Medicare Program; Medicare Appeals; Adjustment to the Amount in Controversy Threshold Amounts for Calendar Year 2009, 55847-55848 [E8-22589]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 73, Number 188 (Friday, September 26, 2008)]
[Notices]
[Pages 55847-55848]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22589]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4136-N]


Medicare Program; Medicare Appeals; Adjustment to the Amount in 
Controversy Threshold Amounts for Calendar Year 2009

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustment in the amount in 
controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) 
hearings and judicial review under the Medicare appeals process. The 
adjustment to the AIC threshold amounts will be effective for requests 
for ALJ hearings and judicial review filed on or after January 1, 2009. 
The 2009 AIC threshold amounts are $120 for ALJ hearings and $1,220 for 
judicial review.

DATES: Effective Date: This notice is effective on January 1, 2009.

FOR FURTHER INFORMATION CONTACT: Liz Hosna, (410) 786-4993.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 1869(b)(1)(E) of the Social Security Act (the Act), as 
amended by section 521 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA), established the AIC 
threshold amounts for ALJ hearing requests and judicial review at $100 
and $1000, respectively, for Medicare Part A and Part B appeals. 
Section 940 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA), amended section 1869(b)(1)(E) of the 
Act to require the AIC threshold amounts for ALJ hearings and judicial 
review to be adjusted annually. The AIC threshold amounts are to be 
adjusted, as of January 2005, by the percentage increase in the medical 
care component of the consumer price index for all urban consumers 
(U.S. city average) for July 2003 to July of the year preceding the 
year involved and rounded to the nearest multiple of $10. Section 
940(b)(2) of the MMA provided conforming amendments to apply the AIC 
adjustment requirement to Medicare Part C (Medicare Advantage ``MA'') 
appeals and certain health maintenance organization and competitive 
health plan appeals. Health care prepayment plans are also subject to 
MA appeals rules, including the AIC adjustment requirement. Section 101 
of the MMA provides for the application of the AIC adjustment 
requirement to Medicare Part D appeals.

A. Medicare Part A and Part B Appeals

    The statutory formula for the annual adjustment to the AIC 
threshold amounts for ALJ hearings and judicial review of Medicare Part 
A and Part B appeals, set forth at section 1869(b)(1)(E) of the Act, is 
included in the applicable implementing regulations, 42 CFR Part 405, 
Subpart I, at Sec.  405.1006(b). The regulations require the Secretary 
of the Department of Health and Human Services (the Secretary) to 
publish changes to the AIC threshold amounts in the Federal Register 
(Sec.  405.1006(b)(2)). In order to be entitled to a hearing before an 
ALJ, a party to a proceeding must meet the AIC requirements at Sec.  
405.1006(b). Similarly, a party must meet the AIC requirement at Sec.  
405.1006(c) at the time judicial review is requested for the court to 
have jurisdiction over the appeal (Sec.  405.1136(a)).

B. Medicare Part C (Medicare Advantage) Appeals

    Section 940(b)(2) of the MMA applies the AIC adjustment requirement 
to Part C (MA) appeals by amending section 1852(g)(5) of the Act. The 
implementing regulations for Medicare Part C appeals are found at 42 
CFR Part 422, Subpart M. Specifically, Sec.  422.600 and Sec.  422.612 
discuss the AIC threshold amounts for ALJ hearings and judicial review.
    Section 422.600 grants any party to the reconsideration, except the 
MA organization, a right to an ALJ hearing as long as the amount 
remaining in controversy after reconsideration meets the threshold 
requirement established annually by the Secretary. Section 422.612 
states that any party, including the MA organization, may request 
judicial review if the amount in controversy meets the threshold 
requirement established annually by the Secretary.

C. Health Maintenance Organizations, Competitive Medical Plans, and 
Health Care Prepayment Plans

    Section 1876(c)(5)(B) of the Act states that the annual adjustment 
to the AIC dollar amounts set forth in section 1869(b)(1)(E) of the Act 
applies to certain beneficiary appeals within the context of health 
maintenance organizations and competitive medical plans. The applicable 
implementing regulations for Medicare Part C appeals are set forth in 
42 CFR Part 422, Subpart M, and as discussed above, apply to these 
appeals. The Medicare Part C appeals rules also apply to health care 
prepayment plan appeals.

D. Medicare Part D (Prescription Drug Plan) Appeals

    The annually adjusted AIC threshold amounts for ALJ hearings and 
judicial review that apply to Medicare Parts A, B, and C appeals also 
apply to Medicare Part D appeals. Section 101 of the MMA added section 
1860D-4(h)(1) of the Act regarding Part D appeals. This statutory 
provision requires a prescription drug plan sponsor to meet the 
requirements set forth in sections 1852(g)(4) and (g)(5) of the Act, in 
a similar manner as MA organizations. As noted above, the annually 
adjusted AIC threshold requirement was added to section 1852(g)(5) of 
the Act by section 940(b)(2)(A) of the MMA. The implementing 
regulations for Medicare Part D appeals can be found at 42 CFR Part 
423, Subpart M. The regulations impart at Sec.  423.562(c) that unless 
the Part D appeals rules provide otherwise, the Part C appeals rules 
(including the annually adjusted AIC threshold amount) apply to Part D 
appeals to the extent they are appropriate. More specifically, Sec.  
423.610 and Sec.  423.630 of the Part D appeals rules discuss the AIC 
threshold amounts for ALJ hearings and judicial review. Section 
423.610(a)

[[Page 55848]]

grants a Part D enrollee, who is dissatisfied with the Independent 
Review Entity (IRE) reconsideration determination, a right to an ALJ 
hearing if the amount remaining in controversy after the IRE 
reconsideration meets the threshold amount established annually by the 
Secretary. Section 423.630(a) allows a Part D enrollee to request 
judicial review of an ALJ's decision if the AIC meets the threshold 
amount established annually by the Secretary.

II. Annual AIC Adjustments

A. AIC Adjustment Formula and AIC Adjustments

    As previously noted, section 940 of the MMA requires that the AIC 
threshold amounts be adjusted annually, beginning in January of 2005, 
by the percentage increase in the medical care component of the 
consumer price index (CPI) for all urban consumers (U.S. city average) 
for July 2003 to the July of the preceding year involved and rounded to 
the nearest multiple of $10.

B. Calendar Year 2009

    The AIC threshold amount for ALJ hearing requests will be $120 and 
the AIC threshold amount for judicial review will be $1,220 for the 
2009 calendar year. These new amounts are based on the 22.3 percent 
increase in the medical care component of the CPI from July of 2003 to 
July of 2008. The CPI level was at 297.6 in July of 2003 and rose to 
363.96 in July of 2008. This change accounted for the 22.3 percent 
increase. The AIC threshold amount for ALJ hearing requests changes to 
$122.30 based on the 22.3 percent increase. In accordance with section 
940 of the MMA, this amount is rounded to the nearest multiple of $10. 
Therefore, the 2009 AIC threshold amount for ALJ hearings is $120. The 
AIC threshold amount for judicial review changes to $1,223.00 based on 
the 22.3 percent increase. This amount was rounded to the nearest 
multiple of $10, resulting in a 2009 AIC threshold amount of $1,220.

C. Summary Table of Adjustments in the AIC Threshold Amounts

    In Table 1 below, we list the Calendar Year 2005 through 2009 
threshold amounts.

                                Table 1--Amount-in-Controversy Threshold Amounts
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                                      CY 2005         CY 2006         CY 2007         CY 2008         CY 2009
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ALJ Hearing.....................            $100            $110            $110            $120            $120
Judicial Review.................            1050            1090            1130            1180           1,220
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Key: CY = Calendar Year.

III. Collection of Information Requirements (If Applicable)

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 35).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program; 
and No. 93.774, Medicare--Supplementary Medical Insurance Program)

    Dated: September 12, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
 [FR Doc. E8-22589 Filed 9-25-08; 8:45 am]
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