Rule: Medicare: Claims Appeal Procedures Changes

Tuesday,
March 8, 2005
Part III
Department of
Health and Human
Services
Centers for Medicare & Medicaid Services
42 CFR Parts 401 and 405

Medicare Program: Changes to the
Medicare Claims Appeal Procedures;
Interim Final Rule
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11420 Federal Register / Vol. 70, No. 44 / Tuesday, March 8, 2005 / Rules and Regulations
DEPARTMENT OF HEALTH AND www.cms.hhs.gov/regulations/ 786–1404 or Rosalind Little, (410) 786–

HUMAN SERVICES ecomments. (Attachments should be in 6972 (for issues relating to reopenings).
Microsoft Word, WordPerfect, or Excel; SUPPLEMENTARY INFORMATION:
Centers for Medicare & Medicaid however, we prefer Microsoft Word.)
Services 2. By mail. You may mail written Submitting Comments: We welcome
comments (one original and two copies) comments from the public on all issues
42 CFR Parts 401 and 405 to the following address ONLY: Centers set forth in this rule to assist us in fully
for Medicare & Medicaid Services, considering issues and developing
[CMS–4064–IFC] policies. You can assist us by
Department of Health and Human
RIN 0938–AM73 Services, Attention: CMS–4064–IFC, referencing the file code CMS–4064–IFC
P.O. Box 8011, Baltimore, MD 21244– and the specific ‘‘issue identifier’’ that
Medicare Program: Changes to the 8011. precedes the section on which you
Medicare Claims Appeal Procedures Please allow sufficient time for mailed choose to comment.
AGENCY: Centers for Medicare & comments to be received before the Inspection of Public Comments: All
Medicaid Services (CMS), HHS. close of the comment period. comments received before the close of
3. By hand or courier. If you prefer, the comment period are available for
ACTION: Interim final rule with comment
you may deliver (by hand or courier) viewing by the public, including any
period. personally identifiable or confidential
your written comments (one original
SUMMARY: Medicare beneficiaries and, and two copies) before the close of the business information that is included in
under certain circumstances, providers comment period to one of the following a comment. After the close of the
and suppliers of health care services, addresses. If you intend to deliver your comment period, CMS posts all
can appeal adverse determinations comments to the Baltimore address, electronic comments received before the
regarding claims for benefits under please call telephone number (410) 786– close of the comment period on its
Medicare Part A and Part B under 7195 in advance to schedule your public website. Comments received
sections 1869 and 1879 of the Social arrival with one of our staff members. timely will be available for public
Security Act (the Act). Section 521 of Room 445–G, Hubert H. Humphrey inspection as they are received,
the Medicare, Medicaid, and SCHIP Building, 200 Independence Avenue, generally beginning approximately 3
Benefits Act of 2000 (BIPA) amended SW., Washington, DC 20201; or 7500 weeks after publication of a document,
section 1869 of the Act to provide for Security Boulevard, Baltimore, MD at the headquarters of the Centers for
significant changes to the Medicare 21244–1850. Medicare & Medicaid Services, 7500
claims appeal procedures. This interim (Because access to the interior of the Security Boulevard, Baltimore,
final rule responds to comments on the HHH Building is not readily available to Maryland 21244, Monday through
November 15, 2002 proposed rule persons without Federal Government Friday of each week from 8:30 a.m. to
regarding changes to these appeal identification, commenters are 4 p.m. To schedule an appointment to
procedures, establishes the encouraged to leave their comments in view public comments, phone (410)
implementing regulations, and explains the CMS drop slots located in the main 786–7197.
how the new procedures will be lobby of the building. A stamp-in clock Copies: To order copies of the Federal
implemented. It also sets forth is available for persons wishing to retain Register containing this document, send
provisions that are needed to implement a proof of filing by stamping in and your request to: New Orders,
the new statutory requirements enacted retaining an extra copy of the comments Superintendent of Documents, P.O. Box
in Title IX of the Medicare Prescription being filed.) 371954, Pittsburgh, PA 15250–7954.
Drug, Improvement, and Modernization Comments mailed to the addresses Specify the date of the issue requested
Act of 2003 (MMA). indicated as appropriate for hand or and enclose a check or money order
DATES: Effective date: These regulations courier delivery may be delayed and payable to the Superintendent of
are effective on May 1, 2005. However, received after the comment period. Documents, or enclose your Visa or
in view of the wide span of applicability For information on viewing public Master Card number and expiration
of these rules and the complex, comments, see the beginning of the date. Credit card orders can also be
intertwined nature of the affected SUPPLEMENTARY INFORMATION section placed by calling the order desk at (202)
appeal procedures, not all of these below. 512–1800 (or toll-free at 1–888–293–
provisions can be implemented FOR FURTHER INFORMATION CONTACT: 6498) or by faxing to (202) 512–2250.
simultaneously. Please see section I.E. Michele Edmondson-Parrott, (410) 786– The cost for each copy is $10. As an
of the preamble for a full description of 6478 (for issues relating to general alternative, you can view and
the implementation approach. appeal rights). Janet Miller, (410) 786– photocopy the Federal Register
Comment date: To be assured 1588 (for issues relating to assignment document at most libraries designated
consideration, comments must be or authorized representatives). Jennifer as Federal Depository Libraries and at
received at one of the addresses Eichhorn Frantz, (410) 786–9531 (for many other public and academic
provided below, no later than 5 p.m. on issues relating to initial determinations libraries throughout the country that
May 9, 2005. and redeterminations). Arrah Tabe- receive the Federal Register.
ADDRESSES: In commenting, please refer Bedward, (410) 786–7129 or Jennifer This Federal Register document is
to file code CMS–4064–IFC. Because of Eichhorn Frantz, (410) 786–9531 (for also available from the Federal Register
staff and resource limitations, we cannot issues relating to Qualified Independent online database through GPO Access, a
accept comments by facsimile (FAX) Contractor (QIC) reconsiderations). service of the U.S. Government Printing
transmission. Arrah Tabe-Bedward, (410) 786–7129 or Office. The web site address is: http://
You may submit comments in one of John Scott (410) 786–3636 (for issues www.access.gpo.gov/nara/index.html.
three ways (no duplicates, please): relating to expedited access to judicial To assist readers in referencing
1. Electronically. You may submit review, Administrative Law Judge (ALJ) sections contained in this preamble, we
electronic comments on specific issues hearings and Medicare Appeals Council are providing the following table of
in this regulation to http:// (MAC) reviews). Jennifer Collins, (410) contents.
Federal Register / Vol. 70, No. 44 / Tuesday, March 8, 2005 / Rules and Regulations 11421
Table of Contents as well as hospice care and some home opportunity for a dissatisfied individual
I. Background health care. Part B, the supplementary to seek review in Federal court.
A. Overview of Existing Medicare Program medical insurance program, covers Consistent with section 1852(g)(5) of
B. Medicare, Medicaid, and SCHIP Benefits certain physicians’ services, outpatient the Act, the MA regulations provide that
Improvement and Protection Act (BIPA) hospital care, and other medical enrollees in MA plans who are
of 2000 services that are not covered under Part dissatisfied with determinations
C. Related Provisions of the Medicare A. regarding their Part C benefits have the
Prescription Drug, Improvement, and right to a hearing before an
Modernization Act (MMA) of 2003 In addition to the original Medicare
program, beneficiaries may elect to Administrative Law Judge (ALJ), review
D. Codification of Regulations
E. Implementation of the New Appeal receive health care coverage under Part by the Departmental Appeals Board
Requirements C of Medicare, the Medicare Advantage (DAB), and judicial review at the
II. Analysis of and Responses to Public (MA) program. Under the MA program, Federal district court level in much the
Comments an individual is entitled to those items same manner as beneficiaries have
A. Overview of Comments on November and services (other than hospice care) under the fee-for-service Medicare
15, 2002 Proposed Rule for which benefits are available under program. These regulations are codified
B. Appeal Rights (§ 405.900 through at §§ 422.600 through 422.612. Section
§ 405.912)
Part A and Part B. An MA plan can
provide additional health care items and 1860D–4(h) of the Act establishes
1. Basis and Scope, Definitions, General similar rights for enrollees in Medicare
Rules, and Parties to Initial services that are not covered under the
original Medicare program. Beginning in prescription drug plans. To the extent
Determinations, Redeterminations,
Reconsiderations, Hearings and Reviews January 2006, beneficiaries also can that there are any differences in the
(§ 405.902 through § 405.906) elect to receive prescription drug appeal procedures for these enrollees,
2. Medicaid State Agencies (§ 405.908) coverage under Part D of Medicare we will address those differences in
3. Appointed Representatives (§ 405.910) through the Medicare prescription drug future Part C and Part D rulemaking
4. Assignment of Appeal Rights (§ 405.912) benefit. documents.
5. Initial Determinations (§ 405.920 The regulations in part 405 subpart G
through § 405.928) Under the original Medicare program,
beginning at § 405.701 describe
6. Redeterminations (§ 405.940 through a beneficiary can generally obtain health
reconsiderations and appeals under
§ 405.958) services from any institution, agency, or Medicare Part A. When a Medicare
7. Redetermination, Notification, and person qualified to participate in the contractor makes a determination for a
Subsequent Limitations on Evidence Medicare program that undertakes to Part A claim, the beneficiary or, in some
(§ 405.954, § 405.956, § 405.966) provide the service to the individual.
8. Reconsiderations (§ 405.960 through circumstances, the provider, can appeal
After the care is provided, the provider the determination. (Consistent with
§ 405.978) or supplier (or, in some cases, a
9. Conduct of a Reconsideration (§ 405.968 sections 1861(u) and 1866(e) of the Act
beneficiary) can submit a claim for and § 400.202, the term ‘‘provider’’
and § 405.976)
10. Reopenings of Initial Determinations, benefits under the Medicare program to generally includes hospitals, skilled
Redeterminations, Reconsiderations, the appropriate government contractor, nursing facilities (SNFs), home health
Hearings, and Reviews (§ 405.980 either a fiscal intermediary (FI) (for all agencies (HHAs), comprehensive
through § 405.986) Part A claims and certain Part B claims) outpatient rehabilitation facilities
11. Expedited Access to Judicial Review or a carrier (for most claims under Part (CORFs), and hospices, as well as
(§ 405.990) B). If the claim is for an item or service
12. ALJ Hearings (§ 405.1000 through
certain clinics, rehabilitation agencies,
that falls within a Medicare benefit and public health agencies.) If the
§ 405.1066) category, is reasonable and necessary for
13. Remand Authority (§ 405.1034) determination is appealed, then the
the individual, and is not otherwise contractor reconsiders the initial
14. When May an ALJ Consolidate a
Hearing? (§ 405.1044) excluded by statute or rule, then the determination. If the contractor upholds
15. When May an ALJ Dismiss a Request contractor pays the claim. However, the the original determination, a party can
for Hearing? (§ 405.1052) Medicare program does not cover all request a hearing before an ALJ,
16. Content of ALJ’s Decision (§ 405.1046) health care expenses. Therefore, if the provided that the amount in controversy
17. Appeals Involving Overpayments Medicare contractor determines that the is at least $100. If a party is dissatisfied
(§ 405.1064) medical care is not covered under the with the ALJ’s decision, a party can
18. Review by the MAC and Judicial Medicare program, then it denies the
Review (§ 405.1100 through § 405.1140)
request review by the DAB. The
claim. component within the DAB that is
III. Response to Comments
IV. Collection of Information Requirements
Generally, when a contractor denies a responsible for Medicare claim appeals
V. Regulatory Impact Analysis claim, it notifies the provider, supplier, is the Medicare Appeals Council (MAC).
VI. Waiver of Proposed Rulemaking or beneficiary of the denial and offers (Although the Medicare appeals
the opportunity to appeal the denial. regulations in part 405 contain some
I. Background The existing appeal procedures for limited provisions regarding ALJ and
[If you choose to comment on issues in original Medicare are set forth in MAC proceedings, these proceedings are
this section, please include the caption regulations at 42 CFR part 405, subparts generally governed by the Social
‘‘BACKGROUND’’ at the beginning of G and H. Separate procedures for Security Administration (SSA)
your comments.] appealing determinations made under regulations at 20 CFR part 404, subpart
the Part C program are set forth at J.) MAC decisions constitute the final
A. Overview of Existing Medicare subpart M of part 422. There is a decision of the Secretary and can be
Program similar, separate appeals process for appealed to a Federal court. Generally,
The original Medicare program Part D claim determinations set forth at the lower level of appeal must be
consists of two parts (Part A and Part B). subpart M of Part 423. After an exhausted before the appeal can be
Part A, known as the hospital insurance appellant has exhausted the elevated to the next level.
program, covers certain care provided to administrative appeal procedures Medicare Part B appeal procedures
inpatients in hospitals, critical access offered under the Medicare program, the are set forth in part 405 subpart H
hospitals, and skilled nursing facilities, Medicare statute provides the (§ 405.801 et seq.). Under these
regulations, beneficiaries and suppliers (including redeterminations) and 1. Requirement To Transfer the
that accept assignment for Medicare allowing appellants to escalate cases to Administrative Law Judge Function to
claims can appeal to a Medicare an ALJ hearing, if reconsiderations are the Department of Health and Human
contractor for a review of the not completed within 30 days; Services (Section 931 of the MMA)
contractor’s initial determination that a • Establishing a uniform amount in Section 931 of the MMA requires
claim cannot be paid, either in full or in controversy threshold of $100 for Part B transfer of the functions of
part. (The term ‘‘supplier’’ is defined appeals at the ALJ level; administrative law judges (ALJs)
under section 1861(d) of the Act, as • Imposing 90-day time limits for
responsible for hearing appeals under
amended by section 901(b) of the MMA, conducting ALJ and DAB appeals and
title XVIII of the Act (and related
and means a physician or other allowing appellants to escalate cases to
provisions of title XI of the Act) from
practitioner, a facility, or other entity the next level of appeal if ALJs or the
the Commissioner of SSA to the
(other than a provider of services that MAC do not meet the 90-day deadline;
Secretary of the Department of Health
furnishes items or services) under and
and Human Services (DHHS). These
Medicare. This regulation will use the • Imposing ‘‘de novo’’ review when
ALJs are required to be organizationally
term ‘‘supplier’’ to include physicians.) the MAC reviews an ALJ decision made
and functionally independent from CMS
Suppliers that do not take assignment after a hearing.
On November 15, 2002, we published and must report to and fall under the
and providers, in some circumstances, general supervision of the Secretary of
also have appeal rights. in the Federal Register a comprehensive
proposed rule (67 FR 69312) to DHHS. The DHHS and SSA were
If the contractor’s review results in a required to jointly develop a plan to
continued denial of the claim, and the implement the provisions of section 521
of the BIPA, as well as other facilitate this transfer not later than
amount in controversy is at least $100, April 1, 2004, and the transfer will take
the appellant can request a second level complementary changes needed to
improve the Medicare claim appeal place no earlier than July 1, 2005, but
appeal known as a ‘‘fair hearing.’’ If the not later than October 1, 2005. On
hearing officer upholds the denial, the procedures.
Revised section 1869 of the Act also March 25, 2004, DHHS and SSA
appellant can request a hearing before submitted a report to the Congress that
an ALJ, provided that the appellant requires that the Secretary establish a
process by which a beneficiary can describes the process through which
meets the amount-in-controversy DHHS and SSA will accomplish the
requirement. (We published a ruling, obtain an expedited determination if the
beneficiary receives a notice from a transfer of responsibility for the ALJ
CMS Ruling No. 02–1, which function. A copy of that report is
implemented the $100 amount-in- provider of services that the provider
plans to terminate all services or available online at http://www.hhs.gov/
controversy requirement for Part B ALJ medicare/appealsrpt.pdf.
hearings specified in section 521 of discharge the beneficiary from the
BIPA for initial determinations made on provider. Previously, this right to an 2. Process for Expedited Access to
or after October 1, 2002. See 67 FR expedited review existed under statute Judicial Review (Section 932 of the
62478, 62480 (Oct. 7, 2002). For initial only for hospital discharges (under MMA)
determinations prior to October 1, 2002, sections 1154 and 1155 of the Act). On
Section 1869(b) of the Act provides
the amount in controversy threshold November 26, 2004, we published a
for expedited access to judicial review
was $500 for all services other than separate final rule, Expedited
in situations involving Medicare claims
home health ($100).) Subsequent Determination Procedures for Provider
appeals. Section 932 of the MMA
aspects of the appeals process for Part Service Terminations (69 FR 69252), to
amends section 1869(b) of the Act by
B claims are identical to those described respond to comments on that aspect of
requiring a review entity to respond to
above for a Part A claim. the November 15, 2002 proposed rule
a request for expedited access to judicial
and to set forth the regulations needed
B. Medicare, Medicaid, and SCHIP review in writing within 60 days after
to establish new expedited review
Benefits Improvement and Protection receiving the request. The term ‘‘review
procedures for provider service
Act of 2000 entity’’ means up to three reviewers
terminations.
who are ALJs or members of the
Section 521 of the Medicare, C. Related Provisions of the Medicare Departmental Appeals Board as
Medicaid, and SCHIP Benefits Prescription Drug, Improvement, and determined by the Secretary. If the
Improvement and Protection Act of Modernization Act of 2003 (MMA) review entity does not act within the 60-
2000, (Pub. L. 106–554) (BIPA), day deadline, then the party can request
amended section 1869 of the Act to On December 8, 2003, the Medicare
Prescription Drug, Improvement, and judicial review. Expedited access to
require revisions to the Medicare fee- judicial review can be granted when the
for-service appeals process. Among the Modernization Act of 2003 (MMA) (Pub.
L. 108–173) was enacted. The MMA MAC does not have authority to decide
major changes required by the BIPA questions of law or regulation relevant
amendments are— includes a number of provisions that
affect the Medicare claim appeals to matters in controversy and there is no
• Establishing a uniform process for
process, each of which is summarized material issue of fact in dispute. See
handling Medicare Part A and Part B
below. To the extent that the new § 405.990.
appeals, including the introduction of a
new level of appeal for Part A claims; statutory language has necessitated 3. Revisions to the Medicare Fee-for-
• Revising the time frames for filing revisions or additions to our proposed Service Appeals Process (Section 933 of
a request for Part A and Part B appeals; regulations to ensure that they conform the MMA)
• Imposing a 30-day time frame for to the MMA, we have incorporated the
certain ‘‘redeterminations’’ made by the needed changes into this interim final a. Requirement for Full and Early
contractors; rule. A brief summary of these Presentation of Evidence (Section
• Requiring the establishment of a provisions follows. To the extent that 933(a))
new appeals entity, the qualified the MMA provisions entail regulatory Section 933(a) of the MMA amends
independent contractor (QIC), to changes, a discussion of those changes section 1869(b) of the Act to require
conduct ‘‘reconsiderations’’ of is set forth in the appropriate section of providers and suppliers to present any
contractors’ initial determinations this preamble. evidence for an appeal no later than the
QIC reconsideration level, unless there rights. See § 405.1046(b). Additionally, suppliers to comment on our proposed
is good cause that prevented the timely section 933 of the MMA amends implementation. The comment period
introduction of the evidence. In this sections 1869(a), 1869(c), and 1869(d) of closed September 10, 2004.
interim final rule with comment, we are the Act to require all appeal notices to
adopting regulations to specify that in be written in a manner calculated to be 5. Appeals by Providers When There Is
the absence of good cause, a provider, understood by a beneficiary. No Other Party Available (Section 939
supplier, or beneficiary represented by a of the MMA)
d. Qualified Independent Contractors
provider or supplier must present
(QICs) (Section 933(d)) In situations where a beneficiary dies
evidence at the QIC level. Evidence not
Prior to the MMA, section 1869(c) of and there is no other party available to
presented by the parties at the QIC level
cannot be introduced at a higher level the Act, as amended by section 521 of appeal an unfavorable determination,
of appeal. See § 405.956(b)(8), BIPA, required the Secretary to enter section 939 of the MMA amends section
§ 405.966(a), § 405.1018, and into contracts with at least 12 entities 1870 of the Act to permit a provider or
§ 405.1122(c). called qualified independent contractors supplier to file an appeal. See
(QICs) to conduct reconsiderations of § 405.906(c).
b. Use of Patients’ Medical Records contested claim determinations. Section
(Section 933(b)) 6. Revisions to the Appeals Time
1869(c) sets forth certain requirements
Frames and Amounts in Controversy
Section 933(b) of the MMA amends for the QICs and their reviews and
section 1869(c)(3)(B)(i) of the Act to panels. Section 933(d) of the MMA (Section 940 of the MMA)
require QICs to review an individual’s makes a number of revisions to section Sections 1869(a)(3)(C)(ii) and
medical records when conducting a 1869(c) of the Act, including providing 1869(c)(3)(C)(i) of the Act as added by
reconsideration involving medical additional detail regarding the eligibility section 521 of BIPA established 30-day
necessity. See § 405.968(a). requirements for QICs (section 933(d)(1) decision making time frames at both the
of the MMA) and the eligibility
c. Notice Requirements for Medicare redetermination and reconsideration
requirements for QIC reviewers (section
Appeals (Section 933(c)) levels. Additionally, section 1869
933(d)(2) of the MMA). We have added
Section 933(c) of the MMA amends § 405.968(c)(3) to reflect the requirement (b)(1)(E) of the Act established the
sections 1869(a), 1869(c), and 1869(d) of of section 1869(g)(1)(C) that where a amount in controversy (AIC)
the Act to require appeal notices issued claim pertains to the furnishing of requirement for ALJ hearing requests
at the initial determination, treatment by a physician, or the and judicial review as $100 and $1000,
redetermination, reconsideration, and provision of items or services by a respectively. Section 940 of the MMA
ALJ levels to include certain physician, a reviewing professional amended these provisions so that the
information. As amended, section must be a physician. In addition, section decision-making time frame for
1869(a)(4) of the Act requires that a 933(d)(3) of the MMA amended section redeterminations and reconsiderations
notice of an initial determination 1869(c)(4) of the Act to reduce from 12 is 60 days and the AICs for ALJ hearings
include the reasons for the to 4 the minimum number of QICs with and judicial review will now be
determination, including whether a whom the Secretary must contract. adjusted annually, beginning on January
local medical review policy (LMRP) or 1, 2005, by the percentage increase in
local coverage determination (LCD) was 4. Process for the Correction of Minor the medical care component of the
used. The notice of initial determination Errors or Omissions Without Pursuing consumer price index (CPI) for all urban
must also include procedures for an Appeal (Section 937 of the MMA)
consumers and rounded to the nearest
obtaining additional data concerning the Section 937 of the MMA requires that multiple of $10. See § 405.950(a),
determination and notification of any the Secretary develop a means of § 405.970(a), and § 405.1006. A
applicable appeal rights, including allowing providers and suppliers to conforming amendment applies these
instructions on how to request a correct minor errors or omissions to AICs to the Part C MA program as well,
redetermination. See § 405.921(a). claims submitted under the programs and we have proposed that they apply
Section 1869(a)(5) of the Act specifies under title XVIII without initiating an to Part D when the new prescription
that a notice of redetermination must appeal. The statute specifies that this drug benefit becomes available in
include the specific reasons for the process be available no later than January 2006. See 69 Fed. Reg. 46,866,
redetermination, a summary of the December 8, 2004. We have revised 46,910, and 46,911, 46,722 for the MA
clinical or scientific evidence used to § 405.980 to allow providers and proposed rule and 69 Fed. Reg. 46,632
make the redetermination, if applicable, suppliers to make these corrections for the Part D proposed rule. (The
information on how to obtain additional through the reopenings process. See medical care component of the CPI
information concerning the § 405.927 and § 405.980. increased by 4.5 percent in 2004.
redetermination, and notification of any This process was developed in
Consequently, the AIC in 2005 for ALJ
applicable appeal rights. See § 405.956. consultation with Medicare contractors
hearings will remain $100, and the AIC
Reconsideration notices, under the and representatives of providers and
for judicial review will be $1,050.)
amended section 1869(c)(3)(E) of the suppliers, as required by section 937 of
Act, are required to include information the MMA. We published an article on 7. Determinations of Sustained or High
about applicable appeal rights. See April 30, 2004 that is available online at Levels of Payment Errors (Section 935(a)
§ 405.976. Section 1869(d) of the Act is http://www.cms.hhs.gov/medlearn/ of the MMA)
also amended to require that notices of matters/mmarticles/2004/SE0420.pdf to
ALJ decisions give the specific reasons address the implementation of section Consistent with section 1893(f)(3) of
for the decision, including, if 937 and consulted with providers and the Act, as amended by section 935(a)
applicable, a summary of the clinical or suppliers about this implementation of the MMA, determinations by the
scientific evidence used in making the during open door forums held between Secretary of sustained or high levels of
decision, the procedures for obtaining August 3 and August 31, 2004. We also payment errors are precluded from
additional information about the created an e-mailbox, administrative or judicial review. See
decision, and any applicable appeal PBG937@cms.hhs.gov, for providers and § 405.926(p).
8. Limitations on Further Review of decisions, and the effect of a revised decision-making time frames for these
Prior Determinations (Section 938(a) of determination or decision. entities.
the MMA) • Expedited Access to Judicial Review Another challenge involves the need
(§ 405.990)—Requirements concerning for appeal entities to process appeals
Section 1869(h)(6) of the Act, as
obtaining expedited access to judicial that were filed before and after the
amended by section 938(a) of the MMA,
review. implementation of these new appeal
requires that there must be no • ALJ Hearings (§ 405.1000 through procedures. For example, the DHHS
administrative or judicial review of § 405.1064)—Requirements concerning ALJs and the MAC will need to continue
‘‘prior determinations’’ on coverage of requesting a hearing, the hearing processing appeals received before the
physicians’’ services, a new aspect of process, applicable notice requirements, implementation of QICs at the same
the Medicare program that the MMA the effect of an ALJ’s decision, and the time that they begin to receive appeals
specifies must begin by June 2005. See applicability of national and local of QIC reconsiderations. Thus, until all
§ 405.926(q). coverage determinations. appeals that were filed under the rules
D. Codification of Regulations • MAC Review (§ 405.1100 through in effect before full implementation of
§ 405.1140)—Requirements concerning these regulations are completed,
The current regulations governing requesting a review, the review process, different administrative deadlines and
Medicare administrative appeals are set applicable notice requirements, the procedures may apply, depending on
forth in 42 CFR part 405, subparts G and effect of a review decision, and the the timing and source of the previous,
H. These regulations will continue to be requirements for requesting judicial lower-level appeal decision. Based on
necessary for an indefinite transition review. previous experience, the need for
period until the completion of all
E. Implementation of the New Appeal parallel procedures could extend over a
appeals that result from initial
Requirements year, as all cases currently in the
determinations made before the appeals pipeline are resolved.
implementation of the new procedures We believe that the changes set forth In addressing these challenges and
set forth in this interim final rule. in this interim final rule, in conjunction implementing the new procedures, we
However, the new BIPA and MMA with the introduction of a new case- need to balance the goal of
provisions make possible a largely specific appeal data system that we are implementing the new procedures as
uniform set of appeals procedures that now developing, will produce quickly as possible with our
can be applied for claims under both substantial improvements in the responsibility to facilitate a clear and
Parts A and B of Medicare. Therefore, efficiency of the Medicare claims appeal well-organized transition to the new
this interim final rule establishes a new process. We expect that the procedures for appellants and appeals
subpart I of part 405 that sets forth in implementation of these new appeal entities alike. We also need to ensure
one location the administrative appeals procedures, along with the transfer of that existing appeals continue to be
requirements for Medicare carriers, the ALJ function from SSA to DHHS, carried out as expeditiously as possible
fiscal intermediaries (FIs), QICs, ALJs, will reduce appellants’ concerns over as we transition fully to the new appeals
and the MAC. The major subjects the fairness and timeliness of Medicare procedures. These goals drive the
covered in subpart I of part 405 are as appeal decisions. The introduction of implementation approach described
follows: QICs, in particular, will not only below.
• General Rules (§ 405.900 through reassure appellants of the independence The appeal procedures set forth in
§ 405.912)—Definitions and of the reconsideration process, but also section 521 of BIPA were to take effect
requirements concerning initial offer them for the first time routine for initial determinations made on or
determinations, parties to appeals, reconsideration, by a panel of after October 1, 2002. As discussed in
appointing a representative, and physicians or other health care the proposed rule, we were unable to
assigning appeal rights. professionals, of all medical necessity fully implement the BIPA provisions by
• Initial Determinations (§ 405.920 issues. As a result, we believe these new that date without disrupting other
through § 405.928)—Requirements procedures will lead, over time, to fundamental functions of the Medicare
concerning the processing time frames significant reductions in the need to program (for example, the processing
for initial claim determinations, pursue appeals at the later stages of the and payment of claims). We were also
descriptions of actions that are initial appeals system, such as ALJ hearings aware of the possibility of additional
determinations, and the effect of an and MAC reviews. statutory changes, as were subsequently
initial determination. In the short term, however, we enacted in the MMA. Additionally, we
• Redeterminations (§ 405.940 recognize that implementing the recognize that the MMA has, in some
through § 405.958)—Requirements changes set forth in this interim final cases, established specific deadlines for
concerning requesting a rule may prove challenging both for the implementation of certain appeals
redetermination, the redetermination entities responsible for conducting provisions. For example, section
process, applicable notice requirements, appeals and for appellants themselves. 933(a)(2) of the MMA establishes an
and the effect of a redetermination. For example, there may be an initial effective date of October 1, 2004 for the
• QIC Reconsiderations (§ 405.960 increase in requests for second level prohibition on submission of new
through § 405.978)—Requirements appeals (that is, reconsiderations by evidence, absent good cause, by
concerning requesting a reconsideration, QICs), given the availability of these providers or suppliers in any ALJ or
the reconsideration process, applicable new independent appeal entities and MAC appeal if that evidence was not
notice requirements, and the effect of a the introduction of physician review presented at the QIC reconsideration.
reconsideration. panels, as well as the fact that the time For other provisions, the MMA either
• Reopenings (§ 405.980 through frame for a QIC decision is only half of makes no explicit reference to an
§ 405.986)—Requirements concerning the current time frame for a contractor effective date, or specifies (under
reopening of determinations and fair hearing. Similarly, increases in section 933(d)(4)) that certain MMA
decisions, including the good cause requests for ALJ hearings or MAC amendments will be effective as if
standard, content requirements for reviews are also possible, in view of the included in the BIPA legislation; that is,
notices of revised determinations or establishment of relatively short as of October 1, 2002. In the absence of
a specific effective date, the provisions appeals process. Thus, we believe that October 1, 2005. We have also taken this
became effective on the date of full implementation of these regulations impending change into account in
enactment of the MMA. must be premised on, and linked to, QIC establishing the implementation
Given the unavoidable delays in full implementation. schedule for the new appeals provisions
implementation of the BIPA changes, it As noted above, another important set forth in this interim final rule.
will not be possible to meet all of the related MMA provision is the transfer of
MMA deadlines. As a practical matter, the ALJ hearing function for Medicare Based on all of these considerations,
full, effective implementation of both claims appeals from SSA to DHHS. the table below illustrates the
the MMA and BIPA provisions can be Section 931(b) of the MMA mandates implementation approach that we are
achieved only in concert with the that this transition take place not earlier following for the provisions of this
availability of QICs in the Medicare than July 1, 2005, and not later than interim final rule:
IMPLEMENTATION APPROACH
Section(s) Effective
§ 401.108 .................................................................................................. Effective date of interim final rule.

§ 405.900–§ 405.928 ................................................................................. Effective date of interim final rule.
§ 405.940, § 944(a), and § 944(b) ............................................................. FI initial determinations issued on or after May 1, 2005. Carrier initial
determinations issued on or after January 1, 2006.
§ 942(a) ..................................................................................................... Effective date of interim final rule.
§ 405.942(b), § 405.944(c), § 405.946 through § 405.958 ........................ All requests for redeterminations received by FIs on and or after May
1, 2005. All requests for redeterminations received by Carriers on or
after January 1, 2006.
§ 405.960–§ 405.978 ................................................................................. May 1, 2005 for redeterminations issued by FIs January 1, 2006 for re-
determinations issued by Carriers.
§ 405.980–§ 405.990 ................................................................................. Effective date of interim final rule.
§ 405.1000–§ 405.1018 ............................................................................. Effective for all appeal requests stemming from a QIC reconsideration.
§ 405.1020 ................................................................................................ July 1, 2005 for all ALJ hearing requests.
§ 405.1022–§ 405.1140 ............................................................................. Effective for all appeal requests stemming from a QIC reconsideration.
As the table reflects, we have possible. In January 2006, at least four ALJ appeal process as soon as possible.
concluded that the best approach to QICs will begin carrying out Implementing the new procedures for
implement the new appeal procedures reconsiderations of appealed carrier appeals resulting from FI
is to phase in the new procedures redeterminations. We believe that this determinations also gives us an
beginning in FY 2005. QIC phased-in approach to QIC opportunity over several months to
reconsiderations will become available implementation constitutes the only identify and address any process
in two stages depending on if an FI or viable approach for an undertaking of problems or other technical difficulties
carrier carries out the redetermination. this magnitude and is critical to involved in the first stages of QIC
For all FI redeterminations issued on or ensuring that we: (1) Minimize reconsiderations before transitioning the
after May 1, 2005, appellants will have disruption among the current Medicare much larger Part B appeals workload
a right to reconsideration by a QIC contractors and current appellants; and that is now performed by carriers.
within 60 days of their request for (2) have adequate opportunity to One unavoidable consequence of this
reconsideration, as well as escalation to educate providers, suppliers, and change will be that some employees of
an ALJ if the reconsideration is not beneficiaries about the new procedures. current contractors will need to be
completed timely. Similarly, the new Phasing in the transition from the either reassigned or discharged since the
reconsideration and escalation current process serves to eliminate any FIs and carriers will no longer be
procedures will take effect for all carrier unnecessary risk in terms of our ability conducting fair hearings. However, we
redeterminations issued on or after to manage major appeal transitions at all believe that the slightly longer transition
January 1, 2006. Thus, in 2006, all new of our FIs and carriers simultaneously. for the much larger carrier workforce
appeals will be carried out under the In addition, these contractors are will help to ameliorate the potential
regulations set forth in this interim final dealing at the same time with numerous human costs of this change.
rule, including provisions on— statutorily mandated changes (such as Finally, we note that wherever it was
• Reconsiderations by QICs; the contracting reform changes required feasible (that is, where the BIPA and
• The new statutory time frames for under Title IX of the MMA). MMA appeals provisions are not
reconsiderations, ALJ hearings, and We have chosen to implement the fundamentally premised on the
MAC reviews; changes initially for redeterminations introduction of QIC reconsiderations
• The possibility of escalation of conducted by fiscal intermediaries for into the appeals process), we have
cases where the time frames are not met; several reasons. Fiscal intermediaries already taken a series of steps to
• The new notice and evidence rules; are responsible for all appeals involving implement the new appeal provisions
and Part A claims, as well a limited number mandated by the statute, including most
• Medicare-specific ALJ procedures. of Part B claims. The Part A process notably the transition to a uniform
The phased-in approach enables at currently does not include a second redetermination process by our FIs and
least two QICs to begin carrying out level of contractor appeal prior to an carriers. We issued instructions (CR
reconsiderations of appealed FI ALJ hearing, unlike the Part B fair 2620) to effect this change beginning on
redeterminations beginning in May hearing procedure. Thus, introducing October 1, 2004. The instructions
2005, and thus to provide the second the QIC reconsideration step first for incorporate both the redetermination
level reconsideration envisioned by the these claims ensures that Part A decision-making time frames and notice
statute for Part A claims as soon as appellants have access to a second pre- requirements required by the statute
(under sections 1869(a)(2), 1869(a)(3) judges, law offices, health plans, and ALJ’s role changes and how much
and 1869(a)(5) of the Act, as amended others. The issues most frequently deference the ALJ gives to our policies;
by section 521 of BIPA and sections 933 raised by commenters include: dismissals and remands of appeals; and
and 940 of the MMA). We have also Beneficiary protections, particularly for distinctions between reopenings and
issued instructions to the contractors unrepresented beneficiaries; deadlines appeals.
regarding the implementation of section for filing appeals and time frames for
These comments and our responses
939 of the MMA (which took effect decision-making; notices; differences
are discussed below, in order of the new
upon enactment of the MMA) between an assignee and an appointed
representative of a beneficiary; authority regulations text. (For the convenience of
concerning appeals by providers when
of representatives of parties; time frames the reader, we are presenting below a
there is no other party available because
of the death of the beneficiary appellant. for the escalation of cases from one level chart offering a sequential overview of
These regulations codify those changes. to the next when adjudicators fail to the available procedures and related
meet their deadlines; the role of the new time frames associated with the former
II. Analysis of and Responses to Public entities, qualified independent and current appeals process. This chart
Comments contractors (QICs), that will perform is for illustrative purposes only, and
A. Overview of Comments on November reconsiderations; evidentiary certain details (such as when escalation
15, 2002 Proposed Rule requirements; the perceived formality of of a case is permissible) have been
administrative law judge (ALJ) omitted for ease of presentation. For a
We received 37 timely comments procedures, especially adversarial full description of the applicable
from organizations representing proceedings whereby we enter the requirements, please consult the
providers and suppliers, beneficiary process in general, and the impact on preamble material that follows and the
advocacy groups, administrative law beneficiaries in particular; whether an regulations text.)
ER08MR05.000</GPH>
B. Appeal Rights (§ 405.900 Through intended to give appeal rights to services failed to meet the requirements
§ 405.912) nonparticipating suppliers who are not of the Medicare covered benefit (for
considered parties to the initial example, a denial of home health
1. Basis and Scope, Definitions, General
determination and who may not have services due to the lack of a physician
Rules, and Parties to Initial
secured an assignment of appeal rights certification). Despite this restriction,
from the beneficiary. however, providers routinely accessed
Reconsiderations, Hearings and Reviews Comment: Several commenters sought the appeals process by acting as the
(§ 405.900 Through § 405.906) clarification on whether the intent of the beneficiary’s appointed representative
[If you choose to comment on issues in proposed rule was to give party status in situations where they would
this section, please include the caption to providers on the basis of a ‘‘technical otherwise not have had appeal rights.
‘‘Appeal Rights—Basis and Scope, etc.’’ denial.’’ (A technical denial is a denial As discussed in the proposed rule, a
at the beginning of your comments.] based on an item or service failing to clear goal of the BIPA legislation was to
In the proposed rule, we proposed meet all of the requirements of a establish a uniform appeals process for
that providers would be allowed to file Medicare-covered benefit, rather than Part A and Part B claims, and thus for
an administrative appeal of Medicare on a determination that an item or all beneficiaries, providers, and
initial determinations to the same extent service is not reasonable and necessary participating suppliers. In keeping with
as beneficiaries. Currently, providers under section 1862(a)(1)(A) of the Act, this goal, we believe that the interests of
have limited rights to appeal Medicare or on a determination that an item or the appeals process would be best
initial determinations: providers can service constitutes custodial care.) Many served by ensuring that providers are
appeal Medicare determinations only interpreted the proposed rule as afforded an equal opportunity to be
when the determination involves a maintaining the current policy that heard with regard to all Medicare initial
finding that: (1) The item or service is providers do not have appeal rights for determinations. Therefore, as proposed,
not covered because it constitutes these types of denials. Other we are specifying that Medicare
custodial care, is not reasonable and commenters believed that our intent providers may file administrative
necessary, or for certain other reasons; was to allow providers to appeal to the appeals of initial determinations to the
and (2) the provider knows, or same extent as beneficiaries and agreed same extent as beneficiaries. With this
reasonably could have been expected to with the proposal. Still other change, we achieve consistency in our
know, that the item or service in commenters questioned whether the approach to which individuals or
question is not covered under Medicare change in policy to expand appeal rights entities can bring an appeal under Part
(that is, there is a finding with respect for providers would mean that A and Part B.
to the limitation of liability provision contractors would no longer deny This interim final rule does not
under section 1879 of the Act). claims because the claims failed to meet change the available bases for claim
Regarding non-participating providers the requirements of the Medicare denials. Contractors may continue to
and suppliers, however, we proposed benefit. deny claims on the basis that the item
maintaining the current appeal policies. Response: A provider or supplier can or service is not a Medicare benefit, or
Consistent with section 940 of the appeal a properly submitted claim only more precisely, that the item or service
MMA, in this interim final rule, we are after the contractor has issued an initial in question does not adhere to all the
making a change to § 405.904(a)(2) determination on that claim. Thus, if a requirements set forth in the definition
concerning the amounts in controversy contractor rejects a claim because the of the Medicare benefit. Rather, this
for ALJ hearings and judicial review. claim was improperly submitted (for interim final rule changes the appeals
Section 940 of the MMA requires the example, the claim was missing the status of providers and participating
amount in controversy to be adjusted basic information needed to process it), suppliers, allowing them to appeal all
annually based on the medical care that rejection does not constitute an denials on their own accord.
component of the consumer price index initial determination. Comment: One commenter requested
for all urban consumers. Accordingly, Currently, § 405.710(b) allows a clarification on whether a beneficiary
we have deleted specific references to provider to appeal an initial can appeal even if the beneficiary has
the previous $100 and $1,000 threshold determination on Part A coverage only appointed a representative or initiated a
requirements. when a contractor determines: (1) That valid assignment of appeal rights. The
We have made two revisions to an item or service is not covered commenter expressed concern that
proposed § 405.906. In the proposed because it constitutes custodial care; (2) under proposed § 405.906, any party to
rule, we inadvertently omitted certain that an item or service is not covered the initial determination can request a
nonparticipating suppliers as potential because it did not qualify as covered redetermination. A literal reading of this
parties to an initial determination. The home health services because the section would permit a beneficiary to
interim final rule corrects that error by beneficiary was not confined to the pursue an appeal even if the beneficiary
specifying under § 405.906(a)(2) that a home or did not need skilled nursing has an appointed representative or has
nonparticipating supplier who has care on an intermittent basis; (3) that an assigned appeal rights to a provider or
accepted assignment can be a party to item or service is not covered because supplier. In addition, the commenter
an initial determination. it was a hospice service provided to a asked if beneficiaries could pursue an
Also, consistent with section 1870(h) non-terminally ill individual; (4) that appeal at the same time as the provider.
of the Act, as amended by section 939(a) the item or service is not covered Response: The commenter raises two
of the MMA, we have added a because it is not reasonable and sets of issues: (1) The appeal rights of a
conforming provision to § 405.906(c) necessary; and (5) either the beneficiary beneficiary who has appointed a
concerning parties to appeals. Where a or provider of services, or both, knew, representative; and (2) the appeal rights
provider or supplier is not already a or could reasonably have been expected of a beneficiary who has assigned these
party, revised § 405.906(c) permits the to know, that the item or service is rights to a provider or supplier.
provider or supplier to appeal an initial excluded from Medicare coverage. Beneficiaries can either exercise their
determination relating to services it Historically, only beneficiaries were appeal rights themselves or through an
rendered to a beneficiary who afforded the right to appeal claims that appointed representative, or they can
subsequently dies. This provision is were denied because the items or assign their appeal rights to the provider
or supplier that delivered the service or suggested that we revise this provision Response: A dual eligible beneficiary
item. (We note that appointment of a since beneficiaries in most instances do is one who is eligible for and enrolled
representative and assignment of appeal not file claims. to receive benefits under both the
rights are two different and unrelated Response: As a general rule, we Medicare and Medicaid programs. To
actions.) Unlike assignment, require providers and suppliers to clarify this concept, we have replaced
appointment of a representative does submit claims to seek reimbursement for the proposed text ‘‘dually eligible for
not entail transferring one’s appeal items or services that they have Medicare and Medicaid’’ in § 405.908.
rights, nor does it make the appointed delivered to beneficiaries. Thus, Instead, the text now states that ‘‘[w]hen
representative a separate party to the beneficiaries generally do not need to a beneficiary is enrolled to receive
appeal. An appointed representative is file claims, but they continue to have benefits under both Medicare and
chosen by a party to assist a beneficiary the right to do so. (In some situations, Medicaid, the Medicaid State Agency
in exercising appeal rights with respect however, beneficiaries are prohibited may file a request for an appeal with
to one or more initial determinations. from filing claims on their own, such as respect to a claim for items or services
The beneficiary retains party status for glucose test strips.) Accordingly, we furnished to a dual eligible beneficiary.’’
during the appeals process, and believe that it is necessary to maintain We note that we further clarified in this
therefore, never loses the right to appeal this language in the interim final rule to provision that the Medicaid State
to subsequent levels of the appeals accommodate those rare instances Agency’s appeal is only with respect to
process. To avoid confusion regarding where beneficiaries may submit claims services for which has made payment or
representation, either the beneficiary or (for example, because a supplier for which it may be liable.
the appointed representative (but not improperly refuses or fails to submit a Comment: A commenter
both the beneficiary and the appointed timely claim with Medicare for recommended that we clarify what
representative) should request the reimbursement). For clarity, we have qualifies as a timely filed
appeal. added § 405.926(n) and § 405.926(o) to redetermination request under
On the other hand, when a beneficiary reflect that a provider or supplier’s § 405.908.
completes a valid assignment of appeal failure to request an initial Response: A request for a
rights, the beneficiary assigns appeal determination or submit a timely claim redetermination by a Medicaid State
rights for the particular claim or claims does not constitute an initial Agency will be considered timely if it
to a provider or supplier who is not determination, and that determinations meets the requirements at § 405.942.
otherwise a party to the initial with respect to whether an entity Section 405.942(a) specifies that a
determination. If the beneficiary assigns qualifies for an exception to the request for a redetermination must be
appeal rights in accordance with electronic claims submission filed within 120 calendar days from the
§ 405.912(f), then the beneficiary requirement under 42 CFR, part 424, are date the party receives the notice of the
transfers any right to request a not considered initial determinations. initial determination. Although the
redetermination, reconsideration, Medicaid State Agency is not a party to
2. Medicaid State Agencies (§ 405.908) the initial determination, it is filing a
hearing, or MAC review with respect to
the item or services at issue, unless the [If you choose to comment on issues in redetermination request with respect to
assignment is revoked in accordance this section, please include the caption a claim for items and services furnished
with § 405.912(g). While it is not ‘‘Medicaid State Agencies’’ at the to a beneficiary. Therefore, the
permissible for a beneficiary to file an beginning of your comments.] timeliness of the request will be
appeal when a valid assignment of In the proposed rule, we drafted a determined by the date that the
appeal rights is in force, it is possible for separate provision acknowledging the beneficiary receives the initial
more than one party to file a request for right of a Medicaid State Agency to determination notice, otherwise known
an appeal on the same claim when no pursue an appeal on behalf of a as the Medicare Summary Notice
assignment of appeal rights has been beneficiary who is entitled to benefits (MSN). For purposes of calculating the
made (for example, a beneficiary and a under both Medicare and Medicaid. We date of receipt of the MSN under
supplier that has accepted assignment of proposed that a Medicaid State Agency § 405.942(a)(1), it is presumed that the
a claim). We are providing under would not be considered a party, unless beneficiary received the MSN 5 days
§§ 405.944(c) and 405.964(c) that if the agency actually pursued a after the date on the MSN, unless there
more than one party timely files a redetermination on behalf of a dually is evidence to the contrary.
request for redetermination or eligible beneficiary. A contractor would
3. Appointed Representatives
reconsideration on the same claim not automatically send a Medicaid State
(§ 405.910)
before a redetermination or Agency notice of determinations made
reconsideration is made on the first during the administrative appeals [If you would like to comment on issues
timely filed request, the contractor or process, nor would the agency be in this section, please include the
the QIC will consolidate the separate permitted to request QIC caption ‘‘Appointed Representatives’’ at
requests into one proceeding and issue reconsiderations, ALJ hearings or MAC the beginning of your comments.]
one determination. These provisions are reviews, unless the agency actually filed Under proposed § 405.910, we
consistent with the longstanding policy a request for redetermination for a incorporated and modified several of
that multiple parties have t he right to beneficiary. If a Medicaid State Agency the provisions in 20 CFR part 404,
appeal the same claim. We note, filed a request for a redetermination, it subpart R, and 42 CFR part 405,
however, that has been very rare for would retain party status for the claim subparts G and H, as they relate to the
more than one party to exercise this throughout the rest of the appeals representation of parties. These
right. process. provisions eliminated the need for
Comment: One commenter pointed Comment: With regard to a Medicaid incorporation of the existing SSA
out that § 405.906(a)(1) lists a State Agency filing an appeal on behalf regulations regarding appointment of
beneficiary who has filed a claim for of an individual that is entitled to both representatives.
payment or has had a claim for payment Medicare and Medicaid benefits, one Proposed § 405.910(a) sets forth the
filed as a party to the initial commenter recommended that we definition of appointed representative as
determination. The commenter clarify the definition of a dual eligible. an individual authorized by a party, or
under State law, to act on the party’s only if these representatives waived requiring non-attorney representatives
behalf in dealing with any of the levels receipt of a fee for their services. to waive any right to charge and receive
of the appeals process. Appointed Response: Section 1869(b)(1)(B)(iv) of a fee. Finally, other commenters
representatives do not have the Act establishes that the inquired about the applicability of the
independent party status and take requirements set out in sections 205(j) Equal Access to Justice Act (EAJA) to
action only on behalf of the individual and 206 of the Act govern who may the new appeals process and
or entity they represent. serve as a representative for a Medicare recommended that the final rule
Under proposed § 405.910(d), we set beneficiary. Section 405.910 of the reference the availability of attorney’s
forth that in order to be valid, an regulations permits anyone who fees.
appointment both needs to be in satisfies the requirements outlined in Response: Section 1869(b)(1)(B)(iv) of
writing, and signed by the party making section 205(j)(2) to act as a the Act establishes that the provisions of
the appointment and the individual representative. The provisions of sections 205(j) and 206 (other than
agreeing to accept the appointment § 405.910(b) discuss persons not subsection (a)(4)) of the Act apply to
(even when the individual being qualified to act as an appointed representation for Medicare claim
appointed is an attorney). Proposed representative. Nothing in section appeals in the same manner as they
section § 405.910(e) establishes the time 205(j)(2) requires appointed apply to representation for Social
frame governing the duration of representatives to be members of the Security claims. By incorporating these
representation as: (1) The life of an bar. Therefore, we do not agree that it sections, the Congress maintained that
individual appeal, and (2) for purposes is appropriate or necessary to limit for appeals before the Secretary,
of appeals of other initial providers’ access to the administrative appointed representatives, including
determinations, one year from its appeals process by requiring them to attorneys, must obtain approval of fees
original effectuation. retain attorneys if they wish to appoint before charging a party.
a representative. Consistent with the current practice of
New section 1869(b)(1)(B)(iv) of the
Similarly, there is nothing in section fee petitions before ALJs, and sections
Act makes clear that section 206(a)(4)
205(j)(2) that requires non-attorneys 205(j) and 206 (other than subsection
does not apply in the case of Medicare
who represent beneficiaries to waive (a)(4)) of the Act, as applied by section
appeals. This section permits the award
their fees. However, we agree with the 1869(b)(1)(B)(iv) of the Act, we are
of attorney’s fees (not to exceed 25
commenter that certain precautions be requiring in new § 405.910(f)(1) that an
percent) from a claimant’s entitlement
taken to prevent a conflict of interest attorney or other person who represents
to past-due disability benefits.
when the party that provides an item or a beneficiary, and who wishes to charge
Therefore, in proposed § 405.910(f), we
service is the same party representing a fee for services rendered in connection
are explicit that no award of attorney the beneficiary in a claim appeal. with an appeal before the Secretary,
fees can be made against the Medicare Therefore, in accordance with section must seek approval of the fee from the
trust funds. However, we requested 1869(b)(1)(B)(iii) of the Act, new Secretary. Although it would be up to
comments on petitions to ALJs to review § 405.910(f)(3) requires that a provider the Secretary to determine the
and approve attorney fees. or supplier who both furnished the reasonableness of the fee, we do not
In proposed § 405.910(g) through service being appealed and represents believe the provisions in sections
§ 405.910(k), we delineated the the beneficiary in the Medicare claim 206(a)(2) and 206(a)(3) of the Act will be
responsibilities and rights of an appeal, must waive the right to collect relevant in determining whether a fee is
appointed representative. In proposed a fee for acting as the appointed reasonable. In Social Security appeals,
§ 405.910(l), we established the rules representative. Additionally, if the those provisions limit a representative’s
regarding delegation. (Delegation is the appeal involves a question of liability fee, in certain instances, to the lesser of
act of empowering another to act as a under section 1879 of the Act, the 25 percent of past due benefits or $4,000
representative.) In order for an provider or supplier may not represent (with the $4,000 cap subject to an
appointed representative to designate the beneficiary unless the provider or update factor determined by the
another person to act as a representative supplier also waives the right to collect Commissioner of Social Security).
(the designee), the appointed payment for the item or service at issue. Unlike Social Security appeals,
representative must: (1) Give the Comment: We solicited comments on Medicare appeals do not involve past-
designee’s name to the party; (2) secure our proposal to require attorneys to due cash benefits; moreover, the
the designee’s acceptance of both the petition ALJs for review and approval of benefits at issue can vary from as little
representation and the requirements of fees. A few commenters suggested that as $100 (the minimum amount in
that representation; and (3) secure the appointed representatives who are controversy for an ALJ appeal) to
represented party’s acceptance of the members of the bar of one of the fifty $100,000 or more, and we do not believe
new arrangement with a signed, written States, the District of Columbia, or that applying a 25 percent test to these
document. We note that the decision on Puerto Rico, not be required to petition divergent figures is reasonable.
whether to have an appointed an ALJ in order to collect a fee. Instead, Therefore, the test in sections 206(a)(2)
representative belongs to the party, and one commenter suggested that oversight and 206(a)(3) of the Act is irrelevant in
we neither encourage nor discourage should be left to the bar of which the determining the reasonableness of
representation. Therefore, under attorney is a member. representatives’ fees. Also, section
proposed § 405.910(m), a party would There were also a number of 206(a)(4) does not apply, because the
have the ability to revoke an comments regarding the ability of Medicare program does not involve
appointment for any reason, at any time. appointed representatives to charge fees. past-due cash benefits. The process for
Comment: A commenter suggested The commenters noted that the obtaining fee approval will be further
amending the regulation to require that proposed rule addressed only fees described either in future rulemaking or
appointed representatives for providers charged by attorney representatives, and in ALJ and MAC level procedural
be members of the bar. However, this recommended that we address fees for manuals or other issuances, as
commenter also recommended non-attorneys in this interim final rule. appropriate.
permitting non-attorneys to act as One commenter recommended that the We do not consider services below the
representatives for beneficiaries, but final rule include explicit language ALJ hearing level in connection with
claims in proceedings before Medicare elements are missing or defective, appointed representative is chosen by a
contractors (such as intermediaries, adjudicators must contact the party with party for the duration of one year to
carriers, QICs, QIOs and other a description of the missing assist the party in exercising appeal
independent review entities) to be documentation or information. Unless rights for one or more initial
services provided in connection with the defect is cured, the prospective determinations. We believe that once an
proceedings before the Secretary. appointed representative lacks the appeal of an initial determination has
Section 206(a) authorizes the authority to act on behalf of the party, been filed, the appointed representative
Commissioner of Social Security to and is not entitled to obtain or receive retains the right to manage that appeal
prescribe rules and regulations to any information related to the appeal, through the entire appeals process,
govern the representation of claimants including the appeal decision. An regardless of how long it takes to reach
in proceedings before the individual may also use a CMS–1696 a final decision. In § 405.910(e)(3), we
Commissioner. This provision has been form to appoint a representative. That state that unless revoked, an
interpreted to include proceedings at form contains all of the required appointment is valid for the life of the
the ALJ level and above. Thus, appeals elements to complete a valid appeal.
before the Secretary of HHS have long appointment of representation. In § 405.910(e)(4), we made an
been interpreted to include only the ALJ Comment: We received several exception for appointments signed in
level and above. Therefore, the fee responses to our request for comments connection with Medicare Secondary
petition provisions do not apply to regarding alternative time frames for the Payer recovery claims, because liability,
services rendered below the ALJ hearing duration of an appointment of no-fault, and worker’s compensation
level, nor do they apply to representative. Some commenters claims often take more than one year to
representatives of non-beneficiary simply wanted clarification of the resolve. Where an appointment of
appellants. policy in the proposed rule. Others representative is related to these
We also agree that fee limitations are understood our proposal to make recovery claims, the appointment is
appropriate for certain non-attorneys appointments valid for one year, but valid from the date that it is signed
who represent beneficiaries. wondered if the one-year period began through the duration of any subsequent
Accordingly, § 405.910(f)(3) requires on the date-of-service for the appealed appeal.
providers and suppliers who furnished claim, or on the date that the We do not agree that either an
the items or services in question to beneficiary, provider or supplier appointment or the representative’s
waive the right to charge and collect any authorized another individual to appeal ability to file appeals of future claims
fee for representing a beneficiary in a on their behalf. One commenter argued continues indefinitely. Appointed
claim appeal. This is required by section that because we offered no indication representatives have unlimited access to
1869(b)(1)(B)(iii) of the Act. To ensure that representatives were initiating protected health care information, and
that this policy is followed consistently, appeals without the consent of the as we stated in the proposed rule, we
we will revise the Appointment of appellants, limiting the duration of have an affirmative duty to ensure that
Representative form, CMS–1696–U4, to appointments would serve only to our adjudicators only disclose protected
reflect this policy. In § 405.910(f)(4), we create unnecessary hardships for health information to authorized third
also added that the Secretary does not appellants. Providers, and suppliers parties. Taking this into consideration,
review fee arrangements made by a would be prevented or delayed from we believe that it is both necessary and
beneficiary for the purposes of making entering the claim appeals process, and appropriate to limit the duration of an
a claim for third party payment (as beneficiaries with chronic conditions appointment and a representative’s
defined in 42 CFR § 411.21) even though would be required to renew the ability to file additional appeals to a
that representation may ultimately appointment every year. period of one year, beginning on the day
include representation for a Medicare Response: A number of the comments that the appointment becomes effective.
Secondary Payer recovery claim. that we received indicate some In § 405.910(i)(4), we specifiy that for
Guidelines for the application of confusion between the appointed initial determinations involving MSP
Equal Access to Justice Act (EAJA) to representative provisions at § 405.910 recovery issues, the notice of initial
claims before the Department may be and the assignment provisions at determination must be sent to the
found at 45 CFR part 13. (The final rule § 405.912. Appointing a representative beneficiary and appointed
was published in the Federal Register at and assigning appeal rights are two representative. This differs from non-
69 FR 2843 (January 21, 2004)). The different and unrelated actions under MSP determinations where only the
final rule governs the applicability of the new appeals process. Beneficiaries beneficiary receives the notice of initial
EAJA to the Medicare claim appeals have the option of either assigning their determination to prevent more than the
process. The Department intends to appeal rights to a provider or supplier, minimum amount of personally
review the EAJA provisions to or appointing a representative to identifiable health information from
determine what, if any, amendments exercise their appeal rights for them. being disclosed. Unlike other notices of
may be necessary to reflect the changes Under the assignment provision, a initial determination, which may
being implemented in this regulation. beneficiary transfers his or her right to include information on claims not at
Comment: A commenter asked what, appeal a specific claim or claims to a issue, MSP notices of initial
if anything, are the consequences of provider or supplier who is not already determination are limited to include
failing to satisfy all seven of the a party to the initial determination. In only the minimum necessary amount of
requirements set out in proposed doing so, the beneficiary completely information related to the claims at
§ 405.910(d) for making out a valid relinquishes any right to appeal the issue.
appointment. claim or claims at issue and the Section 405.910(e)(1) clarifies that the
Response: All of the requirements in provider or supplier becomes a party effective date of the appointment is the
new § 405.910(c) are necessary to and may appeal. day that the Appointment of
complete a valid appointment of Appointing a representative, however, Representative (AOR) form or other
representation. To clarify this matter, does not transfer a party’s appeal rights, written instrument contains the
we are specifying under new nor does it make the appointed signatures of both the party and
§ 405.910(d) that if any of the required representative a party to the appeal. An appointed representative. Also, we are
requiring under § 405.910(e)(2) that made aware when an appointment has Comment: A commenter asked that
during this one-year period, been delegated outweigh the burden of we provide information on how to
representatives must submit a copy of obtaining the beneficiary’s consent. We change an appointed representative
the signed and dated original also do not believe that this requirement during the appeals process.
appointment with each additional will greatly impede the beneficiary’s Response: As indicated in the
appeal that they file on behalf of the ability to receive timely representation. proposed rule, we believe that the
party. In the case where a beneficiary is no decision of whether to retain an
Finally, we made one other significant longer mentally capable of giving appointed representative be left entirely
change to § 405.910. Although we consent or signing the appointment of to the party bringing the appeal. Section
proposed provisions in the context of representative form, the family member 405.910(m) permits a party to revoke an
appeals, we solicited comments on or friend should refer to State law. As appointment at any time and for any
whether the appointment of defined in § 405.902, an authorized reason by submitting a signed, written
representative procedures should apply representative is an individual statement to the entity processing the
for initial determination purposes as authorized under State or other appeal. The revocation is effective once
well. We did not receive comments on applicable law to act on behalf of a it is received by the entity hearing the
this issue, but we believe there is no beneficiary or other party involved in appeal. The party can then appoint a
reason to imply that different the appeal. Unlike an appointed new representative.
procedures or rules apply to initial representative, an authorized 4. Assignment of Appeal Rights
determinations. Therefore, we have representative ‘‘stands in the shoes’’ of (§ 405.912)
provided under § 405.910(a) of this the beneficiary. State requirements
interim final rule that the appointment [If you choose to comment on issues in
differ with respect to what is required this section, please include the caption
of representative provisions apply for to legally represent an incompetent
initial determinations, as well as for ‘‘Assignment of Appeal Rights’’ at the
beneficiary. Individuals appointed or beginning of your comments.]
appeals. Also, under § 405.910(e)(3), an designated under State statutes may act
appointment signed in connection with Under proposed § 405.912, we created
as authorized representatives. For
the party’s efforts to request payment of new regulatory procedures for the
example, some States have health care
a claim is valid from the date that assignment of appeal rights by a
consent statutes providing for health
appointment is signed for the duration beneficiary to a supplier or provider of
care decision-making by surrogates on
of any subsequent appeal, unless the services. We proposed that a provider or
behalf of patients who lack advance
appointment is specifically revoked. supplier that furnished the item or
directives and guardians. Other States
When a contractor issues an initial service at issue and that wanted to take
have laws that grant authority to
determination, it sends a notice of that assignment of a beneficiary’s appeal
individuals with durable powers of
action only to the party, and not to the rights for a particular claim must waive
attorney. In an emergency, a
party’s appointed representative. any right to payment from the
Comment: One commenter was disinterested third party, such as a beneficiary in order to fully protect
concerned about the inability of an public guardianship agency, may be an beneficiaries when their appeal rights
appointed representative to delegate an authorized representative, for example, are assigned. This does not prohibit the
appointment to another person without in a situation where the beneficiary’s provider or supplier from recovery of
first obtaining the party’s signature. The inability to act has arisen suddenly (for any coinsurance or deductible or
commenter opined that requiring a example, a medical emergency, a claiming payment in full where the
beneficiary’s signature in order to traumatic accident, an emotionally beneficiary has signed an Advance
delegate an appointment would greatly traumatic incident, disabling drug Beneficiary Notice (ABN) accepting
impede a beneficiary’s ability to receive interaction, or stroke), and there is no responsibility for payment. We
timely representation. By way of one who can be genuinely considered to proposed that the assignment be valid
example, the commenter noted that a be the beneficiary’s choice as his or her for the duration of the appeals process,
signature requirement would prevent a authorized representative. Thus, an but only for the items or services listed
family member acting as a individual who has legal authority on the assignment form.
representative for an incapacitated under State law is able to make Comment: One commenter requested
beneficiary from retaining an attorney or decisions on behalf of a beneficiary, clarification on whether an assignment
paralegal to represent the beneficiary in including the ability to delegate the applies to an individual item or service,
a Medicare claim appeal. Additionally, appointment to another person, without or to all items or services within an
the commenter stated that the signature first obtaining the beneficiary’s entire claim. The commenter believed
requirement would prevent appointed signature. that assigning different providers or
representatives who are members of a Attorneys in law firms and legal suppliers for multiple items or services
law firm or a legal services organization service organizations present a unique within a claim would be too confusing.
from designating a new representative situation. As a general rule, attorneys Response: We do not believe that it is
within the firm or organization when within the same law firm already are appropriate or necessary to require
program turnover or workload obligated to observe strict beneficiaries to relinquish their rights to
necessitated a change. confidentiality rules with respect to appeal individual items or services.
Response: Although we appreciate the client information, and therefore, the Consistent with our longstanding policy
administrative benefits to be gained common practice of delegating cases to where we allow beneficiaries to appeal
from allowing an appointed other attorneys within the firm does not individual items or services within a
representative to delegate an warrant privacy concerns. Thus, we single claim, § 405.912 permits
appointment to another individual, the believe it is appropriate to permit beneficiaries to assign their appeal
privacy concerns that we noted attorneys to delegate another attorney rights for individual items or services to
previously seriously impact our ability within the same firm or organization as providers and suppliers. We believe that
to permit delegation in most instances. a substitute representative. Section this will not cause confusion since each
We believe that the benefits that are 405.910(l)(2) is amended to reflect this claim originates from a single provider
gained by ensuring that a beneficiary is policy. or supplier. The provider or supplier
needs to ensure that the assignment furnished services. Thus, we are standardized form for assignment, as
form includes the full range of items or maintaining the provision at required by section 1869(b)(1)(C) of the
services furnished on the date of § 405.912(d)(2) that an assignee that Act. This form, which has been
service. furnished the item or service is not consumer-tested with the beneficiary
Comment: One commenter expressed prohibited from recovering payment population, contains extensive
concern that obtaining assignment after when an ABN has been properly information to assist beneficiaries in
services were provided would adversely executed. We believe an alternative understanding the assignment and
affect providers with transient policy would create disincentives for execution of their appeal rights.
populations because their beneficiary providers and suppliers to bring appeals As mentioned in an earlier response,
contact information is usually for on behalf of beneficiaries when they we added a definition of an ‘‘authorized
temporary residences. The commenter believe Medicare is denying coverage representative’’ at § 405.902. Authorized
suggested that the assignment form be improperly. If providers and suppliers representatives (for example, a legal
available to be signed at admission. are faced with the choice of appealing guardian or someone with a power of
Response: We understand the what they believe to be an erroneous attorney) possess all the rights
concerns of the commenter, and agree denial or collecting from the beneficiary associated with the appeals process to
that the assignment form may be in the event of an unfavorable decision, the same extent as beneficiaries.
completed at admission. Section they may simply decide to place the Therefore, we do not believe that it is
405.912(c) does not prevent a provider burden of appeal on the beneficiary. necessary for new § 405.912(c)(2) to
and beneficiary from being able to Comment: Some commenters raised reflect that an authorized representative
complete and execute the assignment at concerns about our proposal to permit may execute an assignment of appeal
the time that the beneficiary receives beneficiaries to revoke an assignment. rights on behalf of a beneficiary.
services. When a provider needs to One commenter recommended that Appointed representatives under
appeal an initial determination that assignment be irrevocable until the § 405.910, including attorneys, may
denies payment for the services appeal is filed or the deadline for filing assist the beneficiary or another party
rendered, the provider can submit the has expired in order to prevent a with Medicare appeals, but they do not
previously signed assignment form with provider or supplier from wasting have any other rights or responsibilities
the request for redetermination. resources pursuing an appeal. The with respect to the beneficiary or
Comment: One commenter suggested commenter suggested that we establish another party, and may not sign
that the regulation be clarified to ensure a time frame for a beneficiary to revoke documents as the beneficiary or party.
that the waiver of collection from the an assignment. Another commenter Thus, an appointed representative may
beneficiary applies even if the appeal is requested that we define the specific not assign appeal rights under § 405.912
unsuccessful. circumstances that constitute without the beneficiary’s or other
Response: We agree that the abandonment. party’s consent.
regulation should be clarified to specify Response: We believe that it is
that the waiver of the right to collect unnecessary to establish a time frame to 5. Initial Determinations (§ 405.920
payment by the assignee remains valid limit a beneficiary’s right to revoke an Through § 405.928)
in the event of an unfavorable assignment. The inherent nature of an [If you choose to comment on issues in
determination or decision. We have assignment protects the interests of a this section, please include the caption
amended our proposed § 405.912(d)(1) beneficiary since transferring the appeal ‘‘Initial Determinations’’ at the
to specify that the waiver remains in rights to a provider or supplier beginning of your comments.]
effect regardless of the outcome of the precludes the provider or supplier from Section 1869(a)(2)(A) of the Act
appeal decision. We have also taken the collecting payment from the beneficiary establishes that for all claims other than
opportunity to correct an omission in in the event of an unfavorable clean claims (a clean claim is a claim
§ 405.912(d)(1). The waiver of payment determination. We believe that that has no defect or impropriety), an
also remains in effect if the assignment beneficiaries will rarely revoke an initial determination must be
is revoked under § 405.912(g)(2) or assignment; therefore, the possibility of concluded, and a notice of that
§ 405.912(g)(3). That is, if the assignee providers and suppliers unnecessarily determination must be mailed, by no
fails to file an appeal of an unfavorable pursuing appeals is remote. A somewhat later than 45 days after the carrier or
decision or if an act or omission by the more likely scenario involves fiscal intermediary receives the claim.
assignee is determined to be contrary to abandonment, that is, inaction on the We proposed that interest would not
the financial interests of the beneficiary, part of the assignee to undertake or accrue on non-clean claims that were
the assignee will not be able to collect proceed in the appeals process. Section not adjudicated within 45 days. By
payment from the beneficiary. 405.912(g)(2) addresses this situation by definition, non-clean claims are often
Comment: One commenter specifying that an assignment may be claims that require additional
recommended that the waiver of the revoked ‘‘[b]y abandonment if the documentation, and therefore take
right to collect from the beneficiary assignee does not file an appeal of an additional time to process.
apply regardless of whether there is an unfavorable decision.’’ With respect to clean claims, section
ABN in effect. The commenter Comment: One commenter supported 1869(a)(2)(B) of the Act requires that
expressed concern that a provider or the use of a standardized form for interest accrues if clean claims are not
supplier might be inclined to require a assignment. The commenter suggested processed within 30 days. This standard
beneficiary to sign an ABN for any item that the form include an explanation of remains the same as specified in
or service in order to protect any future assignment and what an assignee does sections 1816(c)(2) and 1842(c)(2) of the
collection of payment. for a beneficiary. The commenter also Act.
Response: We prohibit providers and suggested that proposed § 405.912(d)(2) We proposed to continue to notify
suppliers from routinely issuing ABNs should be revised to reflect that the parties of the initial determination in
for all services. ABNs generally are assignment may be executed by the writing. The proposed content of the
issued only when the provider or beneficiary or his or her representative. notices included the basis for the
supplier has reason to believe that Response: We agree with the determination and notification to the
Medicare is not likely to cover the commenter and are developing a parties of their right to a
redetermination if they were dissatisfied amount prescribed by regulation (for We also agree with the commenter
with the outcome of the initial example, outpatient services), the issue that MSNs indicate when the basis for
determination. Consistent with existing of the appropriateness of the a claim denial involves a local or
policy, the Remittance Advice (RA) and coinsurance amount was not appealable national coverage determination.
Medicare Summary Notice (MSN) since it was an automatically calculated Effective during 2003, CMS now
would be used as a notice of initial amount based directly on a fee schedule requires fiscal intermediaries and
determination. exempt from review. carriers to provide references to
We also proposed the types of actions We also specified that there be no coverage policies when they describe
that constitute initial determinations, as administrative appeal rights available the basis for claim denials. However,
well as those that do not constitute for certain aspects of initial based on nationwide testing of Medicare
initial determinations. We generally determinations. For example, under beneficiary focus groups, CMS does not
proposed to maintain the existing section 1833(t) of the Social Security include regulatory citations in MSNs
policies concerning initial Act (the Act), administrative appeals are because they are confusing to
determinations, while at the same time prohibited for issues involving the beneficiaries. We believe that referring
unifying the Part A and Part B rules. We calculation of coinsurance amounts for to a local or national coverage
have also included examples specific to outpatient services subject to determination is more meaningful to
Medicare Secondary Payer situations in prospective payment rules, and under beneficiaries in helping them
listing the type of actions that constitute section 1848(i) of the Act, the values understand the reason their claim has
initial determinations. We specified our used to calculate allowable amounts been denied.
longstanding policy that SSA will under the physician fee schedule may The MSN contains the Medicare toll-
continue to make Part A and Part B not be the subject of an administrative free number so that beneficiaries can
entitlement and enrollment appeal. Additionally, we proposed some obtain information about various
determinations. As noted previously in further examples of actions that are not aspects of the Medicare program,
section I.C.1 of this interim final rule, initial determinations, such as waiver of including individual claim
section 931 of the MMA requires the interest determinations and certain determinations. Beneficiaries can also
transfer of ALJ hearing functions from Medicare Secondary Payer actions. use the toll-free number to request a
SSA to HHS. Although SSA will Comment: One commenter suggested copy of the coverage rule or policy used
continue to make Part A and Part B that the initial determination notice as the basis to deny a claim, or they may
entitlement and enrollment contain more details about requesting a
access the policies via the Internet.
determinations and reconsiderations Thus, in light of the information
redetermination, such as the
subject to the requirements set out at 20 already contained in MSNs, we do not
documentation needed to pursue an believe that it is necessary to modify the
CFR Part 404, Subpart J, HHS will be
appeal. The commenter recommended initial determination notices sent to
responsible for reviewing entitlement
that the notice give exact citations for beneficiaries. However, we believe it is
and enrollment decisions at the ALJ and
the rules and policies upon which the appropriate to include in the regulations
MAC levels. We note, however, that this
determination is based and explain how the explicit notice requirements that are
regulation does not provide the specific
to obtain them. The commenter also set forth under section 933(c)(1) of the
procedural requirements that will apply
suggested that the notice include a toll MMA. Therefore, § 405.921(a)(1)
to the adjudication of entitlement
free number that appellants can call to specifies that contractors must write the
appeals. These instructions will instead
be provided separately once this interim receive copies of coverage rules and MSNs in a manner calculated to be
final rule is published. We believe that policies. understood by the beneficiary. We have
this approach will ensure that Response: We agree with the also set forth the statutory content
beneficiaries, providers, suppliers, and commenter that initial determination requirements as to the contents of the
other interested parties receive clear notices contain information necessary notice in § 405.921(a)(2). That is, the
guidance regarding the procedures for for beneficiaries to initiate appeals. notice must contain the reasons for the
appealing an entitlement determination However, we believe that existing notice determination, including whether a
at each level of the appeals process. requirements are fully compatible with local medical review policy, local
We addressed the circumstances this objective, and we do not believe coverage determination, or national
under which an appeal can be filed that additional detail is appropriate. coverage determination was applied, the
when a beneficiary disputes the Currently, beneficiaries receive initial procedures for obtaining additional
computation of coinsurance amounts. determination notices through the information concerning the
Previously, our rules stated that Medicare Summary Notice (MSN), and determination, such as the specific
beneficiaries could appeal Medicare providers and suppliers receive notices provision of the policy, manual, law, or
determinations regarding the on the Remittance Advice (RA). The regulation used in making the
‘‘application of the coinsurance MSN is a consumer-tested, customer- determination, and notification to the
feature.’’ We clarified this provision to friendly monthly statement that lists all parties of their right to a
state that the contractor’s ‘‘computation of the services or supplies billed to redetermination if they are dissatisfied
of coinsurance’’ was considered an Medicare during a 30-day period. It with the outcome of the initial
initial determination, and therefore, contains information about requesting determination. The notice also must
could be appealed. In making this an appeal on the bottom of the last page include instructions on how to request
proposal, we considered that for most and at the back of each page. The MSN a redetermination. Again, we believe
Part B services, beneficiaries were indicates the date that an appeal must that the existing MSNs meet all the new
responsible for a 20 percent coinsurance be filed in order for it to be considered MMA requirements and have codified
payment and, since the contractor timely. The MSN also allows these beneficiary notice requirements in
calculated the percentage, a beneficiary beneficiaries to appeal by circling an § 405.921(a). Furthermore, although the
should be able to appeal the contractor’s item, explaining why they disagree, and statutory requirements apply only with
computation. In instances where the signing and sending the notice, or a respect to beneficiary notices, we have
coinsurance amount was not computed copy of the notice, to a specified adopted very similar requirements for
by the contractor, but rather, was an address. notices to providers and suppliers under
§ 405.921(b). The format and content Some commenters argued for Comment: A few commenters
requirements adopted as the national contractor penalties such as strict suggested that we define the terms
standard for remittance advice contractor evaluations, sanctions, or ‘‘non-clean’’ and ‘‘clean’’ in the context
transactions under HIPAA and the non-renewal of contracts based on of claims.
corresponding CMS requirements for noncompliance beyond a reasonable Response: As defined in sections
electronic and paper remittance advice threshold. These commenters believed 1816(c)(2)(B)(i) and 1842(c)(2)(B)(i) of
notices already require use of messages that any exceptions to the 45-day rule the Act, ‘‘[t]he term ‘‘clean’’ claim
or codes to explain initial should be narrow. Other commenters means a claim that has no defect or
determinations, and the reasons for any urged us to assess interest penalties for impropriety (including any lack of any
full or partial denial decisions that non-clean claims that would mirror the required substantiating documentation)
apply to services on a claim, as well as provision for clean claims. Still other or particular circumstance requiring
the appeal rights in relation to the commenters thought that the 45-day special treatment that prevents timely
decision. Thus, the MMA requirements time frame for non-clean claims might payment from being made on the
for beneficiary notices are generally be too stringent and that we should set claim.’’ Claims that do not meet this
already in use in the remittance advice up specific, achievable time frames with definition are considered ‘‘non-clean’’
notices to providers and suppliers. appropriate penalties to ensure claims. Since the term ‘‘clean claim’’ is
Finally, we note that contractors will compliance. clearly defined in statute, we are
issue MSNs to beneficiaries only, and Response: We understand the maintaining this definition as proposed
not to appointed representatives or commenters’ concerns regarding the in § 405.902.
assignees. Throughout § 405.910, we need for contractors to process claims We have also included in § 405.902
have reinforced the concept that timely and pay them promptly. It is also other statutory and regulatory
important that contractors employ definitions, such as, beneficiary,
appointed representatives have the same
appropriate medical review strategies to provider, supplier, carrier and fiscal
right as beneficiaries to receive
ensure the appropriate payment of intermediary. We did not define these
information on claims only after an
terms in the proposed rule because they
appeal has been filed. Consistent with billed claims. When a contractor
are defined in 42 CFR part 400.
HIPAA, a contractor may not disclose undertakes medical review on a claim,
However, for the convenience of
protected health information without a it is not always possible to pay within
Medicare appellants, we have decided
valid appointment. MSNs encompass a 45 days, particularly if a provider or
to provide definitions in this section as
range of health services and supplies supplier does not submit the additional
well.
that were billed to Medicare within a documentation requested in a timely Comment: One commenter believed
30-day period. Because an appointed manner. We believe that protecting the that we should clearly state whether a
representative may not have authority to Medicare Trust Funds through medical beneficiary who has paid for an item or
receive information on all such services review of certain questionable claims service up front is entitled to any
or supplies, we believe that it is that are flagged by our system edits is interest that would accrue if the
appropriate for contractors to preferable to making inappropriate contractor does not pay the clean claim
disseminate MSNs only to beneficiaries. payments, absent proper evidence. We within the statutory time frame,
Furthermore, we believe that it is retain reputable independent third-party regardless of whether the claim was
unnecessary to incur the substantial auditing firms to ensure that contractors submitted by the beneficiary or on the
costs to modify the standard systems to are following all Medicare laws, rules, beneficiary’s behalf. The commenter
generate MSNs to appointed and regulations. argued that in this situation, the
representatives. In addition, we strongly believe that beneficiary would suffer irreparable
Comment: We received several providers and suppliers play a vital role harm by the delay in processing the
comments regarding procedures that in the FIs’ and carriers’ ability to meet claim, as opposed to the provider or
should be established when contractors their decision-making time frames. If supplier, and paying interest to them
do not meet the statutory deadlines for providers and suppliers submit clean would result in their unjust enrichment.
making initial determinations. Section claims, they can avoid the delays that Response: In the agreement and
521 of BIPA maintains the existing 30- are associated with processing non- attestation statement signed by a
day time frame for 95 percent of clean clean claims. The more complete the provider, the provider agrees not to
claims under sections 1816(c)(2) and claim is upon initial submission, the charge beneficiaries for services for
1842(c)(2) of the Act, and establishes a greater the ability of the Medicare which beneficiaries are entitled to have
45-day time frame for claims that are contractor to process the claim quickly. payment made on their behalf by the
defective or require special treatment or Until a determination can be made, Medicare program. In accordance with
substantiating documentation. Some however, we continue to believe that no the provider participation agreement,
commenters believe that we should interest should accrue on non-clean the provider may only bill the
create an escalation provision for initial claims. In addition, the Congress has beneficiary upfront for any unmet
determinations similar to the escalation authorized interest only in the case of deductible and the applicable
provisions required by statute for QIC clean, complete claims. coinsurance. Therefore, institutional
reconsiderations, ALJ hearings and We also believe that it would be providers are always paid directly by
MAC reviews. This would enable inefficient and result in unnecessary the FI, including any applicable interest.
parties to proceed to the costs to escalate undeveloped claims to Likewise, participating suppliers and
redetermination level of the appeals the redetermination or reconsideration suppliers who accept assignment are
process when contractors fail to meet levels. These claims could not be also precluded from charging the
the 45-day statutory time frame. One reviewed or reconsidered because there beneficiary more than the unmet
commenter recommended that when the would be no initial determination to deductible and the applicable
contractor fails to make an initial review. Furthermore, the Congress coinsurance. If the supplier collects any
determination within 45 days, the claim weighed the merits of escalation and additional payment from the beneficiary
bypasses the redetermination level and chose to implement that option only at before submitting the claim, the
advances to the reconsideration level. the QIC level and above. supplier must show on the claim form
the amount collected. The carrier then handled through the reopenings coinsurance amounts directly premised
will refund directly to the beneficiary process. on base amounts calculated pursuant to
the additional payment along with any Response: As the commenter points section 1833(t)(3) of the Act. Therefore,
applicable interest on the over collected out, CMS Transmittal A–00–08, which the unadjusted coinsurance amount
amount. In situations where the is now in the Program Integrity Manual under 1833(t)(3) of the Act is not an
supplier does not accept assignment on at Chapter 6, allows skilled nursing initial determination subject to any type
a claim, the carrier makes payment facilities (SNFs) to appeal denials based of review. On the other hand, if a party
directly to the beneficiary and includes on section 1862(a)(1)(A) of the Act. believes that an item or service was
any applicable interest regardless of Nothing in this interim final rule limits incorrectly coded, leading to a higher
whether he or she paid the supplier up- the right of appeal created by CMS coinsurance amount for that service, the
front for the item or service. Transmittal A–00–08. party can challenge that determination
Comment: One commenter asserted Although down coding a RUG in an appeal.
that the proposed rule’s reference to category may be considered an initial Comment: One commenter argued
SSA making initial determinations with determination under new that inherent reasonableness is an initial
regard to entitlement issues was § 405.924(b)(12), if the down coding was determination under proposed
incorrect. alleged to be the result of a clerical error § 405.924(b)(13) because it is an issue
Response: We disagree with the as defined in § 405.980(a)(3), then the that has a present or potential effect on
request for appeal likely can be the amount of benefits to be paid under
commenter and maintain our
processed as a request for reopening. Part A or Part B. Another commenter
longstanding policy that SSA makes
This approach is consistent with section believed that a party who is dissatisfied
initial determinations concerning
937(a) of the MMA and the reopening with an initial determination should be
applications for enrollment, as well as
provisions at § 405.980, whereby errors able to appeal a claim where the amount
determinations regarding Part A and
or omissions may be corrected without of payment was determined based on
Part B entitlement. Consistent with our
pursuing appeal. We note that, in this the application of an inherent
current regulations at 42 CFR
interim final rule, we have added a new reasonableness policy.
§ 405.704(a)(3) and § 405.704(a)(4), we
section at § 405.927 regarding initial Response: Sections 1842(b)(8) and
have also added language to
determinations that may be subject to 1842(b)(9) of the Act authorize the
§ 405.924(a)(3) to specify that an initial the reopenings. Secretary to deviate from the payment
determination includes a denial of a We also note that we have added methodologies prescribed in the Act if
request for withdrawal of an application specific language to new the application of those methodologies
for hospital or supplementary medical § 405.924(b)(13) to make it clear that the would result in a payment amount for
insurance or a denial of a request for issue of whether a waiver of adjustment a particular service or group of services
cancellation of a request for withdrawal or recovery under sections 1870(b) and that is determined to be grossly
of an application for hospital or 1870(c) of the Act is appropriate is an excessive or deficient, and therefore, is
supplementary medical insurance. initial determination with respect to a not inherently reasonable. Section
Section 405.904(a)(1) clarifies the provider, supplier, or beneficiary in the 1842(b)(8)(A)(i) of the Act requires the
jurisdictional authority of SSA and context of both non-Medicare Secondary Secretary to describe in regulations the
DHHS with respect to initial Payer overpayments and Medicare factors to be considered in determining
determinations and appeals for Secondary Payer recovery claims. an amount that is realistic and
applications and entitlement issues. Comment: One commenter questioned equitable.
That is, SSA will continue to perform whether the amount of coinsurance Furthermore, pursuant to section
initial determinations and owed under the outpatient prospective 1842(b)(9) of the Act, before making any
reconsiderations, and DHHS’’ ALJs and payment system (OPPS) would be adjustment for inherent reasonableness,
MAC will conduct hearings and considered an initial determination, the Secretary is required to publish a
reviews. As noted above, we intend to given that § 405.924(b)(5) indicates that notice of proposed determination in the
provide further guidance on how ALJs the computation of coinsurance Federal Register and allow no less than
and the MAC will process entitlement amounts constitutes an initial 60 days for public comment on the
appeals in separate instructions. determination. The commenter pointed proposed determination. The public
Comment: We received a comment on out that § 405.926(b) states that comment period on proposed inherent
whether proposed § 405.924(b)(13), ‘‘coinsurance amounts prescribed by reasonableness adjustments gives the
which defines an initial determination regulation for outpatient services under public an opportunity to raise issues
as a determination having a current or the prospective payment system’’ are and concerns regarding these
potential effect on the amount of not initial determinations. The adjustments. All issues and concerns
benefits to be paid, includes Resource commenter believed that section that the public raises are given full
Utilization Group (RUG) categories. The 1833(t)(12) of the Act does not preclude consideration, and a final determination
commenter asked that we clarify in the administrative and judicial review of is published before the actual
final rule that the appeal rights for RUG the computation of OPPS coinsurance adjustments in payments are made. Any
reclassifications established in CMS amounts. adjustment would be broadly applicable
Transmittal A–00–08 are continued in Response: Section 4523(a) of the to a given service or group of services,
the final rule. The commenter also Balanced Budget Act of 1997 (BBA) rather than just to an individual claim
believes that proposed § 405.906(a)(3) amended section 1833 of the Act by determination. Thus, we do not believe
and § 405.940 appeared to grant adding subsection (t) which provides for that the Congress intended for inherent
providers the right to seek the implementation of a prospective reasonableness adjustments to payment
redeterminations when a RUG is down payment system (PPS) for outpatient amounts to constitute initial
coded to another category. However, the services. Section 1833(t)(12) of the Act determinations that are subject to the
commenter noted that this conflicted precludes administrative or judicial appeals process. We have modified
with the reopening provisions at review of the calculation of the § 405.926(c) to clarify this issue.
§ 405.980, which seemed to suggest that unadjusted coinsurance amount, as well We agree with the commenter that
all adjustments to claims must be as administrative or judicial review of where the amount of payment on a
claim was determined based on an caption ‘‘Redeterminations’’ at the MSN, that is, he or she could satisfy the
inherent reasonableness policy, this beginning of your comments.] requirements by circling an item on the
would result in an initial determination MSN, signing the bottom of the MSN,
a. Requesting and Filing a
that is appealable. It is important to note and returning the MSN to the
Redetermination Request
the difference between an initial contractor. In situations where more
determination made on a specific claim, In the proposed rule, we proposed to than one party requested a
and the payment policy or methodology continue the policy of permitting parties redetermination on the same claim, we
used to make that initial determination. to file their requests for a proposed that the contractor would
The latter is not considered an redetermination not only with the consolidate the requests into one
appealable initial determination under appropriate CMS contractor, as proceeding in order to avoid
this subpart. indicated on the notice of initial duplication.
We have added six items that also do determination, but also at a local SSA or Comment: Several commenters
not constitute initial determinations CMS office. In maintaining this policy suggested that we clarify the procedures
for filing requests, we proposed that the for how fiscal intermediaries and
under § 405.926. Under § 405.926(n), we
date the redetermination request would carriers calculate and record the receipt
incorporated CMS’’ longstanding policy
be considered to be filed meant the date date for redetermination requests. One
that a finding that a provider or supplier
the contractor, SSA, or CMS received commenter recommended that we
failed to submit a claim, or failed to
the request. Additionally, we specified establish that the receipt date is the date
submit a timely claim, despite being
that for purposes of issuing a the request first arrives at the
requested to do so by the beneficiary or
redetermination, the date of timely appropriate address. Another
the beneficiary’s subrogee, does not
filing would be considered as the date commenter objected to presuming that
constitute an initial determination, and
that the contractor responsible for the the receipt of the initial determination,
would preclude the claim from being
redetermination received the which is used to calculate the time
subject to the appeals process. Second, redetermination request. We proposed frame for a redetermination request, will
consistent with section 1893(f)(3)(A) of to allow extensions to the time frames be 5 days after the date of the initial
the Act, as amended by section 935(a) for redetermination requests if a party determination notice. The commenter
of the MMA, we have added a showed good cause for missing the 120- argued that often appellants receive
conforming provision at § 405.926(p) day deadline. In order to determine initial determinations much later than
that determinations by the Secretary of whether a party had shown good cause the date on the notice. In some cases,
sustained or high levels of payment for missing the deadline, the contractor the provider does not receive the initial
errors are precluded from administrative would consider: the circumstances that determination until a month later. The
or judicial review. Also, consistent with kept the party from making the request commenter believed that 10 days would
section 938(a) of the MMA, § 405.926(q) on time; whether the contractor’s be a more realistic time frame for
provides that a contractor’s prior actions misled the party; and whether contractors to assume receipt and begin
determination related to coverage of the party had any physical, mental, calculating whether a party met the 120-
physicians’ services is not subject to the educational, or language limitations that day time frame for requesting a
administrative appeals process or prevented the party from filing a timely redetermination.
judicial review. However, a negative request, or from understanding or A few commenters requested that we
determination would not prevent an knowing the need to file a timely define ‘‘evidence to the contrary’’ of the
individual from obtaining a service, request for redetermination. presumed 5-day receipt date in order to
seeking reimbursement and, in the event We also indicated that prevent discrepancies in how different
of a denied claim, appealing the denial redetermination requests would need to contractors handle requests for
under section 1869(b) of the Act. be made in writing. Previously, Part B redeterminations. One commenter
Finally, consistent with established requests for review could be made by suggested that ‘‘evidence to the
policies, we have added three items at telephone; however, we proposed to contrary’’ should be a receipt from a
§ 405.926(o), § 405.926(r), and eliminate telephone requests in order to mail delivery service containing the
§ 405.926(s). Under § 405.926(o), provide a reliable record of the request, date of delivery to the appropriate
determinations with respect to whether and to encourage the submission of address. Another commenter asked
an entity qualifies for an exception to evidence to support the request. We whether a date stamp by the provider
the electronic claims submission proposed that requests would need to be would be an acceptable way to verify
requirement under part 424 of this made using a standard CMS form. the date of receipt of an initial
chapter are not initial determinations. Alternatively, when not made on a CMS determination.
Section 405.926’’ provides that requests form, the request would need to contain Response: We appreciate the concerns
for anticipated payment under the home all the elements listed in § 405.944(b), about calculating and recording the
health prospective payment system that is, the beneficiary’s name, Medicare receipt date for appeal requests based on
under § 409.43(c)(ii)(2) are not initial health insurance claim (HIC) number, the delivery time for the initial
determinations. Lastly, claim specific date of service, and determination notice. We agree that a
submissions on forms or formats that are identification of the item or service for uniform process needs to be used for
incomplete, invalid, or do not meet the which the party was requesting the calculating and recording the date of
requirements for a Medicare claim and redetermination, and the name and receipt of an appeal request. Thus, we
are returned or rejected to the provider signature of the party or appointed proposed to incorporate into the
or supplier also do not constitute initial representative. regulations CMS’s clear, longstanding
determinations. We welcome comments We solicited comments on alternative policy that the date of receipt is
on these additions. approaches that would be convenient presumed to be 5 days after the date of
and easy for appellants. We also the initial determination notice. We will
6. Redeterminations (§ 405.940 through
proposed that a beneficiary or carefully monitor our contractors to
§ 405.958)
beneficiary’s appointed representative ensure that they calculate the time
[If you choose to comment on issues could continue to file a request for an frames appropriately. If we determine
in this section, please include the appeal using the instructions on the that any additional instructions are
needed, we will provide them in received by the appropriate contractor the elimination of accepting requests
manual instructions. for purposes of tracking the adjudication over the telephone. The commenter
We understand that in some cases the time frame. The commenter thought that believed that taking requests by
initial determination notice will be an appellant should be able to presume telephone is a convenient and simple
received later than 5 days from the date that a contractor received a request method for filing an appeal. Another
of the notice, which is why the within 60 days; and therefore, the commenter pointed out that telephone
regulations allow more than 5 days appellant should expect a decision requests facilitated meeting the
where there is evidence to the contrary. within 90 days. Another commenter decision-making time frame. The
An example of evidence to the contrary suggested that CMS develop a web- commenter also indicated that
would include a postmark date or a based system for local SSA, CMS or telephone appeals are advantageous
receipt from a mail service containing contractor staff to enter and because additional documentation can
the date of delivery to the party. We do immediately transmit the request to the be requested while the appellant is on
not believe it would be appropriate to appropriate adjudicator. A few the phone. Other commenters agreed
attempt to include in regulations all the commenters believed that the delayed that requests for redeterminations be
possible ways for a party to demonstrate decision-making time frame penalized made in writing only. They stated that
when the party received an initial beneficiaries for something that was when the request and the response are
determination notice. Instead, we will beyond their control. They argued that given on the telephone, it leaves room
allow adjudicators to exercise their the policy would be unfair to for interpretation on what occurred
discretion as to whether a party’s beneficiaries because they would not during the telephone call. Also, it could
evidence demonstrates that the party receive a timely decision when they be difficult for the QIC to construct the
received the initial determination used an alternative filing location. case file if the redetermination was
beyond 5 days from the date on the Response: We recognize the handled over the telephone. The
notice. Finally, we note that 120 days is commenters’ concerns about the commenter suggested alternative
a significant amount of time for a party confusion and potential delays involved methods such as the use of a secure
to file an appeal and that appellants also in transmitting requests filed at system for fax or electronic mail
have an opportunity to request an alternative locations to the appropriate requests. Another commenter agreed
extension of this deadline; thus, we contractor. Further, as noted above, with our discussion in the preamble to
believe that the calculation of the under section 931 of the MMA, SSA’s the proposed rule that the changes to
receipt date for appeal requests based on role in the Medicare claims appeal the reopening process could resolve the
the prevailing 5-day standard will not process will end with the impending types of issues addressed in the current
pose an undue hardship for most transfer of the ALJ function from SSA to telephone appeals process, and
appellants. DHHS no later than October 1, 2005. In encouraged our efforts to clarify the
Comment: One commenter requested view of the reduced role of SSA in the reopening rules.
clarification on whether adjudicators processing of Medicare appeals, we do Response: We recognize that initiating
could request appellants to provide not believe it is appropriate to specify a redetermination over the telephone
proof to support good cause for failing in the regulations that appeals may be can under some circumstances provide
to file an appeal within the allotted time filed at SSA offices. We have revised a faster process for appellants than a
frame. § 405.942(a) to eliminate the reference to written appeal. In the past, providers
Response: Adjudicators may request alternative filing locations. We believe and suppliers generally initiated
appellants to provide supporting that directing appellants to only one reviews by phone for routine,
documentation that demonstrates that filing location will reduce confusion uncomplicated matters. However,
they have good cause for filing an and eliminate the potential delay in section 937(a) of the MMA requires
appeal beyond the deadline. We transmitting the request. We will also CMS to develop a process whereby, in
strongly encourage appellants to allow an extension to the filing deadline the case of minor errors or omissions
provide supporting documentation when a party, in good faith, sends a that are detected in the submission of
when requesting a contractor, QIC, ALJ, request to a government agency within claims, a provider or supplier can be
or the MAC to consider good cause for the time period to file and the request given an opportunity to correct these
filing an appeal late. In fact, an does not reach the appropriate minor errors or omissions without the
adjudicator can summarily dismiss a contractor until after the time period to need to initiate an appeal. Contractors
request made on the basis of good cause file expires. would also continue to handle these
when there is no evidence to support The elimination of alternative types of issues over the telephone
the request. locations will obviate any routine need through procedures other than appeals,
Comment: Some commenters raised for notices informing appellants of the such as reopenings, including any
objections to beginning the decision- date of receipt at the adjudicating associated adjustments. The reopening
making time frame on the date that the contractor. Given the elimination of process is discussed in more detail later
contractor received the redetermination alternative filing locations, we think it in this preamble under its own heading.
request if an appellant filed an appeal would be unnecessarily burdensome on Written requests offer other
at an alternative location. One contractors to notify all appellants of the advantages of efficiency and accuracy.
commenter agreed with this approach, receipt date, given that it could be easily An appellant submitting a written
but indicated it would be difficult for calculated to within a few days. In request can submit evidence at the same
appellants to know when the time frame addition, we are actively exploring the time as the request. The early
for making a decision started. The development of a web-based system that submission of evidence leads to
commenter suggested that we add a would permit appellants to access real- resolving appeals at lower levels and
requirement that the contractor notify time information about the status of promotes more accurate decision-
the appellant when the request has been their appeals. making. Furthermore, many appeals
received and the date the time frame Comment: We received several involve judgment calls that require
began. Another commenter suggested comments on whether redetermination thought, research and analysis, much of
that we establish a definitive deadline requests should be accepted orally or in which cannot be addressed in a phone
by which an appeal would be presumed writing. One commenter disagreed with call. Also, as noted by a commenter,
written appeals aid contractors in Comment: Several commenters made We will ensure that customer service
developing case files for use at later recommendations about the place and representatives at our 1–800–
appeal stages. method of filing redetermination MEDICARE number provide
Thus, as proposed, we will require requests. One commenter suggested that beneficiaries with accurate information
that appellants request redeterminations all review organizations have an address on how they may obtain standardized
in writing. We will work on identifying for delivery services other than the U.S. appeal forms. Updated appeal forms
simple and convenient methods for Postal Service. The commenter stated will continue to be available on the
appellants to request redeterminations that appellants sometimes wish to use Internet at http://www.cms.hhs.gov/
in writing, such as via facsimile or private services to deliver their appeals, forms and http://www.Medicare.gov/
electronic mail request. Finally, we note particularly to ensure that contractors Basics/forms, as well as at CMS
that contractors are by no means receive the appeals timely. A few contractor offices.
prevented from communicating with commenters suggested that CMS
b. Evidence Submitted With the
appellants by phone in situations where provide appellants an opportunity to
Redetermination Request
contact by telephone can provide submit a redetermination request via
information needed to resolve an facsimile or via e-mail. The commenter In the proposed rule, we specified
appeal. believed that these alternatives would that a party should explain why he or
create better efficiencies for appellants. she disagrees with the contractor’s
Comment: Some commenters raised
Response: We encourage appellants to initial determination and include any
questions about requests for
use delivery services that will ensure evidence that the party believes should
redetermination made by more than one
the timely receipt by contractors of be considered by the contractor in
party. A few commenters objected to our
appeal requests. We will explore with making its redetermination. We wanted
proposal that where two or more parties
contractors ways to achieve efficiencies to encourage appellants to make their
requested an appeal on the same initial
in the appeals process, including case at the earliest possible level. To
determination, the contractor’s deadline
establishing addresses for private facilitate this goal, we proposed that if
for processing the appeal would be appellants could not submit relevant
delivery services. We also will look into
based on the latest filed request. One documentation along with their
the extent to which contractors can set
commenter disagreed with the redetermination requests, then they
up a process to accept facsimile and
consolidation of multiple requests into could provide later submissions.
electronic requests in compliance with
one proceeding, and argued that this However, since it would be difficult to
applicable security and privacy policies
would result in unwarranted delays. process the redetermination within the
and procedures. Should these changes
The commenter suggested that we appropriate time frame, we proposed to
prove feasible, we will implement them
stipulate in this final regulation that the permit contractors to extend the
through manual instructions.
decision-making time frame starts with Comment: Several commenters urged decision-making time frame by up to 14
the first request for redetermination. us to make the standard form for days based on the later submission of
The commenter also thought that requesting a redetermination widely evidence.
contractors should be required to act on available to ensure accessibility by Comment: One commenter suggested
beneficiary appeals when they are beneficiaries. They suggested including that prior to issuing a redetermination,
received, rather than waiting to see if the form for requesting a the contractor should request the
another party appeals. Another redetermination with the initial necessary documentation from the
commenter was concerned whether the determination notice. Alternatively, the appellant and allow the appellant 14
contactor would wait until the end of initial determination should provide days to either submit the documentation
the full 120-day filing deadline to see if information about where to obtain the requested or to certify that there are no
another party would request an appeal. standard form. Commenters additional records to submit. The
Response: Instances when more than recommended that the standard form be commenter also indicated that if the
one party files a request for an appeal available upon request by telephone, on appellant failed to provide the
of the same claim have always been the Internet, and at all SSA and CMS documentation, an unfavorable decision
rare, and we do not expect any change contractor offices. should be rendered based on failure to
in this regard under the new appeals Response: We agree that standardized provide the necessary documentation.
procedures. Although we appreciate the forms should be readily accessible to The commenter also questioned
concern that contractors might wait 120 beneficiaries. As mentioned earlier in whether it was our intent to preclude
days to see if another party appeals, our discussion about initial the QIC from accepting documentation
contractors could not do so even if they determinations, beneficiaries now other than what is requested in the
wanted to, given the requirement that routinely receive Medicare Summary redetermination letter.
they process a redetermination within Notices (MSNs). The MSN contains Response: We believe that the
60 days of a timely filed request. A information on the appeals process and efficiency and accuracy of the appeals
delay will occur only if another request instructions for requesting an appeal. process is enhanced when appellants
is received before the contractor issues Beneficiaries can use the MSN to submit all necessary documentation
a decision. Therefore, we do not believe request an appeal by circling the item or with their redetermination requests.
that consolidating the decision-making service with which they disagree, Although appellants have the
time frame for appeals with multiple explaining why they disagree, signing opportunity to submit evidence related
parties will create an impediment to the the MSN, and returning it or a copy to to the claim at issue at any time during
efficient resolution of appeals. To the the specified address. Consumer testing the redetermination process, we
contrary, we believe that when another has shown that the information on the strongly encourage appellants to submit,
party subsequently requests an appeal MSN is complete and easy for at the time of their request, all evidence
before a decision has been made on the beneficiaries to understand. In most that they want to be considered. If
original request, fairness demands that cases, we believe that allowing supporting documentation is not
the two requests be combined into one beneficiaries to use the MSN to request submitted with the request, the
case. We have amended § 405.944(c) to an appeal is a more effective practice contractor may contact the appellant to
clarify this point. than referring them to a required form. try to obtain the missing information.
The contractor will not necessarily did not specify whether a party could fail to meet the 60-day deadline for
uphold an unfavorable initial submit additional evidence more than issuing a redetermination. In addition,
determination based solely on the lack once, and if so, what the impact would the commenters recommended that we
of documentation submission. The be on the decision-making deadline. For establish specific remedies for
contractor must make a decision based example, would a 14-day extension appellants, such as the ability to
on the information in the case file. apply each time a party submitted escalate cases to QICs, when contractors
If the contractor believes that the additional evidence, or would there by fail to meet their time frames. One
appellant is missing specific only one extension, regardless of how commenter argued that non-
information or documentation necessary many times a party submitted additional enforcement of the time frame would
for processing the redetermination, but evidence? The commenter suggested have a negative impact on beneficiaries,
cannot obtain the information before its that we specify that there are no limits since they cannot proceed to the QIC
deadline, the contractor will uphold the on evidence submission at the until the contractor issues a
claim denial and then list the specific redetermination level and that a party redetermination.
missing information in the can submit additional evidence as many Response: We do not believe that it is
redetermination letter. If the appellant times as it deems appropriate until a appropriate to permit escalation of
requests a QIC reconsideration, the specific point near the time to issue a redeterminations when contractors do
appellant should submit the decision. The commenter recommended not meet their deadlines. We believe
documentation specified in the that evidence should be permitted until this is consistent with the statute in that
redetermination notice with the request 5 days prior to the decision-making the Congress seems to have weighed the
for reconsideration. The QIC may accept deadline (for example, additional merits of escalation and chose to
any additional documentation, even if it evidence could be submitted until 55 implement that option only at the QIC
is not specified in the redetermination days after the contractor received the level and above. The statute also already
notice. If the appellant fails to submit redetermination request). directs that the Secretary monitor the
this evidence before the QIC issues its Response: We believe allowing timeliness of all contractors’
reconsideration, the appellant may be extensions of decision-making time redeterminations. Sections 1816(f) and
precluded from introducing the frames under some circumstances is 1842(b)(2) of the Act require us to
evidence at higher levels of the appeals consistent with the statute. We believe develop criteria, standards and
process, absent a showing of good cause. that an appeal request should include procedures to evaluate a fiscal
(See the discussion below regarding the the pertinent evidence for an intermediary’s or carrier’s performance
regulatory and statutory requirements adjudicator to make an appropriate of its functions. Measuring the
for full and early presentation of determination, as indicated in timeliness of redeterminations is a
evidence.) § 405.946(a). If the evidence is not critical part of this process, and a
submitted with the request, the 14-day contractor’s inability to process
c. Conducting a Redetermination and
extension allows time for an adjudicator redeterminations within the required
Time Frame for Making a Decision
to carefully review and consider 60-day time frame will be enforced
Section 1869 of the Act provides little additional evidence. It is unreasonable through corrective action plans and
or no guidance with respect to the first to expect an adjudicator to prepare other tools that CMS has available to
conduct of redeterminations, with the a decision based on incomplete ensure that carriers and fiscal
exception of establishing the filing and information submitted with the appeal intermediaries fulfill their statutory and
decision-making time frames. Thus, request, and then in as little as a few contractual obligations. Under our
with few exceptions, we did not days, potentially rewrite a decision ongoing Contractor Performance
propose major changes to the existing based on new evidence. Evaluation (CPE) process, CMS devotes
procedures for first level appeals of While a party, by regulation, may extensive resources to onsite surveys of
claim determinations. To assist submit additional evidence as many contractors to ensure that they meet
appellants who might be unable to times as it deems appropriate until the these obligations.
submit relevant documentation along contractor issues a decision, the impact Comment: One commenter
with the request for redetermination, is that the contractor may extend its recommended that we prohibit
and to promote the resolution of appeals decision-making deadline by up to 14 Medicare contractors and QICs from
at the earliest possible level, we days each time. The only way to avoid raising new issues during an appeal.
proposed to allow later submission of the need for extended decision-making Any issues that are different from those
documentation. If the appellant time frames would be to preclude the in dispute should be raised through the
submitted evidence after the request, an submission of additional evidence by reopening process. The commenter
automatic 14-day extension would be appellants after they file their stated that bringing up new issues
added to the decision-making time redetermination requests. Note that creates great confusion for appellants.
frame. See § 405.946(b). although the contractor may extend the Response: A redetermination consists
Comment: One commenter contended deadline, this does not mean that we of a fresh examination of all the issues
that CMS exceeded its statutory expect the contractor to take the involved in a claim to determine
authority by changing the standard with maximum time to issue the decision in whether it is payable. Therefore, the
respect to the established time frame for all cases. As mentioned in the comment redetermination is not limited to
a decision on a request for above, we urge appellants to submit all validating the original reason for the
redetermination. The commenter necessary documentation with their denial of the claim at issue in the
disagreed with the proposal of an requests in order to avoid delays. We appeal. All applicable statutory and
automatic 14-day extension to the time note that from the outset, appellants regulatory provisions, as well as CMS-
frame when an appellant submits have twice the amount of time to issued policies and procedures, bind
evidence after the request. Another request an appeal as adjudicators do to contractors making redeterminations
commenter agreed that additional time conduct the appeal. (for example, CMS Rulings, Medicare
might be necessary to issue a decision Comment: Some commenters argued manual instructions, program
when a party submits additional that we should impose penalties on memoranda, national coverage
evidence. The commenter noted that we fiscal intermediaries and carriers that determinations, local coverage
determinations, and regional medical filing the request for redetermination. to make a request would penalize
review determinations). As a result, all Under this interim final rule, a request unrepresented beneficiaries or those
these authorities must be considered as for withdrawal must be received before that have limited English-speaking
part of the redetermination. a redetermination has been issued. We abilities or mental capacity. One
encourage appellants to submit written commenter argued that unrepresented
d. Withdrawals and Dismissals
requests early to avoid having the notice beneficiaries should be given notice of
In the proposed rule, we proposed to of a redetermination and a request to any deficiencies and an opportunity to
allow parties to withdraw withdraw cross in the mail. correct and file an amended
redetermination requests within 14 days Comment: Proposed § 405.952(b)(2) redetermination request within a
of the original request in order to avoid requires a contractor to dismiss a reasonable time period (for example, 10
situations where the request for request for a redetermination if the business days after receipt of the
withdrawal and the decision crossed in contractor determines that a party has notice). The commenter also
the mail. We also proposed several failed to make out a valid request for recommended that the notice of an
reasons a contractor might dismiss a redetermination that substantially incomplete request should inform the
request (for example, where a request complies with § 405.944. Proposed party of the information necessary to
for redetermination did not contain the § 405.944(b) requires an appellant to request a redetermination; otherwise,
minimum elements for a either use a standard CMS form or the party would not know what
redetermination request set forth in submit a written request containing four information was missing.
proposed § 405.944). We also proposed elements: (1) The beneficiary’s name; (2) Response: We do not agree that
to dismiss a request if the party filing the beneficiary’s health insurance claim contractors should be required to inform
the request died and there was no number; (3) the specific services(s) and appellants of the defects in their
information in the record to determine item(s) for which the redetermination redetermination requests instead of
whether another party might be has been requested, as well as the being able to issue dismissals. Section
prejudiced by the redetermination. specific date(s) of service; and (4) the 405.944(b) requires only four elements
We also proposed that when a name and signature of the party or for making out a valid redetermination
contractor dismissed a request, a written appointed representative of the party. request: (1) The beneficiary’s name; (2)
notice would be sent to the parties. Two commenters pointed out that these the Medicare health insurance claim
Also, a dismissal could be vacated at elements do not mirror the requirements number; (3) the specific services(s) and
any time within 6 months from the date contained on the current standard CMS item(s) for which the redetermination is
of the dismissal notice for good and form to request a review. requested and the specific date(s) of
sufficient cause. Finally, an appellant The commenters requested us to service; and (4) the name and signature
could request a QIC reconsideration of clarify if the current review form would of the party or representative of the
the dismissal within 60 days of the comply with § 405.944. They also party. This constitutes the minimum
dismissal notice. See proposed inquired as to whether we would information needed to process an
§ 405.974(b). develop a new form. If CMS developed appeal, and we believe that it is entirely
Comment: A commenter a new form, the commenters suggested appropriate to require the party
recommended that the dismissal notice providing space on the form for all of appealing to provide this basic
under § 405.952(c) should inform the the required elements listed in the information. Absent this information, it
appellant of the right to request that the proposed rule. Additionally, one would be difficult, if not impossible, to
contractor vacate the dismissal within 6 commenter requested that CMS develop ascertain whether the individual
months. and disseminate a standard form as requesting the appeal is in fact a party
Response: We agree that the dismissal quickly as possible so that parties can or representing a party, or to identify the
notice should include information about become familiar with the information claim at issue. We believe that accepting
vacating the dismissal. We have revised required in the form. appeal requests with insufficient basic
§ 405.952(c) to require that the dismissal Response: We realize that the current information about the claim and
notice state that there is a right to standard forms for requesting a review requiring contractors to inform
request that the contractor vacate the and reconsideration, CMS forms 1964 appellants of the defects in their appeal
dismissal action. and 2649 respectively, do not contain requests would make for an inefficient
Comment: Proposed § 405.952(a) all of the elements required under appeals process. Note that identification
permits a party to withdraw its appeal § 405.944. However, we are in the of the specific items or services for
request by filing a written and signed process of revising all of our current which a redetermination is being
request for withdrawal within 14 appeal forms. The standard CMS form requested can be accomplished in a
calendar days of the filing of the will contain all of the elements variety of relatively simple ways. For
redetermination request. A commenter specified in § 405.944. Once we example, a beneficiary may simply
questioned whether a contractor would complete the new forms, they will be circle the denied service in question on
disregard a request for withdrawal made released and made available to the MSN. Alternatively, for revised
after the 14th day. The commenter appellants at contractor offices, CMS initial determinations (for example,
argued that there was no legitimate offices, on the Internet, and by calling overpayment cases or Medicare
reason to issue a redetermination if 1–800–MEDICARE. We intend to release Secondary Payer recovery cases),
someone wanted to withdraw an appeal the new forms in conjunction with the appellants can meet this criterion by
request. The commenter recommended implementation of these interim final including a copy of the ‘‘demand letter’’
that as long as the withdrawal request regulations. used to initiate these cases. Thus,
was received before the contractor Comment: One commenter contended meeting these minimum requirements is
issued a redetermination, then the that allowing contractors to dismiss not onerous.
request for redetermination should be redeterminations when appellants fail to In arriving at the decision to allow
dismissed. make out valid requests effectively contractors to dismiss invalid
Response: We agree with the denies appellants the ability to pursue redetermination requests under
commenter and will not limit requests appeals. Other commenters maintained § 405.952(b)(2), we considered the fact
for withdrawal to within 14 days of that requiring specific elements in order that a dismissal does not necessarily
terminate a party’s right to file an surviving spouse or estate has no instruct contractors to allow parties to
appeal. If the 120-day time frame for remaining financial interest in the case elect their preferred method of delivery.
filing a redetermination has not expired based on whether either remains liable
7. Redetermination, Notification, and
at the time a contractor issues a for the services or subsequent similar
Subsequent Limitations on Evidence’’
dismissal, then a party may correct the services; (2) no other individual or
(§ 405.954, § 405.956, and § 405.966)
defect and resubmit the appeal. Also, a entity with a financial interest in the
contractor may vacate a dismissal at any case wishes to pursue the appeal; and [If you choose to comment on issues in
time within 6 months from the date of (3) no other party filed a valid and this section, please include the caption
the dismissal notice, if good and timely redetermination request. For ‘‘Redetermination, Notification, and
sufficient cause is shown. Alternatively, example, the contractor will dismiss the Subsequent Limitations on Evidence’’ at
if a party believes that the contractor request if the beneficiary or the the beginning of your comments.]
inappropriately dismissed a request, the beneficiary’s representative filed the When a contractor’s redetermination
party can request a reconsideration by request for redetermination but the fully reverses the initial determination,
the QIC within 60 days of the dismissal. beneficiary was not held liable for the we proposed to maintain the current
Therefore, we are adopting our services at issue. The contractor will policy that proper notification would be
proposed policy in this interim final inquire whether another party wishes to achieved through the MSN or the RA,
rule of dismissing requests that do not continue the appeal. However, the which contractors send to beneficiaries,
meet the requirements of § 405.944. A contractor will not be required to and providers and suppliers,
contractor may, but is not required to, inquire whether any other party wishes respectively. If a redetermination
contact appellants to give them an to continue the appeal unless a valid affirmed the initial determination, either
opportunity to cure a defect in their and timely request for redetermination in whole or in part, we proposed that a
redetermination request before is filed. We wish to note that when a redetermination notice contain: (1) A
dismissing it. We believe that this beneficiary dies and the request for
clear statement indicating the extent to
policy is reasonable given that it is clear redetermination is subsequently
which the redetermination is favorable
how a party must make out a valid dismissed, a party, including the
redetermination request. As under the or unfavorable; (2) a summary of the
beneficiary’s estate, may request the
former appeals process, we will facts; (3) an explanation of how the
contractor to vacate the dismissal under
continue to allow a beneficiary to file an pertinent laws, regulations, coverage
§ 405.932(c) for good and sufficient
appeal by following the requirements rules, and CMS policies apply to the
cause. Examples of good and sufficient
detailed on the MSN. We will instruct facts of the case; (4) a summary of the
cause include when there is the
our contractors to take into rationale for the redetermination; (5)
possibility of Medicaid liability or when
consideration any special needs of notification to the parties of their right
there is a possibility the State (which
unrepresented beneficiaries, or those pays Medicaid funds) will attempt to a reconsideration, the procedures that
with limited capacities or abilities. Also, recovery of its payment from the estate. a party would follow in order to request
we are in the process of creating a As mentioned in our discussion above a reconsideration, and the time limit for
redetermination form that will assist on parties to initial determinations and requesting a reconsideration; (6) a
appellants who are unfamiliar with the appeals, § 405.906(c) now establishes statement of the specific missing
process (for example, unrepresented that in the event of the death of a documentation that would need to be
beneficiaries) with their requests. beneficiary, a provider or supplier may submitted with a request for a
Comment: One commenter requested appeal if there is no other party reconsideration; (7) an explanation that
clarification on the circumstances under available to appeal an initial if the specific supporting
which a request for redetermination determination. Thus, the provider or documentation specified in the notice is
would be dismissed when a beneficiary supplier of the item or service may not submitted with the request for a
dies. The commenter requested request a redetermination in these reconsideration, the evidence will not
clarification about any potential liability situations, consistent with the clear be considered at an ALJ hearing, unless
of the deceased beneficiary’s estate, direction of section 939 of the MMA. the appellant demonstrates good cause
including recovery by a State. The Comment: A commenter requested as to why the evidence was not
commenter believed that § 405.952(b)(4) that we clarify the meaning of provided previously; and (8) any other
also should clarify the situations an ‘‘otherwise transmit’’ in proposed requirements specified by CMS. When a
adjudicator must consider to determine § 405.952(d) in terms of a contractor redetermination notice is sent to a
whether dismissing the redetermination providing a dismissal notice to the provider or supplier announcing a full
request may prejudice another party. parties at their last known addresses. or partial reversal of the initial
The commenter indicated that in almost The commenter pointed out that the determination, the Medicare contractor
every situation, the beneficiary’s estate type of transmission is particularly must also issue an electronic or paper
would be prejudiced by the important for beneficiaries who do not remittance notice to the provider or
determination and argued that a have access to facsimile and electronic supplier to explain the payment.
dismissal would preclude the mail. In general, the proposed requirements
beneficiary’s family or estate from Response: The dismissal notice, like a for the redetermination notice were
protecting its right to seek redetermination notice, will be similar to existing instructions
reimbursement. delivered through first class U.S. mail. concerning the content of contractor
Response: We have revised the Although contractors do not currently appeal determinations. However, our
proposed language in § 405.952(b)(4) to transmit notices by facsimile or proposal that contractors also specify
make the needed clarifications. A electronic mail, we want to ensure that supporting documentation that would
contractor will dismiss a the regulations allow them the need to accompany a reconsideration
redetermination request when the flexibility to do so in the future should request was a new requirement.
beneficiary whose claim is being CMS believe that other notification Comment: We received many
appealed dies while the request is methods are appropriate. Nevertheless, comments on the requirement for the
pending, under the following even if contractors use alternate means redetermination notice to include a
circumstances: (1) The beneficiary’s to provide dismissal notices, we will statement of the specific missing
documentation that must be submitted Comment: One commenter and not to beneficiary appellants. The
with the reconsideration request. In recommended revising the new limitation on the presentation of new
general, the commenters agreed with the evidence provisions to preclude the evidence will also apply to beneficiaries
requirement to identify additional subsequent submission of information represented by providers or suppliers to
supporting documentation in the only to the extent that it involves ensure that providers or suppliers do
redetermination notice. They also objective medical information (for not attempt to circumvent these rules by
agreed that this change would improve example, a specific blood gas percentage offering to represent beneficiaries.
the efficiency of the appeals process by or patient height and weight). Another Further, to the extent that beneficiaries
assisting appellants in knowing the type commenter suggested that we may not be as sophisticated as providers
of documentation to submit. distinguish between the submission of or suppliers regarding the
Several other commenters objected to new evidence that involves readily administrative appeals process this
this provision. Two commenters argued available clinical documentation consideration would not apply in the
that the statute and Medicare directly implicated in the claim dispute case of a beneficiary represented by a
regulations require filing certain and other evidence (for example, expert provider or supplier. Thus, although
documentation with particular types of opinions, clarifying treating physicians’ contractor redetermination notices will
claims (for example, claims for power opinions, or evidence from providers uniformly identify any necessary
wheel chairs require submission of a not directly involved in the dispute). missing documentation, beneficiaries,
power wheelchair Certificate of Medical The commenter recommended only except those represented by providers or
Necessity (CMN)). They argued that if precluding clinical documentation. suppliers, will still be permitted to
the statute and regulations do not Other commenters argued that this introduce evidence after the QIC
require the submission of a particular provision was too burdensome for reconsideration level (although for
piece of documentation, but a contractor providers, suppliers, and beneficiaries, efficiency reasons, they would be better
needs that documentation before it will particularly when they do not have easy served by doing so as soon as possible).
pay a claim, then the contractor should access to supporting documentation that We believe it would be unnecessarily
be required to explain why it needs the may be required. Some of the burdensome to require appellants to
documentation and consider the impact commenters suggested that we exempt certify that they have no further
of requiring compliance with the a beneficiaries from these rules because evidence to submit. (See section II.D.3
request (consistent with the Paperwork they do not have ready access to below for a further discussion of rules
Reduction Act of 1995 (PRA)). They medical records and other related to evidence at QIC
proposed that the carrier or fiscal documentation. reconsiderations.)
intermediary explain in detail the One commenter believed that the Comment: Several commenters made
rationale for collecting any additional proposed rule was too lenient and additional suggestions for improving the
documentation not required for recommended that we limit the rules on notices that inform parties of the
submitting a particular claim. The submission of evidence at the decision on an appeal. Some
commenter argued that the rationale redetermination and reconsideration commenters suggested including a form
should include the legal and medical levels. The commenter suggested that to request a reconsideration on the back
necessity reason for such collection. we require appellants to sign a form of the redetermination notice. Other
Response: We believe that the appeals certifying that they do not have any commenters suggested that CMS make
time frames and procedures mandated more records to submit. available upon request the laws,
by section 521 of BIPA and Title IX of Response: We do not believe that it is regulations, policy manuals, national
the MMA clearly require greater either practical or consistent with the coverage determinations (NCDs), local
efficiency in the Medicare appeals statute to limit the requirement on full coverage determinations (LCDs), and
process. This belief is reinforced by and early presentation of evidence by local medical review policies (LMRPs)
section 933(a) of the MMA, which attempting to distinguish between that were used to make the decision.
requires that a provider or supplier may evidence that is readily available to the They recommended that notices should
not, in any subsequent level of appeal, provider and that which is obtained include the correct citations to the
introduce evidence that was not from providers not directly involved in appropriate provisions. One commenter
presented at the reconsideration the claim dispute. Similarly, we cannot recommended that if the MSN is used
conducted by the QIC, unless there is limit this provision to objective medical to inform a beneficiary of a
good cause that precluded the information. Given the vast amount of redetermination that is wholly
introduction of that evidence at or medical services and items that could be favorable, the MSN should be sent
before that reconsideration. However, involved in a claim dispute, it would be within the proper time frame. This
absent advance notice of what extremely difficult to draw clear commenter also suggested that the
documents are needed to support a distinctions among the numerous types appointed representative receive a copy
claim, appellants may have difficulty of documentation that might be needed. of the decision.
determining what constitutes relevant Nevertheless, where it is not feasible to Response: We agree that including a
evidence for their claim appeals. Thus, obtain this documentation, as indicated form to request a reconsideration with
although not required by the statute, we in § 405.1028, an ALJ will make a the redetermination notice would assist
believe that requiring contractor determination on whether good cause appellants and help them to provide the
redetermination notices to identify for failure to submit the evidence to the information QICs need to process
necessary missing documentation will QIC exists. This applies to all reconsiderations. At one time, we had
provide very valuable information for documentation, including the items considered including a reconsideration
appellants to present their cases to QICs. listed in the notice of redetermination. request form on the reverse side of the
Therefore, we believe this provision is Finally, we note that, consistent with redetermination notice, but consumer-
advantageous to appellants since it section 933(a) of the MMA, we have testing results indicated that appellants
should result in a better understanding specified in the interim final rule that found this confusing. We intend to
of the basis for the unfavorable the limitation on the presentation of continue exploring how best to make
redetermination and lead to more new evidence, absent good cause, available a reconsideration request form
accurate reconsiderations. applies only to providers and suppliers, with the redetermination. Consistent
with section 1869(a)(5) of the Act, as commenter recommended that we would either issue its reconsideration,
amended by section 933(c)(1) of the require payment to be made within 60 notify all parties that it would not be
MMA, we require in § 405.956(b)(9) that days of the date of the favorable able to complete its review by the
contractors make available upon request decision. decision-making deadline, or dismiss
correct information on the laws, Response: We agree that payment the request for reconsideration.
regulations, policy manuals, national should be made within a reasonable Pursuant to section 1869(c) of the Act,
coverage determinations (NCDs), local time from the date of a favorable the notice that the QIC is unable to
coverage determinations (LCDs), and determination. We will continue to complete its reconsideration within the
local medical review policies (LMRPs) evaluate contractors’ performance in decision-making period would advise
that were used to make the decision. effectuating favorable decisions. the appellant of the right to request
We appreciate the commenter’s escalation of the appeal to an ALJ.
8. Reconsiderations (§ 405.960 Through
concern about receiving MSNs within a Under § 405.970(d), appellants would be
§ 405.978)
reasonable amount of time from the date able to submit a written request
of a fully favorable redetermination. [If you choose to comment on issues in directing the QIC to escalate the appeal.
However, it is more efficient and cost- this section, please include the caption We proposed that whenever a QIC
effective for beneficiaries to receive ‘‘Reconsiderations’’ at the beginning of received an escalation request, the QIC
MSNs on a monthly basis, as opposed your comments.] would take one of two actions within 5
to each time a claim or appeal is a. Time Frame for Filing a days: (1) Complete its reconsideration
processed. Thus, if an adjustment is Reconsideration Request and notify the parties of its decision; or
made to a claim as the result of an (2) acknowledge the escalation request
appeal decision, the beneficiary will not Proposed § 405.962(a) specified that in writing and forward the case file to
receive the MSN until the next appellants who wished to file a request the ALJ.
scheduled monthly release. We believe for reconsideration would be required to Comment: A few commenters
that this is an acceptable amount of do so within 180 days of receipt of the expressed concern about how appellants
time, and it continues a longstanding redetermination notice, or within that filed appeals at alternative sites
Medicare practice. CMS will monitor additional time as the QIC might allow would know whether or when the
contractor performance in this regard. for good cause. In proposed § 405.964, proper adjudicator received their
To ensure that appellants are made we set forth the place and method for reconsideration request. To address this
aware of the outcome of a fully filing a request for reconsideration. We situation, the commenters
favorable redetermination in a timely would permit parties to file requests recommended requiring adjudicators to
manner, we added § 405.956(a) and with the QIC, CMS, or SSA offices. For send acknowledgement letters to
§ 405.956(c) to reflect that contractors purposes of establishing whether an appellants that file at alternative
must send a written notice to the appellant had timely filed a request for locations. Other commenters suggested
appellant within 60 calendar days of reconsideration, a request would be requiring all adjudicators to use
receipt of the request for a considered filed on the date it was addresses that are accessible by delivery
redetermination. The written notice received by the QIC, SSA, or CMS. other than the U.S. postal service to
must contain a clear statement However, for reconsideration requests enable appellants to file directly with
indicating that the redetermination is submitted to CMS or SSA offices, the the proper adjudicator.
wholly favorable to the appellant. QIC’s decision-making period would not Response: As discussed above in the
Additionally, we wish to clarify that begin until the QIC received the request. context of requests for redeterminations,
all parties to the appeal are required to We also specified that reconsideration we agree with the commenter that
receive a copy of an unfavorable or requests could either be made using a appellants who use alternate filing
partially favorable redetermination standard CMS form, or some other locations would have difficulty
notice, with the sole exception of written document, as long as it determining if and when the proper
overpayment cases involving multiple contained the key elements captured by adjudicator received their request. Our
beneficiaries. Our experience has been the form; that is, the beneficiary’s name, experience has been that very few
that beneficiaries often are confused by HIC number, date(s) of service and appellants use alternative filing
the copies of notices that they receive in service(s) at issue, and the name and locations (for example, SSA field
conjunction with overpayment and signature of the party or representative offices). However, when they do so,
recovery letters to providers and of the party. If the reconsideration requests often do not arrive timely at the
suppliers. To minimize confusion, request did not contain any one of the proper adjudicating entity. Moreover, as
under § 405.956(a)(2), we specify that in essential elements referenced above, we noted previously, consistent with
these situations, contractors are proposed that the QIC would dismiss section 931 of the MMA, SSA will no
permitted to issue written notices only the reconsideration on the basis that the longer play a role in Medicare claims
to appellants. party failed to make out a valid request. appeals. For these reasons, and
Although we agree that an appointed We also proposed in §§ 405.964(c) consistent with the policy for
representative must receive a copy of and 405.970(b)(3) that QICs would redetermination requests, we have
the redetermination, we do not agree, consolidate multiple requests for revised § 405.964(a) to specify that all
for privacy reasons, that the appointed reconsideration into a single requests for a reconsideration must be
representative also should receive a proceeding, and would issue one filed with the QIC indicated on the
copy of the MSN. MSNs contain reconsideration determination to all notice of redetermination. Just as we
information about other claims filed parties within 30 days of the latest plan to do with intermediaries and
during the previous month, with which reconsideration request. carriers, we also will explore with QICs
the appointed representative may have Proposed § 405.970 set forth the ways that we can create efficiencies in
no authorized involvement. general requirement that QICs would the appeals process, including
Comment: A commenter pointed out complete their reconsiderations within establishing addresses for private
that we did not impose a deadline for 30 days of receiving a timely filed delivery services.
a contractor to make payment on a claim request. By no later than the close of the Comment: Many commenters
after a favorable decision. The 30-day decision-making period, a QIC disagreed with the proposal of ‘‘tolling
the decision-making clock’’ for a QIC instructions, rather than through merits on whether the claim is payable,
reconsideration when an appeal is filed regulations. we do not believe further review is
at an alternative location (for example, Comment: Some commenters pointed necessary. Accordingly we are adding
at an SSA office rather than with the out that currently, some contractors § 405.1004(c) to specify that an ALJ’s
QIC). Commenters perceived this define the date of receipt as the day that decision with respect to a QIC’s
provision as unfairly penalizing the contractor logs in the request, while dismissal of a reconsideration request is
appellants that used alternative filing others define it as the day the request is final and not subject to further review.
locations. Rather than beginning the received in the contractor’s mailroom. Finally, we are not adopting the
decision-making time frame only when To eliminate confusion, one commenter commenter’s suggestion that a
a QIC receives an appeal request, asked that CMS clarify in the final rule subsequent reversal of a dismissal have
commenters suggested that CMS that the date of receipt of a no effect on a party’s appeal rights. On
develop an electronic filing system. An reconsideration request would be the the contrary, a subsequent reversal by
electronic filing system would allow date that the request arrived in the QIC’s an ALJ of a dismissal would restore the
appellants to continue filing their mailroom. party’s reconsideration rights. Thus, it is
appeals at alternative filing locations Response: We recognize the need for necessary for the case to be remanded
and permit adjudicators to receive the consistency in this regard and agree that for the QIC to render a decision on the
appeals almost immediately, thereby inefficiencies in logging in an appeal substantive issue of whether a claim
eliminating the need to toll the request should not adversely affect an must be paid.
decision-making clock. (Note that the appellant. We intend to address the Comment: We received many
issue of tolling the decision-making issue through the QIC contracts and comments and questions on the
deadline also applies to other levels of instructions. procedural aspects of the dismissal
the appeals process.) b. Withdrawal or Dismissal of a Request provision in the reconsideration section
Response: As discussed above, we for Reconsideration of the proposed rule. Commenters asked
believe the best way to facilitate a QIC’s us to specify the circumstances in
ability to adjudicate a reconsideration Proposed § 405.972 established which a dismissal would be appropriate
timely is to require that all provisions for withdrawing and and to identify what an appellant would
reconsideration requests be filed at the dismissing requests for reconsideration. need to show in order to successfully
QIC. Thus, the comments on the ‘‘tolling We proposed that appellants should be appeal the dismissal of a
of the clock’’ issue are no longer able to withdraw their reconsideration reconsideration request. The
pertinent. Note that redetermination requests by filing a written request for commenters also asked us to clarify the
notices will clearly specify the proper withdrawal to the QIC within 14 circumstances under which an
entity to whom to direct a calendar days of filing the adjudicator can dismiss a
reconsideration request. We do reconsideration request. Under reconsideration request when a
recognize that the development of an proposed § 405.972(b), we set forth the beneficiary dies.
electronic filing system would make the reasons why a QIC would dismiss a Response: Section 405.972(b)
appeals process more efficient; request for reconsideration (for example, describes the circumstances that
therefore, we intend to pursue this goal if the party failed to make out a valid warrant dismissal of a reconsideration
both with QICs and the new Medicare request consistent with the request, either entirely or as to any
administrative contractors that are requirements identified in § 405.964). stated issue. A dismissal is appropriate
mandated by the MMA. We also proposed under § 405.972(e) to when the person or entity requesting a
Comment: Some commenters inquired allow appellants to request an ALJ reconsideration is not a proper party
whether carriers and intermediaries review of a QIC dismissal of a under § 405.906 or does not otherwise
would be required to create case files, or reconsideration request if the request have a right to a reconsideration under
to forward redetermination letters and was filed within 60 days of the QIC’s section 1869(b) of the Act. A dismissal
documentation to the QIC for dismissal notice. also is warranted where a party fails to
reconsiderations. One commenter Comment: Some commenters asked us make out a valid request for
argued that the QIC’s success in meeting to give a rationale for allowing appeals reconsideration under § 405.964(a) and
its decision-making time frame would of dismissals and remanding reversed § 405.964(b) or fails to file a request
depend upon the contractors’ dismissals. Other commenters argued within the proper time frame under
compliance with a time frame to that a reconsideration regarding the § 405.962.
forward cases to the QICs. If contractors dismissal of a redetermination request On appeal, the party contesting the
are responsible for forwarding case files should be final and not appealable. In dismissal must provide evidence
to QICs, the commenters suggested that addition, the same commenters asked sufficient to refute the basis for the
CMS establish a time frame in the that we include a provision that a dismissal. For example, if a
regulation for performing this activity. subsequent reversal of a dismissal have reconsideration request were dismissed
One commenter recommended a 15-day no effect on a party’s appeal rights. because the person filing the appeal is
time frame to complete both the Response: Although we recognize that not a proper party, then the appellant
preparation and forwarding of the case permitting appeals of dismissals can be would have to show that they are in fact
file. inefficient at times, we believe our a proper party.
Response: In order to achieve the approach of providing for review of We have amended § 405.972(b)(4) to
statutory time frame for QIC decisions, dismissals at the next adjudicative level identify, in the event of a beneficiary-
efficient processing and forwarding of balances the need for review with the appellant’s death, the circumstances an
case files to the QICs is essential. From need for finality. Because dismissals adjudicator must consider to determine
an appellant’s perspective, however, will only be based on the circumstances whether dismissing the reconsideration
this will be a seamless process, and we involving the appeal request (for request prejudices another party. The
believe that the proper vehicle to example, whether the party included adjudicator will look to determine
address the mechanics of case file the proper elements in its appeal whether all three circumstances are
transmission is through our contractor request, (or whether it is a proper party present: (1) The beneficiary’s surviving
evaluation process and manual to request an appeal) rather than the spouse or estate has no remaining
financial interest in the case, based on Section 405.964(b) requires only five determine if the dismissal is correct. If
whether either remains liable for the elements for making out a valid the adjudicator reverses the dismissal,
services, or for subsequent similar reconsideration request: (1) The the dismissal is vacated and remanded
services under the limitation of liability beneficiary’s name; (2) the beneficiary’s to the previous level of appeal. The
provisions, based on the denial of the Medicare health insurance claim remand of a vacated dismissal is meant
services at issue; (2) no other individual number; (3) the specific service(s) and to ensure that appeals are resolved at
or entity with a financial interest in the item(s) for which the reconsideration is the lowest level possible. If one party’s
case wishes to pursue the appeal; and requested and the specific date(s) of appeal is remanded on a consolidated
(3) no other party to the redetermination service; (4) the name and signature of appeal, all other parties’ appeals on the
filed a valid and timely reconsideration the party or representative of the party; same claim are remanded. The previous
request. For example, the QIC will and (5) the name of the contractor that adjudicator will reopen the dismissal
dismiss the request if the beneficiary or made the redetermination. We added and issue a new determination. This
the beneficiary’s appointed the requirement that the party specify new determination will provide appeal
representative filed the request for the contractor that made the rights.
reconsideration, but the beneficiary was redetermination to facilitate the QIC Comment: A few commenters opined
not held liable for the services at issue. obtaining the case file from the that appellants should be able to
The QIC will inquire whether the appropriate contractor. Since QICs need withdraw a reconsideration request any
provider or supplier of the item or this basic information in order to time after filing the appeal request, but
service wishes to continue the appeal. process an appeal, we believe that it is before a decision is rendered.
However, the QIC will not be required appropriate to require the party Response: Consistent with our policy
to inquire whether any other party appealing to provide adequate for redetermination requests, we agree
wishes to continue the appeal unless a information to identify the specific with the commenters that an appellant
valid and timely request for claim at issue. Further, the name and should be allowed to withdraw an
reconsideration is filed by another signature of the appellant is necessary to appeal request any time after a request
party. We wish to note that when a ascertain whether the individual is filed, but before the QIC issues a
beneficiary dies and the request is requesting the appeal is in fact a party. decision. Thus, we have removed the
subsequently dismissed, a party, This basic information is all that is proposed provision that a withdrawal
including the beneficiary’s estate, may required under § 405.964(b), and it request must be filed with the QIC
request the contractor to vacate the essentially mirrors the information that within 14 calendar days of the filing of
dismissal under § 405.972(d) for good would have already been provided by the reconsideration request. Section
and sufficient cause. Examples of good an appellant at the redetermination 405.972(a) now reads ‘‘an appellant that
and sufficient cause include the level. Thus, we believe that requiring files a request for reconsideration may
possibility of Medicaid liability or the QICs to accept appeal requests with withdraw its request by filing a written
possibility that the State (which pays insufficient information about the claim and signed request for withdrawal
Medicaid funds) will attempt recovery and to inform appellants of the defects * * *. The request for withdrawal must
of its payment from the estate. in their appeal requests makes for an be received in the QIC’s mailroom
As mentioned in our discussion above inefficient appeals process. before the reconsideration is issued.’’
on parties to initial determinations and As under the former appeals process, c. Evidence Submitted With the
appeals, § 405.906(c) reflects that in the CMS will create a standardized Reconsideration Request
event of the death of a beneficiary, a reconsideration form that will assist
provider or supplier will be able to appellants, particularly unrepresented Proposed § 405.966(a) describes the
appeal if no other party is available to beneficiaries, with their requests. type of evidence that accompanies
appeal the redetermination. Thus, the Furthermore, a dismissal of a request for reconsideration requests and specifies
provider or supplier of the item or reconsideration does not necessarily that the failure to submit documentation
service is able to request reconsideration terminate a party’s right to file an listed in the redetermination notice at
in these circumstances. appeal. If the 180-day time frame for the reconsideration level generally
Comment: Some commenters filing a request for reconsideration has prevents the introduction of that
criticized the policy regarding not expired at the time a QIC issues a evidence at subsequent appeal levels.
dismissals of incomplete dismissal, then a party may correct the Under proposed § 405.966(b), if
reconsideration requests. Rather than defect and resubmit the appeal. appellants submit additional
dismissing incomplete reconsideration Additionally, if a party believes its documentation after their request for
requests, commenters thought that a reconsideration was inappropriately reconsideration has been filed,
better policy would be to inform dismissed, it can either ask the QIC to including documentation listed in the
appellants of the defect and afford them vacate its dismissal, or appeal the redetermination notice, the late
an opportunity to cure the defect. At a dismissal to an ALJ. submission results in an automatic 14-
minimum, the commenters suggested an Comment: A few commenters asked day extension of the QIC’s decision-
exception for beneficiaries. how the dismissal of a consolidated making time frame. Section 933(a) of the
Response: Consistent with the appeal or a remand resulting from a MMA subsequently added a similar,
previous discussion of dismissals of reversed dismissal affects a party’s new statutory requirement with respect
redetermination requests, we do not appeal rights. to the full and early presentation of
agree with the commenters that QICs Response: Under § 405.964(c), QICs evidence.
must be required to inform appellants of are required to consolidate multiple Comment: When filing a request for
the defects in their reconsideration requests for reconsideration of the same reconsideration, proposed § 405.966(a)
requests instead of being able to issue claim into one proceeding. The requires a party to present evidence and
dismissals. We believe that this policy dismissal of a party’s individual appeal allegations of fact or law related to the
is reasonable given the new request within a consolidated appeal issue in dispute and explain why it
redetermination notice requirements does not affect any remaining party’s disagrees with the redetermination. In
and the simplicity of the elements of a appeal. When a dismissal is appealed to addition, the evidence would need to
valid reconsideration request. the next level, the adjudicator will include any missing documentation
identified in the redetermination notice. requested in the notice of 9. Conduct of a Reconsideration

Absent good cause, the failure to submit redetermination. (§ 405.968 and § 405.976)
evidence generally prevents its Any case involving the late [If you choose to comment on issues in
introduction at subsequent levels of the submission of evidence, including this section, please include the caption
appeals process. Many commenters appeals by beneficiaries, will continue ‘‘Conduct of a Reconsideration’’ at the
perceived this ‘‘penalty’’ for failing to to result in a 14-day extension of the beginning of your comments.]
comply with the requirement for early decision-making time frame. We believe
In proposed § 405.968, we defined a
presentation of evidence as too harsh. this policy is necessary to encourage all
QIC reconsideration as ‘‘an
Some argued that requiring appellants to submit evidence with their
independent, on-the-record review of an
beneficiaries to submit evidence and appeal requests and to ensure that
initial determination, including the
make allegations of fact and law at the adjudicators have adequate time to
redetermination.’’ If an initial
reconsideration level changes the nature thoroughly review all evidence prior to
determination involved a finding on
of the appeal from an informal review issuing a decision. A 14-day extension
does not apply when the submission of whether an item or service was
to an adversarial proceeding. These reasonable and necessary for the
commenters believe that beneficiaries evidence is in response to a request by
a QIC, unless the QIC’s request pertains diagnosis or treatment of illness or
generally lack the resources and injury (under section 1862(a)(1)(A)) of
sophistication to make a showing at the to documentation specified in the
redetermination notice. the Act, a QIC’s reconsideration must be
time a reconsideration request is filed based on clinical experience and
and are better able to present evidence Any evidence submitted after the
reconsideration level by providers, medical, technical, and scientific
and explain their case in a hearing. evidence, to the extent applicable.
Other commenters indicated that suppliers, or beneficiaries who are
represented by a provider or supplier, Under proposed § 405.968(b), QICs
requiring early presentation of evidence would be bound by NCDs. QICs would
is unfair to all appellants, not just will be evaluated against a good cause
standard for late filing described at be required to follow LCDs, LMRPs and
beneficiaries, especially since the CMS program guidance unless the
proposed rule would allow CMS to § 405.1028. Note that the full and early
presentation of evidence requirement appellant questioned the policy and
enter an appeal as a party at the ALJ provided a persuasive reason why the
established under section 933 of the
level and to submit evidence and policy should not be followed.
MMA and § 405.966 does not apply to
position papers. To address this issue, Under proposed § 405.976, we specify
CMS, and therefore, it does not limit
commenters recommended either that reconsiderations be in writing and
CMS’ ability to introduce evidence at
eliminating this provision entirely, or contain several substantive elements,
the ALJ level. CMS still must submit
creating an exception to this including: (1) A clear statement as to
any evidence within the time frame
requirement for unrepresented whether the reconsideration is favorable
designated by the ALJ. An extension of
beneficiaries. or unfavorable; (2) a summary of the
this deadline is permissible for good
Response: Section 1869(b)(3) of the cause at the discretion of the ALJ. facts; (3) an explanation of how the
Act, as amended by section 933(a)(1) of Comment: Proposed § 405.966(b) pertinent laws, regulations, coverage
the MMA, now specifies that providers allows the QIC to automatically extend rules, and CMS policies apply to the
and suppliers may not introduce its time frame by 14 additional days facts; (4) an explanation of the medical
evidence in any appeal that was not when a party submits additional and scientific rationale for the
presented at the reconsideration evidence after filing its reconsideration reconsideration when the case involved
conducted by the QIC, unless there is request. One commenter recommended determining whether an item or service
good cause that prevented the that the automatic 14-day extension was reasonable or necessary for the
introduction of that evidence at or apply only once, even if an appellant diagnosis or treatment of an illness or
before that reconsideration. This makes more than one late submission. injury; and (5) a clear statement of the
statutory change is largely consistent Response: Consistent with our policy QIC’s rationale for its decision.
with the policy identified in the for redeterminations, a party may Consistent with proposed
proposed rule; therefore, we are submit additional evidence as many § 405.968(b)(3), if the QIC’s decision
adopting this provision as proposed for times as it deems appropriate until the conflicts with an LCD, LMRP, or with
provider and supplier appellants. QIC issues a decision, but the QIC may program guidance (for example, a CMS
However, we are establishing an extend its decision-making deadline by manual instruction), the notice needs to
exception to the ‘‘full and early up to 14 days each time. Thus, we have include the QIC’s rationale for not
presentation of evidence’’ requirement clarified in § 405.966(b) that the 14-day following the policy in question.
for beneficiaries. Specifically, we have extension applies each time a party Similarly, consistent with proposed
added § 405.966(c) to allow beneficiary- submits additional evidence. We note § 405.976(b)(5), the reconsideration
appellants to submit documentation that that this provision also applies to late notice needs to address how any
was specified as missing in the notice of submissions of evidence by other parties missing documentation affects the
redetermination at any time during a to the appeal. The 14-day extension reconsideration and the limitations on
pending appeal without the need for allows time for the QIC to carefully the presentation of evidence at the ALJ
good cause. Note that § 405.966(c)(2) review and consider the additional hearing level.
clarifies that this exception does not evidence. Again, although the QIC may Comment: We received many
apply to beneficiaries who are extend the deadline, by no means do we comments on the provision requiring
represented by providers or suppliers. anticipate that QICs will use the QICs to give deference to a local
See the discussion above at Section II, maximum time to issue decisions in all coverage determination (LCD) or local
B&, ‘‘Redetermination, Notification, and cases. The only time that the submission medical review policy (LMRP) unless an
Subsequent Limitations on Evidence’’, of evidence will not trigger the appellant questions the policy and
for a complete discussion of this issue. automatic 14-day extension is when the provides a reason why the policy should
We will develop manual instructions QIC requests documentation not not be followed that the QIC finds
requiring QICs to help beneficiary- previously requested in the persuasive. Some commenters thought
appellants to obtain documentation redetermination notice. that CMS had exceeded its statutory
authority by binding QICs to LCDs and or other guidance. This amended been the case under the existing Part B
LMRPs and questioned the propriety of provision eliminates the burden fair hearing process. Commenters stated
requiring QICs to give deference to imposed on appellants, including that requiring all QIC proceedings to be
policies that they allege sometimes beneficiaries, to challenge CMS policies held on-the-record was contrary to
contradict statutes and regulations, and in the claim appeals process. (See congressional intent and would limit an
that are not promulgated through notice- section II.G.5 of this preamble for a appellant’s ability to interact with the
and-comment rulemaking. They also related discussion of ALJ and MAC adjudicator. The commenters believed
expressed concern over whether consideration of local coverage that appellants would be deprived of an
unrepresented beneficiaries would be policies.) important opportunity to provide
able to effectively challenge CMS We also note that section 522 of BIPA adjudicators with clarifications and
policies and noted that requiring QICs created a new review process that additional information not contained in
to give deference to LCDs and LMRPs enables certain beneficiaries to the record, and that adjudicators would
would prevent QICs from reviewing challenge LCDs at the ALJ hearing and not have an opportunity to personally
these policies. MAC review levels and NCDs at the assess a beneficiary’s physical/mental
Response: We continue to believe that MAC review level. Thus, we believe that condition. Commenters suggested that
it is both appropriate and consistent it is important to note how the coverage beneficiary appellants in particular
with the statutory intent of BIPA to appeals process could affect QICs in would be adversely affected by this
require QICs to consider LCDs and processing claim appeals. policy. Other commenters agreed that
LMRPs and other CMS program If a party appeals a denial that is QICs should not be required to conduct
guidance and to apply these policies based on an LCD or NCD by filing only in-person or telephone reconsiderations
appropriately in a particular case. A QIC a claim appeal, then adjudicators will within the statutory decision-making
is not required to follow a given policy apply the coverage policy that was in time frame, but expressed concern over
in an individual case if it believes that place on the date the item or service was the accuracy of the QICs’ on-the-record
the policy is not legally persuasive received, regardless of whether some decisions.
under specific circumstances. However, other beneficiary has filed a coverage Response: As the commenters point
this does not mean a QIC may ignore or appeal based on the same LCD or NCD. out, under the existing appeals process,
invalidate an LCD for all subsequent This policy is consistent with original appellants have had an opportunity to
appeals. The Congress created a new Medicare policy that requires LCD or request a ‘‘fair hearing’’ with respect to
and entirely separate process for NCD changes to only be applied Part B determinations. This process,
reviewing the validity of LCDs in prospectively to requests for payment. which has involved on-the-record,
section 1869(f) of the Act, as added by If an appellant files both a claim and telephone, or in-person proceedings, has
section 522 of BIPA. Section 1869(f) of a coverage appeal based on the same served as the second level of appeals for
the Act permits beneficiaries who are initial determination, both appeals will Part B claims, consistent with section
seeking coverage from an item or service go forward. The claim appeal 1842(b)(3)(C) of the Act, which specifies
to challenge the reasonableness of an adjudication time frames will not be that an individual will be granted an
LCD. A challenge to an LCD under impacted because the appeals will be opportunity for a fair hearing by the
section 522 of BIPA is reviewed by an conducted simultaneously. In carrier in any case where the amount in
ALJ. adjudicating the claim appeal, controversy is at least $100. Section
As the commenter suggests, however, adjudicators will apply the coverage 1842(b)(2)(B)(ii) of the Act establishes a
we have reevaluated the proposed policy that was in place on the date the 120-day deadline for the fair hearing
requirement that a QIC could choose not item or service was provided, unless the decision. The existing regulations
to follow LCDs, LMRPs, and CMS appellant receives a favorable coverage governing appeals under Medicare Part
program guidance only if the appellant appeal decision. If the appellant B, in Subpart H of Part 405, describe the
questioned the policy and provided a receives the favorable coverage decision available hearing procedures.
persuasive reason why the policy prior to a decision being issued for the However, the right to a fair hearing
should not be followed. As a result, we claim appeal, then pursuant to 42 CFR has never been part of the appeals
have revised § 405.968 to provide that a § 426.488 and § 426.560, the claim process for Part A claims. For these
QIC may decline to follow a policy in appeal will be adjudicated without claims, § 405.710 establishes a right to a
a particular case either at the request of consideration of the invalidated LCD or ‘‘reconsideration.’’ Neither the statute
a party or at its own discretion. NCD provision(s). If an appellant nor the implementing regulations under
Thus, as revised, § 405.968 states that receives a favorable decision in the Subpart G of Part 405 provide for any
a QIC is not bound by LCDs, LMRPs, or coverage appeal after receiving an type of hearing before the ALJ level for
CMS program guidance, but will give unfavorable claim appeal decision, then Part A claims. Neither the statute nor
substantial deference to these policies if the appellant is entitled to have the the regulations establish a minimum
they are applicable to a particular case. claim appeal reopened and revised for amount in controversy for Part A
Moreover, a QIC may decline to follow good cause, subject to the provisions in reconsiderations.
a policy if the QIC determines, either at § 405.980 and § 405.986, without In contrast to the pre-BIPA statute,
a party’s request or at its own discretion, consideration of the invalid LCD or NCD revised section 1869 of the Act
that the policy does not apply to the provision(s). As a result of these establishes a uniform set of appeals
facts of the particular case. Thus, QICs clarifications, we have added requirements for all Part A and Part B
will not review LCDs, LMRPs, or other § 405.1034(c) to permit ALJs to remand claim determinations. The required
CMS guidance. Rather, they will an appeal to a QIC in this situation. procedures now available under the
evaluate the applicability of the LCD, Comment: Although a few statute consist of a ‘‘redetermination’’ by
LMRP, or CMS guidance to a particular commenters agreed with the proposal an intermediary or carrier, a
claim denial. Their decisions will not that all QIC proceedings would be ‘‘on- ‘‘reconsideration’’ by a QIC, a ‘‘hearing’’
affect subsequent cases and are not the-record,’’ most commenters opposed before an ALJ, and then a ‘‘review’’ by
precedential. A QIC does not have the this proposed policy and recommended the DAB. As under the existing Part A
authority to require CMS or a contractor that QICs be required to offer appellants process, the statute does not establish
to withdraw or revise its LCDs, LMRPs, an opportunity for a hearing, as has any minimum amount in controversy
for reconsiderations and sets this commenter asked whether a QIC panel acknowledge the escalation request and
amount at only $100 for ALJ hearings. would adjudicate an appeal if a section forward the case file to an ALJ.
Section 1869 of the Act, as amended 1862(a)(1)(A) issue (that is, a medical A number of commenters felt that
by BIPA and the MMA, does not necessity issue) was raised for the first BIPA unequivocally requires QICs to
require, or even mention, a hearing at time at the reconsideration level. issue reconsiderations within 30 days of
the QIC level. Instead, section Response: A reconsideration is a new their receipt of a request for
1869(c)(3)(B)(i) of the Act specifies that and independent review of an initial reconsideration. Thus, they were critical
in conducting a reconsideration, the QIC determination and we believe of the proposed policy to allow a QIC
‘‘* * * shall review initial adjudicators at the reconsideration level to issue a notice to an appellant
determinations’’ and that when the should be permitted to raise and indicating that it is unable to complete
determination involves whether an item develop any issues that they believe are a reconsideration within the prescribed
or service is reasonable and necessary relevant to the claims in the case at decision-making time frame. The
under section 1862(a)(1)(A) of the Act, hand. Accordingly, we have added commenters complained that allowing
‘‘* * * such review shall include § 405.968(b)(5) to clarify this policy. QICs to issue these notices, rather than
consideration of the facts and Section 1869(c)(3)(B)(i) of the Act an actual reconsideration, contradicts
circumstances of the initial requires that a reconsidered the statutory intent and creates a
determination by a panel of physicians determination involve consideration by loophole for QICs to avoid compliance
or other appropriate health care a panel of physicians or other health with the decision-making time frames
professionals and [decisions] shall be care professionals when the initial established by BIPA.
based on applicable information, determination is based on section Response: We realize that the
including clinical experience (including 1862(a)(1)(A) of the Act. Thus, if a Congress intends for QICs to issue
the medical records of the individual medical necessity issue was raised for reconsiderations in response to timely
involved) and medical, technical, and the first time at the reconsideration filed reconsideration requests within 60
scientific evidence.’’ The statute then days as stated in section 1869(c)(3)(C)(i)
level, we believe that review by a panel
specifically provides for ‘‘hearings’’ at of the Act (as amended by section
of health professionals would be
the ALJ level under section 1869(d)(1). 940(a)(2) of the MMA). We disagree,
required. Although the panel may
Finally, the Congress established however, with the assertion that the
consider new issues involving the
rigorous decision-making time frames at drafters envisioned that QICs would be
claims in dispute, it must not adjudicate
all levels of the appeals process that will able to issue timely decisions for every
new claims for which the contractor has
significantly reduce the amount of time reconsideration request no matter what
not issued a redetermination.
in which an appellant who chooses to the circumstances involved. To the
Comment: One commenter thought contrary, the Congress clearly expected
use the ALJ process will obtain a
that the redetermination and that there would be situations in which
decision.
Taking into consideration all of the reconsideration levels were redundant QICs would not be able to comply with
above information, we believe our and suggested eliminating one in order the statutory decision-making time
proposal is consistent with the to make the appeals process more frames, as evidenced by the inclusion of
substantially revised appeals efficient. the escalation provisions of section
methodology, including faster decision- Response: Section 1869(a)(3)(A) of the 1869(c)(3)(C)(ii) of the Act,
making time frames, physician Act gives appellants who are ‘‘Consequences of Failure to Meet
reviewers, and lower amount in dissatisfied with their initial Deadline.’’ Here, the Congress created a
controversy thresholds. We believe that determination the right to request a new right for appellants to escalate
the Congress was fully aware of the redetermination. If an appellant is appeals to the ALJ level in the event that
historical meaning of the terms dissatisfied with the redetermination, the QIC failed to mail the notice of
‘‘reconsideration’’ and ‘‘hearing’’ and then section 1869(b)(1)(A) of the Act reconsideration within the decision-
did not use them lightly in the new grants the appellant the right to request making time frame. In order to
statute. Appellants retain the right to a a reconsideration. Thus, both the accommodate appellants’ ability to
hearing at the ALJ level, and this redetermination and reconsideration exercise this right, it is essential that
hearing will take place generally within levels are unambiguously required by QICs provide appellants with a notice
the same time frame as a ‘‘fair hearing’’ statute. It is not within CMS’ discretion when a reconsideration cannot be
under the previous Part B appeals to eliminate either the redetermination issued timely.
process. Thus, we continue to believe or reconsideration levels of appeal. Sections 405.970(a)(2) and
that the statute does not intend or 405.970(c)(2), therefore, do not conflict
a. Time Frame for Making a
require that the QIC reconsideration with the statutory intent or create a
Reconsideration
process include an opportunity for a loophole for avoiding compliance with
hearing. Finally, we note that QICs are Comment: Proposed section the statutory decision-making time
not precluded from contacting 405.970(c) specified that, by no later frames. Rather, these provisions help
appellants and obtaining necessary than the close of the 30-day decision- guarantee that appellants will be able to
information from them by phone or making time frame, a QIC must issue to exercise their right to escalate an appeal
other means. the parties either a reconsideration, a by ensuring that appellants receive
Comment: A few commenters dismissal, or a notice stating that the timely notice of the QIC’s inability to
inquired about the QICs’ ability to hear QIC will not be able to complete its issue a reconsideration within the
or raise new issues. One commenter review by the deadline. The notice statutory time frame. We believe this
recommended that QICs be prohibited would also advise the appellant of the process is highly preferable to not
from raising new issues. Most right to request escalation of the appeal informing an appellant of this fact. We
commenters, however, agreed that QICs to an ALJ. CMS further specified that, also wish to point out that if an
should be able to hear or raise new whenever a QIC receives an escalation escalation request is received prior to
issues not raised at the initial request, the QIC, within 5 days, would the end of the 60-day adjudication
determination or redetermination levels. either complete its reconsideration and period, the QIC will proceed with its
In a related question, another notify the parties of the decision, or review of the reconsideration request
and either (1) issue its reconsideration b. Notice of a Reconsideration availability of reconsiderations. CMS is
by the end of 65 days (the 60-day period Comment: Because the proposed rule working with the QICs to determine
plus 5 days from receipt of the request gives providers and participating how best to provide the public with
to escalate) or (2) send notification to suppliers the same appeal rights as specific information regarding prior QIC
the party on the 60-day deadline that beneficiaries, some commenters reconsiderations.
the QIC cannot complete its review by wondered who would receive the Although we expect QICs to issue
the 60-day deadline and escalate the reconsideration notice if both the consistent reconsiderations, and
request at that time. beneficiary and the provider or supplier appellants will have access to those
Comment: Two commenters prior reconsiderations, it is worth noting
filed timely appeals.
expressed concern over applying the 30- that reconsiderations, like all other
Response: Section 405.964(c)
day decision-making time frame to Medicare administrative appeal
establishes that ‘‘[i]f more than one
reconsiderations of post-pay audit cases decisions, have no precedential value.
party timely files a request for
involving statistical sampling. The Moreover, based on current workload,
commenters stated that the large volume reconsideration on the same claim
before a reconsideration is made on the there may be as many as one million
of claims to be reviewed for these types QIC reconsiderations a year; given the
of cases would prevent QICs from ever first timely filed request, the QIC must
consolidate the separate requests into large volume of anticipated
meeting the 30-day time frame or would reconsiderations, we do not intend to
force the QICs to simply rubberstamp one proceeding and issue one
reconsideration.’’ Thus, pursuant to ‘‘publish’’ them, but we will ensure they
the redetermination in order to meet the are made available.
30-day deadline. The commenters §§ 405.970(c)(1) and 405.976(a)(1), all of
further surmised that ALJs would the parties will receive a copy of the d. QIC Qualifications
regularly overturn QIC reconsiderations reconsideration. This applies to all
reconsiderations, including Comment: Many commenters asked
on these ‘‘big box’’ cases for lack of that the final rule include more explicit
development. The commenters consolidated cases. To minimize
confusion for beneficiaries who have no information about the QICs. In
recommended that CMS either provide particular, commenters wanted the final
a longer decision-making time frame for financial liability in overpayment cases
involving multiple beneficiaries, we rule to identify the minimum
these types of cases, or bypass the qualifications for the QIC panel
reconsideration level for these cases and added an exception at § 405.976(a)(2)
that QICs need to issue written notices members and reviewers, clearly define
allow appellants to go to the ALJ the role of the QIC panel in the
hearing level if they are dissatisfied only to the appellants in these cases.
Therefore, the beneficiary will only reconsideration process, and describe
with the audit determination.
receive a written notice of the the on-going training that would be
Response: We appreciate the
commenters’ observation that it will be reconsideration in such an overpayment made available to the panel members
difficult for the QICs to process ‘‘big case when he or she files an appeal and reviewers. Most of these
box’’ cases resulting from complex post- request or it is a consolidated case. commenters strongly believe that QIC
payment audits that involve individual We also note that we have added a panelists should be licensed, practicing
consideration of multiple claims in a requirement at § 405.976(b)(7) that the health care professionals with sufficient
timely manner, even under the new 60- QIC must also indicate whether the expertise in the relevant area of
day time frame established by section amount in controversy meets the medicine involved in the appeal, and
940(a)(2) of the MMA. At this point, we threshold requirement for an ALJ also possess some legal experience. One
do not have a basis for direct evaluation hearing if the reconsideration is commenter suggested that the
of this issue since the QICs are not yet partially or fully unfavorable. We requirements currently used for Quality
conducting reconsiderations. However, believe this addition will be beneficial Improvement Organization (QIO)
we know that in the former appeals to appellants as well as to adjudicators reviewers might be a good model for
process when a fair hearing officer at those levels where AICs apply. developing the QIC reviewers’
receives a ‘‘big-box’’ case, it generally qualifications. Commenters also asked
c. Publication of Reconsiderations that the final rule spell out the
has taken 60 days to review the
extensive medical records and other Comment: Citing the statutory provisions that would be put in place to
documentation associated with these requirement to make reconsiderations ensure the QICs’ independence.
cases. As mentioned in the previous available, two commenters suggested Response: We agree with commenters
response, we believe that the Congress that the final rule include information that details regarding the qualifications
expected that there would be situations about publication of QIC of the QICs’ panel members and
in which QICs would not be able to reconsiderations. Specifically, the reviewers, the structure of the QICs, and
comply with the decision-making time commenters thought that CMS should their operational policies need to be
frame, as evidenced by the inclusion of establish a time frame for publication of established before implementation of
the escalation provision of section QIC decisions and identify how the the new appeals process. Both BIPA and
1869(c)(3)(C)(ii) of the Act. Thus, if an public would be able to view and obtain the MMA have provided extensive
adjudicator fails to complete a copies of reconsiderations, in order to direction in regard to QIC independence
reconsideration of a ‘‘big-box’’ case ensure that appellants have access to requirements and the eligibility
within 60 days, an appellant has the prior reconsiderations as they make requirements for QIC reviewers, and we
option of either waiting for the QIC’s their own reconsideration requests. intend to ensure through the QIC
reconsideration, or requesting escalation Response: Section 1869(c)(3)(G) of the contracting process that QICs are fully
of the case to the ALJ hearing level. We Act requires QICs to make compliant with these requirements. We
intend to work very closely with reconsiderations available, but does not have also established QIC training
carriers, FIs, and QICs to identify ways require CMS or the QICs to ‘‘publish’’ requirements through the procurement
to streamline the redetermination case all reconsiderations. However, we do process. However, we do not believe it
file transmission and reconsideration not believe that this interim final is necessary or appropriate to address
procedures in order to facilitate the regulation is the appropriate vehicle to these types of issues in regulations, and
achievement of this deadline. provide information regarding the instead will follow the normal business
practice of including this information in decision may have been correct based erroneously pays for codes that should
the contracts with the QICs. upon the evidence of record. (For not have been paid, but there is no
Comment: Although commenters purposes of reopenings, the term evidence that the provider intentionally
overwhelmingly agreed that using ‘‘contractors’’ includes carriers, failed to refund the money; or where
panels of health care professionals at the intermediaries, and program safeguard there is the manipulation of legitimate
QIC level would be an improvement contractors.) Under proposed codes to obtain a higher reimbursement.
over the current appeals process, at least § 405.980(a)(4), we define a clerical While this last example might appear to
one commenter questioned the cost- error as human and mechanical be an example of fraud, it is also an
effectiveness of using these panels for mistakes (for example, mathematical or example of an instance when the similar
appeals involving low dollar claims and computational mistakes, or inaccurate fault provision might be used. The
recommended that we develop data entry). similar fault provision is appropriately
alternative ways of reviewing these Proposed § 405.980(b) through used where fraudulent behavior is
kinds of appeals. § 405.980(e) specify the time frames and suspected but law enforcement is not
Response: We appreciate the requirements for reopening initial proceeding with recovery on the basis of
commenter’s concern and recognize that determinations, redeterminations, fraud.
using panels of physicians and other reconsiderations, hearing decisions, and Proposed § 405.980(d)(1) and
health care professionals to review reviews, both for reopenings initiated by § 405.980(e)(3) provide 180 days from
appeals of section 1862(a)(1)(A) denials contractors, QICs, ALJs, or the MAC, as the date of a reconsideration for either
will not always be cost-effective. well as those requested by parties. a party to request, or a QIC to initiate,
However, based on the unambiguous Either a party can request a reopening, a reopening. Similarly, both the parties
language in section 1869(c)(3)(B)(i) of or a contractor can reopen on its own and the adjudicators at the ALJ and
the Act, the Congress clearly intended motion, for any reason, within one year MAC levels also have 180 days from the
that panels of physicians or other health from the date of the notice of the initial date of a hearing or review decision to
care professionals review all appeals determination or redetermination. A request or initiate a reopening. The
involving determinations on whether an party or a contractor has a 4-year time party, QIC, ALJ, or the MAC have to
item or service is reasonable or frame for requesting or initiating establish good cause for a reopening.
necessary, regardless of the dollar value reopenings for good cause. However, Proposed § 405.982 through § 405.984
of the claim(s) involved. We intend to although a party can request a require contractors, QICs, ALJs, or the
work with QIC’s to determine the most reopening, the contractor can MAC to mail notices of revised
cost-effective means of fulfilling this nevertheless determine that there is not determinations or decisions based on
statutory requirement. good cause to reopen the case. (An reopened determinations,
example of good cause to reopen based reconsiderations, or decisions to the
10. Reopenings of Initial
on a clerical error is when payment for appropriate parties at their last known
a claim is denied because an erroneous addresses. In the case of a reopening
Reconsiderations, Hearings and Reviews
code, which is not covered by Medicare, that results in a favorable decision and
(§ 405.980 through § 405.986)
was used and it is later determined that issuance of additional payment to a
[If you choose to comment on issues in the procedure was miscoded.) We also provider or supplier, a revised
this section, please include the caption proposed that a contractor can reopen remittance advice (RA) must be issued
‘‘Reopenings of Initial Determinations, within 5 years from the date of the to the provider or supplier that explains
Reconsiderations, Hearings, and initial determination or redetermination the payment and reports the appeal
Reviews’’ at the beginning of your if the contractor discovers a pattern of rights; this RA will serve as the notice
comments.] billing errors or identifies an of the reopening determination. In the
Section 1869(b)(1)(G) of the Act, as overpayment extrapolated from a case of a reconsideration that results in
added by BIPA, provides for the statistical sample. additional payment to a provider or
reopening and revision of any initial Finally, we proposed to maintain the supplier, both a reconsideration
determination or reconsidered longstanding policy that reopenings are determination notice and an electronic
determination according to guidelines permitted at any time on claim or paper remittance advice notice must
prescribed by the Secretary. As we determinations that have been procured be issued. Proposed § 405.986 specifies
pointed out in the proposed rule, clear through fraud or similar fault. Proposed how a party, contractor, QIC, ALJ, or the
reopening provisions are needed not § 405.980(b)(4)(ii) defines similar fault MAC would establish good cause for a
only to comply with BIPA, but also to as ‘‘to obtain, retain, convert, seek, or reopening. In this interim final rule, we
address longstanding confusion over the receive Medicare funds to which a have revised proposed § 405.986(b), to
reopening rules for Medicare claim person knows or should reasonably be clarify that although a change in
determinations. Thus, we proposed to expected to know that he or she or substantive law or interpretative policy
establish a unified set of reopening another for whose benefit Medicare is not good cause for reopening, the
regulations that consolidate and clarify funds are obtained, retained, converted, provision does not preclude contractors
the existing reopening provisions of sought, or received is not legally from reopening claims to effectuate a
subparts G and H of part 405. (See 67 entitled. This includes, but is not decision issued under section 1869(f) of
FR 69327.) limited to, a failure to demonstrate that the Act, as amended by section 522 of
First, proposed § 405.980(a) it filed a proper claim as defined in part BIPA. The final regulation
establishes the general rule that a 411 of this chapter.’’ Similar fault is implementing the coverage appeals
reopening is a remedial action taken by intended to cover instances where process was published after the notice
a carrier, intermediary, QIC, ALJ, the Medicare payment is obtained by those of proposed rulemaking for this
MAC, or any other entity designated by with no legal rights to the funds, but regulation was issued. Thus, we have
CMS to change a final determination or where law enforcement is not now added language at § 405.980(b)(5)
decision made with respect to an initial proceeding with a recovery based on to enable contractors to reopen claim
determination, redetermination, fraud. This includes instances where a determinations at any time in order to
reconsideration, hearing, or review, provider has been paid twice for the effectuate favorable coverage appeals
even though the determination or same claim where the contractor decisions issued to a beneficiary. We
wish to make clear that this provision changes its assessment of whether it has determination is unfavorable, in whole
does not allow retroactive application of primary payment responsibility more or in part, to the party thereto, but only
coverage decisions to payment denials. than 1 year after the date of Medicare’s for the purpose of correcting a clerical
initial determination, the contractor is error on which that determination was
a. Reasons and Conditions for
without authority to find good cause to based. In the event that a contractor
Reopenings
reopen a claim. does not believe that a clerical error
Comment: Several commenters exists, the contractor must dismiss the
mentioned that the proposed definition b. Distinguishing Between Reopenings
reopening request and advise the party
for a reopening does not acknowledge and Appeals
of its ability to pursue to the appeals
that the purpose of a reopening is to Comment: Two commenters express process on the claim denial, provided
ensure correct payment amounts; and uncertainty over whether CMS intends the timeframe to request an appeal has
therefore, a reopening may result from for contractors to process corrections of not expired. It should be noted that the
either an overpayment or an clerical errors as reopenings or appeals. party would be requesting an appeal of
underpayment. They believed that CMS One commenter contends that CMS the original denial, not the dismissal of
should clarify in the regulations that a provides conflicting information by the reopening request. Reopenings
reopening can be initiated for either an suggesting in one section of the continue to be discretionary actions on
overpayment or an underpayment. preamble that adjustments resulting the part of the contractors; therefore,
Response: We agree with the from clerical errors are handled through their decision not to reopen is not
commenter that the underlying goal of the reopenings process, while stating in subject to appeal.
the reopening process is to pay claims another section of the preamble, that Similarly, we believe that improper
appropriately, subject to considerations either a party would need to exhaust all denials based on duplicate claims
of administrative finality. In the appeal rights, or the time limit to file an essentially involve clerical errors that
proposed rule (67 FR 69327), we state appeal would need to expire, in order can be best resolved through the
that, ‘‘the purpose for conducting a for the contractor to conduct a reopenings process. When a provider or
reopening should be to change the reopening to correct these errors. supplier receives a denial based on the
determinations or decisions that result Another commenter maintains that the contractor’s determination that the
in either overpayments or proposed rule requires human or claim is a duplicate and the provider or
underpayments.’’ To accommodate this mechanical errors to go through the supplier believes the denial is incorrect,
concept in the regulations, we have appeals process instead. and the contractor agrees that the denial
added text at § 405.980(a)(1) that makes Response: As we stated in the was incorrect, the contractor should
clear that a reopening is an action to proposed rule, ‘‘requests for adjustments reopen the denial. Thus, we added text
change a final determination or decision to claims resulting from clerical errors at § 405.980(a)(3)(iii) to specify that if a
that results in either an overpayment or must be handled through the reopenings provider or supplier wishes to resolve a
an underpayment. process. Therefore, when a contractor denial based on a claim being
Comment: One commenter requests makes an adjustment to a claim, the erroneously identified as a duplicate,
clarification on the conditions for contractor is not processing an appeal, the contractor should process the
reopening. The commenter seeks further but instead, conducting a reopening’’ request as a reopening rather than as an
clarification on whether good cause is (67 FR 69327). Moreover, section 937 of appeal. In the event the contractor does
required for reopenings that occur the MMA subsequently amended the not believe the denial was improper, the
within 1 year from the date of the initial Act to specify that in the case of minor contractor must dismiss the reopening
determination or redetermination, or errors or omissions that are detected in request and advise the party of any
whether a contractor would grant a the submission of claims, CMS must appeal rights, provided the timeframe to
request for reopening for any reason give a provider or supplier an request an appeal on the original denial
within the one-year time frame. opportunity to correct that error or has not expired.
Response: The authority for a omission without the need to initiate an Comment: One commenter was
contractor to reopen a claim or appeal appeal. We equate the MMA’s minor concerned that the proposed rule would
within one year from the date of the errors or omissions to fall under our limit opportunities for reopenings,
initial determination or redetermination definition of clerical errors, located in because proposed § 405.980(a)(5) would
for any reason exists under § 405.980(a)(3). We believe that it is preclude a reopening when a party has
§ 405.750(b)(1) and § 405.841(a). neither cost efficient nor necessary for filed an appeal request. The commenter
Therefore, we have removed proposed contractors to correct clerical errors asked whether one can assume that a
text formerly in § 405.980(a)(2)(i) in through the appeals process. Thus, reopening will not be granted when a
order to avoid the implication that § 405.927 and § 405.980(a)(3) require provider requests an appeal of a denial
contractor reopenings within one year that clerical errors be processed as or partial payment such as that resulting
are premised on good cause. This is reopenings rather than appeals. from a provider submitting an incorrect
consistent with § 405.980(b)(1) and Consistent with the process that we CPT code, diagnosis code, or modifier.
§ 405.980(c)(1), which maintain the developed in consultation with Response: Under normal
authority for contractors to reopen Medicare contractors, and circumstances, a valid request for an
claims or appeals within 1 year for any representations of providers and appeal must be processed as an appeal,
reason. Thus, contractors do not need to suppliers as required under section 937 and once an adjudicator receives a valid
establish good cause under § 405.986(a) of the MMA, we have made a appeal request, the entity that made the
to reopen within 1 year. conforming change at § 405.980(a)(3) to previous determination generally no
We also note that under specify that contractors must grant longer has jurisdictional authority to
§ 405.980(b)(3), contractors may reopen reopenings for clerical errors or reopen that determination. We have
at any time if there exists reliable omissions. Section 405.980(a)(4) of this revised § 405.980(a)(4) to clarify this
evidence that an initial determination interim final rule states that a contractor point.
was procured by fraud or similar fault. may reopen and revise its initial Section 405.980(a)(4) ensures that the
In addition, we have added § 405.986(c) determination or redetermination on its reopening and appeal processes are not
to provide that if a third party payer own motion at any time if the initial engaged at the same time. We recognize,
however, that in certain situations, it enforcement is not proceeding with action results in a favorable decision for
will be apparent that the provider that recovery on the basis of fraud. We do CMS, CMS has the ability to reopen the
is requesting an appeal is actually not believe this definition is overly claims in question and recoup any
bringing a clerical error to the attention broad, given the implicit requirement overpayment. Additionally, if a claim
of the contractor. Under this interim that the fault be ‘‘similar’’ to fraud. has gone through the appeals process on
final rule, irrespective of the provider’s Comment: Several commenters a completely separate issue, CMS may
or supplier’s request for an appeal, a express concern over the provision in reopen the claim, but only to address an
contractor will treat the request for the proposed rule at § 405.980(b)(3), issue not previously decided on appeal.
appeal of a clerical error as a request for which allows a contractor to reopen For example, if a claim is denied as not
a reopening. Therefore, as a practical initial determinations and medically necessary and that denial on
matter, under § 405.980(a)(4), the redeterminations within 5 years of medical necessity is the issue being
contractor must transfer the provider’s discovering a pattern of billing errors, or brought before the adjudicator on
or supplier’s appeal request to the identifying an overpayment appeal, yet an issue of fraud is
reopenings unit for processing. On the extrapolated from a statistical sample. discovered on the same claim, the claim
other hand, if a contractor receives a The commenters point out the difficulty may be reopened to address the issue of
request for a reopening, but disagrees and burden in locating documentation fraud not previously considered on
that the issue is a clerical error, then the on older claims. The commenters also appeal. The reopening action on the
contractor must dismiss the reopening argue that CMS does not provide a fraud issue would occur only after the
request and advise the party of any rationale for the proposed 5-year time claim had proceeded through the
appeal rights, provided that the frame. appeals process on the medical
timeframe to request an appeal on the Response: CMS proposed this necessity issue. Any unfavorable
original denial has not expired. provision in an effort to accommodate decision that was issued based on the
CMS understands that educational overpayments identified by external subsequent reopening would generate
efforts must be undertaken in auditors and law enforcement agencies. appeal rights and any party to that
conjunction with this regulation to There were instances where auditors determination would be able to contest
make the provider and supplier utilized a 5-year sampling methodology, any new denial through the appeals
communities aware of their ability, and identified an overpayment, and process. A previously appealed claim
the contractor’s obligation to resolve instructed the Medicare contractor to could also be reopened by the
clerical errors through the reopenings recoup the overpayment. Since the audit adjudicator to correct a later discovered
process. Until that education occurs, results were usually amounts clerical error.
many providers and suppliers may extrapolated from a statistical sample Comment: One commenter asks if it is
continue to believe that their only, or based on 5 years of records, carriers and CMS’ intent to revise § 405.355(b),
best, recourse is to request an appeal. intermediaries experienced difficulty which allows a reopening for the
collecting the overpayments because collection of an overpayment within 3
c. Similar Fault and Reopenings Within § 405.750(b)(2) and § 405.841(b) bound years from the date of the initial
5 Years carriers and intermediaries to a 4-year determination.
Comment: As noted above, proposed limit for the identification and Response: Section 405.355(b) pertains
§ 405.980(b)(4)(ii) defines similar fault collection of overpayments where a law to the waiver of an adjustment or
as ‘‘to obtain, retain, convert, seek, or enforcement agency did not make a recovery from a provider or other
receive Medicare funds to which a fraud determination. individual who is deemed to be without
person knows or should reasonably be However, we recognize providers’ fault. The provision does not address a
expected to know that he or she or concerns with this proposal and contractor’s ability to reopen an initial
another for whose benefit Medicare consequently have decided to remove it determination or redetermination, and
funds are obtained, retained, converted, from the final regulation. To the extent is not affected by this interim final rule.
sought, or received is not legally that law enforcement findings suggest a
entitled. This includes, but is not need for reopenings in situations that d. Authority To Reopen
limited to, a failure to demonstrate that involve inappropriate billing patterns, Comment: One commenter
it filed a proper claim as defined in part but fall short of outright fraud, recommends that CMS require in the
411 of this chapter.’’ Several contractors may rely on the similar fault regulation text that a determination or
commenters believe that this definition provision at § 405.980(b)(3) to reopen decision can be reopened only by the
is too broad and allows contractors to claims. entity that rendered the decision. For
reopen almost any claim, for any reason. Comment: One commenter asks example, only a QIC can reopen a QIC’s
Response: The definition of similar whether proposed § 405.980(b)(4), decision.
fault covers situations where a which allows contractors to reopen Response: As originally proposed,
contractor identifies an inappropriate initial determinations procured by fraud §§ 405.980(a)(1)(i) through
billing that does not rise to the level of or similar fault, is limited to initial 405.980(a)(1)(iv) specify that only the
fraud. It is necessary to define similar determinations that have not been entity that issues a determination,
fault as those situations when a appealed or reopened. reconsideration or other decision can
contractor has identified inappropriate Response: Section § 405.980(a)(4) of initiate a reopening of that decision.
billing by a provider or supplier that this interim final rule requires that Although this remains true in most
knows or could have been reasonably when a party files a valid request for an instances, we note that this interim final
expected to know that the claim should appeal, the adjudicator no longer has rule contains an exception to this
not have been paid for items or services, jurisdiction to reopen the pending claim general principle at § 405.980(a)(1)(iv),
but the situation is not one where a law or appeal at issue. However, in cases of whereby the MAC can reopen an ALJ’s
enforcement agency has made a fraud or similar fault, the government hearing decision. It should be noted that
determination that the billing is may be pursuing legal action for claims this is a continuation of CMS’ current
fraudulent. The similar fault provision it suspects are fraudulent, an activity practice and does not constitute a
is appropriately used where fraudulent which falls outside of the administrative change in policy. We also note that
behavior is suspected but law appeals process. In the event legal § 405.986(b) specifies that a change in
legal interpretation, regulations, or Response: Our policy that, within 1 evaluations of the contractors’
program instructions (or a declaration of year, for any reason, contractors may performance. Thus, the necessary
what the law means or meant), whether reopen claims and parties may request monitoring and enforcement
by the judiciary or otherwise, does not reopenings, is fair and equitable; mechanisms are already in place.
form a basis for reopening. moreover, no evidentiary standard is
i. Applying Similar Reopening
needed in the those situations. For
e. Time Frames and Notice Standards to Adjudicators and Parties
reopenings after that time, the rules we
Requirements Comment: One commenter
proposed are sufficient; that is,
Comment: One commenter contractors must have good cause for recommends that CMS apply the same
recommends that CMS establish a time reopening claims within 4 years and reopening standards to adjudicators and
frame for processing and completing must have obtained reliable evidence for parties and that a party be able to
reopenings. reopening at any time for fraud or challenge an adjudicator’s reopening
Response: We agree that, wherever similar fault. No matter what the action.
possible, a party must have a reasonable outcome of a reopened and revised Response: As discussed above, an
expectation as to the administrative determination, parties retain the right to adjudicator’s decision on whether to
finality of a decision on a claim or challenge the new determination at the reopen a claim or an appeal is
claims in question. However, since an appropriate appeal level. discretionary and not subject to an
adjudicator can reopen at any time for appeal. However, the reopening
fraud or similar fault, we do not believe g. Inability To Appeal a Decision on standards that apply to parties and
that CMS can establish meaningful time Whether To Reopen adjudicators are very similar in this
frames for processing and completing Comment: One commenter expresses interim final rule. The only provisions
reopenings. Instead, CMS will monitor concern that a party cannot seek review that necessitate a difference are those
the processing of reopenings by of a determination not to grant a request provisions, which allow adjudicators to
contractors during performance reviews for reopening. The commenter argues reopen at any time if reliable evidence
and desk audits. that not allowing an appeal violates a exists that a determination or decision
Comment: One commenter states that party’s due process rights. was procured by fraud or similar fault,
an adjudicator must be required to send Response: It is our longstanding rule and § 405.980(b)(5), which allows
both a reopening notice and a decision that failure to grant a request for contractors to reopen at any time to
notice resulting from the reopening. The reopening is not reviewable. The effectuate a decision issued under the
commenter contends that a reopening Supreme Court has upheld this concept. coverage appeals process. Clearly, a
notice helps the party determine the See Your Home Visiting Nurses party that obtains payment through
adjudicator’s time frame for issuing a Services, Inc. v. Shalala, 525 U.S. 449 fraudulent or other similar means has
decision. Also, the decision notice must (1999); Califano v. Sanders, 430 U.S. 99 no use for this provision. Again, if a
provide the basis and evidence (1977). This does not violate the party’s contractor issues a revised
supporting the reopening. due process rights, because the determination or decision that is
Response: We are not requiring administrative appeals process for unfavorable, the affected party has the
adjudicators to provide a notice to a Medicare claims already affords ample right to appeal.
party when they reopen claims and due process to the party. The reopenings 11. Expedited Access to Judicial Review
appeals, since any action that might process simply offers, but does not (EAJR) (§ 405.990)
result from the reopening will result in guarantee, an additional process if a
a party receiving a notice of the party misses the time frame for filing an [If you choose to comment on issues in
revision. Section 405.982 provides that appeal or if the party has exhausted his this section, please include the caption
adjudicators must issue notices of or her appeal rights. For purposes of ‘‘Expedited Access to Judicial Review’’
revised determinations or decisions administrative finality and efficiency, at the beginning of your comments.]
which, in the event of an adverse CMS cannot sanction an endless cycle In proposed § 405.990, we incorporate
revised determination or decision, must of reopening requests and appeals. the current regulations governing the
state the rationale and basis for the expedited appeals process (EAP) at
revision, and information about appeal h. Enforcement of the Good Cause § 405.718 and § 405.853 with only two
rights. In the case of an adverse Standard changes. First, since under BIPA the
determination, a party would need this Comment: One commenter appeals process is the same for both Part
information should the party decide to recommends that CMS create A and B claims, we consolidated the
appeal. In addition, if a contractor’s enforcement provisions for the good Part A and B regulations governing
reopening of an initial determination cause standard when contractors reopen expedited review of cases involving
results in an overpayment claims. The commenter says that those claims. Second, under BIPA, ALJs
determination, then the contractor must contractors often ignore the guidelines are bound by all NCDs rather than only
issue a demand letter to the affected set out in regulations and manuals and by NCDs based on section 1862(a)(1)(A)
party. If the reopening results in a cite a request for medical records as of the Act. Therefore, the regulations no
favorable determination, then a revised good cause for a reopening, even though longer limit expedited review to cases
MSN and RA will be generated. the medical records existed at the time involving NCDs based on section
the contractor initially reviewed the 1862(a)(1)(A) of the Act.
f. Establishing an Evidentiary Burden of claim. In addition, we establish under
Proof To Reopen Response: The regulations require that proposed § 405.992 the standards that
Comment: One commenter contractors abide by the good cause apply to ALJs and the MAC for policies
recommends that CMS add to the standard for reopening actions after one that are not subject to the expedited
regulation text that a contractor has an year from the date of the initial or appeals process. These standards have
evidentiary burden of proof, particularly revised determination. CMS assesses a been moved to § 405.1060 in this
with respect to those reopening actions contractor’s compliance with Federal interim final rule and are discussed in
that occur after the 1-year limit on laws, regulations and manual detail in the ALJ section. (See section
reopenings for any reason. instructions during audits and II.G.5 of this preamble).
Comment: One commenter questions subject to review by the Secretary.’’ This b. Escalation
the requirement in § 405.990 for a language plainly has two effects—(1) a (1) General Application
$1,000 amount in controversy and the review entity’s determination that is
requirement for unanimous, written favorable to the party requesting EAJR is One of the most significant changes
concurrence from all parties in order to the final agency decision for purposes of required under section 521 of BIPA is
request use of the EAP. The same judicial review, and (2) an ALJ or the the introduction of an appellant’s right
commenter also requests that we make MAC may not alter an unfavorable to escalate a case to an ALJ if a QIC fails
a number of clarifications in § 405.990, to make a timely reconsideration, or to
determination in the regular appeals
including stating explicitly that use of the MAC if an ALJ hearing does not
process. Therefore, in § 405.990(f)(3), we
the EAP is not automatic, the decision produce a timely decision on an appeal
are prohibiting an ALJ or the MAC from
by the review entity is not reviewable, of a QIC reconsideration. As we noted
reviewing a decision by the review in the proposed rule, the statute does
and certification from the review entity entity that either certifies that the
does not trigger an action in Federal not allow an appellant to proceed
requirements for EAJR are met, or beyond the initial contractor level until
district court; the appellant must file a
denies the request. In § 405.990(h)(3), he or she has received a redetermination
suit.
Response: As noted above, proposed we cross reference to § 405.1136 since from that contractor, even if the
§ 405.990 includes no significant requests for EAJR certified by the review contractor does not issue the initial
changes to the existing EAP process. entity must also meet the requirements determination or redetermination
The policies cited by the commenter under that section for filing a civil within the statutory time frames. This is
(decisions to certify a case are not action in a Federal district court. consistent with the pre-BIPA
reviewable, a certification does not Finally, as required under the MMA, regulations, which require an appellant
automatically trigger a Federal suit and if a provider, supplier, or beneficiary is to complete all steps of the appeals
written concurrence from all parties) are granted judicial review, § 405.990(j) process in sequence, except when an
longstanding elements of the EAP requires the application of interest to appellant invokes the expedited appeals
process. Since publication of the the AIC. process described in §§ 405.718 [Part A
proposed rule, however, the MMA has appeals] and 405.853 [Part B appeals].
revised the applicable statutory 12. ALJ Hearings (§ 405.1000 Through BIPA, however, adds the option to
requirements. In this interim final rule, § 405.1064 advance a case to the next level of
we intend to maintain the proposed appeal when, in certain circumstances,
policies, as well as the changes [If you choose to comment on issues in an adjudicator does not act on the
necessitated by section 932 of the MMA. this section, please include the caption appeal within the statutory deadline. In
Therefore, we are revising § 405.990 so ‘‘ALJ Hearings’’ at the beginning of your the proposed rule, we use the term
that it is consistent with the MMA comments.] ‘‘escalation’’ to describe this movement
requirements. of a case to the next level of appeal.
a. Introduction Section 1869(c)(3)(C)(i) of the Act, as
Section 932 of the MMA states that
the Secretary must establish a process In the proposed rule, we included amended by section 940(a)(2) of the
under which a provider or supplier or new procedures to both implement MMA, requires the QICs to decide
a beneficiary may obtain access to section 1869 of the Act, as amended by appeals within 60 days. Sections
judicial review when a review entity 1869(c) and 1869(d) of the Act, as
BIPA, and codify in the Medicare
determines that the Departmental amended by the MMA, now provide
regulations at 42 CFR, part 405, subpart
Appeals Board (DAB) does not have the that an appellant may escalate an appeal
I, all of the requirements that apply to as follows: (1) By requesting an ALJ
authority to decide the question or law ALJ and MAC proceedings. Most of the
or regulation relevant to the matters in hearing if the QIC does not decide the
previous regulations used by the ALJs appeal within 60 days; (2) by requesting
controversy and that there is no material
and the MAC were set forth in 20 CFR, a review by the MAC if the ALJ does not
issue of fact in dispute. As a result, we
are modifying proposed § 405.990(f)(1) part 404 of SSA’s regulations, which decide the appeal of a QIC
and § 405.990(f)(2) to require that focuses on SSA’s disability appeals reconsideration within 90 days; and (3)
requests for expedited access to judicial procedures. We note that we are by requesting judicial review if the MAC
review (EAJR) be evaluated by a review generally carrying over relevant does not complete its review of an ALJ
entity. (Note that in this interim final provisions of these rules applicable to decision within 90 days. (At the ALJ
rule we have replaced references to the Medicare proceedings, but will discuss and MAC levels, the statutory time
EAP with EAJR in order to avoid in the preamble any new regulations period for completing the action begins
confusion with the expedited appeals that make substantive changes to the on the date the appeal is timely filed.)
process under § 405.1200 through ALJ and MAC processes. When an appellant does not request
§ 405.1206, which permits beneficiaries In addition to receiving comments on escalation to the next level, the case
to request an expedited appeal of the proposed new provisions, we remains with the current adjudicator
provider service terminations.) Also, in received some comments on the carry until a final action is issued. We have
§ 405.990(a), we define a review entity over of regulations that are already in revised proposed §§ 405.990 and
as a decision-making body composed of effect for Medicare ALJ hearings and 405.1136(c) to conform to these
up to three reviewers who are ALJs or MAC review. Since most of these requirements.
members of the DAB, as determined by We emphasized in the proposed rule
comments were associated with general
the Secretary. The MMA also establishes that appellants must consider carefully
concerns about changes to the ALJ
a 60-day decision-making time frame for the type of review that is best to resolve
process, we note them, where their case before deciding to escalate an
EAJR requests. Therefore, we have
applicable, in the sections below. appeal, because the type of proceedings
amended § 405.990(f)(2) to implement
this change. Finally, as noted above, this interim and adjudicator varies with each step.
Section 932 of the MMA provides that final rule includes some straightforward For example, appellants who escalate a
a review entity’s determination ‘‘shall changes to the ALJ and MAC process case from the ALJ level to the MAC will
be considered a final decision and not required by the MMA. ordinarily not have the opportunity to
present their case during an oral that adding the QIC’s adjudication time the MAC is not able to issue a final
hearing, unless they received an oral is sufficient. action within 5 days of receipt of the
hearing at the ALJ level before As a corollary to the above decision, request for escalation, it will send a
escalating their case to the MAC. We we are revising the regulations to notice to the appellant acknowledging
also indicated that the statutory provide that, in certain circumstances, receipt of the request for escalation. A
decision making deadlines apply only an appellant has a right to escalate a party can then file an action in Federal
where there is a decision issued at the case to the next level when the ALJ or district court within 60 days after it
prior level. We did not propose any MAC does not decide that case within receives notice of the MAC’s decision.
alternate deadlines for escalated cases, its escalated time frame. Thus, Comment: One commenter expresses
but encouraged comments on whether § 405.1016(c) now specifies that for a concern that the procedures outlined in
the final rule must include time frames case escalated to an ALJ, the ALJ must § 405.1132(b) are not parallel to the
and, if so, what time frames are be issue a decision no later than 180 days procedures governing escalation from
appropriate. after the date that the request for the QIC and ALJ levels, and are too
Comment: Most commenters on this escalation is received by the ALJ hearing burdensome. The commenter suggests
point argue that allowing unlimited office. We also revised sections that if the MAC does not issue an action
time for escalated cases is contrary to 405.1100 and 405.1106(b) to establish a within 5 days of the receipt of the
statutory intent; they recommended that parallel deadline for a case that is request for escalation, the appellant
cases that are escalated to the ALJ and escalated from the ALJ to the MAC. must be able to proceed directly to court
MAC levels be subject to a time limit. without issuance of a MAC ‘‘decision.’’
(2) Specific Provisions Affected by Response: Our use of the word
Commenters varied, however, on how to Escalation
establish appropriate time frames. ‘‘decision’’ in proposed § 405.1132(b)
In the proposed rule, we note that the was an error and did not convey clearly
Recommendations included: (1) statute does not provide a specific the intention of the provision. We are
Requiring escalated cases to be decided mechanism for appellants to request revising the regulation to clarify that
within the ‘‘normal’’ 90 days; (2) adding escalation, nor does it indicate the effect when the MAC issues its ‘‘notice’’
an additional 30 days to the ‘‘normal’’ of an escalation request on case acknowledging that the MAC has not
90-day time frame; and (3) adding the development or other adjudication been able to complete its action within
adjudication time frame from the efforts the QIC, ALJ or MAC may be the statutory period, the appellant can
previous level to the current level. conducting when the escalation request file a civil action with the district court
Under the third recommendation, which is received. We are particularly within 60 days of receipt of the MAC’s
preceded the enactment of the MMA, a concerned about the adverse impact on acknowledgment notice. We recognize
case escalated from the QIC level to the appellants and adjudicators if cases that that the commenter may view the notice
ALJ would have a 120-day time frame are close to completion are deemed as an unnecessary step, since an
(the pre-MMA 30-day QIC time frame automatically escalated at the end of the appellant escalating to the ALJ or MAC
plus the 90-day ALJ time frame) and a statutory adjudication period. To level need only file the request for
case escalated from the ALJ level to the alleviate this problem, we proposed escalation and wait for a response
MAC would have a 180-day time frame that, when a QIC, ALJ, or the MAC (either an action from the QIC or ALJ or
(90-day ALJ time frame plus the 90-day receives a request for escalation after the a notice that the case has been
MAC time frame.) Adjusting this adjudication period has expired, it will forwarded to the next level). However,
suggestion to reflect the new MMA defer sending the case to the next level we believe that the notice described in
adjudication period for the QICs, the for 5 days after the request is received. § 405.1132(a)(2) of this final rule will
time frame for the ALJ level would be If possible, the QIC or ALJ will issue its benefit appellants in several ways. We
150 days. action within the 5-day period. If fully anticipate that some appellants may file
Response: We hold that our original favorable to all parties, the a request for escalation before the
proposal is consistent with the language determination or decision will be sent to MAC’s 90-day period has expired;
of the statute. Moreover, as we noted in the appropriate CMS contractor for prompt notification of when the time
the proposed rule, when ALJs and the effectuation. If the action is not fully period will expire and an indication, if
MAC receive cases that have not favorable, any party to the appeal can possible, of when the MAC anticipates
completed the process below, they will file a request for an ALJ hearing or MAC issuing its decision, will save appellants
require more time to determine what review, as applicable, within the 60-day unnecessary court costs. We also note
issues are properly before them and how appeals period. If the QIC or ALJ is not that BIPA has not changed the
to resolve those issues. As indicated in able to decide the case within the 5-day mechanism whereby appellants who are
the proposed rule, however, we see period, the appellant will be notified dissatisfied with the final decision of
value in establishing time limits for and the case will be forwarded to the the Secretary may bring a civil action in
escalated cases to ensure that appellants next level of appeal. We provide in Federal district court. Section
do not wait indefinitely for a decision. proposed § 405.1104(b) the procedures 1869(b)(1)(A) of the Act provides that
After considering the commenters’ an ALJ must follow when the ALJ is not judicial review of the Secretary’s final
suggestions, we have decided to able to issue a final action or remand decision continues to be governed by
establish a 180-day decision deadline within 5 days of receipt of the request section 205(g) of the Act. Under that
for cases escalated to the ALJ and MAC for escalation. provision, appellants seeking judicial
levels. (For purposes of this discussion, We also proposed similar rules for review of the Secretary’s action must
we call these requirements the cases in which an appellant requests file a civil action within 60 days of the
‘‘escalated time frames.’’) These new escalation from the MAC level to Secretary’s decision, or within any
time frames are, in essence, a Federal district court when the amount additional time allowed by the
modification of the third in controversy is $1,000 or more. We Secretary. We believe that the notice we
recommendation described above. proposed that the MAC can, if feasible, intend to provide under § 405.1132(b) is
Given the nature of ALJ proceedings, issue a final action within 5 days of the within our authority under section
which includes scheduling and request for escalation. We also provided 205(g), and will provide a useful
conducting a hearing, we do not believe in proposed § 405.1132(b), that when benchmark for both appellants and the
courts to determine when a civil action a more distant hearing site. Finally, we governing Part A and Part B appeals,
in an escalated case is timely filed. We stated that we were proposing the above SSA’s VTC rules, codified at 20 CFR
have revised the regulation text of alternatives to an in-person hearing §§ 404.929, 404.936, 404.938 and
§ 405.1132(b) to make the effect of the because we believed they would enable 404.950, have been effective for Part A
notice clearer. ALJs to complete more cases within the and Part B ALJ hearings since March 5,
Similarly, we have retained, at 90-day adjudication period and give 2003. Like other relevant SSA rules, we
§ 405.1134, the provision carried over some appellants, who currently waive have incorporated certain policies
from SSA’s appeals regulations that their right to a hearing and request an regarding the use of VTC into this
allows the MAC to extend the time to on-the-record decision because of interim final rule. (On December 11,
file a civil action for good cause. This traveling or scheduling difficulties, an 2003, SSA issued a final rule on VTC,
regulation is also consistent with the opportunity to present their case orally. which responded to comments on the
language in section 205(g) quoted above, On January 5, 2001, SSA issued a February 3, 2003, rulemaking, but did
and provides protection for beneficiaries proposed rule in which it proposed to not change any of the regulation text.
and other appellants who may need authorize use of VTC in conducting See 68 FR 69003). Thus, where
additional time to file a civil action or hearings before ALJs. See 66 FR 1059. available, ALJs have been conducting
who wish to protect their right to SSA’s final rule with comment (68 FR hearings via VTC in Medicare cases for
commence a civil action while a request 5211), published February 3, 2003, over a year. Our knowledge of this new
to the MAC to reopen its action is addressed the public comments on the process, as well as our experience with
pending. In our experience, the above proposed rule and invited comment on telephone and in-person hearings and
provisions are particularly helpful to the one significant change in the final on-the-record decisions, forms the basis
beneficiaries proceeding pro se and in rule, which provides that appellants of our responses to the comments
no way diminish their access to the may object to VTC only with respect to described below.
Federal courts. their own appearance. Because SSA’s Comment: One commenter states that
ALJs have been conducting Medicare the proposed rule does not indicate
c. Conduct of ALJ Hearing—General
hearings, the reasons articulated in the whether a party may object to the type
Rules
final rule with comment for adopting of hearing (in-person, by VTC, or by
In our November 15, 2002 proposed VTC as a alternative to an in-person telephone) scheduled by the ALJ. The
rule, we discussed how ALJ hearings in hearing reflect SSA’s experience with commenter also notes that a proposal for
Medicare cases are currently conducted conducting Medicare hearings, as well Medicare ALJ hearings conducted by
and how we proposed to conduct those as retirement and disability hearings. In telephone was rejected after criticism
hearings in the future. Section responding to public comments, the from claimant organizations, legal
1869(b)(1)(A) of the Act, as amended by final rule with comment identifies the groups and other organizations was
BIPA, provides that any individual who factors that supported including VTC as received. One of the main concerns at
is dissatisfied with an initial a means of providing a 205(b) hearing. that time was a fact finder’s potential
determination can request a In summary, SSA found that: difficulty in assessing witness
reconsideration, as well as a hearing, • Use of VTC, where available, has credibility and demeanor in a telephone
provided that the request for the hearing decreased the necessity of sending ALJs hearing.
is timely filed and that the amount in to remote sites to hold in-person Response: This interim final rule
controversy requirements are met, as hearings. This, in turn, has decreased makes clear that an appellant can object
provided by section 205(b) of the Act. processing times, since to make travel to to the type of hearing scheduled by the
Traditionally, the Secretary has granted remote hearing sites as effective as ALJ, including proceedings by
individuals entitled to a 205(b) hearing possible, ALJ hearing offices ordinarily telephone or VTC. As noted in our
an in-person hearing. Regulations at 20 wait until they have a sufficient number discussion in the proposed rule, some
CFR § 404.948, which are incorporated of hearing requests to schedule a full appellants waive any type of oral
into the current regulations governing day of hearings. hearing on the grounds that they believe
Part A and Part B appeals, allow an • Use of VTC decreases the difficulty that written submissions to the ALJ will
appellant to waive an in-person hearing of obtaining expert witnesses for a adequately present their case. In the
and request a decision based on the hearing, since it can be difficult to find past, others have waived the right to an
written record. We stated in the medical experts who are available to oral hearing, stating that they are unable
proposed rule that we would continue travel to remote sites. to leave their homes or cannot travel as
that policy and we did not receive any • The time ALJs have spent traveling far as the ALJ hearing office or other
comments on this proposal. to remote sites can be used to perform designated site. In our experience,
We also indicated in the proposed their adjudicatory responsibilities. telephone and VTC hearings offer an
rule that we intend to offer appellants • Surveys of appellants, including opportunity for individuals to present
an opportunity for hearings by beneficiaries, rated VTC procedures their case orally without the burden of
telephone or videoteleconferencing positively. A large percentage has rated extensive travel and, thus, provide an
(VTC), as available. We note at the time the procedures as ‘‘convenient’’ or ‘‘very alternative to presenting their case
the proposed rule was published, VTC convenient.’’ Test data showed that solely in writing. Given these
was available only at selected hearing processing time for these hearings was advantages and benefits, we are
sites throughout the country. We also substantially less than for hearings convinced of the advantages of
explained the advantages of offering conducted at remote sites, and that the incorporating VTC procedures into the
telephone and VTC hearings as ratio of hearings held to hearings Medicare hearings process, particularly
alternatives to in-person hearings. These scheduled was significantly higher for in view of the BIPA time frames.
advantages include: (1) Providing a hearings using VTC procedures than for Therefore, we have revised § 405.1020
hearing in a convenient setting for hearings scheduled in person. to require ALJ hearings to be conducted
beneficiaries who have trouble traveling Because SSA’s regulations at 20 CFR, by VTC if the VTC technology is
even short distances; and (2) providing part 404 subpart J governing procedures available, but allow the appellant to
a more convenient site for providers and for ALJ hearings are incorporated by request an in-person hearing, which will
suppliers who may not wish to travel to reference in the former regulations be granted upon a finding of good cause,
with the understanding that the request § 405.1020, § 405.1022, and § 405.1036 e. Authorities That Are Binding on an
constitutes a waiver of the 90-day time require ALJs to conduct VTC hearings ALJ
frame for holding a hearing and whenever the technology is available In the proposed rule, we explain that
rendering an opinion. and allow ALJs to offer to conduct the Medicare statute, CMS regulations,
ALJs may determine that an in-person telephone hearings if the hearing and CMS Rulings bind ALJs. Prior to
hearing should be conducted if VTC request or administrative record BIPA, ALJs and the MAC were also
technology is not available or special or suggests that a telephone hearing may bound by NCDs, based on section
extraordinary circumstances exist. For be more convenient for one or more of 1862(a)(1) of the Act, but not NCDs,
example, an ALJ could find special and
the parties. based on other statutory provisions.
extraordinary circumstances for holding
Under BIPA, all NCDs, whether based
an in-person hearing when the case d. Actions That Are Reviewable by an
on section 1862(a)(1) of the Act or on
presents complex, challenging or novel ALJ
presentation issues that necessitate an other grounds, are binding on ALJs and
in-person hearing. Similarly, an Current regulations governing the Part the MAC. This change is reflected in
appellant’s proximity to and ability to A and Part B appeals process do not §§ 405.732 and 405.860, as amended at
go to the local hearing office for the provide ALJs jurisdiction to overturn 68 FR 63692, 63715, 63716 (November
hearing may constitute special and dismissals issued by a contractor or a 7, 2003), and is also reflected in
extraordinary circumstances that § 405.1060 of this interim final rule.
carrier hearing officer. In the proposed
warrant the scheduling of an in-person We also note a change in this interim
rule, we proposed giving ALJs the
hearing. final rule to § 401.108, which pertains to
authority to decide or review all final the binding nature of CMS Rulings on
Additionally, § 405.1020(e)(4) of this actions issued by a QIC, including
interim final rule specifies that a party CMS components, and SSA to the extent
dismissals for untimely filing, failure to that it adjudicates matters under the
who objects to either a VTC or exhaust administrative remedies, or res
telephone hearing has a right to request jurisdiction of CMS. In light of the
judicata. The proposed rule also transfer of responsibility for the ALJ
an in-person hearing, which will be
specifies that if an ALJ decides that the hearing function from SSA to HHS, we
granted upon a finding of good cause.
QIC’s dismissal is improper, the ALJ are amending § 401.108(c) and creating
An ALJ could find good cause to grant
a request for an in-person hearing when will remand the case to the QIC for a a new § 405.1063 to specify that CMS
a party demonstrates that the case substantive decision. Rulings bind HHS components that
presents complex, challenging or novel Comment: One commenter questions adjudicate matters under CMS’
presentation issues that necessitate an the propriety of allowing an ALJ to jurisdiction. We recognize that this is an
in-person hearing. Similarly, an ALJ review a contractor’s dismissal order expansion of the current policy, but
may find good cause to schedule a and whether that review constitutes a believe this new requirement will help
hearing based on a party’s proximity to reopening of the contractor’s action. ensure consistency among appeals
and ability to go to the local hearing decisions.
Response: Under the pre-BIPA In the proposed rule, we also address
office. Consistent with SSA’s current
policy, § 405.1020(i)(5) provides that a appeals process, ALJs have sometimes the degree to which ALJs and the MAC
party may object to the use of a VTC or identified contractor dismissals that must defer to non-binding CMS and
telephone hearing only with respect to were inappropriate. Because the contractor policies such as LCDs,
his or her own testimony, but not with regulations did not provide appellants a LMRPs, manual instructions and
respect to the entire hearing. direct right of appeal of dismissals, program memoranda. As reflected in
We anticipate that providers and referring those cases to CMS or the proposed § 405.992, ALJs and the MAC
suppliers will be particularly interested contractor was cumbersome and are expected to give deference to these
in VTC hearings, because they reduce delayed the resolution of the appellant’s policies. The proposed regulations also
the amount of nonproductive travel time appeal. We believe that providing a provide, however, that a party can
previously associated with in-person direct right of appeal will provide both request that an ALJ or MAC disregard a
hearings. a simpler and more cost-effective policy, but the request must provide a
We believe that VTC and telephone method to challenge a dismissal the rationale for why the policy should not
hearings are convenient not only for party believes is inappropriate. Because be followed in the particular case.
providers and suppliers, but also for we are providing a direct appeal right, Comment: Several commenters
beneficiaries and their representatives. the ALJ’s remand to the contractor is not disagreed with the proposed regulation,
In particular, we note that many because they believed that it placed an
a reopening of the contractor’s dismissal
beneficiaries are represented by an adult undue burden on appellants,
order. To clarify the effect of the remand
child whose ability to take time off from particularly unrepresented beneficiaries,
order, we have revised § 405.1004(b) to
work to attend an in-person hearing is to identify policies applicable to their
often limited. Use of telephone hearings provide that when the ALJ determines
case and to explain why the policy
and VTC enables these individuals to that the QIC’s dismissal was in error, the should not be followed.
pursue their parents’ appeals without ALJ will vacate the QIC’s dismissal and Response: New § 405.1060 through
undue disruption of their daily routine. remand the case to the QIC for a § 405.1062 alter the regulation text
Moreover, because the interim final rule reconsideration. Consistent with the proposed under § 405.992 to clarify the
makes clear that an in-person hearing discussion above regarding appeals to applicability of NCDs, LCDs, LMRPS,
may be requested by all appellants, QICs of contractor dismissals, appeals of and CMS program guidance to ALJs and
appellants who believe that their appeal dismissals will be permitted only at the the MAC. Section 405.1062 gives ALJs
can be presented effectively only in next adjudicative level, and we have and the MAC the authority to consider
person, will have the right to request an added § 405.1004(c) to clarify that an whether guidance documents (for
in-person hearing, which will be ALJ’s decision regarding a QIC’s example, LCDs, LMRPs, and manuals)
granted upon a finding of good cause. In dismissal of a reconsideration request is should apply to a specific claim for
light of the new policy on the use of final and there is no subsequent appeal benefits on their own motion, rather
VTC and telephones for ALJ hearings, right. than doing so only at the appellant’s
request. This eliminates barriers for reason why the policy was not followed. consideration of the invalid LCD or NCD
those beneficiaries who are not able to These decisions apply only for purposes provision(s). As a result of these
raise these issues on their own. We note, of the appeal in question, and do not clarifications, we have added
however, that particularly with the have precedential effect. § 405.1034(c) to permit ALJs to remand
advent of the Internet, an increasing The ALJ or MAC will review the facts an appeal to a QIC in this situation.
number of beneficiary appeals contain of the particular case to determine
whether and how the policy in question f. Aggregating Claims To Meet the
challenges to medical policies citing
applies to the specific claim for benefits. Amount in Controversy
medical research and other grounds.
These appeals will be easier to pursue If an ALJ or MAC decision concludes Prior to the enactment of section 521
because notices of redetermination that a policy should not be followed, the of BIPA, the statute and regulations
under § 405.956 will now include more decision will explain why the policy provided different amounts in
detailed explanations concerning the was not followed in light of the facts of controversy for Part A and Part B
basis for a claim denial, including the the particular case. We believe this will appeals. Under Part A, an appellant
application of a LMRP or LCD. provide a useful framework for deciding received a reconsideration of the initial
Comment: Requiring ALJs to defer to cases in which a particular, non-binding determination regardless of the
CMS and contractor policy alters the policy is the focus of the appeal. monetary value of the claim, but had to
ALJ’s role as an independent fact finder Section 522 of BIPA created a new meet a $100 threshold to receive a
and, thus, changes the character of a coverage appeals process that enables hearing before an ALJ. Similarly, an
205(b) hearing. certain beneficiaries to challenge LCDs appellant contesting an initial
Response: We disagree with the and NCDs. Because a beneficiary can determination issued on a Part B claim
commenter’s characterization of the conceivably bring an appeal under both received a review determination
proposed hearing process. Under this the section 522 coverage appeals regardless of the amount in controversy.
regulation, ALJs will continue their process and the section 521 claims However, there was a $100 amount in
traditional role as independent appeal process, we are clarifying in this controversy requirement for a Part B
evaluators of the facts presented in an interim final rule how adjudicators will carrier hearing and a $500 threshold for
individual case. Requiring an ALJ to handle simultaneous appeals. These an ALJ hearing with respect to a Part B
consider CMS policy and give clarifications are consistent with CMS’ claim determination (except for home
substantial deference to it, if applicable final rule that created the new process health where the threshold for ALJ
to a particular case, does not alter the to allow LCD and NCD challenges. See appeals was $100).
ALJ’s role as fact finder. Indeed, ALJs 68 FR 63692 (November 7, 2003). If a The pre-BIPA aggregation provisions
have always been bound by Medicare party appeals a denial that is based on found at former section 1869(b)(2) of the
policies included in CMS regulations, an LCD or NCD by filing only a claim Act directed the Secretary to devise a
CMS rulings, and NCDs based on appeal, then adjudicators will apply the system for allowing appellants to
section 1862(a)(1) of the Act. coverage policy that was in place on the combine claims to meet the amount in
The Federal courts have considered date the item or service was received, controversy as follows:
and applied deference standards in regardless of whether some other In determining the amount in controversy,
considering the validity of various beneficiary has filed a coverage appeal the Secretary, under regulations, shall allow
Medicare policies, and have also based on the same LCD or NCD. This two or more claims to be aggregated if the
recognized that ALJs and the MAC policy is consistent with original claims involve the delivery of similar or
properly consider issues relating to Medicare policy that requires changes to related services to the same individual or
deference as well. For example, in LCD or NCDs to be applied involve common issues of law and fact
Abiona v. Thompson, 237 F. Supp. 2d prospectively to requests for payment. arising from services furnished to two or
more individuals.
258 (E.D.N.Y. 2002), the court upheld a If an appellant files both a claim and
decision in which the MAC denied a coverage appeal based on the same The Secretary implemented the above
anesthesiologists’ requests for payment initial determination, both appeals will provisions in a final regulation
of post-surgical administration of go forward. The claim appeal published March 16, 1994 (the existing
patient-controlled analgesia (PCA). In its adjudication time frames will not be regulations can be found in § 405.740
decision, the MAC relied, inter alia, on impacted because the appeals will be and § 405.817). The regulation
the preamble to the Medicare physician conducted simultaneously. In established two methods of aggregation:
fee schedule and a CMS program adjudicating the claim appeal, one for individual appellants and one
memorandum, both of which provided adjudicators will apply the coverage for multiple appellants. Individual
that payment for physician services policy that was in place on the date the appellants appealing either Part A or
related to PCA was included in the item or service was provided, unless the Part B claims were allowed to aggregate
global fee paid to the surgeon and, appellant receives a favorable coverage two or more claims within a specified
therefore, was not routinely payable to appeal decision. If the appellant period, regardless of issue, to meet the
anesthesiologists. receives the favorable coverage decision jurisdictional minimums for a carrier
In response to the above comments prior to a decision being issued for the hearing and ALJ hearing. Multiple
and to provide a clearer standard of claim appeal, then pursuant to 42 CFR appellants, however, were allowed to
review, we have revised the regulation § 426.488 and § 426.560, the claim aggregate their claims only under the
to provide that: (1) ALJs and the MAC appeal will be adjudicated without statutory requirements; that is, if the
must give substantial deference to LCDs, consideration of the invalidated LCD or claims involved the delivery of similar
LMRPs, CMS manuals or other program NCD provision(s). If an appellant or related services to the same
guidance; (2) the applicability of a CMS receives a favorable decision in the individual or common issues of law and
manual instruction or other non-binding coverage appeal after receiving an fact arising from services furnished to
issuance may be raised by either the unfavorable claim appeal decision, then two or more individuals.
appellant or the MAC or ALJ on their the appellant is entitled to have the BIPA 521 changed the amount in
own motion; and (3) the ALJ or MAC claim appeal reopened and revised for controversy requirements. Section
may decline to follow a policy in a good cause, subject to the provisions in 1869(b)(1)(E) of the Act provides that
particular case, but must explain the § 405.980 and § 405.986, without the amount in controversy for an ALJ
hearing will be $100 for appeals of both to the proposed rule, with the creation g. The ALJ Hearing
Part A and Part B claims. In addition, of the QICs, appellants will have access
(1) When CMS or Its Contractors May
the aggregation provisions were revised: to a review by an independent Participate in an ALJ Hearing
Two or more appeals are allowed to be contractor regardless of a claim’s
aggregated when the appeals either monetary value. Our experience As we explained in the proposed rule,
involve the delivery of similar or related suggests that the large majority of Part previous regulations have not addressed
services to the same individual by one A and Part B appeals decided by the whether CMS or its contractors can
or more providers and suppliers, or QICs will equal or exceed the threshold participate in ALJ hearings. Occasions
there are common issues of law and fact amount in controversy. We also believe have arisen, however, in which an ALJ
arising from services furnished to two or that the QIC review will provide has determined that input from CMS or
more individuals by one or more a contractor will help resolve an issue
sufficient due process for claims below
providers or suppliers. in a case. In some instances, ALJs have
In the proposed rule, we proposed to the threshold amount in controversy. (In
addition, as noted below, the Congress requested position papers, testimony, or
limit aggregation of claims under BIPA other evidence from CMS or a
to those that meet the statutory has recently provided that the amount
contractor, but these proceedings have
requirements for aggregation, that is, in controversy be increased annually
been cumbersome, because the
those that involve the delivery of similar beginning in 2005.) Moreover, as
regulations did not provide specific
or related services to the same explained in the proposed rule, procedures for input. After reviewing
individual, or common issues of law extending or tolling the time for an the outcome of other cases, CMS, as
and fact arising from services furnished appellant to aggregate a claim with well as the Department’s Office of
to two or more individuals. Individual another would in essence extend the Inspector General (in its report issued in
appellants will no longer be allowed to statutory deadline to file a request for September 1999 (OEI–04–97–00160)),
aggregate all timely filed claims, hearing beyond the 60-day deadline and concluded that the cases might have
regardless of issue. We explained that would also prevent ALJs and the MAC been resolved more appropriately if
this change was appropriate because from completing appeals within the CMS or the contractor had been party to
under BIPA, unlike the previous appeals statutory deadlines. the appeal.
system, appellants will have a right to
Comment: Several commenters asked In response to the above concerns, we
appeal to an independent contractor (a
QIC) regardless of a claim’s monetary for specific guidance in calculating the included several provisions in the
value. We also proposed the following amount in controversy for services proposed rule that define the extent to
related policies: where reimbursement is governed by a which CMS and its contractors may
• To continue our pre-BIPA policy of specific formula or fee schedule. participate in the hearing process. We
restricting claims that may be aggregated were also mindful that section
Response: The interim final rule does 1869(c)(3)(J) of the Act specifically
to those that are appealed within 60 not alter the pre-BIPA regulation’s
days after receipt of all reconsiderations provides that the new independent
instructions for calculating the amount contractors, the QICs, will participate in
being appealed, because to do otherwise remaining in controversy. Regardless of
would in essence extend the time to file hearings to the extent required by the
the type of service or payment Secretary. Consistent with this
a request for hearing beyond the 60-day methodology, the amount remaining in
limit; provision, we proposed to revise our
• To provide separate rules for claims controversy for an ALJ hearing is regulations to allow a representative of
that are escalated from the QIC to the computed as the actual amount charged CMS, or a CMS contractor, to participate
ALJ level to ensure that only appeals the individual for the items and services in an ALJ hearing at the request of an
that meet the amount in controversy in question, less any amount for which ALJ, the QIC or CMS. Participation may
requirements are escalated to the ALJ payment has been made by the initial include filing position papers (within
level; and contractor or ordered by the QIC, and the time frame specified by the ALJ) or
• To require appellants to explain in less any deductible and applicable providing testimony to clarify factual or
their request for aggregation why they coinsurance amounts. (Section policy issues in a case, but will not
believe the claims involve common 405.1006(d)(1)). include those aspects of full party status
issues of law and fact or the delivery of Finally, section 940(b)(1) of the MMA (for example, the right to call witnesses
similar or related services. or to cross-examine the witnesses of the
provides that, for requests for an ALJ
Comment: Two commenters believe appellant or another party to the
hearing or judicial review made after
that the proposed limits on aggregation hearing). Because the role of a
2004, the amount in controversy
are too restrictive, because some claims participant will be non-adversarial, we
thresholds will be increased by the proposed to allow participation of the
with low dollar amounts, but involving
percentage increase in the medical care QIC, CMS, or CMS’ contractors in cases
important issues, will not reach the ALJ
component of the consumer price index brought by all appellants, including
level. One commenter added that there
are some claims, such as therapy for all urban consumers (U.S. city beneficiaries. We also explained in the
evaluations, that usually fall below the average) for July 2003 to the July proposed rule that an ALJ will not have
$100 limit. Another commenter preceding the year involved. Amounts the authority to require CMS or a
recommended that the 60-day deadline determined under this formula that are contractor to participate in a case, nor
to file a request for ALJ hearing be tolled not a multiple of $10 will be rounded may the ALJ draw any inferences if CMS
to enable an appellant to aggregate the to the nearest multiple of $10. We have or a contractor decides not to
appeal with another claim still pending proposed to revise § 405.1002, participate. Consistent with the practice
with the QIC. § 405.1006, and § 405.1136(a) to reflect before an ALJ, we amended § 405.1120
Response: The statute requires ALJs this statutory change. When this and § 405.1124 by adding language to
and the MAC to apply the applicable formula results in revisions to the clarify that the MAC is prohibited from
amount in controversy standard under amount in controversy, CMS will alert drawing any adverse inferences if CMS
§ 405.1006 for an ALJ hearing. the public through a Federal Register or a contractor decides not to participate
Moreover, as we noted in the preamble notice, or other appropriate vehicle. in a MAC review.
In addition, we proposed allowing contractors are not explicitly recognized necessary, and consistent with the
CMS or its contractor to enter an appeal as parties in fee-for service appeals statute.
at the ALJ level as a party, unless an under the pre-BIPA statute (former Comment: As noted above, several
unrepresented beneficiary brings the section 1869(b)(2) of the Act), appeals commenters favored the provision
appeal. In this circumstance, CMS or its brought by enrollees of managed care allowing CMS’ and its contractors to
contractor will have all the rights of a organizations (MCOs) are, by statute and invoke party status or otherwise
party, including the right to call regulation, adversarial at the ALJ, MAC, participate at the hearing level, stating
witnesses or cross-examine other and Federal district court levels. that participation will create a full and
witnesses, to submit additional Notably, sections 1852(g)(5) and fair record. These commenters suggested
evidence within the time frame 1876(c)(5)(B) of the Act, which reference various changes to the regulations to
specified by the ALJ, and to seek MAC the right to a ‘‘205(b) hearing,’’ provide clarify who may participate and how the
review of a decision adverse to CMS. that the MCO, as well as the enrollee, is various parties to the hearing would be
Similar to the participation rules, an a party to the hearing. MCOs that notified.
ALJ will not have the authority to receive adverse decisions at the ALJ and Response: Consistent with the above
require CMS or a contractor to enter a MAC levels may appeal those decisions comments, we expect that allowing
case as a party or to draw any inferences to the MAC and Federal district court, CMS or a contractor party status or
if it does not participate in the case. as applicable. participation, combined with the new
One reason for these proposals is to Our experience with these managed rules concerning the submission of
allow ALJs and the MAC to resolve care hearings and appeals suggests that evidence, will create a record that is
issues of fact and law more quickly and most beneficiaries, including those who more complete at an earlier stage in the
reduce the need for remands for are not represented, are able to appeals process. These commenters
additional development. Another aim is participate fully in the hearing process noted the benefit to the Medicare
to reduce the number of cases referred even when the MCO appears at the program of a fully developed record that
to the MAC for own motion review hearing. This is due, in part, to the clearly conveys the program’s coverage
because factual issues have not been and payment policies. We believe a
control exercised by the ALJ, one of
addressed during the ALJ proceedings. fully developed record will benefit all
whose roles is to ensure that all parties
In that regard, we note that these new participants to the hearing. For example,
receive a full and fair hearing. We
regulations link CMS’ ability to refer after the statute was amended in 1986
expect that ALJs will continue to fulfill
certain types of cases to the MAC for to provide for ALJ hearings for Part B
this role under these new rules for fee-
own motion review to the extent to claims, some beneficiaries appealed the
for-service appeals. Neither the existing
which CMS has been a party or has amount of payment awarded to their
nor the proposed regulations
participated in the appeal below. For physicians under the reasonable cost
contemplate that the ALJ will conduct a
example, under § 405.1110(b), if CMS or system because they did not understand
trial-like proceeding with formal rules
its contractor does not participate as a how the amounts had been calculated.
of evidence. (Moreover, as noted above, In those circumstances, the hearing and
party or otherwise in a case at the ALJ
CMS or its contractors may not invoke resulting decision essentially served an
level, any subsequent referral to the
full party status when the appellant is informational purpose. Similarly, CMS
MAC for own motion review is limited
an unrepresented beneficiary.) participation at a hearing may assist
to ALJ decisions or dismissals
containing errors of law or a broad In addition, fee-for-service appeals beneficiaries, as well as adjudicators, in
policy or procedural issue that may conducted under 42 CFR part 405, understanding concepts (for example,
affect the public interest. This provision subparts G and H, are currently the distinction between hospital
affords appellants a measure of adversarial when liability under inpatient and observation admissions)
administrative finality when CMS sections 1879 or 1842(l)(1)(C) of the Act that may affect coverage for certain
chooses not to participate as a party or is an issue. When a provider or supplier benefits. We also hope to alleviate the
otherwise in a case at the ALJ level and has concluded that the service it difficult position that many ALJs
the resolution of the case hinges on the provided to a beneficiary is not covered currently face in adjudicating a case
weight of the evidence rather than the and asserts that it has informed the completely and impartially when the
controlling law and policy. beneficiary of potential non-coverage appellant introduces expert evidence, in
Comment: Although we received before providing the service, the the form of testimony, for the first time
some positive comments concerning interests of the provider or supplier and during the ALJ proceedings, and the ALJ
expanding CMS’ role in the appeals the beneficiary concerning liability are does not have a routine avenue of
process, most of the commenters who adverse and can be contested during the obtaining information on the same topic
addressed this aspect of the proposed ALJ hearing. from the agency.
regulations are opposed or suggested We also disagree with the We also expect that a fully developed
modifications to the process. Those commenters’ conclusion that the record at the ALJ level or below will
opposed are concerned that allowing Congress did not envision that CMS or lead to a reduction in MAC remands to
CMS or its contractors to be parties or its contractors might, in some instances, the ALJ level, as well as CMS referrals
participate will change the nature of the be represented at a hearing and before to the MAC for own motion review. In
hearing from an informal process to an the MAC. As noted in the proposed rule, order to encourage this development,
adversarial hearing process not section 1869(c)(3)(J) of the Act provides § 405.1110(c)(2) provides that if CMS or
contemplated by the Congress. Some of that the new independent contractors, its contractor does not participate at the
these commenters stated that the change the QICs, will participate in hearings to ALJ level, the MAC will exercise own
will particularly disadvantage the extent required by the Secretary. motion review only if the ALJ’s action
beneficiaries. This is a clear indication that the contains an error of law or abuse of
Response: We disagree to some extent Congress recognized the benefit of discretion material to the outcome of the
with the commenters’ characterization agency participation in the appeals case, or if the case presents a broad
of the nature of the ALJ hearing process process. Thus, we continue to believe policy or procedural issue that may
under the pre-BIPA statutory and that limited expansion of CMS role in affect the general public interest. In
regulatory scheme. While CMS or its the ALJ hearing process is appropriate, other words, cases in which CMS or its
contractor decide not to participate at identify the issue to be decided or the include a self-sworn declaration
the ALJ level as a party or otherwise parties to the hearing. It is in the interest describing the movant’s efforts to
will not be reviewed by the MAC on its of the parties and the adjudicator to resolve or narrow the discovery dispute.
own motion if the perceived error correct these mistakes at the earliest As a general rule, the MAC may
concerns the ALJ’s evaluation of the opportunity so that hearings do not have review an ALJ discovery or disclosure
facts of the case rather than an error of to be postponed or supplemented ruling only during the course of its
law or procedure. because necessary parties were not sent review as specified in § 405.1100,
Proposed section 405.1000 listed the the notice of hearing or appropriate § 405.1102, § 405.1104, or § 405.1110.
types of contractors that may participate expert witnesses were not obtained However, there may be immediate MAC
as parties in hearings before an ALJ, to because the issues before the ALJ were review where an ALJ’s ruling authorizes
include Quality Improvement not properly identified before the discovery or disclosure of a matter for
Organizations (QIOs). Therefore, we hearing. Parties may respond to the which an objection based on privilege or
have amended § 405.1000 to include notice, as they do now, in an informal other protection from disclosure (such
this technical change. manner. The regulation does not require as case preparation, confidentiality, or
Comment: Several commenters noted or anticipate formal written undue burden) was made to the ALJ. An
that the proposed regulations do not submissions. ALJ must stay all proceedings affected
address sufficiently how the Comment: Several commenters by a ruling for a minimum of 15 days
participation of CMS or its contractors indicated that while the proposed rules when the ALJ receives notice that a
will affect ALJ hearing procedures such include a provision for issuing party intends to seek MAC review of the
as the issuance of the notice of hearing subpoenas, they do not require CMS to ruling. If the MAC grants a request for
and the potential for discovery. respond to discovery requests or orders. review or takes own motion review of a
Response: We have modified several Response: BIPA does not explicitly ruling, the ALJ ruling will be stayed
of the regulations to clarify how a provide for discovery during ALJ until the MAC issues a written decision
hearing will be handled when CMS or proceedings, and given the time frames that affirms, reverses, or modifies, the
its contractor invokes party status or for adjudications under BIPA, we do not ALJ’s ruling. When CMS requests
decides to participate in a hearing. For envision that most hearings will include review of an ALJ ruling, the MAC must
example, in § 405.1020(c) we require the discovery. However, in light of these grant the request, and the ruling is
ALJ to send a copy of the notice of and other comments relating to automatically stayed pending the MAC’s
hearing to both the QIC and the discovery, we believe it is appropriate to order. With respect to requests from a
contractor that issued the initial permit discovery when an ALJ hearing party other than CMS for review of a
determination. (The QIC or the is adversarial (that is, whenever CMS or discovery ruling, if the MAC does not
contractor will be responsible for its contractor is a party to an ALJ grant review or take own motion review
advising CMS of any significant cases in hearing). Therefore, we have added within the time allotted for the stay,
which the agency may decide to § 405.1037 to permit limited discovery then the stay will be lifted and the
participate.) when CMS participates in an ALJ ruling will stand.
Comment: Several commenters raised hearing as a party. Our experience If a party requests discovery against
concerns that the proposed regulations indicates that most information that is another party to the ALJ hearing, the
contain more formal procedures than relevant to issues before an ALJ can be ALJ adjudication time frame specified in
the previous regulations and will, obtained by direct request by the ALJ or § 405.1016 will be tolled. Tolling the
therefore, inhibit the ability of an subpoena. Therefore, we anticipate that ALJ’s decision-making time frame
unrepresented beneficiary to pursue an extensive discovery will not be pending resolution of the discovery
appeal. necessary. dispute will ensure that ALJs have an
Response: Many of the provisions In general, we allow discovery for appropriate opportunity to consider the
cited by the commenters are identical to matters relevant to the specific subject merits of an appeal, while also
those that have been part of the current matter of the ALJ hearing, but only if maintaining an appellant’s ability to
regulations since 1980 and, in our they are not privileged or otherwise escalate to the MAC if the ALJ is unable
experience, have not been difficult for protected from disclosure, and the ALJ to issue a decision within the statutory
unrepresented beneficiaries to follow. determines that the discovery request is time frame.
For example, a few commenters not unreasonable, unduly burdensome In developing the discovery
suggested that the requirement that a or expensive, or otherwise procedures, we considered their
beneficiary object to the issues in the inappropriate. We also limit discovery potential effects on appellants and other
notice of hearing will require the by permitting a party only to (1) request parties to an appeal. We believe that
beneficiary to file formal objections or of another party the reasonable reasonable discovery can enhance the
pleadings. This is not the intent of the production of documents for inspection fairness of proceedings and the accuracy
regulation, nor in our experience has it and copying, and (2) take the deposition of decisions. We also believe that
inhibited beneficiaries from pursuing of another party if the proposed discovery should be limited to hearings
their requests for hearings. Section deponent agrees to the deposition or the where CMS has joined as a party
405.1024 of the regulation is a carryover ALJ finds that the proposed deposition because it has not been previously
from 20 CFR § 404.939, which has is necessary and appropriate in order to available for ALJ hearings and these
applied to Social Security retirement, secure the deponent’s testimony for an hearings will be adversarial because of
disability, and Medicare hearings since ALJ hearing. An ALJ will decide on a CMS party status. Additionally, ALJs
August 1980. See 45 FR 52078, 52081 case-by-case basis the time frame within will not be able to schedule and hold
(August 5, 1980). We decided to which a party that seeks discovery must hearings in an efficient manner if broad
maintain this regulation not to formalize submit its request and when all discovery is permitted. As previously
the proceedings, but rather to give discovery must be concluded. mentioned, we expect the number of
beneficiaries and other parties the Section 405.1037(d) sets forth rules appeals in which CMS elects to
opportunity to make corrections in for motions to compel and protective participate as a party to be quite low.
those instances, albeit rare, in which the orders. A party that files a motion to When CMS does participate as a party,
ALJ hearing office does not correctly compel or a protective order must also we expect the need for discovery to be
minimal. Also, because we anticipate party by a QIC or other contractor even (3) Parties to an ALJ Hearing
that the majority of appeals in which if those issues are not raised on appeal. In proposed § 405.1020(a), we stated
CMS elects to participate as a party will One commenter suggested that this that the ALJ must send the notice of
involve overpayments, CMS will not regulation places the ALJ ‘‘in an hearing to ‘‘all parties and the QIC that
arbitrarily invoke party status, subject appellate position.’’ issued the reconsideration
itself to possible discovery requests, and Response: This regulation is a direct determination.’’ We received several
risk additional interest liability in an carryover from a currently applicable comments concerning whether ALJs are
attempt to delay the proceedings. regulation at 20 CFR § 404.946(a). In our always required to send notices of
Therefore, we believe that it is unlikely hearing to ‘‘all parties.’’
experience, it is rarely used in the
that these procedures regarding Comment: ALJs currently encounter
Medicare context. We decided to retain
discovery will negatively impact the significant difficulties in determining
it, however, to give the ALJ the
appellant and other parties to an appeal. who receives the notice of hearing when
When all other discovery efforts have authority to remedy clearly inconsistent
outcomes that sometimes present the appeal concerns either a large
failed, parties may also obtain evidence
themselves in a case before an ALJ. For number of initial claims filed by a single
by requesting subpoenas. The Social
Security Act provides for the use of example, an ALJ who has been asked to provider or supplier, or a postpayment
subpoenas, and the proposed reverse a determination that the second audit involving statistical sampling and
regulations, like the current SSA week of skilled nursing facility services a resulting overpayment assessed
regulations applicable to ALJ hearings, was not medically necessary may against a provider or supplier. Although
allow an ALJ, through independent discover that the beneficiary did not the beneficiaries who received the items
initiative or at the request of a party, to have a 3-day qualifying inpatient or services technically may be parties to
issue subpoenas concerning the hospital stay. Section 405.1032(a) these appeals, in many instances they
attendance and testimony of witnesses allows the ALJ to take jurisdiction of an have not been involved in the
and production of evidence. The ALJ earlier, fully favorable determination proceedings below and, due to the
will rule on whether and to what extent with respect to the first week of care, application of the limitation of liability
a party’s requests for subpoenas will be which is also subject to the 3-day and overpayment provisions, may have
granted, taking into account any qualifying stay requirement, but only if: no financial liability for the services at
objections that may be raised. We note (1) That determination may be properly issue. Attempting to locate and send
that if a party fails to comply with a reopened under the reopening notices of hearing to these beneficiaries
subpoena, neither the ALJ nor a party regulations; and (2) the ALJ gives proper is extremely time-consuming and will
may seek judicial enforcement; instead, notice to the parties that this issue will hinder the ALJ’s efforts to hold a
the ALJ must make application to the be addressed. Although we anticipate hearing and issue a decision within the
Secretary for such enforcement. that this provision will be rarely 90-day adjudication period.
Similarly, the Administrative Procedure invoked, we have included it in the Response: We have modified the
Act and the current regulations regulation to address the type of notice of hearings requirements in
applicable to Part A and Part B appeals situation described above. § 405.1020(c) to clarify that an ALJ is
allow the MAC to issue subpoenas. not required to send a notice of hearing
Section 405.1032(c) discusses to a party who has not participated in
Therefore, we have amended § 405.1122 whether an ALJ can consider a claim
by adding paragraph (d), which largely the determinations below and whose
that is not the subject of a hearing liability status for the items or services
mirrors § 405.1036(f) and describes the request. This paragraph was added to
MAC’s ability to issue subpoenas and in dispute has not been altered since the
address CMS’’ concerns that ALJs not initial determination. We believe that
the requirements for submitting a
consider claims that have not been this will ensure that all parties who
subpoena request.
previously adjudicated. Section have an interest in the appeal are given
We recognize that this interim final
rule does not fully discuss how the 405.1032(c) prohibits an ALJ from an opportunity to participate, while at
discovery and subpoena provisions taking jurisdiction of a claim that has the same time alleviating the ALJ
apply to CMS when it enters an ALJ not been adjudicated at the lower hearing office’s obligation to contact
hearing as a party. Therefore, following appeals levels through the QIC level. It those individuals who have not pursued
publication of this interim final rule is important to note the distinction their appeals rights at the earlier levels,
containing the regulatory provisions on between new claims versus new issues or have no financial interest in the
subpoena and discovery procedures, we for purposes of applying § 405.1032. A outcome. However, the regulation does
will issue a CMS Ruling clarifying the new issue is one that is raised for the not prohibit the ALJ from notifying a
application of these provisions to CMS. first time at the ALJ level, that is party who has not previously
relevant to the dates of service that are participated in the appeal, if the ALJ’s
(2) Issues Before an ALJ before the ALJ, but was not previously pre-hearing development suggests that
In the proposed rule, we generally considered in the appeal. For example, the party’s interests may be adversely
adopted the provisions from 20 CFR if a claim was previously denied for a affected by the outcome of the case.
§ 404.946 regarding issues before an reason other than medical necessity and
the appellant raises a medical necessity h. Filing Requests for ALJ Hearing and
ALJ. Section 405.1032(a) generally
issue at the ALJ hearing level, the MAC Review—Time and Place
discusses the types of issues that an ALJ
may consider at a hearing. ALJs may medical necessity issue is new, since it Section 1869(b)(1)(D)(ii) of the Act
consider all of the issues brought out in is relevant to the claim but not the provides that ‘‘[t]he Secretary shall
the previous determinations that were original dispute in the appeal. A new establish in regulations time limits for
not decided entirely in a party’s favor. claim, however, is a claim that has not the filing of a request for a hearing by
Under certain circumstances, ALJs may completed the appeals process at the the Secretary in accordance with
also consider issues decided favorably. through the QIC level. A claim can only provisions in sections 205 and 206.’’ In
Comment: Some commenters objected be combined with an appeal at the ALJ addition, section 1869(d)(1)(A) of the
to § 405.1032(a) allowing an ALJ to level if it has already been reconsidered Act provides that ‘‘[e]xcept as provided
consider issues decided favorably to a by a QIC. in subparagraph (B), an administrative
law judge shall conduct and conclude a Comment: We did not receive any escalation) to the other parties involved
hearing on a decision of a qualified adverse comments concerning starting in the appeal. Although the MAC will
independent contractor under the calculation of the 90-day not dismiss an appeal on the grounds
subsection (c) and render a decision on adjudication period from the date when that the appellant failed to satisfy this
such hearing by not later than the end an adjudicator receives an appellant’s requirement, the adjudication deadline
of the 90-day period beginning on the good cause explanation for filing an will be tolled if the appellant fails to
date a request for hearing has been appeal late. However, we received copy the other parties. This is one of
timely filed.’’ Similarly, section several comments objecting to tolling several provisions we will monitor for
1869(d)(2)(A) of the Act provides that the 90-day adjudication period for effectiveness, and we will assess the
the MAC ‘‘shall conduct and conclude appeals not filed directly with the ALJ need for changes as we gain experience
a review of [an ALJ decision] and make hearing office or MAC until the appeal with the new process.
a decision or remand the case to the reaches the appropriate adjudicator. Comment: One commenter suggested
administrative law judge for Commenters objected for essentially two that the ALJ be required to notify the
reconsideration by not later than the reasons: (1) They felt that tolling the appellant when the request for review is
end of the 90-day period beginning on adjudication period was contrary to the received, so that the appellant will
the date a request for review has been Congress’ direction that the appeals be know when the 90-day adjudication
timely filed.’’ completed within 90 days and (2) that period begins.
Section 205(b) of the Act gives an beneficiaries and other appellants must Response: We agree with the
appellant 60 days to request a hearing. not be penalized for delays caused by commenter. ALJ hearing offices and the
The current regulations governing the government and its contractors. MAC routinely send acknowledgment
appeals of Medicare claims provide for Suggested solutions included increased notices to the appellant when they
appealing from the contractor’s coordination between SSA and CMS receive a request for hearing or MAC
determination or decision to an ALJ local offices with the appeals entities review. However, this interim final rule
and, thereafter, from the ALJ level to the and establishing deemed or presumed requires ALJ hearing requests to be filed
MAC. In the proposed rule, we stated dates of receipt for appeals whose actual with the entity specified in the notice of
receipt is delayed because the reconsideration. Therefore, the decision-
that we will continue to require parties
component that initially received the making time frame begins on the date an
to file their appeals to the ALJ level and
appeal does not forward it timely to the appeal is timely filed with this entity.
the MAC within 60 days. We also stated
adjudicator. Accordingly, § 405.1014(b) has been
that ALJs and the MAC will continue to Response: As noted in the proposed
follow most of the general principles modified to require ALJ hearing offices
rule, and discussed in detail above in
currently found in 20 CFR § 404.933 and to send appellants a notice of the date
both the contractor and QIC context,
42 CFR § 405.722 when they decide of receipt of an appeal request only
directing appellants to only one filing
whether an appeal has been timely filed location will reduce confusion and when a hearing office receives a request
for purposes of establishing the eliminate potential delays in that was initially filed with an entity
appellant’s right to appeal. These transmitting the appeal request. other than the one specified in the
regulations provide that an appeal is Similarly, in the case of ALJ hearings or notice of reconsideration. Similarly,
considered filed on the day it is MAC reviews, requiring appellants to § 405.1016(a) now requires notice of the
received by a Social Security office, file their appeals with a single appeals date of receipt to be sent only when a
CMS, including its contractors, an ALJ, entity will be the simplest and most request for MAC review is filed with an
or, in the case of a request for MAC efficient way of eliminating the delays entity other than the MAC or ALJ
review, the MAC. We stated in the that concern the commenters. In two hearing office.
proposed rule that we will continue to sections of the proposed rule, SSA was i. Adjudication Deadlines
calculate the 60-day filing period based listed as a filing location. As mentioned
on the date the appeal is actually previously, given the reduced role of Section 1869(d)(1)(A) of the Act
received by one of the above offices, as SSA in the processing of Medicare provides that, unless the appellant
reflected in proposed § 405.1014(b). appeals, we believe that an explicit waives the statutory adjudication
However, for purposes of calculating the regulatory reference to SSA field offices deadline, the ALJ ‘‘shall conduct and
90-day adjudication period that governs is no longer appropriate. Therefore, we conclude a hearing on a decision of a
ALJ and MAC actions, we stated that if have revised § 405.1014(b) and [QIC]’’ and issue a decision within 90
a request for ALJ hearing was not filed § 405.1106(a) to eliminate the references days from the date a request for hearing
directly with the ALJ hearing office or to SSA as an alternative filing location. is timely filed. As we discussed in the
a request for MAC review was not filed We intend to instruct the QICs to proposed rule, we interpret this
directly with the MAC, the 90-day include in their reconsideration notices provision as requiring an ALJ to decide
adjudication period would not begin the appropriate entity to whom a a case within 90 days only when the
until the appeal is received by the ALJ subsequent appeal must be directed. We QIC has issued a final action in a case.
or MAC, as applicable. Finally, we will also continue our efforts to make Therefore, we proposed that when an
indicated that in those requests for forms for requesting an ALJ hearing and appellant escalates an appeal from the
hearing or MAC review in which an MAC review accessible and easy to use. QIC to the ALJ level, the proceedings
appellant does not file an appeal within In that regard, we note that a specific before the ALJ will not be subject to the
the 60-day filing period but contends form for requesting MAC review with 90-day limit.
that there is good cause for filing late, directions for filing under the current Comment: As noted in our discussion
the 90-day adjudication period will regulations is available on the of escalation, we received several
begin with the date the good-cause Departmental Appeals Board’s Web site comments objecting to the above
explanation is received by the ALJ or at http://www.hhs.gov/dab. proposal. Some commenters stated that
MAC, as applicable, assuming that the Consistent with our managed care cases escalated from the QIC level to the
ALJ or MAC determines that the regulations, §§ 405.1106(a) and ALJ level be subject to the 90-day limit,
explanation provides good cause for 405.1106(b) require that an appellant and others suggested an extended, but
filing the appeal late. send a copy of the request for review (or still limited, time frame.
Response: As indicated in our improper. However, several commenters deciding the substantive issue(s) in an
discussion above, this interim final rule expressed concern that the mandatory appeal, unless good cause is found for
requires that ALJs complete their action remand provisions altered the ALJ’s role the late submission of evidence,
in cases escalated from the QIC level to as the trier of fact, as well as the de novo § 405.1042(a)(2) ensures that the
the ALJ level within 180 days of the aspect of an ALJ hearing. Others excluded evidence will become a part of
date of receipt of the escalation request. contend that it will be unfair to restrict the record, and that the ALJ or MAC
We also proposed that the 90-day a party’s right to submit new evidence will explain in its action why the
adjudication period be tolled when not considered by the QIC, and at the evidence has been excluded.
delays in submitting evidence or same time allow CMS to submit Comment: Several commenters noted
requests for postponement of a hearing evidence and position papers if it that, while the appellant’s right to
by an appellant, rather than the ALJ’s participates in a case. Many others submit new evidence beyond the QIC
actions, extend the length of the reference specific situations in which level is restrained by the good cause
proceedings. We received no specific they said the prohibition concerning the standard, the regulations do not appear
objections to this proposal. Because we introduction of new evidence should to place similar restrictions on CMS or
have now limited cases escalated from not be applied, or, alternatively, in its contractors if they decide to submit
the QIC level to the ALJ level to a 180- which good cause to introduce the evidence at the hearing.
day adjudication period, we have evidence should be found. Response: We disagree with the
included in the final regulation text that Response: As noted earlier in this commenters’ position that it is unfair to
an appellant’s actions that delay the rule, the MMA amended several of prevent providers and suppliers from
proceedings will similarly toll the 180- BIPA’s appeal provisions. Effective submitting new evidence at the ALJ
day adjudication deadline. October 1, 2004, section 1869(b)(3) of level, while allowing CMS or its
Comment: One commenter asked us the Act, as amended by section 933(a) contractors to submit evidence at the
to clarify the effect of the statutory of the MMA, requires that a provider of ALJ level if the agency elects to join the
provision that allows an appellant to services or supplier not introduce appeal as a party. We have also
waive the 90-day adjudication period. evidence in any appeal that was not considered these comments in light of
The commenter asked if this provision presented at the reconsideration the statutory change described above
allows an appellant to, in essence, agree conducted by the QIC, unless there is that impose a good cause standard on
to an extension of the adjudication good cause that prevented the providers and suppliers for purposes of
period for a limited period. introduction of that evidence at or submitting evidence beyond the QIC
Response: We agree with the before the reconsideration. level. CMS and its contractors are not
commenter that in some instances the This new statutory provision is more permitted to participate in the appeals
appellant may benefit by agreeing to a restrictive than the proposed rule, in process prior to the ALJ level.
limited extension of the adjudication which we proposed only to require that Consequently, they are also prohibited
period in order to give the ALJ sufficient evidence specifically identified in the from submitting evidence in either the
time to obtain additional testimony or notice of redetermination be produced redetermination or the reconsideration.
evidence, or otherwise consider the no later than the reconsideration level. Therefore, if CMS elects to join an
appeal and issue a decision. Section In accordance with section 933(a) of the appeal as a party, the agency should be
405.1036(d), consistent with section MMA, we have amended § 405.1028 and afforded an opportunity to present
1869(d)(1)(B) of the Act, allows an § 405.1122(c) to require providers and evidence and the ALJ level is the
appellant to waive the adjudication suppliers to submit all evidence at the earliest opportunity for this to take
period. We have modified that section reconsideration level unless there is place. We anticipate that there are
to provide that the waiver may be for a good cause for not submitting it at, or several scenarios in which an ALJ will
specific period of time agreed upon by before, that level. Similarly, in need to consider whether a provider or
the ALJ and the appellant. § 405.1028, we require beneficiaries supplier appellant’s request to introduce
who are represented by a provider or new evidence at the ALJ level must be
13. Remand Authority (§ 405.1034) supplier to submit all evidence at the granted for good cause.
In the proposed rule, we noted that reconsideration level unless there is While it is not possible to delineate in
the current regulations governing good cause for not submitting it at, or a regulation all of the situations that can
Medicare appeals do not contain clear before, that level. Although the statute constitute good cause, we note that the
guidance concerning if and when an does not require application of this type of new evidence that may be
ALJ can remand a case to a contractor standard to beneficiaries who are introduced at various levels of appeal
for further proceedings. We proposed represented by providers or suppliers, will also be affected by the number of
giving ALJs remand authority for three we think it is appropriate to extend the issues that are considered during the
specific reasons: (1) When the ALJ requirements of section 933(a) to these course of an appeal. For example, if a
decides that the QIC’s dismissal of a beneficiaries. Doing so will likely QIC disagrees with a contractor’s denial
request for reconsideration was prevent a provider or supplier from of a claim on technical grounds, it may
improper; (2) when the record provided subverting the requirement for full and still determine that the claim is not
to an ALJ lacks the technical early presentation of evidence simply by payable because the service was not
information needed to resolve the case, offering to represent a beneficiary, medically reasonable and necessary.
which only the contractor can provide; rather than appealing on its own behalf. Since the issue of medical necessity
and (3) when an appellant submits new In light of these changes, we have may not have been addressed until the
evidence to the ALJ without providing eliminated the portions of proposed QIC’s determination, the ALJ will need
a good reason for not providing it at the § 405.1030 and § 405.1034 that would to take that into account when
QIC level. have required an ALJ to remand a case determining whether the appellant has
Comment: We did not receive any to the QIC when an appellant good cause to produce additional
comments concerning the ALJ’s introduced new evidence at the ALJ evidence on the medical necessity issue
authority to remand when the ALJ level without good cause. Although an at the ALJ level. Similarly, in instances
decides that the QIC’s dismissal of a ALJ or the MAC may not rely on in which CMS introduces evidence at
request for reconsideration was evidence submitted untimely in the ALJ level that was not part of the
record below, the ALJ should consider involving identical coverage and be given the authority to vacate their
whether the introduction of this payment issues for the same item or own dismissal orders.
evidence constitutes good cause for service provided to multiple Response: SSA’s regulations include a
granting an appellant’s request to beneficiaries. In the majority of these provision allowing ALJs to vacate their
introduce new evidence. cases, the liability of individual own dismissals. However, in practice,
Comment: One commenter objects to beneficiaries has been waived or, if not, this provision has not been an effective
the provision that allows an ALJ to the beneficiary has not filed an appeal remedy in Medicare appeals because the
remand to the QIC when the record or otherwise participated in the claims folder is no longer in the ALJ
provided to the ALJ lacks technical determinations below, and has not filed hearing office and is unavailable to the
information that is material to resolving a separate request for ALJ hearing. ALJ by the time the request to vacate the
the case, and only the contractor can However, if the beneficiary and the order is received in the ALJ hearing
provide the information. The provider or supplier, as applicable, both office. Moreover, resolutions of these
commenter suggests that the ALJ retain file a request for hearing in response to requests have been delayed or
the appeal and ask the contractor to the same QIC reconsideration, the complicated when appellants have
forward the information to the ALJ. provider or supplier may not, in simultaneously asked the ALJ to vacate
Response: We anticipate that most essence, waive the beneficiary’s right to the dismissal order and asked the MAC
appeal files forwarded to the ALJ will an ALJ action within 90 days because it to review the dismissal. In light of these
have all of the documents necessary to wants to consolidate that determination problems, we believe that the better
decide the case. In the rare instance in with other similar appeals. Beneficiaries practice is to provide only for an appeal
which the file lacks necessary technical who do not waive the 90-day of the dismissal order to the MAC.
information, we believe that the most adjudication period in order to Comment: We proposed that either
effective way of completing the record participate in the consolidated the ALJ or the MAC could dismiss a
is to return the case, via remand, to the proceedings must be mindful, however, request for hearing or review, as
contractor. However, § 405.1034 will that their case will be decided without applicable, when a beneficiary dies
give an ALJ the option of either the benefit of any of the testimony that before an appeal is filed, or during the
remanding the case to the contractor, or can be given at the consolidated pendency of the appeal. We did not
asking the contractor to forward the hearing, and that their decision may be receive any comments concerning the
missing information to the ALJ hearing revised if the evidence considered and ALJ’s right to dismiss the request for
office. In the event that we move to an resulting outcome of the consolidated hearing, but did receive a comment
electronic file system, we will consider hearing provides a basis for reopening concerning a MAC’s dismissal on the
revising this provision further. the beneficiary’s case. same grounds. The commenter states
that the MAC must hold a hearing at the
14. When an ALJ Can Consolidate a
15. When an ALJ Can Dismiss a Request request of the beneficiary’s estate on the
Hearing (§ 405.1044)
for a Hearing (§ 405.1052) issue of whether there is any remaining
[If you choose to comment on issues in financial liability of the estate that
this section, please include the caption [If you choose to comment on issues in
this section, please include the caption establishes the estate as a substitute
‘‘ALJ—Consolidation of Hearing’’ at the party that can continue the appeal.
beginning of your comments.] ‘‘When an ALJ Can Dismiss a Request
Response: In our experience, it is not
for a Hearing’’ at the beginning of your
We have continued the longstanding necessary to hold a hearing at either the
comments.]
practice of allowing ALJs to consolidate ALJ or MAC level to resolve whether the
requests for hearing where appropriate. We note that CMS’ pre-BIPA beneficiary’s estate has a right to a
We added in the proposed rule, regulations did not address this issue; hearing or MAC review. The issue in
however, a provision requiring an ALJ rather, ALJs followed the regulations at these circumstances is whether there
to notify CMS of the intent to 20 CFR § 404.957. Those regulations remains an interested, substitute party
consolidate hearings because we believe were designed to resolve appeals filed who has a remaining financial interest
that the consolidation of hearings may by applicants for Social Security in the outcome of the appeal. As
affect CMS’ decision on whether to retirement and disability benefits. indicated in the proposed rule, this
participate or invoke party status. Therefore we proposed new regulations remaining financial interest can be
Comment: We received one comment that address the specific procedural established if the beneficiary either paid
on this provision. The commenter issues that arise in Medicare claims for the service (and, thus, the
recommends that a beneficiary have the appeals. We described an ALJ’s beneficiary’s surviving spouse or estate
right to object to a request for authority to dismiss a request for is seeking reimbursement on behalf of
consolidation of the beneficiary’s appeal hearing on several grounds, including: the beneficiary) or the beneficiary’s
with those of another party (for The death of the beneficiary when there spouse or estate continues to be
example, a provider or supplier is no substitute party with a remaining potentially financially liable to pay for
appealing numerous appeals on the financial interest; dismissals in response the service. Conversely, if the
same issue). The commenter’s concern to a request for withdrawal; dismissals beneficiary’s liability for the service was
is that consolidation of the appeal will based on a previous determination or waived and that determination was not
eliminate the 90-day deadline for decision about the appellant’s rights on used as a basis to establish the
resolution of the case. The commenter the same facts and on the same issue or beneficiary’s liability for subsequent
also states that consolidation will issues, and dismissals based on services, the beneficiary’s spouse or
complicate the hearing and make it abandonment. We received one estate has no remaining financial
more difficult for the beneficiary to comment concerning dismissals related interest in the appeal. Neither the
assert rights in the appeal. to the survival of an appeal following statute nor existing regulations require a
Response: We expect the situation the death of the beneficiary, and one hearing before an appeal may be
described by the commenter to occur concerning when, if ever, an ALJ may dismissed on the above issue, and, in
only rarely. In our experience, providers vacate a dismissal. our experience, a determination of the
and suppliers make requests for Comment: We received a general estate’s remaining financial liability, if
consolidation of hearings in cases comment concerning whether ALJs can any, can be established without a
hearing. We wish to note that when a for purposes of determining the actual b. MAC Review of an ALJ’s Action/De
beneficiary dies and the appeal is amount of payment due. ALJ decisions Novo Review
subsequently dismissed, a party, involving underpayments often indicate Under the regulations governing the
including the beneficiary’s estate, may that Medicare must make payment for a pre-BIPA process, the MAC could deny
ask the MAC to vacate the dismissal service, but do not calculate a specific or dismiss a request for review, or it
under § 405.1108(b). Examples of underpayment amount to be made. could grant the request for review and
situations in which a dismissal should These determinations are not final, either issue a decision or remand the
be vacated include when there is the because the contractor must still case to an ALJ. The MAC could also
possibility of Medicaid liability or when calculate the underpayment amount by review an ALJ’s action in order to
there is a possibility the State (which determining the principal amount to be dismiss a request for hearing for any
pays Medicaid funds) will attempt paid. In addition, if the ALJ makes a reason for which it could have been
recovery of its payment from the estate. finding concerning payment when the dismissed by the ALJ. The MAC also
We note, however, that section 939 of amount of payment was not an issue had the authority under the pre-BIPA
the MMA now provides that, if a before the ALJ, the contractor may
process to review an ALJ’s action on its
beneficiary dies and there is no independently determine the payment
own motion, provided that it took
substitute party available to appeal a amount. Therefore, the date of the final
determination, the provider or supplier review of the case within 60 days after
determination for purposes of
who furnished the item or service can the date of the hearing decision or
determining when interest charges on
pursue the appeal. We have amended dismissal. In the proposed rule, we
underpayments begin accruing is the
§ 405.1052(a)(5) to reflect this change. described the factors the MAC
date that the contractor completes the
However, because a beneficiary’s estate considered under the pre-BIPA
calculation and makes the written
may have an interest in having Medicare regulations in deciding whether to grant
determination of the principal amount
cover a service so that a State (which review. We also noted that if the MAC
that Medicare owes.
pays Medicaid funds) will not attempt denied review of an ALJ’s decision
to recover its Medicaid payment from 17. Appeals Involving Overpayments under those regulations, the ALJ’s
the estate, adjudicators may only (§ 405.1064) action, not the denial of review, was the
dismiss requests involving dually [If you choose to comment on issues in final decision of the Secretary and was
eligible beneficiaries pursuant to the this section, please include the caption reviewable in Federal district court on
requirements set out in § 405.1052. ‘‘Appeals Involving Overpayments’’ at a substantial evidence standard.
the beginning of your comments.] BIPA establishes a new standard for
16. Content of ALJ’s Decision MAC review of an ALJ’s action. Section
A decision that is based on only a
(§ 405.1046) 1869(d)(2)(A) of the Act directs the
portion of a statistical sample does not
[If you choose to comment on issues in accurately reflect the entire record. MAC to conduct its review of an ALJ
this section, please include the caption Therefore, we have added § 405.1064 to decision and make a decision or remand
‘‘Content of ALJ’s Decision’’ at the set forth a general rule regarding ALJ the case to the ALJ within 90 days of a
beginning of your comments.] decisions that are based on statistical request for review. Section 1869(d)(2)(B)
Section 405.1046 of the proposed rule samples. The effect of this technical of the Act specifies that the MAC
sets forth general rules regarding the change is that when an appeal from the reviews the case de novo. In addition,
ALJ’s decision notice. We received no QIC involves an overpayment issue and section 1869(d)(3)(A) of the Act allows
comments on these provisions. the QIC relies on a statistical sample in parties to request a review by the MAC
Subsequently, section 933(c)(3) of the reaching a decision, the ALJ must base if within 90 days of timely filing a
MMA amended section 1869(d) of the his or her decision on a review of all request for an ALJ hearing, the ALJ has
Act to provide that an ALJ decision claims in the same statistical sample. not issued a decision, ‘‘notwithstanding
must be written in a manner calculated any requirements for a hearing for
18. Review by the MAC and Judicial purposes of the party’s right to such a
to be understood by the beneficiary and
Review (§ 405.1100 Through § 405.1140) review.’’
must include:
• The specific reasons for the [If you choose to comment on issues in We proposed under § 405.1100 that
decision (including, to the extent this section, please include the caption when a party requests a MAC review,
appropriate, a summary of the clinical ‘‘Review by the MAC and Judicial the MAC reviews the ALJ’s decision de
or scientific evidence used in making Review’’ at the beginning of your novo. The party does not have the right
the decision); comments.] to a hearing before the MAC, and the
• The procedures for obtaining MAC considers all evidence in the
a. Introduction administrative record. If a case requires
additional information concerning the
decision; and The component of the Departmental additional evidence or proceedings at
• Notification of the right to appeal Appeals Board (DAB) that decides cases the ALJ level, the MAC remands the
the decision and instructions on how to brought under section 521 of BIPA is case to the ALJ for further action.
initiate such an appeal. called the Medicare Appeals Council Otherwise, the MAC communicates its
1. These provisions have now been (MAC). Prior to this interim final rule, final action on the case by issuing a
incorporated in § 405.1046(b) of this the MAC considered requests for review final decision or order that adopts,
interim final rule. The new provisions of Medicare cases under the procedures modifies, or reverses the ALJ’s action, as
are basically verbatim restatements of used by SSA’s Appeals Council. See 20 appropriate. We also proposed other
the statute and are completely CFR §§ 404.966 through 404.985. In the changes to the MAC’s current
compatible with, although more proposed rule, we proposed that some procedures to accommodate the statute’s
detailed than, the proposed provisions. of the regulations governing the SSA’s changes to the MAC’s standard of
2. In addition to changes needed to Appeals Council be modified to meet review, as well as the adjudication
implement section 933(c)(3) of the the particular needs of the Medicare deadlines. (Some of the changes
MMA, we have added paragraph (c) to process and proposed adding other concerning time and place of filing a
§ 405.1046 to clarify CMS’ long-standing regulations to effectuate the BIPA review and other changes that affect
position that ALJ decisions are not final provisions governing MAC review. both the ALJ and MAC process are
discussed earlier in this preamble.) c. Escalation of an Appeal From the ALJ MAC can request that the MAC hold a
Because an ALJ’s decision is not final Level to the MAC hearing, the MAC has the authority to
and binding on all parties if the MAC Section 1869(d)(3)(A) of the Act, as deny the request and decide the case on
reverses the ALJ’s decision, we have amended by section 521 of BIPA, the written record.
amended § 405.1048 to make that point provides that if an ALJ does not issue a We also explained that when the
clear. decision within the 90-day adjudication MAC receives a case escalated from the
Consistent with our managed care period, ‘‘the party requesting the ALJ level, the MAC might issue a
regulations, §§ 405.1106(a) and hearing may request a review by [the decision, dismiss either the request for
405.1106(b) require that an appellant MAC], notwithstanding any hearing or request for review on
must send a copy of the request for requirements for a hearing for purposes procedural grounds, or, if the
MAC review or escalation to the MAC of the [appellant’s] right to such a administrative record is insufficient to
and to the other parties involved in the review.’’ We originally proposed that take any of the above actions, remand
appeal. Although the MAC will not cases escalated to the MAC from the ALJ the case to the ALJ for specific
dismiss an appeal on the grounds that level under this provision would not be development and a decision.
the appellant failed to satisfy this subject to the 90-day adjudication Comment: Some commenters state
requirement, the deadline will be tolled deadline. As discussed earlier in this that it is inappropriate for the MAC to
if the appellant fails to copy the other preamble, we have decided to require remand a case to an ALJ that has been
parties. that the MAC complete its action in an escalated to the MAC because the ALJ
Comment: Most of the comments we escalated case within 180 days of the has not decided the case within the 90-
received concerning MAC review receipt of the request for escalation. day period. Instead, the MAC must
pertained to the MAC’s procedures We also indicated in the proposed correct any deficiencies in the record
when a case is escalated from the ALJ rule that we interpret section itself.
level to the MAC. However, one 1869(d)(3)(A) of the Act to mean that Response: We do not anticipate that
commenter expressed the concern that only the person or entity that requests the MAC will routinely remand an
the MAC’s de novo review standard the ALJ hearing can escalate the appeal escalated case to the ALJ. However, we
would diminish an ALJ’s authority to to the MAC if the ALJ does not meet the need to retain this option for those rare
make findings of fact. 90-day adjudication deadline. For occasions in which the MAC cannot
Response: Section 1869(d)(2)(B) of the example, where CMS has entered a case resolve the case at its level, or when the
Act requires the MAC to conduct any as a party, it may not seek escalation. request for escalation and the other
review of an ALJ’s decision under a de We did not receive any comments remedies requested by the appellant in
novo review standard. Therefore, when concerning this proposal. We also stated the request for review are mutually
the MAC reviews an ALJ’s decision, the that we believed that the statute does exclusive. For example, where an ALJ
MAC will not apply a substantial not require the MAC to hold a hearing fails to issue a decision after a hearing
evidence standard when it considers an when a case is escalated from the ALJ that the appellant does not believe was
ALJ’s findings of fact. However, an ALJ’s to MAC level. a fair hearing, the appellant might
findings and conclusions on factual Comment: We received several escalate at the end of the 90-day
issues will still carry weight, comments that the MAC be required to adjudication period for the purpose of
particularly with respect to the hold a hearing when a case is escalated requesting a hearing and decision by a
credibility of witnesses, and by no from the ALJ level. Some commenters different ALJ. Here, if the MAC
means do the BIPA changes diminish an note that proposed § 405.1108(d)(2) concludes that the appellant did not
ALJ’s authority to make findings of fact. allows the MAC to hold a hearing. receive a fair hearing before the first ALJ
As we indicated in the proposed rule, Response: As we noted in the and determines that the appropriate
the MAC must carefully consider all proposed rule, the statute describes remedy is a hearing before a different
evidence in the record in conducting its different procedures and standards for ALJ, then the MAC can remand that case
review. It must then adopt, modify, or adjudication or review for the various accordingly.
reverse the ALJ’s decision, or remand steps of appeal. Just as some appellants
C. Miscellaneous Comments
the case to an ALJ for further in the pre-BIPA process chose different
proceedings (the MAC can also dismiss processes at the carrier hearing level (in- Comment: We received a number of
a request for review). Note that under person hearing, telephone hearing, or questions about the prioritization of
§ 405.1112, an appellant’s request for a on-the-record decision) and made appeals once the new BIPA appeals
review must identify the parts of the similar choices at the ALJ level, process is implemented. In particular,
ALJ decision with which the appellant appellants who consider escalating their commenters are concerned that at the
disagrees and explain why the ALJ’s cases will have to determine how post-redetermination levels of appeal,
findings and conclusions are wrong. important it is in their case to receive requests filed on or after the effective
The MAC will limit its review to those the type of process provided at a date of the BIPA changes will receive
exceptions, unless the appellant is an particular level. As we explained in the priority because of the new adjudication
unrepresented beneficiary. Thus, the proposed rule, the statute does not deadlines and the possibility of
MAC will review an ALJ’s findings of require that the MAC hold a hearing if escalation. Commenters request that we
fact or conclusion only when a case is escalated to it; rather, the clarify how adjudicators will be
specifically challenged by an appellant. statute allows escalation expected to prioritize appeal requests.
Under those circumstances, or in the ‘‘notwithstanding any requirements for They recommended that CMS require
case of an unrepresented beneficiary a hearing.’’ Moreover, § 405.1108(d)(2) that appeal requests be adjudicated in
appellant, the de novo review standard does not establish an appellant’s right to the order in which they are received. In
will apply. Note that the MAC can a hearing before the MAC; rather, it a related comment, we were asked to
remand the case to an ALJ if the MAC gives the MAC the option to hold a clarify what impact, if any,
determines that additional evidence is hearing when the MAC concludes that implementation of the new appeals
needed or additional action by the ALJ it is necessary. Therefore, although an process will have on appeals that are
is required. appellant who escalates a case to the already in progress.
Response: As discussed in section I– issue in further detail in either a CMS requires that we solicit comment on the
E of this preamble, we are fully Ruling or future rulemaking. following issues:
cognizant of these important issues and Comment: Under the proposed rule, • The need for the information
have taken them into consideration in CMS has the option of joining certain collection and its usefulness in carrying
developing an implementation approach appeals at the ALJ level. A commenter out the proper functions of our agency.
for these new requirements. In general, recommends that if CMS elects to join • The accuracy of our estimate of the
we agree with commenters that an appeal, the agency must be required information collection burden.
adjudicators can be expected to to hire an attorney to represent it. • The quality, utility, and clarity of
continue to carry out appeals in the Response: In the current claim the information to be collected.
order in which appeal requests are appeals process, appellants and other • Recommendations to minimize the
received. Thus, CMS intends to work parties retain almost complete information collection burden on the
closely with the FIs and carriers to discretion to elect or not to elect an affected public, including automated
ensure that all appeal requests are appointed representative. With few collection techniques.
completed on a timely basis. Similarly, exceptions, parties can choose any Therefore, we are soliciting public
CMS, SSA, and HHS are working person to act as their appointed comments on each of these issues for
together to reduce the backlog of cases representative. In the new appeals the information collection requirements
at the ALJ and MAC levels, and thus, process, as in the old, we believe that all discussed below.
minimize this problem. decisions with respect to the selection The PRA exempts most of the
Comment: In the current appeals of an appointed representative should information collection activities
process, contractors are required to be left up to the party, regardless of referenced in this Interim Final Rule
effectuate appeal decisions within 30 whether the party is a beneficiary or with Comment. In particular, 5 CFR
days. A commenter asked what CMS. Accordingly, the Appointed 1320.4 excludes collection activities
effectuation time frame(s) FIs and Representative provisions found in during the conduct of administrative
carriers will be required to adhere to in section 405.910 of the interim final rule actions such as redeterminations,
the new appeals process. maintain our current policy of giving reconsiderations, and/or appeals.
Response: The current appeal parties almost complete control over the Specifically, these actions are taken
regulations do not require carriers or selection of an appointed representative. after the initial determination or a
fiscal intermediaries to effectuate ALJ or As a party to an appeal, CMS enjoys the denial of payment. There is, however,
MAC decisions within a specific time same rights and privileges as any other one requirement contained in this rule
frame. The effectuation time frames that party, including control over its that is subject to the PRA because the
our contractors follow in the current selection of an appointed representative. burden is imposed prior to an
appeals process are based on manual Comment: One commenter asks us to administrative action or denial of
requirements. Neither BIPA nor MMA clarify what, if any, continuing payment. This requirement is discussed
impose any statutory requirements for education will be available to QICs and below.
effectuation of appeals decisions. ALJs.
Nonetheless, it is our intention to Section 405.910 Appointed
Response: The new Administrative Representatives
maintain the current manual QIC (AdQIC) will have primary
requirements for effectuation of ALJ and responsibility for fulfilling the In summary, section 405.910 states an
MAC decisions in the new appeals educational and training needs of the individual or entity may appoint a
process. The relevant manual provisions QICs. representative to act on their behalf in
can be found in the Internet-only exercising their rights to an initial
Manual (IOM)(Medicare Claims III. Response to Comments determination or appeal. This
Processing Manual (Pub. 100–4) at Because of the large number of items appointment of representation must be
Chapter 29 Sections 60.20.2, 60.22, and of correspondence we normally receive in writing and must include all of the
60.24. In conjunction with on Federal Register documents required elements specified in this
implementation of the new appeals published for comments, we are not able section.
process, an additional section will be to acknowledge or respond to them The burden associated with this
added to the IOM detailing the individually. We will consider all requirement is the time and effort of the
effectuation time frames for QIC comments concerning the provisions of individual or entity to prepare an
decisions. the interim final rule that we receive by appointment of representation
Comment: One commenter asks the date and time specified in the DATES containing all of the required
whether the changes implemented by section of this preamble, and respond to information of this section. In an effort
BIPA also apply to the Medicare Cost those comments in the preamble to the to reduce some of the burden associated
Program. final rule. with this requirement, we have
Response: The changes to appeal developed a standardized format that
IV. Collection of Information the individual/entity may opt to use.
procedures that are required under
Requirements
section 521 of BIPA, and Title IX, We estimate that approximately
Subtitle D, of the MMA, apply only to Under the Paperwork Reduction Act 27,277 individuals and entities will
claim determinations with respect to (PRA) of 1995, we are required to elect to appoint a representative to act
Part A and Part B of Medicare. However, provide 30-day notice in the Federal on their behalf each year. Because we
section 1876(c)(5) of the Act and Register and solicit public comment have developed the optional
§ 417.600 of the Medicare cost plan when a collection of information standardized form, we estimate that it
regulations establish that cost plan requirement is submitted to the Office of should only take approximately 15
enrollees have a right to an ALJ hearing Management and Budget (OMB) for minutes to supply the required
and a subsequent right to MAC and review and approval. In order to fairly information to comply with the
judicial review. Thus, the new ALJ and evaluate whether an information requirements of this section. Therefore,
MAC regulations will generally apply to collection should be approved by OMB, we estimate the total burden to be 6,819
cost plans. We intend to address this section 3506(c)(2)(A) of the PRA of 1995 hours on an annual basis.
If you wish to view the proposed this is a major rule and in compliance analysis largely repeats the proposed
standardized notices and the supporting with Executive Order 12866, we have rule impact analysis and estimates. This
documentation, you can download a prepared the RIA below. In accordance interim final rule adopts most of the
copy from the CMS Web site at http:// with the provisions of Executive Order proposed provisions and adds changes
www.cms.hhs.gov/regulations/pra/. 12866, this regulation was reviewed by required under the MMA. The impact of
We have submitted a copy of this final the Office of Management and Budget. any changes is discussed below.
rule to OMB for its review of the The RFA requires agencies, in issuing As discussed in detail above in
information collection requirements certain rules, to analyze options for section II of this preamble, this interim
described above. These requirements are regulatory relief of small businesses. For final rule establishes new regulations
not effective until they have been purposes of the RFA, small entities concerning appeals procedures for
approved by OMB. include small businesses, nonprofit Medicare claims determinations,
If you comment on any of these organizations, and government agencies. consistent with section 1869 of the Act
information collection and record Most hospitals and most other providers as amended by section 521 of BIPA 2000
keeping requirements, please mail and suppliers are small entities, either and sections 931, 932, 933, 935, 937,
copies directly to the following: by nonprofit status or by having 939, and 940 of the MMA.
Centers for Medicare & Medicaid revenues of $25 million or less Among the significant changes
Services, Office of Strategic annually. For purposes of the RFA, all required by the BIPA and MMA
Operations and Regulatory Affairs, providers and suppliers affected by this amendments are:
Regulations Development and regulation are considered to be small • Establishing a uniform process for
Issuances Group, Attn: Dawn entities. Individuals and States are not handling Medicare Part A and Part B
Willinghan, CMS–4064–IFC Room included in the definition of a small appeals, including the introduction of a
C5–14–03, 7500 Security Boulevard, entity. new level of appeal for Part A claims.
Baltimore, MD 21244–1850; and In addition, section 1102(b) of the Act • Revising the time frames for filing
Office of Information and Regulatory requires us to prepare a regulatory a request for a Part A and Part B appeal.
Affairs, Office of Management and impact analysis for a rule that may have • Requiring appeals notices issued at
Budget, Room 10235, New Executive a significant impact on the operations of the redetermination, reconsideration,
Office Building, Washington, DC a substantial number of small rural and ALJ levels to include specific
20503, Attn: Christopher Martin, CMS hospitals. This analysis must conform to information.
Desk Officer Comments submitted to the provisions of section 603 of the • Imposing a 60-day time frame for
OMB may also be e-mailed to the RFA. For purposes of section 1102(b) of redeterminations made by fiscal
following address: e-mail: the Act, we define a small rural hospital intermediaries and carriers.
Christopher_Martin@omb.eop.gov or as a hospital that is located outside of • Requiring the establishment of a
faxed to OMB at (202) 395–6974. a Metropolitan Statistical Area and has new appeals entity, the qualified
fewer than 100 beds. independent contractor (QIC), to
V. Regulatory Impact Analysis We are not preparing analyses for conduct ‘‘reconsiderations’’ of
[If you choose to comment on issues in either the RFA or section 1102(b) of the contractors’ initial determinations
this section, please include the caption Act. As discussed in further detail including redeterminations, and
‘‘Regulatory Impact Analysis’’ at the below, we are uncertain how many allowing appellants to escalate the case
beginning of your comments.] small entities will be affected by this to an ALJ hearing, if reconsiderations
A. Introduction rule. The purpose of this interim final are not completed within 60 days.
rule is to improve the efficiency of the • Requiring providers and suppliers
We have examined the impact of this claims review and appeals process, and to present all evidence for an appeal no
interim final rule with comment under to the extent that these changes shorten later than the QIC reconsideration level,
the criteria of Executive Order 12866 the appeals process, these regulations unless the appellant demonstrates good
(September 1993, Regulatory Planning should reduce the associated burden on cause as to why that evidence was not
and Review), section 1102(b) of the small entities. Similarly, the impact on provided previously.
Social Security Act, the Regulatory small rural hospitals is likely to be • Establishing uniform amount in
Flexibility Act (RFA) (Pub. L. 96–354), negligible or slightly positive. Therefore, controversy thresholds for ALJ hearings
the Unfunded Mandates Reform Act of we are certifying that the interim final and judicial review that will be adjusted
1995 (Pub. L. 104–4), and Executive rule will not have a significant impact annually by the medical care
Order 13132. Executive Order 12866 on a substantial number of small rural component of the Consumer Price Index
directs agencies to assess all costs and hospitals. for all urban consumers.
benefits of available regulatory Section 202 of the Unfunded • Establishing a 90-day time limit for
alternatives and, if regulation is Mandates Reform Act of 1995 also conducting ALJ and DAB appeals and
necessary, to select regulatory requires that agencies assess anticipated allowing appellants to escalate a case to
approaches that maximize net benefits costs and benefits before issuing any the next level of appeal if ALJs or the
(including potential economic, rule that would include any Federal MAC do not meet their deadlines.
environmental, public health and safety mandate that may result in expenditure • Establishing a requirement for ‘‘de
effects, distributive impacts, and in any one year by State, local, or tribal novo’’ review when the MAC reviews an
equity). A regulatory impact analysis governments, in the aggregate, or by the ALJ decision made after a hearing.
(RIA) must be prepared for major rules private sector, of $100 million. This rule This interim final rule does not
with economically significant effects will not have this effect on State, local, establish new rules, or alter existing
($100 million or more annually). or tribal governments, or on the private rules, with respect to the substantive
Although we do not expect this interim sector. standards for determining whether a
final rule to have a substantial financial Medicare claim is payable. Claims that
impact on beneficiaries, providers, or B. Scope of the Changes enter the administrative appeals process
suppliers, we anticipate that Federal We did not receive any comments represent an extremely small portion of
costs to implement this rule may exceed regarding the impact analysis provided the total number of claims that Medicare
the $100 million threshold. Therefore, in the proposed rule. Therefore, this processes each year. In FY 2003, for
example, Medicare contractors administrative perspective, however, to appellants will extend to all levels of
processed 1.05 billion claims; of these the introduction of better notice the Medicare administrative appeals
only about 5.7 million were appealed. requirements, new independent review process.
Thus, the number of Medicare claims entities, and mandatory physician In addition to the new time frames for
that enter the administrative appeals review of medical necessity issues making decisions, the interim final rule
system represents only about 0.5 should increase appellants’ confidence will allow appellants the option of
percent of the total number of claims in the Medicare appeals process. Thus, escalating an appeal to an ALJ if the QIC
filed with Medicare. Moreover, the 5.7 we believe that the implementation of fails to make a decision timely.
million figure represents the total requirements that ensure appellants of Escalation is also available at the
number of claims appealed, not the both the fairness of the decision-making appellants’ option from the ALJ level to
number of appellants. From our process and the accuracy and the MAC if an ALJ fails to issue a
experience, the vast majority of appeal consistency of the decisions reached can hearing decision on a QIC decision
requests are filed by a relatively limited eventually lead to measurable within 90 days of a request for an appeal
group of appellants. Therefore, the reductions in the need for the elevation of a QIC reconsideration (or similarly
number of providers, physicians and of appeals to the slower, more costly from the MAC to Federal court). Clearly,
other suppliers, as well as beneficiaries levels of the appeals system (for these options will be a positive change
who enter the appeals process is far example, ALJ hearings and MAC or for appellants, who have greater control
fewer than the 5.7 million claims that Federal court review). of their appeals and a viable recourse
are appealed. Given the small In the short term, it will not be during the appeals process if, during
percentage of claims and appellants surprising if there is an initial spike in one stage of the appeals process, their
involved in the administrative appeals requests for reconsiderations by QICs appeal is not decided timely.
process, we believe that this interim given the reduced time frame for these Overall, these changes will reduce the
final rule will have little or no effect on second level appeals, the availability of amount of time that it takes for a claim
most Medicare providers and suppliers. new appeal entities, and the to make its way through the
The changes set forth are even less introduction of physician review panels. administrative appeals process. In the
likely to affect beneficiaries, whose Similarly, it is foreseeable that the past, it generally took 3 to 5 years for
appeals are estimated to constitute no number of requests for ALJ hearings or appealed claims to reach resolution at
more than 3 to 5 percent of total MAC reviews may increase given the the MAC level. We anticipate that a
appeals. As discussed in detail below, establishment of relatively short claim will now take about 18 months to
however, for those providers, suppliers, decision-making time frames for these make its way through the entire
and beneficiaries who do file appeals of entities. administrative appeals process.
Medicare claim determinations, the Most of the major changes set forth in
2. Transfer of ALJ Function
effects of this interim final rule should this interim final rule (for example, as
be positive. the new time frames for appeals After the proposed rule was published
decisions) are mandated by the statutes in the Federal Register, a significant
C. Anticipated Effects on Providers, and thus, are not subject to the development occurred involving the
Physicians and Other Suppliers, and Secretary’s discretion. To the extent that transfer of the ALJ function. Section 931
Beneficiaries we have exercised discretion (for of the MMA requires the responsibility
We expect that the changes set forth example, in establishing procedures for for the functions of ALJs for hearing
in this interim final rule will produce conducting appeals), we have attempted appeals under title XVIII of the Act (and
substantial improvements in the to balance the need for accurate, related provisions on title XI of the Act)
consistency and efficiency of the claims expeditious appeals decisions with our to be transferred from the Commissioner
appeal process. For the most part, the responsibilities to implement these of SSA to the Secretary of the DHHS.
anticipated positive impact of the changes in a cost-effective manner. For the most part, organizational
interim final rule on providers, A discussion of the anticipated responsibility for this function should
physicians and other suppliers will be impacts of key provisions follows. not have a material impact on
similar to the anticipated effects on appellants. To the extent that there is an
1. Decision Making Time Frames and
beneficiary appellants, although again impact, it should be positive since ALJs
Escalation
the impact on the provider and supplier will now be able to focus solely on
communities would be more Perhaps the most significant changes Medicare issues instead of both SSA
pronounced due to the much greater set forth are the reductions in and Medicare issues. Note that although
volume of provider and supplier mandatory time frames for issuing this rule reflects the transfer of the ALJ
appeals. We include a brief discussion decisions on appeals. In general, this function from SSA to DHHS, the rule
of the anticipated impact of major means faster receipt of decisions and, does not implement this change.
changes below. for favorable decisions, faster payment.
In general, we do not anticipate that For example, under the interim final 3. Review of Claims by a Panel of Health
the introduction of these new appeals rule, the time frame for a Care Professionals
procedures will have a substantive reconsideration (formally called a Another important change
impact on the final results of claims carrier hearing) has been reduced from implemented through this interim final
appeals; that is, there is no reason to 120 days to 60 days. If the decision is rule is the requirement that a panel of
believe that the use of QICs, or other favorable (that is, the appeal results in physicians or other qualified health care
changes required by BIPA and the a reversal of an initial determination professionals conduct QIC
MMA, will result in any change in the that a claim could not be paid), reconsiderations when the initial
extent to which appeals eventually effectuation of the favorable decision determination being appealed involves a
result in favorable decisions for will be initiated as soon as a decision is medical necessity issue. BIPA mandates
providers, suppliers, or beneficiaries. reached. Given the reduced decision- that when an initial determination
Thus, we do not anticipate that these making time frames, payments will be involves a finding on whether an item
changes will have a quantifiable impact received substantially sooner than or service is reasonable and necessary
on Medicare claims payments. From an under the current system. These benefits for the diagnosis or treatment of an
illness or injury, a QIC’s reconsideration beneficiaries. If the information is not minimum amount in controversy (AIC)
must be based on clinical experience submitted to the QIC, but instead is for appeals below the ALJ level, and
and medical, technical, and scientific presented later in the appeals process, lowers the AIC from $500 to $100 (plus
evidence to the extent applicable. MMA the evidence will not be considered an annual increase based on the CPI) for
further provides that if a claim is for unless the appellant demonstrates good Part B claim determinations that are
treatment, items, or services furnished cause why the information was not appealed to an ALJ. The AIC for Part A
by a physician, the reviewing submitted to the QIC. We believe the claims remains at $100 (plus an annual
professional must also be a physician. end result of these provisions will be increase based on the CPI).
We believe that this change will give that appeals are resolved at the earliest Thus, although we anticipate that the
appellants more confidence that a fair possible administrative level, which is a impact of these changes will be positive
decision has been reached, potentially positive result for all appellants. for the provider, physician, supplier,
reducing their need to pursue and beneficiary communities,
5. Appeal Rights implementing these procedures has
subsequent appeals. Thus, the
introduction of routine involvement of In the past, providers could appeal in generated substantial costs to the
physicians and other health care their own right only when the item or Medicare program. CMS’ FY 2004
professionals into the appeals process service was not covered because it operating plan included $10 million for
should produce administrative finality constituted custodial care, was not QIC implementation start-up costs and
at an earlier level of the process and reasonable and necessary, or in certain $6 million for the Medicare Appeals
benefit both appellants and the other limited situations when the System (MAS), which will be used to
Medicare program. determinations involved a finding with track appeals electronically. In addition,
respect to the limitation of liability CMS plans to spend $6 million from the
4. Decision Letters and Documentation provision under section 1879 of the Act. FY 2004–2005 Medicare Modernization
Requirements In order to appeal in other Act appropriation for MAS. Higher
An important aspect of the proposed circumstances, providers must have spending is likely in FY 2006, as more
rule concerns the content of the notices acted as representatives of beneficiaries. of the appeals workload is transferred
sent to parties when a contractor In the interim final rule, we permit over to the QICs, not to mention the
upholds its initial determination. These participating providers to appeal to the additional costs to implement necessary
requirements include a written same extent as beneficiaries, or changes at the ALJ and MAC appeals
summary of the rationale for the suppliers who take assignment. Also, levels.
redetermination decision and the consistent with section 1870(h) of the
identification of any specific missing Act, as amended by section 939(a) of the E. Federalism
documentation that contributed to the MMA, we permit a provider or supplier Executive Order 13132 establishes
decision to deny the claim in question. to appeal a claim denial where that certain requirements that an agency
Since publication of the proposed rule, provider or supplier has rendered items must meet when it promulgates a
section 933(c) of the MMA amended or services to a beneficiary who proposed rule (and subsequent interim
sections 1869(a), 1869(c), and 1869(d) of subsequently dies and there is no other final and final rules) that imposes
the Act and established statutory notice party available to appeal the denial. We substantial direct requirement costs on
requirements that are very similar to believe these changes will have several State and local governments, preempts
those we proposed. Those statutory positive impacts on appellants. For State law, or otherwise has Federalism
requirements have been incorporated example, they should eliminate any implications. This rule does not have a
into this interim final rule. We believe confusion providers may have in substantial effect on State or local
that these policies will provide determining whether they have standing governments.
appellants with the information they to appeal an initial determination, and
need to build their case early in the they remove the burden for the provider VI. Waiver of Proposed Rulemaking
appeals process. We believe the impact of obtaining an appointment of We ordinarily publish a notice of
of these requirements will be to produce representative from a beneficiary. Thus, proposed rulemaking in the Federal
more accurate decisions at the QIC this interim final rule expands both Register to provide a period for public
reconsideration level, based on all the provider and supplier appeal rights. comment before the provisions of a
appropriate medical information, rather document take effect. However, section
D. Effects on the Medicare Program 553(b) of the Administrative Procedure
than appeals often needing to be raised
to an ALJ before needed documentation In the final analysis, the primary Act provides for waiver of this
is produced. This will give financial impact of implementing these procedure, if an agency for good cause
beneficiaries, providers, and suppliers changes falls upon the government finds that the notice and comment
more detail about why their claim was agencies responsible for conducting procedure is impracticable,
denied and allow them to fashion their appeals; that is, CMS and DHHS. unnecessary, or contrary to the public
appeal accordingly. Deciding appeals within shorter interest and incorporates a statement of
In addition, section 1869(b)(3) of the timeframes and establishing new the finding and the reasons for it into
Act, as amended by section 933(a)(1) of independent review entities to conduct the notice issued.
the MMA, now specifies that providers these appeals entail significant new Subsequent to the publication of the
and suppliers may not introduce costs, as does the development of an proposed rule on November 15, 2002,
evidence in any appeal that was not appeals-specific data system to track the the Medicare Prescription Drug,
presented at the reconsideration results of these appeals. By establishing Improvement, and Modernization Act of
conducted by the QIC. As a matter of shorter decisionmaking timeframes and 2003 (P.L. 108–173) was enacted on
policy, we also have extended this improved procedures in the Medicare December 8, 2003. Title IX of the MMA
requirement to beneficiaries represented appeals system, BIPA and the MMA includes a number of essentially
by providers and suppliers. This will created additional opportunities and nondiscretionary provisions that
ensure that providers and suppliers do incentives for providers, suppliers, and directly affect the Medicare claims
not attempt to circumvent this evidence beneficiaries to request appeals. Also, appeals process. As discussed below,
requirement by offering to represent the statute no longer provides for any we find good cause to incorporate these
requirements into this interim final rule, Thus, we believe there is good cause Medicare Part B under the jurisdiction
rather than to issue a notice of proposed to include the appeals provisions of the of CMS.
rulemaking to address statutory MMA along with the appeals provisions
changes. Due to the close relationship of BIPA (which were previously PART 405—FEDERAL HEALTH
between the provisions of the rule that addressed in the proposed rule) in this INSURANCE FOR THE AGED AND
address new MMA requirements and interim final rule. Publishing these DISABLED
the policies that were included in the provisions in an interim final rule will
■ 3. The authority citation for part 405
November 15, 2002 proposed rule, we give the public ample opportunity to
continues to read as follows:
are soliciting comments on all submit comments. Note that given the
provisions contained in this interim close linkage between many of the Authority: Secs. 205(a) 1102, 1861,
final rule and, as required under section proposed requirements and those set 1862(a), 1869, 1871, 1874, 1881, and 1886(k)
of the Social Security Act (42 U.S.C. 405(a)
902 of the MMA, will publish a forth under the MMA, we believe it is
1302, 1395x, 1395y(a), 1395ff, 1395hh,
subsequent final rule addressing any appropriate to consider comments on all 1395kk, 1395rr and 1395ww(k)), and Sec. 353
comments received in response to this aspects of this rule, including those that of the Public Health Service Act (42 U.S.C.
interim final rule not later than 3 years have previously been subject to notice 263a).
after the publication date of this rule. and comment. Publication of this ■ 4. Add a new subpart I, § 405.900
The BIPA section 521 provisions have interim final rule will serve the public through § 405.1140 to read as follows:
previously been subject to comment in interest by ensuring that Medicare
the proposed rule of November 15, beneficiaries, providers, and suppliers Subpart I—Determinations,
2002. The comments received in have access to the improved Medicare Redeterminations, Reconsiderations,
response to that proposed rule are appeals system as expeditiously as and Appeals Under Original Medicare
described in this interim final rule, and possible, consistent with congressional (Parts A and B)
the policies included in this interim intent.
final rule reflect those comments. Sec.
List of Subjects 405.900 Basis and scope.
As a rule, the MMA appeals 405.902 Definitions.
provisions are straightforward and self- 42 CFR Part 401 405.904 Medicare initial determinations,
explanatory and do not involve Claims, Freedom of information, redeterminations and appeals: General
significant agency discretion in how Health facilities, Medicare, Privacy. description.
they should be implemented. For 405.906. Parties to the initial
example, section 940 of the MMA 42 CFR Part 405 determinations, redeterminations,
establishes new decisionmaking reconsiderations, hearings and reviews.
Administrative practice and 405.908 Medicaid State agencies.
timeframes for both redeterminations procedure, Health facilities, Health 405.910 Appointed representatives.
and reconsiderations, and it would be professions, Kidney diseases, Medical 405.912 Assignment of appeal rights.
unnecessary and contrary to the public devices, Medicare, Reporting and
interest not to implement these recordkeeping requirements, Rural Initial Determinations
deadlines as soon as possible. Similarly, areas, X-rays. 405.920 Initial determinations.
section 939 of the MMA establishes new 405.921 Notice of initial determination.
■ For the reasons set forth in the 405.922 Time frame for processing initial
appeal rights for providers when a
preamble, the Centers for Medicare & determinations.
beneficiary dies and there is no other
Medicaid Services amends 42 CFR 405.924 Actions that are initial
party available to appeal a determinations.
chapter IV as set forth below:
determination; not implementing this 405.926 Actions that are not initial
provision as soon as practicable would PART 401—GENERAL determinations.
again be contrary to the public interest. ADMINISTRATIVE REQUIREMENTS 405.927 Initial determinations subject to the
Not only would proposed rulemaking reopenings process.
be unnecessary and contrary to the Subpart B—Confidentiality and 405.928 Effect of the initial determination.
public interest, it would also be Disclosure Redeterminations
impracticable. The BIPA provisions that ■ 1. The authority citation for part 401 405.940 Right to a redetermination.
were set forth in our proposed rule are continues to read as follows: 405.942 Time frame for filing a request for
in many cases inextricably linked with a redetermination.
Authority: Secs. 1102 and 1871 of the
the subsequent MMA provisions, and it Social Security Act (42 U.S.C. 1302 and 405.944 Place and method of filing a
would be virtually impossible to finalize 1395hh). Subpart F is also issued under the request for a redetermination.
the proposed rule without incorporating authority of the Federal Claims Collection 405.946 Evidence to be submitted with the
the MMA provisions. Moreover, the Act (31 U.S.C. 3711). redetermination request.
MMA legislation mandated provisions 405.948 Conduct of a redetermination.
■ 2. Amend § 401.108 by revising 405.950 Time frame for making a
that were nearly identical to those set paragraph (c) to read as follows: redetermination.
forth in the proposed rule, such as the 405.952 Withdrawal or dismissal of a
requirements concerning the full and § 401.108 CMS rulings.
request for a redetermination.
early presentation of evidence under * * * * * 405.954 Redetermination.
section 933(a) of the MMA and the new (c) CMS Rulings are published under 405.956 Notice of a redetermination.
notice requirements for Medicare the authority of the Administrator, CMS. 405.958 Effect of a redetermination.
appeals under 933(c) of the MMA. Even They are binding on all CMS Reconsideration
absent the MMA provisions, the components, on all HHS components
requirements set forth in this interim that adjudicate matters under the 405.960 Right to a reconsideration.
405.962 Time frame for filing a request for
final rule would have constituted logical jurisdiction of CMS, and on the Social a reconsideration.
outgrowths of the proposed rule, and it Security Administration to the extent 405.964 Place and method of filing a
would be both impracticable and that components of the Social Security request for a reconsideration.
illogical not to incorporate these Administration adjudicate matters 405.966 Evidence to be submitted with the
requirements into this regulation. pertaining to Medicare Part A and reconsideration request.
405.968 Conduct of a reconsideration. 405.1062 Applicability of local coverage (other than a contract under section
405.970 Time frame for making a determinations and other policies not 1852 of the Act) to administer
reconsideration. binding on the ALJ and MAC. provisions of titles XVIII or XI of the
405.972 Withdrawal or dismissal of a 405.1063 Applicability of CMS rulings. Act.
request for a reconsideration. 405.1064 ALJ decisions involving statistical
405.974 Reconsideration. samples. § 405.902 Definitions.
405.976 Notice of a reconsideration. For the purposes of this subpart, the
Medicare Appeals Council Review
405.978 Effect of a reconsideration. term—
405.1100 Medicare Appeals Council
Reopenings review: General. ALJ means an Administrative Law
405.980 Reopenings of initial 405.1102 Request for MAC review when an Judge of the Department of Health and
determinations, redeterminations, and ALJ issues decision or dismissal. Human Services.
reconsiderations, hearings and reviews. 405.1104 Request for MAC review when an Appellant means the beneficiary,
405.982 Notice of a revised determination ALJ does not issue a decision timely. assignee or other person or entity that
or decision. 405.1106 Where a request for review or has filed and pursued an appeal
405.984 Effect of a revised determination or escalation may be filed. concerning a particular initial
decision. 405.1108 MAC actions when request for determination. Designation as an
405.986 Good cause for reopening. review or escalation is filed. appellant does not in itself convey
405.1110 MAC reviews on its own motion.
Expedited Access to Judicial Review standing to appeal the determination in
405.1112 Content of request for review.
405.1114 Dismissal of request for review. question.
405.990 Expedited access to judicial
405.1116 Effect of dismissal of request for Appointed representative means an
review.
MAC review or request for hearing. individual appointed by a party to
ALJ Hearings 405.1118 Obtaining evidence from the represent the party in a Medicare claim
405.1000 Hearing before an ALJ: General MAC. or claim appeal.
rule. 405.1120 Filling briefs with the MAC. Assignee means:
405.1002 Right to an ALJ hearing. 405.1122 What evidence may be submitted (1) A supplier that furnishes items or
405.1004 Right to ALJ review of QIC notice to the MAC. services to a beneficiary and has
of dismissal. 405.1124 Oral argument. accepted a valid assignment of a claim
405.1006 Amount in controversy required 405.1126 Case remanded by the MAC. or
to request an ALJ hearing and judicial 405.1128 Action of the MAC. (2) A provider or supplier that
review. 405.1130 Effect of the MAC’s decision. furnishes items or services to a
405.1008 Parties to an ALJ hearing. 405.1132 Request for escalation to Federal
beneficiary, who is not already a party,
405.1010 When CMS or its contractors may district court.
participate in an ALJ hearing. 405.1134 Extension of time to file action in
and has accepted a valid assignment of
405.1012 When CMS or its contractors may Federal district court. the right to appeal a claim executed by
be a party to a hearing. 405.1136 Judicial review. the beneficiary.
405.1014 Request for an ALJ hearing. 405.1138 Case remanded by a Federal Assignment of a claim means the
405.1016 Time frames for deciding an district court. transfer by a beneficiary of his or her
appeal before an ALJ. 405.1140 MAC review of ALJ decision in a claim for payment to the supplier in
405.1018 Submitting evidence before the case remanded by a Federal district return for the latter’s promise not to
ALJ hearing. court. charge more for his or her services than
405.1020 Time and place for a hearing what the carrier finds to be the
before an ALJ. Subpart I—Determinations, Medicare-approved amount, as provided
405.1022 Notice of a hearing before an ALJ. Redeterminations, Reconsiderations, in § 424.55 and § 424.56 of this chapter.
405.1024 Objections to the issues. and Appeals Under Original Medicare Assignment of appeal rights means
405.1026 Disqualification of the ALJ. (Part A and Part B)
405.1028 Prehearing case review of the transfer by a beneficiary of his or her
evidence submitted to the ALJ by the § 405.900 Basis and scope. right to appeal under this subpart to a
appellant. provider or supplier who is not already
(a) Statutory basis. This subpart is a party, as provided in section
405.1030 ALJ hearing procedures.
405.1032 Issues before an ALJ.
based on the provisions of sections 1869 1869(b)(1)(C) of the Act.
405.1034 When an ALJ may remand a case (a) through (e) and (g) of the Act. Assignor means a beneficiary whose
to the QIC. (b) Scope. This subpart establishes the provider of services or supplier has
405.1036 Description of an ALJ hearing requirements for appeals of initial taken assignment of a claim or an appeal
process. determinations for benefits under Part A of a claim.
405.1037 Discovery. or Part B of Medicare, including the Authorized representative means an
405.1038 Deciding a case without a hearing following: individual authorized under State or
before an ALJ. (1) The initial determination of
405.1040 Prehearing and posthearing
other applicable law to act on behalf of
whether an individual is entitled to a beneficiary or other party involved in
conferences.
benefits under Part A or Part B. the appeal. The authorized
405.1042 The administrative record.
405.1044 Consolidated hearing before an (Regulations governing reconsiderations representative will have all of the rights
ALJ. of these initial determinations are at 20 and responsibilities of a beneficiary or
405.1046 Notice of an ALJ decision. CFR, part 404, subpart J). party, as applicable, throughout the
405.1048 The effect of an ALJ’s decision. (2) The initial determination of the appeals process.
405.1050 Removal of a hearing request from amount of benefits available to an Beneficiary means an individual who
an ALJ to the MAC. individual under Part A or Part B. is enrolled to receive benefits under
405.1052 Dismissal of a request for a (3) Any other initial determination Medicare Part A or Part B.
hearing before an ALJ. relating to a claim for benefits under Carrier means an organization that
405.1054 Effect of dismissal of a request for Part A or Part B, including an initial has entered into a contract with the
a hearing before an ALJ.
determination made by a quality Secretary in accordance to section 1842
Applicability of Medicare Coverage Policies improvement organization under of the Act and is authorized to make
405.1060 Applicability of nation coverage section 1154(a)(2) of the Act or by an determinations for Part B of title XVIII
determinations (NCDs). entity under contract with the Secretary of the Act.
Clean claim means a claim that has no including expedited determinations as request, and the Qualified Independent
defect or impropriety (including any described in § 405.1200 through Contractor (QIC) will perform, a
lack of required substantiating § 405.1208. reconsideration of the claim if the
documentation) or particular Reliable evidence means evidence requirements for obtaining a
circumstance requiring special that is relevant, credible, and material. reconsideration are met. Following the
treatment that prevents timely payment Remand means to vacate a lower level reconsideration, the beneficiary may
from being made on the claim under appeal decision, or a portion of the request, and the ALJ will conduct a
title XVIII within the time periods decision, and return the case, or a hearing if the amount remaining in
specified in sections 1816(c) and portion of the case, to that level for a controversy and other requirements for
1842(c) of the Act. new decision. an ALJ hearing are met. If the
Family member means for purposes of Similar fault means to obtain, retain, beneficiary is dissatisfied with the
the QIC reconsideration panel under convert, seek, or receive Medicare funds decision of the ALJ, he or she may
§ 405.968 the following persons as they to which a person knows or should request the MAC to review the case. If
relate to the physician or healthcare reasonably be expected to know that he the MAC reviews the case and issues a
provider. or she or another for whose benefit decision, and the beneficiary is
(1) The spouse (other than a spouse Medicare funds are obtained, retained, dissatisfied with the decision, the
who is legally separated from the converted, sought, or received is not beneficiary may file suit in Federal
physician or health care professional legally entitled. This includes, but is not district court if the amount remaining in
under a decree of divorce or separate limited to, a failure to demonstrate that controversy and the other requirements
maintenance); he or she filed a proper claim as defined for judicial review are met.
(2) Children (including stepchildren in part 411 of this chapter. (b) Non-beneficiary appellants. In
and legally adopted children); Supplier means, unless the context general, the procedures described in
(3) Grandchildren; otherwise requires, a physician or other paragraph (a) of this section are also
(4) Parents; and practitioner, a facility, or other entity available to parties other than
(5) Grandparents. (other than a provider of services) that beneficiaries either directly or through a
Fiscal Intermediary means an furnishes items or services under representative acting on a party’s behalf,
organization that has entered into a Medicare. consistent with the requirements of this
contract with CMS in accordance with Vacate means to set aside a previous subpart I. A provider generally has the
section 1816 of the Act and is action. right to judicial review only as provided
authorized to make determinations and under section 1879(d) of the Act; that is,
payments for Part A of title XVIII of the § 405.904 Medicare initial determinations,
redeterminations and appeals: General when a determination involves a finding
Act, and Part B provider services as that services are not covered because—
description.
specified in § 421.5(c) of this chapter. (1) They were custodial care (see
MAC stands for the Medicare Appeals (a) General overview. (1) Entitlement
appeals. The SSA makes an initial § 411.15(g) of this chapter); they were
Council within the Departmental not reasonable and necessary (see
Appeals Board of the U.S. Department determination on an application for
Medicare benefits and/or entitlement of § 411.15(k) of this chapter); they did not
of Health and Human Services. qualify as covered home health services
Party means an individual or entity an individual to receive Medicare
benefits. A beneficiary who is because the beneficiary was not
listed in § 405.906 that has standing to
dissatisfied with the initial confined to the home or did not need
appeal an initial determination and/or a
determination may request, and SSA skilled nursing care on an intermittent
subsequent administrative appeal
will perform, a reconsideration in basis (see § 409.42(a) and (c)(1) of this
determination.
accordance with 20 CFR part 404, chapter); or they were hospice services
Provider means a hospital, critical
subpart J if the requirements for provided to a non-terminally ill
access hospital, skilled nursing facility,
obtaining a reconsideration are met. individual (see § 418.22 of this chapter);
comprehensive outpatient rehabilitation
Following the reconsideration, the and
facility, home health agency, or hospice (2) Either the provider or the
that has in effect an agreement to beneficiary may request a hearing before
beneficiary, or both, knew or could
participate in Medicare, or clinic, an Administrative Law Judge (ALJ)
reasonably be expected to know that
rehabilitation agency, or public health under this subpart (42 CFR part 405,
those services were not covered under
agency that has in effect a similar subpart I). If the beneficiary obtains a
Medicare.
agreement, but only to furnish hearing before an ALJ and is dissatisfied
outpatient physical therapy or speech with the decision of the ALJ, he or she § 405.906 Parties to the initial
pathology services, or a community may request the Medicare Appeals determinations, redeterminations,
mental health center that has in effect a Council (MAC) to review the case. reconsiderations, hearings and reviews.
similar agreement but only to furnish Following the action of the MAC, the (a) Parties to the initial determination.
partial hospitalization services. beneficiary may be entitled to file suit The parties to the initial determination
Qualified Independent Contractor in Federal district court. are the following individuals and
(QIC) means an entity which contracts (2) Claim appeals. The Medicare entities:
with the Secretary in accordance with contractor makes an initial (1) A beneficiary who files a claim for
section 1869 of the Act to perform determination when a claim for payment under Medicare Part A or Part
reconsiderations under § 405.960 Medicare benefits under Part A or Part B or has had a claim for payment filed
through § 405.978. B is submitted. A beneficiary who is on his or her behalf, or in the case of
Quality Improvement Organization dissatisfied with the initial a deceased beneficiary, when there is no
(QIO) means an entity that contracts determination may request that the estate, any person obligated to make or
with the Secretary in accordance with contractor perform a redetermination of entitled to receive payment in
sections 1152 and 1153 of the Act and the claim if the requirements for accordance with part 424, subpart E of
42 CFR subchapter F, to perform the obtaining a redetermination are met. this chapter. Payment by a third party
functions described in section 1154 of Following the contractor’s payer does not entitle that entity to
the Act and 42 CFR subchapter F, redetermination, the beneficiary may party status.
(2) A supplier who has accepted status at the QIC, ALJ, MAC, and (2) To initiate an appeal within the 1-
assignment for items or services judicial review levels. year time frame, the representative must
furnished to a beneficiary that are at file a copy of the AOR form, or other
issue in the claim. § 405.910 Appointed representatives. conforming written instrument, with the
(3) A provider of services who files a (a) Scope of representation. An appeal request. Unless revoked, the
claim for items or services furnished to appointed representative may act on representation is valid for the duration
a beneficiary. behalf of an individual or entity in of an individual’s appeal of an initial
(b) Parties to the redetermination, exercising his or her right to an initial determination.
reconsideration, hearing and MAC. The determination or appeal. Appointed (3) For an initial determination of a
parties to the redetermination, representatives do not have party status Medicare Secondary Payer recovery
reconsideration, hearing, and MAC and may take action only on behalf of claim, an appointment signed in
review are— the individual or entity that they connection with the party’s efforts to
(1) The parties to the initial represent. make a claim for third party payment is
determination in accordance with (b) Persons not qualified. A party may valid from the date that appointment is
paragraph (a) of this section, except not name as an appointed signed for the duration of any
under paragraph (a)(1) of this section representative, an individual who is subsequent appeal, unless the
where a beneficiary has assigned appeal disqualified, suspended, or otherwise appointment is specifically revoked.
rights under § 405.912; prohibited by law from acting as a (f) Appointed representative fees. (1)
(2) A State agency in accordance with representative in any proceedings before General rule. An appointed
§ 405.908; DHHS, or in entitlement appeals, before representative for a beneficiary who
(3) A provider or supplier that has SSA. wishes to charge a fee for services
accepted an assignment of appeal rights (c) Completing a valid appointment. rendered in connection with an appeal
from the beneficiary according to For purposes of this subpart, an before the Secretary must obtain
§ 405.912; appointment of representation must: approval of the fee from the Secretary.
(4) A non-participating physician not (1) Be in writing and signed and dated Services rendered below the ALJ level
billing on an assigned basis who, in by both the party and individual are not considered proceedings before
accordance with section 1842(l) of the agreeing to be the representative; the Secretary.
Act, may be liable to refund monies (2) Provide a statement appointing the (2) No fees or costs against trust
collected for services furnished to the representative to act on behalf of the funds. No award of attorney or any other
beneficiary because those services were party, and in the case of a beneficiary, representative’s fees or any costs in
denied on the basis of section 1862(a)(1) authorizing the adjudicator to release connection with an appeal may be made
of the Act; and identifiable health information to the against the Medicare trust funds.
(5) A non-participating supplier not appointed representative. (3) Special rules for providers and
billing on an assigned basis who, in (3) Include a written explanation of suppliers. A provider or supplier that
accordance with sections 1834(a)(18) the purpose and scope of the furnished the items or services to a
and 1834(j)(4) of the Act, may be liable representation; beneficiary that are the subject of the
to refund monies collected for items (4) Contain both the party’s and appeal may represent that beneficiary in
furnished to the beneficiary. appointed representative’s name, phone an appeal under this subpart, but the
(c) Appeals by providers and number, and address; provider or supplier may not charge the
suppliers when there is no other party (5) Identify the beneficiary’s Medicare beneficiary any fee associated with the
available. If a provider or supplier is not health insurance claim number; representation. If a provider or supplier
already a party to the proceeding in (6) Include the appointed furnishes services or items to a
accordance with paragraphs (a) and (b) representative’s professional status or beneficiary, the provider or supplier
of this section, a provider of services or relationship to the party; may not represent the beneficiary on the
supplier may appeal an initial (7) Be filed with the entity processing issues described in section 1879(a)(2) of
determination relating to services it the party’s initial determination or the Act, unless the provider or supplier
rendered to a beneficiary who appeal. waives the right to payment from the
subsequently dies if there is no other (d) Curing a defective appointment of beneficiary for the services or items
party available to appeal the representative. involved in the appeal.
determination. (1) If any one of the seven elements (4) Special rules for purposes of third
named in paragraph (c) of this section party payment. The Secretary does not
§ 405.908 Medicaid State agencies. is missing from the appointment, the review fee arrangements made by a
When a beneficiary is enrolled to adjudicator should contact the party and beneficiary for purposes of making a
receive benefits under both Medicare provide a description of the missing claim for third party payment (as
and Medicaid, the Medicaid State documentation or information. defined in 42 CFR 411.21) even though
agency may file a request for an appeal (2) Unless the defect is cured, the the representation may ultimately
with respect to a claim for items or prospective appointed representative include representation for a Medicare
services furnished to a dually eligible lacks the authority to act on behalf of Secondary Payer recovery claim.
beneficiary only for services for which the party, and is not entitled to obtain (5) Reasonableness of representative
the Medicaid State agency has made or receive any information related to the fees. In determining the reasonableness
payment, or for which it may be liable. appeal, including the appeal decision. of a representative’s fee, the Secretary
A Medicaid State agency is considered (e) Duration of appointment. (1) will not apply the test specified in
a party only when it files a timely Unless revoked, an appointment is sections 206(a)(2) and (a)(3) of the Act.
redetermination request with respect to considered valid for 1 year from the date (g) Responsibilities of an appointed
a claim for items or services furnished that the Appointment of Representative representative. (1) An appointed
to a beneficiary in accordance with 42 (AOR) form or other conforming written representative has an affirmative duty
CFR parts 940 through 958. If a State instrument contains the signatures of to—
agency files a request for both the party and the appointed (i) Inform the party of the scope and
redetermination, it may retain party representative. responsibilities of the representation;
(ii) Inform the party of the status of (j) Effect of notice or request to an provider or supplier may not be an
the appeal and the results of actions appointed representative. A notice or assignee. A provider or supplier that
taken on behalf of the party, including, request sent to the appointed furnishes an item or service to a
but not limited to, notification of appeal representative has the same force and beneficiary may not seek assignment for
determinations, decisions, and further effect as if was sent to the party. that item or service when considered a
appeal rights; (k) Information available to the party to the initial determination as
(iii) Disclose to a beneficiary any appointed representative. An appointed defined in § 405.906.
financial risk and liability of a non- representative may obtain any and all (c) Requirements for a valid
assigned claim that the beneficiary may appeals information applicable to the assignment of appeal right. The
have; claim at issue that is available to the assignment of appeal rights must—
(iv) Not act contrary to the interest of party. (1) Be executed using a CMS standard
the party; and (l) Delegation of appointment by form;
(v) Comply with all laws and CMS appointed representative. An appointed (2) Be in writing and signed by both
regulations, CMS Rulings, and representative may not designate the beneficiary assigning his or her
instructions. another individual to act as the appeal rights and by the assignee;
(2) An appeal request filed by a appointed representative of the party (3) Indicate the item or service for
provider or supplier described in unless— which the assignment of appeal rights is
paragraph (f)(3) of this section must also (1) The appointed representative authorized;
include a statement signed by the provides written notice to the party of (4) Contain a waiver of the assignee’s
provider or supplier stating that no the appointed representative’s intent to right to collect payment from the
financial liability is imposed on the delegate to another individual. The assignor for the specific item or service
beneficiary in connection with that notice must include: that are the subject of the appeal except
representation. If applicable, the appeal (i) The name of the designee; and as set forth in paragraph (d)(2) of this
request must also include a signed (ii) The designee’s acceptance to be section; and
statement that the provider or supplier obligated and comply with the (5) Be submitted at the same time the
waives the right to payment from the requirements of representation under request for redetermination or other
beneficiary for services or items this subpart. appeal is filed.
regarding issues described in section (2) The party accepts the designation (d) Waiver of right to collect payment.
1879(a)(2) of the Act. as evidenced by a written statement (1) Except as specified in paragraph
(h) Authority of an appointed signed by the party. This signed (d)(2) of this section, the assignee must
representative. An appointed statement is not required when the waive the right to collect payment for
representative may, on behalf of the appointed representative and designee the item or service for which the
party— are attorneys in the same law firm or assignment of appeal rights is made. If
(1) Obtain appeals information about organization. the assignment is revoked under
the claim to the same extent as the (m) Revoking the appointment of paragraph (g)(2) or (g)(3) of this section,
party; representative. (1) A party may revoke the waiver of the right to collect
(2) Submit evidence; an appointment of representative payment nevertheless remains valid. A
(3) Make statements about facts and without cause at any time. waiver of the right to collect payment
law; and (2) Revocation. Revocation is not remains in effect regardless of the
(4) Make any request, or give, or effective until the adjudicator receives a outcome of the appeal decision.
receive, any notice about the appeal signed, written statement from the (2) The assignee is not prohibited
proceedings. party. from recovering payment associated
(i) Notice or request to an appointed (3) Death of the party. (i) The death with coinsurance or deductibles or
representative. of a party terminates the authority of the when an advance beneficiary notice is
(1) Initial determinations. When a appointed representative, except as properly executed.
contractor takes an action or issues an specified in paragraph (m)(3)(ii) of this (e) Duration of a valid assignment of
initial determination, it sends the action section. appeal rights. Unless revoked, the
or notice to the party. (ii) A party’s death does not terminate assignment of appeal rights is valid for
(2) Appeals. When a contractor, QIC, an appeal that is in progress if another all administrative and judicial review
ALJ, or the MAC takes an action or individual or entity may be entitled to associated with the item or service as
issues a redetermination, receive or obligated to make payment indicated on the standard CMS form,
reconsideration, or appeal decision, in for the items or services that are the even in the event of the death of the
connection with an initial subject of the appeal. The appointment assignor.
determination, it sends notice of the of representative remains in effect for (f) Rights of the assignee. When a
action to the appointed representative. the duration of the appeal except for valid assignment of appeal rights is
(3) The contractor, QIC, ALJ or MAC MSP recovery claims. executed, the assignor transfers all
sends any requests for information or appeal rights involving the particular
evidence regarding a claim that is § 405.912 Assignment of appeal rights. item or service to the assignee. These
appealed to the appointed (a) Who may be an assignee. Only a include, but are not limited to—
representative. The contractor sends any provider, or supplier that— (1) Obtaining information about the
requests for information or evidence (1) Is not a party to the initial claim to the same extent as the assignor;
regarding an initial determination to the determination as defined in § 405.906; (2) Submitting evidence;
party. and (3) Making statements about facts or
(4) For initial determinations and (2) Furnished an item or service to the law; and
appeals involving Medicare Secondary beneficiary may seek assignment of (4) Making any request, or giving, or
Payer recovery claims, the adjudicator appeal rights from the beneficiary for receiving any notice about appeal
sends notices and requests to both the that item or service. proceedings.
beneficiary and the appointed (b) Who may not be an assignee. An (g) Revocation of assignment. When
representative. individual or entity who is not a an assignment of appeal rights is
revoked, the rights to appeal revert to (b) Notice of initial determination sent entitlement that the applicant failed to
the assignee. An assignment of appeal to providers and suppliers. establish by not submitting the
rights may be revoked in any of the (1) An electronic or paper remittance requested evidence).
following ways: advice (RA) notice is the notice of initial (3) A denial of a request for
(1) In writing by the assignor. The determination sent to providers and withdrawal of an application for
revocation of assignment must be suppliers that accept assignment. The hospital or supplementary medical
delivered to the adjudicator and the electronic RA must comply with the insurance, or a denial of a request for
assignor, and is effective on the date of format and content requirements of the cancellation of a request for withdrawal.
receipt by the adjudicator. standard adopted for national use by (4) A determination as to whether an
(2) By abandonment if the assignee covered entities under the Health individual, previously determined as
does not file an appeal of an unfavorable Insurance Portability and entitled to hospital or supplementary
decision. Accountability Act (HIPAA) and related medical insurance, is no longer entitled
(3) By act or omission by the assignee CMS manual instructions. When a paper to those benefits, including a
that is determined by an adjudicator to RA is mailed, it must comply with CMS determination based on nonpayment of
be contrary to the financial interests of manual instructions that parallel the premiums.
the assignor. HIPAA data content and coding (b) Claims made by or on behalf of
(h) Responsibilities of the assignee. requirements. beneficiaries. The Medicare contractor
Once the assignee files an appeal, the (2) The notice of initial determination makes initial determinations regarding
assignee becomes a party to the appeal. must contain: claims for benefits under Medicare Part
The assignee must meet all (i) The basis for any full or partial A and Part B. A finding that a request
requirements for appeals that apply to denial determination of services or for payment or other submission does
any other party. items on the claim; not meet the requirements for a
(ii) Information on the right to a Medicare claim as defined in § 424.32 of
Initial Determinations redetermination if the provider or this chapter, is not considered an initial
§ 405.920 Initial determinations. supplier is dissatisfied with the determination. An initial determination
outcome of the initial determination; for purposes of this subpart includes,
After a claim is filed with the
(iii) All applicable claim adjustment but is not limited to, determinations
appropriate contractor in the manner
reason and remark codes to explain the with respect to:
and form described in subpart C of part (1) If the items and/or services
determination;
424 of this chapter, the contractor furnished are covered under title XVIII;
(iv) The source of the RA and who
must— (2) In the case of determinations on
may be contacted if the provider or
(a) Determine if the items and services the basis of section 1879(b) or (c) of the
supplier requires further information;
furnished are covered or otherwise Act, if the beneficiary, or supplier who
(v) All content requirements of the
reimbursable under title XVIII of the accepts assignment under § 424.55 of
standard adopted for national use by
Act; this chapter knew, or could reasonably
covered entities under HIPAA; and
(b) Determine any amounts payable have expected to know at the time the
(vi) Any other requirements specified
and make payment accordingly; and items or services were furnished, that
by CMS.
(c) Notify the parties to the initial the items or services were not covered;
determination of the determination in § 405.922 Time frame for processing initial (3) In the case of determinations on
accordance with § 405.921. determinations. the basis of section 1842(l)(1) of the Act,
§ 405.921 Notice of initial determination.
The contractor issues initial if the beneficiary or physician knew, or
determinations on clean claims within could reasonably have expected to know
(a) Notice of initial determination sent 30 days of receipt if they are submitted at the time the services were furnished,
to the beneficiary. (1) The notice must by or on behalf of the beneficiary who that the services were not covered;
be written in a manner calculated to be received the items and/or services; (4) Whether the deductible is met;
understood by the beneficiary, and sent otherwise, interest must be paid at the (5) The computation of the
to the last known address of the rate specified at 31 U.S.C. 3902(a) for coinsurance amount;
beneficiary; the period beginning on the day after (6) The number of days used for
(2) Content of the notice. The notice the required payment date and ending inpatient hospital, psychiatric hospital,
of initial determination must contain— on the date payment is made. or post-hospital extended care;
(i) The reasons for the determination, (7) The number of home health visits
including whether a local medical § 405.924 Actions that are initial used;
review policy, a local coverage determinations. (8) Periods of hospice care used;
determination, or national coverage (a) Applications and entitlement of (9) Requirements for certification and
determination was applied; individuals. SSA makes initial plan of treatment for physician services,
(ii) The procedures for obtaining determinations and processes durable medical equipment, therapies,
additional information concerning the reconsiderations with respect to an inpatient hospitalization, skilled
contractor’s determination, such as a individual on the following: nursing care, home health, hospice, and
specific provision of the policy, manual, (1) A determination with respect to partial hospitalization services;
law or regulation used in making the entitlement to hospital insurance or (10) The beginning and ending of a
determination; supplementary medical insurance under spell of illness, including a
(iii) Information on the right to a Medicare. determination made under the
redetermination if the beneficiary is (2) A disallowance of an individual’s presumptions established under
dissatisfied with the outcome of the application for entitlement to hospital § 409.60(c)(2) of this chapter, and as
initial determination and instructions or supplementary medical insurance, if specified in § 409.60(c)(4) of this
on how to request a redetermination; the individual fails to submit evidence chapter;
and requested by SSA to support the (11) The medical necessity of services,
(iv) Any other requirements specified application. (SSA specifies in the initial or the reasonableness or appropriateness
by CMS. determination the conditions of of placement of an individual at an
acute level of patient care made by the (c) Any issue regarding the (o) Determinations with respect to
Quality Improvement Organization computation of the payment amount of whether an entity qualifies for an
(QIO) on behalf of the contractor in program reimbursement of general exception to the electronic claims
accordance with § 476.86(c)(1) of this applicability for which CMS or a carrier submission requirement under part 424
chapter; has sole responsibility under Part B of this chapter;
(12) Any other issues having a present such as the establishment of a fee (p) Determinations by the Secretary of
or potential effect on the amount of schedule set forth in part 414 of this sustained or high levels of payment
benefits to be paid under Part A or Part chapter, or an inherent reasonableness errors in accordance with section
B of Medicare, including a adjustment pursuant to § 405.502(g), 1893(f)(3)(A) of the Act;
determination as to whether there was and any issue regarding the cost report
an underpayment of benefits paid under (q) A contractor’s prior determination
settlement process under Part A;
Part A or Part B, and if so, the amount related to coverage of physicians’
(d) Whether an individual’s appeal services;
thereof; meets the qualifications for expedited
(13) If a waiver of adjustment or access to judicial review provided in (r) Requests for anticipated payment
recovery under sections 1870(b) and (c) § 405.990; under the home health prospective
of the Act is appropriate: (e) Any determination regarding payment system under § 409.43(c)(ii)(2)
(i) When an overpayment of hospital whether a Medicare overpayment claim of this chapter; and
insurance benefits or supplementary must be compromised, or collection (s) Claim submissions on forms or
medical insurance benefits (including a action terminated or suspended under formats that are incomplete, invalid, or
payment under section 1814(e) of the the Federal Claims Collection Act of do not meet the requirements for a
Act) was made for an individual; or 1966, as amended; Medicare claim and returned or rejected
(ii) For a Medicare Secondary Payer to the provider or supplier.
recovery claim against a beneficiary or (f) Determinations regarding the
against a provider or supplier. transfer or discharge of residents of
§ 405.927 Initial determinations subject to
(14) If a particular claim is not skilled nursing facilities in accordance the reopenings process.
payable by Medicare based upon the with § 483.12 of this chapter;
(g) Determinations regarding the Minor errors or omissions in an initial
application of the Medicare Secondary
readmission screening and annual determination must be corrected only
Payer provisions of section 1862(b) of
resident review processes required by through the contractor’s reopenings
the Act.
(15) Under the Medicare Secondary subparts C and E of part 483 of this process under § 405.980(a)(3).
Payer provisions of sections 1862(b) of chapter; § 405.928 Effect of the initial
the Act that Medicare has a recovery (h) Determinations for a waiver of determination.
claim against a provider, supplier, or Medicare Secondary Payer recovery
under section 1862(b) of the Act; (a) An initial determination described
beneficiary for services or items that
(i) Determinations for a waiver of in § 405.924(a) is binding unless it is
were already paid by the Medicare
program, except when the Medicare interest; revised or reconsidered in accordance
Secondary Payer recovery claim against (j) Determinations for a finding with 20 CFR 404.907, or revised as a
the provider or supplier is based upon regarding the general applicability of the result of a reopening in accordance with
failure to file a proper claim as defined Medicare Secondary Payer provisions 20 CFR 404.988.
in part 411 of this chapter because this (as opposed to the application in a (b) An initial determination described
action is a reopening. particular case); in § 405.924(b) is binding upon all
(c) Determinations by QIOs. An initial (k) Determinations under the parties to the initial determination
determination for purposes of this Medicare Secondary Payer provisions of unless—
subpart also includes a determination section 1862(b) of the Act that Medicare (1) A redetermination is completed in
made by a QIO that: has a recovery against an entity that was accordance with § 405.940 through
(1) A provider can terminate services or is required or responsible (directly, as § 405.958; or
provided to an individual when a an insurer or self-insurer, as a third (2) The initial determination is
physician certified that failure to party administrator, as an employer that revised as a result of a reopening in
continue the provision of those services sponsors or contributes to a group accordance with § 405.980.
is likely to place the individual’s health health plan or a large group health plan,
at significant risk; or (c) An initial determination listed in
or otherwise,) to make payment for
(2) A provider can discharge an § 405.924(b) where a party submits a
services or items that were already
individual from the provider of services. timely, valid request for redetermination
reimbursed by the Medicare program;
under § 405.942 through § 405.944 must
§ 405.926 Actions that are not initial (l) A contractor’s, QIC’s, ALJ’s, or
be processed as a redetermination under
determinations. MAC’s determination or decision to
§ 405.948 through § 405.958 unless the
Actions that are not initial reopen or not to reopen an initial
initial determination involves a clerical
determinations and are not appealable determination, redetermination,
error or other minor error or omission.
under this subpart include, but are not reconsideration, hearing decision, or
limited to— review decision; Redeterminations
(a) Any determination for which CMS (m) Determinations that CMS or its
§ 405.940 Right to a redetermination.
has sole responsibility, for example— contractors may participate in or act as
(1) If an entity meets the conditions parties in an ALJ hearing or MAC A person or entity that may be a party
for participation in the program; review; to a redetermination in accordance with
(2) If an independent laboratory meets (n) Determinations that a provider or § 405.906(b) and that is dissatisfied with
the conditions for coverage of services; supplier failed to submit a claim or an initial determination may request a
(b) The coinsurance amounts failed to submit a timely claim despite redetermination by a contractor in
prescribed by regulation for outpatient being requested to do so by the accordance with § 405.940 through
services under the prospective payment beneficiary or the beneficiary’s § 405.958, regardless of the amount in
system; subrogee; controversy.
§ 405.942 Time frame for filing a request (iv) The contractor gave the party the initial determination was based, and
for a redetermination. incorrect or incomplete information any additional evidence the parties
(a) Time frame for filing a request. about when and how to request a submit or the contractor obtains on its
Except as provided in paragraph (b) of redetermination; or own. An individual who was not
this section, any request for (v) The party did not receive notice of involved in making the initial
redetermination must be filed within the determination or decision; or determination must make a
120 calendar days from the date a party (vi) The party sent the request to a redetermination. The contractor may
receives the notice of the initial Government agency in good faith within raise and develop new issues that are
determination. the time limit, and the request did not relevant to the claims in the particular
(1) For purposes of this section, the reach the appropriate contractor until case.
date of receipt of the initial after the time period to file a request
determination will be presumed to be 5 expired. § 405.950 Time frame for making a
days after the date of the notice of initial redetermination.
determination, unless there is evidence § 405.944 Place and method of filing a (a) General rule. The contractor mails,
to the contrary. request for a redetermination. or otherwise transmits, written notice of
(2) The request is considered as filed (a) Filing location. The request for the redetermination or dismissal to the
on the date it is received by the redetermination must be filed with the parties to the redetermination at their
contractor. contractor indicated on the notice of last known addresses within 60
(b) Extending the time frame for filing initial determination. calendar days of the date the contractor
a request. General rule. If the 120-day (b) Content of redetermination receives a timely filed request for
period in which to file a request for a request. The request for redetermination redetermination.
redetermination has expired and a party must be in writing and should be made (b) Exceptions. (1) If a contractor
shows good cause, the contractor may on a standard CMS form. A written grants an appellant’s request for an
extend the time frame for filing a request that is not made on a standard extension of the 120-day filing deadline
request for redetermination. CMS form is accepted if it contains the
(1) How to request an extension. A made in accordance with § 405.942(b),
same required elements as follows: the 60-day decision-making time frame
party may file a request for an extension (1) The beneficiary’s name;
of time for filing a request for a begins on the date the contractor
(2) The Medicare health insurance receives the late-filed request for
redetermination with the contractor. claim number;
The party should include any evidence redetermination, or when the request for
(3) Specific service(s) and/or item(s) an extension is granted, whichever is
supporting the request for extension. for which the redetermination is being
The request for redetermination later.
requested and the specific date(s) of the (2) If a contractor receives from
extension must— service;
(i) Be in writing; multiple parties timely requests for
(4) The name and signature of the redetermination of a claim
(ii) State why the request for
party or the representative of the party. determination, consistent with
redetermination was not filed within the
(c) Requests for redetermination by § 405.944(c), the contractor must issue a
required time frame; and
(iii) Meet the requirements of more than one party. If more than one redetermination or dismissal within 60
§ 405.944. party timely files a request for days of the latest filed request.
(2) How the contractor determines if redetermination on the same claim
(3) If a party submits additional
good cause exists. In determining if a before a redetermination is made on the
evidence after the request for
party has good cause for missing a first timely filed request, the contractor
redetermination is filed, the contractor’s
deadline to request a redetermination, must consolidate the separate requests
60-day decision-making time frame is
the contractor considers— into one proceeding and issue one
extended for 14 calendar days for each
(i) The circumstances that kept the redetermination.
submission, consistent with
party from making the request on time; § 405.946(b).
§ 405.946 Evidence to be submitted with
(ii) If the contractor’s action(s) misled the redetermination request.
the party; and § 405.952 Withdrawal or dismissal of a
(iii) If the party had or has any (a) Evidence submitted with the request for a redetermination.
physical, mental, educational, or request. When filing the request for
redetermination, a party must explain (a) Withdrawing a request. A party
linguistic limitations, including any that files a request for redetermination
lack of facility with the English why it disagrees with the contractor’s
determination and should include any may withdraw its request by filing a
language, that prevented the party from written and signed request for
filing a timely request or from evidence that the party believes should
be considered by the contractor in withdrawal. The request for withdrawal
understanding or knowing about the
making its redetermination. must contain a clear statement that the
need to file a timely request.
(b) Evidence submitted after the appellant is withdrawing the request for
(3) Examples of good cause. Examples
of circumstances when good cause may request. When a party submits a redetermination and does not intend
be found to exist include, but are not additional evidence after filing the to proceed further with the appeal. The
limited to, the following situations: request for redetermination, the request must be received in the
(i) The party was prevented by serious contractor’s 60-day decision-making contractor’s mailroom before a
illness from contacting the contractor in time frame is automatically extended for redetermination is issued. The appeal
person, in writing, or through a friend, 14 calendar days for each submission. will proceed with respect to any other
relative, or other person; or parties that have filed a timely request
(ii) The party had a death or serious § 405.948 Conduct of a redetermination. for redetermination.
illness in his or her immediate family; A redetermination consists of an (b) Dismissing a request. A contractor
or independent review of an initial dismisses a redetermination request,
(iii) Important records of the party determination. In conducting a either entirely or as to any stated issue,
were destroyed or damaged by fire or redetermination, the contractor reviews under any of the following
other accidental cause; or the evidence and findings upon which circumstances:
(1) When the person or entity claim(s), and renders a redetermination (8) Notification that evidence not
requesting a redetermination is not a affirming or reversing, in whole or in submitted to the QIC as indicated in
proper party under § 405.906(b) or does part, the initial determination in paragraph (b)(6) of this section, is not
not otherwise have a right to a question. considered at an ALJ hearing or further
redetermination under section 1869(a) appeal, unless the appellant
of the Act; § 405.956 Notice of a redetermination. demonstrates good cause as to why that
(2) When the contractor determines (a) Notification to parties. (1) General evidence was not provided previously;
the party failed to make out a valid rule. Written notice of a redetermination and
request for redetermination that affirming, in whole or in part, the initial (9) The procedures for obtaining
substantially complies with § 405.944; determination must be mailed or additional information concerning the
(3) When the party fails to file the otherwise transmitted to all parties at redetermination, such as specific
redetermination request within the their last known addresses in provisions of the policy, manual, or
proper filing time frame in accordance accordance with the time frames regulation used in making the
with § 405.942; established in § 405.950. Written notice redetermination.
(4) When a beneficiary or the of a redetermination fully reversing the (10) Any other requirements specified
beneficiary’s representative files a initial determination must be mailed or by CMS.
request for redetermination, but the otherwise transmitted to the appellant (c) Content of the notice for a full
beneficiary dies while the request is in accordance with the time frames reversal. For decisions that are full
pending, and all of the following criteria established in § 405.950. If the reversals of the initial determination,
apply: redetermination results in issuance of the redetermination must be in writing
(i) The beneficiary’s surviving spouse supplemental payment to a provider or and contain—
or estate has no remaining financial supplier, the Medicare contractor must (1) A clear statement indicating that
interest in the case. In deciding this also issue an electronic or paper RA the redetermination is wholly favorable;
issue, the contractor considers if the notice to the provider or supplier. (2) Any other requirements specified
surviving spouse or estate remains liable (2) Overpayment cases involving by CMS.
for the services for which payment was multiple beneficiaries who have no (d) Exception for beneficiary appeal
denied or a Medicare contractor held liability. In an overpayment case requests. (1) The notice must inform
the beneficiary liable for subsequent involving multiple beneficiaries who beneficiary appellants that the
similar services under the limitation of have no liability, the contractor may requirements of paragraph (b)(8) of this
liability provisions based on the denial issue a written notice only to the section are not applicable for purposes
of payment for services at issue; appellant. of beneficiary appeals.
(ii) No other individual or entity with (b) Content of the notice for (2) This exception does not apply for
a financial interest in the case wishes to affirmations, in whole or in part. For appeal requests from beneficiaries who
pursue the appeal; and decisions that are affirmations, in whole are represented by providers or
(iii) No other party filed a valid and or in part, of the initial determination, suppliers.
timely redetermination request under the redetermination must be written in
§ 405.942 and § 405.944; a manner calculated to be understood by § 405.958 Effect of a redetermination.
(5) When a party filing the a beneficiary, and contain— In accordance with section 1869
redetermination request submits a (1) A clear statement indicating the (a)(3)(D) of the Act, once a
timely written request for withdrawal extent to which the redetermination is redetermination is issued, it becomes
with the contractor; or favorable or unfavorable; part of the initial determination. The
(6) When the contractor has not (2) A summary of the facts, including, redetermination is final and binding
issued an initial determination on the as appropriate, a summary of the upon all parties unless—
claim or the matter for which a clinical or scientific evidence used in (a) A reconsideration is completed in
redetermination is sought. making the redetermination;
(c) Notice of dismissal. A contractor accordance with § 405.960 through
(3) An explanation of how pertinent § 405.978; or
mails or otherwise transmits a written
laws, regulations, coverage rules, and (b) The redetermination is revised as
notice of the dismissal of the
CMS policies apply to the facts of the a result of a reopening in accordance
redetermination request to the parties at
case; with § 405.980.
their last known addresses. The notice
(4) A summary of the rationale for the
states that there is a right to request that Reconsideration
redetermination in clear,
the contractor vacate the dismissal
understandable language; § 405.960 Right to a reconsideration.
action.
(d) Vacating a dismissal. If good and (5) Notification to the parties of their A person or entity that is a party to
sufficient cause is established, a right to a reconsideration and a a redetermination made by a contractor
contractor may vacate its dismissal of a description of the procedures that a as described under § 405.940 through
request for redetermination within 6 party must follow in order to request a § 405.958, and is dissatisfied with that
months from the date of the notice of reconsideration, including the time determination, may request a
dismissal. frame within which a reconsideration reconsideration by a QIC in accordance
(e) Effect of dismissal. The dismissal must be requested; with § 405.962 through § 405.966,
of a request for redetermination is final (6) A statement of any specific regardless of the amount in controversy.
and binding, unless it is modified or missing documentation that must be
reversed by a QIC under § 405.974(b) or submitted with a request for a § 405.962 Timeframe for filing a request for
reconsideration, if applicable; a reconsideration.
vacated under paragraph (d) of this
section. (7) A statement that all evidence the (a) Timeframe for filing a request.
appellant wishes to introduce during Except as provided in paragraph (b) of
§ 405.954 Redetermination. the claim appeals process should be this section, any request for a
Upon the basis of the evidence of submitted with the request for a reconsideration must be filed within
record, the contractor adjudicates the reconsideration; 180 calendar days from the date the
party receives the notice of the consolidate the separate requests into initial determination involves a finding
redetermination. one proceeding and issue one on whether an item or service is
(1) For purposes of this section, the reconsideration. reasonable and necessary for the
date of receipt of the redetermination diagnosis or treatment of illness or
will be presumed to be 5 days after the § 405.966 Evidence to be submitted with injury (under section 1862(a)(1)(A) of
the reconsideration request.
date of the notice of redetermination, the Act), a QIC’s reconsideration must
unless there is evidence to the contrary. (a) Evidence submitted with the involve consideration by a panel of
(2) For purposes of meeting the 180- request. When filing a request for physicians or other appropriate health
day filing deadline, the request is reconsideration, a party should present care professionals, and be based on
considered as filed on the date it is evidence and allegations of fact or law clinical experience, the patient’s
received by the QIC. related to the issue in dispute and medical records, and medical, technical,
(b) Extending the time for filing a explain why it disagrees with the initial and scientific evidence of record to the
request. (1) General rule. A QIC may determination, including the extent applicable.
extend the 180-day timeframe for filing redetermination. (b) Authority of the QIC. (1) National
a request for reconsideration for good (1) This evidence must include any coverage determinations (NCDs), CMS
cause. missing documentation identified in the Rulings, and applicable laws and
(2) How to request an extension. A notice of redetermination, consistent regulations are binding on the QIC.
party to the redetermination must file its with § 405.956(b)(6). (2) QICs are not bound by LCDs,
request for an extension of the time for (2) Absent good cause, failure to
LMRPs, or CMS program guidance, such
filing the reconsideration request with submit all evidence, including
as program memoranda and manual
its request for reconsideration. A party documentation requested in the notice
instructions, but give substantial
should include evidence to support the of redetermination prior to the issuance
deference to these policies if they are
request for extension. The request for of the notice of reconsideration
applicable to a particular case. A QIC
reconsideration and request for precludes subsequent consideration of
may decline to follow a policy, if the
extension must— that evidence.
QIC determines, either at a party’s
(i) Be in writing; (b) Evidence submitted after the
request or at its own discretion, that the
(ii) State why the request for request. Each time a party submits
policy does not apply to the facts of the
reconsideration was not filed within the additional evidence after filing the
particular case.
required timeframe; and request for reconsideration, the QIC’s
(3) If a QIC declines to follow a policy
(iii) Meet the requirements of 60-day decisionmaking timeframe is
in a particular case, the QIC’s
§ 405.964. automatically extended by up to 14
reconsideration explains the reasons
(3) How the QIC determines whether calendar days for each submission. This
why the policy was not followed.
good cause exists. In determining extension does not apply to timely
submissions of documentation (4) A QIC’s decision to decline to
whether a party has good cause for follow a policy under this section
missing a deadline to request specifically requested by a QIC, unless
the documentation was originally applies only to the specific claim being
reconsideration, the QIC applies the reconsidered and does not have
good cause provisions contained in requested in the notice of
redetermination. precedential effect.
§ 405.942(b)(2) and (b)(3). (5) A QIC may raise and develop new
(c) Exception for beneficiaries and
§ 405.964 Place and method of filing a State Medicaid Agencies that file issues that are relevant to the claims in
request for a reconsideration. reconsideration requests. (1) a particular case provided that the
(a) Filing location. The request for Beneficiaries and State Medicaid contractor rendered a redetermination
reconsideration must be filed with the Agencies that file requests for with respect to the claims.
QIC indicated on the notice of reconsideration are not required to (c) Qualifications of the QIC’s panel
redetermination. comply with the requirements of members. (1) Members of a QIC’s panel
(b) Content of reconsideration request. paragraph (a) of this section. However, who conduct reconsiderations must
The request for reconsideration must be the automatic 14-day extension have sufficient medical, legal, and other
in writing and should be made on a described in paragraph (b) of this expertise, including knowledge of the
standard CMS form. A written request section applies to each evidence Medicare program.
that is not made on a standard CMS submission made after the request for (2) When a redetermination is made
form is accepted if it contains the same reconsideration is filed. with respect to whether an item or
required elements, as follows: (2) Beneficiaries who are represented service is reasonable and necessary
(1) The beneficiary’s name; by providers or suppliers must comply (section 1862(a)(1)(A) of the Act), the
(2) Medicare health insurance claim with the requirements of paragraph (a) QIC designates a panel of physicians or
number; of this section. other appropriate health care
(3) Specific service(s) and item(s) for professionals to consider the facts and
which the reconsideration is requested § 405.968 Conduct of a reconsideration. circumstances of the redetermination.
and the specific date(s) of service; (a) General rules. (1) A (3) Where a claim pertains to the
(4) The name and signature of the reconsideration consists of an furnishing of treatment by a physician,
party or the representative of the party; independent, on-the-record review of an or the provision of items or services by
and initial determination, including the a physician, a reviewing professional
(5) The name of the contractor that redetermination and all issues related to must be a physician.
made the redetermination. payment of the claim. In conducting a (d) Disqualification of a QIC panel
(c) Requests for reconsideration by reconsideration, the QIC reviews the member. No physician or health care
more than one party. If more than one evidence and findings upon which the professional employed by or otherwise
party timely files a request for initial determination, including the working for a QIC may review
reconsideration on the same claim redetermination, was based, and any determinations regarding—
before a reconsideration is made on the additional evidence the parties submit (1) Health care services furnished to a
first timely filed request, the QIC must or that the QIC obtains on its own. If the patient if that physician or health care
professional was directly responsible for written request from the appellant to request for reconsideration, but the
furnishing those services; or escalate the case to an ALJ after the beneficiary dies while the request is
(2) Health care services provided in or adjudication period has expired. pending, and all of the following criteria
by an institution, organization, or (3) Notify all parties that it has apply:
agency, if that physician or health care dismissed the request for (i) The beneficiary’s surviving spouse
professional or any member of the reconsideration consistent with or estate has no remaining financial
physician’s family or health care § 405.972. interest in the case. In deciding this
professional’s family has, directly or (d) Responsibilities of the appellant. If issue, the QIC considers if the surviving
indirectly, a significant financial an appellant wishes to exercise the spouse or estate remains liable for the
interest in that institution, organization, option of escalating the case to an ALJ, services for which payment was denied
or agency (see the term family member the appellant must notify the QIC in or a Medicare contractor held the
as defined in § 405.902). writing. beneficiary liable for subsequent similar
(e) Actions following appellant’s services under the limitation of liability
§ 405.970 Timeframe for making a notice. (1) If the appellant fails to notify provisions based on the denial of
reconsideration. the QIC, or notifies the QIC that the payment for services at issue;
(a) General rule. Within 60 calendar appellant does not choose to escalate (ii) No other individual or entity with
days of the date the QIC receives a the case, the QIC completes its a financial interest in the case wishes to
timely filed request for reconsideration reconsideration and notifies the pursue the appeal; and
or any additional time provided by appellant of its action consistent with (iii) No other party to the
paragraph (b) of this section, the QIC § 405.972 or § 405.976. redetermination filed a valid and timely
mails, or otherwise transmits to the (2) If the appellant notifies the QIC request for reconsideration under
parties at their last known addresses, that the appellant wishes to escalate the § 405.962 and § 405.964.
written notice of— case, the QIC must take one of the (5) When a party filing for the
(1) The reconsideration; following actions within 5 days of reconsideration submits a written
(2) Its inability to complete its review receipt of the notice or 5 days from the request of withdrawal to the QIC and
within 60 days in accordance with end of the applicable adjudication satisfies the criteria set forth in
paragraphs (c) through (e) of this period under paragraph (a) or (b) of this paragraph (a) of this section before the
section; or section: reconsideration has been issued; or
(3) Dismissal. (i) Complete its reconsideration and (6) When the contractor has not
(b) Exceptions. (1) If a QIC grants an notify all parties of its decision issued a redetermination on the initial
appellant’s request for an extension of consistent with § 405.972 or § 405.976. determination for which a
the 180-day filing deadline made in (ii) Acknowledge the escalation notice reconsideration is sought.
accordance with § 405.962(b), the QIC’s in writing and forward the case file to (c) Notice of dismissal. A QIC mails or
60-day decision-making timeframe the ALJ hearing office. otherwise transmits written notice of the
begins on the date the QIC receives the § 405.972 Withdrawal or dismissal of a dismissal of the reconsideration request
late filed request for reconsideration, or request for a reconsideration. to the parties at their last known
when the request for an extension that (a) Withdrawing a request. An addresses. The notice states that there is
meets the requirements of § 405.962(b) appellant that files a request for a right to request that the contractor
is granted, whichever is later. reconsideration may withdraw its vacate the dismissal action. The appeal
(2) If a QIC receives timely requests will proceed with respect to any other
request by filing a written and signed
for reconsideration from multiple request for withdrawal. The request for parties that have filed a timely request
parties, consistent with § 405.964(c), the withdrawal must— for reconsideration.
QIC must issue a reconsideration, notice (1) Contain a clear statement that the (d) Vacating a dismissal. If good and
that it cannot complete its review, or appellant is withdrawing the request for sufficient cause is established, a QIC
dismissal within 60 days for each reconsideration and does not intend to may vacate its dismissal of a request for
submission of the latest filed request. proceed further with the appeal. reconsideration within 6 months of the
(3) Each time a party submits (2) Be received in the QIC’s mailroom date of the notice of dismissal.
additional evidence after the request for before the reconsideration is issued. (e) Effect of dismissal. The dismissal
reconsideration is filed, the QIC’s 60- (b) Dismissing a request. A QIC of a request for reconsideration is final
day decisionmaking timeframe is dismisses a reconsideration request, and binding, unless it is modified or
extended by up to 14 days for each either entirely or as to any stated issue, reversed by an ALJ under § 405.1004 or
submission, consistent with under any of the following vacated under paragraph (d) of this
§ 405.966(b). circumstances: section.
(c) Responsibilities of the QIC. Within (1) When the person or entity
60 days of receiving a request for a requesting reconsideration is not a § 405.974 Reconsideration.
reconsideration, or any additional time proper party under § 405.906(b) or does (a) Reconsideration of a contractor
provided for under paragraph (b) of this not otherwise have a right to a determination. Except as provided in
section, a QIC must take one of the reconsideration under section 1869(b) of § 405.972, upon the basis of the
following actions: the Act; evidence of record, the QIC must issue
(1) Notify all parties of its (2) When the QIC determines that the a reconsideration affirming or reversing,
reconsideration, consistent with party failed to make out a valid request in whole or in part, the initial
§ 405.976. for reconsideration that substantially determination, including the
(2) Notify the appellant that it cannot complies with § 405.964(a) and (b); redetermination, in question.
complete the reconsideration by the (3) When the party fails to file the (b) Reconsideration of contractor’s
deadline specified in paragraph (b) of reconsideration request in accordance dismissal of a redetermination request.
this section and offer the appellant the with the timeframes established in (1) A party to a contractor’s dismissal of
opportunity to escalate the appeal to an § 405.962; a request for redetermination has a right
ALJ. The QIC continues to process the (4) When a beneficiary or the to have the dismissal reviewed by a QIC,
reconsideration unless it receives a beneficiary’s representative files a if the party files a written request for
review of the dismissal with the QIC summary must indicate how the missing Reopenings
within 60 days after receipt of the documentation affected the
§ 405.980 Reopenings of initial
contractor’s notice of dismissal. reconsideration; and determinations, redeterminations, and
(2) If the QIC determines that the
(ii) The summary must also specify reconsiderations, hearings and reviews.
contractor’s dismissal was in error, it
that, consistent with § 405.956(b)(8) and (a) General rules. (1) A reopening is a
vacates the dismissal and remands the
§ 405.966(b), all evidence, including remedial action taken to change a final
case to the contractor for a
evidence requested in the notice of determination or decision that resulted
redetermination.
(3) A QIC’s reconsideration of a redetermination, that is not submitted in either an overpayment or
prior to the issuance of the underpayment, even though the
contractor’s dismissal of a
reconsideration will not be considered determination or decision was correct
redetermination request is final and not
at an ALJ level, or made part of the based on the evidence of record. That
subject to any further review.
administrative record, unless the action may be taken by—
§ 405.976 Notice of a reconsideration. appellant demonstrates good cause as to (i) A contractor to revise the initial
(a) Notification to parties. (1) General determination or redetermination;
why the evidence was not provided (ii) A QIC to revise the
rules. (i) Written notice of the prior to the issuance of the QIC’s
reconsideration must be mailed or reconsideration;
reconsideration. This requirement does (iii) An ALJ to revise the hearing
otherwise transmitted to all parties at not apply to beneficiaries, unless the decision; or
their last known addresses, in beneficiary is represented by a provider (iv) The MAC to revise the hearing or
accordance with the timeframes or supplier or to State Medicaid review decision.
established in § 405.970(a) or (b). Agencies; (2) If a contractor issues a denial of a
(ii) The notice must be written in a claim because it did not receive
manner reasonably calculated to be (6) Information concerning to the
requested documentation during
understood by a beneficiary. parties’ right to an ALJ hearing,
medical review and the party
(iii) The QIC must promptly notify the including the applicable amount in
subsequently requests a
entity responsible for payment of claims controversy requirement and redetermination, the contractor must
under Part A or Part B of its aggregation provisions; process the request as a reopening.
reconsideration. If the reconsideration (7) A statement of whether the (3) Notwithstanding paragraph (a)(4)
results in issuance of supplemental amount in controversy needed for an of this section, a contractor must
payment to a provider or supplier, the ALJ hearing is met when the process clerical errors (which includes
Medicare contractor must also issue an reconsideration is partially or fully mirror errors and omissions) as
electronic or paper RA notice to the reopenings, instead of redeterminations
unfavorable;
provider or supplier. as specified in § 405.940. If the
(2) Overpayment cases involving (8) A description of the procedures contractor receives a request for
multiple beneficiaries who have no that a party must follow in order to reopening and disagrees that the issue is
liability. In an overpayment case obtain an ALJ hearing of an expedited a clerical error, the contractor must
involving multiple beneficiaries who reconsideration, including the time dismiss the reopening request and
have no liability, the QIC may issue a frame under which a request for an ALJ advise the party of any appeal rights,
written notice only to the appellant. hearing must be filed; provided the timeframe to request an
(b) Content of the notice. The (9) If appropriate, advice as to the appeal on the original denial has not
reconsideration must be in writing and requirements for use of the expedited expired. For purposes of this section,
contain— clerical error includes human and
access to judicial review process set
(1) A clear statement indicating mechanical errors on the part of the
whether the reconsideration is favorable forth in § 405.990;
party or the contractor such as—
or unfavorable; (10) The procedures for obtaining (i) Mathematical or computational
(2) A summary of the facts, including additional information concerning the mistakes;
as appropriate, a summary of the reconsideration, such as specific (ii) Inaccurate data entry; or
clinical or scientific evidence used in provisions of the policy, manual, or (iii) Denials of claims as duplicates.
making the reconsideration; regulation used in making the (4) When a party has filed a valid
(3) An explanation of how pertinent reconsideration; and request for an appeal of an initial
laws, regulations, coverage rules, and (11) Any other requirements specified determination, redetermination,
CMS policies, apply to the facts of the reconsideration, hearing, or MAC
by CMS.
case, including, where applicable, the review, no adjudicator has jurisdiction
rationale for declining to follow an LCD, § 405.978 Effect of a reconsideration. to reopen a claim at issue until all
LMRP, or CMS program guidance; appeal rights are exhausted. Once the
(4) In the case of a determination on A reconsideration is final and binding appeal rights have been exhausted, the
whether an item or service is reasonable on all parties, unless— contractor, QIC, ALJ, or MAC may
or necessary under section 1862(a)(1)(A) (a) An ALJ decision is issued in reopen as set forth in this section.
of the Act, an explanation of the accordance to a request for an ALJ (5) The contractor’s, QIC’s, ALJ’s, or
medical and scientific rationale for the hearing made in accordance with MAC’s decision on whether to reopen is
decision; § 405.1014; final and not subject to appeal.
(5) A summary of the rationale for the (6) A Medicare secondary payer
(b) A review entity issues a decision
reconsideration. demand to recover a conditional
(i) If the notice of redetermination in accordance to a request for expedited payment, based upon a provider’s or
indicated that specific documentation access to judicial review under supplier’s failure to demonstrate that it
should be submitted with the § 405.990; or filed a proper claim with a plan,
reconsideration request, and the (c) The reconsideration is revised as a program, or insurer, as defined in
documentation was not submitted with result of a reopening in accordance with § 411.21 of this chapter, because this
the request for reconsideration, the § 405.980. action is a reopening.
(b) Time frames and requirements for (3) The MAC may reopen its review (b) Redeterminations. The revision of
reopening initial determinations and decision on its own motion within 180 a redetermination is binding upon all
redeterminations initiated by a days from the date of the review parties unless a party files a written
contractor. A contractor may reopen and decision for good cause in accordance request for a QIC reconsideration that is
revise its initial determination or with § 405.986. If the MAC’s decision accepted and processed in accordance
redetermination on its own motion— was procured by fraud or similar fault, with § 405.960 through § 405.978.
(1) Within 1 year from the date of the then the MAC may reopen at any time. (c) Reconsiderations. The revision of
initial determination or redetermination (e) Time frames and requirements for a reconsideration is binding upon all
for any reason. reopening reconsiderations, hearing parties unless a party files a written
(2) Within 4 years from the date of the decisions, and reviews requested by a request for an ALJ hearing that is
initial determination or redetermination party. (1) A party to a reconsideration accepted and processed in accordance
for good cause as defined in § 405.986. may request that a QIC reopen its with § 405.1000 through § 405.1064.
(3) At any time if there exists reliable reconsideration within 180 days from (d) ALJ Hearing decisions. The
evidence as defined in § 405.902 that the date of the reconsideration for good revision of a hearing decision is binding
the initial determination was procured cause in accordance with § 405.986. upon all parties unless a party files a
by fraud or similar fault as defined in (2) A party to a hearing may request written request for a MAC review that
§ 405.902. that an ALJ reopen his or her decision is accepted and processed in accordance
(4) At anytime if the initial within 180 days from the date of the with § 405.1100 through § 405.1130.
determination is unfavorable, in whole hearing decision for good cause in (e) MAC review. The revision of a
or in part, to the party thereto, but only accordance with § 405.986. MAC review is binding upon all parties
for the purpose of correcting a clerical (3) A party to a review may request unless a party files a civil action in
error on which that determination was that the MAC reopen its decision within which a Federal district court accepts
based. 180 days from the date of the review jurisdiction and issues a decision.
(5) At any time to effectuate a decision for good cause in accordance (f) Appeal of only the portion of the
decision issued under the coverage with § 405.986. determination or decision revised by the
appeals process. reopening. Only the portion of the
(c) Time frame and requirements for § 405.982 Notice of a revised initial determination, redetermination,
reopening initial determinations and determination or decision.
reconsideration, or hearing decision
redeterminations requested by a party. (a) When adjudicators initiate revised by the reopening may be
(1) A party may request that a contractor reopenings. When any determination or subsequently appealed.
reopen its initial determination or decision is reopened and revised as (g) Effect of a revised determination or
redetermination within 1 year from the provided in § 405.980, the contractor, decision. A revised determination or
date of the initial determination or QIC, ALJ, or the MAC must mail its decision is binding unless it is appealed
redetermination for any reason. revised determination or decision to the or otherwise reopened.
(2) A party may request that a parties to that determination or decision
contractor reopen its initial at their last known address. In the case § 405.986 Good cause for reopening.
determination or redetermination of a full or partial reversal resulting in (a) Establishing good cause. Good
within 4 years from the date of the issuance of a payment to a provider or cause may be established when—
initial determination or redetermination supplier, a revised electronic or paper (1) There is new and material
for good cause in accordance with remittance advice notice must be issued evidence that—
§ 405.986. by the Medicare contractor. An adverse (i) Was not available or known at the
(3) A party may request that a revised determination or decision must time of the determination or decision;
contractor reopen its initial state the rationale and basis for the and
determination at any time if the initial reopening and revision and any right to (ii) May result in a different
determination is unfavorable, in whole appeal. conclusion; or
or in part, to the party thereto, but only (b) Reopenings initiated at the request (2) The evidence that was considered
for the purpose of correcting a clerical of a party. The contractor, QIC, ALJ, or in making the determination or decision
error on which that determination was the MAC must mail its revised clearly shows on its face that an obvious
based. Third party payer error does not determination or decision to the parties error was made at the time of the
constitute clerical error. See to that determination or decision at their determination or decision.
§ 405.986(c). last known address. In the case of a full (b) Change in substantive law or
(d) Time frame and requirements for or partial reversal resulting in issuance interpretative policy. A change of legal
reopening reconsiderations, hearing of a payment to a provider or supplier, interpretation or policy by CMS in a
decisions and reviews initiated by a a revised electronic or paper remittance regulation, CMS ruling, or CMS general
QIC, ALJ, or the MAC. (1) A QIC may advice notice must be issued by the instruction, or a change in legal
reopen its reconsideration on its own Medicare contractor. An adverse revised interpretation or policy by SSA in a
motion within 180 days from the date of determination or decision must state the regulation, SSA ruling, or SSA general
the reconsideration for good cause in rationale and basis for the reopening instruction in entitlement appeals,
accordance with § 405.986. If the QIC’s and revision and any right to appeal. whether made in response to judicial
reconsideration was procured by fraud precedent or otherwise, is not a basis for
or similar fault, then the QIC may § 405.984 Effect of a revised determination reopening a determination or hearing
reopen at any time. or decision. decision under this section. This
(2) An ALJ may reopen its hearing (a) Initial determinations. The provision does not preclude contractors
decision on its own motion within 180 revision of an initial determination is from conducting reopenings to
days from the date of the decision for binding upon all parties unless a party effectuate coverage decisions issued
good cause in accordance with files a written request for a under the authority granted by section
§ 405.986. If the ALJ’s decision was redetermination that is accepted and 1869(f) of the Act.
procured by fraud or similar fault, then processed in accordance with § 405.940 (c) Third party payer error. A request
the ALJ may reopen at any time. through § 405.958. to reopen a claim based upon a third
party payer’s error in making a primary (c) Content of the request for EAJR. paragraphs (b), (c), and (d) of this
payment determination when Medicare The request for EAJR must— section.
processed the claim in accordance with (1) Allege that there are no material (2) Within 60 days after the date the
the information in its system of records issues of fact in dispute and identify the review entity receives a request and
or on the claim form does not constitute facts that the requestor considers accompanying documents and materials
good cause for reopening. material and that are not disputed; and meeting the conditions in paragraphs
(d) MSP recovery claim. A (2) Assert that the only factor (b), (c), and (d) of this section, the
determination under the Medicare precluding a decision favorable to the review entity will issue either a
Secondary Payer provisions of Section requestor is— certification in accordance to paragraph
1862(b) of the Act that Medicare has an (i) A statutory provision that is (g) of this section or a denial of the
MSP recovery claim for services or unconstitutional, or a provision of a request.
items that were already reimbursed by regulation or national coverage (3) A determination by the review
the Medicare program is not a determination and specify the statutory entity either certifying that the
reopening. provision that the requestor considers requirements for EAJR are met pursuant
unconstitutional or the provision of a to paragraph (g) of this section or
Expedited Access to Judicial Review
regulation or a national coverage denying the request is final and not
§ 405.990 Expedited access to judicial determination that the requestor subject to review by the Secretary.
review. considers invalid, or (4) If the review entity fails to make
(a) Process for expedited access to (ii) A CMS Ruling that the requester a determination within the time frame
judicial review. (1) For purposes of this considers invalid; specified in paragraph (f)(2) of this
section, a ‘‘review entity’’ means an (3) Include a copy of any QIC section, then the requestor may bring a
entity of up to three reviewers who are reconsideration and of any ALJ hearing civil action in Federal district court
ALJs or members of the Departmental decision that the requester has received; within 60 days of the end of the time
Appeals Board (DAB), as determined by (4) If any QIC reconsideration or ALJ frame.
the Secretary. hearing decision was based on facts that (g) Certification by the review entity.
(2) In order to obtain expedited access the requestor is disputing, state why the If a party meets the requirements for the
to judicial review (EAJR), a review requestor considers those facts to be EAJR, the review entity certifies in
entity must certify that the Medicare immaterial; and writing that—
Appeals Council (MAC) does not have (5) If any QIC reconsideration or ALJ (1) The material facts involved in the
the authority to decide the question of hearing decision was based on a claim are not in dispute;
law or regulation relevant to the matters provision of a law, regulation, national (2) Except as indicated in paragraph
in dispute and that there is no material coverage determination or CMS Ruling (g)(3) of this section, the Secretary’s
issue of fact in dispute. in addition to the one the requestor interpretation of the law is not in
(3) A party may make a request for considers unconstitutional or invalid, a dispute;
EAJR only once with respect to a statement as to why further (3) The sole issue(s) in dispute is the
question of law or regulation for a administrative review of how that constitutionality of a statutory
specific matter in dispute in an appeal. provision applies to the facts is not provision, or the validity of a provision
(b) Conditions for making the necessary. of a regulation, CMS Ruling, or national
expedited appeals request. (1) A party (d) Place and time for an EAJR coverage determination;
may request EAJR in place of an ALJ request. (1) Method and place for filing (4) But for the provision challenged,
hearing or MAC review if the following request. The requestor may include an the requestor would receive a favorable
conditions are met: EAJR request in his or her request for an decision on the ultimate issue (such as
(i) A QIC has made a reconsideration ALJ hearing or MAC review, or, if an whether a claim should be paid); and
determination and the party has filed a appeal is already pending with an ALJ (5) The certification by the review
request for— or the MAC, file a written EAJR request entity is the Secretary’s final action for
(A) an ALJ hearing in accordance with with the ALJ hearing office or MAC purposes of seeking expedited judicial
§ 405.1002 and a final decision of the where the appeal is being considered. review.
ALJ has been issued; The ALJ hearing office or MAC forwards (h) Effect of certification by the review
(B) MAC review in accordance with the request to the review entity within entity. If an EAJR request results in a
§ 405.1102 and a final decision of the 5 calendar days of receipt. certification described in paragraph (g)
MAC has not been issued; or (2) Time of filing request. The party of this section—
(ii) The appeal has been escalated may file a request for the EAJR— (1) The party that requested the EAJR
from the QIC to the ALJ level after the (i) If the party has requested a hearing, is considered to have waived any right
period described in § 405.970(a) and at any time before receipt of the notice to completion of the remaining steps of
§ 405.970(b) has expired, and the QIC of the ALJ’s decision; or the administrative appeals process
does not issue a final action within the (ii) If the party has requested MAC regarding the matter certified.
time frame described in § 405.970(e). review, at any time before receipt of (2) The requestor has 60 days,
(2) The requestor is a party, as defined notice of the MAC’s decision. beginning on the date of the review
in paragraph (e) of this section. (e) Parties to the EAJR. The parties to entity’s certification within which to
(3) The amount remaining in the EAJR are the persons or entities who bring a civil action in Federal district
controversy meets the requirements of were parties to the QIC’s court.
§ 405.1006(b) or (c). reconsideration determination and, if (3) The requestor must satisfy the
(4) If there is more than one party to applicable, to the ALJ hearing. requirements for venue under section
the reconsideration, hearing, or MAC (f) Determination on EAJR request. (1) 1869(b)(2)(C)(iii) of the Act, as well as
review, each party concurs, in writing, The review entity described in the requirements for filing a civil action
with the request for the EAJR. paragraph (a) of this section will in a Federal district court under
(5) There are no material issues of fact determine whether the request for EAJR § 405.1136(a) and § 405.1136(c) through
in dispute. meets all of the requirements of § 405.1136(f).
(i) Rejection of EAJR. (1) If a request (d) The ALJ issues a decision based on vacates the dismissal and remands the
for EAJR request does not meet all the the hearing record. case to the QIC for a reconsideration.
conditions set out in paragraphs (b), (c) (e) If all parties to the hearing waive (c) An ALJ’s decision regarding a
and (d) of this section, or if the review their right to appear at the hearing in QIC’s dismissal of a reconsideration
entity does not certify a request for person or by telephone or video- request is final and not subject to further
EAJR, the review entity advises in teleconference, the ALJ may make a review.
writing all parties that the request has decision based on the evidence that is
in the file and any new evidence that is § 405.1006 Amount in controversy
been denied, and returns the request to required to request an ALJ hearing and
the ALJ hearing office or the MAC, submitted for consideration. judicial review.
which will treat it as a request for (f) The ALJ may require the parties to
participate in a hearing if it is necessary (a) Definitions. For the purposes of
hearing or for MAC review, as aggregating claims to meet the amount
appropriate. to decide the case. If the ALJ determines
that it is necessary to obtain testimony in controversy requirement for an ALJ
(2) Whenever a review entity forwards
from a non-party, he or she may hold a hearing or judicial review:
a rejected EAJR request to an ALJ (1) ‘‘Common issues of law and fact’’
hearing office or the MAC, the appeal is hearing to obtain that testimony, even if
means the claims sought to be
considered timely filed and the 90-day all of the parties have waived the right
aggregated are denied, or payment is
decision making time frame begins on to appear. In that event, however, the
reduced, for similar reasons and arise
the day the request is received by the ALJ will give the parties the opportunity
from a similar fact pattern material to
hearing office or the MAC. to appear when the testimony is given,
the reason the claims are denied or
(j) Interest on any amounts in but may hold the hearing even if none
payment is reduced.
controversy. (1) If a provider or supplier of the parties decide to appear. (2) ‘‘Delivery of similar or related
is granted judicial review in accordance (g) An ALJ may also issue a decision
services’’ means like or coordinated
with this section, the amount in on the record on his or her own
services or items provided to one or
controversy, if any, is subject to annual initiative if the evidence in the hearing
more beneficiaries.
interest beginning on the first day of the record supports a fully favorable (b) ALJ review. To be entitled to a
first month beginning after the 60-day finding. hearing before an ALJ, the party must
period as determined in accordance meet the amount in controversy
with paragraphs (f)(4) or (h)(2) of this § 405.1002 Right to an ALJ hearing.
(a) A party to a QIC reconsideration requirements of this section.
section, as applicable. (1) For ALJ hearing requests, the
(2) The interest is awarded by the may request a hearing before an ALJ if—
(1) The party files a written request required amount remaining in
reviewing court and payable to a controversy must be $100 increased by
prevailing party. for an ALJ hearing within 60 days after
receipt of the notice of the QIC’s the percentage increase in the medical
(3) The rate of interest is equal to the care component of the consumer price
rate of interest applicable to obligations reconsideration; and
(2) The party meets the amount in index for all urban consumers (U.S. city
issued for purchase by the Federal
controversy requirements of § 405.1006. average) as measured from July 2003 to
Supplementary Medical Insurance Trust
(b) A party who files a timely appeal the July preceding the current year
Fund for the month in which the civil
before a QIC and whose appeal involved.
action authorized under this subpart is (2) If the figure in paragraph (b)(1) of
commenced. continues to be pending before a QIC at
the end of the period described in this section is not a multiple of $10,
(4) No interest awarded in accordance
§ 405.970 has a right to a hearing before then it is rounded to the nearest
with this paragraph shall be income or
an ALJ if— multiple of $10. The Secretary will
cost for purposes of determining
(1) The party files a written request publish changes to the amount in
reimbursement due to providers or
with the QIC to escalate the appeal to controversy requirement in the Federal
suppliers under Medicare.
the ALJ level after the period described Register when necessary.
ALJ Hearings in § 405.970(a) and (b) has expired and (c) Judicial review. To be entitled to
the party files the request in accordance judicial review, a party must meet the
§ 405.1000 Hearing before an ALJ: General amount in controversy requirements of
rule. with § 405.970(d);
(2) The QIC does not issue a final this subpart at the time it requests
(a) If a party is dissatisfied with a judicial review.
QIC’s reconsideration or if the action within 5 days of receiving the
request for escalation in accordance (1) For review requests, the required
adjudication period specified in amount remaining in controversy must
§ 405.970 for the QIC to complete its with § 405.970(e)(2); and
(3) The party has an amount be $1,000 or more, adjusted as specified
reconsideration has elapsed, the party in paragraphs (b)(1) and (b)(2) of this
remaining in controversy specified in
may request a hearing. section.
(b) A hearing may be conducted in- § 405.1006.
(2) [Reserved]
person, by video-teleconference (VTC), § 405.1004 Right to ALJ review of QIC (d) Calculating the amount remaining
or by telephone. At the hearing, the notice of dismissal. in controversy. (1) The amount
parties may submit evidence (subject to (a) A party to a QIC’s dismissal of a remaining in controversy is computed
the restrictions in § 405.1018 and request for reconsideration has a right to as the actual amount charged the
§ 405.1028), examine the evidence used have the dismissal reviewed by an ALJ individual for the items and services in
in making the determination under if— question, reduced by—
review, and present and/or question (1) The party files a written request (i) Any Medicare payments already
witnesses. for an ALJ review within 60 days after made or awarded for the items or
(c) In some circumstances, a receipt of the notice of the QIC’s services; and
representative of CMS or its contractor, dismissal; and (ii) Any deductible and coinsurance
including the QIC, QIO, fiscal (2) The party meets the amount in amounts applicable in the particular
intermediary or carrier, may participate controversy requirements of § 405.1006. case.
in or join the hearing as a party. (see (b) If the ALJ determines that the (2) Notwithstanding paragraph (d)(1)
§ 405.1010 and § 405.1012). QIC’s dismissal was in error, he or she of this section, when payment is made
for items or services under section 1879 of law and fact or delivery of similar or hearing that it intends to participate as
of the Act or § 411.400 of this chapter, related services. a party no later than 10 days after
or the liability of the beneficiary for receiving the notice of hearing.
those services is limited under § 411.402 § 405.1008 Parties to an ALJ hearing. (c) When CMS or one or more of its
of this chapter, the amount in (a) Who may request a hearing. Any contractors participate in a hearing as a
controversy is computed as the amount party to the QIC’s reconsideration may party, it may file position papers,
that the beneficiary would have been request a hearing before an ALJ. provide testimony to clarify factual or
charged for the items or services in However, only the appellant (that is, the policy issues, call witnesses or cross-
question if those expenses were not paid party that filed and maintained the examine the witnesses of other parties.
under § 411.400 of this chapter or if that request for reconsideration by a QIC) CMS or its contractor(s) will submit any
liability was not limited under § 411.402 may request that the appeal be escalated position papers within the time frame
of this chapter, reduced by any to the ALJ level if the QIC does not specified by the ALJ. CMS or its
deductible and coinsurance amounts complete its action within the time contractor(s), when acting as parties,
applicable in the particular case. frame described in § 405.970. may also submit additional evidence to
(e) Aggregating claims to meet the (b) Who are parties to the ALJ hearing. the ALJ within the time frame
amount in controversy— The party who filed the request for designated by the ALJ.
(1) Appealing QIC reconsiderations to hearing and all other parties to the (d) The ALJ may not require CMS or
the ALJ level. Either an individual reconsideration are parties to the ALJ a contractor to enter a case as a party or
appellant or multiple appellants may hearing. In addition, a representative of draw any adverse inferences if CMS or
aggregate two or more claims to meet CMS or its contractor may be a party a contractor decides not to enter as a
the amount in controversy for an ALJ under the circumstances described in party.
hearing if— § 405.1012.
§ 405.1014 Request for an ALJ hearing.
(i) The claims were previously § 405.1010 When CMS or its contractors
reconsidered by a QIC; (a) Content of the request. The request
may participate in an ALJ hearing. for an ALJ hearing must be made in
(ii) The request for ALJ hearing lists (a) An ALJ may request, but may not
all of the claims to be aggregated and is writing. The request must include all of
require, CMS and/or one or more of its the following—
filed within 60 days after receipt of all contractors, to participate in any (1) The name, address, and Medicare
of the reconsiderations being appealed; proceedings before the ALJ, including health insurance claim number of the
and the oral hearing, if any. CMS and/or one beneficiary whose claim is being
(iii) The ALJ determines that the or more of its contractors, including a appealed.
claims that a single appellant seeks to QIC, may also elect to participate in the (2) The name and address of the
aggregate involve the delivery of similar hearing process. appellant, when the appellant is not the
or related services, or the claims that (b) If CMS or one or more of its beneficiary.
multiple appellants seek to aggregate contractors elects to participate, it (3) The name and address of the
involve common issues of law and fact. advises the ALJ, the appellant, and all designated representatives if any.
Part A and Part B claims may be other parties identified in the notice of (4) The document control number
combined to meet the amount in hearing of its intent to participate no assigned to the appeal by the QIC, if
controversy requirements. later than 10 days after receiving the any.
(2) Aggregating claims that are notice of hearing. (5) The dates of service.
escalated from the QIC level to the ALJ (c) Participation may include filing (6) The reasons the appellant
level. Either an individual appellant or position papers or providing testimony disagrees with the QIC’s reconsideration
multiple appellants may aggregate two to clarify factual or policy issues in a or other determination being appealed.
or more claims to meet the amount in case, but it does not include calling (7) A statement of any additional
controversy for an ALJ hearing if— witnesses or cross-examining the evidence to be submitted and the date
(i) The claims were pending before witnesses of a party to the hearing. it will be submitted.
the QIC in conjunction with the same (d) When CMS or its contractor (b) When and where to file. The
request for reconsideration; participates in an ALJ hearing, the request for an ALJ hearing after a QIC
(ii) The appellant(s) requests agency or its contractor may not be reconsideration must be filed—
aggregation of the claims to the ALJ called as a witness during the hearing. (1) Within 60 days from the date the
level in the same request for escalation; (e) CMS or its contractor must submit party receives notice of the QIC’s
and any position papers within the time reconsideration;
(iii) The ALJ determines that the frame designated by the ALJ. (2) With the entity specified in the
claims that a single appellant seeks to (f) The ALJ cannot draw any adverse QIC’s reconsideration. The appellant
aggregate involve the delivery of similar inferences if CMS or a contractor must also send a copy of the request for
or related services, or the claims that decides not to participate in any hearing to the other parties. Failure to
multiple appellants seek to aggregate proceedings before an ALJ, including do so will toll the ALJ’s 90-day
involve common issues of law and fact. the hearing. adjudication deadline until all parties to
Part A and Part B claims may be the QIC reconsideration receive notice
combined to meet the amount in § 405.1012 When CMS or its contractors of the requested ALJ hearing. If the
controversy requirements. may be a party to a hearing. request for hearing is timely filed with
(f) Content of request for aggregation. (a) CMS and/or one or more of its an entity other than the entity specified
When an appellant(s) seeks to aggregate contractors, including a QIC, may be a in the QIC’s reconsideration, the
claims in a request for an ALJ hearing, party to an ALJ hearing unless the deadline specified in § 405.1016 for
the appellant(s) must— request for hearing is filed by an deciding the appeal begins on the date
(1) Specify all of the claims the unrepresented beneficiary. the entity specified in the QIC’s
appellant(s) seeks to aggregate; and (b) CMS and/or the contractor(s) reconsideration receives the request for
(2) State why the appellant(s) believes advises the ALJ, appellant, and all other hearing. If the request for hearing is
that the claims involve common issues parties identified in the notice of filed with an entity, other than the
entity specified in the QIC’s discussed in paragraph (a) and (c) of this (2) The notice of hearing will require
reconsideration, the ALJ hearing office section is tolled. all parties to the ALJ hearing (and any
must notify the appellant of the date of potential participant from CMS or its
§ 405.1018 Submitting evidence before the
receipt of the request and the contractor who wishes to attend the
ALJ hearing.
commencement of the 90-day hearing) to reply to the notice by:
adjudication time frame. (a) Except as provided in this section, (i) Acknowledging whether they plan
(c) Extension of time to request a parties must submit all written evidence to attend the hearing at the time and
hearing. (1) If the request for hearing is they wish to have considered at the place proposed in the notice of hearing;
not filed within 60 calendar days of hearing with the request for hearing (or or
receipt of the QIC’s reconsideration, an within 10 days of receiving the notice of (ii) Objecting to the proposed time
appellant may request an extension for hearing). and/or place of the hearing.
(b) If a party submits written evidence (d) A party’s right to waive a hearing.
good cause (See §§ 405.942(b)(2) and
later than 10 days after receiving the A party may also waive the right to a
405.942(b)(3)).
(2) Any request for an extension of notice of hearing, the period between hearing and request that the ALJ issue
time must be in writing, give the reasons the time the evidence was required to a decision based on the written
why the request for a hearing was not have been submitted and the time it is evidence in the record. As provided in
received is not counted toward the § 405.1000, the ALJ may require the
filed within the stated time period, and
adjudication deadline specified in parties to attend a hearing if it is
must be filed with the entity specified
§ 405.1016. necessary to decide the case. If the ALJ
in the notice of reconsideration. (c) Any evidence submitted by a
(3) If the ALJ finds there is good cause determines that it is necessary to obtain
provider, supplier, or beneficiary
for missing the deadline, the time testimony from a non-party, he or she
represented by a provider or supplier
period for filing the hearing request will may still hold a hearing to obtain that
that is not submitted prior to the
be extended. To determine whether testimony, even if all of the parties have
issuance of the QIC’s reconsideration
good cause for late filing exists, the ALJ waived the right to appear. In those
determination must be accompanied by
uses the standards set forth in cases, the ALJ will give the parties the
a statement explaining why the
§ 405.942(b)(2) and § 405.942(b)(3). evidence is not previously submitted to opportunity to appear when the
(4) If a request for hearing is not testimony is given but may hold the
the QIC, or a prior decision-maker (see
timely filed, the adjudication period in hearing even if none of the parties
§ 405.1028).
§ 405.1016 begins the date the ALJ (d) The requirements of this section decide to appear.
hearing office grants the request to do not apply to oral testimony given at (e) A party’s objection to time and
extend the filing deadline. a hearing, or to evidence submitted by place of hearing. (1) If a party objects to
an unrepresented beneficiary. the time and place of the hearing, the
§ 405.1016 Time frames for deciding an party must notify the ALJ at the earliest
appeal before an ALJ.
§ 405.1020 Time and place for a hearing possible opportunity before the time set
(a) When a request for an ALJ hearing before an ALJ. for the hearing.
is filed after a QIC has issued a (a) General. The ALJ sets the time and (2) The party must state the reason for
reconsideration, the ALJ must issue a place for the hearing, and may change the objection and state the time and
decision, dismissal order, or remand to the time and place, if necessary. place he or she wants the hearing to be
the QIC, as appropriate, no later than (b) Determining how appearances are held.
the end of the 90-day period beginning made. The ALJ will direct that the (3) The request must be in writing.
on the date the request for hearing is appearance of an individual be (4) The ALJ may change the time or
received by the entity specified in the conducted by videoteleconferencing place of the hearing if the party has
QIC’s notice of reconsideration, unless (VTC) if the ALJ finds that VTC good cause. (Section 405.1052(a)(2)
the 90-day period has been extended as technology is available to conduct the provides the procedures the ALJ follows
provided in this subpart. appearance. The ALJ may also offer to when a party does not respond to a
(b) The adjudication period specified conduct a hearing by telephone if the notice of hearing and fails to appear at
in paragraph (a) of this section begins on request for hearing or administrative the time and place of the hearing.)
the date that a timely filed request for record suggests that a telephone hearing (f) Good cause for changing the time
hearing is received by the entity may be more convenient for one or more or place. The ALJ can find good cause
specified in the QIC’s reconsideration, of the parties. The ALJ, with the for changing the time or place of the
or, if it is not timely filed, the date that concurrence of the Managing Field scheduled hearing and reschedule the
the ALJ hearing office grants any Office ALJ, may determine that an in- hearing if the information available to
extension to the filing deadline. person hearing should be conducted if— the ALJ supports the party’s contention
(c) When an appeal is escalated to the (1) VTC technology is not available; or that—
ALJ level because the QIC has not (2) Special or extraordinary (1) The party or his or her
issued a reconsideration determination circumstances exist. representative is unable to attend or to
within the period specified in § 405.970, (c) Notice of hearing. (1) The ALJ will travel to the scheduled hearing because
the ALJ must issue a decision, dismissal send a notice of hearing to all parties of a serious physical or mental
order, or remand to the QIC, as that filed an appeal or otherwise condition, incapacitating injury, or
appropriate, no later than the end of the participated in any of the death in the family; or
180-day period beginning on the date determinations in paragraphs (c) (2) Severe weather conditions make it
that the request for escalation is through (i) of this section, any party impossible to travel to the hearing; or
received by the ALJ hearing office, who was found liable for the services at (3) Good cause exists as set forth in
unless the 180-day period is extended as issue subsequent to the initial paragraph (g) of this section.
provided in this subpart. determination, the contractor that (g) Good cause in other
(d) When CMS is a party to an ALJ issued the initial determination, and the circumstances. (1) In determining
hearing and a party requests discovery QIC that issued the reconsideration, whether good cause exists in
under § 405.1037 against another party advising them of the proposed time and circumstances other than those set forth
to the hearing, the adjudication periods place of the hearing. in paragraph (f) of this section, the ALJ
considers the party’s reason for for a time and place when the party may § 405.1024 Objections to the issues.
requesting the change, the facts appear in person before the ALJ. (a) If a party objects to the issues
supporting the request, and the impact described in the notice of hearing, he or
of the proposed change on the efficient § 405.1022 Notice of a hearing before an
ALJ. she must notify the ALJ in writing at the
administration of the hearing process. earliest possible opportunity before the
(2) Factors evaluated to determine the (a) Issuing the notice. After the ALJ time set for the hearing, and no later
impact of the change include, but are sets the time and place of the hearing, than 5 days before the hearing.
not limited to, the effect on processing notice of the hearing will be mailed to
(b) The party must state the reasons
other scheduled hearings, potential the parties and other potential
for his or her objections and send a copy
delays in rescheduling the hearing, and participants, as provided in
of the objections to all other parties to
whether any prior changes were granted § 405.1020(c) at their last known
the appeal.
the party. addresses, or given by personal service,
unless the parties have indicated in (c) The ALJ makes a decision on the
(3) Examples of other circumstances a objections either in writing or at the
party might give for requesting a change writing that they do not wish to receive
this notice. The notice is mailed or hearing.
in the time or place of the hearing
include, but are not limited to, the served at least 20 days before the § 405.1026 Disqualification of the ALJ.
following: hearing.
(a) An ALJ cannot conduct a hearing
(i) The party has attempted to obtain (b) Notice information. (1) The notice if he or she is prejudiced or partial to
a representative but needs additional of hearing contains a statement of the any party or has any interest in the
time. specific issues to be decided and will matter pending for decision.
(ii) The party’s representative was inform the parties that they may
(b) If a party objects to the ALJ who
appointed within 10 days of the designate a person to represent them
will conduct the hearing, the party must
scheduled hearing and needs additional during the proceedings.
notify the ALJ within 10 calendar days
time to prepare for the hearing. (2) The notice must include an of the date of the notice of hearing. The
(iii) The party’s representative has a explanation of the procedures for ALJ considers the party’s objections and
prior commitment to be in court or at requesting a change in the time or place decides whether to proceed with the
another administrative hearing on the of the hearing, a reminder that, if the hearing or withdraw.
date scheduled for the hearing. appellant fails to appear at the
(c) If the ALJ withdraws, another ALJ
(iv) A witness who will testify to facts scheduled hearing without good cause,
will be appointed to conduct the
material to a party’s case is unavailable the ALJ may dismiss the hearing
hearing. If the ALJ does not withdraw,
to attend the scheduled hearing and the request, and other information about the
the party may, after the ALJ has issued
evidence cannot be otherwise obtained. scheduling and conduct of the hearing.
an action in the case, present his or her
(v) Transportation is not readily (3) The appellant will also be told if
objections to the MAC in accordance
available for a party to travel to the his or her appearance or that of any
with § 405.1100 et seq. The MAC will
hearing. other party or witness is scheduled by
then consider whether the hearing
(vi) The party is unrepresented, and is VTC, telephone, or in person. If the ALJ
decision should be revised or a new
unable to respond to the notice of has scheduled the appellant or other
hearing held before another ALJ. If the
hearing because of any physical, mental, party to appear at the hearing by VTC,
case is escalated to the MAC after a
educational, or linguistic limitations the notice of hearing will advise that the
hearing is held but before the ALJ issues
(including any lack of facility with the scheduled place for the hearing is a VTC
a decision, the MAC considers the
English language) that he or she has. site and explain what it means to appear
reasons the party objected to the ALJ
(h) Effect of rescheduling hearing. If a at the hearing by VTC.
during its review of the case and, if the
hearing is postponed at the request of (4) The notice advises the appellant or MAC deems it necessary, may remand
the appellant for any of the above other parties that if they object to the case to another ALJ for a hearing and
reasons, the time between the originally appearing by VTC or telephone, and decision.
scheduled hearing date and the new wish instead to have their hearing at a
hearing date is not counted toward the time and place where they may appear § 405.1028 Prehearing case review of
adjudication deadline specified in in person before the ALJ, they must evidence submitted to the ALJ by the
§ 405.1016. follow the procedures set forth at appellant.
(i) A party request for an in-person § 405.1020(i) for notifying the ALJ of (a) Examination of any new evidence.
hearing. (1) If a party objects to a VTC their objections and for requesting an in- After a hearing is requested but before
hearing or to the ALJ’s offer to conduct person hearing. it is held, the ALJ will examine any new
a hearing by telephone, the party must (c) Acknowledging the notice of evidence submitted with the request for
notify the ALJ at the earliest possible hearing. (1) If the appellant, any other hearing (or within 10 days of receiving
opportunity before the time set for the party to the reconsideration, or their the notice of hearing) as specified in
hearing and request an in-person representative does not acknowledge § 405.1018, by a provider, supplier, or
hearing. receipt of the notice of hearing, the ALJ beneficiary represented by a provider or
(2) The party must state the reason for hearing office attempts to contact the supplier to determine whether the
the objection and state the time or place party for an explanation. provider, supplier, or beneficiary
he or she wants the hearing to be held. (2) If the party states that he or she did represented by a provider or supplier
(3) The request must be in writing. not receive the notice of hearing, an had good cause for submitting the
(4) A request for an in-person hearing amended notice is sent to him or her by evidence for the first time at the ALJ
shall constitute a waiver of the 90-day certified mail or e-mail, if available. (See level.
time frame specified in § 405.1016. § 405.1052 for the procedures the ALJ (b) Determining if good cause exists.
(5) The ALJ may grant the request, follows in deciding if the time or place An ALJ finds good cause, for example,
with the concurrence of the Managing of a scheduled hearing will be changed when the new evidence is material to an
Field Office ALJ, upon a finding of good if a party does not respond to the notice issue addressed in the QIC’s
cause and will reschedule the hearing of hearing). reconsideration and that issue was not
identified as a material issue prior to the the determination, he or she notifies the the right to appear before the ALJ to
QIC’s reconsideration. parties before the hearing and may present evidence and to state his or her
(c) If good cause does not exist. If the consider it an issue at the hearing. position. A party may appear by video-
ALJ determines that there was not good (b) New issues—(1) General. The ALJ teleconferencing (VTC), telephone, or in
cause for submitting the evidence for may consider a new issue at the hearing person as determined under § 405.1020.
the first time at the ALJ level, the ALJ if he or she notifies all of the parties (2) A party may also make his or her
must exclude the evidence from the about the new issue any time before the appearance by means of a
proceeding and may not consider it in start of the hearing. The new issue may representative, who may make the
reaching a decision. include issues resulting from the appearance by VTC, telephone, or in
(d) Notification to all parties. As soon participation of CMS at the ALJ level of person, as determined under § 405.1020.
as possible, but no later than the start of adjudication and from any evidence and (3) Witness testimony may be given
the hearing, the ALJ must notify all position papers submitted by CMS for and CMS participation may also be
parties that the evidence is excluded the first time to the ALJ. The ALJ or any accomplished by VTC, telephone, or in
from the hearing. party may raise a new issue; however, person, as determined under § 405.1020.
the ALJ may only consider a new issue (b) Waiver of the right to appear. (1)
§ 405.1030 ALJ hearing procedures. A party may send the ALJ a written
if its resolution—
(a) General rule. A hearing is open to (i) Could have a material impact on statement indicating that he or she does
the parties and to other persons the ALJ the claim or claims that are the subject not wish to appear at the hearing.
considers necessary and proper. of the request for hearing; and (2) The appellant may subsequently
(b) At the hearing. At the hearing, the (ii) Is permissible under the rules withdraw his or her waiver at any time
ALJ fully examines the issues, questions governing reopening of determinations before the notice of the hearing decision
the parties and other witnesses, and and decisions (see § 405.980). is issued; however, by withdrawing the
may accept documents that are material (2) [Reserved] waiver the appellant agrees to an
to the issues consistent with § 405.1018 (c) Adding claims to a pending extension of the adjudication period as
and § 405.1028. appeal. An ALJ cannot add any claim, specified in § 405.1016 that may be
(c) Missing evidence. The ALJ may including one that is related to an issue necessary to schedule and hold the
also stop the hearing temporarily and that is appropriately before an ALJ, to a hearing.
continue it at a later date if he or she pending appeal unless it has been (3) Other parties may withdraw their
believes that there is material evidence adjudicated at the lower appeals levels waiver up to the date of the scheduled
missing at the hearing. If the missing and all parties are notified of the new hearing, if any. Even if all of the parties
evidence is in the possession of the issue(s) before the start of the hearing. waive their right to appear at a hearing,
appellant, and the appellant is a the ALJ may require them to attend an
provider, supplier, or a beneficiary § 405.1034 When an ALJ may remand a oral hearing if he or she believes that a
represented by a provider or supplier, case to the QIC. personal appearance and testimony by
the ALJ must determine if the appellant (a) General. If an ALJ believes that the the appellant or any other party is
had good cause for not producing the written record is missing information necessary to decide the case.
evidence earlier. that is essential to resolving the issues (c) Presenting written statements and
(d) Good cause exists. If good cause on appeal and that information can be oral arguments. A party or a person
exists, the ALJ considers the evidence in provided only by CMS or its contractors, designated to act as a party’s
deciding the case and the adjudication then the ALJ may either: representative may appear before the
period specified in § 405.1016 is tolled (1) Remand the case to the QIC that ALJ to state the party’s case, to present
from the date of the hearing to the date issued the reconsideration or a written summary of the case, or to
the evidence is submitted. (2) Retain jurisdiction of the case and enter written statements about the facts
(e) Good cause does not exist. If the request that the contractor forward the and law material to the case in the
ALJ determines that there was not good missing information to the appropriate record. A copy of any written statements
cause for not submitting the evidence hearing office. must be provided to the other parties to
sooner, the evidence is excluded. (b) ALJ remands a case to a QIC. a hearing, if any, at the same time they
(f) Reopen the hearing. The ALJ may Consistent with § 405.1004 (b), the ALJ are submitted to the ALJ.
also reopen the hearing at any time will remand a case to the appropriate (d) Waiver of adjudication period. At
before he or she mails a notice of the QIC if the ALJ determines that a QIC’s any time during the hearing process, the
decision in order to receive new and dismissal of a request for appellant may waive the adjudication
material evidence pursuant to § 405.986. reconsideration was in error. deadline specified in § 405.1016 for
The ALJ may decide when the evidence (c) Relationship to local and national issuing a hearing decision. The waiver
is presented and when the issues are coverage determination appeals may be for a specific period of time
discussed. process. (1) The ALJ remands an appeal agreed upon by the ALJ and the
to the QIC that made the reconsideration appellant.
§ 405.1032 Issues before an ALJ. (e) What evidence is admissible at a
if the appellant is entitled to relief
(a) General rule. The issues before the pursuant to 42 CFR 426.460(b)(1), hearing. The ALJ may receive evidence
ALJ include all the issues brought out in 426.488(b), or 426.560(b)(1). at the hearing even though the evidence
the initial determination, (2) Unless the appellant is entitled to is not admissible in court under the
redetermination, or reconsideration that relief pursuant to 42 CFR 426.460(b)(1), rules of evidence used by the court.
were not decided entirely in a party’s 426.488(b), or 426.560(b)(1), the ALJ (f) Subpoenas. (1) When it is
favor. (For purposes of this provision, applies the LCD or NCD in place on the reasonably necessary for the full
the term ‘‘party’’ does not include a date the item or service was provided. presentation of a case, an ALJ may, on
representative of CMS or one of its his or her own initiative or at the
contractors that may be participating in § 405.1036 Description of an ALJ hearing request of a party, issue subpoenas for
the hearing.) However, if evidence process. the appearance and testimony of
presented before the hearing causes the (a) The right to appear and present witnesses and for a party to make books,
ALJ to question a favorable portion of evidence. (1) Any party to a hearing has records, correspondence, papers, or
other documents that are material to an is stayed until the MAC issues a written deposition or the ALJ finds that the
issue at the hearing available for decision that affirms, reverses, or proposed deposition is necessary and
inspection and copying. modifies the ALJ’s action on the appropriate in order to secure the
(2) A party’s written request for a subpoena. deponent’s testimony for an ALJ
subpoena must— (vi) If the MAC does not grant review hearing.
(i) Give the names of the witnesses or or take own motion review within the (3) A party may not request
documents to be produced; time allotted for the stay, the stay is admissions or send interrogatories or
(ii) Describe the address or location of lifted and the ALJ’s action stands. take any other form of discovery not
the witnesses or documents with (6) Enforcement. (i) If the ALJ permitted under this section.
sufficient detail to find them; determines, whether on his or her own (c) Time limits. (1) A party’s discovery
(iii) State the important facts that the motion or at the request of a party, that request is timely if the date of receipt of
witness or document is expected to a party or non-party subject to a a request by another party is no later
prove; and subpoena issued under this section has than the date specified by the ALJ
(iv) Indicate why these facts cannot be refused to comply with the subpoena, hearing.
proven without issuing a subpoena. the ALJ may request the Secretary to (2) A party may not conduct discovery
(3) Parties to a hearing who wish to seek enforcement of the subpoena in any later than the date specified by the
subpoena documents or witnesses must accordance with section 205(e) of the ALJ.
file a written request for the issuance of Act, 42 U.S.C. 405(e). (3) Before ruling on a request to
a subpoena with the requirements set (ii) Any enforcement request by an extend the time for requesting discovery
out in paragraph (f)(2) of this section ALJ must consist of a written notice to or for conducting discovery, the ALJ
with the ALJ within 10 calendar days of the Secretary describing in detail the must give the other parties to the appeal
receipt of the notice of hearing. ALJ’s findings of noncompliance and a reasonable period to respond to the
(4) Where a party has requested a his or her specific request for extension request.
subpoena, a subpoena will be issued enforcement, and providing a copy of (4) The ALJ may extend the time in
only where a party— the subpoena and evidence of its receipt which to request discovery or conduct
(i) Has sought discovery; by certified mail by the party or discovery only if the requesting party
(ii) Has filed a motion to compel; nonparty subject to the subpoena.
(iii) Has had that motion granted by establishes that it was not dilatory or
(iii) The ALJ must promptly mail a otherwise at fault in not meeting the
the ALJ; and copy of the notice and related
(iv) Nevertheless, has not received the original discovery deadline.
documents to the party subject to the (5) If the ALJ grants the extension
requested discovery. subpoena, and to any other party and
(5) Reviewability of subpoena request, it must impose a new discovery
affected non-party to the appeal. deadline and, if necessary, reschedule
rulings— (g) Witnesses at a hearing. Witnesses
(i) General rule. An ALJ ruling on a the hearing date so that all discoveries
may appear at a hearing. They testify end no later than 45 days before the
subpoena request is not subject to under oath or affirmation, unless the
immediate review by the MAC. The hearing.
ALJ finds an important reason to excuse (d) Motions to compel or for protective
ruling may be reviewed solely during them from taking an oath or affirmation.
the course of the MAC’s review order. (1) Each party is required to make
The ALJ may ask the witnesses any a good faith effort to resolve or narrow
specified in § 405.1102, § 405.1104, or questions relevant to the issues and
§ 405.1110, as applicable. Exception. To any discovery dispute.
allows the parties or their designated
the extent a subpoena compels (2) A party may submit to the ALJ a
representatives to do so.
disclosure of a matter for which an motion to compel discovery that is
objection based on privilege, or other § 405.1037 Discovery. permitted under this section or any ALJ
protection from disclosure such as case (a) General rules. (1) Discovery is order, and a party may submit a motion
preparation, confidentiality, or undue permissible only when CMS elects to for a protective order regarding any
burden, was made before an ALJ, the participate in an ALJ hearing as a party. discovery request to the ALJ.
MAC may review immediately the (2) The ALJ may permit discovery of (3) Any motion to compel or for
subpoena or that portion of the a matter that is relevant to the specific protective order must include a self-
subpoena as applicable. subject matter of the ALJ hearing, sworn declaration describing the
(ii) Where CMS objects to a discovery provided the matter is not privileged or movant’s efforts to resolve or narrow the
ruling, the MAC must take review and otherwise protected from disclosure and discovery dispute. The declaration must
the discovery ruling at issue is the ALJ determines that the discovery also be included with any response to
automatically stayed pending the MAC’s request is not unreasonable, unduly a motion to compel or for protective
order. burdensome or expensive, or otherwise order.
(iii) Upon notice to the ALJ that a inappropriate. (4) The ALJ must decide any motion
party or non-party, as applicable, (3) Any discovery initiated by a party in accordance with this section and any
intends to seek MAC review of the must comply with all requirements and prior discovery ruling in the appeal.
subpoena, the ALJ must stay all limitations of this section, along with (5) The ALJ must issue and mail to
proceedings affected by the subpoena. any further requirements or limitations each party a discovery ruling that grants
(iv) The ALJ determines the length of ordered by the ALJ. or denies the motion to compel or for
the stay under the circumstances of a (b) Limitations on discovery. Any protective order in whole or in part; if
given case, but in no event is the stay discovery before the ALJ is limited. applicable, the discovery ruling must
less than 15 days beginning after the day (1) A party may request of another specifically identify any part of the
on which the ALJ received notice of the party the reasonable production of disputed discovery request upheld and
party or non-party’s intent to seek MAC documents for inspection and copying. any part rejected, and impose any limits
review. (2) A party may not take the on discovery the ALJ finds necessary
(v) If the MAC grants a request for deposition, upon oral or written and appropriate.
review of the subpoena, the subpoena or examination, of another party unless the (e) Reviewability of discovery and
portion of the subpoena, as applicable, proposed deponent agrees to the disclosure rulings—
(1) General rule. An ALJ discovery (b) Parties do not wish to appear. (1) (5) A typed transcription of the
ruling, or an ALJ disclosure ruling such The ALJ may decide a case on the hearing is prepared if a party seeks
as one issued at a hearing is not subject record and not conduct a hearing if— judicial review of the case in a Federal
to immediate review by the MAC. The (i) All the parties indicate in writing district court within the stated time
ruling may be reviewed solely during that they do not wish to appear before period and all other jurisdictional
the course of the MAC’s review the ALJ at a hearing, including a hearing criteria are met, unless, upon the
specified in § 405.1100, § 405.1102, conducted by telephone or Secretary’s motion prior to the filing of
§ 405.1104, or § 405.1110, as applicable. videoconferencing, if available; or an answer, the court remands the case.
(2) Exception. To the extent a ruling (ii) The appellant lives outside the (b) Requesting and receiving copies of
authorizes discovery or disclosure of a United States and does not inform the the record.
matter for which an objection based on ALJ that he or she wants to appear, and (1) A party may request and receive a
privilege, or other protection from there are no other parties who wish to copy of all or part of the record,
disclosure such as case preparation, appear. including the exhibits list, documentary
confidentiality, or undue burden, was (2) When a hearing is not held, the evidence, and a copy of the tape of the
made before the ALJ, the MAC may decision of the ALJ must refer to the oral proceedings. The party may be
review that portion of the discovery or evidence in the record on which the asked to pay the costs of providing these
disclosure ruling immediately. decision was based. items.
(2) If a party requests all or part of the
(i) Where CMS objects to a discovery § 405.1040 Prehearing and posthearing record from the ALJ and an opportunity
ruling, the MAC must take review and conferences. to comment on the record, the time
the discovery ruling at issue is (a) The ALJ may decide on his or her beginning with the ALJ’s receipt of the
automatically stayed pending the MAC’s own, or at the request of any party to the request through the expiration of the
order. hearing, to hold a prehearing or time granted for the party’s response
(ii) Upon notice to the ALJ that a party posthearing conference to facilitate the does not count toward the 90-day
intends to seek MAC review of the hearing or the hearing decision. adjudication deadline.
ruling, the ALJ must stay all (b) The ALJ informs the parties of the
proceedings affected by the ruling. time, place, and purpose of the § 405.1044 Consolidated hearing before an
conference at least 7 calendar days ALJ.
(iii) The ALJ determines the length of
the stay under the circumstances of a before the conference date, unless a (a) A consolidated hearing may be
given case, but in no event must the party indicates in writing that it does held if one or more of the issues to be
length of the stay be less than 15 days not wish to receive a written notice of considered at the hearing are the same
beginning after the day on which the the conference. issues that are involved in another
ALJ received notice of the party or non- (c) At the conference, the ALJ may request for hearing or hearings pending
party’s intent to seek MAC review. consider matters in addition to those before the same ALJ.
stated in the notice of hearing, if the (b) It is within the discretion of the
(iv) Where CMS requests the MAC to ALJ to grant or deny an appellant’s
take review of a discovery ruling or parties consent in writing. A record of
the conference is made. request for consolidation. In considering
where the MAC grants a request for an appellant’s request, the ALJ may
(d) The ALJ issues an order stating all
review made by a party other than CMS consider factors such as whether the
agreements and actions resulting from
of a ruling, the ruling is stayed until the claims at issue may be more efficiently
the conference. If the parties do not
time the MAC issues a written decision decided if the requests for hearing are
object, the agreements and actions
that affirms, reverses, modifies, or combined. In considering the
become part of the hearing record and
remands the ALJ’s ruling. appellant’s request for consolidation,
are binding on all parties.
(v) With respect to a request from a the ALJ must take into account the
party, other than CMS, for review of a § 405.1042 The administrative record. adjudication deadlines for each case and
discovery ruling, if the MAC does not (a) Creating the record. (1) The ALJ may require an appellant to waive the
grant review or take own motion review makes a complete record of the adjudication deadline associated with
within the time allotted for the stay, the evidence, including the hearing one or more cases if consolidation
stay is lifted and the ruling stands. proceedings, if any. otherwise prevents the ALJ from
(f) Adjudication time frames. If a (2) The record will include marked as deciding all of the appeals at issue
party requests discovery from another exhibits, the documents used in making within their respective deadlines.
party to the ALJ hearing, the ALJ the decision under review, including, (c) The ALJ may also propose on his
adjudication time frame specified in but not limited to, claims, medical or her own motion to consolidate two or
§ 405.1016 is tolled until the discovery records, written statements, certificates, more cases in one hearing for
dispute is resolved. reports, affidavits, and any other administrative efficiency, but may not
evidence the ALJ admits. In the record, require an appellant to waive the
§ 405.1038 Deciding a case without a the ALJ must also discuss any evidence adjudication deadline for any of the
hearing before an ALJ.
excluded under § 405.1028 and include consolidated cases.
(a) Decision wholly favorable. If the a justification for excluding the (d) Before consolidating a hearing, the
evidence in the hearing record supports evidence. ALJ must notify CMS of his or her
a finding in favor of appellant(s) on (3) The appellant may review the intention to do so, and CMS may then
every issue, the ALJ may issue a hearing record at the hearing, or, if a hearing is elect to participate in the consolidated
decision without giving the parties prior not held, at any time before the ALJ’s hearing, as a party, by sending written
notice and without holding a hearing. notice of decision is issued. notice to the ALJ within 10 days after
The notice of the decision informs the (4) If a request for review is filed or receipt of the ALJ’s notice of the
parties that they have the right to a the case is escalated to the MAC, the consolidation.
hearing and a right to examine the complete record, including any (e) If the ALJ decides to hold a
evidence on which the decision is recording of the hearing, is forwarded to consolidated hearing, he or she may
based. the MAC. make either a consolidated decision and
record or a separate decision and record ALJ hearing office, unless the 90-day hearing and does not intend to further
on each claim. The ALJ ensures that any period is extended as provided in proceed with the appeal. If an attorney,
evidence that is common to all claims § 405.1016. or other legal professional on behalf of
and material to the common issue to be (e) Recommended decision. An ALJ a beneficiary or other appellant files the
decided is included in the consolidated issues a recommended decision if he or request for withdrawal, the ALJ may
record or each individual record, as she is directed to do so in the MAC’s presume that the representative has
applicable. remand order. An ALJ may not issue a advised the appellant of the
recommended decision on his or her consequences of the withdrawal and
§ 405.1046 Notice of an ALJ decision.
own motion. The ALJ mails a copy of dismissal.
(a) General rule. Unless the ALJ the recommended decision to all the (2) Neither the party that requested
dismisses the hearing, the ALJ will issue parties at their last known address. the hearing nor the party’s
a written decision that gives the representative appears at the time and
findings of fact, conclusions of law, and § 405.1048 The effect of an ALJ’s decision. place set for the hearing, if—
the reasons for the decision. The The decision of the ALJ is binding on (i) The party was notified before the
decision must be based on evidence all parties to the hearing unless— time set for the hearing that the request
offered at the hearing or otherwise (a) A party to the hearing requests a for hearing might be dismissed without
admitted into the record. The ALJ mails review of the decision by the MAC further notice for failure to appear;
a copy of the decision to all the parties within the stated time period or the (ii) The party did not appear at the
at their last known address, to the QIC MAC reviews the decision issued by an time and place of hearing and does not
that issued the reconsideration ALJ under the procedures set forth in contact the ALJ hearing office within 10
determination, and to the contractor that § 405.1110, and the MAC either issues a days and provide good cause for not
issued the initial determination. For final action or the appeal is escalated to appearing; or
overpayment cases involving multiple Federal district court under the (iii) The ALJ sends a notice to the
beneficiaries, where there is no provisions at § 405.1132 and the Federal party asking why the party did not
beneficiary liability, the ALJ may choose district court issues a decision. appear; and the party does not respond
to send written notice only to the (b) The decision is reopened and to the ALJ’s notice within 10 days or
appellant. In the event a payment will revised by an ALJ or the MAC under the does not provide good cause for the
be made to a provider or supplier in procedures explained in § 405.980; failure to appear.
conjunction with this ALJ decision, the (c) The expedited access to judicial (iv) In determining whether good
contractor must also issue a revised review process at § 405.990 is used; cause exists under this paragraph (a)(2),
electronic or paper remittance advice to (d) The ALJ’s decision is a the ALJ considers any physical, mental,
that provider or supplier. recommended decision directed to the educational, or linguistic limitations
(b) Content of the notice. The decision MAC and the MAC issues a decision; or (including any lack of facility with the
must be written in a manner calculated (e) In a case remanded by a Federal English language), that the party may
to be understood by a beneficiary and district court, the MAC assumes have.
must include— jurisdiction under the procedures in (3) The person or entity requesting a
(1) The specific reasons for the § 405.1138 and the MAC issues a hearing has no right to it under
determination, including, to the extent decision. § 405.1002.
appropriate, a summary of any clinical (4) The party did not request a hearing
or scientific evidence used in making § 405.1050 Removal of a hearing request within the stated time period and the
the determination; from an ALJ to the MAC. ALJ has not found good cause for
(2) The procedures for obtaining If a request for hearing is pending extending the deadline, as provided in
additional information concerning the before an ALJ, the MAC may assume § 405.1014(d).
decision; and responsibility for holding a hearing by (5) The beneficiary whose claim is
(3) Notification of the right to appeal requesting that the ALJ send the hearing being appealed died while the request
the decision to the MAC, including request to it. If the MAC holds a hearing, for hearing is pending and all of the
instructions on how to initiate an appeal it conducts the hearing according to the following criteria apply:
under this section. rules for hearings before an ALJ. Notice (i) The request for hearing was filed
(c) Limitation on decision. When the is mailed to all parties at their last by the beneficiary or the beneficiary’s
amount of payment for an item or known address informing them that the representative, and the beneficiary’s
service is an issue before the ALJ, the MAC has assumed responsibility for the surviving spouse or estate has no
ALJ may make a finding as to the case. remaining financial interest in the case.
amount of payment due. If the ALJ In deciding this issue, the ALJ considers
makes a finding concerning payment § 405.1052 Dismissal of a request for a if the surviving spouse or estate remains
when the amount of payment was not hearing before an ALJ. liable for the services that were denied
an issue before the ALJ, the contractor Dismissal of a request for a hearing is or a Medicare contractor held the
may independently determine the in accordance with the following: beneficiary liable for subsequent similar
payment amount. In either of the (a) An ALJ dismisses a request for a services under the limitation of liability
aforementioned situations, an ALJ’s hearing under any of the following provisions based on the denial of the
decision is not final for purposes of conditions: services at issue.
determining the amount of payment (1) At any time before notice of the (ii) No other individuals or entities
due. The amount of payment hearing decision is mailed, if only one that have a financial interest in the case
determined by the contractor in party requested the hearing and that wish to pursue an appeal under
effectuating the ALJ’s decision is a new party asks to withdraw the request. This § 405.1002.
initial determination under § 405.924. request may be submitted in writing to (iii) No other individual or entity filed
(d) Timing of decision. The ALJ issues the ALJ or made orally at the hearing. a valid and timely request for an ALJ
a decision by the end of the 90-day The request for withdrawal must hearing in accordance to § 405.1020.
period beginning on the date when the include a clear statement that the (6) The ALJ dismisses a hearing
request for hearing is received in the appellant is withdrawing the request for request entirely or refuses to consider
any one or more of the issues because an NCD applies to a specific claim for for review, unless the 90-day period is
a QIC, an ALJ or the MAC has made a benefits and, if so, whether the NCD was extended as provided in this subpart.
previous determination or decision applied correctly to the claim. (d) When deciding an appeal that was
under this subpart about the appellant’s escalated from the ALJ level to the
rights on the same facts and on the same § 405.1062 Applicability of local coverage MAC, the MAC will issue a final action
determinations and other policies not
issue(s) or claim(s), and this previous binding on the ALJ and MAC.
or remand the case to the ALJ within
determination or decision has become 180 days of receipt of the appellant’s
final by either administrative or judicial (a) ALJs and the MAC are not bound request for escalation, unless the 180-
action. by LCDs, LMRPs, or CMS program day period is extended as provided in
(7) The appellant abandons the guidance, such as program memoranda this subpart.
request for hearing. An ALJ may and manual instructions, but will give
conclude that an appellant has substantial deference to these policies if § 405.1102 Request for MAC review when
they are applicable to a particular case. ALJ issues decision or dismissal.
abandoned a request for hearing when
the ALJ hearing office attempts to (b) If an ALJ or MAC declines to (a) A party to the ALJ hearing may
schedule a hearing and is unable to follow a policy in a particular case, the request a MAC review if the party files
contact the appellant after making ALJ or MAC decision must explain the a written request for a MAC review
reasonable efforts to do so. reasons why the policy was not within 60 days after receipt of the ALJ’s
(b) Notice of dismissal. The ALJ mails followed. An ALJ or MAC decision to decision or dismissal. A party
a written notice of the dismissal of the disregard such policy applies only to requesting a review may ask that the
hearing request to all parties at their last the specific claim being considered and time for filing a request for MAC review
known address. The notice states that does not have precedential effect. be extended if—
there is a right to request that the MAC (c) An ALJ or MAC may not set aside (1) The request for an extension of
vacate the dismissal action. or review the validity of an LMRP or time is in writing;
LCD for purposes of a claim appeal. An (2) It is filed with the MAC; and
§ 405.1054 Effect of dismissal of a request ALJ or the DAB may review or set aside (3) It explains why the request for
for a hearing before an ALJ. an LCD (or any part of an LMRP that review was not filed within the stated
The dismissal of a request for a constitutes an LCD) in accordance with time period. If the MAC finds that there
hearing is binding, unless it is vacated part 426 of this title. is good cause for missing the deadline,
by the MAC under § 405.1108(b). the time period will be extended. To
§ 405.1063 Applicability of CMS Rulings.
Applicability of Medicare Coverage determine whether good cause exists,
CMS Rulings are published under the the MAC uses the standards outlined at
Policies authority of the Administrator, CMS. §§ 405.942(b)(2) and 405.942(b)(3).
§ 405.1060 Applicability of national Consistent with § 401.108 of this (b) A party does not have the right to
coverage determinations (NCDs). chapter, rulings are binding on all CMS seek MAC review of an ALJ’s remand to
(a) General rule. (1) An NCD is a components, on all HHS components a QIC or an ALJ’s affirmation of a QIC’s
determination by the Secretary of that adjudicate matters under the dismissal of a request for
whether a particular item or service is jurisdiction of CMS, and on the Social reconsideration.
covered nationally under Medicare. Security Administration to the extent (c) For purposes of requesting MAC
(2) An NCD does not include a that components of the Social Security review (§ 405.1100 through § 405.1140),
determination of what code, if any, is Administration adjudicate matters unless specifically excepted the term,
assigned to a particular item or service under the jurisdiction of CMS. ‘‘party,’’ includes CMS where CMS has
covered under Medicare or a § 405.1064 ALJ decisions involving entered into a case as a party according
determination of the amount of payment statistical samples. to § 405.1012. The term, ‘‘appellant,’’
made for a particular item or service. does not include CMS, where CMS has
When an appeal from the QIC
(3) NCDs are made under section entered into a case as a party according
involves an overpayment issue and the
1862(a)(1) of the Act as well as under to § 405.1012.
QIC used a statistical sample in reaching
other applicable provisions of the Act.
(4) An NCD is binding on all Medicare its reconsideration, the ALJ must base § 405.1104 Request for MAC review when
contractors, including QIOs, QICs, his or her decision on a review of the an ALJ does not issue a decision timely.
Medicare Advantage Organizations, entire statistical sample used by the (a) Requesting escalation. An
Prescription Drug Plans and their QIC. appellant who files a timely request for
sponsors, HMOs, CMPs, HCPPs, ALJs Medicare Appeals Council Review hearing before an ALJ and whose appeal
and the MAC. continues to be pending before the ALJ
(b) Review by an ALJ. (1) An ALJ may § 405.1100 Medicare Appeals Council at the end of the applicable ALJ
not disregard, set aside, or otherwise review: General. adjudication period under § 405.1016
review an NCD. (a) The appellant or any other party to may request MAC review if—
(2) An ALJ may review the facts of a the hearing may request that the MAC (1) The appellant files a written
particular case to determine whether an review an ALJ’s decision or dismissal. request with the ALJ to escalate the
NCD applies to a specific claim for (b) Under circumstances set forth in appeal to the MAC after the
benefits and, if so, whether the NCD was § 405.1104 and 405.1108, the appellant adjudication period has expired; and
applied correctly to the claim. may request that a case be escalated to (2) The ALJ does not issue a final
(c) Review by the MAC. (1) The MAC the MAC for a decision even if the ALJ action or remand the case to the QIC
may not disregard, set aside, or has not issued a decision or dismissal in within the latter of 5 days of receiving
otherwise review an NCD for purposes his or her case. the request for escalation or 5 days from
of a section 1869 claim appeal, except (c) When the MAC reviews an ALJ’s the end of the applicable adjudication
that the DAB may review NCDs as decision, it undertakes a de novo period set forth in § 405.1016.
provided under part 426 of this title. review. The MAC issues a final action (b) Escalation. (1) If the ALJ is not
(2) The MAC may review the facts of or remands a case to the ALJ within 90 able to issue a final action or remand
a particular case to determine whether days of receipt of the appellant’s request within the time period set forth in
paragraph (a)(2) of this section, he or § 405.1108 MAC actions when request for (ii) In CMS’ view, the ALJ’s decision
she sends notice to the appellant. review or escalation is filed. or dismissal is not supported by the
(2) The notice acknowledges receipt (a) Except as specified in paragraphs preponderance of evidence in the record
of the request for escalation, and (c) and (d) of this section, when a party or the ALJ abused his or her discretion.
confirms that the ALJ is not able to issue requests that the MAC review an ALJ’s (2) CMS’s referral to the MAC is made
a final action or remand order within decision, the MAC will review the ALJ’s in writing and must be filed with the
the statutory time frame. decision de novo. The party requesting MAC no later than 60 days after the
(3) If the ALJ does not act on a request review does not have a right to a hearing ALJ’s decision or dismissal is issued.
for escalation within the time period set before the MAC. The MAC will consider The written referral will state the
forth in paragraph (a)(2) of this section all of the evidence in the administrative reasons why CMS believes that the MAC
or does not send the required notice to record. Upon completion of its review, must review the case on its own motion.
the appellant, the QIC decision becomes the MAC may adopt, modify, or reverse CMS will send a copy of its referral to
a final administrative decision for the ALJ’s decision or remand the case to all parties to the ALJ’s action and to the
purposes of MAC review. an ALJ for further proceedings. ALJ. Parties to the ALJ’s action may file
(c) No escalation. If the ALJ’s (b) When a party requests that the exceptions to the referral by submitting
adjudication period set forth in MAC review an ALJ’s dismissal, the written comments to the MAC within 20
§ 405.1016 expires, the case remains MAC may deny review or vacate the days of the referral notice. A party
with the ALJ until a final action is dismissal and remand the case to the submitting comments to the MAC must
issued and the appellant does not ALJ for further proceedings. send such comments to CMS and all
request escalation to the MAC or the (c) The MAC will dismiss a request other parties to the ALJ’s decision.
appellant requests escalation to the for review when the party requesting (c) Standard of review. (1) Referral by
MAC. review does not have a right to a review CMS after participation at the ALJ level.
by the MAC, or will dismiss the request If CMS or its contractor participated in
§ 405.1106 Where a request for review or for a hearing for any reason that the ALJ an appeal at the ALJ level, the MAC
escalation may be filed. could have dismissed the request for exercises its own motion authority if
(a) When a request for a MAC review hearing. there is an error of law material to the
is filed after an ALJ has issued a (d) When an appellant requests outcome of the case, an abuse of
decision or dismissal, the request for escalation of a case from the ALJ level discretion by the ALJ, the decision is
review may be filed with the MAC or to the MAC, the MAC may take any of not consistent with the preponderance
the hearing office that issued the ALJ’s the following actions: of the evidence of record, or there is a
decision or dismissal. The appellant (1) Issue a decision based on the broad policy or procedural issue that
must also send a copy of the request for record constructed at the QIC and any may affect the general public interest. In
review to the other parties to the ALJ additional evidence, including oral deciding whether to accept review
decision or dismissal. Failure to copy testimony, entered in the record by the under this standard, the MAC will limit
the other parties tolls the MAC’s ALJ before the case was escalated. its consideration of the ALJ’s action to
adjudication deadline set forth in (2) Conduct any additional those exceptions raised by CMS.
§ 405.1100 until all parties to the proceedings, including a hearing, that (2) Referral by CMS when CMS did
hearing receive notice of the request for the MAC determines are necessary to not participate in the ALJ proceedings or
MAC review. If the request for review is issue a decision. appear as a party. The MAC will accept
timely filed with the ALJ hearing office (3) Remand the case to an ALJ for review if the decision or dismissal
rather than the MAC, the MAC’s further proceedings, including a contains an error of law material to the
adjudication period to conduct a review hearing. outcome of the case or presents a broad
begins on the date the request for review (4) Dismiss the request for MAC policy or procedural issue that may
is received by the MAC. Upon receipt of review because the appellant does not affect the general public interest. In
a request for review from an entity other have the right to escalate the appeal. deciding whether to accept review, the
than the ALJ hearing office, the MAC (5) Dismiss the request for a hearing MAC will limit its consideration of the
will send written notice to the appellant for any reason that the ALJ could have ALJ’s action to those exceptions raised
of the date of receipt of the request and dismissed the request. by CMS.
commencement of the adjudication time § 405.1110 MAC reviews on its own (d) MAC’s action. If the MAC decides
frame. motion. to review a decision or dismissal on its
(b) If an appellant files a request to (a) General rule. The MAC may decide own motion, it will mail the results of
escalate an appeal to the MAC level on its own motion to review a decision its action to all the parties to the hearing
because the ALJ has not completed his or dismissal issued by an ALJ. CMS or and to CMS if it is not already a party
or her action on the request for hearing any of its contractors may refer a case to the hearing. The MAC may adopt,
within the adjudication deadline under to the MAC for it to consider reviewing modify, or reverse the decision or
§ 405.1016, the request for escalation under this authority anytime within 60 dismissal, may remand the case to an
must be filed with both the ALJ and the days after the date of an ALJ’s decision ALJ for further proceedings or may
MAC. The appellant must also send a or dismissal. dismiss a hearing request. The MAC
copy of the request for escalation to the (b) Referral of cases. (1) CMS or any must issue its action no later than 90
other parties. Failure to copy the other of its contractors may refer a case to the days after receipt of the CMS referral,
parties tolls the MAC’s adjudication MAC if, in their view, the decision or unless the 90-day period has been
deadline set forth in § 405.1100 until all dismissal contains an error of law extended as provided in this subpart.
parties to the hearing receive notice of material to the outcome of the claim or The MAC may not, however, issue its
the request for MAC review. In a case presents a broad policy or procedural action before the 20-day comment
that has been escalated from the ALJ, issue that may affect the public interest. period has expired, unless it determines
the MAC’s 180-day period to issue a CMS may also request that the MAC that the agency’s referral does not
final action or remand the case to the take own motion review of a case if— provide a basis for reviewing the case.
ALJ begins on the date the request for (i) CMS or its contractor participated If the MAC does not act within the
escalation is received by the MAC. in the appeal at the ALJ level; and applicable adjudication deadline, the
ALJ’s decision or dismissal remains the representative, and the beneficiary’s adverse inference if CMS or a contractor
final action in the case. surviving spouse or estate has no either participates, or decides not to
remaining financial interest in the case. participate in MAC review.
§ 405.1112 Content of request for review.
In deciding this issue, the MAC
(a) The request for MAC review must § 405.1122 What evidence may be
considers whether the surviving spouse
be filed with the MAC or appropriate submitted to the MAC.
or estate remains liable for the services
ALJ hearing office. The request for that were denied or a Medicare (a) Appeal before the MAC on request
review must be in writing and must be contractor held the beneficiary liable for for review of ALJ’s decision. (1) If the
made on a standard form. A written subsequent similar services under the MAC is reviewing an ALJ’s decision, the
request that is not made on a standard limitation of liability provisions based MAC limits its review of the evidence
form is accepted if it contains the on the denial of the services at issue; to the evidence contained in the record
beneficiary’s name; Medicare health (2) No other individual or entity with of the proceedings before the ALJ.
insurance claim number; the specific a financial interest in the case wishes to However, if the hearing decision
service(s) or item(s) for which the pursue an appeal under § 405.1102; decides a new issue that the parties
review is requested; the specific date(s) (3) No other party to the ALJ hearing were not afforded an opportunity to
of service; the date of the ALJ’s final filed a valid and timely review request address at the ALJ level, the MAC
action, if any, if the party is requesting under § 405.1102 and § 405.1112. considers any evidence related to that
escalation from the ALJ to the MAC, the issue that is submitted with the request
hearing office in which the appellant’s § 405.1116 Effect of dismissal of request for review.
request for hearing is pending; and the for MAC review or request for hearing.
(2) If the MAC determines that
name and signature of the party or the The dismissal of a request for MAC
additional evidence is needed to resolve
representative of the party; and any review or denial of a request for review
the issues in the case and the hearing
other information CMS may decide. of a dismissal issued by an ALJ is
record indicates that the previous
(b) The request for review must binding and not subject to further
decision-makers have not attempted to
identify the parts of the ALJ action with review unless reopened and vacated by
obtain the evidence, the MAC may
which the party requesting review the MAC. The MAC’s dismissal of a
remand the case to an ALJ to obtain the
disagrees and explain why he or she request for hearing is also binding and
evidence and issue a new decision.
disagrees with the ALJ’s decision, not subject to judicial review.
dismissal, or other determination being (b) Appeal before MAC as a result of
appealed. For example, if the party § 405.1118 Obtaining evidence from the appellant’s request for escalation. (1) If
MAC. the MAC is reviewing a case that is
requesting review believes that the ALJ’s
action is inconsistent with a statute, A party may request and receive a escalated from the ALJ level to the
regulation, CMS Ruling, or other copy of all or part of the record of the MAC, the MAC will decide the case
authority, the request for review should ALJ hearing, including the exhibits list, based on the record constructed at the
explain why the appellant believes the documentary evidence, and a copy of QIC and any additional evidence,
action is inconsistent with that the tape of the oral proceedings. including oral testimony, entered in the
authority. However, the party may be asked to pay record by the ALJ before the case was
(c) The MAC will limit its review of the costs of providing these items. If a escalated.
an ALJ’s actions to those exceptions party requests evidence from the MAC (2) If the MAC receives additional
raised by the party in the request for and an opportunity to comment on that evidence with the request for escalation
review, unless the appellant is an evidence, the time beginning with the that is material to the question to be
unrepresented beneficiary. For purposes MAC’s receipt of the request for decided, or determines that additional
of this section only, we define a evidence through the expiration of the evidence is needed to resolve the issues
representative as anyone who has time granted for the party’s response in the case, and the record provided to
accepted an appointment as the will not be counted toward the 90-day the MAC indicates that the previous
beneficiary’s representative, except a adjudication deadline. decision-makers did not attempt to
member of the beneficiary’s family, a § 405.1120 Filing briefs with the MAC. obtain the evidence before escalation,
legal guardian, or an individual who the MAC may remand the case to an ALJ
routinely acts on behalf of the Upon request, the MAC will give the
to consider or obtain the evidence and
beneficiary, such as a family member or party requesting review, as well as all
issue a new decision.
friend who has a power of attorney. other parties, a reasonable opportunity
to file briefs or other written statements (c) Evidence related to issues
§ 405.1114 Dismissal of request for review. about the facts and law relevant to the previously considered by the QIC. (1) If
case. Any party who submits a brief or new evidence related to issues
The MAC dismisses a request for
statement must send a copy to all of the previously considered by the QIC is
review if the party requesting review
other parties. Unless the party submitted to the MAC by a provider,
did not file the request within the stated
requesting review files the brief or other supplier, or a beneficiary represented by
period of time and the time for filing has
statement with the request for review, a provider or supplier, the MAC must
not been extended. The MAC also
the time beginning with the date of determine if the provider, supplier, or
dismisses the request for review if—
(a) The party asks to withdraw the receipt of the request to submit the brief the beneficiary represented by a
request for review; and ending with the date the brief is provider or supplier had good cause for
(b) The party does not have a right to received by the MAC will not be submitting it for the first time at the
request MAC review; or counted toward the adjudication MAC level.
(c) The beneficiary whose claim is timeframe set forth in § 405.1100. The (2) If the MAC determines that good
being appealed died while the request MAC may also request, but not require, cause does not exist, the MAC must
for review is pending and all of the CMS or its contractor to file a brief or exclude the evidence from the
following criteria apply: position paper if the MAC determines proceeding, may not consider it in
(1) The request for review was filed by that it is necessary to resolve the issues reaching a decision, and may not
the beneficiary or the beneficiary’s in the case. The MAC will not draw any remand the issue to an ALJ.
(3) The MAC must notify all parties if received notice of the party or non- appear before it if the MAC determines
it excludes the evidence. The MAC may party’s intent to seek Secretary review. that it may be helpful in resolving the
remand to an ALJ if— (iv) If the Secretary grants a request issues in the case.
(i) The ALJ did not consider the new for review, the subpoena or portion of (e) The MAC will not draw any
evidence submitted by the provider, the subpoena, as applicable, is stayed inference if CMS or a contractor decides
supplier, or beneficiary represented by a until the Secretary issues a written not to participate in the oral argument.
provider or supplier because good cause decision that affirms, reverses, modifies,
did not exist; and or remands the MAC’s action for the § 405.1126 Case remanded by the MAC.
(ii) The MAC finds that good cause subpoena. (a) When the MAC may remand a
existed under § 405.1028 and the ALJ (v) If the Secretary does not grant case. Except as specified in
should have reviewed the evidence. review or take own motion review § 405.1122(c), the MAC may remand a
(iii) The new evidence is submitted by within the time allotted for the stay, the case in which additional evidence is
a party that is not a provider, supplier, stay is lifed and the MAC’s action needed or additional action by the ALJ
or a beneficiary represented by a stands. is required. The MAC will designate in
provider or supplier. (f) Enforcement. (1) If the MAC its remand order whether the ALJ will
(d) Subpoenas. (1) When it is determines, whether on its own motion issue a final decision or a recommended
reasonably necessary for the full or at the request of a party, that a party decision on remand.
presentation of a case, the MAC may, on or non-party subject to a subpoena (b) Action by ALJ on remand. The ALJ
its own initiative or at the request of a issued under this section has refused to will take any action that is ordered by
party, issue subpoenas requiring a party comply with the subpoena, the MAC the MAC and may take any additional
to make books, records, correspondence, may request the Secretary to seek action that is not inconsistent with the
papers, or other documents that are enforcement of the subpoena in MAC’s remand order.
material to an issue at the hearing accordance with section 205(c) of the (c) Notice when case is returned with
available for inspection and copying. Act, 42 U.S.C. 405(c). a recommended decision. When the ALJ
(2) A party’s request for a subpoena (2) Any enforcement request by the sends a case to the MAC with a
must— MAC must consist of a written notice to recommended decision, a notice is
(i) Give a sufficient description of the the Secretary describing in detail the mailed to the parties at their last known
documents to be produced; MAC’s findings of noncompliance and address. The notice tells them that the
(ii) State the important facts that the its specific request for enforcement, and case was sent to the MAC, explains the
documents are expected to prove; and providing a copy of the subpoena and rules for filing briefs or other written
(iii) Indicate why these facts could not evidence of its receipt by certified mail statements with the MAC, and includes
be proven without issuing a subpoena. by the party or nonparty subject to the a copy of the recommended decision.
(3) A party to the MAC review on subpoena. (d) Filing briefs with the MAC when
escalation that wishes to subpoena (3) The MAC must promptly mail a ALJ issues recommended decision. (1)
documents must file a written request copy of the notice and related Any party to the recommended decision
that complies with the requirements set documents to the party or non-party may file with the MAC briefs or other
out in paragraph (d)(2) of this section subject to the subpoena, and to any written statements about the facts and
within 10 calendar days of the request other party and affected non-party to the law relevant to the case within 20 days
for escalation. appeal. of the date on the recommended
(4) A subpoena will issue only where (4) If the Secretary does not grant decision. Any party may ask the MAC
a party— review or take own motion review for additional time to file briefs or
(i) Has sought discovery; within the time allotted for the stay, the statements. The MAC will extend this
(ii) Has filed a motion to compel; stay is lifted and the subpoena stands. period, as appropriate, if the party
(iii) Has had that motion granted; and shows that it has good cause for
(iv) Nevertheless, has still not § 405.1124 Oral argument. requesting the extension.
received the requested discovery. A party may request to appear before (2) All other rules for filing briefs with
(e) Reviewability of subpoena the MAC to present oral argument. and obtaining evidence from the MAC
rulings— (a) The MAC grants a request for oral follow the procedures explained in this
(1) General rule. A MAC ruling on a argument if it decides that the case subpart.
subpoena request is not subject to raises an important question of law, (e) Procedures before the MAC. (1)
immediate review by the Secretary. policy, or fact that cannot be readily The MAC, after receiving a
(2) Exception. (i) To the extent a decided based on written submissions recommended decision, will conduct
subpoena compels disclosure of a matter alone. proceedings and issue its decision or
for which an objection based on (b) The MAC may decide on its own dismissal according to the procedures
privilege, or other protection from that oral argument is necessary to explained in this subpart.
disclosure such as case preparation, decide the issues in the case. If the MAC (2) If the MAC determines that more
confidentiality, or undue burden, was decides to hear oral argument, it tells evidence is required, it may again
made before the MAC, the Secretary the parties of the time and place of the remand the case to an ALJ for further
may review immediately that subpoena oral argument at least 10 days before the inquiry into the issues, rehearing,
or portion of the subpoena. scheduled date. receipt of evidence, and another
(ii) Upon notice to the MAC that a (c) In case of a previously decision or recommended decision.
party or non-party, as applicable, unrepresented beneficiary, a newly However, if the MAC decides that it can
intends to seek Secretary review of the hired representative may request an get the additional evidence more
subpoena, the MAC must stay all extension of time for preparation of the quickly, it will take appropriate action.
proceedings affected by the subpoena. oral argument and the MAC must
(iii) The MAC determines the length consider whether the extension is § 405.1128 Action of the MAC.
of the stay under the circumstances of reasonable. (a) After it has reviewed all the
a given case, but in no event is less than (d) The MAC may also request, but evidence in the administrative record
15 days after the day on which the MAC not require, CMS or its contractor to and any additional evidence received,
subject to the limitations on MAC certified by the review entity other than process in § 405.990, the civil action
consideration of additional evidence in CMS may request that the time for filing must be filed within 60 days after
§ 405.1122, the MAC will make a an action in a Federal district court be receipt of the review entity’s
decision or remand the case to an ALJ. extended. certification, except where the time is
(b) The MAC may adopt, modify, or (b) The request must— extended by the ALJ or MAC, as
reverse the ALJ hearing decision or (1) Be in writing. applicable, upon a showing of good
recommended decision. (2) Give the reasons why the action cause.
(c) The MAC mails a copy of its was not filed within the stated time
decision to all the parties at their last period. (d) Proper defendant. (1) In any civil
known addresses. For overpayment (3) Be filed with the MAC. action described in paragraph (a) of this
cases involving multiple beneficiaries (c) If the party shows that he or she section is filed, the Secretary of HHS, in
where there is no beneficiary liability had good cause for missing the his or her official capacity, is the proper
the MAC may choose to send written deadline, the time period will be defendant. Any civil action properly
notice only to the appellant. In the event extended. To determine whether good filed shall survive notwithstanding any
the decision will result in a payment to cause exists, the MAC uses the change of the person holding the Office
a provider or supplier, the Medicare standards specified in § 405.942(b)(2) or of the Secretary of HHS or any vacancy
contractor must issue any electronic or (b)(3). in such office.
paper remittance advice notice to that (2) If the complaint is erroneously
provider or supplier. § 405.1136 Judicial review.
(a) General rules. (1) To the extent filed against the United States or against
§ 405.1130 Effect of the MAC’s decision. authorized by sections 1869, any agency, officer, or employee of the
The MAC’s decision is binding on all 1876(c)(5)(B), and 1879(d) of the Act, a United States other than the Secretary,
parties unless a Federal district court party to a MAC decision, or an appellant the plaintiff will be notified that he or
issues a decision modifying the MAC’s who requests escalation to Federal she has named an incorrect defendant
decision or the decision is revised as the district court if the MAC does not and is granted 60 days from the date of
result of a reopening in accordance with complete its review of the ALJ’s receipt of the notice in which to
§ 405.980. A party may file an action in decision within the applicable commence the action against the correct
a Federal district court within 60 days adjudication period, may obtain a court defendant, the Secretary.
after the date it receives notice of the review if the amount remaining in (e) Prohibition against judicial review
MAC’s decision. controversy satisfies the requirements of of certain Part B regulations or
§ 405.1132 Request for escalation to § 405.1006(c). instructions. Under section 1869(e)(1) of
Federal court. (2) If the MAC’s adjudication period the Act, a court may not review a
(a) If the MAC does not issue a set forth in § 405.1100 expires and the regulation or instruction that relates to
decision or dismissal or remand the case appellant does not request escalation to a method of payment under Medicare
to an ALJ within the adjudication period Federal district court, the case remains Part B if the regulation was published,
specified in § 405.1100, or as extended with the MAC until a final action is or the instructions issued, before
as provided in this subpart, the issued. January 1, 1991.
appellant may request that the appeal, (b) Court in which to file civil action.
(1) Any civil action described in (f) Standard of review. (1) Under
other than an appeal of an ALJ section 205(g) of the Act, the findings of
dismissal, be escalated to Federal paragraph (a) of this section must be
filed in the district court of the United the Secretary of HHS as to any fact, if
district court. Upon receipt of a request
States for the judicial district in which supported by substantial evidence, are
for escalation, the MAC may—
(1) Issue a decision or dismissal or the party resides or where such conclusive.
remand the case to an ALJ, if that action individual, institution, or agency has its (2) When the Secretary’s decision is
is issued within the latter of 5 calendar principal place of business. adverse to a party due to a party’s
days of receipt of the request for (2) If the party does not reside within failure to submit proof in conformity
escalation or 5 calendar days from the any judicial district, or if the individual, with a regulation prescribed under
end of the applicable adjudication time institution, or agency does not have its section 205(a) of the Act pertaining to
period set forth in § 405.1100; or principal place of business within any the type of proof a party must offer to
(2) If the MAC is not able to issue a such judicial district, the civil action establish entitlement to payment, the
decision or dismissal or remand as set must be filed in the District Court of the
court will review only whether the
forth in paragraph (a)(1) of this section, United States for the District of
proof conforms with the regulation and
it will send a notice to the appellant Columbia.
(c) Time for filing civil action. (1) Any the validity of the regulation.
acknowledging receipt of the request for
escalation and confirming that it is not civil action described in paragraph (a) of § 405.1138 Case remanded by a Federal
able to issue a decision, dismissal or this section must be filed within the district court.
remand order within the statutory time time periods specified in § 405.1130,
§ 405.1132, or § 405.1134, as applicable. When a Federal district court remands
frame. a case to the Secretary for further
(b) A party may file an action in a (2) For purposes of this section, the
date of receipt of the notice of the consideration, unless the court order
Federal district court within 60 days specifies otherwise, the MAC, acting on
after the date it receives the MAC’s MAC’s decision or the MAC’s notice
that it is not able to issue a decision behalf of the Secretary, may make a
notice that the MAC is not able to issue
within the statutory timeframe shall be decision, or it may remand the case to
a final action or remand unless the party
presumed to be 5 calendar days after the an ALJ with instructions to take action
is appealing an ALJ dismissal.
date of the notice, unless there is a and either issue a decision, take other
§ 405.1134 Extension of time to file action reasonable showing to the contrary. action, or return the case to the MAC
in Federal district court. (3) Where a case is certified for with a recommended decision. If the
(a) Any party to the MAC’s decision judicial review in accordance with the MAC remands a case, the procedures
or to a request for EAJR that has been expedited access to judicial review specified in § 405.1140 will be followed.
§ 405.1140 MAC review of ALJ decision in a timely request for a 30-day extension. decide to assume jurisdiction of the case
a case remanded by a Federal district court. A request for an extension of more than even though no written exceptions have
(a) General rules. (1) In accordance 30 days must include a statement of been filed.
with § 405.1138, when a case is reasons as to why the party needs the (2) Notice of this action is mailed to
remanded by a Federal district court for additional time and may be granted if all parties at their last known address.
further consideration and the MAC the MAC finds good cause under the (3) The parties will be provided with
remands the case to an ALJ, a decision standard established in § 405.942(b)(2) the opportunity to file briefs or other
subsequently issued by the ALJ becomes or (b)(3). written statements with the MAC about
the final decision of the Secretary unless (2) If written exceptions are timely the facts and law relevant to the case.
the MAC assumes jurisdiction. filed, the MAC considers the party’s (4) After the briefs or other written
(2) The MAC may assume jurisdiction reasons for disagreeing with the statements are received or the time
based on written exceptions to the decision of the ALJ. If the MAC allowed (usually 30 days) for submitting
decision of the ALJ that a party files concludes that there is no reason to them has expired, the MAC will either
with the MAC or based on its authority change the decision of the ALJ, it will issue a final decision of the Secretary
under paragraph (c) of this section. issue a notice addressing the exceptions affirming, modifying, or reversing the
(3) The MAC either makes a new, and explaining why no change in the decision of the ALJ, or remand the case
independent decision based on the decision of the ALJ is warranted. In this to an ALJ for further proceedings,
entire record that will be the final instance, the decision of the ALJ is the including a new decision.
decision of the Secretary after remand, final decision of the Secretary after (d) Exceptions are not filed and the
or remands the case to an ALJ for further remand. MAC does not otherwise assume
proceedings. (3) When a party files written jurisdiction. If no exceptions are filed
(b) A party files exceptions exceptions to the decision of the ALJ, and the MAC does not assume
disagreeing with the decision of the ALJ. the MAC may assume jurisdiction at any jurisdiction of the cases within 60 days
(1) If a party disagrees with an ALJ time. If the MAC assumes jurisdiction, after the date of the ALJ’s decision, the
decision described in paragraph (a) of it makes a new, independent decision decision of the ALJ becomes the final
this section, in whole or in part, he or based on its consideration of the entire decision of the Secretary after remand.
she may file exceptions to the decision record adopting, modifying, or reversing Dated: January 12, 2005.
with the MAC. Exceptions may be filed the decision of the ALJ or remanding the
Mark B. McClellan,
by submitting a written statement to the case to an ALJ for further proceedings,
MAC setting forth the reasons for including a new decision. The new Administrator, Centers for Medicare &
Medicaid Services.
disagreeing with the decision of the ALJ. decision of the MAC is the final
The party must file exceptions within decision of the Secretary after remand. Approved: January 12, 2005.
30 days of the date the party receives (c) MAC assumes jurisdiction without Tommy G. Thompson,
the decision of the ALJ or submit a exceptions being filed. (1) Any time Secretary.
written request for an extension within within 60 days after the date of the [FR Doc. 05–4062 Filed 3–1;–05; 2:07 pm]
the 30-day period. The MAC will grant decision of the ALJ, the MAC may BILLING CODE 4120–01–P

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Rule: Medicare: Claims Appeal Procedures Changes

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Tuesday,

42 CFR Parts 401 and 405

DEPARTMENT OF HEALTH AND www.cms.hhs.gov/regulations/ 786–1404 or Rosalind Little, (410) 786–

§ 401.108 .................................................................................................. Effective date of interim final rule.

identified in the redetermination notice. requested in the notice of 9. Conduct of a Reconsideration

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