Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 401, 405, 422, 423, and 478

[HHS-2015-49]

RIN 0991-AC02

Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures

AGENCY:

Centers for Medicare & Medicaid Services, HHS.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would revise the procedures that the Department of Health and Human Services would follow at the Administrative Law Judge level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage and other Medicare competitive health plans, and enrollees in Medicare prescription drug plans, as well as appeals of Medicare beneficiary enrollment and entitlement determinations, and certain Medicare premium appeals. In addition, this proposed rule would revise procedures that the Department of Health and Human Services would follow at the Centers for Medicare & Medicaid Services (CMS) and the Medicare Appeals Council (Council) levels of appeal for certain matters affecting the Administrative Law Judge level.

DATES:

To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. eastern standard time (e.s.t.) on August 29, 2016.

ADDRESSES:

In commenting, refer to “HHS-2015-49” at the top of your comments. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. We will not accept comments submitted after the comment period.

You may submit comments in one of two ways (to ensure that we do not receive duplicate copies, please choose only one of the ways listed):

1.

Electronically.

You may submit electronic comments on this proposed rule at

www.regulations.gov

. For new users, you can find instructions on how to find a proposed rule and submit comments under the “Help” tab at

www.regulations.gov

.

If you are submitting comments electronically, we strongly encourage you to submit any comments or attachments in Microsoft Word format. If you must submit a comment in Portable Document Format (PDF), we strongly encourage you to convert the PDF to print-to-PDF format or to use some other commonly used searchable text format. Please do not submit the PDF in a scanned or read-only format. Using a print-to-PDF format allows us to electronically search and copy certain portions of your submissions.

2.

U.S. Mail or commercial delivery.

You may send written comments to the following address ONLY: Office of Medicare Hearings and Appeals, Department of Health and Human Services, Attention: HHS-2015-49, 5201 Leesburg Pike, Suite 1300, Falls Church, VA 22041.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

Privacy Note:

Because comments will be made available for public viewing in their entirety on the Federal eRulemaking portal, commenters should exercise caution and only include in their comments information that they wish to make publicly available.

For information on viewing public comments, see the beginning of the

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

Rita Wurm, (410) 786-1139 (for issues related to CMS appeals policies and reopening policies).

Jason Green, (571) 777-2723 (for issues related to Administrative Law Judge appeals policies).

Debbie Nobleman, (202) 565-0139 (for issues related to Council appeals policies).

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We will post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received:

www.regulations.gov

. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 4 weeks after publication of a document, at the headquarters of the Office of Medicare Hearings and Appeals, 1700 North Moore Street, Suite 1650, Arlington, Virginia 22209, Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. To schedule an appointment to view public comments, phone (703) 235-0635.

Abbreviations

Because we refer to a number of terms by abbreviation or a shortened form in this proposed rule, we are listing these abbreviations and shortened forms, and their corresponding terms in alphabetical order below:

Act—Social Security Act

ALJ—Administrative Law Judge

APA—Administrative Procedures Act

BIPA—Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Pub. L. 106-554)

CMS—Centers for Medicare & Medicaid Services

Council—Medicare Appeals Council

DAB—Departmental Appeals Board

HHS—U.S. Department of Health and Human Services

IRE—Independent Review Entity

IRMAA—Income Related Monthly Adjustment Amount

MA—Medicare Advantage

MAO—Medicare Advantage Organization

MMA—Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173)

OIG—HHS Office of Inspector General

OMHA—Office of Medicare Hearings and Appeals

QIC—Qualified Independent Contractor

QIO—Quality Improvement Organization

SSA—Social Security Administration

Section 1557 of the Affordable Care Act

Independent of the standards proposed in this rule, the Department commits to complying with section 1557 of the Affordable Care Act, Public Law 111-148, 124 Stat. 470 (42 U.S.C. 18116), which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. HHS issued a proposed rule to implement section 1557,

Nondiscrimination in Health Programs and Activities,

on September 8, 2015. 80 FR 54172. The proposed rule would apply, in part, to health programs and activities administered by the Department.

Table of Contents

I. Background

II. General Provisions of the Proposed Regulations

A. Precedential Final Decisions of the Secretary

B. Attorney Adjudicators

C. Application of 405 Rules to Other Parts

D. OMHA References

E. Medicare Appeals Council References

III. Specific Provisions of the Proposed Rule

A. Provisions of Part 405, subpart I and Part 423, subparts M and U

1. Overview

2. General provisions, reconsiderations, reopenings, and expedited access to judicial review

a. Part 423, subpart M general provisions (§ 423.562)

b. Part 423, subpart U title and scope (§ 423.1968)

c. Medicare initial determinations, redeterminations and appeals general description (§ 405.904)

d. Parties to the initial determinations, redeterminations, reconsiderations proceedings on a request for hearing, and Council review (§ 405.906)

e. Medicaid State agencies (§ 405.908)

f. Appointed representatives (§ 405.910)

g. Actions that are not initial determinations (§ 405.926)

h. Notice of a redetermination (§ 405.956)

i. Time frame for making a reconsideration following a contractor redetermination, withdrawal or dismissal of a request for a reconsideration, and reconsideration (§§ 405.970, 405.972, and 405.974)

j. Notice of reconsideration (§ 405.976)

k. Effect of a reconsideration (§ 405.978)

l. Reopenings (§§ 405.980, 405.982, 405.984, 423.1978, 423.1980, 423.1982, and 423.1984)

m. Expedited access to judicial review (§§ 405.990 and 423.1990)

3. ALJ hearings

a. Hearing before an ALJ and decision by an ALJ and attorney adjudicator: General rule (§§ 405.1000 and 423.2000)

b. Right to an ALJ hearing (§§ 405.1002 and 423.2002)

c. Right to a review of QIC or IRE notice of dismissal (§§ 405.1004 and 423.2004)

d. Amount in controversy required for an ALJ hearing (§§ 405.1006 and 423.1970)

e. Parties to an ALJ hearing (§§ 405.1008 and 423.2008)

f. CMS and CMS contractors as participants or parties in the adjudication process (§§ 405.1010, 405.1012, and 423.2010)

i. Section 405.1010: When CMS or its contractors may participate in the proceedings on a request for an ALJ hearing

ii. Section 423.2010: When CMS, the IRE, or Part D plan sponsors may participate in the proceedings on a request for an ALJ hearing

iii. Section 405.1012: When CMS or its contractors may be a party to a hearing

g. Request for an ALJ hearing or review of a QIC or an IRE dismissal (§§ 405.1014, 423.1972 and 423.2014)

i. Requirements for a request for hearing or review of a QIC or an IRE dismissal

ii. Requests for hearing involving statistical sampling and extrapolations

iii. Opportunity to cure defective filings

iv. Where and when to file a request for hearing or review of a QIC or an IRE dismissal

v. Sending copies of a request for hearing and other evidence to other parties to the appeal

vi. Extending time to file a request for hearing or review of a QIC or an IRE dismissal

h. Time frames for deciding an appeal of a QIC or an IRE reconsideration or an escalated request for a QIC reconsideration, and request for Council review when an ALJ does not issue a decision timely (§§ 405.1016, 405.1104 and 423.2016)

i. Section 405.1016: Time frames for deciding an appeal of a QIC or an escalated request for a QIC reconsideration

ii. Section 405.1104: Request for Council review when an ALJ does not issue a decision timely

iii. Section 423.2016: Time frames for deciding an appeal of an IRE reconsideration

i. Submitting evidence (§§ 405.1018 and 423.2018)

j. Time and place for a hearing before an ALJ (§§ 405.1020 and 423.2020)

k. Notice of a hearing before an ALJ and objections to the issues (§§ 405.1022, 405.1024, 423.2022, and 423.2024)

l. Disqualification of the ALJ or attorney adjudicator (§§ 405.1026 and 423.2026)

m. Review of evidence submitted by the parties (§ 405.1028)

n. ALJ hearing procedures (§§ 405.1030 and 423.2030)

o. Issues before an ALJ or attorney adjudicator (§§ 405.1032, 405.1064 and 423.2032)

p. Requesting information from the QIC or IRE, and remanding an appeal (§§ 405.1034, 405.1056, 405.1058, 423.2034, 423.2056, and 423.2058)

q. Description of the ALJ hearing process and discovery (§§ 405.1036, 405.1037, and 423.2036)

r. Deciding a case without a hearing before an ALJ (§§ 405.1038 and 423.2038)

s. Prehearing and posthearing conferences (§§ 405.1040 and 423.2040)

t. The administrative record (§§ 405.1042 and 423.2042)

u. Consolidated proceedings (§§ 405.1044 and 423.2044)

v. Notice of decision and effect of an ALJ's or attorney adjudicator's decision (§§ 405.1046, 405.1048, 423.2046, and 423.2048)

w. Removal of a hearing request from an ALJ to the Council (§§ 405.1050 and 423.2050)

x. Dismissal of a request for hearing or request for review and effect of a dismissal of a request for hearing or request for review (§§ 405.1052, 405.1054, 423.2052 and 423.2054)

4. Applicability of Medicare coverage policies (§§ 405.1060, 405.1062, 405.1063, 423.2062, and 423.2063)

5. Council review and judicial review

a. Council review: general (§§ 405.1100, 423.1974 and 423.2100)

b. Request for Council review when ALJ issues decision or dismissal (§§ 405.1102 and 423.2102)

c. Where a request for review or escalation may be filed (§§ 405.1106 and 423.2106)

d. Council actions when request for review or escalation is filed (§§ 405.1108 and 423.2108)

e. Council reviews on its own motion (§§ 405.1110 and 423.2110).

f. Content of request for review (§§ 405.1112 and 423.2112).

g. Dismissal of request for review (§§ 405.1114 and 423.2114)

h. Effect of dismissal of request for Council review or request for hearing (§§ 405.1116 and 423.2116)

i. Obtaining evidence from the Council (§§ 405.1118 and 423.2118)

j. What evidence may be submitted to the Council (§§ 405.1122 and 423.2122)

k. Case remanded by the Council (§§ 405.1126 and 423.2126)

l. Action of the Council (§§ 405.1128 and 423.2128)

m. Request for escalation to Federal court (§ 405.1132)

n. Judicial review (§§ 405.1136, 423.1976, and 423.2136)

o. Case remanded by a Federal court (§§ 405.1038 and 423.2138)

p. Council review of ALJ decision in a case remanded by a Federal district court (§§ 405.1140 and 423.2140)

B. Part 405, subpart J expedited reconsiderations (§ 405.1204)

C. Part 422, subpart M

1. General provisions (§ 422.562).

2. Notice of reconsidered determination by the independent entity (§ 422.594).

3. Request for an ALJ hearing (§ 422.602).

4. Medicare Appeals Council (Council) review (§ 422.608).

5. Judicial review (§ 422.612)

6. Reopening and revising determinations and decisions (§ 422.616)

7. How an MA organization must effectuate standard reconsideration determinations and decisions, and expedited reconsidered determinations (§§ 422.618 and 422.619)

8. Requesting immediate QIO review of the decision to discharge from the inpatient hospital and fast-track appeals of service terminations to independent review entities (IREs) (§§ 422.622 and 422.626).

D. Part 478, subpart B

1. Applicability and beneficiary's right to a hearing (§§ 478.14 and 478.40)

2. Submitting a request for a hearing (§ 478.42)

3. Determining the amount in controversy (§ 478.44)

4. Medicare Appeals Council and judicial review (§ 478.46)

5. Reopening and revision of a reconsidered determination or a decision (§ 478.48)

IV. Collection of Information Requirements

V. Response to Comments

VI. Regulatory Impact Statement

VII. Federal Analysis

I. Background

In accordance with provisions of sections 1155, 1852, 1860D-4, 1869, and 1876 of the Act, and their implementing regulations, there are multiple administrative appeal processes for Medicare fee-for-service (Part A and Part B) claim, entitlement and certain premium initial determinations; Medicare Advantage (Part C) and other competitive health plan organization determinations; and Part D plan sponsor coverage determinations and certain premium determinations. The first, and in many instances a second, level of administrative appeal are administered

by Medicare contractors, Part D plan sponsors, Medicare Advantage organizations or Medicare plans, or by the SSA. For example, under section 1869 of the Act, the Medicare claims appeal process involves redeterminations conducted by the Medicare Administrative Contractors (which are independent of the staff that made the initial determination) followed by reconsiderations conducted by QICs. However, all of the appeals discussed in this proposed regulation could be appealed to the ALJs at OMHA if the amount in controversy requirement and other requirements are met after these first and/or second levels of appeal.

OMHA, a staff division within the Office of the Secretary of HHS, administers the nationwide ALJ hearing program for Medicare claim, organization and coverage determination, and entitlement and certain premium appeals. If the amount in controversy and other filing requirements are met, a hearing before an ALJ is available following a QIO reconsidered determination under section 1155 of the Act; an SSA or QIC reconsideration, or a request for QIC reconsideration for which a decision is not issued timely and a party requests escalation of the matter under section 1869(b)(1)(A) and (d) of the Act (Part A and Part B appeals); an IRE reconsideration or QIO reconsidered determination under sections 1876(c)(5)(B) or 1852(g)(5) of the Act (Part C and other managed health plan appeals); or an IRE reconsideration under section 1860D-4(h) of the Act (Part D appeals). In addition, under current regulations a review by an ALJ is available following a dismissal of a request for reconsideration, if the amount in controversy and other filing requirements are met.

OMHA provides Medicare beneficiaries and the providers and suppliers that furnish items or services to Medicare beneficiaries, as well as applicable plans, MAOs, and Medicaid State agencies with a fair and impartial forum to address disagreements regarding: Medicare coverage and payment determinations made by Medicare contractors, MAOs, or Part D plan sponsors; and determinations related to Medicare beneficiary eligibility and entitlement, Part B late enrollment penalties, and IRMAAs, which apply to Medicare Part B and Part D premiums, made by SSA. Further review of OMHA ALJ decisions, except decisions affirming a dismissal of a request for reconsideration, is available from the Medicare Appeals Council (Council) within the DAB, a staff division within the Office of the Secretary of HHS. Judicial review is then available for Council decisions in Federal courts, if the amount in controversy and other requirements are met.

OMHA ALJs began adjudicating appeals in July 2005, based on section 931 of the MMA, which required the transfer of responsibility for the ALJ hearing level of the Medicare claim and entitlement appeals process from SSA to HHS. New rules at 42 CFR part 405, subpart I and subpart J were also established to implement statutory changes to the Medicare fee-for-service (Part A and Part B) appeals process made by BIPA in 2000 and the MMA in 2003. Among other things, these new rules addressed appeals of reconsiderations made by QICs, which were created by BIPA for the Part A and Part B programs. These rules also apply to appeals of SSA reconsiderations. The statutory changes made by BIPA included a 90-day adjudication time frame for ALJs to adjudicate appeals of QIC reconsiderations beginning on the date that a request for an ALJ hearing is timely filed. The new part 405, subpart I rules were initially proposed in the November 15, 2002

Federal Register

(67 FR 69312) (2002 Proposed Rule) to implement BIPA, and were subsequently implemented in an interim final rule with comment period, which also set forth new provisions to implement the MMA, in the March 8, 2005

Federal Register

(70 FR 11420) (2005 Interim Final Rule). Correcting amendments to the 2005 Interim Final Rule were published in the June 30, 2005

Federal Register

(70 FR 37700) (2005 Correcting Amendment I) and in the August 26, 2005

Federal Register

(70 FR 50214) (2005 Correcting Amendment II), and the final rule was published in the December 9, 2009

Federal Register

(74 FR 65296) (2009 Final Rule). Subsequent revisions to part 405, subpart I to implement the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act, Pub. L. 112-242) were published in the February 27, 2015

Federal Register

(80 FR 10611) (SMART Act Final Rule).

In addition to the part 405, subpart I rules, OMHA applies the rules at 42 CFR part 478, subpart B to individuals' appeals of QIO reconsidered determinations; part 422, subpart M to appeals of IRE reconsiderations or QIO reconsidered determinations under the Medicare Advantage (Part C) and other competitive health plan programs; and part 423, subpart U to appeals of IRE reconsiderations under the Medicare prescription drug (Part D) program.

In recent years, the Medicare appeals process has experienced an unprecedented and sustained increase in the number of appeals. At OMHA, for example, the number of requests for an ALJ hearing or review increased 1,222 percent, from fiscal year (FY) 2009 through FY 2014. The increasing number of requests has strained OMHA's available resources and resulted in delays for appellants to obtain hearings and decisions.

Despite significant gains in OMHA ALJ productivity (in FY 2014, each OMHA ALJ issued, on average, a record 1,048 decisions and an additional 456 dismissals), and CMS and OMHA initiatives to address the increasing number of appeals, the number of requests for an ALJ hearing and requests for reviews of QIC and IRE dismissals continue to exceed OMHA's capacity to adjudicate the requests. As of April 30, 2016, OMHA had over 750,000 pending appeals, while OMHA's adjudication capacity was 77,000 appeals per year, with an additional adjudication capacity of 15,000 appeals per year expected by the end of Fiscal Year 2016.

HHS has a three-prong approach to addressing the increasing number of appeals and the current backlog of claims waiting to be adjudicated at OMHA: (1) Request new resources to invest at all levels of appeal to increase adjudication capacity and implement new strategies to alleviate the current backlog; (2) take administrative actions to reduce the number of pending appeals and implement new strategies to alleviate the current backlog ; and (3) propose legislative reforms that provide additional funding and new authorities to address the volume of appeals. In this notice of proposed rulemaking, HHS is pursuing the three-prong approach by proposing rules that would expand the pool of available OMHA adjudicators and improve the efficiency of the appeals process by streamlining the processes so less time is spent by adjudicators and parties on repetitive issues and procedural matters.

II. General Provisions of the Proposed Regulations

A. Precedential Final Decisions of the Secretary

Council decisions are binding on the parties to that particular appeal and are the final decisions of the Secretary from which judicial review may be sought under section 205(g) of the Act, in accordance with current §§ 405.1130, 422.612(b), 423.2130, and 478.46(b). As explained in the 2009 Final Rule (74 FR 65307 through 65308), “binding” indicates the parties are obligated to

abide by the adjudicator's action or decision unless further recourse is available and a party exercises that right. “Final” indicates that no further administrative review of the decision is available and judicial review may be immediately sought.

In 1999, the OIG issued a report entitled “Medicare Administrative Appeals—ALJ Hearing Process” (OEI-04-97-00160) (Sept. 1999) (

http://oig.hhs.gov/oei/reports/oei-04-97-00160.pdf

). In that report, the OIG noted that the DAB respondents voiced strong interest in having precedent setting authority in the Medicare administrative appeals process “to clean-up inconsistencies in the appeals process.” The OIG recommended that such a case precedent system be established.

Pursuant to section 931(a) of the MMA, HHS and SSA developed a plan for the transition of the ALJ hearing function for some types of Medicare appeals from SSA to HHS, and addressed the feasibility of precedential authority of DAB decisions. See

Report to Congress: Plan for the Transfer of Responsibility for Medicare Appeals

(Mar. 2004) (

https://www.ssa.gov/legislation/medicare/medicare_appeal_transfer.pdf

). HHS determined that at that time, it was not feasible or appropriate to confer precedential authority on Council decisions, but indicated that it would reevaluate the merits of granting precedential authority to some or all Council decisions after the BIPA and MMA changes to the appeals process were fully implemented.

BIPA and MMA changes to the appeals process have now been fully implemented and we believe it is appropriate to propose that select Council decisions be made precedential to increase consistency in decisions at all levels of appeal for appellants. Proposed § 401.109 would introduce precedential authority to the Medicare claim and entitlement appeals process under part 405, subpart I; part 422, subpart M; part 423, subparts M and U; and part 478, subpart B. Proposed § 401.109(a) would grant authority to the Chair of the DAB to designate a final decision of the Secretary issued by the Council as precedential. We believe this would provide appellants with a consistent body of final decisions of the Secretary upon which they could determine whether to seek appeals. It would also assist appeal adjudicators at all levels of appeal by providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions. In the limited circumstances in which a precedential decision would apply to a factual question, the decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed since the Council issued the precedential final decision.

It is appropriate for the DAB Chair to have the role of designating select Council decisions as precedential. The DAB Chair leads the DAB, which was established in 1973. The DAB has wide jurisdiction over disputes arising under many HHS programs and components, and has issued precedential decisions for many years within several of its areas of jurisdiction. (Examples of DAB jurisdiction may be found at 45 CFR part 16, 42 CFR part 498, 42 CFR part 426, and on the DAB's Web site at

www.hhs.gov/dab

.) The Council has been housed within the DAB as an organization since 1995 and is itself also under the leadership of the DAB Chair. Thus, the DAB Chair brings both expertise in the Medicare claims appeals over which the Council has jurisdiction and experience from the DAB's precedential cases to carrying out the role of designating Council decisions to be precedential. Moreover, having the designation performed by the DAB Chair respects the continued independence of the Council as an adjudicative body by allowing the DAB to determine the effect of its own decisions. Limiting binding precedential effect to selected decisions provides the necessary discretion to designate as precedential those Council decisions in which a significant legal or factual issue was fully developed on the record and thoroughly analyzed. Designation might not be appropriate where an issue was mentioned in the decision as relevant but was not outcome determinative, and therefore may not have been as fully developed as is necessary for precedential decisions or where the issues addressed are not likely to have broad application beyond the particular case.

To help ensure appellants and other stakeholders are aware of Council decisions that are designated as precedential, we are proposing that § 401.109(b) would require notice of precedential decisions to be published in the

Federal Register

, and the decisions themselves would be made available to the public, with necessary precautions taken to remove personally identifiable information that cannot be disclosed without the individual's consent. Designated precedents would be posted on an accessible Web site maintained by HHS. Decisions of the Council would bind all lower-level decision-makers from the date that the decisions are posted on the HHS Web site.

Proposed § 401.109(c) would make these precedential decisions binding on all CMS components, on all HHS components that adjudicate matters under the jurisdiction of CMS, and on SSA to the extent that SSA components adjudicate matters under the jurisdiction of CMS, in the same manner as CMS Rulings under current § 401.108. That means the precedential decision would be binding on CMS and its contractors in making initial determinations, redeterminations, and reconsiderations, under part 405 subpart I, or equivalent determinations under parts 422 subpart M, 423 subparts M and U, and 478 subpart B; OMHA ALJs and, as proposed in II.B below, attorney adjudicators; the Council in its future decisions; and SSA to the extent that it adjudicates matters under the jurisdiction of CMS. Individual determinations and decisions by CMS contractors, OMHA ALJs, and the Council currently are not precedential and have no binding effect on future initial determinations (and equivalent determinations) or claims appeals. We are not proposing to change the non-precedential status and non-binding effect on future initial determinations (and equivalent determinations) or claim appeals of any determinations or decisions except as to Council decisions designated as precedential by the DAB Chair.

Proposed § 401.109(d) would specify the scope of the precedential effect of a Council decision designated by the DAB Chair. The Council's legal analysis and interpretation of an authority or provision that is binding (see, for example §§ 405.1060 and 405.1063) or owed substantial deference (see, for example § 405.1062) would be binding in future determinations and appeals in which the same authority or provision is applied and is still in effect. However, if CMS revises the authority or provision that is the subject of a precedential decision, the Council's legal analysis and interpretation would not be binding on claims or other disputes to which the revised authority or provision applies. For example, if a Council decision designated as precedential by the DAB Chair interprets a CMS manual instruction, that interpretation would be binding on pending and future appeals and initial determinations to which that manual instruction applies. However, CMS would be free to follow its normal internal process to revise the manual instruction at issue. Once the revised instruction is issued through the CMS process, the revised instruction would

apply to making initial determinations on all claims thereafter. This would help ensure that CMS continues to have the ultimate authority to administer the Medicare program and promulgate regulations, and issue sub-regulatory guidance and policies on Medicare coverage and payment.

If the decision is designated as precedential by the DAB Chair, proposed § 401.109(d) would also make the Council's findings of fact binding in future determinations and appeals that involve the same parties and evidence. For example, if a precedential Council decision made findings of fact related to the issue of whether an item qualified as durable medical equipment and the same issue was in dispute in another appeal filed by the same party, and that party submitted the same evidence to support its assertion, the findings of fact in the precedential Council decision would be binding. However, we note that many claim appeals turn on evidence of a beneficiary's condition or care at the time discrete items or services are furnished, and therefore proposed § 401.109 is unlikely to apply to findings of fact in these appeals.

In addition, consistent with proposed § 401.109, we are proposing at § 405.968(b)(1) to add precedential decisions designated by the Chair of the Departmental Appeals Board as an authority that is binding on the QIC. We are also proposing at §§ 405.1063 and 423.2063, which currently cover the applicability of laws, regulations, and CMS Rulings, to add new paragraph (c) to the sections to provide that precedential decisions designated by the Chair of the Departmental Appeals Board in accordance with § 401.109 are binding on all CMS components, all HHS components that adjudicate matters under the jurisdiction of CMS, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS. Finally, we are proposing to add precedential decisions to the titles of §§ 405.1063 and 423.2063 to reflect the additional topic covered by proposed paragraph (c).

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Precedential final decisions of the Secretary” at the beginning of your comment.

B. Attorney Adjudicators

Sections 1155, 1852(g)(5), 1860D-4(h), 1869(b)(1)(A), and 1876(c)(5)(B) provide a right to a hearing to the same extent as provided in section 205(b) by the HHS Secretary for certain appealable decisions by Medicare contractors or SSA, when the amount in controversy and other filing requirements are met. Hearings under these statutory provisions are conducted by OMHA ALJs with delegated authority from the HHS Secretary, in accordance with these sections and the APA.

Under current §§ 405.1038 and 423.2038, OMHA ALJs are also responsible for a portion of the appeals workload that does not require a hearing because a request for an ALJ hearing may also be addressed without conducting a hearing. For example, under §§ 405.1038 and 4423.2038, if the evidence in the hearing record supports a finding in favor of the appellant(s) on every issue, or if all parties agree in writing that they do not wish to appear before the ALJ at a hearing, the ALJ may issue a decision on the record without holding a hearing. Under current §§ 405.1052(a)(1) and 423.2052(a)(1), OMHA ALJs must also address a large number of requests to withdraw requests for ALJ hearings, which appellants often file pursuant to litigation settlements, law enforcement actions, and administrative agreements in which they agree to withdraw appeals and not seek further appeals of resolved claims. In addition, pursuant to §§ 405.1004 and 423.2004, OMHA ALJs review whether a QIC or IRE dismissal was in error. Under these sections, the ALJ reviews the dismissal, but no hearing is required. In FY 2015, OMHA ALJs addressed approximately 370 requests to review whether a QIC or IRE dismissal was in error. Also adding to the ALJs' workload are remands to Medicare contractors for information that can only be provided by CMS or its contractors under current §§ 405.1034(a) and 423.2034(a), and for further case development or information at the direction of the Council. Staff may identify the basis for these remands before an appeal is assigned to an ALJ and a remand order is prepared, but an ALJ must review the appeal and issue the remand order, taking the ALJ's time and attention away from hearings and making decision on the merits of appeals.

Under section 1869(d) of the Act, an ALJ must conduct and conclude a hearing on a decision of a QIC under subsection (c). Subsection (c) of section 1869 of the Act involves the conduct of reconsiderations by QICs. We believe that the statute does not require the action to be taken by an ALJ in cases where there is no QIC reconsideration (for example, where the QIC has issued a dismissal), or in cases of a remand or a withdrawal of a request for an ALJ hearing, and therefore the findings of fact and conclusions of law need not be rendered. ALJ hearings are ideally suited to obtain testimony and other evidence, and hear arguments related to the merits of a claim or other determination on appeal. ALJs are highly qualified to conduct those hearings and make findings of fact and conclusions of law to render a decision in the more complex records presented with a mix of documentary and testimonial evidence. However, well-trained attorneys can perform a review of the administrative record and more efficiently draft the appropriate order for certain actions, such as issuing dismissals based on an appellant's withdrawal of a request for an ALJ hearing, remanding appeals for information or at the direction of the Council, and conducting reviews of QIC and IRE dismissals.

In addition, current §§ 405.1038 and 423.2038 provide mechanisms for deciding cases without an oral hearing, based on the written record. Cases may be decided without an oral hearing when the record supports a finding in favor of the appellant(s) on every issue; all of the parties have waived the oral hearing in writing; or the appellant lives outside of the United States and did not inform the ALJ that he or she wishes to appear, and there are no other parties who wish to appear. In these circumstances, the need for an experienced adjudicator knowledgeable in Medicare coverage and payment law continues, and well-trained attorneys can review the record, identify the issues, and make the necessary findings of fact and conclusions of law when the regulations do not require a hearing to issue a decision in the appealed matter.

To enable OMHA to manage requests for an ALJ hearing and requests for reviews of QIC and IRE dismissals in a more timely manner and increase service to appellants, while preserving access to a hearing before an ALJ in accordance with the statutes, we are proposing to revise rules throughout part 405, subparts I and J; part 422, subpart M; part 423, subparts M and U; and part 478, subpart B, to provide authority that would allow attorney adjudicators to issue decisions when a decision can be issued without an ALJ conducting a hearing under the regulations, dismissals when an appellant withdraws his or her request for an ALJ hearing, and remands for information that can only be provided by CMS or its contractors or at the direction of the Council; as well as to conduct reviews of QIC and IRE dismissals. We also are proposing to revise the rules so that decisions and

dismissals issued by attorney adjudicators may be reopened and/or appealed in the same manner as equivalent decisions and dismissals issued by ALJs. Allowing attorney adjudicators to issue decisions, dismissals, and remands as described above, and to conduct reviews of QIC and IRE dismissals would expand the pool of OMHA adjudicators and allow ALJs to focus on cases going to a hearing, while still providing appellants with quality reviews and decisions, dismissals, and remands. In addition, the rights associated with an appeal adjudicated by an ALJ would extend to any appeal adjudicated by an attorney adjudicator, including any applicable adjudication time frame, escalation option, and/or right of appeal to the Council.

In addition, we note that even if an attorney adjudicator was assigned to adjudicate a request for an ALJ hearing, that hearing request still could be reassigned to an ALJ for an oral hearing if the attorney adjudicator determined that a hearing could be necessary to render a decision. For example, if the parties waived their rights to an oral hearing in writing, allowing a decision to be issued without conducting an oral hearing in accordance with current §§ 405.1038(b)(1) or 423.2038(b)(1), but the attorney adjudicator believed testimony by the appellant or another party would be necessary to decide the appeal, the attorney adjudicator would refer the appeal to an ALJ to determine whether conducting an oral hearing would be necessary to decide the appeal regardless of the waivers, pursuant to current §§ 405.1036(b)(3) or 423.2036(b)(3). We also note that parties to a decision that is issued without an ALJ conducting an oral hearing pursuant to current §§ 405.1038(a) or 423.2038(a) (that is, the decision is favorable to the appellant on every issue and therefore may be issued based on the record alone) continue to have a right to a hearing and a right to examine the evidence on which the decision is based and may pursue that right by requesting a review of the decision by the Council, which can remand the case for an ALJ to conduct a hearing and issue a new decision.

To implement this proposal, we are proposing to revise provisions throughout part 405 subpart I, part 422 subpart M, part 423 subparts M and U, and part 478 subpart U, as detailed in proposed revisions to specific sections, in section III of this proposed rule, below. In addition, we are proposing to define an attorney adjudicator in § 405.902, which provides definitions that apply to part 405 subpart I. We are proposing to define an “attorney adjudicator” in § 405.902 as a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance. In addition, we are proposing to indicate in § 405.902 that the attorney adjudicator is authorized to take the actions provided for in subpart I on requests for ALJ hearing and requests for reviews of QIC dismissals. These proposals would provide the public with an understanding of the attorney adjudicator's qualifications and scope of authority, and we also note that attorney adjudicators would receive the same training as OMHA ALJs.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Attorney Adjudicators” at the beginning of your comment.

C. Application of 405 Rules to Other Parts

Current § 422.562(d) states that unless subpart M regarding grievances, organization determinations and appeals under the Medicare Advantage program provides otherwise, the regulations found in part 405 apply under subpart M to the extent appropriate. In addition, current § 422.608, which is a section within subpart M, provides that the regulations under part 405 regarding Council review apply to the subpart to the extent that they are appropriate.

Similar to current § 422.562(d), § 478.40(c) indicates that the part 405 regulations apply to hearings and appeals under subpart B of part 478 regarding QIO reconsiderations and appeals, unless they are inconsistent with specific provisions in subpart B. Thus, the part 405 rules are used, to the extent appropriate, for administrative review and hearing procedures in the absence of specific provisions related to administrative reviews and hearing procedures in part 422, subpart M; and part 478, subpart B, respectively. These general references to part 405 are often helpful in filling in gaps in procedural rules when there is no rule on point in the respective part. However, there has been confusion on the application of part 405 rules when a part 405 rule implements a specific statutory provision that is not in the authorizing statute for the referring subpart and HHS has not adopted a similar policy for the referring subpart in its discretion to administer the Medicare Advantage, QIO, and cost plan appeals programs. For example, certain procedures and provisions of section 1869 of the Act (governing certain determinations and appeals under Medicare Part A and Part B) that are implemented in part 405, subpart I are different than or not addressed in sections 1155 (providing for reconsiderations and appeals of QIO determinations), 1852(g) (providing for appeals of MA organization determinations), and 1876 (providing for appeals of organization determinations made by section 1876 health maintenance organizations (HMOs) and competitive medical plans (CMPs). Section 1869 of the Act provides for, among other things, redeterminations of certain initial determinations, QIC reconsiderations following redeterminations or expedited determinations; ALJ hearings and decisions following a QIC reconsideration; DAB review following ALJ decisions; specific time frames in which to conduct the respective adjudications; and, at certain appeal levels, the option to escalate appeals to the next level of appeal if the adjudication time frames are not met. In addition, section 1869(b)(3) of the Act does not permit providers and suppliers to introduce evidence in an appeal brought under section 1869 of the Act after the QIC reconsideration, unless there is good cause that precluded the introduction of the evidence at or before the QIC reconsideration.

In contrast, sections 1852(g)(5) of the Act and 1876(c)(5)(B) of the Act incorporate some, but not all, of the provisions of section 1869 of the Act, and add certain requirements, such as making the MAO, HMO, or CMP a party to an ALJ hearing. For example, sections 1852(g)(5) and 1876(c)(5)(B) of the Act specifically incorporate section 1869(b)(1)(E)(iii) of the Act to align the amount in controversy requirements for an ALJ hearing and judicial review among the three sections. However, sections 1852(g) and 1876(c)(5)(B) do not incorporate adjudication time frames and escalation provisions, or the limitation on new evidence provision of section 1869(b)(3) of the Act.

Additionally, section 1155 of the Act provides for an individual's right to appeal certain QIO reconsidered determinations made under section 1154 of the Act directly to an ALJ for hearing. However, section 1155 of the Act does not reference section 1869 of the Act or otherwise establish an adjudication time frame, and provides for a different amount in controversy requirement for an ALJ hearing.

Despite these statutory distinctions, HHS has established similar procedures by regulation to the extent practicable, when not addressed by statute. For example, section 1860D-4(h) of the Act, which addresses appeals of coverage

determinations under Medicare Part D, incorporates paragraphs (4) and (5) of section 1852(g) of the Act. As discussed above, section 1852(g) does not incorporate adjudication time frames from section 1869 of the Act or otherwise establish such time frames. However, through rulemaking for Part D coverage determination appeals, HHS has adopted a 90-day adjudication time frame for standard requests for an ALJ hearing and requests for Council review of an ALJ decision, as well as a 10-day adjudication time frame when the criteria for an expedited hearing or review are met.

To clarify the application of the part 405 rules, we are proposing revisions to parts 422 and 478. Proposed §§ 422.562(d) and 422.608 would provide that the part 405 rules do not apply when the part 405 rule implements a statutory provision that is not also applicable to section 1852 of the Act. Similarly, proposed § 478.40(c) would provide that the part 405 rules do not apply when the part 405 rule implements a statutory provision that is not also applicable to section 1155 of the Act. In addition, proposed § 478.40(c) removes language that equates an initial determination and reconsidered determination made by a QIO to contractor initial determinations and reconsidered determinations under part 405 because that language has caused confusion with provisions that are specific to part 405 and QIC reconsiderations, and it is not necessary to apply the remaining part 405, subpart I procedural rules in part 478, subpart B proceedings. In addition to clarifying the application of part 405 rules to other parts, these revisions would help ensure that statutory provisions that are specific to certain Medicare appeals are not applied to other appeals without HHS first determining, through rulemaking, whether it would be appropriate to apply a provision and how best to tailor aligning policies for those other appeals.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Application of part 405 rules to other parts” at the beginning of your comment.

D. OMHA References

When the 2005 Interim Final Rule was published in March 2005, implementing the part 405, subpart I rules, OMHA was not yet in operation. Further, processes and procedures were being established under the part 405 subpart I rules, with new CMS contractors and the newly transitioned ALJ hearing function. Since that time, OMHA and CMS and its contractors have developed operating arrangements to help ensure appeals flow between CMS contractors and OMHA, and that appeal instructions for appellants provide clear direction on how and where to file requests for hearings and reviews. However, many of the current rules for the ALJ hearing program that OMHA administers reflect the transition that was occurring at the time of the 2005 Interim Final Rule, and OMHA is not mentioned in the regulation text.

To provide clarity to the public on the role of OMHA in administering the ALJ hearing program, and to clearly identify where requests and other filings should be directed, we are proposing to define OMHA in § 405.902 as the Office of Medicare Hearings and Appeals within the U.S. Department of Health and Human Services, which administers the ALJ hearing process in accordance with section 1869(b)(1) of the Act. We are also proposing to amend rules throughout part 405, subparts I and J; part 422, subpart M; part 423, subparts M and U; and part 478, subpart B to reference OMHA or an OMHA office, in place of current references to an unspecified entity, ALJs, and ALJ hearing offices, when a reference to OMHA or an OMHA office provides a clearer explanation of a topic. To implement this proposal, we are proposing to revise provisions throughout part 405 subparts I and J, part 422 subpart M, part 423 subparts M and U, and part 478 subpart U, as detailed in proposed revisions to specific sections, in section III of this proposed rule, below.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “OMHA references” at the beginning of your comment.

E. Medicare Appeals Council References

The Council is currently referred to as the “MAC” throughout current part 405, subpart I; part 422, subpart M; and part 423, subparts M and U. This reference has caused confusion in recent years with the transition from Fiscal Intermediaries and Carriers, to Medicare administrative contractors—for which the acronym “MAC” is also commonly used—to process claims and make initial determinations and redeterminations in the Medicare Part A and Part B programs. In addition, current §§ 422.618 and 422.619 reference the Medicare Appeals Council but use “Board” as the shortened reference, and part 478, subpart B, references the DAB as the reviewing entity for appeals of ALJ decisions and dismissals but the Council is the entity that conducts reviews of ALJ decisions and dismissals, and issues final decisions of the Secretary for Medicare appeals under part 478, subpart B.

To address potential confusion with references to Medicare administrative contractors and align references to the Council as the reviewing entity for appeals of ALJ decisions and dismissals throughout part 405, subpart I; part 422, subpart M; and part 423, subparts M and U, we are proposing to amend the following rules to replace “MAC” or “Board” with “Council”: §§ 405.902, 405.904, 405.906, 405.908, 405.910, 405.926, 405.980, 405.982, 405.984, 405.990, 405.1026, 405.1036, 405.1037, 405.1042, 405.1046, 405.1048, 405.1050, 405.1052, 405.1054, 405.1060, 405.1063, 405.1062, 405.1100, 405.1102, 405.1104 (as re-designated and revised as proposed § 405.1016(e)-(f)), 405.1106, 405.1108, 405.1110, 405.1112, 405.1114, 405.1116, 405.1118, 405.1120, 405.1122, 405.1124, 405.1126, 405.1128, 405.1130, 405.1132, 405.1134, 405.1136, 405.1138, 405.1140, 422.561, 422.562, 422.608, 422.612, 422.616, 422.618, 422.619, 422.622, 422.626, 423.560, 423.562, 423.1968, 423.1974, 423.1976, 423.1978, 423.1980, 423.1982, 423.1984, 423.1990, 423.2026, 423.2036, 423.2042, 423.2046, 423.2048, 423.2050, 423.2052, 423.2054, 423.2062, 423.2063, 423.2100, 423.2102, 423.2106, 423.2108, 423.2110, 423.2112, 423.2114, 423.2116, 423.2118, 423.2120, 423.2122, 423.2124, 423.2126, 423.2128, 423.2130, 423.2134, 423.2136, 423.2138, and 423.2140.

In addition, to align references to the Council as the reviewing entity for appeals of ALJ decisions and dismissals in part 478, subpart B, we are proposing to amend §§ 478.46 and 478.48 to replace “Departmental Appeals Board” and “DAB,” with “Medicare Appeals Council” and “Council”.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Medicare Appeals Council references” at the beginning of your comment.

III. Specific Provisions of the Proposed Rule

A. Provisions of Part 405, Subpart I and Part 423, Subparts M and U

1. Overview

Part 405, subpart I and part 423, subpart U contain detailed procedures for requesting and adjudicating a request for an ALJ hearing, and a request for a review of a QIC or IRE dismissal. Part 423, subpart U provisions were proposed in the March 17, 2008

Federal

Register

(73 FR 14342) and made final in the December 9, 2009

Federal Register

(74 FR 65340), and generally follow the part 405, subpart I procedures. In this proposed rule, we generally discuss proposals related to part 405, subpart I, and then whether any aligning revisions to part 423, subpart U, are proposed, unless a provision is specific to Part 405 and there is no corresponding part 423 provision.

2. General Provisions, Reconsiderations, Reopenings, and Expedited Access to Judicial Review

a. Part 423, Subpart M General Provisions (§ 423.562)

Current § 423.562(b)(4) lists the appeal rights of a Part D plan enrollee, if the enrollee is dissatisfied with any part of a coverage determination. Specifically, paragraph (b)(4)(v) describes the right to request Council review of the ALJ's hearing decision if the ALJ affirms the IRE's adverse coverage determination in whole or in part, and paragraph (b)(4)(vi) describes the right to judicial review of the hearing decision if the Council affirms the ALJ's adverse coverage determination in whole or in part, and the amount in controversy requirements are met. We are proposing to revise paragraph (b)(4)(v) to insert “or attorney adjudicator” after each instance of “the ALJ.” This proposal is necessary to implement the proposal to allow attorneys to adjudicate requests for an ALJ hearing when no hearing is conducted as proposed in section II.B above, by stating the right to request Council review of an attorney adjudicator decision that affirms the IRE's adverse coverage determination. We also are proposing to remove “hearing” before “decision” in paragraph (b)(4)(v) to reflect that an attorney adjudicator issues decisions without conducting a hearing, and an ALJ may issue a decision without conducting a hearing.

In paragraph (b)(4)(vi), we are proposing to remove “ALJ's” and insert “ALJ's or attorney adjudicator's” in its place to implement the proposal to allow attorneys to adjudicate requests for an ALJ hearing when no hearing is conducted as proposed in section II.B above, by including an attorney adjudicator's decision as a decision that may be affirmed by the Council. We also are proposing to remove “hearing” before “decision” in paragraph (b)(4)(vi) because while the Council may conduct a hearing, Council decisions are generally issued without conducting a hearing, and the decision of the Council is subject to judicial review.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Part 423, subpart M general provisions” at the beginning of your comment.

b. Part 423, Subpart U Title and Scope (§ 423.1968)

The current heading of part 423, subpart U references ALJ hearings but does not reference decisions. We are proposing to revise the heading by replacing “ALJ Hearings” with “ALJ hearings and ALJ and attorney adjudicator decisions” to reflect that subpart U covers decisions by ALJs and attorney adjudicators, as proposed in section II.B above.

Current § 423.1968 explains the scope of the requirements in subpart U. We are proposing at § 423.1968 to expand the scope of subpart U to include actions by attorney adjudicators, as proposed in section II.B above. Specifically, we are proposing at § 423.1968(a) to add that subpart U sets forth requirements relating to attorney adjudicators with respect to reopenings; at § 423.1968(b) to add that subpart U sets forth requirements relating to ALJ decisions and decisions of attorney adjudicators if no hearing is conducted; and at § 423.1968(d) to add that subpart U sets forth the requirements relating to Part D enrollees' rights with respect to ALJ hearings and ALJ or attorney adjudicator reviews. These changes would be necessary to accurately describe the scope of the revised provisions of subpart U to implement the attorney adjudicator proposal discussed in section II.B above.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Part 423, subpart U title and scope” at the beginning of your comment.

c. Medicare Initial Determinations, Redeterminations and Appeals General Description (§ 405.904)

Section 405.904(a) provides a general overview of the entitlement and claim appeals process to which part 405, subpart I applies. Current paragraphs (a)(1) and (a)(2) provide that if a beneficiary obtains a hearing before an ALJ and is dissatisfied with the decision of the ALJ, the beneficiary may request that the Council review the case. To provide for the possibility that a decision may be issued without conducting a hearing by an ALJ, as permitted under current rules, or an attorney adjudicator, as proposed in II.B above, we are proposing to add language in paragraphs (a)(1) and (a)(2) to provide that if the beneficiary is dissatisfied with the decision of an ALJ or attorney adjudicator when no hearing is conducted, the beneficiary may request that the Council review the case. This proposal would provide a comprehensive overview of the entitlement and claim appeals process, with information on the potential for and right to appeal decisions by ALJs when no hearing is conducted, and the right to appeal decisions by attorney adjudicators, if the attorney adjudicator proposals are made final.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Medicare initial determinations, redeterminations and appeals general description” at the beginning of your comment.

d. Parties to the Initial Determinations, Redeterminations, Reconsiderations, Proceedings on a Request for Hearing, and Council Review (§ 405.906)

Current § 405.906 discusses parties to the appeals process and subsection (b) currently addresses parties to the redetermination, reconsideration, hearing and MAC. We are proposing in the paragraph heading and introductory text to subsection (b) to replace the phrases “hearing and MAC” and “hearing, and MAC review,” respectively, with “proceedings on a request for hearing, and Council review” because, absent an assignment of appeal rights, the parties are parties to all of the proceedings on a request for hearing, including the hearing if one is conducted, and they are parties to the Council's review.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Parties to the initial determinations, redeterminations, reconsiderations, hearings, and reviews” at the beginning of your comment.

e. Medicaid State Agencies (§ 405.908)

Current § 405.908 discusses the role of Medicaid State agencies in the appeals process and states that if a State agency files a request for redetermination, it may retain party status at the QIC, ALJ, MAC and judicial review levels. We are proposing to replace “ALJ” with “OMHA” to provide that the State agency has party status regardless of the adjudicator assigned to the State agency's request for an ALJ hearing or request for review of a QIC dismissal at the OMHA level of review, as attorney adjudicators may issue decisions on

requests for hearing and adjudicate requests for reviews of QIC dismissals, as proposed in section II.B above.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Medicaid State agencies” at the beginning of your comment.

f. Appointed Representatives (§ 405.910)

The 2002 Proposed Rule (67 FR 69318 through 69319) explained that the § 405.910 requirements for a valid appointment of a representative are necessary to help ensure that adjudicators are sharing and disseminating confidential information with the appropriate individuals. The 2005 Interim Final Rule (70 FR 11428 through 11431) adopted a general requirement to include a beneficiary's health insurance claim number (HICN) for a valid appointment of a representative in § 405.910(c)(5). The SMART Act Final Rule (80 FR 10614, 10617) revised § 405.910(c)(5) to explicitly limit the requirement to include a beneficiary's HICN to instances in which the beneficiary is the party appointing a representative. However, the Medicare manual provision for completing a valid appointment of representative (Medicare Claims Processing Manual (Internet-Only Manual 100-4), chapter 29, § 270.1.2) details the requirements for an appointment of representation to contain a unique identifier of the party being represented. Specifically, if the party being represented is the beneficiary, the Medicare number must be provided, and if the party being represented is a provider or supplier, the National Provider Identifier (NPI) number should be provided. Additionally, the official form for executing a valid appointment of representative (form CMS-1696, available at

https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS1696.pdf

) provides a blank space for the party to include a Medicare or NPI number. To assist adjudicators in sharing and disseminating confidential information only with appropriate individuals, we are proposing to revise § 405.910(c)(5) to add a requirement to include the Medicare NPI of the provider or supplier that furnished the item or service when the provider or supplier is the party appointing a representative. We are retaining the requirement to identify the beneficiary's Medicare HICN when the beneficiary is the party appointing a representative.

Current § 405.910 also addresses defective appointments, and delegations and revocations of appointments. However, there has been confusion on the effects on the adjudication of an appeal when a defective appointment must be addressed, or when an adjudicator is not timely informed of a delegation or revocation of an appointment. To address the effect of a defective appointment on the adjudication of an appeal to which an adjudication time frame applies, we are proposing to add § 405.910(d)(3), which would extend an applicable adjudication time frame from the later of (1) the date that a defective appointment of representative was filed or (2) the date the current appeal request was filed by the prospective appointed representative, to the date that the defect in the appointment was cured or the party notifies the adjudicator that he or she will proceed with the appeal without a representative. We are proposing this revision because, in accordance with current § 405.910(d)(1) and (d)(2), a prospective appointed representative lacks the authority to act on behalf of a party and is not entitled to obtain or receive any information related to the appeal. Thus, contact with the party may be necessary to obtain missing information from the appointment, which may delay adjudicating the appeal until the appointment is cured or the party decides to proceed with the appeal without a representative. However, we are proposing that if the request was filed by a prospective appointed representative, the request would be considered filed for the purpose of determining timeliness of the request, even if the individual is not the appointed representative after the appointment is cured, or the party decides to proceed with the appeal without a representative.

We are also proposing at § 405.910(f)(1) to replace “ALJ level” with “OMHA level” so there is no confusion that proceedings at the OMHA level are considered proceedings before the Secretary for purposes of appointed representative fees, regardless of whether the case is assigned to an ALJ or attorney adjudicator.

Current § 405.910(i)(2) and (i)(3) provide that if an appeal involves an appointed representative, an ALJ sends notices of actions or appeal decisions, and requests for information or evidence regarding a claim that is appealed to the appointed representative. We are proposing to insert “or attorney adjudicator” after “ALJ” in § 405.910(i)(2) and (i)(3). This proposal would provide that attorney adjudicators (as proposed in section II.B above), like an ALJ under the current provisions, would send notices of actions or appeal decisions, and requests for information or evidence regarding a claim that is appealed to the appointed representative.

A representative and/or the represented party is responsible for keeping the adjudicator of a pending appeal current on the status of the representative. In practice, sometimes adjudicators are not informed of a delegation or revocation of an appointment of representative that has been filed for an appeal, which results in confusion and potentially duplicative or unnecessary proceedings. We are proposing to revise § 405.910(l)(2) (which, as described later, we are proposing to re-designate as (l)(1)(ii)) to add that a delegation is not effective until the adjudicator receives a copy of the party's written acceptance of the delegation, unless the representative and designee are attorneys in the same law firm or organization, in which case the written notice to the party of the delegation may be submitted if the acceptance is not obtained from the party. This proposed revision would emphasize the importance of keeping adjudicators current on the status of the representative and also state the effects of failing to do so. Proposed § 405.910(l)(2) also serves to assist adjudicators in sharing and disseminating confidential information only with appropriate individuals, and to provide adjudicators with appropriate contact information for scheduling purposes. To accommodate proposed paragraph (l)(2), current paragraph (l), except for the title of the paragraph, would be re-designated as paragraph (l)(1), and the current subparagraphs would also be re-designated accordingly. In addition, we are proposing to add a missing “by” in current paragraph (l)(1)(ii) (re-designated as (l)(1)(i)) of § 405.910 to indicate that a designee accepts to be obligated “by” and comply with the requirements of representation. We are also proposing to revise language in current paragraph (l)(2) (re-designated as (1)(l)(ii)) of § 405.910 to clarify that “this signed statement” refers to the “written statement signed by the party,” and the written statement signed by the party is not required when the appointed representative and designee are attorneys in the same law firm or organization and the notice of intent to delegate under paragraph (l)(1)(i) indicates that fact. To further emphasize the importance of keeping adjudicators current on the status of the representative and clarify the effects of failing to do so, we are also proposing

to add § 405.910(l)(3) and (m)(4) that a party's or representative's failure to notify the adjudicator that an appointment of representative has been delegated or revoked, respectively, is not good cause for missing a deadline or not appearing at a hearing.

We are not proposing any changes for part 423, subpart U because it does not have a corresponding provision for representative appointments.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Appointed representatives” at the beginning of your comment.

g. Actions That Are Not Initial Determinations (§ 405.926)

Current § 405.926(l) provides that an ALJ's decision to reopen or not to reopen a decision is not an initial determination, and in accordance with the introductory language of § 405.926, is therefore not appealable under subpart I. In section III.A.2.l below, we are proposing to revise the reopening rules to provide that attorney adjudicators would have the authority to reopen their decisions to the same extent that ALJs may reopen their decisions under the current provisions. We are proposing to insert “or attorney adjudicator's” after “ALJ's” in § 405.926(l) to provide that the attorney adjudicator's decision to reopen a decision also is an action that is not an initial determination and therefore not an appealable action under subpart I.

Current § 405.926(m) provides that a determination that CMS or its contractors may participate in or act as parties in an ALJ hearing is not an initial determination, and in accordance with the introductory language of § 405.926, is therefore not appealable under subpart I. As explained in section III.A.3.f below, we are proposing to revise § 405.1010, which currently discusses when CMS or a contractor may participate in an ALJ hearing. As explained in the proposal to revise § 405.1010, CMS or a contractor may elect to participate in the proceedings on a request for an ALJ hearing for which no hearing is conducted, in addition to participating in an ALJ hearing as a non-party participant. To align with our proposed revision to § 405.1010, we are proposing to revise § 405.926(m) to indicate that CMS or its contractors may participate in the full scope of the proceedings on a request for an ALJ hearing, including the hearing, by replacing “participate in or act as parties in an ALJ hearing,” with “participate in the proceedings on a request for an ALJ hearing or act as parties in an ALJ hearing.”

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Actions that are not initial determinations” at the beginning of your comment.

h. Notice of a Redetermination (§ 405.956)

Current § 405.956(b)(8) requires that the notice of a redetermination include a statement that evidence not submitted to the QIC is not considered at an ALJ hearing or further appeal, unless the appellant demonstrates good cause as to why that evidence was not provided previously. We are proposing to remove “an ALJ hearing” and add “the OMHA level” in its place so that the notice of a redetermination is clear that, absent good cause and subject to the exception in § 405.956(d) for beneficiaries not represented by a provider or supplier, evidence that was not submitted to the QIC is not considered by an ALJ or an attorney adjudicator, as defined in Section II.B above.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Notice of a redetermination” at the beginning of your comment.

i. Time Frame for Making a Reconsideration Following a Contractor Redetermination, Withdrawal or Dismissal of a Request for Reconsideration, and Reconsideration (§§ 405.970, 405.972, and 405.974)

As discussed in the 2005 Interim Final Rule (70 FR 11444 through 11445) and the 2009 Final Rule (74 FR 65311 through 65312), HHS adopted a policy of providing for one level of administrative review of a dismissal of a request for appeal. As a result, an adjudicator's decision or dismissal when reviewing a dismissal action issued at the previous level is binding and not subject to further review. The policy balances a party's need for review and the need for administrative finality. The policy is embodied in the rules relating to reviews of dismissals at the next adjudicative level in current §§ 405.972(e), 405.974(b)(3), 405.1004(c), 405.1102(c), 405.1108(b), and 405.1116.

At the QIC level of appeal, a review of a contractor redetermination and a review of a contractor's dismissal of a request for a redetermination are both characterized as a “reconsideration.” While the outcome of a QIC's reconsideration of a contractor dismissal is differentiated and further reviews are not permitted in accordance with current § 405.974(b)(3), an ambiguity exists with regard to the time frame for completing this type of reconsideration and escalation options when that time frame is not met. Current § 405.970 establishes the time frame for making a reconsideration without further qualification. However, section 1869(b)(1)(D)(i) of the Act establishes that a right to a reconsideration of an initial determination (which includes a redetermination under section 1869(a)(3)(D) of the Act) exists if a timely request for a reconsideration is filed within 180 days following receipt of a contractor's redetermination, which is discussed in current § 405.962. In contrast, current § 405.974(b)(1) requires that a request for a QIC reconsideration of a contractor's dismissal of a request for redetermination must be filed within 60 calendar days after receiving the contractor's notice of dismissal. Section 1869 of the Act does not address dismissals. Rather, section 1869(c)(3)(C)(i) and (c)(3)(C)(ii) of the Act only provide for a time frame to complete a reconsideration of an initial determination, and an option to escalate a case if that time frame is not met.

The effect of the ambiguity in current § 405.970 is the potential escalation of a request for a QIC reconsideration of a contractor's dismissal when the reconsideration is not completed within 60 calendar days of a timely filed request for a reconsideration of the dismissal, and a potential hearing being required in accordance with current § 405.1002(b). The potential effect of this ambiguity is contrary to the policy of limiting reviews of dismissals to the next adjudicative level of administrative appeal, as well as the statutory construct for providing ALJ hearings after QIC reconsiderations of redeterminations, or escalations of requests for reconsiderations following a redetermination. We also note that in the parallel context of an ALJ review of a QIC's dismissal of a request for reconsideration, current §§ 405.1002 and 405.1004 establish a clear distinction between a request for hearing following a QIC reconsideration and a request for a review of a QIC dismissal, and current §§ 405.1016 and 405.1104 address the adjudication time frames for ALJ decisions, and the option to escalate an appeal to the Council when a time frame is not met, only in the context of a request for hearing, in accordance with section 1869(d)(1) and (d)(3)(A) of the Act.

To address this unintended outcome of current § 405.970, we are proposing to amend the title of § 405.970 and

paragraphs (a), (b)(1), (b)(2), (b)(3), (c), (e)(1), and (e)(2)(i) to provide that the provisions would only apply to a request for a reconsideration following a contractor redetermination, and not to a request for QIC review of a contractor's dismissal of a request for redetermination. These proposed revisions would further our policy on reviews of dismissals and help appellants better understand what may be escalated to OMHA for an ALJ hearing. We are also proposing to replace “the ALJ hearing office” in current paragraph (e)(2)(ii) with “OMHA” because the QIC sends case files for escalated cases to a centralized location, not to individual field offices. We did not propose any parallel changes for part 423 because subpart U does not address IRE reconsiderations and subpart M does not have a provision with the same ambiguity.

To provide additional clarity to the procedures for reviews of dismissal actions we are also proposing to amend the text in §§ 405.972(b)(3), (e) and 405.974(b)(3), and the introductory text of § 405.974(b) to replace the references to a “reconsideration” of a contractor's dismissal of a request for redetermination with the word “review” so that the QIC's action is referred to as a review of a contractor's dismissal of a request for redetermination. We are also proposing to revise the section heading of § 405.972 to read “Withdrawal or dismissal of a request for reconsideration or review of a contractor's dismissal of a request for redetermination” and the section heading of § 405.974 to read, “Reconsideration and review of a contractor's dismissal of a request for redetermination.” These proposed revisions are consistent with the description of a reconsideration in section 1869(c)(3)(B)(i) of the Act and § 405.968(a). A QIC's review of a contractor dismissal action is limited to the appropriateness of the dismissal action and does not consist of a review of the initial determination and redetermination, which is the meaning attributed to a reconsideration. In reviewing a contractor dismissal action, the QIC either affirms or vacates the dismissal of the request for redetermination. If a dismissal action is vacated, the appeal is remanded back to the MAC to conduct a redetermination on the merits (§ 405.974).

Current § 405.972(e) provides that a QIC's dismissal of a request for reconsideration is binding unless it is modified or reversed by an ALJ under § 405.1004. As discussed in section II.B above, we are proposing that an attorney adjudicator may conduct a review of a QIC's dismissal of a request for reconsideration and in section III.A.3.c below, we are proposing to revise § 405.1004 to provide the effect of an attorney adjudicator's action taken in reviewing the QIC dismissal is equivalent to the effect of an ALJ's action taken in reviewing the QIC dismissal. To align with our proposed revision to § 405.1004, we are proposing to insert “or attorney adjudicator” after “an ALJ” in § 405.972(e) to indicate that a QIC's dismissal of a request for reconsideration is binding unless it is modified or reversed by an ALJ or attorney adjudicator under § 405.1004.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Time frame for making a reconsideration following a contractor redetermination, withdrawal or dismissal of a request for reconsideration, and reconsideration” at the beginning of your comment.

j. Notice of Reconsideration (§ 405.976)

Section 1869(b)(3) of the Act states that a provider or supplier may not introduce evidence in any appeal that was not presented at the reconsideration conducted by a QIC unless there is good cause as to why the evidence was not provided prior to the issuance of the QIC's reconsideration. Under this authority, current § 405.976(b)(5)(ii) provides that a notice of reconsideration must include a summary of the rationale for the reconsideration that specifies that all evidence that is not submitted prior to the issuance of the reconsideration will not be considered at the ALJ level, or made part of the administrative record, unless the appellant demonstrates good cause as to why the evidence was not provided prior to the issuance of the QIC's reconsideration; however, it does not apply to a beneficiary unless the beneficiary is represented by a provider or supplier or to state Medicaid agencies. The statement that the evidence will not be made part of the administrative record is inconsistent with our practice of making a complete record of the administrative proceedings for further reviews, including documents submitted by parties that were not considered in making the decision. Current § 405.1028(c) states that if good cause does not exist, the ALJ must exclude the evidence from the proceedings and may not consider it in reaching a decision. However, it does not instruct the ALJ to remove the evidence from the administrative record, and to do so would preclude an effective review of the good cause determination. In addition, we noted in the 2005 Interim Final Rule (70 FR 11464) that under current § 405.1042(a)(2), excluded evidence is part of the record because it states that in the record, the ALJ must also discuss any evidence excluded under § 405.1028 and include a justification for excluding the evidence. To help ensure that the evidence is preserved in the administrative record, we are proposing to delete “or made part of the administrative record” from the paragraph in § 405.976(b)(5)(ii).

Current § 405.976(b)(7) requires that the QIC notice of reconsideration contain a statement of whether the amount in controversy needed for an ALJ hearing is met when the reconsideration is partially or fully unfavorable. As further discussed in section III.A.3.d below, we are proposing revisions to § 405.976(b)(7) along with revisions to the methodology for calculating the amount in controversy required for an ALJ hearing under § 405.1006(d) to better align the amount in controversy with the actual amount in dispute. Please refer to section III.A.3.d for a discussion of these proposals.

We are not proposing any changes to part 423 because subpart U does not address IRE reconsiderations and subpart M does not contain similar provisions.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Notice of reconsideration” at the beginning of your comment.

k. Effect of a Reconsideration (§ 405.978)

Current § 405.978 discusses the effect of a QIC reconsideration, and states that a reconsideration is binding on all parties unless, among other things, an ALJ decision is issued in accordance to a request for an ALJ hearing made in accordance with § 405.1014. As discussed in section II.B above, we are proposing that an attorney adjudicator may issue a decision on a request for an ALJ hearing when a hearing is not conducted, and in section III.A.3.v below, we are proposing to revise § 405.1048 to provide the effect of an attorney adjudicator's decision is equivalent to the effect of an ALJ's decision. To align with our proposals to provide that an attorney adjudicator may issue a decision on a request for an ALJ hearing when a hearing is not conducted and the effect of that decision is equivalent to the effect of an ALJ's decision, we are proposing to insert “or attorney adjudicator” after the first use of “ALJ” in § 405.978(a) to

indicate that a QIC reconsideration is binding on all parties unless, among other things, an ALJ or attorney adjudicator decision is issued in accordance to a request for an ALJ hearing made in accordance with § 405.1014.

We are inviting public comments on this proposal. If you choose to comment on the proposal in this section, please include the caption “Effect of a reconsideration” at the beginning of your comment.

l. Reopenings (§§ 405.980, 405.982, 405.984, 423.1978, 423.1980, 423.1982, and 423.1984)

Sections 405.980 and 423.1980 set forth the rules governing reopening and revision of initial determinations, redeterminations, reconsiderations, decisions, and reviews; §§ 405.982 and 423.1982 set forth the rules governing notice of a revised determination or decision; and §§ 405.984 and 423.1984 set forth the rules on the effect of a revised determination or decision. Pursuant to current §§ 405.1038 and 423.2038, an ALJ may issue a decision on a request for hearing without conducting a hearing in specified circumstances. As proposed in section II.B above, an attorney adjudicator also would be able to issue decisions on requests for an ALJ hearing in specified circumstances, issue dismissals when a party withdraws a request for hearing, and issue decisions on requests to review QIC or IRE dismissals.

We are proposing to insert “or attorney adjudicator” or “attorney adjudicator's,” after “ALJ” or “ALJ's” in §§ 405.980(a)(1)(iii), (a)(4), (a)(5), (d) introductory text, (d)(2), (e)(2); 405.982(a), (b); 405.984(d); 423.1980(a)(1)(iii), (a)(4), (d) introductory text, (d)(2), (e)(2); 423.1982(a), (a)(1), (a)(2), (b), (b)(1), and (b)(2); 423.1984(d); 423.1978(a); 423.1980(a)(2). These proposals would provide that decisions issued by attorney adjudicators, as proposed in section II.B above, may be reopened in the same manner as decisions issued by an ALJ (that is, when there is good cause in accordance with §§ 405.986 or 423.1986, or the decision was procured by fraud or similar fault), and with the same limitations, requirements, and effects as reopening an ALJ decision. We believe it is necessary for an attorney adjudicator or the Council to have the authority to reopen the attorney adjudicator's decision on the same bases as an ALJ or the Council may reopen the ALJ's decision under the current rules; to address instances in which there is good cause to reopen the attorney adjudicator's decision (in accordance with §§ 405.986 or 423.1986) or the attorney adjudicator's decision was procured by fraud or similar fault; and the action should be subject to the same limitations and requirements, and have the same effects as an ALJ's action under the provisions.

We are also proposing to replace “hearing decision,” “hearing decisions,” or “hearings,” with “decision” or “decisions” in the titles of current §§ 405.980 and 423.1980; §§ 405.980(a)(1)(iii), (d) introductory text, (d)(2), (e) introductory text, and (e)(2); 423.1980(a)(1)(iii), (d) introductory text, (d)(2), (e) introductory text, and (e)(2); to replace “hearing” with “ALJ or attorney adjudicator decision” in §§ 405.980(a)(1)(iv), (a)(4), (e)(2); 423.1980(a)(1)(iv), (a)(2), and (e)(2); and to replace “ALJ hearing decisions” and “hearing decision,” with “ALJ or attorney adjudicator decisions” and “ALJ or attorney adjudicator decision”, respectively, in §§ 405.984(d) and 423.1984(d). These proposals would avoid any confusion that reopening under these provisions is limited to decisions for which an oral hearing was conducted, whether the decision is issued by an ALJ without conducting a hearing, as permitted under current rules or by an attorney adjudicator without conducting a hearing, as proposed in section II.B above.

In addition, we are proposing to add in §§ 405.980(a)(1)(iii), (d)(2), (e)(2), and 423.1980(a)(1)(iii), (d)(2), (e)(2) that an ALJ, or attorney adjudicator as proposed in section II.B above, revises “his or her” decision and may reopen “his or her” decision, which reflects our current policy that the deciding ALJ may reopen his or her decision, and avoids any potential confusion that an ALJ or attorney adjudicator may reopen the decision of another ALJ or attorney adjudicator. We are also proposing to insert “its” before “review” in §§ 405.980(a)(1)(iv) and 423.1980(a)(1)(iv) to indicate that the Council's review decision may only be reopened by the Council, to differentiate it from an ALJ or attorney adjudicator decision that the Council may also reopen. In addition, we are proposing to specify in §§ 405.980(d)(2) and (e)(2), and 423.1980(d)(2) and (e)(2) that the Council may reopen “an ALJ or attorney adjudicator” decision consistent with the current policy that the Council may reopen an ALJ decision, and to differentiate the provisions from §§ 405.980(d)(3) and (e)(3), and 423.1980(d)(3) and (e)(3), which provide for the Council to reopen its review decision. We also propose in § 405.980(e)(3) to insert “Council” before “review” to clarify that a party to a Council review may request that the Council reopen its decision.

Finally, we are proposing at § 405.984(c) to replace “in accordance with § 405.1000 through § 405.1064” with “in accordance with § 405.1000 through § 405.1063” to account for the proposed removal of § 405.1064 discussed below.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Reopenings” at the beginning of your comment.

m. Expedited Access to Judicial Review (§§ 405.990 and 423.1990)

Sections 405.990 and 423.1990 set forth the procedures governing expedited access to judicial review (EAJR). Current §§ 405.990(d) and 423.1990(d) allow a requesting party to file an EAJR request with an ALJ or the Council, which is then responsible for forwarding the request to the EAJR review entity within 5 calendar days of receipt. In accordance with current §§ 405.990(f) and 423.1990(e), a request for EAJR must be acted upon by the EAJR review entity within 60 calendar days after the date that the review entity receives a request and accompanying documents and materials. In practice, this process has resulted in confusion and delays for requesting parties when EAJR requests are sent directly to an ALJ or the Council. To simplify the process for requesting parties and to help ensure the timely processing of EAJR requests, we are proposing to revise §§ 405.990(d)(1) and 423.1990(d)(1) to direct EAJR requests to the DAB, which administers the EAJR process. Specifically, we are proposing at §§ 405.990(d)(1)(i) and (ii), and 423.1990(d)(1)(i) and (ii) that the requestor or enrollee may file a written EAJR request with the DAB with the request for ALJ hearing or Council review if a request for ALJ hearing or Council review is not pending, or file a written EAJR request with the DAB if an appeal is already pending for an ALJ hearing or otherwise before OMHA or the Council. We are also proposing to revise §§ 405.990(i)(1) and (2) and 423.1990(h)(1) and (2) so that the review entity would forward a rejected EAJR request to OMHA or the Council instead of an ALJ hearing office or the Council, to align with the revised EAJR filing process in which a request for ALJ hearing is submitted to the DAB with an EAJR request; this would also help ensure OMHA can process the request for an ALJ hearing as quickly as possible in the event an EAJR request is rejected.

Current §§ 405.990(i)(2) and 423.1990(h)(2) provide that a 90 calendar day time frame will apply to an appeal when a rejected EAJR request is received by the hearing office or the Council. Current § 405.990(b)(1)(ii) states that an EAJR request may be filed when a request for a QIC reconsideration has been escalated for an ALJ hearing, and in accordance with current § 405.1016(c), a 180 calendar day time frame will apply in that circumstance. In addition, current §§ 405.1036(d) and 423.2036(d) allow an appellant or enrollee to waive the adjudication period for an ALJ to issue a decision specified in §§ 405.1016 and 405.2016, respectively, at any time during the hearing process. To address the possibility that a time frame other than 90 calendar days applies to an appeal, or no adjudication time frame applies to an appeal, we are proposing to revise §§ 405.990(i)(2) and 423.1990(h)(2) to remove the reference to 90 calendar days and provide that if an adjudication time frame applies to an appeal, the adjudication time frame begins on the day the request for hearing is received by OMHA or the request for review is received by the Council, from the EAJR review entity.

In addition, proposed § 405.990(i)(1) would remove the redundant “request” after “EAJR request” in current paragraph (i)(1), which was a drafting error; and proposed § 423.1990(b)(1)(i) would remove “final” before referring to a decision, dismissal, or remand order of the ALJ or attorney adjudicator, as proposed in section II.B above, because as we explained in the 2009 Final Rule (74 FR 65307 through 65308), final decisions of the Secretary are those for which judicial review may be immediately sought under section 205(g) of the Act and the use of “final” in current § 423.1990(b)(1)(i) may cause confusion with such a final decision.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Expedited access to judicial review” at the beginning of your comment.

3. ALJ Hearings

a. Hearing Before an ALJ and Decision by an ALJ or Attorney Adjudicator: General Rule (§§ 405.1000 and 423.2000)

Current §§ 405.1000 and 423.2000 provide a general overview and rules for hearings before an ALJ and decisions on requests for hearings. We are proposing to revise §§ 405.1000(d), (e), (g); and 423.2000(d), (e), (g) to include decisions by attorney adjudicators, as proposed in section II.B above. We are also proposing to retitle the sections to reflect that the provisions of the section extend to decisions by both ALJ and attorney adjudicators. We are proposing to change the language in §§ 405.1000(a), (b), (c), and (d); and 423.2000(a) and (b) to state that a hearing may only be conducted by an ALJ. These proposals would provide readers with an accurate overview of how a request for an ALJ hearing would be adjudicated, including the potential that a decision could be issued without conducting a hearing by an ALJ or an attorney adjudicator as proposed in section II.B above, while informing readers that if a hearing is conducted, an ALJ will conduct the hearing.

Current § 405.1000(c) provides that CMS or a contractor may elect to participate in a hearing, and § 423.2000(c) provides that CMS, the IRE or Part D plan sponsor may request to participate in a hearing. As discussed in section III.A.3.f below, we are proposing to revise §§ 405.1010 and 423.2010 so that these entities may elect (for § 405.1010) or request (for § 423.2010) to participate in the proceedings on a request for hearing, including participation before a hearing is scheduled. We are proposing to revise §§ 405.1000(c) and 423.2000(c) so that the sections would reference §§ 405.1010 and 423.2010, respectively, with regard to participating in the proceedings. By referencing §§ 405.1010 and 423.2010, the proposed revisions would direct readers to those sections addressing the full scope of potential participation by CMS or its contractors, or a Part D plan sponsor, on a request for an ALJ hearing, including participating in the proceedings on a request for an ALJ hearing, which as discussed in proposed §§ 405.1010 and 423.2010, may include any proceedings before an oral hearing is scheduled. We are also proposing in § 405.1000(c) to state that CMS or its contractor may join the hearing before an ALJ as a party under § 405.1012, which would direct readers to the appropriate section addressing the full scope of CMS or its contractor acting as a party. (Because CMS, the IRE, and the Part D plan sponsor may not be a party to a hearing under part 423, subpart U, there is no corollary to § 405.1012 in that subpart and therefore a similar revision is not proposed for § 423.2000(c).)

Current §§ 405.1000(d) and 423.2000(d) provide that a decision is based on the hearing record, and current §§ 405.1000(g) and 423.2000(g) reference a hearing record in describing when a decision can be issued based on the record, without a hearing. However, current §§ 405.1042 and 423.2042 identify the record as the administrative record. The references to a hearing record in current paragraphs (d) and (g) may cause confusion when no hearing is conducted. To make the terminology consistent throughout the rules, account for decisions that are issued without a hearing being conducted, and minimize confusion, we are proposing to revise §§ 405.1000(d) and 423.2000(d) so that a decision is based on the administrative record, including, for an ALJ, any hearing record, and §§ 405.1000(g) and 423.2000(g) to provide that a decision is based on the administrative record.

Current § 405.1000(e) and (g) discuss two circumstances in which a decision on a request for hearing can be issued by an ALJ without conducting a hearing, either where the parties waive the hearing or where the record supports a fully favorable finding. Related to current § 405.1000(e), current § 405.1000(f) discusses the ALJ's authority to conduct a hearing even if the parties waive the hearing. As discussed in section III.A.3.r below, we are proposing to revise § 405.1038 to modify the circumstances in which a decision on a request for hearing can be issued without conducting a hearing. As discussed in the proposed revisions to § 405.1038, we would require that waivers be obtained by the parties entitled to a notice of hearing in accordance with § 405.1020(c), or to require that the record supports a fully favorable finding for the appellant and there is no other party or no other party is entitled to a notice of hearing in accordance with § 405.1020(c). Proposed § 405.1000(e), (f), and (g) would be revised for consistency with the § 405.1038 proposals and to accurately summarize when a decision on a request for hearing can be issued without conducting a hearing in accordance with proposed § 405.1038. We are not proposing similar changes in § 423.2000(e), (f), and (g) because we are not proposing changes to when a decision on a request for hearing can be issued without conducting a hearing in § 423.2038.

Current § 405.964(c) requires a QIC to consolidate requests for a reconsideration filed by different parties on the same claim before a reconsideration is made on the first timely filed request. While current § 405.1044 permits an ALJ to consolidate requests for hearing if one or more of the issues to be considered at the hearing are the same issues that are involved in another request for hearing pending before the same ALJ, the provision is discretionary and dependent on the requests being

assigned to the same ALJ. To mitigate the potential of requests for hearing on the same claim filed by different parties being separately adjudicated, we are proposing to add § 405.1000(h) to require that when more than one party files a timely request for hearing on the same claim before a decision is made on the first timely filed request, the requests are consolidated into one proceeding and record, and one decision, dismissal, or remand is issued. We note that if a decision was issued on the first timely request before an additional request is timely filed or good cause is found to extend the period to file the additional request for hearing, a reopening of the decision may be considered by the deciding adjudicator in accordance with § 405.980. For example, if a request is submitted with new and material evidence that was not available at the time of the decision and may result in a different conclusion, the reopening provisions at § 405.980 would apply. Because only the enrollee is a party in a part 423, subpart U proceeding on a request for an ALJ hearing, no corresponding changes are proposed for § 423.2000.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Hearing before an ALJ and decision by an ALJ or attorney adjudicator general rule” at the beginning of your comment.

b. Right to an ALJ Hearing (§§ 405.1002 and 423.2002)

Current §§ 405.1002 and 423.2002 discuss a right to an ALJ hearing. Current §§ 405.1002(a) and 423.2002(a) provide that a party to a QIC reconsideration or the enrollee who receives an IRE reconsideration, respectively, may “request” a hearing before an ALJ if the party or enrollee files a timely request and meets the amount in controversy requirement. However, a party or enrollee is entitled to a hearing only when those requirements are met. See sections 1860D-4(h) and 1869(b)(1)(A) of the Act. Therefore, we are proposing to revise §§ 405.1002(a) and 423.2002(a) introductory text to state that the party to a QIC reconsideration or the enrollee who receives an IRE reconsideration has a right to a hearing rather than may request a hearing. These proposed changes would align the provisions with the statute and clarify that the party or enrollee has a right to a hearing before an ALJ when the criteria are met.

Current §§ 405.1002(a)(4) and 423.2002(e) provide that the request is considered filed on the date it is received by the entity specified in the QIC's or IRE's reconsideration. There has been confusion when a request is sent to an OMHA office that is not specified in the reconsideration, and this error causes delays in processing the request. We are proposing to revise §§ 405.1002(a)(4) and 423.2002(e) to replace “entity” with “office” to avoid confusion that the request may be filed with OMHA as an entity, and therefore any OMHA office, rather than the specific OMHA office identified in the QIC's or IRE's reconsideration. This would help ensure appellants are aware that a request for hearing must be filed with the office indicated in the notice of reconsideration to avoid delays. For example, when the notice of reconsideration indicates that a request for hearing must be filed with the OMHA central docketing office, an appellant will cause a delay if the request is sent to the QIC or IRE, or an OMHA field office. We also note that as explained in the 2009 Final Rule (74 FR 65319 through 65320), pursuant to current § 405.1014(b)(2), if a request for hearing is timely filed with an entity other than the entity specified in the notice of reconsideration, the request is not treated as untimely or otherwise rejected. This would remain true for requests that are timely filed with an office other than the office specified in the notice of reconsideration, pursuant to proposed § 405.1014(c)(2), which incorporates the requirement from current § 405.1014(b)(2). This would also apply in part 423, subpart U adjudications because the same language appears in current § 423.2014(c)(2) and is incorporated in proposed § 423.2014(d)(2).

Current § 405.1002(b)(1) provides that when a party files a request with the QIC to escalate the appeal, it is escalated to “the ALJ level.” We are proposing to revise § 405.1002(b)(1) to replace “to the ALJ level” with “for a hearing before an ALJ” so that when a request for a QIC reconsideration is escalated, it is escalated “for a hearing before an ALJ.” This would help ensure that the right to a hearing is clear when an appeal is escalated from the QIC. There is no corresponding provision in part 423, subpart U.

Current § 423.2002(c) provides that the ALJ must document all oral requests for expedited hearings. However, an ALJ is not assigned to an appeal until after the request for hearing is received and processed. Thus, we are proposing to revise § 423.2002(c) to state that “OMHA” must document all oral requests for expedited hearings. There is no corresponding provision in part 405, subpart I.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Right to an ALJ hearing” at the beginning of your comment.

c. Right to a Review of QIC or IRE Notice of Dismissal (§§ 405.1004 and 423.2004)

Current §§ 405.1004 and 423.2004 discuss the right to an ALJ review of a QIC notice of dismissal or IRE notice of dismissal, respectively. As proposed in section II.B above, attorney adjudicators or ALJs would conduct reviews of QIC or IRE dismissals. Accordingly, we are proposing to remove references to an ALJ in the titles of proposed §§ 405.1004 and 423.2004, though ALJs would continue to have the authority to conduct reviews of QIC or IRE dismissals if a request for a review of a QIC or IRE dismissal is assigned to an ALJ. We also propose to insert “or attorney adjudicator” after ALJ in §§ 405.1004(a) introductory language, (b), (c); and 423.2004(a) introductory language, (b), and (c), to provide that an attorney adjudicator could review a QIC or IRE dismissal, as proposed in section II.B above. We also are proposing to replace the reference to “entity” in current §§ 405.1004(a)(4) and 423.2004(a)(4), with “office,” for the same reasons discussed above in III.A.3.b, for amending parallel language in §§ 405.1002 and 423.2002.

Current §§ 405.1004(b) and 423.2004(b) provide that if an ALJ determines that the QIC's or IRE's dismissal was in error, he or she vacates the dismissal and remands the case to a QIC or IRE. As discussed in III.A.3.p below, we are proposing to revise the remand provisions and add new §§ 405.1056 and 405.1058, 423.2056, and 423.2058 to govern when remands may be issued, whether and to what extent remands may be reviewed, providing notice of a remand, and the effect of a remand. We are also proposing to revise §§ 405.1004(b) and 423.2004(b) to add references to proposed §§ 405.1056 and 423.2056, respectively, to explain that the remand would be in accordance with proposed §§ 405.1056 and 423.2056, which as discussed in section III.A.3.p below, would address issuing remands and notices thereof, including for remands of QIC or IRE dismissals.

Current §§ 405.1004(c) and 423.2004(c) state that an ALJ's decision regarding a QIC's or IRE's dismissal of a reconsideration request is binding and not subject to further review, and that the dismissal of a request for ALJ review of a QIC's or IRE's dismissal of a

reconsideration request is binding and not subject to further review, unless vacated by the Council under § 405.1108(h) or § 423.2108(b), respectively. In our experience, these sections as currently drafted have been a source of confusion for adjudicators and appellants. The two sentences convey different actions that can result from a request for review of a QIC or IRE dismissal—a decision regarding whether the QIC's or IRE's dismissal was correct, or a dismissal of the appellant's request for an ALJ review of the QIC's or IRE's dismissal. We are proposing to separate and further distinguish the two situations to avoid the current confusion that results from two of the three possible outcomes that may result from a request to review a QIC or IRE dismissal (the third being a remand of the dismissal, addressed in paragraph (b) in the respective sections) being in the same paragraph by proposing a separate paragraph for each outcome currently addressed in paragraph (c).

We are proposing to revise §§ 405.1004(c) and 423.2004(c) to include the possible outcome in the first sentence of current §§ 405.1004(c) and 423.2004(c) of a decision affirming the QIC's or IRE's dismissal. We also are proposing to move language in current §§ 405.1004(c) and 423.2004(c) stating that the decision of an ALJ on a request for review of a QIC dismissal is binding and not subject to further review, to proposed §§ 405.1048(b) and 423.2048(b), which as discussed in section III.A.3.v below, would address the effects of decisions on requests to review a QIC or IRE dismissal. In addition, we are proposing in §§ 405.1004(c) and 423.2004(c), respectively, to state that a decision affirming a QIC or IRE dismissal would be issued in accordance with proposed §§ 405.1046(b) and 423.2046(b), which as discussed in section III.A.3.v below, would address issuing decisions on requests for review of a QIC or IRE dismissal and notices thereof.

The 2009 Final Rule (74 FR 65311 through 65312) also explained that if a request for ALJ review of a QIC dismissal was invalid and thus subject to dismissal, the dismissal of the request to review a QIC dismissal was binding and not subject to further review (however, a party could request that the dismissal be vacated by the Council pursuant to § 405.1108(b)). We are proposing to add §§ 405.1004(d) and 423.2004(d) to state that the ALJ or attorney adjudicator may dismiss a request for review of a QIC's or an IRE's dismissal in accordance with proposed §§ 405.1052(b) or 423.2052(b), respectively, which as discussed in section III.A.3.x below, would address dismissals of requests for review of a QIC or IRE dismissal and notices thereof. We also are proposing to move language in current §§ 405.1004(c) and 423.2004(c) stating that the dismissal is binding and not subject to further review unless the dismissal is vacated, to proposed §§ 405.1054(b) and 423.2054(b), which would address the effects of a dismissal of a request for review of a QIC's or an IRE's dismissal and as discussed in section III.A.3.x below, would provide authority for an ALJ or attorney adjudicator to vacate a dismissal and therefore replace the current reference to the Council.

We are inviting public comments on these proposals. If you choose to comment on the proposals in this section, please include the caption “Right to a review of QIC or IRE notice of dismissal” at the beginning of your comment.

d. Amount in Controversy Required for an ALJ Hearing (§§ 405.1006, 405.976(b)(7), 423.1970, 422.600(b), and 478.44(a))

Current § 405.1006 sets forth the requirements for meeting the amount in controversy for an ALJ hearing. The title of current § 405.1006 states that the amount in controversy is required to “request” an ALJ hearing and judicial review. However, as discussed in III.A.3.b above, section 1869(b)(1)(A) of the Act states that a party is entitled to a hearing before the Secretary and judicial review, subject to the amount in controversy and other requirements. To align the title of § 405.1006 with the statutory provision, we are proposing that the amount in controversy is required “for” an ALJ hearing and judicial review rather than “to request” an ALJ hearing and judicial review. Put another way, a party may request an ALJ hearing or judicial review, albeit unsuccessfully, without satisfying the amount in controversy requirement.

Section 1869(b)(1)(E) of the Act establishes the minimum amounts in controversy for a hearing by the Secretary and for judicial review, but does not establish how to calculate the amounts in controversy. Current § 405.1006(d) states that the amount remaining in controversy is calculated based on the actual amount charged to the individual (a beneficiary) for the items or services in question (commonly referred to as billed charges), reduced by any Medicare payments already made or awarded for the items or services, and any deductible and coinsurance amounts applicable to the particular case. In an effort to align the amount in controversy with a better approximation of the amount at issue in an appeal, we are proposing to revise the basis (that is, the starting point before any deductions for any payments already made by Medicare or any coinsurance or deductible that may be collected) used to calculate the amount in controversy. For appeals of claims submitted by providers of services, physicians, and other suppliers that are priced based on a published Medicare fee schedule or published contractor priced amount (as discussed below), rather than using the actual amount charged to the individual as the basis for the amount in controversy, we are proposing to use the Medicare allowable amount for the items and/or services being appealed, subject to the exceptions discussed below. An allowable amount is the maximum amount of the billed charge deemed payable for the item or service. For the purposes of the amount in controversy under § 405.1006, we are proposing at § 405.1006(d)(2)(i)(A) that for items and services with a published Medicare fee schedule or published contractor-priced amount, the basis for the amount in controversy is the allowable amount, which would be the amount reflected on the fee schedule or in the contractor-priced amount for those items or services in the applicable jurisdiction and place of service.

For a vast majority of items and services furnished and billed by physicians and other suppliers, allowable amounts are determined based on Medicare fee schedules. Fee schedules are updated and published on an annual basis by CMS through rulemaking, and CMS and its contractors have tools and resources available to inform physicians and other suppliers of allowable amounts based on these fee schedules, including the Physician Fee Schedule Look-up Tool available at

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PFSlookup/

and spreadsheets for other fee schedules that can be accessed on the CMS Web site through the fee schedule main page at

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FeeScheduleGenInfo/index.html

. Allowable amounts for many contractor priced items and services are also included in these tools and resources. Allowable amounts are included on the Medicare remittance advice for paid items and services, but not for items and services that are denied. However, where the allowable amount for an item or service is determined based on a published fee schedule or contractor priced amount, we anticipate that appellants, other than beneficiaries who

are not represented by a provider, supplier, or Medicaid State agency, would be able to use the existing CMS and contractor tools and resources to determine allowable amounts for denied services when filing a request for hearing, and those amounts could be verified by OMHA in determining whether the claims included in the request meet the amount in controversy requirement. As discussed below, where the appellant is a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, CMS would require the QIC to specify in the notice of reconsideration, for partially or fully unfavorable reconsideration decisions, whether the amount remaining in controversy is estimated to meet or not meet the amount required for an ALJ hearing under proposed § 405.1006(d).

Due to the pricing methodology for many items and services furnished by providers of services, such as hospitals, hospices, home health agencies, and skilled nursing facilities, at the present time an allowable amount is not easily discerned or verified with existing CMS and contractor pricing tools (for example, there is no pricing tool available for hospital outpatient services paid under the outpatient prospective payment system (OPPS)) for pre-payment claim denials (where items or services on the claim are denied, in full or in part, before claim payment has been made). Similarly, items and services furnished by providers or suppliers that are always non-covered, as well as unlisted procedures, may not have published allowable amounts based on a fee schedule or a published contractor-priced amount. Therefore, we are proposing at § 405.1006(d)(2)(i)(B) to continue using the provider's or supplier's billed charges as the basis for calculating the amount in controversy for appeals of claims that are not priced according to a CMS-published fee schedule and do not have a published contractor-priced amount (except as discussed below). We note that the method for calculating the amount in controversy in this scenario would be the same as under current § 405.1006(d), and we believe that all appellants have access to this information through claims billing histories, remittance advices, or the column titled “Amount Provider [or Supplier] Charged” on the Medicare Summary Notice. However, we are soliciting comment on whether existing tools and resources are available that would enable providers, suppliers, and Medicaid State agencies to submit an allowable amount in their request for hearing (as proposed in Section III.A.3.g.i below) for items and services not subject to published fee schedules or published contractor priced amounts, and whether those amounts could also be verified by OMHA. We are also soliciting comment on how such tools and resources could be used in appeals filed by beneficiaries.

Current § 405.1006(d)(1) introductory text uses “the actual amount charged the individual for the items and services in question” as the basis (starting point) for calculating the amount in controversy, before any reductions described in paragraphs (d)(1)(i) and (ii) (for any Medicare payments already made or awarded and any deductible and coinsurance applicable in the particular case) occur. For the reasons discussed above, we are proposing to revise paragraph (d)(1) introductory text to state that in situations other than those described in § 405.1006(d)(3) through (7) (discussed below), the amount in controversy is computed as “the basis for the amount in controversy for the items and services in the disputed claim as defined in paragraph (d)(2)”, less applicable reductions described in paragraphs (d)(1)(i) and (ii), and are proposing to revise paragraph (d)(2) to specify the amount that would be used as the basis for the amount in controversy on a situational basis. We are also proposing at § 405.1006(d)(3) through (7) five exceptions to the general calculation methodology specified in proposed paragraphs (d)(1) and (2).

There has also been confusion in calculating the amount in controversy when an appealed reconsideration involves multiple claims. Section 1869 of the Act and part 405, subpart I provide for an appeals process in which each claim decision is appealed and separately adjudicated. However, in some instances, claims are considered together based on an appellant's request. To address confusion with calculating the amount in controversy when reconsiderations involve multiple claims and to help ensure § 405.1006 clearly conveys that the amount in controversy requirement must be met for each appealed claim unless the claim can be aggregated as discussed below, proposed § 405.1006(d)(1) would clarify that the amount in controversy is based on the items or services in the disputed “claim.”

We are proposing to maintain the current reduction to the calculation of the amount in controversy in § 405.1006(d)(1)(i), which states that the basis for the amount in controversy is reduced by any Medicare payments already made or awarded for the items or services. In addition, current § 405.1006(d)(1)(ii) provides that the basis for the amount in controversy is further reduced by “[a]ny deductible and coinsurance amounts applicable in the particular case.” We are proposing to revise § 405.1006(d)(1)(ii) to read, “Any deductible and/or coinsurance amounts that may be collected for the items or services.” We believe revising this provision is appropriate to better align the amount at issue in the appeal and the amount in controversy so that in situations where a provider or supplier is prohibited from collecting applicable coinsurance and/or deductible, or must refund any such amounts already collected, the basis for the amount in controversy is not reduced by that amount (for example, if a provider or supplier is held liable for denied services under the limitation on liability provision in section 1879 of the Act, any amounts collected for the denied service, including coinsurance and/or deductible must be refunded).

As discussed above, we are proposing at § 405.1006(d)(2)(i) that, for situations other than those described in § 405.1006(d)(2)(ii) and (iii), the basis for calculating the amount in controversy under § 405.1006(d)(1) would be the Medicare allowable amount, which is the amount reflected on the fee schedule or in the contractor-priced amount for those items or services in the applicable jurisdiction and place of service if there is a published Medicare fee schedule or published contractor-priced amount for the items or services in the disputed claim; or if there is no published Medicare fee schedule or contractor-priced amount for the items or services in the disputed claim, the basis for the amount in controversy would be the provider or supplier's billed charges submitted on the claim for the items and services. We believe providers, suppliers, and Medicaid State agencies would be able to utilize existing CMS and CMS contractor tools and resources to determine the allowable amount for items and services with published fee schedule or published contractor-priced amounts, and for items or services without a published fee schedule or published contractor priced amount, the calculation methodology for the amount in controversy would be the same as the calculation methodology specified in current § 405.1006(d). However, there may be instances where a beneficiary would appeal a claim for items and services for which the allowable amount would be the basis for the amount in controversy under proposed § 405.1006(d)(2)(i)(A) (for example, a claim for items or services with a published fee schedule or published

contractor-priced amount that does not involve an overpayment and for which the beneficiary has not been determined to be financially responsible). We believe most beneficiaries are not familiar with published fee schedule or contractor-priced amounts and may be unable to determine the amount in controversy in these circumstances with the resources currently available to them. However, as discussed below, we are proposing at § 405.976(b)(7) that the QIC include in the notice of reconsideration a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing, if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration is partially or fully unfavorable to the appellant. For appeals filed by beneficiaries, often the amount at issue is aligned not with the Medicare allowable amount, but rather with the billed charges of the provider or supplier. For example, where a beneficiary is held financially responsible for a denied claim under the limitation on liability provisions in section 1879 of the Act because he or she received an Advance Beneficiary Notice of Noncoverage (ABN), the beneficiary is responsible for the billed charges on the claim. Or, for a claim not submitted on an assignment-related basis that is denied, the beneficiary may be responsible for the billed charges, or the billed charges subject to the limiting charge in section 1848(g) of the Act. Medicare notifies the beneficiary of the amount he or she may be billed for denied services on the Medicare Summary Notice in a column titled, “Maximum You May Be Billed.” For appeals filed by a provider, supplier, or Medicaid State agency for denied items or services for which the beneficiary was determined to be financially responsible, we believe providers, suppliers, and Medicaid State agencies would have sufficient access to the provider or supplier's billing information and Medicare claims processing data to determine the amount charged to the beneficiary. Accordingly, we are proposing at § 405.1006(d)(2)(ii) that for any items or services for which a beneficiary has been determined to be financially responsible, the basis for the amount in controversy is the actual amount charged to the beneficiary (or the maximum amount the beneficiary may be charged if no bill has been received) for the items or services in the disputed claim. As discussed above, this amount would be set forth on the Medicare Summary Notice in the column titled “Maximum You May Be Billed.”

We are also proposing at § 405.1006(d)(2)(iii) that if a beneficiary received or may be entitled to a refund of the amount the beneficiary previously paid to the provider or supplier for the items or services in the disputed claim under applicable statutory or regulatory authorities, the basis for the amount in controversy would be the actual amount originally charged to the beneficiary for the items or services in the disputed claim, as we believe that the amount originally charged to the beneficiary is more reflective of the actual amount at issue for the beneficiary and for the provider or supplier in this situation. We believe appellants would have access to and would use the same information for determining the basis for the amount in controversy under paragraph § 405.1006(d)(2)(iii) as they would under § 405.1006(d)(2)(ii).

As discussed above, we are proposing at § 405.1006(d)(3) through (7) five exceptions to the general methodology used to calculate the amount in controversy specified in § 405.1006(d)(1). Current § 405.1006(d)(2) provides that, notwithstanding current § 405.1006(d)(1), when payment is made for items or services under section 1879 of the Act or § 411.400, or the liability of the beneficiary for those services is limited under § 411.402, the amount in controversy is computed as the amount that the beneficiary would have been charged for the items or services in question if those expenses were not paid under § 411.400 or if that liability was not limited under § 411.402, reduced by any deductible and coinsurance amounts applicable in the particular case. We are proposing to re-designate current § 405.1006(d)(2) as § 405.1006(d)(3) and to revise the paragraph to state that when payment is made for items or services under section 1879 of the Act or § 411.400, or the liability of the beneficiary for those services is limited under § 411.402, the amount in controversy would be calculated in accordance with § 405.1006(d)(1) and (2)(i), except there is no deduction under paragraph (d)(1)(i) for expenses that are paid under § 411.400 or as a result of liability that is limited under § 411.402. For example, when a claim for items or service is denied under section 1862(a)(1)(A) of the Act because the items or services were not reasonable and necessary for the treatment of illness or injury or to improve the functioning of a malformed body member, Medicare payment may nonetheless be made under the limitation on liability provisions of § 1879 of the Act if neither the provider/supplier nor the beneficiary knew, or could reasonably have been expected to know, that payment would not be made. In instances such as these, we are proposing that the amount in controversy would be calculated as if the items or services in the disputed claim were denied and no payment had been made under section 1879 of the Act. We believe this exception is appropriate because appellants may still wish to appeal findings of non-coverage related to items and services for which liability of the party was limited or payment was made under section 1879 of the Act or § 411.400 or for which the beneficiary was indemnified under § 411.402, but if these payments or indemnifications were deducted from the basis for the amount in controversy, the amount in controversy could be zero. As this exception relates only to whether deductions are made under § 405.1006(d)(1)(i) for any Medicare payments already made or awarded for the items or service, and the amount in controversy would otherwise be calculated in accordance with proposed § 405.1006(d)(1) and (d)(2)(i), we believe appellants would have access to and would use the same information for determining the amount in controversy under § 405.1006(d)(3) as they would under § 405.1006(d)(1) and (d)(2)(i).

Current § 405.1006 does not address calculating the amount in controversy for matters involving a provider or supplier termination of a Medicare-covered item or service when the beneficiary did not elect to continue receiving the item or service (for example, § 405.1206(g)(2) provides that if a beneficiary is dissatisfied with a QIO's determination on his or her discharge and is no longer an inpatient in a hospital, the determination is subject to the general claims appeal process). In this circumstance, items and services have not been furnished, and therefore, a claim has not been submitted. Yet the beneficiary may elect not to continue receiving items or services while appealing the provider or supplier termination due to potential financial responsibility for the items or services. While an amount in controversy cannot be assessed for a period of time during which no items or services were furnished, a beneficiary may assert a continuing need for the items or services based on his or her condition at the time an appeal is heard. To address this circumstance, we are proposing new § 405.1006(d)(4), which would provide that when a matter involves a provider or supplier

termination of Medicare-covered items or services and the beneficiary did not elect to continue receiving the items or services that are disputed by a beneficiary, the amount in controversy is calculated as discussed above regarding proposed (d)(1) and (d)(2)(ii) (which addresses situations where the beneficiary is determined to be financially responsible), except that the basis for the amount in controversy and any deductible and coinsurance that may be collected for the items or services are calculated using the amount the beneficiary would have been charged if the beneficiary had received the items or services that the beneficiary asserts should be covered by Medicare based on the beneficiary's current condition at the time an appeal is heard, and Medicare payment was not made. This proposal would allow the beneficiary to pursue coverage for an item or service and potentially meet the amount in controversy requirement in instances in which he or she would not otherwise be able to pursue a hearing before an ALJ because no items or services have been rendered and therefore no amount in controversy exists because there is no disputed claim. In these instances, the beneficiary has been notified of a preliminary decision by a provider or supplier that Medicare will not cover continued provision of the items or services in dispute. Therefore, we believe using the amount the beneficiary would be charged if the beneficiary elected to continue receiving the items or services that the beneficiary asserts should be covered and if Medicare payment were not made for these items or services (in other words, the amount the beneficiary would be charged if the beneficiary were financially responsible for these items or services) is most reflective of the actual amount in dispute. Most beneficiary appeals of provider or supplier terminations of Medicare-covered items or services involve the termination of Part A services and, therefore, we expect it would be rare that the amount in controversy would be less than that required for an ALJ hearing. However, we expect that beneficiaries wishing to determine if the amount in controversy required for an ALJ hearing was met could obtain from the provider or supplier the amount the beneficiary would be charged if the beneficiary elected to continue receiving the items or services and Medicare payment were not made. In addition, as discussed below, we are proposing at § 405.976(b)(7) that the QIC would include in its notice of reconsideration a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing, if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration decision was partially or fully unfavorable.

We considered using Medicare payable amounts for denied items and services as the basis for the amount in controversy calculation specified in proposed § 405.1006(d)(1), as that would be a more precise estimate of the amount at issue in the appeal than either the Medicare allowable amount or the billed charges. Payable amounts would take into account payment rules related to the items and services furnished that may increase or decrease allowable amounts (for example, multiple surgery reductions, incentive payments, and competitive bidding payments). However, CMS systems do not currently calculate payable amounts for denied services, and undertaking major system changes would delay implementation and has been determined not to be cost effective. While payable amounts may be a better representation of the amount at issue in the appeal, we believe the Medicare allowable amount and the other amount in controversy calculations provided in proposed § 405.1006(d) are appropriate and reliable estimates that align well with the amount at issue for claims for which a payable amount has not been calculated.

However, for post-payment denials, or overpayments, a payable amount has been determined and would be the most reliable indicator of the amount actually at issue in the appeal. Therefore, we are proposing new § 405.1006(d)(5) to state that, notwithstanding the calculation methodology in proposed paragraphs (d)(1) and (2), when a claim appeal involves an overpayment determination, the amount in controversy would be the amount of the overpayment specified in the demand letter. In a post-payment denial, the amount of the overpayment identified in the demand letter is readily available to appellants, and is the most accurate reflection of the amount actually at issue in the appeal. In addition, current § 405.1006 does not address appeals that involve an estimated overpayment amount determined through the use of sampling and extrapolation. In this circumstance, the claims sampled to determine the estimated overpayment may not individually meet the amount in controversy requirement, but the estimated overpayment determined through the use of extrapolation may meet the amount in controversy requirement. To address this circumstance, we are also proposing in new § 405.1006(d)(5) that when a matter involves an estimated overpayment amount determined through the use of sampling and extrapolation, the estimated overpayment as extrapolated to the entire statistical sampling universe is the amount in controversy. This proposal would provide appellants the opportunity to appeal claims that may not individually meet the amount in controversy requirement if such claims were part of the sample used in making an overpayment determination that does meet the amount in controversy requirement. Because the overpayment determination reflects the amount for which the appellant is financially responsible, we believe it would be appropriate to allow appellants to appeal individual claims in the sample that was used to determine the overpayment. Whether an appeal involves an individual overpayment or an estimated overpayment determined through the use of sampling and extrapolation, we believe appellants against whom an overpayment was assessed would need only to consult the demand letter they received in order to determine the amount in controversy. However, we expect there may be circumstances where a beneficiary wishes to appeal an overpayment that was assessed against a provider or supplier, and in these situations the beneficiary may not have a copy of the demand letter that was received by the provider or supplier. For this reason, and as discussed below, we are proposing at § 405.976(b)(7) that the QIC would include in its notice of reconsideration a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing, if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration decision was partially or fully unfavorable. We are also proposing new § 405.1006(d)(6), which would provide that when a beneficiary files an appeal challenging only the computation of a coinsurance amount, or the amount of a remaining deductible applicable to the items or services in the disputed claim, the amount in controversy is the difference between the amount of the coinsurance or remaining deductible, as determined by the contractor, and the amount of the coinsurance or remaining deductible the beneficiary believes is correct. We believe this provision is appropriate in these instances because,

without this provision, the amount in controversy determined under the general calculation methodology in § 405.1006(d)(1) would be zero for a paid claim. In addition, we believe that the calculation proposed at § 405.1006(d)(6) would appropriately reflect the amount at issue for the beneficiary in these appeals where the computation of a coinsurance amount, or the amount of a remaining applicable deductible is challenged. We believe beneficiaries would have access to the coinsurance and/or deductible amounts determined by the contractor for the paid claim on the beneficiary's Medicare Summary Notice, in the column titled “Maximum You May Be Billed,” and would need only to subtract the amount of coinsurance and/or deductible the beneficiary believes he or she should have been charged in order to arrive at the amount in controversy. We expect it would be extremely rare for a non-beneficiary appellant to file an appeal challenging the computation of a coinsurance amount or the amount of a remaining deductible.

In addition, we are proposing new § 405.1006(d)(7), which would provide that for appeals of claims where the allowable amount has been paid in full and the appellant is challenging only the validity of the allowable amount, as reflected in the published Medicare fee schedule or in the published contractor priced amount applicable to the items or services in the disputed claim, the amount in controversy is the difference between the amount the appellant argues should have been the allowable amount for the items or services in the disputed claim in the applicable jurisdiction and place of service, and the published allowable amount for the items or services. We believe this provision is appropriate in these instances because, without this provision, the amount in controversy determined under the general calculation methodology in § 405.1006(d)(1) would be zero for such paid claims. In addition, we believe that the calculation proposed at § 405.1006(d)(7) would appropriately reflect the amount at issue for the appellant in these appeals. We believe that, generally, these types of appeals are filed by providers and suppliers who are already familiar with the allowable amount for the items or services in the disputed claim based on information obtained from published fee schedules or contractor-priced amounts. Further, we believe that a fee schedule or contractor price challenge filed by a beneficiary on a paid claim would be a very rare occurrence. However, as discussed below, in the event a beneficiary would want to file such an appeal, the beneficiary could obtain an estimate of the amount in controversy from the QIC reconsideration. As discussed further below, we are proposing at § 405.976(b)(7) that the QIC would include in its notice of reconsideration a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing, if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration decision was partially or fully unfavorable.

In the event that a reconsideration, or a redetermination if the appeal was escalated from the QIC without a reconsideration, involves multiple claims and some or all do not meet the amount in controversy requirement, section 1869 of the Act states that, in determining the amount in controversy, the Secretary, under regulations, shall allow two or more appeals to be aggregated if the appeals involve the delivery of similar or related services to the same individual by one or more providers or suppliers, or common issues of law and fact arising from services furnished to two or more individuals by one or more providers or suppliers. Under this authority, § 405.1006(e) provides for aggregating claims to meet the amount in controversy requirement.

The title of current § 405.1006(e)(1) for aggregating claims when appealing a QIC reconsideration is phrased differently than the corresponding title for aggregating claims when escalating a request for a QIC reconsideration in current § 405.1006(e)(2), which may cause confusion. We are proposing to revise the title to § 405.1006(e)(1) to “Aggregating claims in appeals of QIC reconsiderations for an ALJ hearing” so it clearly applies to aggregating claims in appeals of QIC reconsiderations, and is parallel to the phrasing used in the title of § 405.1006(e)(2). The proposed titles of § 405.1006(e)(1) and (e)(2), and proposed § 405.1006(e)(2)(ii) would also replace “to the ALJ level” with “for an ALJ hearing” to again highlight that the appeal of a QIC reconsideration or escalation of a request for a QIC reconsideration is for an ALJ hearing.

Current § 405.1006(e)(1)(ii) provides that to aggregate claims, the request for ALJ hearing must list all of the claims to be aggregated. This has caused confusion because some appellants read current § 405.1006(e)(1)(ii) as allowing appeals of new claims to be aggregated with claims in previously filed appeals, provided the new request for hearing lists the claims involved in the previously filed appeals. However, current § 405.1006(e)(2)(i), which applies to aggregating claims that are escalated from the QIC for a hearing before an ALJ, requires that the claims were pending before the QIC in conjunction with the same request for reconsideration. We note that in the context of a request for hearing, aggregating new claims with claims from previously filed requests could delay the adjudication of the requests and is inconsistent with the current rule for aggregating claims that are escalated from the QIC. To address these issues and bring consistency to the aggregation provisions, we are proposing to revise § 405.1006(e)(1)(ii) to require the appellant(s) to request aggregation of the claims in the same request for ALJ hearing or in multiple requests for an ALJ hearing filed with the same request for aggregation. This would allow an individual or multiple appellants to file either one request for an ALJ hearing for multiple claims to be aggregated, or multiple requests for an ALJ hearing for the appealed claims when requesting aggregation, while requiring them to be filed together with the associated request for aggregation. We are also proposing in § 405.1006(e)(1)(iii) and (e)(2)(iii) that an ALJ or attorney adjudicator may determine that the claims that a single appellant seeks to aggregate involve the delivery of similar or related services, or the claims that multiple appellants seek to aggregate involve common issues of law and fact, but only an ALJ may determine the claims that a single appellant seeks to aggregate do not involve the delivery of similar or related services, or the claims that multiple appellants seek to aggregate do not involve common issues of law and fact. We are proposing this because an attorney adjudicator adjudicating requests for an ALJ hearing when no hearing is conducted, as proposed in section II.B above, would not be permitted under this proposed rule to dismiss a request for an ALJ hearing due to procedural issues such as an invalid aggregation request. Because only an ALJ would be permitted to dismiss a request for an ALJ hearing because there is no right to a hearing, which includes not meeting the amount in controversy requirement for a hearing, in accordance with proposed § 405.1052(a), an attorney adjudicator could not make a determination that the aggregation criteria were not met because that determination would result

in a dismissal of a request for an ALJ hearing.

Current § 405.976(b)(7) requires that the QIC notice of reconsideration contain a statement of whether the amount in controversy needed for an ALJ hearing is met when the reconsideration is partially or fully unfavorable. We are proposing to revise § 405.976(b)(7) to require that the QIC notice of reconsideration include a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing only if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration is partially or fully unfavorable. In line with current practice, we are not proposing to require that the QIC indicate what it believes to be the exact amount in controversy, but rather only an estimate of whether it believes the amount in controversy is met, because we believe the ultimate responsibility for determining whether the amount in controversy required for an ALJ hearing is met lies with appellants, subject to verification by an ALJ or attorney adjudicator (though, as discussed in section II.B above, only an ALJ would be able to dismiss a request for hearing for failure to meet the amount in controversy required for an ALJ hearing). We believe that providers, suppliers, and Medicaid State agencies have the tools, resources, and payment information necessary to calculate the amount in controversy in accordance with § 405.1006(d), and are familiar with the allowable amounts for the places of service in which they operate. Furthermore, applicable plans against whom a Medicare Secondary Payer overpayment is assessed would have access to the overpayment amount specified in the demand letter, which would be used to determine the amount in controversy under proposed § 405.1006(d)(5). Thus, we do not believe it is necessary for the QICs to continue to provide this statement for providers, suppliers, applicable plans, Medicaid State agencies, or beneficiaries represented by providers, suppliers or Medicaid State agencies. Furthermore, as discussed in section III.A.3.g.i below, we are proposing that appellants, other than beneficiaries who are not represented by a provider, supplier, or Medicaid State agency, include the amount in controversy in their requests for hearing (unless the matter involves a provider or supplier termination of Medicare-covered items or services that is disputed by a beneficiary, and the beneficiary did not elect to continue receiving the items or services). As providers, suppliers, Medicaid State agencies, applicable plans, and beneficiaries represented by a provider, supplier, or Medicaid State agency would be responsible for calculating the amount in controversy and including it on the request for hearing as proposed in section III.A.3.g.i, we do not believe a statement by the QIC that indicates only whether the amount in controversy was or was not met adds significant value to such appellants. Furthermore, we expect that the Medicare allowable amount under proposed § 405.1006(d)(2)(i)(A) would be the basis for the amount in controversy in the majority of Part B appeals filed by non-beneficiary appellants. While QICs have access to the amount charged to an individual based on billed charges, the allowable amounts for claims vary based on where these items and services were furnished, and the applicable fee schedules and contractor-priced amounts, and continuing to require the QICs to include a statement whether the amount in controversy needed for an ALJ hearing is met in all instances in which the decision is partially or fully unfavorable to the appellant would require substantially more work by the QIC, and could delay reconsiderations and increase costs to the government.

Although we are not proposing that beneficiaries who are not represented by a provider, supplier, or Medicaid State agency would need to include the amount in controversy on their requests for hearing (as discussed later in this preamble), we do believe there may be instances where a beneficiary would want to know if the amount in controversy meets the amount required for an ALJ hearing when deciding whether to file a request for hearing. We believe there may be instances where a beneficiary who is not represented by a provider, supplier, or Medicaid State agency may not currently have sufficient information to determine whether the amount in controversy required for an ALJ hearing is met under proposed § 405.1006. For example, under proposed § 405.1006(d)(2)(i)(A), for items and services with a published Medicare fee schedule or published contractor-priced amount (and for which the beneficiary was determined to be not financially responsible), the basis for the amount in controversy would generally be the allowable amount, which is the amount reflected on the fee schedule or in the contractor-priced amount for those items or services in the applicable jurisdiction and place of service. Beneficiaries not represented by a provider, supplier, or Medicaid State agency would not generally be expected to be familiar with fee schedule and contractor-priced amounts, and we believe they may have difficulty determining whether the amount in controversy required for an ALJ hearing is met in these cases. We also believe beneficiaries not represented by a provider, supplier, or Medicaid State agency might be unable to determine the amount of an overpayment assessed against a provider or supplier for items or services furnished to the beneficiary for purposes of calculating the amount in controversy under proposed § 405.1006(d)(5), as the beneficiary might not have access to the demand letter received by the provider or supplier, and may no longer have access to the Medicare Summary Notice reflecting the original payment amount. Accordingly, because there are situations where such beneficiaries may not have sufficient information to determine the amount in controversy, we are proposing to revise § 405.976(b)(7) to state that the QIC would include in its notice of reconsideration a statement of whether the amount in controversy is estimated to meet or not meet the amount required for an ALJ hearing, if the request for reconsideration was filed by a beneficiary who is not represented by a provider, supplier, or Medicaid State agency, and the reconsideration decision was partially or fully unfavorable.

Current § 423.1970 describes the amount in controversy requirement for part 423, subpart U proceedings. For the same reasons we are proposing to revise § 405.1006(e)(1)(ii), we are proposing in § 423.1970(c)(1)(ii) and (c)(2)(ii) to provide that a single enrollee's or multiple enrollees' request for aggregation, respectively, must be filed at the same time the request (or requests) for hearing for the appealed reconsiderations is filed. In addition, we are proposing to revise § 423.1970(c)(1)(ii) and § 423.1970(c)(2)(ii) to state that the request for aggregation and requests for hearing must be filed within 60 calendar days after receipt of the notice of reconsideration for each reconsideration being appealed, unless the deadline is extended in accordance with § 423.2014(d). This will help ensure there is no confusion that the timely filing requirement applies to each of the requests for hearing filed with the request for aggregation. Because we are proposing to directly reference the 60 calendar day filing requirement under

§ 423.1972(b) and the possible extension of the filing requirement under § 423.2014(d), we are also proposing to remove the current references in § 423.1970(c)(1)(ii) and (c)(2)(ii) to the filing requirement in § 423.1972(b). In addition, for the same reasons we are proposing to revise § 405.1006(e)(1)(iii) and (e)(2)(iii), we are proposing in § 423.1970(c)(1)(iii) and (c)(2)(iii) that an ALJ or attorney adjudicator may determine that the appeals that a single enrollee seeks to aggregate involve the delivery of prescription drugs to a single enrollee, or the appeals that multiple enrollees seek to aggregate involve the same prescription drugs, but only an ALJ may determine appeals that a single enrollee seeks to aggregate do not involve the delivery of prescription drugs to a single enrollee, or the appeals that multiple enrollees seek to aggregate do not involve the same prescription drugs. We are proposing to replace “prescription” in current § 423.1970(c)(2)(iii) with “prescription drugs” in proposed § 423.1970(c)(2)(iii) for consistency with current and proposed § 423.1970(c)(1)(iii). Finally, we are also proposing to correct the spelling of “prescription” in current § 423.1970(c)(2)(iii).

Current § 422.600(b) provides that the amount in controversy for appeals of reconsidered determinations to an ALJ (under the Part C Medicare Advantage program), is computed in accordance with part 405. However, if the basis for the appeal is the MAO's refusal to provide services, current § 422.600(c) provides that the projected value of those services are used to compute the amount in controversy. We are not proposing to revise these provisions because we believe the proposed revisions to § 405.1006 described above encompass and have application to the scenarios appealed under part 422, subpart M. In particular, we note that as is the case under current § 405.1006, if an enrollee received items or services and is financially responsible for payment because the MAO has refused to cover the item or services, the amount in controversy would be calculated using the billed charges as the basis for the amount in controversy, as provided in proposed § 405.1006(d)(2)(ii). If the enrollee did not receive the items or services, the provisions of current § 422.600(c) would apply. We also note that current §§ 422.622(g)(2) and 422.626(g)(3) provides for an appeal to an ALJ, the Council, or federal court of an IRE's affirmation of a termination of provider services “as provided for under [part 422, subpart M],” thus triggering the amount in controversy rules in 422.600, which cross-reference part 405 (that is, the rules proposed here). Proposed § 405.1006 would address scenarios appealed under part 422, subpart M that are not clearly addressed in current § 405.1006, such as provider service terminations, which would be addressed in proposed § 405.1006(d)(4), and coinsurance and deductible challenges, which would be addressed in proposed § 405.1006(d)(6).

Current § 478.44(a) also references back to part 405 provisions for determining the amount in controversy when requesting an ALJ hearing after a QIO reconsidered determination. We have proposed revisions to § 478.44 in section III.D.3, below, to update part 405 references, but we are not proposing in § 478.44 to revise how the current or proposed part 405 provision would be applied in calculating the amount in controversy. Similar to the part 422, subpart M provisions discussed above, we believe the proposed revisions to § 405.1006 described above encompass and have application to the scenarios appealed under part 478, subpart B.

We are inviting public comments on these proposals. If you choose to comment on issues in this section, please include the caption “Amount in controversy required for an ALJ hearing” at the beginning of your comment.

e. Parties to an ALJ Hearing (§§ 405.1008 and 423.2008)

Current §§ 405.1008 and 423.2008 discuss the parties to an ALJ hearing. Because current §§ 405.1002(a) and 423.2002(a) already address who may request a hearing before an ALJ after a QIC or IRE issues a reconsideration and current § 405.1002(b) addresses who may request escalation of a request for a QIC reconsideration, we are proposing to remove current §§ 405.1008(a) and 423.2008(a).

We are proposing to retain and revise the language as discussed below in current §§ 405.1008(b) and 423.2008(b), but remove the paragraph designation. Current §§ 405.1008(b) and 423.2008(b) identify the parties “to the ALJ hearing,” but this could be read to be limited to parties to an oral hearing, if a hearing is conducted. To address this potential confusion, we are proposing to revise §§ 405.1008 and 423.2008 to replace “parties to an ALJ hearing” with “parties to the proceedings on a request for an ALJ hearing” and “party to the ALJ hearing” with “party to the proceedings on a request for an ALJ hearing.” Likewise, we also are proposing to revise the titles to §§ 405.1008 and 423.2008 from “Parties to an ALJ hearing” to “Parties to the proceedings on a request for an ALJ hearing.”

We are inviting public comments on these proposals. If you choose to comment the proposals in this section, please include the caption “Parties to an ALJ hearing” at the beginning of your comment.

f. CMS and CMS Contractors as Participants or Parties in the Adjudication Process (§§ 405.1010, 405.1012, and 423.2010)

Consistent with section 1869(c)(3)(J) of the Act, §§ 405.1010 and 405.1012 allow CMS and its contractors to elect to be a participant or a party to a Part A or Part B hearing before an ALJ. Current § 423.1010 allows CMS, a Part D plan sponsor, or an IRE to request to be a participant in the proceedings of a Part D hearing before an ALJ. Since current §§ 405.1010, 405.1012, and 423.2010 were added, CMS and its contractors, including the Part D IRE, and Part D plan sponsors, have assisted the ALJ hearing process by clarifying factual and policy issues, which provides ALJs with more information to resolve the issues on appeals. However, as we have gained experience with CMS and these entities as participants and parties to hearings, we have heard from ALJs and stakeholders that additional parameters are needed to help ensure hearings with the entities are as efficient as possible; expectations and roles are clear; and the entities have an opportunity to assist with appeals for which no hearing is conducted.

Therefore, we are proposing significant revisions to §§ 405.1010, 405.1012, and 423.2010 to achieve these objectives.

Proposed §§ 405.1010 (When CMS or its contractors may participate in the proceedings on a request for an ALJ hearing), 405.1012 (When CMS or its contractors may be a party to a hearing), and 423.2010 (When CMS, the IRE, or Part D plan sponsor may participate in the proceedings on a request for an ALJ hearing) would be reorganized and aligned for clarity, and revised to improve the participation process. The proposed revised sections would be similarly structured to address when an entity may elect or request to participate in the proceedings on a request for an ALJ hearing, or be a party to a hearing; how elections or requests are made; the roles and responsibilities of CMS and its contractors; limitations on hearing participation; and invalid elections or requests.

i. Section 405.1010: When CMS or Its Contractors May Participate in the Proceedings on a Request for an ALJ Hearing

Current § 405.1010(a) provides that an ALJ may request, but may not require, CMS and/or its contractors to participate in any proceedings before the ALJ, including the oral hearing, if any, and CMS or its contractors may elect to participate in the hearing process. Under current § 405.1010(b), if that election is made, CMS or its contractor must advise the ALJ, the appellant, and all other parties identified in the notice of hearing of its intent to participate no later than 10 calendar days after receiving the notice of hearing. Section 405.1010(c) sets forth what participation includes and § 405.1010(d) states that participation does not include CMS or its contractor being called as a witness during the hearing. Section 405.1010(e) requires CMS or its contractors to submit any position papers within the time frame designated by the ALJ. Finally, § 405.1010(f) states that the ALJ cannot draw any adverse inferences if CMS or a contractor decides not to participate in any proceedings before an ALJ, including the hearing.

The reference to the period in which an election to participate must be filed beginning upon receipt of the notice of hearing in current § 405.1010(b) has caused confusion when CMS or its contractors attempt to enter proceedings before a hearing is scheduled, or when no notice of hearing is necessary because an appeal may be decided on the record. To help ensure that CMS and its contractors have the opportunity to enter the proceedings with minimal disruption to the adjudication process prior to a hearing being scheduled or when a hearing may not be conducted, we are proposing in § 405.1010(a)(1) to provide that CMS or its contractors may elect to participate in the proceedings on a request for an ALJ hearing upon filing a notice of intent to participate in accordance with paragraph (b), at either of, but not later than, two distinct points in the adjudication process described in paragraph (b)(3).

As provided in current § 405.1010(a) and (f), we are proposing at § 405.1010(a)(2) that an ALJ may request but may not require CMS and/or one or more of its contractors to participate in any proceedings before the ALJ, including the oral hearing, if any; and the ALJ cannot draw any adverse inferences if CMS or the contractor decides not to participate in the proceedings.

We are proposing in § 405.1010(b) to address how CMS or a contractor makes an election to participate in an appeal, before or after receipt of a notice of hearing or when a notice of hearing is not required. Under proposed § 405.1010(b)(1), we are proposing that if CMS or a contractor elects to participate before receipt of a notice of hearing (such as during the 30 calendar day period after being notified that a request for hearing was filed as proposed in § 405.1010(b)(3)(i)) or when a notice of hearing is not required, CMS or the contractor must send written notice of its intent to participate to the parties who were sent a copy of the notice of reconsideration, and to the assigned ALJ or attorney adjudicator, as proposed in section II.B above, or if the appeal is not yet assigned, to a designee of the Chief ALJ. Proposed § 405.1010(b)(1) would provide for sending the written notice of intent to participate to an ALJ or attorney adjudicator assigned to an appeal because, as we discuss in proposed in section II.B, an attorney adjudicator also would have the authority to issue decisions on a request for an ALJ hearing when no hearing is conducted, and in accordance with proposed § 405.10

This text is long and has been trimmed here. Open the source document for the complete record.