.From: Cohen, Irv [icohen@fulbright.com] Sent: Wednesday, July 28, 2004 3:52 PM To: FDADOCKETS@OC.FDA.GOV Subject: Comments - Docket No. 2004S-0270 Comments on Report to Congress Entitled "Plan for Transfer of Responsibility for Medicare Appeals" - Docket No. 2004S-0270s -------------------------------------------------------------------------------- July 28, 2004 BY ELECTRONIC MAIL Secretary U.S. Department of Health & Human Services 330 Independence Avenue SW Washington, DC 20201-0002 Re: Comments on Report to Congress Entitled "Plan for Transfer of Responsibility for Medicare Appeals" - Docket No. 2004S-0270 Dear Mr. Secretary: Pursuant to your notice of June 28, 2004, these comments are being submitted on behalf of the Diabetic Product Suppliers Coalition (the “Coalition”). The Coalition is comprised of Medicare-participating, direct-to-consumer suppliers of diabetic products. They represent the major source to Medicare beneficiaries of Part B-covered diabetic products and file a huge number of claims annually with the Medicare Durable Medical Equipment Regional Carriers (the “DMERCs”). A significant number of claims are initially denied by the DMERCs, and many of the Part B appeals before administrative law judges (“ALJs”) involve diabetic supplies. Accordingly, the Coalition is very interested in the transfer of the ALJ function from the Social Security Administration (“SSA”) to the United States Department of Health and Human Services (“HHS”) and appreciates the opportunity to comment on the April 2004 report to Congress. A. tHE mma AND the Report to Congress Congress mandated that HHS should assume responsibility for ALJ appeals in section 931 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “MMA”). The ALJs are to be placed in an administrative office that is organizationally and functionally separate from the Centers for Medicare and Medicaid Services (“CMS”). The ALJs are to report to, and be under the general supervision of, the Secretary of HHS. The ALJ functions are to be transferred between July 1 and October 1, 2005. Other MMA provisions provide for expedited appeals of provider terminations and sanctions, and for modifications to procedural steps, deadlines and threshold amounts for administrative appeals. The MMA also modifies the appeals process for provider enrollment determinations. One provision in section 931 of the MMA requires the Secretary to ensure the independence of the ALJ upon the transfer of the Medicare hearings function. Section 931 of the MMA required the Secretary and the Commissioner of SSA to submit a report to Congress by April 2004 on their plan for the transfer of responsibility for Medicare appeals under section 931. That report was issued and gives an extremely optimistic timetable for implementation of the transfer. While the report addressed many of the operational issues potentially raised by the transfer of responsibility, maintaining the independence of the ALJs was barely addressed. The report merely indicates that since “SSA has a long history of maintaining independence of ALJs . . . the Secretary will consult with the Commissioner in order to adopt procedures and policies to maintain such independence upon the transfer of the Medicare hearings function.” Id. at page 12. The report also recognizes that CMS published a ruling on October 1, 2003 that established interim administrative procedures for CMS contractors, ALJs and the Departmental Appeals Board to follow these procedures were to be followed until finalization of regulations that comprehensively addressed the overall changes to the Medicare claims appeal process required by the Medicare, Medicaid, and SHCIP Benefits Improvement and Protection Act of 2000 (“BIPA”). Proposed regulations were issued by CMS on November 15, 2002 (CMS‑4004‑P, 67 Fed. Reg. 69312). Those proposed regulations included several controversial provisions regarding actual hearing procedures of the ALJ and many formal comments were submitted in response to the proposal. The proposed rule included provisions that would: 1. Limit an appellant’s right to move to a higher level of appeal when a determination was not timely made by the adjudicating entity to one time during the entire appeals process. 2. Permit CMS to enter an appeal as a party, at CMS’s discretion and to be adverse to the appellant (without any compensation for legal fees to the appellant should the appellant prevail). 3. Bind ALJs not only to law and regulations, but also to CMS and carriers policies and guidelines. 4. Limit argument and evidence before ALJs to those presented at initial levels of appeal, although most appellants are not represented by counsel at such initial levels. (Note: the MMA included a similar restriction.) It appears from the Report to Congress that the Department believes that these issues will be conclusively addressed in Medicare regulations, which CMS is finalizing. B. Issues that Need to be Addressed It is evident that the provider and beneficiary communities will have many concerns with how the transfer of the ALJ function to HHS will be accomplished and how the Secretary will ensure the independence of the ALJs upon the transfer. The Report should have addressed the following concerns: 1. Should the regulations prescribing the nature of ALJ hearings and the limits of an ALJ’s judicial discretion be promulgated as part of CMS regulations, in light of Congressional concerns regarding who should oversee the ALJs? We believe that, as part of the transfer, the Secretary of HHS, and not CMS, should determine through regulations the role of the ALJs. Deferring to CMS’s experience is in direct conflict with the intention of Congress to ensure that CMS does not limit the independence of the ALJs. It is obvious that these regulations are a direct attempt to limit the ALJs independence in their decision-making, and it is incumbent upon the Secretary to remove CMS from promulgation of these regulations as part of the transition. 2. Are the provisions of the proposed regulations consistent with Congressional intent as expressed in the MMA or the Administrative Procedures Act? We believe the Secretary should reissue proposed regulations with strong emphasis on the MMA and the Administrative Procedures Act. 3. In light of the aggressive timetable for the fully operational transition, what will happen to appeals should the timetables not be met? While we applaud the timetable goals adopted by the Secretary and the Commissioner, we strongly support adoption of a contingency plan should the timetable not be met. We are deeply concerned that if the timetables are not met, SSA will not accept appeals after the mandated transition date, and HHS will be unable to hold timely hearings. Instead of speeding up the process as Congress intended, it would slow it down to a worse level than it was before the passage of section 931 -- and that has been an unconscionably slow process. C. PUBLIC MEETING HHS has been holding public open door meetings on a variety of issues, particularly as they involve the MMA. These meetings have been very helpful in airing a broad range of concerns from all parts of the health care provider and beneficiary communities. We strongly encourage the Secretary to hold such an open door public meeting on section 931 of the MMA. The Coalition would be glad to participate in and to promote attendance at such a meeting. We again want to express our appreciation for this opportunity to comment on the report. Very truly yours, Irwin Cohen Counsel for the Diabetic Product Suppliers Coalition Irwin Cohen Fulbright & Jaworski L.L.P. 801 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2615 202-662-4679 icohen@fulbright.com IC/ams