[Federal Register Volume 59, Number 51 (Wednesday, March 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5791]
[[Page Unknown]]
[Federal Register: March 16, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 405, 417, and 473
[BPD-694-F]
RIN 0938-AE93
Medicare Program; Aggregation of Medicare Claims for
Administrative Appeals
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
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SUMMARY: Medicare beneficiaries and, under certain circumstances,
providers, physicians and other entities furnishing health care
services may appeal adverse determinations regarding certain claims for
benefits payable under part A and part B of Medicare. For
administrative appeals at the carrier or intermediary hearing level or
administrative law judge (ALJ) level and for any subsequent judicial
review, the amount remaining in dispute must meet or exceed threshold
amounts set by statute. Section 1869(b)(2) of the Social Security Act
permits claims to be aggregated to reach the ALJ hearing threshold
amounts. This final rule establishes a system of aggregation under
which individual appellants have one set of requirements for
aggregating claims and two or more appellants have a different set of
requirements for aggregating claims.
EFFECTIVE DATE: April 15, 1994.
FOR FURTHER INFORMATION CONTACT: Paul Olenick, (410) 966-4472.
SUPPLEMENTARY INFORMATION:
Background
Statutory Basis
Section 1869(b) of the Social Security Act (the Act) grants
Medicare beneficiaries who are dissatisfied with certain Medicare
determinations the right to a hearing before an administrative law
judge (ALJ) and the right to judicial review. The Social Security
Administration (SSA) makes determinations concerning entitlement to
Medicare. Other determinations concerning payment are made initially by
Medicare contractors. Fiscal intermediaries make most part A and some
part B determinations; carriers make most part B determinations. Our
regulations generally address appeals of claims arising under part A at
42 CFR part 405, subpart G, and appeals of claims under part B at 42
CFR part 405, subpart H.
Utilization and quality control peer review organizations (PROs)
also make certain types of part A and part B determinations. Section
1155 of the Act establishes beneficiary rights to hearings and judicial
review of certain Medicare issues (mostly inpatient hospital service
denials) adjudicated initially by PROs. Our regulations address this
subject at 42 CFR part 473, subpart B.
For enrollees of health maintenance organizations (HMOs),
competitive medical plans (CMPs), and health care prepayment plans
(HCPPs), the HMO, CMP or HCPP is responsible for making initial
determinations. Section 1876(c)(5)(B) of the Act establishes
beneficiary rights to ALJ hearings and judicial review of certain part
A and part B claims submitted by or on behalf of enrollees of HMOs,
CMPs or HCPPs. Our regulations address this subject at 42 CFR 417.600
to 417.638.
For the following discussion, the term ``provider'' refers to a
hospital, skilled nursing facility, home health agency, hospice program
or comprehensive outpatient rehabilitation facility that has in effect
an agreement to participate in Medicare. See section 1861(u) of the Act
and 42 CFR 400.202.
The term ``supplier'' is defined in 42 CFR 400.202 and means a
physician or other practitioner, or an entity other than a provider,
who furnishes health care services under Medicare. Although
``supplier'' encompasses physicians, our usual phraseology is
``physician or supplier.''
Under section 1879(d) of the Act, a physician or supplier who
accepted assignment or a provider of services has the same appeal
rights as that of an individual beneficiary under certain limited
circumstances when the issue in dispute involves medical necessity,
custodial care, or home health denials involving the failure to meet
homebound or intermittent skilled nursing care requirements. Moreover,
by regulation, we have provided that a physician or supplier that has
taken assignment of a Medicare claim under part B has the same appeal
rights as the beneficiary.
Under section 1842(l) of the Act, a physician who does not accept
assignment must refund to the beneficiary any amounts collected for
services found to be not reasonable and necessary. A refund is not
required if the physician did not know and could not reasonably have
been expected to know that Medicare would not pay for the services, or
if the beneficiary was appropriately informed in advance that Medicare
would not pay for the services and agreed to pay for them. With respect
to a physician who is subject to the refund requirement, our
regulations at 42 CFR 411.408 provide that if payment is denied for
unassigned claims because the services are found to be not reasonable
and necessary, the physician who does not accept assignment has the
same appeal rights as the physician who submits claims on an
assignment-related basis, as detailed in subpart H of part 405 and
subpart B of part 473. (See 55 FR 24561, June 18, 1990.)
Omnibus Budget Reconciliation Act of 1986
Before the enactment of the Omnibus Budget Reconciliation Act of
1986 (OBRA '86) (Public L. 99-509), section 1869 of the Act provided
for ALJ hearings and judicial review of claims for entitlement to
Medicare parts A and B and of disputes over claims for benefits under
part A. There was no provision for ALJ hearings or judicial review for
disputes over the amount of part B benefits, except under section 1876
of the Act pertaining to HMO, CMP and HCPP denials, and concerning
certain PRO matters as authorized by section 1155 of the Act. Instead,
as specified in section 1842(b)(3)(C) of the Act, Medicare carriers
(or, if appropriate, intermediaries) provided fair hearings on claims
for part B benefits when the amount remaining in controversy was $100
or more. (Before receiving a fair hearing, beneficiaries must receive
an initial determination and review of their claims. Carriers perform
initial determinations and reviews of claims for part B benefits in
accordance with 42 CFR part 405, subpart H.)
Section 9341 of OBRA '86 amended section 1869 of the Act to permit
hearings before ALJs and judicial review of claims for benefits under
part B. The law provided that, for a part B ALJ hearing, the amount in
controversy must be at least $500 and, for judicial review, the amount
in controversy must be at least $1000. It did not change the existing
amount in controversy requirements ($100 and $1000, respectively, under
the Medicare part A provisions and $200 and $2000, respectively, under
the PRO provisions) for ALJ hearings and judicial review.
Section 9341 of OBRA '86 further provided that in determining the
amount in controversy, the Secretary, by regulations, must permit
claims to be aggregated if the claims involve the delivery of similar
or related services to the same individual or involve common issues of
law and fact arising from services furnished to two or more
individuals. This aggregation provision applies to requests for ALJ
hearings of both part A and part B claims brought under section 1869 of
the Act.
Under OBRA '86, the right to an ALJ hearing and judicial review for
part B claims as well as the right to aggregate under section
1869(b)(2) of the Act apply to claims for items and services furnished
on or after January 1, 1987.
The Omnibus Budget Reconciliation Act of 1990
The Omnibus Budget Reconciliation Act of 1990 (OBRA '90) (Public L.
101-508) provided that the Secretary would carry out a study of the
effects of permitting the aggregation of claims that involve common
issues of law and fact furnished in the same carrier area to two or
more individuals by two or more physicians within the same 12-month
period for purposes of appeals provided for under section 1869(b)(2).
The study would be conducted in at least four carrier areas. The
Secretary would report on the results of the study and any
recommendations to the Senate Finance Committee and the Committees on
Energy and Commerce and Ways and Means of the House of Representatives
by December 31, 1992.
Aggregation Before OBRA '86
Before OBRA '86, the statute was silent on the issue of aggregating
claims to meet the threshold amounts to establish a right to part A or
part B hearings. We had, however, provided for beneficiaries to
aggregate certain part A claims in our regulations at 42 CFR 405.740
and 405.745. Our regulations at 42 CFR 405.741 also provide that the
presiding officer at the hearing (that is, the ALJ) determines whether
the $100 threshold is met. The current regulations for part A claims do
not allow a provider to aggregate claims involving more than one
beneficiary.
Before OBRA '86, we had also provided for the aggregation of part B
claims to reach the amount in controversy required for a hearing before
a carrier hearing officer. In 42 CFR 405.820(b) (redesignated as
Sec. 405.817 in this rule), we permit a beneficiary to aggregate any
and all part B claims for treatment or medical equipment or supplies
(or both) furnished to him or her. A physician or supplier may
aggregate any and all claims accepted on an assignment-related basis
for services or supplies he or she provided to one or more
beneficiaries. Each such claim must have completed all prior levels of
appeal and the request for subsequent appeal of each such claim must be
timely filed. The regulations do not address whether claims may be
aggregated together by two or more appellants to meet the minimum
amount in controversy needed for appeal.
Proposed Rule
On June 20, 1991, we published a proposed rule that described how
we would implement the OBRA '86 provision amending section 1869(b)(2)
of the Act concerning aggregation of claims (56 FR 28353). In the
absence of specific legislative history, we concluded at that time that
the OBRA '86 aggregation provision did not provide a basis for
permitting two or more appellants to aggregate their claims to meet the
threshold amount in controversy for administrative or judicial appeal.
We based our conclusion, in part, on our assessment that section 1869
of the Act in all respects applies to claims filed by individuals.
Because the OBRA '86 aggregation provision amended section 1869 of the
Act, it was our view that individual appeals alone were affected.
Therefore, we proposed that only an individual appellant could
aggregate his or her own claims to reach the jurisdictional minimums
for appeal. Moreover, in our view, the OBRA '90 provision, in which the
Congress directed the Secretary to conduct a pilot study to investigate
the effect of permitting aggregation of claims by two or more
appellants, suggested that the Congress had not yet decided to provide
for aggregation of claims by multiple appellants.
The specific statutory language of the OBRA '86 aggregation
provision directs the Secretary to issue regulations to permit
aggregation under the limited circumstances specified (that is, if the
claims involve the delivery of similar or related services to the same
individual or involve common issues of law and fact arising from
services furnished to two or more individuals) to reach the threshold
amounts in controversy for ALJ hearings. Upon initial consideration of
this provision, we believed it would be appropriate to have a uniform
aggregation policy for all levels of administrative appeal. Therefore,
we proposed to rescind our current regulations governing carrier
hearings under part B to conform them with the more narrow aggregation
rules contained in OBRA '86. We also proposed minor revisions to our
current part A aggregation rules, to make them consistent with the OBRA
'86 aggregation requirements. We devised procedural rules to be
followed for determining the amount in controversy and we described
what actions were required of individuals and providers to aggregate
claims to meet the amount in controversy threshold. We also proposed
definitions of: ``Delivery of similar or related services,''
``services,'' ``common issues of law and fact,'' ``common issues of
law,'' ``common issues of fact,'' and ``mutually exclusive bases for
appeal.''
Comments and Responses
We received comments from 21 commenters on our proposed rule. The
commenters included an intermediary/carrier association, a carrier,
seven provider associations or their legal counsel, five medical
associations or their legal counsel, five beneficiary advocacy
organizations, one PRO and one provider. Below we discuss the comments
and our responses.
Comment: A number of commenters expressed direct opposition to our
assertion that the Congress did not intend for more than one appellant
to aggregate their claims. The commenters presented various reasons why
they believed that the Congress intended to permit aggregation by
groups of individuals and providers.
Response: We reexamined our proposed aggregation policy in light of
the public comments submitted in response to the proposed rule and are
revising our position to take the comments into account. Our revised
position also takes into account a February 5, 1992, district court
decision in favor of a group of anesthesiologists who contended that
they should be able to aggregate their claims on the basis of ``common
issues of law and fact arising from services furnished to two or more
individuals'' (Moore v. Sullivan, 785 F. Supp. 44 (S.D.N.Y. 1992)).
Section 1869(b)(2) of the Act states, in pertinent part, that
``(i)n determining the amount in controversy, the Secretary, under
regulations, shall allow * * *'' claims to be aggregated under the
criteria outlined in that section (emphasis added). Thus, although the
plain wording of the statute makes it clear that the Secretary will
provide for aggregation of claims in the situations provided in the
statute, it does not limit the Secretary's authority to allow
aggregation in additional, unspecified circumstances as well. Thus, we
believe that the statute affords the Secretary considerable discretion
in devising an aggregation policy, as long as she allows aggregation in
the circumstances outlined in the statute.
Consistent with this interpretation, we have concluded that in
drafting section 1869(b)(2) of the Act, the Congress did not
necessarily mean to overhaul the current aggregation system for appeals
raised by individual beneficiaries and providers. Rather, we believe
that the Congress intended to provide an additional avenue for reaching
the amount in controversy to provide for group adjudication of issues
arising from claims that, because they involve fairly small amounts,
may never be adjudicated beyond the intermediary or carrier level.
However, in providing for this additional access to the appeals process
by two or more appellants, the Congress recognized that such appeals
would only be an efficient use of the administrative and judicial
appeals process if the underlying claims presented common issues that,
if resolved, would be decisive for all the claims included in the
appeal. Therefore, the Congress required that such appeals involve
``similar or related services'' or ``common issues of law and fact.''
As a result of our reexamination of this issue, we have decided to
permit aggregation of claims by two or more appellants at the ALJ
level. In order for two or more appellants to aggregate their claims,
the claims must involve the delivery of similar or related services to
the same individual or involve common issues of law and fact arising
from services furnished to two or more individuals. Although the
Congress expanded the part B appeals process to also include judicial
review of part B claims, the statute does not require the courts to
follow the administrative aggregation rules established by the
Secretary for determining the amount in controversy. However, the
courts may wish to use the administrative rules as a reference point
for determining the amount in controversy at the judicial level.
Therefore, we are providing in our regulations that, when a civil
action is filed, the Secretary may assert that the aggregation
provisions contained in 42 CFR part 405, subparts G and H, may be
applied to determine the amount in controversy for judicial review.
(We note that under our interpretation of section 1869(b)(2) of the
Act, two or more beneficiaries will not be able to aggregate their
claims under the criterion involving ``delivery of similar or related
services to the same individual,'' because the provision describes
services to only one individual. Moreover, two or more providers/
suppliers may avail themselves of this provision only if they are
providing similar or related services to the same patient. However,
this limitation is of little practical consequence, since, under the
first prong of the bifurcated system of aggregation we are establishing
with this regulation, an individual appellant (either a beneficiary or
a provider/supplier) may aggregate all claims relating to the same
patient without having to demonstrate that the services provided are
either similar or related.)
In order to effectuate this interpretation we are establishing one
set of requirements for aggregating claims for individual appellants
and another set of requirements for aggregating claims when two or more
appellants together seek to aggregate their claims. The system will
work as follows:
Individual Appellants
Our approach for individual part A appellants (including individual
HMO, CMP, HCPP or PRO appellants (hereafter, references to HMOs will
include CMPs and HCPPs)) will permit an individual who files an appeal
to aggregate two or more part A claims (in a specified time period),
regardless of issue, to meet the requisite jurisdictional minimum for
an ALJ hearing. Also, an individual who files a part B appeal will be
permitted to aggregate two or more part B claims (in a specified time
period), regardless of issue, to meet the jurisdictional minimums for a
carrier hearing and ALJ hearing.
This approach expands the existing aggregation policy currently
applied to part A appellants. (Existing aggregation policy for
individual part A appellants is limited to the following circumstances:
Items or services furnished to a patient of a provider arising from a
single continuous period of treatment and any series of posthospital
home health visits.) It is also consistent with the aggregation policy
currently existing for part B appellants in that it allows appellants
to aggregate two or more claims regardless of issue. (However,
consistent with the provision in the proposed rule dated June 20, 1991
(56 FR 28355), we are requiring in the final rule that, for all claims
to be aggregated, the request for appeal must be timely filed; see
Secs. 405.740(a) and 405.817(a).)
Two or More Appellants
Two or more part A appellants will be permitted to aggregate their
part A claims together (in a specified time period) to meet the
requisite jurisdictional minimum for an ALJ hearing. Similarly, two or
more part B appellants will be permitted to aggregate their part B
claims together (in a specified time period) to meet the jurisdictional
minimum for an ALJ hearing. However, two or more appellants may
aggregate their claims only if the claims involve the delivery of
similar or related services to the same individual or common issues of
law and fact arising from services furnished to two or more
individuals.
To reflect these changes, we are revising the text of
Secs. 405.740, 405.742, 405.820 (redesignated as Sec. 405.815), and
405.827 that we proposed in our June 20, 1991 rule. Sections 405.740
and 405.817 contain our procedures for determining the amount in
controversy and for aggregating claims. We are not making final
Secs. 405.742 and 405.827 that we included in the proposed rule (the
relevant contents have been incorporated elsewhere) and we are removing
current Sec. 405.741.
Comment: Because section 1869(b)(2) of the Act applies only to
aggregation for ALJ hearings, the current liberal rules for individual
appellants to aggregate claims at carrier fair hearings should be
retained.
Response: As stated in our previous response, we will permit
individual part A or part B appellants to aggregate their claims
regardless of issue to reach the minimum amounts in controversy needed
for a carrier hearing or ALJ hearing. (However, consistent with the
provision in the proposed rule dated June 20, 1991 (56 FR 28355), we
are requiring in the final rule that, for all claims to be aggregated,
the request for appeal must be timely filed; see Secs. 405.740(a) and
405.817(a).)
Although we are essentially retaining the current aggregation rules
for individual part B appellants, we are not allowing two or more
appellants to aggregate their claims together at the carrier hearing
level. Rather, we are providing in the final rule that two or more
appellants may aggregate their claims together beginning at the ALJ
hearing level. We are adopting this approach because, as noted by the
commenters, the statute does not require that proceedings conducted
under section 1842(b)(3)(C) of the Act (carrier hearings) utilize the
aggregation provisions in section 1869(b)(2) of the Act. For this
reason, we are also not making final the provision in Sec. 405.832(d)
of the proposed regulation text. That provision would have authorized
an ALJ to review a carrier hearing officer's dismissal of a hearing
request based on the section 1869(b)(2) aggregation criteria to
determine whether those criteria had been properly applied.
Comment: The definitions of ``common issues of law and fact'' and
``delivery of similar or related services'' are inconsistent with the
statute and unnecessarily restrictive and burdensome.
Response: We have reevaluated the definitions of ``common issues of
law and fact'' and ``delivery of similar or related services'' in light
of the comments received and the general lack of practical experience
in applying these criteria.
Many of the public comments received on this issue persuasively
demonstrated that the proposed definitions were too narrow to encompass
many case scenarios that present common decisional issues. For example,
one of the commenters noted that the requirement that similar services
may only be those ``with the same procedural terminology and code'' is
excessively strict. For instance, claims for echocardiography services
such as standard echocardiography (CPT 93307), doppler echocardiography
(CPT 93320) and doppler color-flow echocardiography (CPT 93321) may be
``similar or related services'' that could be aggregated under the
statute. This same commenter believed that ``common issues of law and
fact'' should be defined to permit aggregation on the basis of broad
categorical issues such as level of care, the type of action taken by
the contractor (for example, downcoding), or the involvement of one or
more physicians in the patient's care even though CPT codes, sites of
service, and diagnoses may differ. While we agree that the definition
of common issues of law and fact published in our proposed rule was
overly restrictive, we do not agree with this suggestion.
Aggregation on the basis of broad categorical issues would render
the aggregation requirements virtually meaningless in many instances.
We believe that the key concept in determining ``common issues of law
and fact'' is the materiality of the alleged common facts. For example,
a group of claims denied under section 1862(a)(1) of the Act as not
medically reasonable and necessary because a certain procedure is
considered experimental would present ``common issues of law and fact''
if the procedure had been performed for the same reason for each
patient but not if it had been performed for different purposes. A
procedure may be considered experimental for purposes of treating one
particular condition or diagnosis but not for the treatment of a second
condition or diagnosis. Facts establishing medical necessity in the
first instance would not establish medical necessity in the second
instance. Consequently, although the situation might present common
issues of law, common issues of fact would not be present.
In our view, both ``similar or related services'' and ``common
issues of law and fact'' require that the appeal present common issues,
which when resolved will have some decisional impact on the aggregated
claims. In order to further this statutory goal and rather than attempt
to anticipate every situation that would warrant aggregation, we have
decided to provide more general definitions for these terms, which are
as follows: ``Delivery of similar or related services,'' with respect
to the aggregation of claims by two or more appellants to meet the
minimum amount in controversy needed for an ALJ hearing, means like or
coordinated services or items provided to the same beneficiary by the
appellants. ``Common issues of law and fact,'' with respect to the
aggregation of claims by two or more appellants to meet the minimum
amount in controversy needed for an ALJ hearing, occur when the claims
sought to be aggregated arise from a similar fact pattern material to
the reason the claims are denied and the claims are denied or reduced
for similar reasons.
This approach will provide adjudicators with more flexibility and
discretion to decide if the criteria for aggregation under section
1869(b)(2) of the Act have been met in a particular case. (Some
commenters suggested that the proposed regulations did not give
adjudicators enough discretion in applying the statutory terms.) In any
event, we intend to monitor in the future the application of these
definitions by adjudicators and we will consider providing more precise
definitions via rulemaking if experience shows this is warranted.
Comment: The procedural rules for aggregating claims, requiring
appellants to identify claims by type of item or service and to explain
the basis for the aggregation, go beyond the capacity of the average
appellant and represent an impediment to appeal.
Response: We agree that the documentation requirements should be
modified. Sections 405.742(a) and 405.827(a) of the proposed rule
imposed strict documentation requirements on an appellant seeking to
aggregate claims. For instance, we proposed to require an appellant to
identify each claim by the type of item or service, the person or
entity that furnished the item or service and the amount being
contested. Also, we proposed to require the appellant to describe why
claims are either ``similar or related'' or involve ``common issues of
law and fact.'' In light of the comments received, we are not making
final the stringent documentation requirements and are establishing the
following standard procedural requirements:
The appellant(s) must specify the claims that he or she
seeks to aggregate. The burden is clearly on the appellant in this
situation to identify the claims sought for aggregation. Otherwise, the
appellant risks having his case dismissed for failure to meet the
amount in controversy. In other words, in considering a request for
hearing or review, carrier hearing officers, ALJs and the Appeals
Council must consider claims identified by the appellant to determine
whether the requisite amount in controversy is met, but they need not
aggregate other pending cases not included in the appellant's request
for hearing. In addition, although we are not requiring that appellants
describe in their requests for hearing why the claims they seek to
aggregate involve ``similar or related services'' or ``common issues of
law and fact,'' we note that it is in the appellant's interest to
address these issues in the appeal, as well as any other aspects of the
case he or she believes were decided incorrectly.
In order for all claims to be aggregated, the request for
appeal must be timely filed with respect to all claims included in the
appeal. For example, a carrier hearing officer issues an adverse
hearing decision that is received by the beneficiary on June 5. As a
result of this decision, $300 remains in controversy. On a separate
matter, the hearing officer issues an adverse decision, which is
received by a different beneficiary on July 10. As a result of the July
decision, $400 remains in controversy. The beneficiaries believe that
their decisions involve common issues and because, individually,
neither of their cases meet the $500 minimum required for an ALJ
hearing, they seek to aggregate their claims together ($300+$400=$700)
to obtain jurisdiction before an ALJ. In this hypothetical situation, a
request for an ALJ hearing that includes these two claims may be made
no later than August 4. A request for ALJ hearing filed, for example,
on September 1, would fail because the 60-day appeal period for the
June 5 decision would have lapsed and there would only be $400
remaining in controversy. Therefore, when individual appellants seek to
aggregate their claims under Sec. 405.740(a) or Sec. 405.817(a), or
when two or more appellants seek to aggregate their claims together
under section 1869(b)(2) of the Act, they must be aware of the
appropriate timeframe for appealing to an ALJ (60 days from the
previous administrative determination) and proceed accordingly.
In order for claims to be aggregated at a carrier hearing
or an ALJ hearing, the claims must have completed all prior levels of
appeal. For example, two beneficiaries seek to aggregate their part B
claims in a request for ALJ hearing under section 1869(b)(2) of the
Act. The ALJ may aggregate only those claims for which a beneficiary or
other party has received an initial determination, a review
determination and a carrier hearing decision. This requirement is
consistent with the general rule contained throughout subparts G and H
of part 405 that appellants must complete all prior steps in the
appeals process before proceeding to the next level.
In general, an appellant may not aggregate part A and part
B claims together to meet the requisite amount in controversy for a
carrier hearing or ALJ hearing. Section 1869(b)(2) of the Act
recognizes a distinct appeals process for part A and for part B and
provides different rules for each. Part A and part B claims are
processed independently of one another and follow different appeals
processes. As such, we think it is clearly impermissible for an
appellant to aggregate part A and part B claims together.
There is one notable exception to the general rule described above.
HMO determinations may involve a combination of part A and part B
services; the part A and part B claims involved in such determinations
are not processed independently of one another. Therefore, an HMO
appellant is permitted to aggregate part A and part B claims together.
We are revising Sec. 417.630 of the regulations to provide that HMO
appellants may combine both part A and part B services in their appeals
to reach the amount in controversy. (This provision was previously
codified at Sec. 417.260(b)(4), a regulation that was obsoleted on
October 17, 1991 (56 FR 51985).)
Comment: The proposed rule implements a statutory change to section
1869 of the Act and, as such, should not apply to: (1) The separate and
distinct appeals process for HMOs under section 1876 of the Act, or (2)
the appeals process involving PRO determinations under section 1155 of
the Act.
Response: We agree with this comment to the extent that the
aggregation criteria under section 1869(b)(2) of the Act should not
apply to the HMO appeals process. For enrollees of HMOs, the HMO is
responsible for making the initial determinations. Section
1876(c)(5)(B) of the Act establishes beneficiary rights to ALJ hearings
and judicial review of certain part A and part B claims submitted by or
on behalf of HMO enrollees. HCFA regulations address this subject at 42
CFR 417.600 to 417.638.
The Congress specifically amended section 1869 of the Act to
provide for the aggregation of claims by two or more appellants in very
specific circumstances; that is, if the claims involve the delivery of
similar or related services to the same individual or common issues of
law and fact. The Congress did not similarly amend section 1876 of the
Act to provide for such aggregation in the HMO setting. Accordingly, we
do not believe that HMO appellants should be afforded the aggregation
rights specified in section 1869 of the Act. We are modifying the
regulation text in Sec. 417.630(b) to state specifically that the
aggregation provisions contained in section 1869(b)(2) do not apply to
HMO appeals.
On the other hand, we believe that the aggregation criteria under
section 1869(b)(2) of the Act should apply to the PRO appeals process.
PROs issue determinations under title XI of the Act relating to quality
of care, medical necessity and appropriateness of setting and the
appeals process for these determinations is governed by section 1155 of
the Act. The PROs also issue limitation of liability determinations
under section 1879 of the Act and the appeals process for such
determinations is governed by section 1869(b) of the Act. Given this
policy, a case decided by a PRO may involve, in essence, two separate
determinations, one for the substantive coverage issue under section
1155 of the Act and the other for the limitation of liability issue
under section 1869(b) of the Act. Having an adjudicator apply different
aggregation rules to each issue in a case would make the situation
unnecessarily complex. Therefore, we are revising the regulation to
allow multiple appellants to aggregate claims decided by PROs under the
criteria in section 1869(b)(2), regardless of whether the claim is
decided under title XI or title XVIII. However, we also note that PRO
appellants may only aggregate those claims under section 1869(b)(2)
that they have standing to appeal under the rules provided in part 473.
In the HMO regulations at 42 CFR 417.630 and in the PRO regulations
at Sec. 473.44, we are also specifying in the final rule (by cross-
reference to the appropriate provisions in part 405, subparts G and H)
that individual HMO and PRO appellants (as opposed to group appellants)
are permitted to aggregate their claims in the same manner provided to
individual appellants who appeal claims under section 1869 of the Act.
Thus, an individual appellant challenging a determination by an HMO or
a PRO may aggregate two or more claims regardless of the issues
involved. We are making these changes to provide a consistent, across-
the-board procedure for an individual appellant seeking to aggregate
his or her claims to reach the minimum amount in controversy needed for
an ALJ hearing. Because this is a liberalization of the current rules,
we do not anticipate any objections from any members of the
beneficiary/provider community concerning this policy.
Comment: Section 9341 of OBRA '86 does not provide that a carrier
hearing must always precede an ALJ hearing. Section 1842(b)(3)(C) of
the Act was amended to provide for carrier hearings when the amount in
controversy is ``at least $100, but less than $500.'' Therefore, for
amounts in controversy of $500 or more following a carrier's review
determination, a claimant should be able to appeal directly to an ALJ.
Response: As we announced in the preamble to the proposed rule (56
FR 28354 (June 20, 1991)), this rule was intended to establish criteria
for determining the amount in controversy thresholds for both Part A
and B ALJ hearings. Although we captioned Sec. 405.820 (now
redesignated Sec. 405.815) as ``Right to hearing,'' we did not intend
for this regulation to provide all of the procedural requirements
necessary to establish the right to an ALJ hearing. Those requirements
will be addressed in a separate regulation document. In the meantime,
to the extent not superseded by this or other regulations, Part B ALJ
hearings and Appeals Council review are conducted pursuant to the
procedures outlined in HCFA and SSA's Federal Register notice of June
1, 1988 (53 FR 20023).
In order to clarify the scope of Sec. 405.815, we have revised the
caption to read ``Amount in controversy for carrier hearing, ALJ
hearing and judicial review'' and have made other clarifying changes to
the regulation text. However, because, under current procedures, we
continue to require that appellants complete the carrier fair hearing
process before proceeding to an ALJ hearing, we briefly address the
commenters' concerns about the legality of this requirement.
We disagree with the commenters' conclusion concerning the
requirements of the statute. We believe that the Secretary has the
authority under the Medicare statute to require that claimants whose
claims exceed $500 complete all prior stages of the administrative
appeals process, including a carrier fair hearing, before obtaining an
ALJ hearing.
We note that the Secretary's position on this point is supported by
the decision of the U.S. Court of Appeals for the Second Circuit in
Isaacs v. Bowen, 865 F.2d 468 (2nd Cir. 1989), which considered the
effect of the statutory provision cited by the commenters. In 1987,
HCFA amended its Medicare Carriers Manual to require that a carrier
fair hearing must precede an ALJ hearing regardless of the amount in
controversy. Following this revision, the Congress held hearings
concerning the Medicare appeals process and enacted the Omnibus Budget
Reconciliation Act of 1987 (OBRA '87), Public Law 100-203, which
addressed the carrier fair hearing procedures in two respects. First,
the language of section 1842(b)(3)(C) of the Act describing the
monetary amounts for a carrier fair hearing was changed by substituting
the phrase ``less than $500'' for the phrase ``not more than $500.''
Second, the Congress authorized the General Accounting Office to
conduct a cost-effectiveness study of the Secretary's requirement for
carrier hearings before proceeding to an ALJ hearing. In light of these
provisions, which were enacted after the Congress had heard testimony
concerning HCFA's decision to require carrier hearings in all
circumstances, the Court of Appeals for the Second Circuit found that
the Congress by its actions had ratified the manual provision.
Comment: A single overpayment determination may involve a large
number of claims and several different issues. The overpayment in its
entirety should be considered as a ``common issue of law and fact'' and
therefore all claims contained therein should be aggregable.
Response: An overpayment determination made to an individual person
or entity will fall under the first prong of our bifurcated approach.
That is, an individual appellant may aggregate all appealable claims
included in a single overpayment determination regardless of the issues
involved. (However, the appellant may only aggregate those claims
included in the overpayment determination that the appellant has
standing to appeal under the rules provided in part 405, subparts G and
H, part 417 or part 473, as applicable.) Thus, the section 1869(b)(2)
criterion of ``common issues of law and fact,'' applicable to two or
more appellants who seek to aggregate their claims together, does not
apply in this situation.
Comment: Physicians in a multi-specialty group practice would be
prohibited from aggregating claims together. An exception to the
proposed rule should be made for physicians in the same group practice
whose claims are billed and paid in the name of the group.
Response: In light of the approach we are taking in the final rule,
we believe the concerns raised by the commenter no longer apply.
Physicians in a multi-specialty group practice would not be prohibited
from aggregating their claims together as long as those claims involve
``similar or related services'' or ``common issues of law and fact.''
As previously stated, the proposed rule did not permit two or more
appellants to aggregate their claims together and limited the rights of
individual appellants to aggregate their claims on the basis of
``similar or related services'' or ``common issues of law and fact.''
The final rule establishes a bifurcated system of aggregation whereby:
(1) Individual appellants may aggregate two or more claims regardless
of issue and (2) two or more appellants may aggregate their claims
together if the claims involve the delivery of similar or related
services to the same individual or involve common issues of law and
fact arising from services furnished to two or more individuals.
If a multi-specialty group of physicians: (1) Has one billing
number, (2) bills Medicare under that number, (3) uses a uniform charge
structure and (4) typically appeals as a single entity (rather than
having its physicians appeal individually), we believe that the
aggregation rules pertaining to individual appellants should apply.
Therefore, in this situation, the multi-specialty group would be able
to submit claims from two or more of its physicians in a single appeal
request (the filing time limit would have to be met for the particular
level of appeal) without having to demonstrate that the claims involve
common issues.
Comment: A non-participating physician may accept or reject
assignment on claims at his or her discretion. Because the proposed
rule permits a non-participating physician under section 1842(l) of the
Act to aggregate unassigned claims for appeal purposes, the non-
participating physician should be able to aggregate assigned claims
with his or her unassigned claims if ``common issues of law and fact''
or ``delivery of similar or related services'' are involved.
Response: We agree with this comment. The determining factor in the
situation posed is not whether a non- participating physician's claims
are assigned or unassigned, but whether the claims are appealable.
Under the first prong of our bifurcated approach, an individual
appellant may aggregate all appealable claims regardless of issue.
Therefore, a non-participating physician may aggregate assigned claims
with unassigned claims providing that he or she has standing to appeal
the claims under the rules in part 405, subpart H, part 417 or part
473, as applicable. The section 1869(b)(2) criteria of ``common issues
of law and fact'' and ``delivery of similar or related services,''
applicable to two or more appellants who seek to aggregate their claims
together, do not apply in this situation.
Comment: One commenter suggested that the regulations should afford
adjudicators more discretion to determine whether ``common issues of
law and fact'' exist based upon evidence presented by the entity
seeking a hearing.
On the other hand, another commenter believed that giving the
carrier hearing officer the power to determine the criteria for
aggregation gives too much discretion to these officials.
Response: As stated in a previous response, we have reevaluated the
definition of ``common issues of law and fact'' in light of the
comments received and the general lack of practical experience in
applying this criterion. In our view, the statute requires commonality
of law and fact so that the appeal will present common issues, which,
when resolved, will have some decisional impact on aggregated claims.
In order to further this statutory goal and rather than attempt to
anticipate every situation that would warrant aggregation, we have
decided to provide a more general definition for this term. This
approach will provide adjudicators with more flexibility and discretion
to determine if the criteria for aggregation under section 1869(b)(2)
of the Act have been met in a particular case.
The concern raised by the second commenter is no longer an issue
because carrier hearing officers will not be applying the criteria in
section 1869(b)(2) of the Act to determine whether the bases for
aggregation have been met.
Comment: If the hearing officer dismisses the request to aggregate
claims to meet the $100 requirement, then certainly the $500
requirement would not be met for a Part B ALJ appeal. A dismissal by a
carrier hearing officer should not be subject to further appeal rights.
Response: Under the proposed rule, the only issue in a carrier
hearing officer dismissal that the ALJ could review was the
applicability of the criteria in section 1869(b)(2) of the Act; that
is, ``delivery of similar or related services'' and ``common issues of
law and fact.'' In light of the approach to aggregation that we are
taking in the final rule, carrier hearing officers will not be
considering section 1869(b)(2) criteria. Therefore, we are not making
final the proposed regulation text that would have allowed ALJ review
of a carrier hearing officer's dismissal of a hearing request.
Comment: One commenter believes the requirement that ``at each
review level the filing time limit must be met for all claims to be
aggregated'' creates a chilling effect on the ability of home health
agencies (HHAs) to aggregate claims.
Response: As stated in previous responses, the proposed rule
provided for aggregation only by individual appellants and only under
the circumstances described in section 1869(b)(2) of the Act, that is,
if the claims involve the delivery of similar or related services to
the same individual or common issues of law and fact arising from
services furnished to two or more individuals. Accordingly, the
proposed rule might have significantly limited an HHA's ability to
aggregate claims. However, the final rule permits an individual
appellant, such as an HHA, to aggregate two or more claims regardless
of issue. (However, the HHA, like all appellants, may only aggregate
those claims that it has standing to appeal under the rules provided in
part 405, subparts G and H, part 417 or part 473, as applicable.) As a
result, the effect of the new bifurcated approach should be to
facilitate aggregation of claims by HHAs such that the time limits for
appeal will not be significant barriers.
Section 1869(b)(1) of the Act incorporates by reference the
provisions of section 205(b) of the Act relating to hearings under the
Medicare program. Section 205(b)(1) of the Act mandates that an
individual must request an ALJ hearing within 60 days after receipt of
the previous decision. Therefore, Part A and Part B Medicare appellants
are obliged to appeal claims within this timeframe. We believe that
allowing appellants to aggregate claims beyond this timeframe would
dilute this requirement.
Comment: Three commenters had concerns about our proposed
requirement that claims with mutually exclusive bases for appeal could
not be aggregated. One thought that this requirement could prohibit a
supplier from aggregating claims denied or only partially paid because
of carrier error; another thought that ``mutually exclusive'' means
incompatible and that our examples do not show incompatibility. The
latter commenter also thought the definition to be unclear, invalid and
unnecessary because of our definition of ``common issues of law.'' The
third commenter thought the requirement should be relaxed if not
eliminated and that at the very least physicians should not be
prohibited from appealing claims denied for more than one reason.
Response: We agree with the commenters that the definition for
``mutually exclusive bases for appeal'' is overly restrictive and
difficult to apply. Upon further review, we have decided to eliminate
this term to provide more flexibility to an ALJ in applying the
criteria for multiple appellant aggregation under section 1869(b)(2) of
the Act.
Comment: The proposed rule sets forth a definition of ``delivery of
similar or related services'' to mean, among other things, services
provided to a single beneficiary during the same continuous course of
treatment or continuous period of medical care. One commenter believes
we should develop more precise definitions of ``continuous course of
treatment'' and ``continuous period of medical care'' to avoid
inconsistent carrier application of the aggregation rule.
Response: In light of the comments received questioning the
definition of ``delivery of similar or related services'' and our lack
of practical experience in applying it (and other terms), we have
decided to provide a more general definition for this term. This
approach will provide adjudicators with more flexibility and discretion
to decide if this criterion for aggregation by multiple appellants
under section 1869(b)(2) of the Act has been met in a particular case.
As stated previously, we intend to monitor in the future the
application of this definition by adjudicators and we will consider
providing more precise definitions via rulemaking if experience shows
this is warranted.
Comment: As recommended by the House Budget Committee in its Report
accompanying OBRA '86 (H.R. Rep. No. 727, 99th Cong., 2nd Sess., 95-96
(1986)), ALJs with specific knowledge of the Medicare program should be
assigned to review carrier hearing decisions. Also, HCFA should issue a
new set of aggregation rules to enhance physician access to appropriate
due process through fair hearings and administrative appeals.
Response: The portion of this comment that addresses who will hear
Medicare cases is beyond the scope of this regulation. With respect to
the second portion of the comment, the commenter believes that the
proposed rule places undue burdens on physicians who want to appeal
Medicare claims and suggests generally that physicians are being placed
at a disadvantage under the aggregation rules. Although we disagree
with the commenter's assessment of the proposed rule, in light of the
bifurcated approach to aggregation that we are taking in the final
rule, we believe the commenter no longer should have any concerns in
this regard. An individual physician who accepts assignment has the
same appeal rights as a beneficiary; he or she is able to aggregate two
or more assigned claims from one or more beneficiaries without having
to demonstrate that the claims involve common issues. Moreover, two or
more physicians may aggregate their claims together to meet the minimum
amount needed for appeal if the claims involve ``common issues of law
and fact'' or, if the claims involve services to a single beneficiary,
they involve ``similar or related services.''
Comment: Section 4113 of OBRA '90 directed the Secretary to conduct
a study of the ``effects of permitting the aggregation of claims that
involve common issues of law and fact furnished * * * to two or more
individuals by two or more physicians within the same 12-month
period.'' The proposed rule stated that the study mandated by the
Congress confirms, for the present, that the Congress did not require
the Secretary to provide for aggregation by two or more appellants. One
commenter believed that the Congress had already accepted the premise
that two or more appellants could aggregate their claims together and
the study was merely a response to a proposed House bill that would
have extended the period in which claims could be aggregated from 60
days to 12 months.
Response: In the absence of specific legislative history, we took
the position in the proposed rule that the OBRA '86 aggregation
provision did not provide a basis for permitting two or more appellants
to aggregate their claims together to meet the minimum amount in
controversy needed for a particular level of appeal. It was our view
that the OBRA '90 provision, in which the Congress directed the
Secretary to conduct a pilot study to investigate the effect of
permitting aggregation by two or more appellants, suggested that the
OBRA '86 aggregation provision should apply only to individual
appellants.
As discussed previously, we have changed our position from the
proposed rule to provide for aggregation by two or more appellants
under the statutory criteria for aggregation specified in section
1869(b)(2) of the Act. The study itself has been completed and a report
is being prepared.
Comment: The proposed rule provides that a single provider may
combine claims from several different beneficiaries if common issues of
law and fact are involved. The commenter, a PRO, is concerned that this
could place an added and unnecessary burden on the PRO appeals system.
Response: As we stated in a previous response, we are applying the
section 1869(b)(2) aggregation provision to the PRO appeals process.
Therefore, two or more PRO appellants will be permitted to aggregate
their appealable claims together on the basis of ``similar or related
services'' or ``common issues of law and fact.'' However, any
aggregation under section 1869(b)(2) will take place in connection with
a request for an ALJ hearing or judicial review and, consequently,
should not result in any significant burden on PROs.
In the final rule we are expanding the aggregation rights for
individual appellants under part A. As a result, an individual provider
appellant would be able to aggregate two or more claims of one or more
beneficiaries. However, it has been our experience that the amount in
controversy ($200) for an ALJ hearing has not been a particular
obstacle in PRO appeals even when a single claim is being adjudicated.
Comment: One commenter noted that the proposed rule did not address
whether claims of several different beneficiaries, each meeting the
minimum amount in controversy needed for appeal, could be consolidated
into a single hearing for reasons of economy and efficiency.
Response: This comment is beyond the announced scope of this
regulation. In the second full paragraph on p. 28357 of the preamble to
the proposed rule, we state that ``We emphasize that the purpose of
these regulations is to provide criteria for aggregation of claims in
order to meet the amount in controversy requirements (that is, the
jurisdictional threshold) for appealing Medicare claims. These rules
are not meant to address procedures (or alter existing provisions)
concerning the conduct of hearings once the required amount in
controversy is established or to address the discretion of the
presiding officer to join claims in a single hearing for administrative
purposes'' (emphasis supplied).
Summary of Revisions
Below we describe changes we are making, as discussed above in the
responses to comments, to both the regulations as they currently appear
in the Code of Federal Regulations and to the rules we proposed on June
20, 1991.
A. Definitions (Secs. 405.701 and 405.802)
1. We are adding a definition of ``appellant'', to designate the
beneficiary, provider or other person or entity appealing a
determination of benefits under part A (Sec. 405.701) or part B
(Sec. 405.802), to facilitate the implementation of our bifurcated
system of aggregation by providing a single, consistent term
identifying the person or entity that has filed the appeal in a part A
or part B claim. The term merely identifies the individual that filed
the appeal; designation as an ``appellant'' does not convey the right
to appeal the issue in question.
2. We are not making final the proposed definitions of ``common
issues of * * * fact'' and ``common issues of law'' because they are
overly restrictive and difficult to apply. We are revising the proposed
definition of ``common issues of law and fact'' to provide a more
general application of this term and to provide ALJs with more
flexibility in applying this criterion for aggregation.
3. We are revising the proposed definition of ``delivery of similar
or related services'' to provide a more general application of this
term and to provide ALJs with more flexibility in applying this
criterion for aggregation.
4. We are not making final the proposed definition of ``mutually
exclusive bases of appeal'' because it is overly restrictive and
difficult to apply.
5. We are not making final the proposed definition of ``services''
because we believe that the definition of services in Sec. 400.202 is
sufficient.
B. Principles for Determining the Amount in Controversy (Sec. 405.740)
We are modifying the proposed principles for determining the amount
in controversy and revising the current rules to say specifically that
two or more appellants may aggregate their claims together to meet the
amount in controversy requirements if the claims at issue are appealed
on time and involve common issues of law and fact. Further, two or more
providers may aggregate their claims together if the claims involve the
delivery of similar or related services to the same individual. We are
also providing that individual appellants may aggregate their claims
without having to demonstrate that the claims involve common issues.
C. Determinations of Amount in Controversy (Sec. 405.741)
We are not making final the proposed section. The proposed
provisions are no longer relevant because of our revised policy, and we
have incorporated the current provision--that the presiding officer
will determine whether the amount in controversy is $100 or more--into
Sec. 405.740.
D. Procedural Rules for Aggregating Claims (Proposed Sec. 405.742)
This section is not included in the final rule as the now relevant
portions are in Sec. 405.740. The provision at proposed
Sec. 405.742(c), which would have required a reconsideration by the
appropriate entity before a hearing, is not included because the
concept is repeated elsewhere in the subpart.
E. Definitions (Sec. 405.802)
1. We are adding the definition of ``appellant'' for the reasons
explained above under the discussion of Sec. 405.701.
2. The definition of ``carrier'' is revised to include
intermediaries authorized to make determinations with respect to part B
provider services, obviating our need to add the phrase
``intermediaries where appropriate'' everywhere we proposed.
F. Notice of Review Determination and Effect of Review Determination
(Secs. 405.811 and 405.812)
We are revising these sections to update the cross-references. We
are also specifying that the hearing referred to is a carrier hearing
and changing the tense of the sentences to present tense in accordance
with our current style.
G. Amount in Controversy for Carrier Hearing, ALJ Hearing and Judicial
Review (Proposed Sec. 405.820)
We are revising the proposed Sec. 405.820 by redesignating it as
Sec. 405.815, changing its heading, and moving the contents of
paragraphs (b) and (d) with appropriate changes to Secs. 405.820 and
405.821, respectively. Paragraph (c) of the current Sec. 405.820 will
be Sec. 405.821(b).
H. Principles for Determining the Amount in Controversy (Sec. 405.817)
We are adding this new section. It contains, as does Sec. 405.740,
our procedures and policies for determining the amount in controversy
and for aggregating claims. Most of this section was derived from
proposed Sec. 405.827, which is not included in this final rule.
I. Request for a Carrier Hearing (Sec. 405.821)
We are revising the current contents of this section to include
those portions of proposed Sec. 405.827 that remain relevant; that is,
Sec. 405.827 (c) and (d).
J. Procedural Rules for Aggregating Claims (Proposed Sec. 405.827)
We are not including this section in the final rule as we have
revised our policy and placed that policy as well as unrevised
procedures in other sections, as explained above. Paragraph (d),
concerning exhaustion of administrative remedies, is covered elsewhere
in the subpart.
K. Dismissal of Request for Carrier Hearing (Sec. 405.832)
We are not revising paragraph (d) as proposed because carrier
hearing officers will not be making determinations concerning
aggregation on the basis of ``delivery of similar or related services
or ``common issues of law and fact.''
L. Right to a Hearing (Sec. 417.630)
We are revising the cross-references in this section because of
changes in this final rule. We are also adding a provision that members
of HMOs who are appellants may combine both part A and part B services
in their appeals. We are also specifying in a new paragraph (b) that
the criteria for aggregating claims under section 1869(b)(2) of the Act
do not apply to appeals under part 417.
M. Determining the Amount in Controversy (Sec. 473.44)
We are updating cross-references in this section. We are also
specifying that the criteria for aggregating claims under section
1869(b)(2) of the Act, as implemented at Secs. 405.740(b) and
405.817(b), apply to appeals under part 473.
N. We Are Revising the Headings of the Following Sections To Include
the Word ``Carrier''
Secs. 405.822, 405.823, 405.824, 405.825, 405.830, 405.831,
405.832, 405.833, 405.834, 405.835, 405.841 and 405.860.
Paperwork Burden
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 1980 (44 U.S.C. 3501 et seq.).
Regulatory Impact Statement
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a final rule will not
have a significant economic impact on a substantial number of small
entities. For purposes of the RFA, all physicians, providers, and
suppliers are considered to be small entities. Individuals and States
are not included in the definition of a small entity.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis if a final rule may have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 604
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 50 beds.
This final rule establishes in Medicare regulations an approach for
aggregating Medicare claims by two or more appellants to obtain the
right to an ALJ hearing. It also provides easier access to the appeals
process for an individual part A appellant, by providing these
individuals with essentially the same aggregation rights that an
individual part B appellant now has.
We believe that the system for aggregating claims by two or more
appellants will provide for easier access to hearings but we do not
expect it to be widely used. This is because an individual appellant
(who is permitted to combine claims without having to demonstrate a
basis for the aggregation) should usually be able to meet the
appropriate jurisdictional thresholds on his or her own behalf without
having to combine the claims of other appellants. We also believe that
individuals concerned with privacy of their records or proceedings, or
individuals not inclined to locate other potential appellants might
choose not to avail themselves of this opportunity. For whatever
reasons, only a few requests for hearing involving the aggregation of
claims by multiple appellants have been submitted in response to the
decision in Moore vs. Sullivan. Nor do we expect that the changes to
the aggregation rules for individual part A appellants will
significantly increase the volume of part A hearings. The Secretary
certifies that this final rule will not result in a significant
economic impact on a substantial number of small entities and will not
have a significant impact on the operations of a substantial number of
small rural hospitals. This regulation was reviewed by the Office of
Management and Budget.
List of Subjects
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
maintenance organizations (HMO), Health professions, Kidney diseases,
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural
areas, X-rays.
42 CFR Part 417
Administrative practice and procedure, Grant programs--health,
Health care, Health facilities, Health insurance, Health maintenance
organizations (HMO), Loan programs--health, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 473
Administrative practice and procedure, Health care, Health
professions, Peer Review Organizations (PRO), Reporting and
recordkeeping requirements.
42 CFR chapter IV is amended as follows:
A. Part 405 is amended as set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
1. Subpart G is amended as follows:
Subpart G--Reconsiderations and Appeals Under Medicare Part A
a. The authority citation for subpart G is revised to read as
follows:
Authority: Secs. 1102, 1151, 1154, 1155, 1869(b), 1871, 1872,
and 1879 of the Social Security Act (42 U.S.C. 1302, 1320c, 1320c-3,
1320c-4, 1395ff(b), 1395hh, 1395ii and 1395pp).
b. In Sec. 405.701, the section heading is revised and a new
paragraph (d) is added to read as follows:
Sec. 405.701 Basis, purpose and definitions.
* * * * *
(d) Definitions. As used in subpart G of this part, the term--
Appellant designates the beneficiary, provider or other person or
entity that has filed an appeal concerning a particular determination
of benefits under Medicare part A. Designation as an appellant does not
in itself convey standing to appeal the determination in question.
Common issues of law and fact, with respect to the aggregation of
claims by two or more appellants to meet the minimum amount in
controversy needed for a hearing, occurs when the claims sought to be
aggregated are denied or reduced for similar reasons and arise from a
similar fact pattern material to the reason the claims are denied.
Delivery of similar or related services, with respect to the
aggregation of claims by two or more provider appellants to meet the
minimum amount in controversy needed for a hearing, means like or
coordinated services or items provided to the same beneficiary by the
appellants.
c. Section 405.740 is revised to read as follows:
Sec. 405.740 Principles for determining the amount in controversy.
(a) Individual appellants. For the purpose of determining whether
an individual appellant meets the minimum amount in controversy needed
for a hearing ($100), the following rules apply:
(1) The amount in controversy is computed as the actual amount
charged the individual for the items and services in question, less any
amount for which payment has been made by the intermediary and less any
deductible and coinsurance amounts applicable in the particular case.
(2) A single beneficiary may aggregate claims from two or more
providers to meet the $100 hearing threshold and a single provider may
aggregate claims for services provided to one or more beneficiaries to
meet the $100 hearing threshold.
(3) In either of the circumstances specified in paragraph (a)(2) of
this section, two or more claims may be aggregated by an individual
appellant only if the claims have previously been reconsidered and a
request for hearing has been made within 60 days after receipt of the
reconsideration determination(s).
(4) When requesting a hearing, the appellant must specify in his or
her appeal request the specific claims to be aggregated.
(b) Two or more appellants. As specified below, under section
1869(b)(2) of the Act, two or more appellants may aggregate their
claims together to meet the minimum amount in controversy needed for a
hearing ($100). The right to aggregate under this statutory provision
applies to claims for items and services furnished on or after January
1, 1987.
(1) The aggregate amount in controversy is computed as the actual
amount charged the individual(s) for the items and services in
question, less any amount for which payment has been made by the
intermediary and less any deductible and coinsurance amounts applicable
in the particular case.
(2) In determining the amount in controversy, two or more
appellants may aggregate their claims together under the following
circumstances:
(i) Two or more beneficiaries may combine claims representing
services from the same or different provider(s) if the claims involve
common issues of law and fact;
(ii) Two or more providers may combine their claims if the claims
involve the delivery of similar or related services to the same
beneficiary; or
(iii) Two or more providers may combine their claims if the claims
involve common issues of law and fact with respect to services
furnished to two or more beneficiaries.
(iv) In any of the circumstances specified in paragraphs (b)(2)(i)
through (b)(2)(iii) of this section, the claims may be aggregated only
if the claims have previously been reconsidered and a request for
hearing has been made within 60 days after receipt of the
reconsideration determination(s). Moreover, in the request for hearing,
the appellants must specify the claims that they seek to aggregate.
(c) The determination as to whether the amount in controversy is
$100 or more is made by the administrative law judge (ALJ).
(d) In determining the amount in controversy under paragraph (b) of
this section, the ALJ also makes the determination as to what
constitutes ``similar or related services'' or ``common issues of law
and fact.''
(e) When a civil action is filed by either an individual appellant
or two or more appellants, the Secretary may assert that the
aggregation principles contained in this subpart may be applied to
determine the amount in controversy for judicial review ($1000).
(f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1)
of this section, when payment is made for certain excluded services
under Sec. 411.400 of this chapter or the liability of the beneficiary
for those services is limited under Sec. 411.402 of this chapter, the
amount in controversy is computed as the amount that would have been
charged the beneficiary for the items or services in question, less any
deductible and coinsurance amounts applicable in the particular case,
had such expenses not been paid pursuant to Sec. 411.400 of this
chapter or had such liability not been limited pursuant to Sec. 411.402
of this chapter.
(g) Under this subpart, an appellant may not combine part A and
part B claims together to meet the requisite amount in controversy for
a hearing. HMO, CMP and HCPP appellants under part 417 of this chapter
may combine part A and part B claims together to meet the requisite
amounts in controversy for a hearing.
Sec. 405.741 [Removed]
d. Section 405.741 is removed.
2. Subpart H is amended as follows:
Subpart H--Appeals Under the Medicare Part B Program
a. The authority citation for subpart H is revised to read as
follows:
Authority: Secs. 1102, 1842(b)(3)(C), and 1869(b) of the Social
Security Act (42 U.S.C. 1302, 1395u(b)(3)(C), 1395ff(b)).
b. The heading for subpart H is revised as set forth above.
c. Section 405.802 is revised to read as follows:
Sec. 405.802 Definitions.
As used in subpart H of this part, the term--
Appellant designates the beneficiary, assignee or other person or
entity that has filed an appeal concerning a particular determination
of benefits under Medicare part B. Designation as an appellant does not
in itself convey standing to appeal the determination in question.
Assignee means a physician or supplier who furnishes services to a
beneficiary under Medicare part B and who has accepted a valid
assignment executed by the beneficiary.
Assignment means the transfer by the assignor of his or her claim
for payment to the assignee in return for the latter's promise not to
charge more for his or her services than the carrier finds to be the
reasonable charge or other approved amount.
Assignor means a beneficiary under Medicare part B whose physician
or supplier has taken assignment of a claim.
Carrier means an organization which has entered into a contract
with the Secretary pursuant to section 1842 of the Act and which is
authorized to make determinations with respect to part B of title XVIII
of the Act. For purposes of this subpart, the term carrier also refers
to an intermediary that has entered into a contract with the Secretary
under section 1816 of the Act and is authorized to make determinations
with respect to part B provider services, as specified in Sec. 421.5(c)
of this chapter.
Common issues of law and fact, with respect to the aggregation of
claims by two or more appellants to meet the minimum amount in
controversy needed for an ALJ hearing, occurs when the claims sought to
be aggregated are denied or reduced for similar reasons and arise from
a similar fact pattern material to the reason the claims are denied.
Delivery of similar or related services, with respect to the
aggregation of claims by two or more physician/supplier appellants to
meet the minimum amount in controversy needed for an ALJ hearing, means
like or coordinated services or items provided to the same beneficiary
by the appellants.
Representative means an individual meeting the conditions described
in Secs. 405.870 through 405.871.
d. Section 405.811 is revised to read as follows:
Sec. 405.811 Notice of review determination.
Written notice of the review determination is mailed to a party at
his or her last known address. The review determination states the
basis of the determination and advises the party of his or her right to
a carrier hearing when the amount in controversy is $100 or more as
determined in accordance with Sec. 405.817. The notice states the place
and manner of requesting a carrier hearing as well as the time limit
under which a hearing must be requested (see Sec. 405.821).
e. Section 405.812 is revised to read as follows:
Sec. 405.812 Effect of review determination.
The review determination is final and binding upon all parties to
the review unless a carrier hearing decision is issued pursuant to a
request for hearing made in accordance with Sec. 405.821 or is revised
as a result of reopening in accordance with Sec. 405.841.
f. Section 405.820 is redesignated as Sec. 405.815 and is revised
to read as follows:
Sec. 405.815 Amount in controversy for carrier hearing, ALJ hearing
and judicial review.
Any party designated in Sec. 405.822 is entitled to a carrier
hearing after a review determination has been made by the carrier if
the amount remaining in controversy is $100 or more and the party meets
the requirements of Sec. 405.821 of this subpart. To be entitled to a
hearing before an ALJ following the carrier hearing, the amount
remaining in controversy must be $500 or more, and for judicial review
following the ALJ hearing and Appeals Council Review, the amount
remaining in controversy must be $1000 or more.
g. A new Sec. 405.817 is added as follows:
Sec. 405.817 Principles for determining amount in controversy.
(a) Individual appellants. For the purpose of determining whether
an individual appellant meets the minimum amount in controversy needed
for a carrier hearing ($100) or ALJ hearing ($500), the following rules
apply:
(1) The amount in controversy is computed as the actual amount
charged the individual for the items and services in question, less any
amount for which payment has been made by the carrier and less any
deductible and coinsurance amounts applicable in the particular case.
(2) A single beneficiary may aggregate claims from two or more
physicians/suppliers to meet the $100 or $500 thresholds. A single
physician/supplier may aggregate claims from two or more beneficiaries
to meet the $100 or $500 threshold levels of appeal.
(3) In either of the circumstances specified in paragraph (a)(2) of
this section, two or more claims may be aggregated by an individual
appellant to meet the amount in controversy for a carrier hearing only
if the claims have previously been reviewed and a request for hearing
has been made within six months after the date of the review
determination(s).
(4) In either of the circumstances specified in paragraph (a)(2) of
this section, two or more claims may be aggregated by an individual
appellant to meet the amount in controversy for an ALJ hearing only if
the claims have previously been decided by a carrier hearing officer
and a request for an ALJ hearing has been made within 60 days after
receipt of the carrier hearing officer decision(s).
(5) When requesting a carrier hearing or an ALJ hearing, the
appellant must specify in his or her appeal request the specific claims
to be aggregated.
(b) Two or more appellants. As specified in this paragraph, under
section 1869(b)(2) of the Act, two or more appellants may aggregate
their claims together to meet the minimum amount in controversy needed
for an ALJ hearing ($500). The right to aggregate under this statutory
provision applies to claims for items and services furnished on or
after January 1, 1987.
(1) The aggregate amount in controversy is computed as the actual
amount charged the individual(s) for the items and services in
question, less any amount for which payment has been made by the
carrier and less any deductible and coinsurance amounts applicable in
the particular case.
(2) In determining the amount in controversy, two or more
appellants may aggregate their claims together under the following
circumstances:
(i) Two or more beneficiaries may combine claims representing
services from the same or different physician(s) or supplier(s) if the
claims involve common issues of law and fact;
(ii) Two or more physicians/suppliers may combine their claims if
the claims involve the delivery of similar or related services to the
same beneficiary;
(iii) Two or more physicians/suppliers may combine their claims if
the claims involve common issues of law and fact with respect to
services furnished to two or more beneficiaries.
(iv) In any of the circumstances specified in paragraphs (b)(2)(i)
through (b)(2)(iii) of this section, the claims may be aggregated only
if the claims have previously been decided by a carrier hearing
officer(s) and a request for ALJ hearing has been made within 60 days
after receipt of the carrier hearing officer decision(s). Moreover, in
a request for ALJ hearing, the appellants must specify the claims that
they seek to aggregate.
(c) The determination as to whether the amount in controversy is
$100 or more is made by the carrier hearing officer. The determination
as to whether the amount in controversy is $500 or more is made by the
ALJ.
(d) In determining the amount in controversy under paragraph (b) of
this section, the ALJ will also make the determination as to what
constitutes ``similar or related services'' or ``common issues of law
and fact.''
(e) When a civil action is filed by either an individual appellant
or two or more appellants, the Secretary may assert that the
aggregation principles contained in this subpart may be applied to
determine the amount in controversy for judicial review ($1000).
(f) Notwithstanding the provisions of paragraphs (a)(1) and (b)(1)
of this section, when payment is made for certain excluded services
under Sec. 411.400 of this chapter or the liability of the beneficiary
for those services is limited under Sec. 411.402 of this chapter, the
amount in controversy is computed as the amount that would have been
charged the beneficiary for the items or services in question, less any
deductible and coinsurance amounts applicable in the particular case,
had such expenses not been paid under Sec. 411.400 of this chapter or
had such liability not been limited under Sec. 411.402 of this chapter.
(g) Under this subpart, an appellant may not combine part A and
part B claims together to meet the requisite amount in controversy for
a carrier hearing or ALJ hearing. HMO, CMP and HCPP appellants under
part 417 of this chapter may combine part A and part B claims together
to meet the requisite amount in controversy for a hearing.
h. Section 405.821 is revised to read as follows:
Sec. 405.821 Request for carrier hearing.
(a) A request for a carrier hearing is any clear expression in
writing by a claimant asking for a hearing to adjudicate a claim when
not acted upon with reasonable promptness or by a party to a review
determination who states, in effect, that he or she is dissatisfied
with the carrier's review determination and wants further opportunity
to appeal the matter to the carrier.
(b) The hearing request must be filed at an office of the carrier
or at an office of SSA or HCFA.
(c) Except when a carrier hearing is held because the carrier did
not act upon a claim with reasonable promptness (see Sec. 405.801), a
party to the review determination may request a carrier hearing within
six months after the date of the notice of the review determination.
The carrier may, upon request by the party affected, extend the period
for filing the request for hearing.
Secs. 405.822, 405.823, 405.824, 405.825, 405.826, 405.830, 405.832,
405.833, 405.834, 405.835, 405.841, and 405.860 [Amended]
i. The headings of Secs. 405.822, 405.823, 405.824, 405.825,
405.826, 405.830, 405.832, 405.833, 405.834, 405.835, 405.841, and
405.860 are amended by adding the word ``carrier'' before the word
``hearing''.
B. Part 417 is amended as set forth below:
PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
PLANS, AND HEALTH CARE PREPAYMENT PLANS
1. The authority citation for part 417 continues to read as
follows:
Authority: Secs. 1102, 1833(a)(1)(A), 1861(s)(2)(H), 1871, 1874
and 1876 of the Social Security Act as amended (42 U.S.C. 1302,
1395l(a)(1)(A), 1395x(s)(2)(H), 1395hh, 1395kk, and 1395mm); section
114(c) of Public Law 97-248 (42 U.S.C. 1395mm note); section 9312(c)
of Public Law 99-509 (42 U.S.C. 1395mm note); and section 1301 of
the Public Health Service Act (42 U.S.C. 300e) and 31 U.S.C. 9701.
2. Section 417.630 is revised to read as follows:
Sec. 417.630 Right to a hearing.
(a) Any party to the reconsideration who is dissatisfied with the
reconsidered determination has a right to a hearing if the amount in
controversy is $100 or more. The amount in controversy for an
individual claimant, which can include any combination of part A and
part B services, is computed in accordance with Sec. 405.740(a) of this
chapter for part A services and Sec. 405.817(a) of this chapter for
part B services. When the basis for the appeal is the refusal of
services, the projected value of those services must be used in
computing the amount in controversy.
(b) The criteria for aggregating claims available to two or more
appellants under section 1869(b)(2) of the Act do not apply to appeals
under this part.
PART 473--RECONSIDERATIONS AND APPEALS
C. Part 473 is amended to read as follows:
1. The authority citation for part 473 continues to read as
follows:
Authority: Secs. 1102, 1154, 1155, 1866, 1871, and 1879 of the
Social Security Act (42 U.S.C. 1302, 1320c-3, 1320c-4, 1395cc,
1395hh, and 1395pp).
2. In Sec. 473.44, paragraph (a) is revised to read as follows:
Sec. 473.44 Determining the amount in controversy for a hearing.
(a) After an individual appellant has submitted a request for a
hearing, the ALJ determines the amount in controversy in accordance
with Sec. 405.740(a) of this chapter for Part A services or
Sec. 405.817(a) of this chapter for Part B services. When two or more
appellants submit a request for hearing, the ALJ determines the amount
in controversy in accordance with Sec. 405.740(b) of this chapter for
Part A services and Sec. 405.817(b) of this chapter for Part B
services.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: November 3, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: January 24, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-5791 Filed 3-15-94; 8:45 am]
BILLING CODE 4120-01-P
