Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures
Federal RegisterJan 17, 2017
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 401, 405, 422, 423, and 478
[HHS-2016-79]
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:
Final rule.
SUMMARY:
This final rule revises the procedures that the Department of Health and Human Services (HHS) follows at the Administrative Law Judge (ALJ) level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage (MA) 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 final rule revises procedures that the Department of Health and Human Services follows at the Centers for Medicare & Medicaid Services (CMS) and the Medicare Appeals Council (Council) levels of appeal for certain matters affecting the ALJ level.
DATES:
These regulations are effective on March 20, 2017.
FOR FURTHER INFORMATION CONTACT:
Joella Roland, (410) 786-7638 (for issues related to CMS appeals policies and reopening policies).
Jason Green, (571) 777-2723 (for issues related to Administrative Law Judge appeals policies).
Angela Roach, (202) 565-0132 (for issues related to Council appeals policies).
SUPPLEMENTARY INFORMATION:
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:
AASIS—ALJ Appeal Status Information System
Act—Social Security Act
ALJ—Administrative Law Judge
APA—Administrative Procedure 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
DME—Durable Medical Equipment
EAJR—Expedited Access to Judicial Review
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)
OCPM—OMHA Case Processing Manual
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
VTC—Video-teleconferencing
Section 1557 of the Affordable Care Act
Independent of the standards in this final rule, the Department commits to complying with section 1557 of the Affordable Care Act, Pub. L. 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 final rule to implement section 1557,
Nondiscrimination in Health Programs and Activities,
on May 18, 2016. 81 FR 31376. The final rule applies, in part, to health programs and activities administered by the Department.
Table of Contents
I. Background
A. Overview of the Appeals Process
B. Recent Workload Challenges
II. Summary of the Proposed Provisions and Response to Comments on the July 5, 2016, Proposed Rule
A. General Provisions of the Proposed Regulations
1. Precedential Final Decisions of the Secretary
2. Attorney Adjudicators
3. Application of 405 Rules to Other Parts
4. OMHA References
5. Medicare Appeals Council References
B. Specific 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)
C. Specific Provisions of Part 405, Subpart J Expedited Reconsiderations
D. Specific Provisions of 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).
E. Specific Provisions of 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)
F. Effective Date and Applicability of the Provisions of the Final Rule
III. Comments Beyond the Scope of the Final Rule
IV. Provisions of the Final Rule
V. Collection of Information Requirements
VI. Regulatory Impact Statement
VII. Federal Analysis
I. Background
A. Overview of the Appeals Process
In accordance with provisions of sections 1155, 1852, 1860D-4, 1869, and 1876 of the Social Security Act (Act), and associated 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; MA (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, MA 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 Qualified Independent Contractors (QICs). However, all of the appeals discussed in this final rule can be appealed to the ALJs at the Office of Medicare Hearings and Appeals (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 Quality Improvement Organization (QIO) reconsidered determination under section 1155 of the Act; a Social Security Administration (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 Independent Review Entity (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, Medicare Advantage Organizations (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 income related monthly adjustment amounts (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 MA (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.
B. Recent Workload Challenges
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. We attribute the growth in appeals to: (1) The expanding Medicare beneficiary population
1
and utilization of services across that population; (2) enhanced monitoring of payment accuracy in the Medicare Part A and Part B (fee-for-service) programs; (3) growth in appeals from State Medicaid agencies
2
for beneficiaries dually enrolled in both Medicare and Medicaid; and (4) national implementation of the Medicare fee-for-service Recovery Audit program
3
in 2009. The increasing number of requests has strained OMHA's available resources and resulted in delays for appellants to obtain hearings and decisions.
1
Enrollment in fee-for-service Medicare and MA and other competitive health plans increased from roughly 49 million beneficiaries and enrollees in 2011 to 55.5 million in 2015, while enrollment in Part D prescription drug plans and MA prescription drug plans increased from roughly 29.5 million in 2011 to 39.5 million in 2015 (
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Dashboard/Medicare-Enrollment/Enrollment%20Dashboard.html
).
2
In FY 2009, OMHA received 230 requests for hearing filed by Medicaid State agencies, compared to nearly 25,000 in FY 2014.
3
As of April 25, 2016, Recovery Audit-related appeals accounted for 31 percent of the pending appeals at OMHA. Based on trends in receipts at this time, we estimate that Recovery Audit related appeals currently constitute 20 percent of incoming appeals.
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, compared to an average of 471 decisions and 80 dismissals per ALJ in 2009), and CMS and OMHA initiatives to address the increasing number of appeals,
4
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 September 30, 2016, OMHA had over 650,000 pending appeals, while OMHA's adjudication capacity—based on a maximum sustainable capacity of 1,000 appeals per ALJ team—was approximately 92,000 appeals per year.
4
CMS and OMHA initiatives include OMHA's Settlement Conference Facilitation and Statistical Sampling Initiative; and CMS's QIC formal telephone discussion demonstration and increased use of prior authorization models for areas with high payment error rates.
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 final rule, HHS is pursuing the three-prong approach by implementing rules that 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. In particular, we believe the proposals we are finalizing in section II.A.2 below to provide authority for attorneys to issue decisions when a decision can be issued without an ALJ hearing, dismissals when an appellant withdraws his or her request for an ALJ hearing, remands as provided in §§ 405.1056 and 423.2056 as finalized in this rule or at the direction of the Council, and reviews of QIC and IRE dismissals, could redirect approximately 24,500 appeals per year to attorney adjudicators, who would be able to process these appeals at a lower cost than would be required if only ALJs were used to address the same workload (see section VI below for more details regarding our estimate).
II. Summary of the Proposed Provisions and Responses to Comments on the July 5, 2016, Proposed Rule
In the July 5, 2016
Federal Register
, we published a proposed rule that would revise the procedures that the Department of Health and Human Services would follow at the ALJ level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in MA 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. 81 FR 43790. In addition, we proposed to revise procedures that the Department of Health and Human Services would follow at the CMS and the Council levels of appeal for certain matters affecting the ALJ level. Discussed below are the comments to the July 5, 2016, proposed rule. We include a summary and explanation of each proposed regulatory provision, provide a summary of, and responses to, the comments received, and describe the changes, if any, to be made in finalizing the provision in this rulemaking.
We received 68 timely comments on the proposed rule from individuals, organizations representing providers and suppliers, beneficiary advocacy groups, law offices, health plans, CMS contractors, and others. Summaries of the public comments and our responses to those comments are set forth below.
A. General Provisions of the Proposed Regulations
1. 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 HHS Office of Inspector General (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 stated in the proposed rule that we believed it was appropriate to propose that select Council decisions be made precedential to increase consistency in decisions at all levels of appeal for appellants. We proposed in proposed § 401.109 to introduce precedential authority to the Medicare claim and entitlement appeals process under part 405, subpart I for Medicare fee-for-service (Part A and Part B) appeals; part 422, subpart M for appeals of organization determinations issued by MA and other competitive health plans (Part C appeals); part 423, subparts M and U for appeals of Part D prescription drug coverage determinations; and part 478, subpart B for appeals of certain QIO determinations. 81 FR 43790, 43792-43794. We proposed in § 401.109(a) that the Chair of the DAB would have authority to designate a final decision of the Secretary issued by the Council as precedential. In the proposed rule we stated that we believed this would provide appellants with a consistent body of final decisions of the Secretary upon which they could determine whether to seek appeals. We also stated it would assist appeal adjudicators at all levels of appeal by providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions. Further, we stated that 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.
We stated in the proposed rule that 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, we stated that 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, we stated in the proposed rule that 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. We also stated that 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. We further stated that 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 proposed in § 401.109(b) that notice of precedential decisions would 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 an individual's consent. We stated that designated precedents would be posted on an accessible Web site maintained by HHS, and that decisions of the Council would bind all lower-level decision-makers from the date that the decisions are posted on the HHS Web site.
We proposed in § 401.109(c) to 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 section II.B of the proposed rule (and discussed in section II.A.2 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 did not propose 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.
We proposed to specify the scope of the precedential effect of a Council decision designated by the DAB Chair in § 401.109(d). Specifically, we proposed that 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, we proposed that 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. We stated that 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, we proposed in § 401.109(d) that the Council's findings of fact would be binding in future determinations and appeals that involve the same parties and evidence. For example, we stated in the proposed rule that if a precedential Council decision made findings of fact related to the issue of whether an item qualified as durable medical equipment (DME) 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 noted that many claim appeals turn on evidence of a beneficiary's condition or care at the time discrete items or services are furnished, and that therefore § 401.109, as proposed, is unlikely to apply to findings of fact in these appeals.
In addition, consistent with § 401.109, we proposed at § 405.968(b)(1) to add precedential decisions designated by the Chair of the Departmental Appeals Board (DAB) as an authority that is binding on the QIC. We also proposed 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 DAB Chair in accordance with § 401.109 are binding on all CMS components, all HHS components that adjudicate matters under the jurisdiction of CMS, and (in § 405.1063(c)) on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS. Finally, we proposed to add precedential decisions to the titles of §§ 405.1063 and 423.2063 to reflect the additional topic covered by proposed paragraph (c).
We received forty-eight comments on this proposal. In two instances, the same commenter submitted the same comment twice, so there were forty-six distinct comments. Among those offering comments were providers and suppliers and organizations representing them, beneficiary advocacy groups, health plan providers and administrators, and individuals. Overall, the majority of commenters supported the proposal to designate certain Council cases as precedent, but some of them made requests for clarification or modification, which we address below. Twelve commenters either opposed the proposal or suggested that it be tabled for further review. Some commenters did not take a clear position in favor of or against adoption of the proposal but offered various comments which we address below. Provided below are summaries of the specific comments received and responses to these comments:
Comment:
Numerous commenters raised concerns regarding the lack of specific standards or criteria for selecting precedential decisions. One commenter suggested that the Council should adopt the standards currently used by federal circuit courts for designating precedential decisions. Two commenters requested clarity on the precedential effect of factual findings. One further opined that factual statements should never be given precedential effect because the Council is not a fact finding institution and because facts change over time. One commenter suggested that only decisions fully favorable to beneficiaries should be designated as precedential. Two commenters suggested that all Council decisions involving legal analysis or interpretations of authority should have precedential force, and others suggested that in addition to granting precedential authority to the Council, the rule should require MACs and QICs to treat prior ALJ decisions as precedential.
Response:
We appreciate the commenters' concern about additional clarity as to how decisions will be selected to have precedential effect. As explained above, the purpose of § 401.109 is to increase predictability and consistency in decision-making throughout the appeals process, and to provide clear direction on repetitive legal and policy questions. We believe that designating certain decisions as precedential, and therefore binding on all lower levels of review, will help ensure that appellants and other stakeholders are provided a more predictable outcome at all stages of review. In addition, selecting certain decisions as precedential helps to ensure that similar cases receive consistent results.
We understand commenters' concern that stakeholders understand the considerations that will guide designation of precedential Council decisions. However, given that the variety of issues that may arise in the interpretation and application of Medicare law and policy is broad and changes rapidly, it is not practicable to articulate a comprehensive set of criteria that the DAB Chair must follow to determine which decisions are appropriate for such designation. We can, however, identify some factors that the DAB Chair may consider when
determining whether to designate a decision as precedential. The primary goal is to identify Council decisions involving issues of wide applicability where designation as precedent is likely to materially contribute to improving predictability and consistency in decisions prospectively. For example, decisions that address recurring legal issues, or interpret or clarify an existing law, CMS rule or policy, may be appropriately designated as precedential. In addition, the DAB Chair may also consider whether a decision has general application to a broad number of cases. Another factor the DAB Chair may consider is whether a decision analyzes or interprets a legal issue of general public interest. Before designating a decision as precedential, the DAB Chair may also take into consideration the state of the record developed at the lower levels of review. Records where the facts are fully developed and analyzed, or where legal arguments have been fully raised and argued are better candidates for precedential designation.
In response to the commenter's suggestion that the Council should adopt standards currently used by federal circuit courts for designating precedential decisions, we do not believe federal court standards provide the best model for criteria transferable to this internal agency administrative adjudication process. As a threshold matter, each federal circuit court establishes its own standards for designating precedent, so there is no uniform circuit court rule the Council can simply adopt. Moreover, there are substantial differences between the Medicare appeals system and the federal court system, and many factors considered by federal circuit courts in designating precedential decisions have no application in the Medicare appeals context. For example, many federal circuit courts will designate a decision as precedential if it establishes a rule of law within the circuit or creates a conflict with another circuit. Such criteria would not be applicable or helpful for the Council to consider because the Medicare appeals process is not divided into circuits. It is worth noting, however, that the factors identified in the preceding paragraph are similar to some of the factors federal circuit courts typically consider in designating precedent.
In regards to the effect of factual findings in precedential decisions, the Council's legal analysis and interpretation in a decision is applied in a specific factual context, as is also true with court decisions. That analysis and interpretation in a decision designated as precedential must be applied by decision-makers at lower levels in future cases in which the same authority or provision applies and is still in effect. If the same authority or provision would not apply in a future case because the relevant facts are not the same, the precedential decision also would not be applicable in the future case. Moreover, if CMS issues new regulatory provisions or revised policies, a precedential decision analyzing and interpreting the prior regulations or policies may not apply on review of a coverage decision made under the new regulation or policy if the relevant content of the new regulation or policy is different from that interpreted in the precedential decision.
We understand the commenters may be concerned that proposed § 401.109(d)(2) authorizes the establishment of generally applicable “factual precedent.” That proposed section, however, provides that factual findings in precedential decisions are binding only in future determinations and appeals involving the same parties, facts, and circumstances. The purpose of this provision is to discourage parties to a precedential decision from subsequently filing repetitive appeals involving the same facts in an effort to get a “second bite at the apple.” It does not mean factual findings in a precedential decision would be binding in future claims involving different facts, parties, or circumstances.
We also disagree with the assertion that the Council is not a fact-finding institution. The Council's review is de novo and based on review of the entire administrative record as compiled through the OMHA level of appeal, including review of the hearing if one was conducted, as well as all additional admissible evidence and briefings submitted to the Council. Accordingly, Council decisions properly include factual findings and, as stated above, adjudicators will take into consideration relevant factual changes when determining whether a precedential decision should apply. We disagree with the suggestion that the DAB Chair should limit the pool of precedential decisions to only those that are favorable to the beneficiary. We do not believe the DAB should take into consideration to which party the decision was favorable when designating a decision as precedential. To do so would insert bias into the selection process, which goes against the DAB's mission to provide impartial and independent review. We also disagree with the suggestion that all Council decisions involving legal analysis or interpretations of authority should have precedential effect. We understand the commenter's suggestion in this regard is to ensure consistency in the types of decisions that are designated as precedential. However, many Council decisions turn on the resolution of specific disputes of fact or on issues too unusual to have applicability or usefulness in other cases. As such, in those instances, the legal analyses or interpretations will not have widespread applicability or usefulness. We also decline to require MACs and QICs to treat prior ALJ decisions as precedential. Although there are limited circumstances where an ALJ decision may become a final decision, it is the role of the Council to issue final decisions on behalf of the Secretary. Those decisions of the Council designated as precedent will be binding on cases to which they are applicable at all lower levels of the agency adjudication process nationwide. We do not believe it would be appropriate for the decision of a single ALJ to establish precedent affecting parties nationwide without having been subject to review by the Council. Moreover, because ALJs would not be bound by each other's decisions, the decision of a MAC or QIC issued in compliance with one ALJ's decision might be reversed by a different ALJ. Therefore, making individual ALJ decisions precedential and binding on MACs and QICs would not necessarily serve the goal of increasing predictability and consistency.
Based on comments received and for the reasons we set forth, we are adding the following language to the final regulation at § 401.109(a) to include general criteria the DAB Chair may consider when selecting a Council decision as precedential, “In determining which decisions should be designated as precedential, the DAB Chair may take into consideration decisions that address, resolve, or clarify recurring legal issues, rules or policies, or that may have broad application or impact, or involve issues of public interest.”
Comment:
Several commenters questioned the provision granting the DAB Chair sole authority to designate decisions as precedential, or suggested that the designation process should include input from other sources, including providers, contractors, stakeholders, CMS, and OMHA. One commenter expressed concern that the DAB Chair as an agency employee may be biased against appellants. Other commenters felt the rule should provide a mechanism for appellants, advocates, and stakeholders to request that specific decisions be deemed precedential. In a
similar vein, some commenters felt that the rule should include procedures for challenging and overturning precedent. Some commenters suggested that these procedures should include granting appellants the right to seek judicial review after a decision is deemed precedential. A few commenters expressed concern that the rule contains no time frames for designating and applying precedential decisions.
Response:
We disagree that it is inappropriate for the DAB Chair to have the sole authority to designate certain Council decisions as precedential. The Council is an adjudicatory and deliberative body comprised of the DAB Chair, Administrative Appeals Judges and Appeals Officers and is independent of the agency's operating divisions. To involve others, whether components of the agency or outside parties, in the designation process would undermine the independence of the Council. Any influence on the Council's legal interpretation or analysis outside the record and arguments developed within the scope of a case is inappropriate. Moreover, the DAB Chair, as a member of the Council, has the expertise and experience to determine which decisions should be designated as precedential because they will provide improved predictability and consistency across future cases. We also note here the designation of a decision as precedential does not create a new law or policy. By designating decisions as precedential, the DAB Chair is merely providing for consistent legal interpretation and analysis of CMS's existing laws, rule and policies. The contention that the DAB Chair as an “agency employee” may create a body of law that is more favorable to HHS is unsupported. The mission of the DAB is to provide impartial, independent review of disputed decisions in a wide range of HHS programs under more than 60 statutory provisions. The DAB Chair will continue to advance that mission when designating precedential Council decisions.
To the extent that appellants or CMS or its contractors believe that a case may result in a decision that should be considered precedential, then the parties are free to argue so in their appeal requests or own motion referrals. In addition, the Council routinely permits parties to file briefs and other written statements pursuant to 42 CFR 405.1120, which constitutes an appropriate mechanism by which parties could argue the potential precedential status of a decision. Filing a brief in a case would also aid in the fuller development and analysis of legal issues, which may make the resulting decision a better candidate for precedential designation.
The regulations provide recourse to those appellants who do not agree with a Council's decision—judicial review. Appellants who disagree with the Council's legal interpretation or analysis in a decision may appeal the decision to federal district court in accordance with § 405.1136, regardless of whether the decision is designated as precedential. CMS also has recourse if it disagrees with a precedential decision. If CMS disagrees with the Council's legal interpretation and analysis of CMS's policy or rule, then CMS may change the policy or rule, or issue a later clarification or ruling. Given these existing mechanisms by which parties may challenge decisions on the merits or by which CMS may prospectively change policies, we do not believe it is necessary to include appeal rights or other procedures specific to challenging the designation of particular decisions as precedential.
We also decline to specify a timeframe in which the DAB Chair must designate a decision as precedential because resource and procedural constraints may limit how quickly the designation process may be completed. We do anticipate, however, that the DAB Chair will generally make the designation within a reasonable amount of time after the issuance of the decision, though as noted below, the DAB Chair may choose to wait to designate certain decisions as precedent until the time to file a request for judicial review expires. We also expect publication of the decision in the
Federal Register
to be done around the same time as a precedential decision is identified on the HHS Web site in order to provide public notice.
Comment:
We received several comments requesting clarification on the effects of Council decisions designated as precedential. Two commenters sought clarification as to how findings made in precedential decisions should be used in the context of Medicare Part C and D appeals, and asked whether MAOs and Part D plan sponsors will be held accountable to these findings from an oversight perspective. One commenter sought clarification as to whether the Council will designate as precedential decisions relating to pre-service and copayment issues. Other commenters requested clarification on the effect of federal district court decisions that reverse Council decisions designated as precedential. One commenter further opined that because of the possibility of precedential decisions being overturned on judicial review, it is inappropriate to make Council decisions precedential. A few commenters also suggested that the rule should include procedures for reversing claim denials resulting from subsequently overturned precedent. One commenter requested clarification as to whether a party whose appeal is denied based on a precedential decision must proceed through the full appeals process prior to seeking judicial review of the denial.
Response:
We understand the desire for clarification on the effects of precedential decisions. To the extent the commenters are seeking clarification as to whether Part C and D plans will be required to determine the applicability of precedential decisions when adjudicating future cases, we clarify that § 401.109, as finalized, applies to all Medicare parts. As previously stated, the legal analysis and interpretation of a Medicare authority or provision in a decision designated as precedential must be applied by decision-makers at lower levels in future cases in which the same authority or provision applies and is still in effect. If the commenters seek clarification on whether Part C and D plans will be subject to additional oversight by CMS related to the application of precedential decisions, after the rule is finalized CMS will evaluate the extent to which the application of precedential decisions will require modification to existing plan oversight processes. In regards to whether Council decisions related to pre-service and copayment issues will be designated as precedential, we have outlined the factors the DAB Chair may consider when designating a precedential decision in the final regulation at § 401.109(a). With regard to the effect of a federal court decision that reverses a particular Council decision designated as precedential, the individual case would no longer be binding on the parties and would no longer serve as precedent. In order to ensure that this situation rarely arises, however, the DAB Chair may choose to wait to designate certain decisions as precedent until the time for appeal expires or until a federal court renders a final, unreviewable, decision on judicial review. Although we recognize the possibility that a Council decision designated as precedential may later be reversed, we do not agree that it is therefore inappropriate to designate certain decisions as precedential. The proposed structure is similar to the federal court system, where a federal circuit court's decision may be given precedential effect even though it ultimately may be reversed by the United States Supreme Court.
We also recognize the possibility that an appellant may seek judicial review of a later case applying the precedential decision. If a federal court reverses a later case applying a precedential Council decision, then the effect of the court's ruling on the original precedential decision will depend on many factors, including the court's basis for reversal, whether the court remands to the Council, whether the court's decision itself is non-precedential or non-published, and whether other federal courts have issued conflicting decisions. For example, a finding by the court that the precedent was misapplied to the later case might have a different impact than a finding that the rationale underlying the precedent was erroneous. Due to the many different possibilities, we do not believe we can address in advance the possible effects of federal court decisions on later cases applying precedential Council decisions.
For the same reasons, we also do not find it appropriate to create new procedures for reversing claim denials resulting from subsequently overturned precedent. We do note, however, that the existing appeals process permits some of the relief sought. If a party believes that a denial is based on overturned precedent, then it is free to appeal the denial and make that argument before the adjudicator.
If a party believes that its claim has been inappropriately denied because of the application of a precedential decision, the party must still exhaust the administrative appeals process as statutorily required under sections 1869 and 205 of the Act. We are without authority in this rulemaking to waive statutory requirements.
Comment:
Some commenters expressed concerns that the proposal undermines ALJ independence and one commenter expressed concern that granting precedential authority to the Council will impose greater limits on the scope of ALJ reviews than currently exist.
Response:
We disagree that the proposed rule impedes ALJ independence. ALJs, as well as the Council, are required to apply the laws and regulations pertaining to the Medicare and Medicaid programs as well as CMS rulings published under the authority of the CMS Administrator, regardless of whether a decision is designated as precedential (see § 405.1063). Council decisions do not create new laws or policies, but instead interpret CMS's existing laws, regulations and rulings and determine how they apply to specified circumstances. An ALJ remains free to determine whether and how the relevant authority as interpreted by the Council applies in the context of a specific case.
Comment:
Many commenters voiced general support for the proposal, but indicated contractors, providers, and suppliers need to be adequately trained and educated regarding the proper application of precedential decisions. A few commenters suggested that MACs and QICs should be provided with summaries of each precedential decision explaining how the decision may be applied to future claims. A few commenters sought clarification as to whether precedential decisions will be treated as supplemental to CMS manuals and guidelines. A few commenters also requested that all OMHA and Council decisions be made publicly available, even if non-precedential. One commenter suggested that precedential decisions should be posted on the Council's Web site and should only apply to claims decided after the posting date.
Response:
We thank the commenters for their support. As we stated in the proposed rule, in addition to publishing decisions designated as precedential in the
Federal Register
, precedential decisions will be posted on an accessible HHS Web site and a precedential decision would be binding from the date posted. As regards the request that all OMHA and Council decisions be made publicly available (even if not precedential), we note that implementing this suggestion to publish the high volume of decisions issued at both the OMHA and Council levels would require extensive additional resources.
We agree that it is important for CMS, its contractors, providers, beneficiaries and other stakeholders to be educated on the existence of precedential decisions and their effects on pending appeals. In order to promote consistency, CMS, OMHA and the Council have participated in joint training sessions for the past several years. We anticipate including training sessions on precedential decisions as an effective means of educating all levels of adjudicators. In addition, education sessions may also be appropriate during forums where the public participates, such as the OMHA Appellant Forum. We find it inadvisable, however, to require the Council to provide to MACs and QICs summaries of each precedential decision discussing the precedential effect of a decision and how it should be applied to future cases. The precedent arises from the Council decision itself, and creating separate summaries risks possible ambiguity or misunderstanding. While lower levels of review are bound by a legal interpretation or analysis, or certain factual findings, stated in a Council decision that has been designated as precedential, it is outside the Council's jurisdiction to instruct the review of lower-level adjudicators in cases not before the Council.
As we have noted, Council precedents do not create new law or policy and therefore do not “supplement” manuals or guidelines but may analyze, interpret, and apply them.
Comment:
One commenter felt the proposal will not effectively reduce the backlog because it will take a significant amount of time to establish a meaningful body of precedential decisions.
Response:
We acknowledge that it will take time to establish a body of precedential decisions addressing enough issues to meaningfully impact the backlog. Nevertheless, we believe that establishing precedential decisions will allow for more predictable and consistent outcomes at all levels of administrative review. Moreover, we anticipate that designating certain Council decisions as precedential will help parties better determine the likelihood of success on appeal and assist parties in making decisions regarding whether to pursue administrative appeal of their cases.
After review and consideration of the comments received, and for the reasons discussed above and in the proposed rule, we are finalizing the changes to §§ 405.968, 405.1063, and 423.2063 as proposed without modification, and are finalizing § 401.109 with the following modification. As discussed above, we are adding the following language to § 401.109(a) to include the general factors the DAB Chair may consider when selecting a Council decision as precedential: “In determining which decisions should be designated as precedential, the DAB Chair may take into consideration decisions that address, resolve, or clarify recurring legal issues, rules or policies, or that may have broad application or impact, or involve issues of public interest.”
2. Attorney Adjudicators
As described below, we proposed changes to provide authority for attorney adjudicators to issue decisions when a decision can be issued without an ALJ conducting a hearing under the regulations, to dismiss appeals when an appellant withdraws his or her request for an ALJ hearing, to remand appeals as provided in §§ 405.1056 and 423.2056 or at the direction of the Council, and to conduct reviews of QIC
and IRE dismissals. 81 FR 43790, 43794-43795. Sections 1155, 1852(g)(5), 1860D-4(h), 1869(b)(1)(A), and 1876(c)(5)(B) of the Act 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 423.2038, 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 decisions 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 stated in the proposed rule that we believe 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. As we stated in the proposed rule, 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, we stated in the proposed rule that 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. We stated in the proposed rule that, 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 ALJ hearings 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 proposed 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, to dismiss appeals when an appellant withdraws his or her request for an ALJ hearing, and to remand appeals 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 proposed 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. As we stated in the proposed rule, 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, we proposed that 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 noted 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 noted 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 proposed 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 and in section III of the proposed rule. In addition, we proposed to define an attorney adjudicator in § 405.902, which provides definitions that apply to part 405 subpart I, as a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance. We also proposed 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. We stated that these revisions to § 405.902 would provide the public with an understanding of the attorney adjudicator's qualifications and scope of authority, and we also noted that attorney adjudicators would receive the same training as OMHA ALJs, which we note would focus on substantive areas of Medicare coverage and payment policy, as well as administrative procedures unrelated to the hearing components for which ALJs are exclusively responsible.
Provided below are summaries of the specific comments received and responses to these comments:
We received forty-seven comments on this proposal. A majority of the comments came from providers and suppliers, organizations representing providers and suppliers, beneficiary advocacy organizations, representatives, health plan providers, CMS contractors, and individuals. Twenty-nine of the commenters, mostly from the appellant community, generally supported or raised no objection to the proposal, but had requests for clarification, suggestions for modifications, and concerns or questions. Three commenters fully supported the proposal. Five commenters were equivocal. Three commenters generally supported the proposal, but opposed allowing attorney adjudicators to conduct reviews of QIC and IRE dismissals. Seven commenters opposed the proposal, including two comments from professional associations for ALJs.
Comment:
A majority of commenters, mostly from organizations representing the appellant community, voiced broad support for the proposal, but a few commenters questioned whether the use of attorney adjudicators would significantly alleviate the backlog. One commenter questioned the utility of using attorney adjudicators given that all attorney adjudicators would be afforded the same training as ALJs. The commenter suggested it seemed logical to simply hire more ALJs instead.
Response:
We thank the commenters for their support. Requests for a hearing before an ALJ have increased dramatically in recent years and appeals pending at OMHA continue to exceed OMHA's capacity to adjudicate appeals within the time frames set forth in the statute and rules. The introduction of attorney adjudicators is one action that would help OMHA process cases more efficiently. Attorney adjudicators would allow OMHA to identify and adjudicate appeals that do not require a hearing as early in the administrative process as possible. The use of attorney adjudicators to adjudicate these appeals would reduce the wait time for appellants to receive decisions in cases in which no hearing is required or conducted. It would also help to address the volume of appeals OMHA continues to receive by channeling some of those appeals through a less costly adjudicator, which will allow OMHA to hire more adjudicators than the same resources would allow if allocated to hiring ALJs and support staff, while reserving ALJs and their support staff for appeals that require a hearing. We estimated in the proposed rule that, based on FY 2015 data, the proposal to expand the pool of adjudicators at OMHA could redirect approximately 23,650 appeals per year to attorney adjudicators, to process these appeals at a lower cost to the government than would be required if only ALJs were used to address the same workload. (Basing the estimates on FY 2016 data, we now estimate the impact to be approximately 24,500 appeals per year.) Thus, we believe the use of attorney adjudicators will help OMHA manage high receipt levels, and help alleviate the backlog by allowing OMHA to increase its overall adjudication capacity. OMHA has added as many ALJs and support staff as its current space and budget allow it to sustain. Additional ALJs and support staff will be hired to meet the need for adjudicators, as resources become available. However, the proposal would allow for OMHA to adjudicate more appeals using existing resources by providing for adjudication by attorney adjudicators of appeals that do not require a hearing before an ALJ.
Comment:
Two commenters asked if attorney adjudicators would be doing the work that paralegals are already currently performing under the direction of an ALJ.
Response:
Some OMHA paralegals do currently draft remands, dismissals, and decisions that will be made on the record under the direction of an ALJ. However, we do not believe that is comparable to the work that will be performed by attorney adjudicators. Attorney adjudicators would be licensed attorneys and would have full responsibility for reviewing the record, assessing the pertinent facts in the record and identifying the relevant authorities, conducting the necessary analysis, and drafting and issuing the decision, remand, or dismissal under the attorney adjudicator's signature.
Comment:
A few commenters believed that attorney adjudicators would not resolve the backlog because providers are unlikely to waive their right to a hearing if doing so would require them to forego the ability to present clinical information to either an ALJ or an attorney adjudicator.
Response:
As discussed above and in the proposed rule, we believe attorney adjudicators will be an important new resource to help address the volume of appeals by increasing OMHA's adjudications capacity, which may help alleviate the backlog of pending appeals at OMHA. However, we have not suggested that the attorney adjudicator proposal will resolve the backlog; it is one of a number of administrative actions that we are undertaking to address the appeals workload and resulting backlog, and is in concert with other actions, such as requesting additional funding for the program. Further, we do not believe the proposal would require providers or other appellants to forego the ability to present clinical information to either an ALJ or attorney adjudicator. Although waiving the right to a hearing under current §§ 405.1038(b) and 423.2038(b) means an appellant and the other parties forgo the ability to present clinical information to an ALJ at a hearing, that does not preclude the appellant and other parties from presenting written information, including clinical information, for the ALJ to consider in issuing a decision based on the record alone, in accordance with current §§ 405.1018 and 423.2018. The same would be true under the regulations as finalized in this rule, except that an attorney adjudicator instead of an ALJ would issue the decision. The decision to waive the right to appear at a hearing before an ALJ is solely at the discretion of the appellant and, as finalized in this rule, the other parties who would be sent a notice of hearing if a hearing were to be scheduled. By waiving the right to appear at a hearing, the party would be requesting that the ALJ or attorney adjudicator issue a decision based on the written evidence in the record. In
addition, we note that parties also have the option to withdraw a waiver of the right to appear at the hearing any time before a notice of decision has been issued under §§ 405.1036(b)(2) and 423.2036(b)(2).
Comment:
Many of the commenters who generally supported the proposal believed that OMHA should establish clear and specific guidelines for both the qualifications and the hiring of attorney adjudicators. Commenters suggested that attorney adjudicators should have at least one to three years of experience in Medicare coverage, payment, and appeals, obtained through work with a provider, OMHA, or CMS or its contractors. A few commenters recommended that OMHA hire its existing attorney advisors working under the direction of ALJs as attorney adjudicators.
Response:
We thank the commenters for their support. We believe the definition we proposed in § 405.902 is sufficient to identify the requirement that attorney adjudicators be licensed attorneys, the knowledge that attorney adjudicators will possess, and their scope of authority. OMHA will identify desirable qualifications, including the specific knowledge, skills, and abilities necessary for an attorney adjudicator to be successful in the position, and human resource professionals will determine the specific guidelines for the qualifications and hiring for the position of attorney adjudicator in accordance with the Office of Personnel Management and HHS Departmental standards, after the effective date of the rule. The position description for the attorney adjudicator position and the job announcements will reflect these assessments and determinations. Further, although we may consider hiring existing OMHA attorney advisors as attorney adjudicators, we do not believe it would be appropriate to detail this type of information in the regulations at this time, or to make statements about what the qualifications may be before those delegated with authority to take human resource actions, such as the classification of positions and the determination of qualification standards, are consulted.
Comment:
Most commenters emphasized the importance of training to help ensure attorney adjudicator decisions are consistent with Medicare law and guidance. One commenter from a professional association for ALJs indicated “with no definition of well trained or review criteria, an attorney adjudicator with little or no Medicare adjudicatory training or experience is more likely to issue a legally or factually incorrect decision than a well-seasoned ALJ.” By contrast, several of the commenters who generally supported the proposal appreciated that, as discussed above and in section II.B of the proposed rule, attorney adjudicators would receive the same training as ALJs.
Response:
We thank the commenters for their support, and disagree with the commenter who opined that in the absence of clearly defined training or review criteria, an attorney adjudicator with little or no Medicare adjudicatory training/experience would be more likely to issue a legally or factually incorrect decision than an ALJ. Section 405.902, as finalized in this rule, defines an attorney adjudicator as a licensed attorney employed by OMHA “with knowledge of Medicare coverage and payment laws and guidance.” As noted above (and discussed in section II.B of the proposed rule), attorney adjudicators would undergo the same training as new OMHA ALJs to help ensure that their decisions are consistent with Medicare law and guidance. In addition to hiring qualified adjudicators, OMHA ALJs and other legal staff, which would include attorney adjudicators, are required to attend continuing education and training programs to maintain familiarity with the most current Medicare law and guidance.
Comment:
One commenter, on behalf of an association for ALJs, asked “what does guidance mean with respect to the Medicare Program, and if the attorney adjudicator receives guidance as to how to proceed with the claim from a supervisor at OMHA, an attorney adjudicator is not an independent decision-maker.”
Response:
We believe this commenter misinterpreted the term “guidance” as set forth in the definition of attorney adjudicator in § 405.902. CMS and its contractors issue guidance that describe criteria for coverage and payment of items and services in the form local coverage determinations (LCDs), and CMS program memoranda and manual instructions. This is the guidance that is referenced in the definition of attorney adjudicator in § 405.902. Current § 405.1062(a) provides that ALJs are not bound by LCDs or CMS program guidance but must give substantial deference to these policies if they are applicable to a particular case. Section 405.1062(a), as finalized in this rule, extends the provision to require that attorney adjudicators, like ALJs, give the same substantial deference to these polices.
Comment:
To guarantee an impartial and fair adjudication process, some commenters suggested OMHA should require attorney adjudicators to file a financial disclosure report to ensure no financial conflicts of interest exist. Other commenters believed that the fact that attorney adjudicators would be rated and eligible for awards could create a conflict of interest because attorney adjudicators would have no protection from agency interference and may be assigned cases outside of rotation.
Response:
As executive branch employees, all OMHA employees are subject to the Federal criminal conflict of interest statute at 18 U.S.C. 208, which prohibits a federal employee from participating in matters in which the employee, certain family members, or certain business associates have a financial interest, and to the Federal Employee Standards of Conduct at 5 CFR 2635, which provide general principles of ethical conduct and administer requirements regulating appearances of conflicts of interests, gifts, financial interests, impartiality in official duties, outside employment, and misuse of position. The regulations at 5 CFR 2634, implementing Federal statutes and administered by the Office of Government Ethics, set the guidelines for which employees are required to file financial disclosure reports subject to certification by an ethics official, in accordance with applicable statutes. HHS ethics officials, in consultation with the Office of Government Ethics, will determine which employees will be required to submit financial disclosures in accordance with the ethics regulations at 5 CFR 2634, which determines the content of such disclosures.
In addition, §§ 405.1026 and 423.2026, as finalized in this rule, serve as important safeguards in the administrative appeals process, and provide that an ALJ or attorney adjudicator cannot adjudicate an appeal if he or she is prejudiced or partial to any party or has any interest in the matter pending for decision. This rule as finalized also provides a process that would allow a party to object to an assigned ALJ or attorney adjudicator. The objecting party would also have the opportunity to have the Council review the objections in cases where an adjudicator does not withdraw pursuant to §§ 405.1026 and 423.2026.
Under 5 U.S.C. 43 and 5 CFR 430.101, attorney adjudicators, as Federal employees, would be subject to the Performance Management Appraisal Program (PMAP), which provides for an annual performance appraisal of HHS Federal employees. ALJs are exempt from annual performance appraisals pursuant to 5 U.S.C. 4301(2)(D) and 5 CFR 430.202(b). However, the statutes
governing PMAPs do not provide an exclusion that would exempt attorney adjudicators from annual performance reviews. Annual performance reviews are an important tool for holding employees accountable and we believe that as stewards of taxpayer dollars, we are responsible for holding adjudicators accountable for minimal production levels and levels of quality in their work, through annual performance reviews or otherwise. However, in managing its obligation to administer PMAPs for all OMHA employees except ALJs, OMHA will take precautions to avoid performance criteria that would interfere with an attorney adjudicator's ability to independently make findings of fact based on the record, identify the applicable authorities, and issue a decision in accordance with those authorities, so as to afford attorney adjudicators with a similar level of qualified decisional independence that is afforded to ALJs. Further, OMHA's business process is to assign appeals to ALJs in rotation so far as practicable, as required under 5 U.S.C. 3105, and OMHA would assign appeals to attorney adjudicators in the same manner. Based on the foregoing, we believe there will be protections in place to guarantee an impartial and fair adjudication process for all parties to an appeal before an OMHA adjudicator, regardless of whether the case is assigned to an ALJ or to an attorney adjudicator.
Comment:
Some commenters felt that attorney adjudicator decisions should be subject to oversight or a quality review process.
Response:
We thank the commenters for their suggestion. In addition to reviews by the Council pursuant to a party's request for review or a referral by CMS as a check on individual decisions issued by ALJs and as proposed, attorney adjudicators, OMHA has a quality assurance program (QAP). The OMHA QAP involves a retrospective review of ALJ decisions and assists OMHA in identifying opportunities for training and policy development to increase decisional quality. The OMHA QAP will include attorney adjudicator decisions after the rule is implemented.
Comment:
One commenter suggested OMHA should compile a yearly report to assess the impact attorney adjudicators have on the backlog, including the types of decisions issued and the percentage of dispositions that were in favor of the government.
Response:
We thank the commenter for its suggestion. The OMHA Web site (
www.hhs.gov/omha
) currently contains summary tables that list overall disposition data and dispositions by ALJ. The data, which is organized by fiscal year, includes the number of dispositions that were fully favorable, unfavorable, partially favorable, and dismissed. The disposition data will be expanded to include data for attorney adjudicators as they begin to decide appeals. We believe this data would assist OMHA and the public with assessing the impact of attorney adjudicators on the appeals workload.
Comment:
One commenter indicated the proposed rule does not specify who would assign the cases to the ALJs and attorney adjudicators. Several commenters asked how cases will be assigned to attorney adjudicators and suggested OMHA must establish a well-defined process for assignment of cases to attorney adjudicators.
Response:
OMHA's business process is to assign appeals to ALJs in rotation so far as practicable, as required under 5 U.S.C. 3105, and OMHA would assign appeals to attorney adjudicators in the same manner. More information on the appeal assignment process is available in the OMHA Case Processing Manual (OCPM), which is accessible to the public at the OMHA Web site (
www.hhs.gov/omha
). If an appeal is initially assigned to an ALJ and the ALJ later determines it can be adjudicated by an attorney adjudicator, the appeal would be reassigned to an attorney adjudicator in the same manner as a new appeal assignment to an attorney adjudicator. Similarly, if an appeal is initially assigned to an attorney adjudicator and the attorney adjudicator later determines that only an ALJ can adjudicate the appeal, the appeal would be reassigned to an ALJ in the same manner as a new appeal assignment to an ALJ.
Comment:
Several commenters supported the proposal to allow requests for hearings initially assigned to an attorney adjudicator to be reassigned to an ALJ for oral hearing if necessary in order to render a decision. However, commenters suggested OMHA establish clearer guidance and thresholds for reassignment and a timeline for an attorney adjudicator to reassign an appeal to an ALJ. One commenter indicated the proposal does not provide the regulatory text or authority for an attorney adjudicator to refer an appeal to an ALJ for hearing when the attorney adjudicator determines a hearing is required. A few commenters also indicated the proposal does not specify the procedure for reassignment of cases from an ALJ to an attorney adjudicator, where the ALJ has determined the disposition could be fully favorable, nor does the proposal require the ALJ to make a record of such a determination.
Response:
We believe the threshold requirement of whether a hearing is necessary for a decision is clear in the statute and regulations. In addition, we decline to establish a time frame in the regulations for an attorney adjudicator to reassign a case to an ALJ, as this would be an internal process, and to do so would limit our flexibility to establish and change business processes through OMHA operational policies, which the Administrative Procedure Act (APA) permits OMHA to adopt without notice and comment rulemaking. We also do not believe that regulation text or authority is necessary for an attorney adjudicator to refer an appeal to an ALJ, as an attorney adjudicator would be referring the appeal to an ALJ because the attorney adjudicator believes that he or she does not have the authority to issue a decision in the appeal, for example, because the attorney adjudicator believes a hearing is necessary to decide the appeal.
Further, the procedure for reassignment of cases from an ALJ to an attorney adjudicator, for example, where the ALJ has determined the disposition could be fully favorable to the appellants on every issue based on the record and no other party is liable for the claims at issue, will also be established by OMHA operational policies, including the OCPM. However, we note that in the scenario presented in the comment, the ALJ would also have the authority to retain assignment of the appeal and issue a decision without conducting a hearing. In the event that an ALJ determines the disposition could be fully favorable to the appellants on every issue based on the record and no other party is liable for the claims at issue and the case is reassigned to an attorney adjudicator, the ALJ will not make a record of the determination because the attorney adjudicator will make an independent assessment and will not be bound by the ALJ's determination.
Comment:
Several commenters asked whether OMHA would inform the parties to an appeal when the appeal is assigned to an attorney adjudicator.
Response:
OMHA would continue its current practice of issuing a Notice of Assignment to appellants when a request is assigned, which includes the assigned adjudicator. Appellants and other parties can also obtain and track the status of a pending appeal, including its assigned adjudicator, by visiting OMHA's ALJ Appeal Status Information System (AASIS) page at:
http://aasis.omha.hhs.gov
.
Comment:
Several commenters asked whether a party waiving the right to attend the hearing could choose a
decision by either an attorney adjudicator or an ALJ, and whether parties could object to the assignment. One commenter suggested modeling the attorney adjudicator process on existing Federal court process for the assignment of magistrates, where all parties would be given the option for their case to be assigned to an attorney adjudicator.
Response:
Sections 405.1038 and 423.2038, as finalized in this rule, specifically indicate an ALJ or attorney adjudicator may decide a case on the record when an appeal can be decided without a hearing before an ALJ. These regulations, as finalized, serve as notice that waiving the right to appear at a hearing allows an attorney adjudicator to issue a decision, if a hearing is not necessary to decide the appeal (we note that a hearing may still be conducted by an ALJ if it is necessary to decide the appeal, even if one or more of the parties has waived their right to appear at the hearing). We believe that allowing the parties to choose whether an ALJ or attorney adjudicator will issue the decision when the right to appear at the hearing is waived, or to object if the appeal is assigned to an attorney adjudicator would negate some of the anticipated efficiencies of the proposal and provide the parties with undue influence over the adjudicator assigned to the appeal. However, we note that under §§ 405.1036(b)(2) and 423.2036(b)(2), as finalized in this rule, appellants and other parties may withdraw a waiver of the right to appear at the hearing at any time before a notice of decision has been issued. In addition, if an appellant has concerns about the individual assigned to the appeal having a conflict or bias, §§ 405.1026 and 423.2026, as finalized in this rule, can be used to request that the adjudicator withdraw from the appeal. We appreciate the suggestion to consider having an option for the parties to have their case assigned to an attorney adjudicator, similar to the Federal court process for some magistrate assignments. However, we do not believe that such an option would be appropriate for the administrative appeals addressed in this rule, because attorney adjudicators may only adjudicate appeals that do not require a hearing. A hearing may be necessary in some cases to decide the appeal, and in these cases, under section 1869 of the Act and the regulations finalized in this rule, only an ALJ may conduct a hearing.
Comment:
Two commenters from professional associations for ALJs indicated that appellants, including self-represented appellants, may not know the difference between a decision by an independent ALJ as compared to a decision issued by an attorney adjudicator. In the commenters' opinion, the record must clearly demonstrate a valid and informed waiver of the right to have a claim heard by an ALJ.
Response:
We do not believe there will be a qualitative distinction in decisions issued by ALJs and attorney adjudicators, and both adjudicators will share a similar qualified decisional independence with respect to the decisions that they issue, as discussed further below. However, parties to Medicare claims and appeals are presumed to have knowledge of the published Medicare rules and guidance, regardless of whether they have representation. Therefore, we believe this final rule would serve as sufficient notice that by waiving the right to appear at a hearing, parties would be aware that the decision may be issued by either an ALJ or an attorney adjudicator, if no hearing is required to decide the appeal. However, we will review and revise appeal instructions, and online and other guidance available to appellants to highlight that if an oral hearing is waived, an attorney adjudicator may issue the decision. We will also review and revise current Form HHS-723 (Waiver of Right to an Administrative Law Judge (ALJ) Hearing) to clearly convey that a decision may be issued by an attorney adjudicator.
With regard to unrepresented beneficiaries and enrollees, we believe they represent the most vulnerable segment of the appellant population. However, it is rare that an unrepresented beneficiary waives the right to appear at the hearing. In practice, in the few instances when this does occur, OMHA reviews the stated reason for waiving the right to appear at the hearing and may contact the unrepresented beneficiary or enrollee to confirm that the waiver is knowingly made. We believe this process will help ensure that an unrepresented beneficiary or enrollee understands the implications of waiving his or her right to appear at the hearing and the record demonstrates that understanding. In addition, we are reviewing the current form for waiving the right to appear at a hearing (form HHS-723), to determine if revisions may be necessary so users will understand that by waiving the right to appear at the hearing, the waiving party would be aware that the decision may be issued by either an ALJ or an attorney adjudicator, if no hearing is required to decide the appeal.
Comment:
Several commenters asked whether a party could appeal an unfavorable decision by an attorney adjudicator to an ALJ. Several commenters believed OMHA should allow parties who disagree with the attorney adjudicator's decision to request an ALJ review the attorney adjudicator's decision and allow the ALJ to reissue an amended decision should the ALJ find the attorney adjudicator's decision to be deficient.
Response:
A party would not have the right to appeal an unfavorable decision by an attorney adjudicator to an ALJ. All parties to an appeal would receive a written notice of decision issued by an attorney adjudicator. The notice of decision would provide instructions for requesting a review of the decision by the Council if a party disagrees with the decision. 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 (see §§ 405.1102 and 405.1106, as finalized in this rule). Parties to a decision issued without an ALJ conducting an oral hearing pursuant to §§ 405.1038(a) or 423.2038(a) 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 review of the decision by the Council, which can remand the case for an ALJ to conduct a hearing and issue a new decision.
Comment:
One commenter noted that the proposed rule is silent on the requirements for a timely request for ALJ hearing when a party to an appeal wishes to appeal a fully favorable on the record decision issued by an attorney adjudicator.
Response:
As discussed above, parties to a decision issued without an ALJ conducting an oral hearing pursuant to §§ 405.1038(a) or 423.2038(a) continue to have a right to an ALJ hearing, and may pursue that right by appealing to the Council, which can remand the case for an ALJ to conduct a hearing and issue a new decision. Sections 405.1102(a)(1) and 423.2102(a)(1), as finalized in this rule, provide that a party to a decision or dismissal issued by an ALJ or attorney adjudicator may request a review of the decision by the Council by filing a written request for review within 60 calendar days after receipt of the ALJ's or attorney adjudicator's decision or dismissal. We believe §§ 405.1102(a)(1) and 423.2102, as finalized in this rule, provide the requirements for filing a timely request to appeal a decision issued by an attorney adjudicator, including a fully favorable decision issued by an attorney
adjudicator. In addition, we note that the notice of decision sent with an attorney adjudicator's decision will include instructions for filing a request for review with the Council, including the time frame in which the request for review must be filed.
Comment:
One commenter stated “in any waiver to allow a decision by an attorney adjudicator, it must be clearly explained that by accepting such a decision, the beneficiary may be waiving his or her right to appeal the decision to the Federal district court as it will not have completed all administrative proceedings below.”
Response:
We disagree with the commenter's interpretation that a beneficiary would be waiving their right to appeal to Federal district court by waiving the right to an ALJ hearing. Section 405.904(a)(2), as finalized in this rule, states “If the beneficiary obtains a hearing before the ALJ and is dissatisfied with the decision of the ALJ, or if the beneficiary requests a hearing and no hearing is conducted, and the beneficiary is dissatisfied with the decision of an ALJ or attorney adjudicator, he or she may request the Council to review the case. If the Council reviews the case and issues a decision, and the beneficiary is dissatisfied with the decision, the beneficiary may file suit in Federal district court if the amount remaining in controversy and the other requirements for judicial review are met.”
Comment:
A few commenters, on behalf of Medicare contractors, asked whether attorney adjudicators could render summary decisions in favor of CMS Recovery Auditors or other interested contractors, or only in favor of the appellant. These commenters suggested summary decisions should be permitted to extend in both directions.
Response:
We interpret the commenter's use of the term “summary decisions” to mean decisions that are issued on the record without a hearing before an ALJ, and we assume the commenters are asking whether attorney adjudicators could issue decisions on the record that are favorable to CMS and its contractors (or to CMS, the IRE, and/or the plan sponsor) pursuant to §§ 405.1038(a) and 423.2038(a). Sections 405.1038(a) and 423.2038(a), as finalized in this rule, clearly limit the ALJ's or attorney adjudicator's ability to issue decisions on the record to situations where the administrative record supports a finding fully in favor of the
appellant(s)
on every issue and no other party to the appeal is liable for claims at issue. Decisions that are favorable to CMS and its contractors (or to CMS, the IRE, and/or the plan sponsor), are not fully favorable to the appellant(s) (because CMS and its contractors (or CMS, the IRE and/or the plan sponsor) are not appellants in a request for an ALJ hearing), and therefore, such a decision could not be issued on the record under §§ 405.1038(a) and 423.2038(a.), as finalized in this rule.
Comment:
Many commenters suggested that OMHA establish a bright line rule and clear scope of an attorney adjudicator's authority. One commenter indicated “the number of cases that fall within [attorney adjudicators'] scope of authority is so limited, that their use will have no more than negligible impact on the processing of appeals.”
Response:
We believe the rule as finalized, clearly establishes the scope of an attorney adjudicator's authority. The scope and authority of an attorney adjudicator to issue decisions under the rule as finalized, is set forth in § 405.902, which states an “attorney adjudicator means a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance, and authorized to take the actions provided for in this subpart on requests for ALJ hearing and requests for reviews of QIC dismissals.” Other rules in the subpart then describe when an attorney adjudicator may issue a decision, dismissal, or remand. As finalized in this rule, an attorney adjudicator may issue: (1) Decisions that can be issued without an ALJ conducting a hearing in accordance with §§ 405.1038 and 423.2038; (2) dismissals when an appellant withdraws his or her request for an ALJ hearing in accordance with §§ 405.1052 and 423.2052; (3) remands to the QIC, IRE, or other contractor, or the Part D plan sponsor, in accordance with §§ 405.1056 and 423.2056; and (4) reviews of QIC and IRE dismissals in accordance with §§ 405.1004 and 423.2004.
Comment:
Some commenters supported allowing attorney adjudicators to issue dismissals when an appellant withdraws a request for hearing, remands for information that can only be supplied by CMS or contractors and, in certain instances, issue decisions that are fully favorable to the appellant, but the commenters opposed allowing attorney adjudicators to review a QIC or IRE dismissal, stating neither § 405.1004 nor § 423.2004 preclude a hearing being held for review of a QIC or IRE dismissal, respectively. These commenters suggested that the review of QIC and IRE dismissals “may sometimes require a hearing to determine findings of fact or conclusions of law.”
Response:
We recognize that current §§ 405.1004 and 423.2004 do not preclude conducting a hearing on a review or a QIC or IRE dismissal, and acknowledge review of QIC and IRE dismissals may sometimes require a hearing to determine findings of fact or conclusions of law. As discussed previously regarding the reassignment of cases from an attorney adjudicator to an ALJ, an attorney adjudicator may refer an appeal to an ALJ because the attorney adjudicator believes that he or she does not have the authority to issue a decision in the appeal, for example, because the attorney adjudicator believes a hearing is necessary to determine findings of fact or conclusions of law. These appeals will be reassigned to an ALJ to conduct a hearing. However, as discussed above and in section II.B of the proposed rule, although under section 1869(d) of the Act, an ALJ must conduct and conclude a hearing on a decision of a QIC, we believe that the statute does not require that the same action be taken by an ALJ in cases where there is no QIC reconsideration, for example, where the QIC has dismissed the request for reconsideration. In addition, we believe the determination whether a QIC or IRE dismissal was issued in error generally can be conducted on the record, given the limited scope of review, in the same manner as QICs review MAC dismissals of redetermination requests, and the Council reviews ALJ dismissals of requests for hearing. Moreover, we believe attorney adjudicators will be capable of reviewing the administrative record, identifying the issues related to the dismissal, and determining whether the QIC and IRE dismissal was issued in error.
Comment:
One commenter requested that for cases where an attorney adjudicator finds the QIC or IRE dismissed an appeal in error, the appeal should be remanded to the QIC or IRE with the attorney adjudicator's reasoning for the decision and with instructions on how to proceed.
Response:
Sections 405.1004(b) and 423.2004(b), as finalized in this rule, state if the ALJ or attorney adjudicator determines that the QIC's or IRE's dismissal was in error, he or she vacates the dismissal and remands the case to the QIC or IRE for a reconsideration in accordance with §§ 405.1056 and 423.2056. We expect that an ALJ's or attorney adjudicator's notice of remand will explain the ALJ's or attorney adjudicator's basis for vacating the QIC's or IRE's dismissal, and §§ 405.1056(d) and 423.2056(d)), as finalized in this rule, state that the ALJ or attorney adjudicator will remand the case to the
QIC or IRE for a reconsideration, which we believe is the only required instruction.
Comment:
A few commenters, including two professional associations for ALJs, opposed the attorney adjudicator proposal on the basis that the proposal is inconsistent with the APA or the Act and improperly delegates decision-making authority to individuals who are not appointed as ALJs. The commenters also argued provisions of the APA and the Act give ALJs judicial independence to render decisions, and attorney adjudicators do not have judicial independence to the same extent as ALJs.
Response:
We disagree with the commenters and believe the proposal is fully consistent the APA and the Act. As a preliminary matter, we note that in interpreting the APA, courts have held that ALJs have “qualified decisional independence” in carrying out their adjudicative functions, rather than full “judicial independence.” According to the case law, the intent of the APA is that ALJs should decide each case based on the record evidence, free from any pressure from their employing agencies to reach a particular result in a particular case. This decisional independence is designed to help ensure impartial decision-making and to maintain public confidence in the essential fairness of the process. This decisional independence is, however, “qualified” because ALJs are still bound to follow the regulations and policies of their employing agency, and are also subject to direction designed to ensure efficient operation and service to the public. See Butz v. Economou, 438 U.S. 478, 513 (1978); Abrams v. Social Security Administration, 703 F. 3d 538, 545 (Fed. Cir. 2012); Nash v. Bowen, 869 F. 2d 675, 680 (2nd Cir. 1989), cert. denied, 493 U.S. 812 (1989); Nash v. Califano, 613 F. 2d 10, 15 (2nd Cir. 1980). In implementing this final rule, OMHA will afford attorney adjudicators the same level of qualified decisional independence. As discussed above, OMHA will take precautions to avoid performance criteria that would interfere with an attorney adjudicator's ability to independently make findings of fact based on the record, identify the applicable authorities, and issue a decision in accordance with those authorities, so as to afford attorney adjudicators with a similar level of qualified decisional independence that is afforded to ALJs. Further, OMHA's business process is to assign appeals to ALJs in rotation so far as practicable, as required under 5 U.S.C. 3105, and OMHA would assign appeals to attorney adjudicators in the same manner. This qualified decisional independence helps ensure an impartial and fair adjudication process for all parties to an appeal before an OMHA adjudicator, regardless of whether the case is assigned to an ALJ or to an attorney adjudicator.
Sections 554 and 556 of the APA apply only to adjudications that are required by statute to be determined on the record after an opportunity for an agency hearing. In accordance with sections 1155, 1852(g)(5), 1860D-4(h), 1869(b)(1)(A), and 1876(c)(5)(B) of the Act and their implementing regulations (at 42 CFR part 405 subpart I, part 478 subpart B, part 422 subpart M, and part 423 subpart U), individuals dissatisfied with certain lower level appeal determinations are entitled to a hearing, subject to timely filing and amount in controversy limitations, to the same extent as is provided under section 205(b) of the Act. Reading these sections together, the Act directs the Secretary of Health and Human Services to provide an opportunity for a hearing regarding the right to Medicare benefits, which the Secretary has delegated to OMHA ALJs to conduct and render a decision. The rule, as finalized, is not inconsistent with the APA or the Act, but instead would augment this process by authorizing attorney adjudicators to make decisions in appeals when there is no requirement for a hearing, or in cases where parties waive the right to appear at a hearing before an ALJ and the hearing is not necessary to make a decision. The Act requires only that parties be given an opportunity for a hearing; no provision of the Act requires the Secretary to utilize an ALJ to issue a decision that does not require a hearing, for example, because the parties have waived their right to one or because no reconsideration has been issued.
Parties will continue to have an opportunity for a hearing where a reconsideration has been issued, the hearing request has been timely filed, and the amount remaining in controversy has been met. In that respect, the proposal, as finalized in this rule, does not change the process or the rights of the parties. 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 §§ 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 §§ 405.1036(b)(3) or 423.2036(b)(3). In addition, parties to a decision issued without an ALJ conducting an oral hearing pursuant to §§ 405.1038(a) or 423.2038(a) 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 review of the decision by the Council, which can remand the case for an ALJ to conduct a hearing and issue a new decision. Under the rule we are finalizing, either an attorney adjudicator or an ALJ may issue a decision when no hearing is required before an ALJ, but if a hearing is to be held, the ALJ will conduct that hearing and issue the decision. We believe this process is fully in accord with the APA and the Act.
Comment:
One commenter suggested that “it is a violation of statute to assign attorney adjudicators to render decisions that are less than fully favorable to a beneficiary because it deprives the beneficiary of an impartial ALJ, appointed and protected under the provisions of the APA.”
Response:
We disagree with the commenter. In accordance with section 1869(b)(1)(A) of the Act, any individuals dissatisfied with an initial determination and reconsideration are entitled to a hearing, subject to timely filing and amount in controversy limitations, and (d)(1)(A) states that an ALJ “shall conduct and conclude a hearing on a decision of a qualified independent contractor under subsection (c) and render a decision
on such hearing”
(emphasis added). However, the rule we are finalizing, provides for a decision by another adjudicator (an attorney adjudicator) if such a hearing is waived under § 405.1038(b) or not required under § 405.1038(c), as finalized in this rule. As discussed above, no provision of the Act requires the Secretary to utilize an ALJ to issue a decision that does not require a hearing. OMHA will afford attorney adjudicators with a similar level of qualified decisional independence that is afforded to ALJs, to help ensure an impartial and fair adjudication process for all parties to an appeal before an OMHA adjudicator, regardless of whether the case is assigned to an ALJ or to an attorney adjudicator.
Comment:
One commenter referred to the language in section II.B of the proposed rule where we stated that we believed well-trained attorneys could 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. 81 FR 43790, 43794. The commenter indicated “well-trained attorney” is not defined in the proposed regulation and asked whether a “well trained” attorney is required to be a member in good standing of a bar in the United States.
Response:
Section § 405.902, as finalized in this rule, states an “Attorney Adjudicator means a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance, and authorized to take the actions provided for in this subpart on requests for ALJ hearing and requests for reviews of QIC dismissals.” A licensed attorney would be a member in good standing of a bar in the United States.
Comment:
One commenter argued that proposed § 405.1006(e)(1)(ii), (e)(1)(iii) and (e)(2)(iii) may overcomplicate the process of aggregating claims because an attorney adjudicator could determine that the minimum amount in controversy was met, but would be required to refer the appeal to an ALJ if it appeared that the claims were not properly aggregated or if the appeal did not meet the required amount in controversy, in order for an ALJ to dismiss the request for hearing. The commenter also believed ALJs might simply adopt the attorney adjudicator's preliminary determination, which could result in improperly denied requests for hearing.
Response:
We appreciate the commenter's perspective but believe these procedures are necessary to help ensure that a request for a hearing before an ALJ is reviewed by an ALJ before being dismissed for not meeting the amount in controversy required for an ALJ hearing. A referral to an ALJ would only be necessary when the attorney adjudicator believes the appealed claims do not meet the amount in controversy requirement and the aggregation request may not be valid, because the request for hearing would be subject to a possible dismissal for not meeting the amount in controversy requirement. Section 405.1006(e)(1) and (2), as finalized in this rule, provide that only an ALJ may determine that the claims were not properly aggregated and therefore do not meet the minimum amount in controversy required for an ALJ hearing. Thus, the ALJ is required to make this determination, and would not be permitted to simply adopt the attorney adjudicator's preliminary determination without conducting an independent review. If an ALJ dismisses a request for hearing after determining that an aggregation request was not valid, and therefore the minimum amount in controversy was not met, and the appellant does not agree with the dismissal, the appellant may request a review of the dismissal by the Council. Instructions for requesting a review by the Council will be included in the notice of dismissal sent to the appellant with the ALJ's dismissal order.
After review and consideration of the comments received, and for the reasons discussed above and in the proposed rule, we are finalizing our proposals as discussed above without modification to provide authority for 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, remands as provided in §§ 405.1056 and 423.2056 or at the direction of the Council, and reviews of QIC and IRE dismissals. Also, we are finalizing the definition of attorney adjudicator in § 405.902 as proposed without modification.
In addition, we are making a conforming technical revision to § 423.558(b) to replace “ALJ hearings” with “ALJ hearings and ALJ and attorney adjudicator decisions” for consistency with the revised title of part 423, subpart U, and the revisions discussed above providing for attorney adjudicator reviews.
3. Application of 405 Rules to Other Parts
Current § 422.562(d) states that unless subpart M regarding grievances, organization determinations and appeals under the MA 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. Pursuant to § 417.600, these rules governing MA organization determinations are also applicable to beneficiary appeals and grievances when the beneficiary is enrolled in a competitive medical plan or HMO (also known as “cost plan”) under section 1876 of the Act; therefore our discussion of MA proceedings applies also to cost plan appeals and grievances initiated under § 417.600.
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, as we stated in the proposed rule, 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 MA, QIO, and cost plan appeals programs (81 FR 43795). 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 proposed revisions to parts 422 and 478. Specifically, we proposed in §§ 422.562(d) and 422.608 that the part 405 rules would not apply when the part 405 rule implements a statutory provision that is not also applicable to section 1852 of the Act (81 FR 43796, 43876-43877). Similarly, we proposed in § 478.40(c) that the part 405 rules would not apply when the part 405 rule implements a statutory provision that is not also applicable to section 1155 of the Act (81 FR 43890-43891). In addition, we proposed in § 478.40(c) to remove 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. We stated in the proposed rule that, 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 (81 FR 43796). In our discussion of these proposals, we identified the statutory differences in sections 1155 and 1852(g) of the Act compared to section 1869 discussed above.
Provided below are summaries of the specific comments received and responses to these comments:
Comment:
We received three comments on proposed §§ 422.562(d), 422.608, and 478.40(c), expressing concern that the added language is too general and does not address the specific changes that are intended by the proposals. The commenters indicated that the general language will create more confusion rather than clarifying existing ambiguity about which part 405 rules apply to MA program appeals under part 422, subpart M and to appeals of QIO reconsidered determinations under part 478, subpart B, and may have the unintended consequence of stripping away protections for unrepresented beneficiaries. Two of the commenters stated that the proposals will take away important safeguards that currently provide consistency in application of beneficiary rights across the appeals spectrum and provide answers in the absence of specific applicable provisions. The same commenters argued that under proposed §§ 422.562(d) and 422.608, part 405 rules apply to administrative reviews, hearing processes, and representation of parties “to the extent that they are appropriate, unless the part 405 regulation implements a provision of section 1869 of the Act that is not also in section 1852(g)(5) of the Act” but the only provisions of section 1869 of the Act that are referenced in section 1852(g)(5) of the Act relate to amounts in controversy. The commenters argued that the language of the proposals would mean that all sections of part 405, other than those relating to amounts in controversy, are unavailable to fill the gaps in part 422, subpart M. The same commenters used the part 405 rule in § 405.1018, which requires a good cause determination for the submission of new evidence by providers, suppliers, and beneficiaries represented by a provider or supplier, if such evidence was not submitted prior to the issuance of the QIC's reconsideration determination, as an example of where the proposals may have an unintended consequence of taking away a beneficiary safeguard. The commenters suggested that if current § 405.1018(d), which states that the requirements of § 405.1018 do not apply to oral testimony given at a hearing, or to evidence submitted by an unrepresented beneficiary, was not available in part 422, subpart M proceedings, then an enrollee in the MA program may not be able to invoke the protections in § 405.1018(d). All commenters requested that after the agency provides further details on which part 405 rules do not apply, it should provide the public with an opportunity to review the specific changes and allow them to make more meaningful comments on the proposal.
Response:
We do not agree with the comment that the proposal would mean that all sections of part 405, other than those relating to amounts in controversy, are unavailable to fill the gaps in part 422, subpart M. The proposal related to part 405, subpart I provisions that implement requirements in section 1869 of the Act that are not also contained in section 1852(g). Section 1852(g)(5) of the Act, which is implemented in part 422, subpart M, does, as the commenter highlights, reference portions of section 1869 of the Act related to the amount in controversy threshold. However, section 1852(g)(5) of the Act also entitles an MA enrollee to “a hearing before the Secretary to the same extent as is provided in section 205(b) [of the Act],” which is also referenced in section 1869 of the Act. Thus, section 1852(g) of the Act includes certain provisions, in addition to the amount in controversy provisions, that are also in section 1869 of the Act. The provisions of part 405, subpart I that implement these provisions would continue to apply to part 422, subpart M appeals to the extent they are appropriate, and therefore the proposal would not mean that all sections of part 405, subpart I, other than those relating to amounts in controversy, are unavailable to fill the gaps in part 422, subpart M. Rather, as we explained in the preamble to the proposed rule, the proposal would serve to clarify that the provisions of part 405, subpart I that implement provisions of section 1869 of the Act that are not also addressed in sections 1852 and 1155 of the Act, are not appropriate to apply in appeals initiated under part 422, subpart M, and part 478, subpart B. Using the commenter's example of § 405.1018, only paragraphs (c) and (d)(2) specifically relate to a provision of section 1869 of the Act; specifically, as we explained in the proposed rule, 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. The other subsections of § 405.1018 do not effectuate a specific provision of section 1869 of the Act, but rather relate to the hearing before the Secretary, which is also required under section 1852(g) of the Act, and therefore applying the other subsections of § 405.1018 to part 422, subpart M would continue to be appropriate under the proposal.
Proposed §§ 422.562(d), 422.608, and 478.40(c) were intended to clarify the application of part 405 rules to appeals and hearings initiated under other parts and to help ensure that statutory provisions that are specific to appeals under section 1869 of the Act 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. In explaining the proposal, we also provided examples of specific provisions in section 1869 of the Act that are not also in sections 1852 and 1155 of the Act, and therefore the proposal would impact the part 405, subpart I provisions that implement those specific provisions of section 1869 of the Act that we discussed in explaining the proposal. While we believe our proposals provided sufficient information and notice regarding the part 405, subpart I provisions that would not apply in MA program appeals under part 422, subpart M and in appeals of QIO reconsidered determinations under part 478, subpart B, commenters raised concerns that the proposal and proposed regulation text were not sufficiently detailed. In response to the commenters' concerns we are finalizing §§ 422.562(d), 422.608, and 478.40(c) with modifications to specify in greater detail those part 405 provisions that implement provisions of section 1869 of the Act that are not also applicable to sections 1852 or 1155 of the Act, and that we do not believe apply to part 422, subpart M and part 478, subpart B adjudications. We specifically discussed three such provisions in section II.C of the proposed rule. The three specific topics covered by part 405, subpart I that implement provisions of section 1869 of the Act and that we believe do not apply to part 422, subpart M and part 478, subpart B adjudications are: (1) Specific time frames to conduct adjudications at each level of administrative appeal (sections 1869(a)(3)(C)(ii), (c)(3)(C)(i), (d)(1), and (d)(2) of the Act); (2) the option to request escalation of appeals when a QIC, OMHA, or the Council does not render a decision within an applicable adjudication time frame (sections 1869(c)(3)(C)(ii) and (d)(3) of the Act); and (3) the requirement that a provider or supplier, or beneficiary represented by a provider or supplier, must establish good cause to introduce evidence that was not presented at the reconsideration by the QIC (section 1869(b)(3) of the Act). Because these provisions of section 1869 of the Act were discussed in the proposed rule as examples of provisions that are not also included in sections 1852 and 1155 of the Act, and that we do not believe apply to appeals and hearings under part 422, subpart M and part 478, subpart B, and because these three areas have historically been the subject of the greatest confusion for appellants and OMHA staff regarding application of part 405 rules to other parts, we are finalizing the proposal with respect to those three areas. We will conduct additional notice and comment rulemaking if we identify additional provisions in the part 405, subpart I rules that implement provisions of section 1869 of the Act that are not also included in sections 1852(g) and 1155 of the Act, and we believe those provisions should not apply to part 422, subpart M and part 478, subpart B adjudications. Furthermore, we believe that listing the specific sections of part 405, subpart I that do not apply in MA program appeals under part 422, subpart M, and in appeals of QIO reconsidered determinations under part 478, subpart B addresses commenters' concerns regarding confusion or ambiguity.
Section 1869(d)(1)(A) of the Act provides that unless the appellant waives the statutory adjudication time frame, the ALJ conducts and concludes a hearing on a decision of the QIC and renders a decision no later than the end of the 90-day period beginning on the date a request for hearing is timely filed. In addition, section 1869(d)(2) of the Act provides that the DAB conducts and concludes a review of the decision on a hearing and renders a decision no later than the end of the 90-day period beginning on the date a request for review is timely filed. Sections 1852(g)(5) and 1155 of the Act do not contain similar adjudication time frames for an ALJ and DAB to render a decision. Therefore, we are specifying in §§ 422.562(d) and 478.40(c), and in § 422.608 through reference to § 422.562(d)(2), that the adjudication time frames at the OMHA level and the Council in part 405 do not apply in proceedings under either part 422, subpart M or part 478, subpart B. Similarly, because the part 405 escalation provisions originate in section 1869(c)(3)(C)(ii) and (d)(3) of the Act and are not incorporated into sections 1852(g) or 1155 of the Act, and the part 405 rules for adjudication time frames for an ALJ or the Council do not apply, we are specifying that the options to request escalation of an appeal in part 405 do not apply in proceedings under either part 422, subpart M or part 478, subpart B. In addition, we do not think it would be appropriate to apply the part 405, subpart I rules to time frames for adjudications below the OMHA level for Part C and QIO appeals because those parts already contain regulations regarding time frames and expediting appeals that are different from the part 405, subpart I provisions. For example, under § 422.572(f) and § 422.590(g), if an MAO fails to provide the enrollee with timely notice of an expedited organization determination or expedited reconsideration, the failure constitutes an adverse determination; the adverse decision then, respectively, is subject to appeal or must be forwarded to the IRE. With respect to OMHA-level adjudication time frames and the option to escalate an appeal from the OMHA level to the Council, we note that § 405.1016, as finalized in this rule, applies only to requests for a hearing filed after a QIC has issued a reconsideration. In the final rule establishing the MA program, CMS stated that part 405 regulatory provisions that are dependent upon QICs would not apply to part 422, subpart M adjudications because an IRE—not a QIC—conducts reconsiderations for MA appeals (70 FR 4588, 4676). We believe the same rationale extends to reconsiderations conducted by a QIO under part 478, subpart B. We also believe it is unwise to extend the adjudication time frames to additional cases or to create an option for escalation of an appeal where such provisions are not required by statute given the current volume of pending appeals at OMHA and the Council. However, we note that the vast majority of MA and QIO appeals are filed by beneficiaries and enrollees, and current OMHA and Council policy provides for the prioritization of appeals filed by beneficiaries or enrollees. Thus, we anticipate that there will be little change in adjudicatory processing times for most appellants in MA program appeals and appeals of QIO reconsidered determinations. Accordingly, we do not believe that the policies we are finalizing above will take away current
protections or safeguards for beneficiaries.
In addition, 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 QIC reconsideration unless there is good cause that precluded the introduction of such evidence at or before that reconsideration. Several provisions in part 405 implement this limitation on the submission of new evidence by providers and suppliers, as well as beneficiaries represented by providers and suppliers, and further implement rules for the review of whether good cause exists for late submissions. Neither section 1852(g)(5) nor section 1155 of the Act contains a similar limitation on the submission of new evidence by providers and suppliers if such evidence was not presented at an earlier stage in the appeal proceedings. Furthermore, the requirement to show good cause for the introduction of new evidence applies to evidence that was not presented at the QIC reconsideration and, as noted above, part 405 provisions that are dependent upon QICs do not apply to adjudications under part 422, subpart M, and we believe the same rationale extends to reconsiderations conducted by QIOs under part 478, subpart B. Therefore, we are specifying in §§ 422.562(d) and 478.40(c), and in § 422.608 through reference to § 422.562(d)(2), that the good cause limitations on new evidence submitted by providers, suppliers, and beneficiaries represented by a provider or supplier, outlined in part 405, subpart I do not apply in proceedings under part 422, subpart M or part 478, subpart B. Although two commenters expressed concern that the proposals could mean that an enrollee in the MA program would not be able to invoke the protection of current § 405.1018(d), these finalized rules specifically identify §§ 405.1018(c), 405.1028(a), and 405.1122(c) as part 405 sections that do not apply in part 422, subpart M, and therefore the protections afforded to unrepresented beneficiaries in current § 405.1018(d) are unnecessary in part 422, subpart M appeals because there is no need for any appellant in a Part C appeal to show good cause for the introduction of new evidence for the first time at the OMHA level. As we stated above, we do not believe that the policies we are finalizing will take away current protections or safeguards for beneficiaries appealing an MA organization determination (or cost plan determination) or appealing from a QIO determination.
After review and consideration of the comments received, for the reasons discussed above and in the proposed rule, we are finalizing the following changes to §§ 422.562(d), 422.608, and 478.40(c). We are specifying in §§ 422.562(d) and 478.40(c), and in 422.608 through reference to § 422.562(d)(2), those specific provisions of part 405, subpart I discussed in the proposed rule that are not applicable to MA program appeals under part 422, subpart M or appeals of QIO reconsidered determinations under part 478, subpart B, as discussed above. The provisions we are specifying are: (1) § 405.950 (time frames for making a redetermination); (2) § 405.970 (time frame for making a reconsideration following a contractor redetermination, including the option to escalate an appeal to the OMHA level); (3) § 405.1016 (time frames for deciding an appeal of a QIC reconsideration or escalated request for a QIC reconsideration, including the option to escalate an appeal to the Council); (4) The option to request that an appeal be escalated from the OMHA level to the Council as provided in § 405.1100(b) and the time frames for the Council to decide an appeal of an ALJ's or attorney adjudicator's decision or an appeal that is escalated from the OMHA level to the Council as provided in § 405.1100(c) and (d); (5) § 405.1132 (request for escalation to Federal court); and (6) §§ 405.956(b)(8), 405.966(a)(2), 405.976(b)(5)(ii), 405.1018(c), 405.1028(a), and 405.1122(c) and any other references to requiring a determination of good cause for the introduction of new evidence by a provider, supplier, or a beneficiary represented by a provider or supplier.
4. 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 proposed 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 also proposed 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 these changes, we proposed 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 the proposed rule.
Provided below are summaries of the specific comments received and responses to these comments:
Comment:
We received three comments on this proposal. One commenter supported the proposal as necessary to update regulatory language to clearly reflect the role of OMHA in administering ALJ appeals. Two commenters opposed the proposal. One commenter argued that each change from “ALJ” to “OMHA” takes a specific power granted directly to an ALJ adjudicating a case and transfers it to OMHA administrators. Another commenter interpreted the proposal as a transfer of control over ALJs' workloads from ALJs to OMHA.
Response:
We disagree with the commenters' interpretation of the proposal as a transfer of authority from ALJs to OMHA administrators. Rather, the proposal provides clarity to the public on the role of OMHA in administering the ALJ hearing program and clearly identifies where requests and other filings should be directed to ease appellant confusion and more efficiently process appeals by helping to ensure filings are properly routed. As discussed above (and in section II.D of the proposed rule), 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. OMHA was not yet in operation or mentioned in the regulation text at the time the Interim Final Rule was published in March 2005. We believe that reference to OMHA or an OMHA office in place of current references to an unspecified entity, ALJs, and ALJ hearing offices
would provide a clearer explanation of a topic in certain regulations and would clarify areas of the regulations that may have confused appellants in the past. For example, current § 405.970(e)(2)(ii) states that, for cases that have been escalated from the reconsideration level of appeal to the OMHA level of appeal, the QIC forwards the case file “to the ALJ hearing office.” The concept of an ALJ hearing office is most analogous to OMHA's individual field offices. In practice, however, the QIC sends case files for escalated cases to a centralized location, not to individual field offices. Thus, we believe reference to OMHA would be more appropriate here. Similarly, as another example, current § 405.1104 states that an appellant who files a timely request for hearing before an ALJ and whose appeal continues to be “pending before the ALJ” at the end of an applicable adjudication time period under § 405.1016 may request to escalate the appeal to the Council level of review. However, appeals that are eligible to be escalated may be unassigned and not yet before an ALJ. Thus, we believe that it would be appropriate to state “pending with OMHA” in this regulation (see § 405.1016(f)(1), as finalized).
After review and consideration of the comments received, for the reasons discussed above and in the proposed rule, we are finalizing our proposals without modification to define OMHA and replace certain references to ALJs, ALJ hearing offices, and unspecified entities with a reference to OMHA or an OMHA office.
5. 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 proposed 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, 405.1062, 405.1063, 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 proposed to amend §§ 478.46 and 478.48 to replace “Departmental Appeals Board” and “DAB,” with “Medicare Appeals Council” and “Council”.
Provided below are summaries of the specific comments received and responses to these comments:
Comment:
We received two comments on this proposal—one of which was a collective comment submitted by the four then-current CMS DME Medicare Administrative Contractors (MACs). Both comments supported the proposal to replace references to “MAC” with “Council” as necessary to reduce confusion between the Council and CMS Medicare Administrative Contractors.
Response:
We thank the commenters for their support and agree that the proposed revisions will reduce confusion.
After review and consideration of the comments received, for the reasons discussed above and in the proposed rule, we are finalizing our proposals without modification to replace references to “MAC” and “Board,” with “Council” in the sections listed above, and to replace references to “Departmental Appeals Board” and “DAB” with “Medicare Appeals Council” and “Council” in §§ 478.46 and 478.48. In addition to the sections listed above, we are also making a conforming technical revision to § 423.558(b) to replace the reference to “MAC” in § 423.558(b) with “Council.”
B. Specific Provisions of Part 405, Subpart I and Part 423, Subparts Mand 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 final rule, we generally discuss provisions of the proposed rule related to part 405, subpart I, and then whether any aligning revisions to part 423, subpart U, were proposed, unless a provision is specific to part 405 and there is no corresponding part 423 provision. We then discuss the policies we are finalizing in this final rule related to parts 405 and 423.
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 proposed revisions to paragraphs (b)(4)(v) and (vi) to account for the possibility that an appeal at the OMHA level could be decided by an attorney adjudicator or by an ALJ without conducting a hearing. 81 FR 43790, 43797. We proposed to revise paragraph (b)(4)(v) to insert “or attorney adjudicator” after each instance of “the ALJ.” We stated in the proposed rule that this proposal was 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 of the proposed rule (and discussed in section II.A.2 above), by stating the right to request Council review of an attorney adjudicator decision that affirms the IRE's adverse coverage determination. We also proposed 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 proposed 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 of the proposed rule (and discussed in section II.A.2 above), by including an attorney adjudicator's decision as a decision that may be affirmed by the Council. We also proposed 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 received no comments on these proposals, other than comments discussed in section II.A.2 above related to our general proposals to provide authority for attorney adjudicators to issue certain decisions, dismissals and remands, and 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. Accordingly, for the reasons discussed above and in the proposed rule, we are finalizing these changes to § 423.562 as proposed without modification.
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 proposed 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 of the proposed rule (and discussed in section II.A.2 above). 81 FR 43790, 43797.
Current § 423.1968 explains the scope of the requirements in subpart U. We proposed in § 423.1968 to expand the scope of subpart U to include actions by attorney adjudicators, as proposed in section II.B of the proposed rule (and discussed in section II.A.2 above). 81 FR 43790, 43797. Specifically, we proposed 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. We stated that these changes are necessary to accurately describe the scope of the revised provisions of subpart U to implement the attorney adjudicator proposal discussed in section II.B of the proposed rule and II.A.2 of this final rule above.
We received no comments on these proposals, other than comments discussed in section II.A.2 above related to our general proposals to provide authority for attorney adjudicators to issue certain decisions, dismissals and remands, and 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. Accordingly, for the reasons discussed above and in the proposed rule, we are finalizing these changes to § 423.1968 as proposed without modification.
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 of the proposed rule (and discussed in section II.A.2 of this final rule above), we proposed 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. We stated in the proposed rule that this 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. 81 FR 43790, 43797.
Provided below is a summary of the specific comment received and our response to this comment:
Comment:
We received one comment on this proposal. The commenter supported our proposal as necessary to ensure that beneficiaries' concerns were given appropriate consideration by clearly stating that there is a right to request that the Council review a case when no hearing is conducted and a decision is issued by an ALJ or attorney adjudicator.
Response:
We thank the commenter for its support. We believe the changes will help beneficiaries (and others appellants pursuant to § 405.904(b)) understand that they have the same right to appeal decisions by ALJs when no hearing is conducted, or decisions by attorney adjudicators, as they currently have to appeal decisions by an ALJ when a hearing is conducted.
After review and consideration of the comment received, for the reasons discussed above and in the proposed rule, we are finalizing these changes to § 405.904 as proposed, with the following modifications. We are removing “Administrative Law Judge (ALJ)” and “Medicare Appeals Council (Council)” from paragraph (a)(1) and adding “ALJ” and “Council” in their places, respectively, for consistency with the rest of part 405, subpart I and because the term “ALJ” is already defined in § 405.902.
d. Parties to the Initial Determinations, Redeterminations, Reconsiderations Proceedings on a Request for Hearing, and Council Review (§ 405.906)
Section 405.906 discusses parties to the appeals process and subsection (b) addresses parties to the redetermination, reconsideration, hearing and MAC. We proposed 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. 81 FR 43790, 43797.
We received no comments on this proposal, other than comments in support of our general proposals to replace references to “MAC” and “Board,” with “Council,” and to replace references to “Departmental Appeals Board” and “DAB” with “Medicare Appeals Council” and “Council,” as
discussed in section II.A.5 above. Accordingly, for the reasons discussed above and in the proposed rule, we are finalizing these changes to § 405.906 as proposed without modification.
e. Medicaid State Agencies (§ 405.908)
Section 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 proposed 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 of the proposed rule (and discussed in section II.A.2 above). 81 FR 43790, 43797-43798.
Provided below is a summary of the specific comment received and response to the comment:
Comment:
We received one comment on this proposal. The commenter supported the proposal to clarify that Medicaid State agencies that file a request for redetermination have the right to retain party status at the OMHA level regardless of whether a case is assigned to an ALJ or to an attorney adjudicator. However, the commenter asked that the term “OMHA level of review” be replaced with “and attorney adjudicator or ALJ review,” or, alternatively, that the term “OMHA level of review” be defined as the level of review that entails review by an ALJ or attorney adjudicator, and used consistently throughout the regulations. The commenter expressed concern that the term “OMHA level of review” could be confusing because the term is not currently in common use.
Response:
We thank the commenter for the recommendation. As a preliminary matter, we note that the changes proposed in § 405.908 to which the commenter is referring would revise the last sentence to read, “If a State agency files a request for redetermination, it may retain party status at the QIC, OMHA, Council, and judicial review levels.” The word “review” in this sentence is part of the term “judicial review” as described in §
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