If a QIC grants an appellant's request for an extension of the
180-day filing deadline made in accordance with Sec. 405.962(b), the
QIC's 30-day decision-making time frame begins on the date the QIC
receives the request for an extension.
(3) If a QIC receives timely requests from multiple parties for a
reconsideration, consistent with Sec. 405.964(c), the QIC must issue a
reconsideration decision, dismissal, or notice that it cannot complete
its review within 30 days of the latest filed request.
(4) If a party submits additional evidence after the request for
reconsideration has been filed, the QIC's 30-day decision-making time
frame will be extended for 14 days, consistent with Sec. 405.966(b).
(c) Responsibilities of the QIC. (1) Within 30 days of receiving a
request for a reconsideration, or any additional time provided for
under paragraph (b) of this section, a QIC must take one of the
following actions:
(i) Notify all parties of the QIC's reconsideration decision,
consistent with Sec. 405.976.
(ii) Notify all parties that it cannot complete the reconsideration
within 30 days and offer the appellant the opportunity to escalate the
appeal to an ALJ. The QIC continues to process the reconsideration
unless it receives a written request from the appellant to escalate the
case to an ALJ.
(iii) Notify all parties that it has dismissed the request for
reconsideration.
(d) Responsibilities of the appellant. If an appellant wishes to
exercise the option of escalating the case to an ALJ, the appellant
must notify the QIC in writing.
(e) Actions following appellant's notice. (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
and notifies the appellant of its action consistent with Sec. 405.976.
(2) If the appellant notifies the QIC that the appellant wishes to
escalate the case, the QIC must take one of the following actions
within 5 days of receipt of the request:
(i) Complete its reconsideration and notify all parties of its
decision consistent with Sec. 405.976.
(ii) Acknowledge the escalation request in writing to all parties
and forward the case file to the ALJ.
Sec. 405.972 Withdrawal or dismissal of a request for a
reconsideration.
(a) Withdrawing a request. A party that files a request for
reconsideration may withdraw its request by filing a written and signed
request for withdrawal. The request must be filed with the QIC within
14 calendar days of the filing of the reconsideration request.
(b) Dismissing a request. A QIC will dismiss a reconsideration
request, either entirely or as to any stated issue, under any of the
following circumstances:
(1) When the person or entity requesting a reconsideration is not a
proper party under Sec. 405.906 or does not otherwise have a right to
a reconsideration under section 1869(b) of the Act;
(2) When the QIC determines that the party fails to make out a
valid request for reconsideration that substantially complies with
Sec. 405.964(a);
(3) When the party fails to file the reconsideration request within
the proper filing time frame in accordance with Sec. 405.970(a);
(4) When the party that filed the request for reconsideration
request dies and there is no information in the record to determine
whether there is another party that may be prejudiced by the
reconsideration;
[[Page 69349]]
(5) When the party filing for the reconsideration submits a written
request of withdrawal to the QIC; or
(6) When the contractor has not issued a redetermination decision
on the claim for which a reconsideration is sought.
(c) Notice of dismissal. A contractor will mail or otherwise
transmit written notice of the dismissal of the reconsideration request
to the parties at their last known addresses.
(d) Vacating a dismissal. If good and sufficient cause is
established, a QIC may vacate a dismissal of a request for
reconsideration within 6 months of the date of the notice of dismissal.
(e) Effect of dismissal. The dismissal of a request for
reconsideration is binding, unless it is appealed to an ALJ under Sec.
405.1004 or vacated under paragraph (d) of this section.
Sec. 405.974 Reconsideration decision.
(a) Reconsideration of a contractor determination. Upon the basis
of the evidence of record, the QIC shall make a decision on the claims
and/or issues in dispute and issue a reconsideration decision affirming
or reversing, in whole or in part, the initial determination in
question.
(b) Reconsideration of contractor's dismissal of a redetermination
request. (1) A party to a contractor's dismissal of a request for
redetermination has a right to have the dismissal reviewed by a QIC, if
the party files a written request for review of the dismissal with the
QIC within 60 days after receipt of the contractor's notice of
dismissal.
(2) If the QIC determines that the contractor's dismissal was in
error, it will remand the case to the contractor for a redetermination
decision.
(3) A QIC's decision with respect to a contractor's dismissal of a
redetermination request is final and not appealable to an ALJ.
Sec. 405.976 Notice of a reconsideration decision.
(a) Notification to parties. Written notice of the reconsideration
decision must be mailed or otherwise transmitted to all parties at
their last known addresses, in accordance with the time frames
established in Sec. 405.970(a). The QIC also must promptly notify the
entity responsible for payment of claims under Part A or Part B of its
reconsideration decision.
(b) Content of the notice. The reconsideration decision must be in
writing and contain--
(1) A clear statement indicating whether the reconsideration
decision is favorable or unfavorable;
(2) A summary of the facts;
(3) An explanation of how pertinent laws, regulations, coverage
rules, and CMS policies, apply to the facts of the case, including the
rationale for any conflict with an LCD, LMRP, or CMS program guidance;
(4) In the case of a determination on whether an item or service is
reasonable or necessary for the diagnosis or treatment of an illness or
injury, an explanation of the medical and scientific rationale for the
decision;
(5) A clear statement of the QIC's rationale for its
reconsideration decision. If the notice of redetermination indicates
that specific documentation be submitted with the reconsideration
request, and this documentation was not submitted with the request for
reconsideration the statement must--
(i) Indicate how the missing documentation affected the
reconsideration decision; and
(ii) Specify that consistent with Sec. 405.956(b)(7), if the
documentation requested in the notice of redetermination decision was
not submitted with the reconsideration request, this evidence will not
be considered at an ALJ hearing, or made part of the administrative
record, unless the appellant demonstrates good cause as to why the
documentation was not provided with the reconsideration request;
(6) Advice to the parties of their right to an ALJ hearing,
including the applicable amount in controversy requirement and
aggregation provision;
(7) If appropriate, advice as to the requirements for use of the
expedited appeals process set forth in Sec. 405.990;
(8) A description of the procedures that a party must follow in
order to obtain an ALJ hearing or an expedited appeal, including the
time frames under which a request for an ALJ hearing or expedited
appeal must be filed; and
(9) Any other requirements specified by CMS.
Sec. 405.978 Effect of a reconsideration decision.
A reconsidered determination is final and binding on all parties,
unless--
(a) An ALJ decision is issued under either a request for an ALJ
hearing made in accordance with Sec. 405.1014 or a request for an
expedited appeal under Sec. 405.990; or
(b) The reconsideration decision is revised as a result of a
reopening in accordance with Sec. 405.980.
Reopenings
Sec. 405.980 Reopenings of initial determinations, redeterminations,
and reconsiderations, hearings and reviews.
(a) General rules. (1) A reopening is a remedial action taken to
change a final determination or decision even though the determination
or decision may have been correct based on the evidence of record. That
action may be taken by--
(i) A contractor to revise the initial determination or
redetermination;
(ii) A QIC to revise the reconsideration;
(iii) An ALJ to revise the hearing decision; or
(iv) The MAC to revise the review decision.
(2) A reopening of an initial determination or redetermination may
be granted when the following conditions are met:
(i) When good cause is shown as defined in Sec. 405.896; and
(ii) If the time limit to file an appeal has expired; or
(iii) If the issue does not involve a clerical error and appeal
rights have been exhausted.
(3) If a contractor issues a denial because it did not receive
requested documentation during medical review and the party
subsequently requests a redetermination, the contractor must process
the request as a reopening.
(4) Notwithstanding paragraph (a)(5) of this section, a contractor
must process clerical errors as reopenings, instead of redeterminations
as defined in Sec. 405.940. For purposes of this section, ``clerical
error'' includes human and mechanical errors on the part of the party
or the contractor such as--
(i) Mathematical or computational mistakes; or
(ii) Inaccurate data entry.
(5) When a party has filed a request for an appeal of an initial
determination, redetermination, reconsideration, or hearing, the
contractor, QIC, or ALJ no longer has jurisdiction over the claim or
appeal and may not reopen it.
(6) The contractor's, QIC's, ALJ's, or MAC's decision on whether to
reopen is final and not subject to appeal.
(7) A Medicare secondary payer recovery claim based upon a
provider's or supplier's failure to demonstrate that it filed a proper
claim as defined in part 411 of this chapter is a reopening.
(b) Time frames and requirements for reopening initial
determinations and redeterminations initiated by a contractor. A
contractor may reopen and revise its initial determination or
redetermination decision on its own motion--
[[Page 69350]]
(1) Within 1 year from the date of the initial determination or
redetermination for any reason.
(2) Within 4 years from the date of its initial determination or
redetermination for good cause as defined in Sec. 405.986.
(3) Within 5 years from the date of the initial determination or
redetermination on the claim if--
(i) The contractor discovers a pattern of billing errors; or
(ii) The contractor identifies an overpayment extrapolated from a
statistical sample.
(4) At any time if there exists reliable evidence that an initial
determination was procured by fraud or similar fault. For the purposes
of this section:
(i) ``Reliable evidence'' means evidence that is relevant,
credible, and material.
(ii) ``Similar fault'' means to obtain, retain, convert, seek, or
receive Medicare funds to which a person knows or should reasonably be
expected to know that he or she or another for whose benefit Medicare
funds are obtained, retained, converted, sought, or received is not
legally entitled. This includes, but is not limited to, a failure to
demonstrate that it filed a proper claim as defined in part 411 of this
chapter.
(c) Time frame and requirements for reopening initial
determinations and redeterminations requested by a party. (1) A party
may request that a contractor reopen its initial determination or
redetermination within 1 year from the date of the initial
determination or redetermination for any reason.
(2) A party may request that a contractor reopen its initial
determination or redetermination within 4 years from the date of the
initial determination or redetermination for good cause in accordance
with Sec. 405.986.
(d) Time frame and requirements for reopening reconsiderations,
hearing decisions and reviews initiated by a QIC, ALJ, or the MAC. (1)
A QIC may reopen its reconsideration decision on its own motion within
180 days from the date of the reconsideration decision for good cause
in accordance with Sec. 405.986.
(2) An ALJ may reopen its reconsideration decision on its own
motion within 180 days from the date of the reconsideration decision
for good cause in accordance with Sec. 405.986.
(3) The MAC may reopen its review decision on its own motion within
180 days from the date of the review decision for good cause in
accordance with Sec. 405.986.
(e) Time frames and requirements for reopening reconsiderations,
hearing decisions, and reviews requested by a party. (1) A party to a
reconsideration may request that a QIC reopen its reconsideration
within 180 days from the date of the reconsideration decision for good
cause in accordance with Sec. 405.986.
(2) A party to a hearing may request that an ALJ reopen its
decision within 180 days from the date of the hearing decision for good
cause in accordance with Sec. 405.986.
(3) A party to a review may request that the MAC reopen its
decision within 180 days from the date of the review decision for good
cause in accordance with Sec. 405.986.
Sec. 405.982 Notice of a revised determination or decision.
When any determination or decision is reopened and revised as
provided in Sec. 405.980, the contractor, QIC, ALJ, or the MAC must
mail its revised determination or decision to the parties to that
determination or decision at their last known address. The revised
determination or decision must state the rationale and basis for the
revision and any right to appeal.
Sec. 405.984 Effect of a revised determination or decision.
(a) Initial determinations. The revision of an initial
determination will be binding upon all parties unless a party files a
written request for a redetermination in accordance with Sec. 405.942
through Sec. 405.946.
(b) Redeterminations. The revision of a redetermination will be
binding upon all parties unless a party files a written request for a
QIC reconsideration in accordance with Sec. 405.962 through Sec.
405.966.
(c) Reconsiderations. The revision of a reconsideration decision
will be binding upon all parties unless a party files a written request
for an ALJ hearing in accordance with Sec. 405.1014.
(d) ALJ Hearing decisions. The revision of a hearing decision will
be binding upon all parties unless a party files a written request for
a MAC review and the request is accepted in accordance with Sec.
405.1110.
(e) MAC review. The revision of a MAC review will be binding upon
all parties unless a party files an action in Federal district court.
(f) Appeal of only the portion of the determination modified by the
reopening. Only the portion of the initial determination,
redetermination, reconsideration, or hearing decision modified by the
reopening may be subsequently appealed.
Sec. 405.986 Good cause for reopening.
(a) Establishing good cause. A party, contractor, QIC, ALJ, or MAC
must establish good cause for a reopening. Good cause may be
established when--
(1) There is new and material evidence that--
(i) Was not available or known at the time of the determination or
decision; and
(ii) May result in a different conclusion; or
(2) The evidence that was considered in making the determination or
decision clearly shows on its face that an obvious error existed at the
time the determination or decision was made.
(b) Change in substantive law or interpretative policy. A
contractor or QIC will not find good cause to reopen a claim or appeal
if the only reason for reopening is a change resulting from a judicial
decision, legal interpretation, or administrative ruling upon which the
determination or decision was made.
Expedited Appeals Process
Sec. 405.990 Expedited appeals process.
(a) Conditions for use of expedited appeals process (EAP). A party
may use the EAP to request court review in place of an ALJ hearing or
Medicare Appeals Council (MAC) review if the following conditions are
met:
(1) A QIC has made a reconsideration determination; an ALJ has made
a hearing decision; or MAC review has been requested, but a final
decision of the MAC has not been issued.
(2) The requestor is a party, as defined in paragraph (d) of this
section.
(3) The party has filed a request for an ALJ hearing in accordance
with Sec. 405.1002, or MAC review in accordance with Sec. 405.1102.
(4) The amount remaining in controversy is $1,000 or more.
(5) If there is more than one party to the reconsideration
determination, hearing decision, or MAC review, each party concurs, in
writing, with the request for the EAP.
(b) Content of the request for EAP. The request for the EAP must--
(1) Allege that there are no material issues of fact in dispute;
and
(2) Assert that the only factor precluding a decision favorable to
the requestor is a statutory provision that is unconstitutional or a
regulation, national coverage determination, or a CMS Ruling that is
invalid.
(c) Place and time for requesting an EAP. (1) Method and place for
filing request. The requestor may include an EAP request in his or her
request for an ALJ hearing or MAC review, as applicable, or, if an
appeal is already
[[Page 69351]]
pending with an ALJ or the MAC, file a written EAP request with the
hearing or MAC office where the appeal is being considered.
(2) Time of filing request. The party may file a request for the
EAP--
(i) If the party has requested a hearing, at any time before
receipt of the notice of the ALJ's decision; or
(ii) If the party has requested MAC review, at any time before
receipt of notice of the MAC's decision.
(d) Parties to the EAP. The parties to the EAP are the persons or
entities who were parties to the QIC's reconsideration determination
and, if applicable, to the ALJ hearing.
(e) Determination on request for EAP. (1) For EAP requests
initiated at the ALJ level, an ALJ determines whether all conditions of
paragraphs (a) and (b) of this section are met.
(2) If a hearing decision has been issued, the MAC determines
whether all conditions of paragraphs (a) and (b) of this section are
met.
(f) Certification for the EAP. If the party meets the requirements
for the EAP, the ALJ or the MAC, as appropriate, certifies in writing
that--
(1) The facts involved in the claim are not in dispute;
(2) Except as indicated in paragraph (f)(3) of this section, CMS's
interpretation of the law is not in dispute;
(3) The sole issue(s) in dispute is the constitutionality of a
statutory provision or the validity of a regulation, CMS Ruling, or
national coverage determination;
(4) Except for the provision challenged, the right(s) of the
requestor is established; and
(5) The decision made by the ALJ or MAC is final for purposes of
seeking judicial review.
(g) Effect of ALJ or MAC certification. (1) Following the issuance
of the certification described in paragraph (f) of this section, the
party waives completion of the remaining steps of the administrative
appeals process.
(2) The 60-day period for filing a civil suit in a Federal district
court begins on the date of receipt of the ALJ or MAC certification.
(h) Effect of a request for EAP that does not result in
certification. If a request for the EAP does not meet all the
conditions for use of the process, the ALJ or MAC so advises the party
and treats the request as a request for hearing or MAC review, as
appropriate.
Sec. 405.992 ALJ and MAC deference to policies not subject to the
expedited appeals process.
(a) In general, an ALJ or the MAC gives deference to an LCD, LMRP,
or CMS program guidance, such as program memoranda and manual
instructions.
(b) A party may request that an ALJ or the MAC disregard an LCD,
LMRP, or CMS program guidance. The party's request should explain why
the policy should not be followed.
(c) The ALJ or MAC may disregard the policy in question if it finds
the party's rationale for why the policy should not be followed to be
persuasive, finds that the policy has been applied incorrectly, or
finds for other reason that the policy is invalid for purposes of the
party's appeal.
ALJ Hearings
Sec. 405.1000 Hearing before an ALJ: General rule.
If a party is dissatisfied with a QIC's reconsideration or if the
adjudication period for the QIC to complete its reconsideration has
elapsed, the party may request a hearing. A hearing may be conducted
in-person, by videoconference, or by telephone. At the hearing the
parties may submit new 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 question witnesses. In some
circumstances, a representative of CMS or its contractor, including the
QIC, fiscal intermediary or carrier, hereafter in these regulations
``CMS or its contractor,'' may be present. See Sec. 405.1010 and Sec.
405.1012. The ALJ will issue a decision based on the hearing record. If
all parties to the hearing waive their right to appear at the hearing
in person or by telephone or videoconference, the ALJ will make a
decision based on the evidence that is in the file and any new evidence
that may have been submitted for consideration. 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
have waived the right to appear. In that event, however, the ALJ will
notify the parties that he is holding the hearing in their absence.
Sec. 405.1002 Right to ALJ hearing.
(a) A party to a QIC reconsideration may request a hearing before
an ALJ if--
(1) The party files a written request for an ALJ hearing within 60
days after receipt of the notice of the QIC's reconsideration; and
(2) The amount remaining in controversy after the QIC's
reconsideration is $100 or more; or
(b) A party who files a timely appeal before a QIC and whose appeal
continues to be pending before a QIC at the end of the period described
in Sec. 405.970 has a right to a hearing before an ALJ if--
(1) The party files a written request with the QIC to escalate the
appeal to the ALJ level after the period described in Sec. 405.970 has
expired and the party files the request within the time frame included
in Sec. 405.970(d);
(2) The QIC does not issue a final action within 5 days of
receiving the request for escalation; and
(3) The amount remaining in controversy after the redetermination
was $100 or more.
Sec. 405.1004 Right to ALJ review of QIC dismissal.
(a) A party to a QIC's dismissal of the request for reconsideration
has a right to have the dismissal reviewed by an ALJ if--
(1) The party files a written request for an ALJ review within 60
days after receipt of the notice of the QIC's dismissal; and
(2) The amount in controversy is $100 or more.
(b) If the ALJ determines that the QIC's dismissal was in error, he
or she will remand the case to the QIC for a reconsideration
determination.
Sec. 405.1006 Amount in controversy required to request an ALJ
hearing and judicial review.
To be entitled to a hearing before an ALJ following a
reconsideration by a QIC, the amount remaining in controversy must be
$100 or more, and for judicial review, following the ALJ hearing and
MAC review, the amount remaining in controversy must be $1,000 or more.
(a) The following rules describe how the amount in controversy is
calculated and how individual and multiple appellants may combine
claims to meet the minimum amount in controversy needed for an ALJ
hearing ($100).
(b) Calculating the amount in controversy. (1) The amount in
controversy is computed as the actual amount charged the individual for
the items and services in question, less any amount for which payment
has been made by the initial contractor or ordered by the QIC and less
any deductible and coinsurance amounts applicable in the particular
case.
(2) Notwithstanding the above, when payment is made for certain
excluded 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 that would have been charged the beneficiary
for
[[Page 69352]]
the items or services in question, less any deductible and coinsurance
amounts applicable in the particular case, had those expenses not been
paid under Sec. 411.400 of this chapter or had that liability not been
limited under Sec. 411.402 of this chapter.
(c) Aggregating claims to meet the amount in controversy--(1)
Appealing QIC reconsideration determinations to the ALJ level. Two or
more claims may be aggregated by either an individual appellant or
multiple appellants to meet the amount in controversy for an ALJ
hearing if--
(i) The claims have previously been reconsidered by a QIC; and
(ii) The request for ALJ hearing lists all of the claims to be
aggregated and is filed within 60 days after receipt of all of the
reconsideration determinations being appealed; and
(iii) The ALJ determines that the claims the appellant(s) seeks to
aggregate involve the delivery of similar or related services or common
issues of law and fact. An appellant may combine Part A and Part B
claims together to meet the amount in controversy requirements.
(2) Aggregating claims that are escalated from the QIC level to the
ALJ level. Two or more claims may be aggregated by either an individual
appellant or multiple appellants to meet the amount in controversy for
an ALJ hearing if--
(i) The claims were pending before the QIC in conjunction with the
same request for reconsideration; and
(ii) The appellant requests aggregation of the claims to the ALJ
level in the same request for escalation; and
(iii) The ALJ determines that the claims the appellant(s) seeks to
aggregate involve the delivery of similar or related services or common
issues of law and fact. Part A and Part B claims may be combined
together to meet the amount in controversy requirements.
(d) Definitions. For the purposes of aggregating claims to meet the
amount in controversy for an ALJ hearing:
(1) ``Common issues of law and fact'' means that claims sought to
be aggregated are denied or reduced for similar reasons and arise from
a similar fact pattern material to the reason the claims are denied.
(2) ``Delivery of similar or related services'' means like or
coordinated services or items provided to one or more beneficiaries.
(e) Content of request for aggregation. When an appellant(s) seeks
to aggregate claims in a request for an ALJ hearing, the appellant
must--
(1) Specify all of the claims the appellant(s) seeks to aggregate;
and
(2) State why the appellant(s) believe that the claims involve
common issues of law and fact or delivery of similar or related
services.
Sec. 405.1008 Parties to an ALJ hearing.
(a) Who may request a hearing. Any party to the QIC's
reconsideration may request a hearing before an ALJ. However, only the
appellant (that is, the party that filed the request for
reconsideration by a QIC) may request that the appeal be escalated to
the ALJ level if the QIC does not complete its action within the
deadline described in Sec. 405.970.
(b) Who are parties to the ALJ hearing. The party who filed the
request for hearing and all other parties to the QIC's reconsideration
determination are parties to the ALJ hearing. In addition, a
representative of CMS or its contractor may be made a party under the
circumstances described in Sec. 405.1012.
Sec. 405.1010 When CMS or its contractors may participate in an ALJ
hearing.
An ALJ may request, but may not require, CMS or one of its
contractors, to participate in any proceedings before the ALJ,
including the oral hearing, if any. CMS and its contractors, including
a QIC, may also elect to participate in the hearing process.
Participation may include filing position papers or providing testimony
to clarify factual or policy issues in a case, but does not include
calling witnesses or cross-examining the witnesses of a party to the
hearing.
Sec. 405.1012 When CMS or its contractors may be a party to a
hearing.
CMS or its contractors, including a QIC, may be a party to an ALJ
hearing unless the request for hearing is filed by an unrepresented
beneficiary. CMS or the contractor will advise the ALJ that it intends
to participate as a party no later than 10 days after receiving the
notice of hearing. When CMS or its contractor participates 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 and the contractor, when acting as parties, may
also submit additional evidence to the ALJ. The ALJ may not require CMS
or a contractor to enter a case as a party.
Sec. 405.1014 Request for an ALJ hearing.
(a) Content of the request. The request for a hearing must be made
in writing. The request should include all of the following--
(1) The name, address, and health insurance claim number of the
beneficiary whose claim is being appealed;
(2) The name and address of the appellant, when the appellant is
not the beneficiary.
(3) The name and address of any designated representative.
(4) The document control number assigned to the appeal by the QIC,
if any.
(5) The dates of service.
(6) The reasons the appellant disagrees with the QIC's
reconsideration or other determination being appealed.
(7) A statement of any additional evidence to be submitted and the
date it will be submitted.
(b) When and where to file. The request for an ALJ hearing after a
QIC reconsideration must be filed--
(1) Within 60 days from the date the party receives notice of the
QIC's reconsideration;
(2) With the hearing office, the QIC that issued the
reconsideration, CMS, or a local Social Security office. If the request
for hearing is timely filed with the QIC, CMS or a Social Security
office rather than the hearing office, the 90-day deadline for deciding
the appeal begins on the date the request for hearing is received by
the hearing office.
(c) Filing request for escalation. If an appellant files a request
to escalate an appeal to the ALJ level because the QIC has not
completed its action within the deadline described in Sec. 405.970,
the request for escalation must be filed with both the QIC and the
hearing office. A case escalated from the QIC to the ALJ level is not
subject to the 90-day adjudication deadline.
(d) Extension of time to request a hearing. If the request for
hearing is not filed within 60 days of receipt of the QIC's
reconsideration determination, an appellant may request an extension.
The request for an extension of time must be in writing, and it must
give the reasons why the request for a hearing was not filed within the
stated time period. If a request for hearing is not timely filed, the
90-day adjudication period does not begin until the hearing office
receives this explanation in addition to the request for hearing.
Sec. 405.1016 Requirement to decide appeal in 90 days.
(a) When a request for an ALJ hearing is filed after a QIC has
issued a reconsideration, the ALJ must issue a decision, dismissal
order, or remand to the QIC, as appropriate, no later than the end of
the 90-day period beginning on the date the request for hearing has
been timely filed, unless the 90-day period has been extended as
provided in this subpart.
[[Page 69353]]
(b) The 90-day adjudication period begins on the date that a timely
filed request for hearing is received by the hearing office, or, if it
is not timely filed, the date that the hearing office receives a
written explanation from the appellant that the ALJ accepts as a good
reason for the late filing. If the written explanation is received by
the hearing office after the request for hearing is received, the 90-
day adjudication period begins when the written explanation is
received. See Sec. 405.942(b)(2).
(c) The 90-day adjudication period does not apply when an appellant
requests escalation of an appeal to the ALJ level because the QIC has
not issued a reconsideration determination within the period specified
in Sec. 405.970.
Sec. 405.1018 Submitting evidence before the ALJ hearing.
Parties must submit with the request for hearing (or within 10 days
of receiving the notice of hearing) all written evidence they wish to
have considered at the hearing. If an appellant submits written
evidence later than 10 days after receiving the notice of hearing, the
period between the time the evidence was required to have been
submitted and the time received will not be counted toward the 90-day
adjudication deadline. Any submission of new evidence that was not
considered by the QIC during its reconsideration must be accompanied by
a statement explaining why the evidence was not previously submitted to
the QIC. The above requirements do not apply to oral testimony given at
a hearing, including expert testimony.
Sec. 405.1020 Time and place for a hearing before an ALJ.
(a) The ALJ sets the time and place for the hearing, and may change
the time and place, if necessary. The ALJ will send a notice of hearing
to all parties and the QIC that issued the reconsideration
determination advising them of the proposed time and place of the
hearing. The notice of hearing will require all parties to the ALJ
hearing to reply to the notice as follows:
(1) Acknowledge that the party will attend the hearing at the time
and place proposed in the notice of hearing; or
(2) Object to the proposed time and place of the hearing. The party
must state the reason for the objection and state the time and place he
or she wants the hearing to be held. If at all possible, the request
should be in writing. The ALJ will change the time or place of the
hearing if the party has good cause, as determined under paragraphs (b)
and (c) of this section (section 405.1052(a)(2) provides procedures the
ALJ will follow when a party does not respond to a notice of hearing);
or
(3) Waive the right to an oral hearing and request that the ALJ
issue a decision based on the written evidence in the record. As
provided in Sec. 405.1000, if the 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.
(b) The ALJ will find good cause for changing the time or place of
the scheduled hearing and will reschedule the hearing if the
information available to the ALJ supports the party's contention that--
(1) The party or his or her representative is unable to attend or
to travel to the scheduled hearing because of a serious physical or
mental condition, incapacitating injury, or death in the family; or
(2) Severe weather conditions make it impossible to travel to the
hearing.
(c) In determining whether good cause exists in circumstances other
than those set out in paragraph (b) of this section, the ALJ will
consider the party's reason for requesting the change, the facts
supporting it, and the impact of the proposed change on the efficient
administration of the hearing process. Factors affecting the impact of
the change include, but are not limited to, the effect on the
processing of other scheduled hearings, delays that might occur in
rescheduling the hearing, and whether any prior changes were granted
the party. Examples of such other circumstances, which a party might
give for requesting a change in the time or place of the hearing,
include, but are not limited to, the following:
(1) The party has attempted to obtain a representative but needs
additional time.
(2) The party's representative was appointed within 10 days of the
scheduled hearing and needs additional time to prepare for the hearing.
(3) The party's representative has a prior commitment to be in
court or at another administrative hearing on the date scheduled for
the hearing.
(4) A witness who will testify to facts material to a party's case
would be unavailable to attend the scheduled hearing and the evidence
cannot be otherwise obtained.
(5) Transportation is not readily available for a party to travel
to the hearing.
(6) The appellant lives or has his or her principal place of
business closer to another hearing site.
(7) The party is unrepresented, and is unable to respond to the
notice of hearing because of any physical, mental, educational, or
linguistic limitations (including any lack of facility with the English
language) that he or she has.
(d) 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
will not be counted toward the 90-day adjudication deadline.
Sec. 405.1022 Notice of a hearing before an ALJ.
After the ALJ sets the time and place of the hearing, notice of the
hearing will be mailed to the parties at their last known addresses, or
given by personal service, unless the parties have indicated in writing
that they do not wish to receive this notice. The notice will be mailed
or served at least 20 days before the hearing. The notice of hearing
will contain a statement of the specific issues to be decided and tell
the parties that they may designate a person to represent them during
the proceedings. The notice will also contain an explanation of the
procedures for requesting a change in the time or place of the hearing,
a reminder that if the appellant fails to appear at the scheduled
hearing without good cause the ALJ may dismiss the hearing request, and
other information about the scheduling and conduct of the hearing. If a
party or his or her representative does not acknowledge receipt of the
notice of hearing, the hearing office will attempt to contact the party
for an explanation. If the party states that he or she did not receive
the notice of hearing, an amended notice will be sent to him or her by
certified mail or e-mail, if available. See Sec. 405.1020 and Sec.
405.1052 for the procedures we will follow in deciding whether the time
or place of a scheduled hearing will be changed if a party does not
respond to the notice of hearing.
Sec. 405.1024 Objections to the issues.
If a party objects to the issues described in the notice of
hearing, he or she must notify the ALJ in writing at the earliest
possible opportunity before the time set for the hearing, and no later
than 5 days before the hearing. The party must state the reasons for
his or her objections and send a copy of the objections to all other
parties to the appeal. The ALJ will make a decision on the objections
either in writing or at the hearing.
[[Page 69354]]
Sec. 405.1026 Disqualification of the ALJ.
An ALJ will not conduct a hearing if he or she is prejudiced or
partial with respect to any party or has any interest in the matter
pending for decision. If a party objects to the ALJ who will conduct
the hearing, the party must notify the ALJ within 10 days of the notice
of hearing. The ALJ will consider the party's objections and will
decide whether to proceed with the hearing or withdraw. If he or she
withdraws, another ALJ will be appointed to conduct the hearing. If the
ALJ does not withdraw, the party may, after the ALJ has issued an
action in the case, present his or her objections to the MAC. The MAC
will then consider whether the hearing decision should be revised or a
new hearing held before another ALJ. If the case is escalated to the
MAC after a hearing is held but before the ALJ issues a decision, the
MAC will consider the reasons the party objected to the ALJ during its
review of the case and, if the MAC deems it necessary, may remand the
case to another ALJ for a hearing and decision.
Sec. 405.1028 Prehearing case review of evidence submitted to the ALJ
by the appellant.
After a hearing is requested but before it is held, the ALJ will
examine any new evidence submitted with the request for hearing
according to Sec. 405.1018 to determine whether the appellant had good
cause for submitting the evidence for the first time at the ALJ level.
If the ALJ determines that there was not good cause for submitting the
evidence first at the ALJ level, and the evidence is of such probative
value that it may have a material outcome on the case, the ALJ will
remand the case to the QIC for a revised reconsideration. If the
revised reconsideration issued on remand is not fully favorable to all
parties, any party to that determination may file a new request for an
ALJ hearing.
Sec. 405.1030 ALJ hearing procedures--General.
A hearing is open to the parties and to other persons the ALJ
considers necessary and proper. At the hearing, the ALJ looks fully
into the issues, questions the parties and other witnesses, and may
accept documents that are material to the issues, if the ALJ determines
that the party has shown good cause for not submitting the evidence
within the period specified in Sec. 405.1018 and Sec. 405.1028. 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 material is in the possession of the
appellant, the ALJ will determine whether the appellant had good cause
for not producing the evidence earlier. If good cause exists, the ALJ
will consider the evidence in deciding the case and the 90-day
adjudication period will be tolled from the date of the hearing to the
date the evidence is submitted. If the ALJ determines that there was
not good cause for submitting the evidence sooner, he may remand the
case to the QIC, as provided in Sec. 405.1034. The ALJ may also reopen
the hearing at any time before he or she mails a notice of the decision
in order to receive new and material evidence. The ALJ may decide when
the evidence will be presented and when the issues will be discussed.
Sec. 405.1032 Issues before an ALJ.
(a) General. The issues before the ALJ include all the issues
brought out in the initial determination, redetermination, or
reconsideration that were not decided entirely in a party's favor. (For
purposes of this section, the term ``party'' does not include a
representative of CMS or the QIC who may be participating in the
hearing.) However, if evidence presented before the hearing causes the
ALJ to question a favorable portion of the determination, he or she
will notify the parties before the hearing and may consider it an issue
at the hearing.
(b) New issues--(1) General. The ALJ may consider a new issue at
the hearing if he or she notifies all of the parties about the new
issue any time between receiving the hearing request and issuing the
notice of hearing. The ALJ or any party may raise a new issue; however,
the ALJ may only consider a new issue if its resolution--
(i) Will have a material impact on the claim or claims that are the
subject of the request for hearing; and
(ii) Is permissible under the rules governing reopening of
determinations and decisions.
(2) Notice of a new issue. The ALJ will notify all of the parties
in the notice of hearing if he or she intends to consider a new issue.
Sec. 405.1034 When ALJ will remand to the QIC.
(a) The ALJ will remand a case to the QIC that issued the
reconsideration in the following circumstances:
(1) The appellant submits new evidence to the ALJ that was not
provided to either the contractor or the QIC during their consideration
of the appeal, and the appellant does not provide a good reason for
first submitting the evidence at the ALJ level. An ALJ will find good
cause when the appellant submits new evidence at the ALJ level, the
evidence relates to an issue that was the basis for the QIC's
unfavorable reconsideration and that issue was not identified as a
material issue before the QIC's determination, and the ALJ finds that
the appellant had a good reason for submitting the evidence for the
first time at the ALJ level, the ALJ will decide the appeal.
(2) The appellant submits new evidence to the ALJ that was not
provided to either the contractor or the QIC during its consideration
of the appeal, and the appellant acknowledges that he or she does not
have a good reason for first submitting the evidence at the ALJ level.
In this instance, the appellant may request the ALJ to remand the case
to the QIC for further proceedings so that the new evidence may be
considered.
(b) An ALJ may also remand a case to the QIC if the written record
of the proceedings before the initial contractor or the QIC does not
contain information that is essential to resolving the issues on appeal
and is information that can only be provided by CMS or its contractors.
Examples of that information include claim payment histories or
information from the common working file concerning such issues as the
number of days remaining in a benefit period.
Sec. 405.1036 Description of ALJ hearing process.
(a) The right to appear and present evidence. Any party to a
hearing has the right to appear before the ALJ, either personally or by
means of a designated representative, to present evidence and to state
his or her position.
(b) Waiver of the right to appear. A party may send the ALJ a
waiver or a written statement indicating that he or she does not wish
to appear at the hearing. The appellant may subsequently withdraw the
waiver at any time before the notice of the hearing decision is issued,
provided that the appellant agrees to an extension of the 90-day
adjudication period that may be necessary to schedule and hold the
hearing. Other parties may withdraw the waiver up to the date of the
scheduled hearing, if any. Even if all of the parties waive their right
to appear at a hearing, the ALJ may require them to attend an oral
hearing, if he or she believes that a personal appearance and testimony
by the appellant or any other party is necessary to decide the case.
(c) Presenting written statements and oral arguments. A party or a
person designated to act as a party's representative may appear before
the ALJ to state the party's case, to present a written summary of the
case, or to
[[Page 69355]]
enter written statements about the facts and law material to the case
in the record. A copy of any written statements should be provided to
the other parties to hearing, if any, at the same time they are
submitted to the ALJ.
(d) Waiver of 90-day adjudication period. At any time during the
hearing process, the appellant may waive the 90-day adjudication
deadline for issuing a hearing decision.
(e) What evidence is admissible at a hearing. The ALJ may receive
evidence at the hearing even though the evidence would not be
admissible in court under the rules of evidence used by the court.
(f) Subpoenas. (1) When it is reasonably necessary for the full
presentation of a case, an ALJ may, on his or her own initiative or at
the request of a party, issue subpoenas for the appearance and
testimony of witnesses and for the production of books, records,
correspondence, papers, or other documents that are material to an
issue at the hearing.
(2) Parties to a hearing who wish to subpoena documents or
witnesses must file a written request for the issuance of a subpoena
with the ALJ within 10 days of the notice of hearing. The written
request must give the names of the witnesses or documents to be
produced; describe the address or location of the witnesses or
documents with sufficient detail to find them; state the important
facts that the witness or document is expected to prove; and indicate
why these facts could not be proven without issuing a subpoena.
(3) The hearing office will pay the cost of issuing the subpoena.
(4) The hearing office will pay subpoenaed witnesses the same fees
and mileage they would receive if they had been subpoenaed by a Federal
district court.
(g) Witnesses at a hearing. Witnesses may appear at a hearing. They
will testify under oath or affirmation, unless the ALJ finds an
important reason to excuse them from taking an oath or affirmation. The
ALJ may ask the witnesses any questions material to the issues and will
allow the parties or their designated representatives to do so.
Sec. 405.1038 Deciding a case without an oral hearing before an ALJ.
(a) Decision wholly favorable. If the evidence in the hearing
record supports a finding in favor of all the parties on every issue,
and neither the QIC nor CMS has given notice of its intention to
participate in the hearing, the ALJ may issue a hearing decision
without giving the parties prior notice and without holding an oral
hearing. However, the notice of the decision will inform the parties
that they have the right to an oral hearing and a right to examine the
evidence on which the decision is based.
(b) Parties do not wish to appear in-person. (1) The ALJ may decide
a case on the record and not conduct an oral hearing if--
(i) All the parties indicate in writing that they do not wish to
appear before the ALJ at an oral hearing, including a hearing conducted
by telephone or videoconferencing, if available; or
(ii) The appellant lives outside 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.
(2) When an oral hearing is not held, the ALJ will make a record of
the evidence. The record will include the claims, written statements,
certificates, reports, affidavits, and other documents that were used
in making the determination under review and any additional evidence
the parties to the hearing present in writing. The decision of the ALJ
must be based on this record.
Sec. 405.1040 Prehearing and posthearing conferences.
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. The ALJ will tell the
parties of the time, place, and purpose of the conference at least 7
days before the conference date, unless the parties have indicated in
writing that they do not wish to receive a written notice of the
conference. At the conference, the ALJ may consider matters in addition
to those stated in the notice of hearing, if the parties consent in
writing. A record of the conference will be made. The ALJ will 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.
Sec. 405.1042 When a record of a hearing before an ALJ is made.
The ALJ will make a complete record of the hearing proceedings. The
tape, other recording, or written transcript, as applicable, will be
maintained in the case file, and forwarded with the file to the MAC if
a request for MAC review is filed or the case is escalated from the ALJ
level to the MAC. The record of the hearing will be prepared as a typed
copy of the proceedings 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 the Secretary requests the
court to remand the case.
Sec. 405.1044 Consolidated hearing before an ALJ.
(a) 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 another request for hearing or hearings pending before the same ALJ.
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 such factors as whether the claims at issue may be
more efficiently decided if the requests for hearing are combined. In
considering the appellant's request for consolidation, the ALJ will
take into account the adjudication deadlines for each case and may
require an appellant to waive the 90-day adjudication deadline if
consolidation would otherwise prevent the ALJ from deciding all of the
appeals at issue within their respective deadlines.
(b) The ALJ may also propose on his or her own motion to
consolidate two or more cases in one hearing for administrative
efficiency, but may not require an appellant to waive the 90-day
adjudication deadline for any of the consolidated cases.
(c) Before consolidating a hearing, the ALJ must notify CMS of his
or her intention to do so, and CMS may then elect to participate in the
consolidated hearing, as a party, by sending written notice to the ALJ
within 10 days after receipt of the ALJ's notice.
(d) 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 claim. The ALJ will ensure 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.
Sec. 405.1046 The decision of an ALJ.
(a) General rule. The ALJ 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 included in the record. The ALJ will mail a copy of the
decision to all the parties at their last known address and to the QIC
that issued the reconsideration determination.
(b) Timing of decision. The ALJ will issue a decision by the end of
the 90-day period beginning on the date when the request for hearing is
received in the hearing office, unless the 90-day period
[[Page 69356]]
has been extended as provided in this subpart.
(c) Recommended decision. An ALJ will issue a recommended decision
if he or she is directed to do so in the MAC's remand order. An ALJ may
not issue a recommended decision on his or her own motion. The ALJ will
mail a copy of the recommended decision to all the parties at their
last known address.
Sec. 405.1048 The effect of an ALJ's decision.
The decision of the ALJ is binding on all parties to the hearing
unless--
(a) A party to the hearing requests a review of the decision by the
MAC within the stated time period and the MAC either issues a final
action in response to the request for review or the appeal is escalated
to Federal district court under the provisions at Sec. 405.1132;
(b) The decision is revised by an ALJ or the MAC under the
procedures explained in Sec. 405.980;
(c) The expedited appeals process is used;
(d) The ALJ's decision is a recommended decision directed to the
MAC; or
(e) In a case remanded by a Federal court, the MAC assumes
jurisdiction under the procedures Sec. 405.1138.
Sec. 405.1050 Removal of a hearing request from an ALJ to the MAC.
If a request for hearing is pending before an ALJ, the MAC may
assume responsibility for holding a hearing by requesting that the ALJ
send the hearing request to it. If the MAC holds a hearing, it will
conduct the hearing according to the rules for hearings before an ALJ.
Notice will be mailed to all parties at their last known address
informing them that the MAC has assumed responsibility for the case.
Sec. 405.1052 Dismissal of a request for a hearing before an ALJ.
Dismissal of request for hearings will be in accordance with the
following:
(a) An ALJ will dismiss a request for a hearing under any of the
following conditions:
(1) At any time before notice of the hearing decision is mailed,
the party that requested the hearing asks to withdraw the request. This
request may be submitted in writing to the ALJ or made orally at the
hearing. The request for withdrawal must contain a clear statement that
the appellant is withdrawing the request for hearing and does not
intend to further proceed with the appeal. If the request for
withdrawal is filed by an attorney, or other legal professional on
behalf of a beneficiary or other appellant, the ALJ may presume that
the representative has advised the appellant of the consequences of the
withdrawal and dismissal.
(2) 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 without further notice;
(ii) The party did not appear at the time and place of hearing and
does not thereafter contact the hearing office and provide a good
reason for not appearing;
(iii) The ALJ sends a notice to the party asking why the party did
not appear; and
(iv) The party does not respond to the ALJ's notice within 10 days
or does not give a good reason for the failure to appear. In
determining good cause, the ALJ will consider any physical, mental,
educational, or linguistic limitations (including any lack of facility
with the English language), which the party may have.
(3) The person or entity requesting a hearing has no right to it
under Sec. 405.1002.
(4) The party did not request a hearing within the stated time
period and has not provided a good reason for extending the time for
requesting a hearing, as provided in Sec. 405.942(b)(2).
(5) The beneficiary whose claim is being appealed died either
before the request for hearing was filed or while the request for
hearing is pending and both 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 will consider whether 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 parties to the QIC reconsideration determination
participated in the proceedings before the QIC. For purposes of
applying this provision, participation means that the party either
filed the request for QIC reconsideration or submitted evidence or
comments to the QIC during its consideration of the case.
(6) The ALJ decides that there is cause to dismiss a hearing
request entirely or to refuse to consider any one or more of the issues
because the doctrine of res judicata applies in that a Medicare
contractor, a QIC, an ALJ or the MAC has made a previous determination
or decision under this subpart about the appellant's rights on the same
facts and on the same issue or issues, and this previous determination
or decision has become final by either administrative or judicial
action.
(7) The appellant abandons the request for hearing. An ALJ may
conclude that an appellant has abandoned a request for hearing when the
hearing office attempts to schedule a hearing and is unable to locate
the appellant after making reasonable efforts to do so.
(b) Notice of dismissal. The ALJ will mail a written notice of the
dismissal of the hearing request to all parties at their last known
address. The notice will state that there is a right to request that
the MAC vacate the dismissal action.
Sec. 405.1054 Effect of dismissal of a request for a hearing before
an ALJ.
The dismissal of a request for a hearing is binding, unless it is
vacated by the MAC.
Medicare Appeals Council Review
Sec. 405.1100 Medicare Appeals Council review: General.
The party who requested an ALJ hearing (the appellant) or any other
party to the hearing may request that the Medicare Appeals Council
(MAC) review an ALJ's decision or dismissal. Under certain
circumstances, the appellant may request that a case be escalated to
the MAC for a decision even if the ALJ has not issued a decision or
dismissal in his or her case. The MAC reviews an ALJ's decision de
novo. When reviewing an ALJ's decision, the MAC issues a final action
or remands a case to the ALJ within 90 days of receipt of the
appellant's request for review, unless the 90-day period has been
extended as provided in this subpart.
Sec. 405.1102 Request for MAC review when ALJ issues decision.
(a) A party to the ALJ hearing may request a MAC review if the
party files a written request for a MAC review within 60 days after
receipt of the ALJ's decision or dismissal. A party requesting a review
may ask that the time for filing a request for MAC review be extended
if--
(1) The request for an extension of time is in writing;
(2) It is filed with the MAC; and
(3) It explains why the request for review was not filed within the
stated time period. If the appellant shows that he or she had good
cause for missing the deadline, the time period will be extended. To
determine whether good cause exists, the MAC uses the standards
explained in Sec. 405.942(b)(2).
[[Page 69357]]
(b) A party does not have the right to seek MAC review of an ALJ's
remand to a QIC.
(c) For purposes of requesting MAC review (Sec. 405.1102 through
Sec. 405.1138), 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 Request for MAC review when an ALJ does not issue a
decision timely.
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 90-day adjudication period described in Sec. 405.1016 may request
a MAC review if--
(a) The appellant files a written request with the ALJ and the MAC
to escalate the appeal to the MAC after the 90-day adjudication period
has expired; and
(b) The ALJ does not issue a final action or remand the case to the
QIC within 5 days of receiving the request for escalation.
Sec. 405.1106 Where a request for review or escalation may be filed.
(a) When a request for a MAC review is filed after an ALJ has
issued a decision or dismissal, the request for review may be filed
with the MAC, the hearing office that issued the ALJ's decision or
dismissal or a Social Security office. If the request for hearing is
timely filed with the hearing office or a Social Security office rather
than the MAC, the MAC's 90-day period to conduct a review begins on the
date the request for review is received by the MAC.
(b) If an appellant files a request to escalate an appeal to the
MAC level because the ALJ has not completed his or her action on the
request for hearing within the 90-day adjudication deadline, the
request for escalation must be filed with both the ALJ and the MAC.
Appeals that are escalated from the ALJ level to the MAC are not
subject to the 90-day MAC adjudication deadline.
Sec. 405.1108 MAC actions when request for review or escalation is
filed.
(a) When a party requests that the MAC review an ALJ's decision,
the MAC will review the ALJ's decision de novo. The party requesting
review does not have a right to a hearing before the MAC. The MAC will
consider all of the evidence in the administrative record. Upon
completion of its review, the MAC may adopt, modify, or reverse the
ALJ's decision or remand the case to an ALJ for further proceedings.
(b) When a party requests that the MAC review an ALJ's dismissal,
the MAC may deny review or remand the case to the ALJ for further
proceedings.
(c) The MAC will dismiss a request for review when the party
requesting review does not have a right to a review by the MAC or
dismiss the request for an ALJ hearing for any reason that the ALJ
could have dismissed the request for hearing.
(d) When an appellant requests escalation of a case from the ALJ
level to the MAC, the MAC may take any of the following actions:
(1) Issue a decision based on the record constructed at the QIC and
any additional evidence, including oral testimony, entered in the
record by the ALJ before the case was escalated.
(2) Conduct any additional proceedings, including a hearing, that
the MAC determines are necessary to issue a decision.
(3) Remand the case to an ALJ for further proceedings, including a
hearing.
(4) Dismiss the request for MAC review because the appellant does
not have the right to escalate the appeal.
(5) Dismiss the request for ALJ hearing for any reason that the ALJ
could have dismissed the request.
Sec. 405.1110 MAC reviews on its own motion.
(a) General rule. The MAC may decide on its own motion to review a
decision or dismissal issued by an ALJ. CMS or its contractors may
refer a case to the MAC for it to consider reviewing under this
authority anytime within 60 days after the date of an ALJ's decision or
dismissal.
(b) Referral of cases. (1) CMS or its contractors (hereafter: CMS)
may refer a case to the MAC if, in their view, the decision or
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 MAC take own motion
review of a case if--
(i) CMS or its contractor participated in the appeal at the ALJ
level; and
(ii) In its view, the ALJ's decision or dismissal is not supported
by the preponderance of evidence in the record or the ALJ abused his or
her discretion.
(2) CMS's referral to the MAC will be made in writing and must be
filed with the MAC no later than 60 days after the ALJ's decision or
dismissal is issued. The written referral will state the reasons why
CMS believes that the MAC should review the case on its own motion. CMS
will send a copy of its referral to all parties to the ALJ action and
to the ALJ. Parties to the ALJ's action may file exceptions to the
referral by submitting written comments to the MAC within 20 days of
the referral notice. Copies of any comments submitted to the MAC must
be sent to CMS and all other parties to the ALJ's decision.
(c) Standard of review--(1) Referral by CMS after participation at
ALJ level. If CMS or its contractor participated in an appeal at the
ALJ level, the MAC will exercise 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, 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 MAC will
limit its consideration of the ALJ's action to those exceptions raised
by CMS.
(2) Referral by CMS when CMS did not participate in the ALJ
proceedings or appear as a party. The MAC 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 MAC will limit its consideration of the ALJ's action to
those exceptions raised by CMS.
(d) MAC's action. If the MAC 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. The MAC may adopt, modify,
or reverse the decision or dismissal or may remand the case to an ALJ
for further proceedings. The MAC must issue its action no later than 90
days after receipt of the CMS referral, unless the 90-day period has
been extended as provided in this subpart. The MAC may not, however,
issue its action before the 20-day comment period has expired, unless
it determines that the agency's referral does not provide a basis for
reviewing the case. If the MAC does not act within the 90-day deadline,
the ALJ's decision or dismissal remains the final action in the case.
Sec. 405.1112 Content of request for review.
(a) The request for review should identify the parts of the ALJ
action with which the party requesting review disagrees and explain why
he or she believes that the ALJ's findings and conclusions are wrong.
For example, if the party requesting review believes that the ALJ's
action is inconsistent with a
[[Page 69358]]
statute, regulation, ruling, or other authority, the request for review
should explain why the appellant believes the action is inconsistent
with that authority.
(b) The MAC will limit its review of an ALJ'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 Dismissal of request for review.
The MAC will dismiss a request for review if the party requesting
review did not file the request within the stated period of time and
the time for filing has not been extended. The MAC will also dismiss
the request for review if--
(a) The party asks to withdraw the request for review;
(b) The party does not have a right to request MAC review; or
(c) The beneficiary whose claim is being appealed died either
before the request for review was filed or while the request for review
is pending and both of the following criteria apply:
(1) 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, and, in
considering this issue, the MAC will consider whether 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.
(2) No other parties to the ALJ decision participated in the
proceedings before the ALJ. For purposes of applying this provision,
participation means that the party either filed the request for an ALJ
hearing, submitted evidence or written statements to the ALJ, or
appeared at the hearing.
Sec. 405.1116 Effect of dismissal of request for MAC review or
request for hearing.
The dismissal of a request for MAC review or denial of a request
for review of a dismissal issued by an ALJ is binding and not subject
to further review. The dismissal of a request for hearing by the MAC is
also binding and not subject to judicial review.
Sec. 405.1118 Obtaining evidence from MAC.
A party may request and receive copies or a statement of the
documents or other written evidence upon which the hearing decision or
dismissal was based and a copy of the transcript of oral evidence.
However, the party will be asked to pay the costs of providing these
copies unless there is a good reason they should not pay. If a party
requests evidence from the MAC and an opportunity to comment on that
evidence, the time beginning with the MAC's receipt of the request for
evidence through the expiration of the comment period will not count
toward the 90-day adjudication deadline.
Sec. 405.1120 Filing briefs with the MAC.
Upon request, the MAC will give the party requesting review, as
well as all other parties a reasonable opportunity to file briefs or
other written statements about the facts and law relevant to the case.
Any party who submits a brief or statement must send a copy to each of
the other parties. Unless the party requesting review files the brief
or other statement with the request for review, the time beginning with
the receipt of the request to submit the brief and ending with the date
the brief is received by the MAC will not count toward the 90-day
adjudication deadline. The MAC may also request, but not require, CMS
or its contractor to file a brief or position paper if the MAC
determines that it is necessary to resolve the issues in the case.
Sec. 405.1122 What evidence may be submitted to the MAC.
(a) Appeal before the MAC on request for review of ALJ's decision.
(1) If the MAC is reviewing an ALJ's decision, the MAC will limit its
review of the evidence to the evidence contained in the record of the
proceedings before the ALJ. However, if the hearing decision decides a
new issue that the parties were not afforded an opportunity to address
at the ALJ level, the MAC will consider any evidence related to that
issue that is submitted with the request for review.
(2) If the MAC determines that additional evidence is needed to
resolve the issues in the case and the hearing record indicates that
the parties or previous decision-makers have not attempted to obtain
the evidence, the MAC may remand the case to an ALJ to obtain the
evidence and issue a new decision.
(b) Appeal before MAC as a result of appellant's request for
escalation. (1) If the MAC is reviewing a case that has been escalated
from the ALJ level to the MAC, the MAC will decide the case based on
the record constructed at the QIC and any additional evidence,
including oral testimony, entered in the record by the ALJ before the
case was escalated.
(2) If the MAC receives additional evidence with the request for
escalation that is material to the question to be decided, or
determines that additional evidence is needed to resolve the issues in
the case, and the record provided to the MAC indicates that the parties
or previous decision-makers did not attempt to obtain the evidence
before escalation, the MAC may remand the case to an ALJ to consider or
obtain the evidence and issue a new decision.
Sec. 405.1124 Oral argument.
A party may request to appear before the MAC to present oral
argument. The MAC will grant a request for oral argument if it decides
that the case raises an important question of law, policy, or fact that
cannot be readily decided based on written submissions alone. In
addition, the MAC may decide on its own that oral argument is necessary
to decide the issues in the case. If the MAC decides to hear oral
argument, it will tell the parties of the time and place of the oral
argument at least 10 days before the scheduled date. The MAC may also
request, but not require, CMS or its contractor to appear before it if
the MAC determines that it would be helpful in resolving the issues in
the case.
Sec. 405.1126 Case remanded by the MAC.
(a) When the MAC may remand a case. The MAC may remand a case in
which additional evidence is needed or additional action by the ALJ is
required. The MAC will designate in its remand order whether the ALJ
will issue a final decision or a recommended decision on remand.
(b) Action by ALJ on remand. The ALJ will take any action that is
ordered by the MAC and may take any additional action that is not
inconsistent with the MAC's remand order.
(c) Notice when case is returned with a recommended decision. When
the ALJ sends a case to the MAC with a recommended decision, a notice
is mailed to the parties at their last known address. The notice tells
them that the case has been sent to the MAC, explains the rules for
filing briefs or other written statements with the MAC, and includes a
copy of the recommended decision.
(d) Filing briefs with the MAC when ALJ issues recommended
decision. (1) Any party to the recommended decision may file briefs or
other written statements about the facts and law relevant to the case
with the MAC
[[Page 69359]]
within 20 days of the date that the recommended decision is mailed. Any
party may ask the MAC for additional time to file briefs or statements.
The MAC will extend this period, as appropriate, if the party shows
that they had good cause for missing the deadline.
(2) All other rules for filing briefs with and obtaining evidence
from the MAC follow the procedures explained in this subpart.
(e) Procedures before the MAC. (1) The MAC, after receiving a
recommended decision, will conduct its proceedings and issue its
decision according to the procedures explained in this subpart.
(2) If the MAC believes that more evidence is required, it may
again remand the case to an ALJ for further inquiry into the issues,
rehearing, receipt of evidence, and another decision or recommended
decision. However, if the MAC decides that it can get the additional
evidence more quickly, it will take appropriate action.
Sec. 405.1128 Decision of the MAC.
After it has reviewed all the evidence in the administrative record
and any additional evidence received, subject to the limitations on MAC
consideration of additional evidence in Sec. 405.1122, the MAC will
make a decision or remand the case to an ALJ. The MAC may adopt, modify
or reverse the ALJ hearing decision or recommended decision. A copy of
the MAC's decision will be mailed to the parties at their last known
address.
Sec. 405.1130 Effect of the MAC's decision.
The MAC's decision is binding on all parties unless the party files
an action in Federal district court, or the decision is revised. A
party may file an action in a Federal district court within 60 days
after the date it receives notice of the MAC's decision.
Sec. 405.1132 Request for escalation to Federal court.
If the MAC does not issue a final action or remand the case to an
ALJ within the 90-day adjudication period as extended as provided in
this subpart, the appellant may request that the appeal be escalated to
Federal district court. Upon receipt of a request for escalation, the
MAC may--
(a) Issue a final action or remand the case to an ALJ, if that
action is issued within 5 days of receipt of the request for
escalation; or
(b) If the MAC is not able to issue a final action or remand within
5 days of receipt of the request for escalation, it will send a notice
to the appellant acknowledging receipt of the request for escalation. A
party may file an action in a Federal district court within 60 days
after the date it receives notice of the MAC's decision.
Sec. 405.1134 Extension of time to file action in Federal district
court.
Any party to the MAC's decision or to an expedited appeals process
certification may request that the time for filing an action in a
Federal district court be extended. The request must be in writing, and
it must give the reasons why the action was not filed within the stated
time period. The request must be filed with the MAC, or if it concerns
an expedited appeals process agreement certified by an ALJ, with the
ALJ. If the party shows that he or she had good cause for missing the
deadline, the time period will be extended. To determine whether good
cause exists, we use the standards explained in Sec. 405.942(b)(2).
Sec. 405.1136 Judicial review.
(a) General rule. To the extent authorized by sections 1869,
1876(c)(5)(B), and 1879(d) of the Act, a party to a MAC decision, or an
appellant who requests escalation to Federal district court if the MAC
does not complete its review of the ALJ's decision within the 90-day
adjudication period, may obtain a court review if the amount remaining
in controversy is $1,000 or more. The party, including an appellant who
requests escalation to Federal district court if the MAC does not
complete its review of the ALJ's decision within the 90-day
adjudication period, may obtain court review by filing a civil action
in a district court of the United States in accordance with the
provisions of section 205(g) of the Act.
(b) Court in which to file civil action. Any civil action described
in paragraph (a) of this section must be filed in the district court of
the United States for the judicial district in which the party resides
or where such individual, institution, or agency has its principal
place of business. If the party does not reside within any such
judicial district, or if such individual, institution, or agency does
not have its principal place of business within any such judicial
district, the civil action must be filed in the District Court of the
United States for the District of Columbia.
(c) Time for filing civil action. Any civil action described in
paragraph (a) of this section must be filed within the time periods
specified in Sec. 405.1130, Sec. 405.1132, or Sec. 405.1134, as
applicable. For purposes of these sections, the date of receipt of the
notice of the MAC's decision or notice of the MAC's receipt of the
appellant's request for escalation shall be presumed to be 5 days after
the date of such notice, unless there is a reasonable showing to the
contrary. Where a case is certified for judicial review pursuant to the
expedited appeals process in Sec. 405.990, the civil action must be
filed within 60 days after receipt of the ALJ or MAC certification,
except where the time has been extended by the ALJ or MAC, as
applicable, upon a showing of good cause.
(d) Proper defendant. Where any civil action described in paragraph
(a) of this section is filed, the Secretary of HHS, shall, in his or
her official capacity, be the proper defendant. Any such civil action
properly filed shall survive notwithstanding any change of the person
holding the office of Secretary of HHS or any vacancy in such office.
If the complaint is erroneously filed against the United States or
against any agency, officer, or employee of the United States other
than the Secretary, the plaintiff will be notified that he has named an
incorrect defendant and will be granted 60 days from the date of
receipt of the notice in which to commence the action against the
correct defendant, the Secretary.
(e) Prohibition against judicial review of certain Part B
regulations or instructions. Under section 1869(e)(1) of the Act, a
court may not review a regulation or instruction that relates to a
method of payment under Part B if the regulation was promulgated, or
the instructions issued, before January 1, 1991.
(f) Standard of review. Under section 205(g) of the Act, the
findings of the Secretary of HHS as to any fact, if supported by
substantial evidence, are conclusive. In addition, when the Secretary's
decision is adverse to a party due to a party's failure to submit proof
in conformity with a regulation prescribed under section 205(a) of the
Act (pertaining to the type of proof a party must offer to establish
entitlement to payment), the court will review only whether the proof
conforms with the regulation and the validity of the regulation.
Sec. 405.1138 Case remanded by a Federal court.
When a Federal court remands a case to the Secretary for further
consideration, the MAC, acting on behalf of the Secretary, may make a
decision, or it may remand the case to an ALJ with instructions to take
action and issue a decision or return the case to the MAC with a
recommended decision. If the case is remanded by the MAC, the
procedures explained in Sec. 405.1140 will be followed.
[[Page 69360]]
Sec. 405.1140 MAC review of ALJ decision in a case remanded by a
Federal court.
(a) General rule. In accordance with Sec. 405.1138, when a case is
remanded by a Federal court for further consideration, the decision of
the ALJ will become the final decision of the Secretary after remand on
that case unless the MAC assumes jurisdiction of the case. The MAC may
assume jurisdiction based on written exceptions to the decision of the
ALJ that the party files with the MAC or based on its authority under
paragraph (c) of this section. The MAC will either make a new,
independent decision based on the entire record that will be the final
decision of the Secretary after remand, or remand the case to an ALJ
for further proceedings.
(b) A party files exceptions disagreeing with the decision of the
ALJ. (1) If a party disagrees with the decision of the ALJ, in whole or
in part, he or she may file exceptions to the decision with the MAC.
Exceptions may be filed by submitting a written statement to the MAC
setting forth the reasons for disagreeing with the decision of the ALJ.
The exceptions must be filed within 30 days of the date the party
receives the decision of the ALJ or an extension of time in which to
submit exceptions must be requested in writing within the 30-day
period. A timely request for a 30-day extension will be granted by the
MAC. A request for an extension of more than 30 days must include a
statement of reasons as to why the party needs the additional time.
(2) If written exceptions are timely filed, the MAC will consider
the party's reasons for disagreeing with the decision of the ALJ. If
the MAC concludes that there is no reason to change the decision of the
ALJ, it will issue a notice addressing the exceptions and explaining
why no change in the decision of the ALJ is warranted. In this
instance, the decision of the ALJ is the final decision of the
Secretary after remand.
(3) When a party files written exceptions to the decision of the
ALJ, the MAC may assume jurisdiction at any time, even after the 60-day
time period which applies when a party does not file exceptions. If the
MAC assumes jurisdiction, it will make a new, independent decision
based on its consideration of the entire record adopting, modifying, or
reversing the decision of the ALJ or remand the case to an ALJ for
further proceedings, including a new decision. The new decision of the
MAC is the final decision of the Secretary after remand.
(c) MAC assumes jurisdiction without exceptions being filed. Any
time within 60 days after the date of the decision of the ALJ, the MAC
may decide to assume jurisdiction of the case even though no written
exceptions have been filed. Notice of this action will be mailed to all
parties at their last known address. The parties will be provided with
the opportunity to file briefs or other written statements with the MAC
about the facts and law relevant to the case. After the briefs or other
written statements have been received or the time allowed (usually 30
days) for submitting them has expired, the MAC will either issue a
final decision of the Secretary affirming, modifying, or reversing the
decision of the ALJ, or remand the case to an ALJ for further
proceedings, including a new decision.
(d) Exceptions are not filed and the MAC does not otherwise assume
jurisdiction. If no exceptions are filed and the MAC does not assume
jurisdiction of the case, the decision of the ALJ becomes the final
decision of the Secretary after remand.
Expedited Determinations and Reconsiderations
Sec. 405.1200 A beneficiary's right to an expedited determination.
(a) Applicability. (1) For purposes of Sec. Sec. 405.1200 through
405.1206, provider of services is defined, in accordance with section
1861(u) of the Act, as a hospital, critical access hospital, home
health agency (HHA), skilled nursing facility (SNF), hospice program,
or comprehensive outpatient rehabilitation facility (CORF).
(2) Scope. The expedited determination and reconsideration
provisions contained in Sec. Sec. 405.1200 through 405.1206 apply to
terminations of services furnished by a non-residential provider and
the discharge of a beneficiary from a residential provider of services.
(b) Beneficiary's right to an expedited determination by the QIO.
(1) A beneficiary who has received notice that a nonresidential
provider plans to terminate their services, or that a residential
provider plans to discharge the beneficiary, is entitled to an
expedited determination by the QIO in the State in which the
beneficiary is receiving provider services when--
(i) The beneficiary disagrees with the nonresidential provider of
those services that services being furnished should be terminated and a
physician who is treating the beneficiary in relation to the services
the beneficiary is receiving in the provider certifies that failure to
continue the provision of that service(s) may place the beneficiary's
health at significant risk; or
(ii) The residential provider notifies the beneficiary of its plans
to discharge the beneficiary from that provider of services.
(2) If a beneficiary does not contest the termination decision in a
timely manner, that beneficiary may not later assert the expedited
review process under this section.
(c) Procedures the beneficiary must follow. (1) A beneficiary must
submit the request for an expedited determination to the QIO in the
State in which the beneficiary is receiving those provider services, in
writing or by telephone no later than noon of the next calendar day
following receipt of the provider's notice of termination.
(2) The beneficiary or his or her representative must be prepared
to answer questions and/or supply information that the QIO may request
in order to conduct its review.
(d) Procedures the QIO must follow. (1) On the date that the QIO
receives the request for an expedited determination under paragraph (c)
of this section, it must immediately notify the provider of those
services that a request for an expedited determination has been made.
(2) The provider of those services must supply any information the
QIO requires to conduct its review and must make it available by phone
or in writing, by close of business of the day after the QIO notifies
the provider of the request for an expedited determination. This
information includes, but is not limited to, medical records and a copy
of the provider's written notice of termination if one was issued to
the beneficiary.
(3) The QIO must examine the medical records that pertain to the
services in dispute.
(4) The QIO must solicit the views of the beneficiary that
requested the expedited determination.
(5) The QIO must provide an opportunity for the provider/
practitioner to explain why the termination or discharge is
appropriate.
(6) The QIO must make its determination no later than 72 hours
after receipt of the request for an expedited determination and the
requested information.
(e) Notice of an expedited initial determination. (1) The QIO must
immediately notify the beneficiary, beneficiary's physician, and the
provider of services, of its determination. The QIO's initial
notification shall be done by telephone and subsequently with a written
notice.
(2) A written notice of the expedited determination must contain
the following:
(i) The basis for the determination.
[[Page 69361]]
(ii) A detailed rationale for the reconsidered determination.
(iii) A statement explaining the Medicare payment consequences of
the determination and the beneficiary's date of liability.
(iv) A statement informing the beneficiary of his or her appeal
rights including the name and phone number of the qualified independent
contractor that he or she must appeal to.
(v) The time period for filing the subsequent appeal.
(f) Effect of an expedited determination. The expedited
determination is binding upon the beneficiary and provider of those
disputed services, absent reconsideration by a QIC in accordance with
Sec. 405.1202. A beneficiary who does not file a timely request for an
expedited QIC reconsideration subsequently may request a QIC
reconsideration under Sec. 405.960 of this subpart, but the coverage
protections described in paragraph (g) of this section would not extend
through those reconsiderations.
(g) Coverage during QIO review. When a beneficiary files an appeal
in accordance with paragraph (c) of this section, the beneficiary may
not be billed for any disputed services. The QIO decision may result in
beneficiary liability, however.
Sec. 405.1202 Right to an expedited reconsideration by a QIC.
(a) Beneficiary's right to an expedited QIC reconsideration. A
beneficiary that has received an expedited determination from a QIO as
specified in Sec. 405.1200, and is dissatisfied with that
determination, may request an expedited reconsideration by the
designated QIC.
(b) Procedures the beneficiary must follow. (1) A beneficiary must
submit the request for an expedited reconsideration to the QIC no later
than noon of the next calendar day following receipt of the QIO's
written determination notice. This request may be made in writing or by
telephone.
(2) The beneficiary or his or her representative must be available
to answer questions and/or supply information that the QIO may request
to conduct its review.
(c) Procedures the QIC must follow. (1) On the date that the QIC
receives the request for an expedited reconsideration in accordance
with paragraph (b) of this section, it must immediately notify the
provider of those disputed services that a request has been made. The
QIC must conduct a review regardless of whether the beneficiary will be
liable for the services or stay in dispute.
(2) The QIC must request and review any information that it needs
to make an expedited reconsideration determination. This information
includes, but is not limited to, the beneficiary's medical records.
(3) The QIO and the provider of the disputed services must supply
any information that the QIC requires to conduct its review, and must
make it available, by telephone or in writing, by the close of business
of the day after the beneficiary received the QIO expedited
determination notice.
(4) The QIC must solicit the views of the beneficiary that
requested the expedited determination.
(5) The QIC must render its reconsideration determination no later
than 72 hours from receipt of the request for an expedited
reconsideration and the information requested to make its decision.
(6) If the QIC does not render a decision within 72 hours of
receipt of the request and the information, the QIC must notify the
beneficiary and inform that beneficiary of his or her right to have
this case escalated to the ALJ hearing level if--
(i) The beneficiary filed a timely expedited appeal before the QIC;
and
(ii) The amount remaining in controversy after the QIO
determination is $100 or more.
(7) The QIC must notify the beneficiary, in writing, of the rules
for escalation under Sec. 405.1002 (Right to ALJ hearing when QIC does
not issue reconsideration determination timely).
(d) Notice of an expedited reconsideration determination. The QIC
must render its expedited reconsideration determination and notify the
beneficiary, the physician of the beneficiary who requested the
expedited reconsideration determination, and the provider of those
services no later than 72 hours from receipt of the request for review.
(1) The QIC's initial notification shall be done by telephone and
followed by a written notice.
(2) A written notice of the expedited reconsideration determination
must contain the following:
(i) The basis for the reconsidered determination.
(ii) Detailed rationale for the reconsidered determination.
(iii) A statement explaining the Medicare payment consequences of
the reconsidered determination and the beneficiary's date of liability.
(iv) A statement informing the beneficiary of his or her subsequent
appeal rights in accordance with Sec. 405.1000 (Right to ALJ hearing
when QIC issues reconsideration determination) and the time period for
filing that appeal.
(v) The amount in controversy in accordance with the rules at Sec.
405.1004 (Amount in controversy for ALJ hearing and judicial review).
(e) Effect of an expedited reconsideration. The reconsidered
determination is binding upon the beneficiary and provider of those
disputed services and is subject to review in accordance with Sec.
405.1000 (Right to ALJ hearing when QIC issues reconsideration
determination).
(f) Coverage during QIC review. When a beneficiary files an appeal
in accordance with paragraph (b)(1) of this section, the beneficiary
may not be billed for any disputed services until a QIC reconsidered
determination has been rendered. The QIC decision may result in
beneficiary liability, however.
Sec. 405.1204 Expedited appeals of inpatient hospital discharges.
(a) Beneficiary's right to an expedited initial determination with
respect to an inpatient hospital discharge. (1) A beneficiary who has
received a notice of noncoverage may request an expedited determination
by the QIO when a hospital (acting directly or through its utilization
review committee) with physician concurrence, determines that inpatient
care is no longer necessary. A beneficiary who requests an expedited
QIO review may remain in the hospital with no additional financial
liability as specified in paragraph (e)(2) of this section.
(2) A beneficiary who fails to request an expedited initial
determination in accordance with paragraph (c) of this section and
remains in the hospital may still request an expedited initial
determination, but the financial liability rules of paragraph (e)(2) of
this section do not apply.
(b) Beneficiary's right to other review. (1) A beneficiary who
fails to request an expedited determination in accordance with
paragraph (c)(1)(iii) of this section and remains in the hospital may
still request an expedited review at any time during the course of his
or her inpatient hospital stay. The QIO will render a decision in
accordance with paragraph (d)(5)(ii) of this section and the financial
liability rules of paragraph (e)(2) of this section do not apply.
(2) A beneficiary who fails to request an expedited initial
determination in accordance with paragraph (c)(1)(iii) of this section,
and is no longer an inpatient in the hospital, may still request QIO
review within 30 calendar days after receipt of the hospital's written
termination notice or at any time for good cause. The QIO will
[[Page 69362]]
render a decision in accordance with paragraph (d)(5)(iii) of this
section and the financial liability rules of paragraph (e)(1) of this
section do not apply.
(c) Procedures the beneficiary must follow. For the expedited
appeal process, the following rules apply:
(1) The beneficiary must submit the request for an expedited
determination--
(i) To the QIO that has an agreement with the hospital under part
475 of this chapter;
(ii) In writing or by telephone; and
(iii) By noon of the first working day after he or she receives
written notice that the hospital has determined that the hospital stay
is no longer necessary.
(2) The beneficiary (or his or her representative), upon request by
the QIO, must be prepared to discuss his or her case with the QIO.
(d) Procedures the QIO must follow. On the date that the QIO
receives the beneficiary's request:
(1) The QIO must notify the hospital that the beneficiary has filed
a request for immediate review.
(2) The hospital must supply any information, including medical
records, that the QIO requires to conduct its review and must make it
available, by phone or in writing, by the close of business of the
first full working day after the day the beneficiary receives notice of
the proposed discharge.
(3) The QIO must examine the pertinent records pertaining to the
services.
(4) The QIO must solicit the views of the beneficiary who requested
the expedited determination.
(5)(i) The QIO must make a determination and notify the
beneficiary, the hospital, and physician of its determination by close
of business of the first working day after it receives all requested
pertinent information.
(ii) When the beneficiary did not request an expedited initial
determination in accordance with paragraph (c)(1)(iii) of this section
and remains an inpatient in the hospital, the QIO will make a
determination and notify the beneficiary, the hospital, and physician
of its determination within 2 working days following receipt of the
request and pertinent information.
(iii) When the beneficiary did not request an expedited initial
determination in accordance with paragraph (c)(1)(iii) of this section
and is no longer an inpatient in the hospital, the QIO will make a
determination and notify the beneficiary, the hospital, and physician
of its determination within 30 calendar days after receipt of the
request.
(e) Coverage during QIO expedited review. (1) In general, if the
beneficiary remains in the hospital after receiving the advanced
written notice of termination, and the hospital, the physician who
concurred in the hospital's determination on which the advanced written
notice of termination was based, or the QIO subsequently finds that the
beneficiary requires an acute level of inpatient hospital care, the
beneficiary is not financially responsible for continued care until the
hospital once again determines that the beneficiary no longer requires
inpatient care, secures concurrence from the physician responsible for
the beneficiary's care or the QIO and notifies the beneficiary.
(2) Timely filing. If a beneficiary files a request for an
expedited determination by the QIO in accordance with paragraph
(c)(1)(iii) of this section, the beneficiary is not financially
responsible beneficiary for inpatient hospital services furnished
before noon of the calendar day after the date the beneficiary (or his
or her representative) receives a written expedited determination by
the QIO.
(3) Untimely filing. (i) When a beneficiary does not file a request
for an expedited determination by the QIO in accordance with paragraph
(c)(1)(iii) of this section and remains an inpatient in the hospital,
that beneficiary may be responsible for charges that extend beyond the
date specified on the hospital's advance written notice of termination
or as otherwise stated by the QIO.
(4) Hospital requests expedited review. When the hospital requests
review in accordance with Sec. 405.1206, and the QIO concurs with the
hospital's decision, a hospital may not charge a beneficiary until the
date specified by the QIO.
(f) Notice of an expedited determination. (1) When a QIO renders an
expedited determination in accordance with paragraph (d)(5) of this
section, it must notify the beneficiary, physician, and hospital of its
decision, by telephone and in writing. The QIO's initial notification
must be done telephonically and subsequently with a written notice.
(2) A written notice of the expedited initial determination must
contain the following:
(i) The basis for the determination.
(ii) A detailed rationale for the determination.
(iii) A statement explaining the Medicare payment consequences of
the expedited determination and date of liability, if any.
(iv) A statement informing the beneficiary of his or her appeal
rights including the name and phone number of the QIC that he or she
must appeal to if he or she disagrees with this decision.
(v) The time period for filing reconsideration review by the QIC.
(g) Effect of an expedited QIO determination. The QIO determination
is binding upon the beneficiary, physician, and hospital.
(1) When beneficiary remains in hospital. If the beneficiary is
still an inpatient in the hospital and is dissatisfied with this
determination, he or she must request an appeal subject to Sec.
405.1202.
(2) When beneficiary is no longer an inpatient in the hospital. If
the beneficiary is no longer an inpatient in the hospital and is
dissatisfied with this determination, this determination is subject to
the general QIC reconsideration rules set forth in Sec. Sec. 405.960
through 405.978 of this subpart.
Sec. 405.1206 Hospital requests expedited QIO review.
(a) If the hospital (acting directly or through its utilization
review committee) believes that the beneficiary does not require
further inpatient hospital care but is unable to obtain the agreement
of the physician, it may request an expedited determination by the QIO.
(b) Procedures hospital must follow. (1) The hospital must (acting
directly or through its utilization review committee) notify the
beneficiary (or his or her representative) that it has requested that
review.
(2) The hospital must supply any pertinent information the QIO
requires to conduct its review and must make it available by phone or
in writing, by close of business of the first full working day
immediately following the day the hospital submits the request for
review.
(c) Procedures the QIO must follow. (1) On the date that the QIO
receives the request for review by the hospital, it must review any
pertinent information submitted by the hospital.
(2) The QIO must examine the pertinent records pertaining to the
services.
(3) The QIO must solicit the views of the beneficiary in question.
(4) The QIO must make a determination and notify the beneficiary,
the hospital, and physician within 2 working days of either the
hospital's request or receipt of any pertinent information submitted by
the hospital.
(d) Notice of an expedited determination. (1) When a QIO renders
[[Page 69363]]
an expedited determination as stated in paragraph (c)(4) of this
section, it must notify the beneficiary, physician, and hospital of its
decision, by telephone and in writing. The QIO's initial notification
must be done telephonically and subsequently with a written notice.
(2) A written notice of the expedited initial determination must
contain the following:
(i) The basis for the determination.
(ii) A detailed rationale for the determination.
(iii) A statement explaining the Medicare payment consequences of
the expedited determination and date of liability, if any.
(iv) A statement informing the beneficiary of his or her appeal
rights including the name and phone number of the qualified independent
contractor (QIC) that he or she must appeal to if that beneficiary is
dissatisfied with the QIO's determination.
(v) The time period for filing the subsequent appeal.
(e) Effect of an expedited initial determination. The initial
determination is binding upon the beneficiary, physician, and hospital.
(1) When beneficiary remains in hospital. If the beneficiary is
still an inpatient in the hospital and is dissatisfied with this
determination, he or she must request an appeal in accordance with
Sec. 405.1204 (QIC expedited reconsideration).
(2) When beneficiary has been discharged. When the beneficiary is
no longer an inpatient in the hospital and subsequently chooses to
appeal this decision, he or she must file an appeal in accordance with
Sec. Sec. 405.960 through 405.978.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: September 25, 2002.
Thomas A Scully,
Administrator, Centers for Medicare & Medicaid Services.
Approved: September 25, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-28296 Filed 11-14-02; 8:45 am]
BILLING CODE 4120-01-P