81278 Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Notices 

and should be submitted to the contact 

person below in advance of the meeting. 

Contact Person for More Information: 

Theodore M. Katz, M.P.A., Executive 

Secretary, NIOSH, CDC, 1600 Clifton Road 

NE., Mailstop: E–20, Atlanta, GA 30333, 

Telephone (513) 533–6800, Toll Free 1–800– 

CDC–INFO, E-mail ocas@cdc.gov. 

The Director, Management Analysis and 

Services Office, has been delegated the 

authority to sign Federal Register notices 

pertaining to announcements of meetings and 

other committee management activities, for 

both the Centers for Disease Control and 

Prevention, and the Agency for Toxic 

Substances and Disease Registry. 

Dated: December 20, 2010. 

Lorenzo J. Falgiano, 

Acting Director, Management Analysis and 

Services Office Centers for Disease Control 

and Prevention. 

[FR Doc. 2010–32421 Filed 12–23–10; 8:45 am] 

BILLING CODE 4163–18–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–6041–NC] 

Medicare Program: Solicitation of 

Comments Regarding Development of 

a Recovery Audit Contractor Program 

for the Medicare Part C and D 

Programs 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Request for information. 

SUMMARY: This notice presents an 

approach and requests comments on the 

provision of the Patient Protection and 

Affordable Care Act (Pub. L. 111–148), 

as amended by the Health Care and 

Education Reconciliation Act of 2010 

(Pub. L. 111–152), (collectively known 

as The Affordable Care Act (ACA)) that 

requires the expansion of the Recovery 

Audit Contractor (RAC) Program to the 

Medicare Part C and D programs. 

DATES: Comment Date: To be assured 

consideration, comments must be 

received at one of the addresses 

provided below, no later than 5 p.m. on 

February 25, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–6041–NC. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–6041–NC, P.O. Box 8013, 

Baltimore, MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services 

Department of Health and Human 

Services, Attention: CMS–6041–NC, 

Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. Alternatively, 

you may deliver (by hand or courier) 

your written comments only to one of 

the following addresses prior to the 

close of the comment period: a. For 

delivery in Washington, DC—Centers 

for Medicare & Medicaid Services 

Department of Health and Human 

Services, Room 445–G, Hubert H. 

Humphrey Building, 200 Independence 

Avenue, SW., Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, call 

(410) 786–9994 in advance to schedule 

your arrival with one of our staff 

members. 

Comments erroneously mailed to the 

addresses indicated as appropriate for 

hand or courier delivery may be delayed 

and received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by following 

the instructions at the end of the 

‘‘Collection of Information 

Requirements’’ section in this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Cynthia Moreno (410) 786–1164. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http:// 

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately three weeks after 

publication of a document, at the 

headquarters of CMS, 7500 Security 

Boulevard, Baltimore, Maryland 21244, 

Monday through Friday of each week 

from 8:30 a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

The Balanced Budget Act of 1997 

(BBA) (Pub. L. 105–33) established the 

Medicare+Choice (M+C) program. 

Under section 1851(a)(1) of the Social 

Security Act (the Act), every individual 

with Medicare Parts A and B, except for 

individuals with end stage renal 

disease, could elect to receive benefits 

either through the original Medicare 

program or an M+C plan, if one was 

offered where the beneficiary lived. The 

primary goal of the M+C program was 

to provide Medicare beneficiaries with a 

wider range of health plan choices. 

The Medicare, Medicaid, and SCHIP 

Balanced Budget Refinement Act of 

1999, (Pub. L. 106–113), amended the 

M+C provisions of the BBA. Further 

amendments were made to the M+C 

program by the Medicare, Medicaid, and 

SCHIP Benefits Improvement and 

Protection Act of 2000 (Pub. L. 106– 

554), enacted December 21, 2000. 

On December 8, 2003, the Congress 

enacted the Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) (Pub. L. 108–173). Title I 

of the MMA added new sections 1860D– 

1 through 1860D–42 to the Act creating 

the Medicare Prescription Drug Benefit 

(Part D) program, a landmark change to 

the Medicare program. 

Sections 201 through 241 of Title II of 

the MMA made significant changes to 

the M+C program. As directed by Title 

II of the MMA, we renamed the M+C 

program the Medicare Advantage (MA) 

program. We also revised our 

regulations to include new payment and 

bidding provisions based largely on risk, 

to recognize the addition of regional 

Preferred Provider Organization plans, 

to address the provision of prescription 


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Federal Register / Vol. 75, No. 247 / Monday, December 27, 2010 / Notices 81279 

drug benefits under the Medicare Part D 

regulations, and to make other changes. 

The MMA, at section 1860D–12(b)(3) 

of the Act, directed that specific aspects 

of the MA contracting requirements 

apply to the prescription drug plan 

benefit program. Consequently, the 

processes for contract determinations 

and the administrative appeal rights in 

the two programs are virtually identical. 

We published the regulations 

implementing the MA and prescription 

drug benefit regulations separately, as 

proposed and final rules, though their 

development and publication were 

closely coordinated. On August 3, 2004, 

we published proposed rules for the MA 

program (69 FR 46866) and prescription 

drug benefit program (69 FR 46632). The 

final regulations implementing both 

programs, published on January 28, 

2005 (70 FR 4588 and 70 FR 4194, 

respectively), reflect this similarity. 

Section 306 of the MMA gave us 

authority to pilot a new contracting 

authority designed to detect improper 

payments. This MMA provision 

directed the Secretary to demonstrate 

the use of RACs in identifying Medicare 

fee-for-service (FFS) underpayments 

and overpayments and collecting 

Medicare overpayments. Overpayments 

and underpayments were identified 

through a careful review of individual 

Medicare claims to determine if the 

claims were medically necessary, 

correctly coded, and conformed to 

Medicare payment policy. An important 

characteristic of the RAC program is that 

RACs are paid contingency fees based 

on the overpayments collected from 

providers and for underpayments 

identified. 

The initial demonstration project ran 

from 2005 to 2008 in California, New 

York, Florida, Massachusetts, South 

Carolina, and Arizona. One of the key 

objectives of the RAC demonstration 

program was to identify improper 

payments in Medicare FFS programs 

and implement corrective actions that 

will prevent future improper payments. 

We designed the demonstration to 

accomplish two specific goals: To 

demonstrate whether RACs can identify 

past improper payments in the Medicare 

FFS program (as specified in section 306 

of the MMA); and to determine whether 

the RACs can provide information to 

CMS that could help prevent future 

improper payments. The demonstration 

proved to be successful, recovering 

$992.7 million in gross overpayments, 

as well as identifying $37.8 million in 

underpayments that were subsequently 

paid to providers. 

The demonstration results showed the 

effectiveness of a recovery auditing 

program in Medicare Part A and Part B. 

The Tax Relief and Health Care Act of 

2006 (Pub. L. 109–432) gave the 

Secretary until January 1, 2010 to 

implement the national RAC program 

nationwide. As of October 29, 2009 the 

RAC FFS Medicare program was fully 

implemented. Currently, the RACs are 

reviewing all claim and provider types 

upon approval from us. The ACA makes 

a number of changes to Medicare 

programs, including Medicare Part C 

and Part D, to enhance the agency’s 

current efforts to further reduce fraud, 

waste, and abuse in Medicare programs. 

Section 6411(b) of ACA expands the 

use of RACs to all of Medicare (Title 

XVIII) amending the existing FFS RAC 

statute at section 1893(h) of the Act. The 

amendments to 1893(h) of the Act 

provide us with general authority to 

enter into contracts with RACs to 

identify overpayments and 

underpayments and recoup 

overpayments in Medicare Part C and 

Part D. In addition to the identification 

of underpayments and overpayments 

and the recoupment of overpayments, 

section 6411 of ACA also establishes 

special rules for Part C and Part D that 

require RACs to— 

• Ensure that each MA plan and Part 

D plan has anti-fraud plans in place and 

to review the effectiveness of the antifraud plans; 

• Examine claims for reinsurance 

payments to determine whether 

prescription drug plans submitting such 

claims incurred costs in excess of the 

allowable reinsurance costs permitted 

under the statute; and 

• Review estimates submitted by 

prescription drug plans by private plans 

with respect to the enrollment of high 

cost beneficiaries (as defined by the 

Secretary) and to compare such 

estimates with the numbers of such 

beneficiaries actually enrolled by such 

plans. 

II. Proposed Approach and Solicitation 

of Comments for Section 6411 of the 

Affordable Care Act 

We want to utilize RAC overpayment 

and underpayment findings to reduce 

future improper payments in the 

Medicare Parts C and D programs. With 

that objective, we are interested in 

knowing how the RAC findings could be 

used to more accurately inform 

Medicare’s reimbursement to Part C and 

Part D plans. Our current experience for 

utilizing RACs has been limited to the 

Medicare FFS model. Given the 

fundamental differences between 

Medicare FFS and the Medicare Parts C 

and D programs and since this is the 

first time we have attempted to expand 

RACs to other parts of the Medicare 

program, we are soliciting the views of 

industry stakeholders on how to best 

implement the RAC program 

requirements established in section 

6411(b) of the ACA for the Medicare 

Part C and Part D programs. We 

recognize that the payment structure in 

the Medicare Part C and Part D 

programs is different than in Medicare 

FFS, so we want to ensure that the RACs 

are utilized in the most efficient and 

appropriate manner to return any 

identified overpayments to the Medicare 

Trust Fund. 

Based on the comments received from 

this solicitation, we may do further 

rulemaking on the development and 

implementation of requirements for 

RACs in the Part C and Part D programs. 

We are most interested in receiving 

comments on the following: 

• Methods for RACs to identify 

underpayments and overpayments in 

the Medicare Part C and Part D 

programs. 

• Utilizing a phased-in approach for 

RACs in the Medicare Part C and Part 

D programs, similar to the development 

of RACs in the Medicare FFS program. 

• The criteria or qualifications 

necessary to enable a RAC to 

knowledgeably and appropriately 

review the payments in Medicare Part C 

and Part D plans. (We note that in order 

to meet the qualifications, the Medicare 

FFS RACs must obtain the services of 

certified coders, nurses, or therapists, 

and a Contractor Medical Director.) 

• Specific conflict of interest rules 

that should apply to RACs for the 

Medicare Parts C and D programs. 

• Establishing an oversight entity for 

Medicare Part C and Part D RAC Issue 

Approval. We are considering 

establishing a review board for the Part 

C and Part D RACs. (We note that FFS 

RACs have the authority to pursue clearcut vulnerabilities that can lead to 

improper payments. However, for more 

complex vulnerabilities, a review board 

is utilized. This board decides whether 

FFS RACs can proceed with the 

proposed review.) 

• Methods for resolving 

underpayments and how payments 

related to underpayments identified by 

the RAC would be implemented in the 

Part C and Part D programs. 

• Potential for allowing Part C and 

Part D plans to use RACs within their 

own plans to identify overpayments in 

its operations. Working through us, the 

RAC contractor would come to an 

agreement with interested MA 

organizations (MAO) to conduct claims 

review. The claims review would be 

conducted on claims submitted to the 

MAO for payment to providers serving 

the MAO enrollees. The RAC would be 

paid by the MA organization on a 


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contingency fee basis and overpayments 

the MAO recoups as a result of the RAC 

activities would be retained by the 

MAO. In approaching this work, the 

RAC contractor would consider the use 

of complex and automated review of 

claims. 

• Approaches to implementing the 

following special rules provisions of 

section 6411(b) of ACA: 

++ We want to utilize RACs to ensure 

that each Part C and Part D plan has 

anti-fraud plans in place and to review 

the effectiveness of those anti-fraud 

plans. In accordance with section 

1893(h) of the ACA, the RACs for the 

Part C and Part D programs would be 

paid on a contingency basis, as in the 

Medicare FFS program. We are 

interested in the industry’s views on 

how to pay RACs on a contingency basis 

for reviewing anti-fraud plans in the 

Part C and Part D programs given there 

are no recoveries or overpayments 

resulting from a review of such plans. 

Should this contingency basis differ 

from how RACs are paid for reviewing 

Medicare FFS claims? If so, how? 

++ The statute requires that we use 

RACs to examine claims for reinsurance 

payments to determine whether Part D 

plans submitting such claims incurred 

costs in excess of the allowable 

reinsurance costs permitted under the 

statute. Under the Part D statute, Part D 

plans legitimately incur costs in excess 

of allowable reinsurance costs during 

the catastrophic phase of the benefit. In 

the catastrophic phase of the defined 

standard benefit, 80 percent of the 

negotiated price is paid by Federal 

reinsurance, 15 percent is the 

responsibility of the sponsor (and is 

incorporated into their bid for the direct 

subsidy) and 5 percent is the 

responsibility of the beneficiary. 

Prospective reinsurance payments to 

plans are based on plans’ estimates of 

reinsurance costs and, as required by 

statute, we reconcile these prospective 

reinsurance payments for sponsors with 

actual reinsurance costs. Given this 

annual reconciliation process, requiring 

RACs to review the accuracy of the 

prospective reinsurance payments is 

less likely to result in recovery of 

overpayments. 

However, we are considering having 

RACs examine the accuracy and 

completeness of sponsors’ reporting of 

Direct and Indirect Remuneration (DIR). 

The DIR information reported by plans 

includes rebates paid by pharmaceutical 

manufacturers, as well as other 

remuneration received by the plan that 

has the effect of reducing their drug 

costs, and is used as a factor in our 

payment calculations to Part D plans. 

Under-reporting of DIR by plans would 

overstate plans’ drug costs, including in 

the catastrophic phase of the benefit, 

and would result in an overpayment to 

the plan. We are interested in receiving 

comments on how RACs could be used 

to review the accuracy and 

completeness of DIR information 

provided to us by plans. 

++ The statute also requires that we 

use RACs to review estimates submitted 

by Part D plans with respect to 

enrollment of high cost beneficiaries. A 

Part D sponsor’s estimates for the 

enrollment of high cost beneficiaries 

may impact the reinsurance estimates in 

their Part D bids and thus, the 

prospective reinsurance subsidy 

payments they receive from us. 

However, given the structure of the Part 

D program that requires us to reconcile 

reinsurance subsidy payments against a 

Part D sponsor’s actual costs, requiring 

RACs to undertake this activity is less 

likely to result in recovery of any 

reinsurance overpayments. However, as 

noted previously, we are interested in 

receiving comments on how RACs 

might be used to identify overpayments 

and underpayments associated with DIR 

reporting. 

++ We are interested in learning about 

successful overpayment recoupment 

models in managed care that may 

already exist in the commercial sector 

and to what extent these models are 

applicable to Part C. Successfully 

integrating RACs into Part C presents a 

particular challenge because of how Part 

C payments are paid. Under the 

statutory payment formula, plans are 

paid on a capitated basis. Therefore, the 

plan, not the government, is at direct 

risk for any overpayments and 

underpayments made to its providers. 

We are interested in learning whether 

and how other purchasers have 

identified overpayments and 

underpayments made by capitated plans 

and to what extent savings were shared 

between the plan and the purchaser. 

• Any additional information 

concerning the development of a RAC 

program in Medicare Part C and Part D 

and how we can establish the required 

program elements to protect the 

Medicare Parts C and D programs from 

fraud, waste, and abuse. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: December 8, 2010. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

[FR Doc. 2010–32498 Filed 12–23–10; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

Office of Head Start; Statement of 

Organization, Functions, and 

Delegations of Authority 

AGENCY: Administration for Children 

and Families, HHS. 

ACTION: Notice. 

SUMMARY: Statement of Organizations, 

Functions, and Delegations of 

Authority. The Administration for 

Children and Families (ACF) has 

reorganized the Office of Head Start 

(OHS). This reorganization creates the 

Grants and Contracts Division and the 

State Initiatives Division. It renames the 

Educational Development and 

Partnership Division, titling it the 

Education and Comprehensive Services 

Division. It also renames the Immediate 

Office of Head Start, the Office of the 

Director. Additionally, it renames the 

Policy and Budget Division, the Policy 

and Planning Division. 

FOR FURTHER INFORMATION CONTACT: 

Yvette Sanchez-Fuentes, Office of the 

Director, Office of Head Start, 1250 

Maryland Avenue, SW., Washington, 

DC 20024, 202–205–8573. 

This notice amends Part K of the 

Statement of Organization, Functions, 

and Delegations of Authority of the 

Department of Health and Human 

Services (HHS), Administration for 

Children and Families (ACF) as follows: 

Chapter KU, Office of Head Start (OHS), 

as last amended 71 FR 59117–59123, 

October 6, 2006. 

I. Under Chapter, KU, Office of Head 

Start, delete KU in its entirety and 

replace with the following: 

KU.00 MISSION. The Office of Head 

Start (OHS) advises the Assistant 

Secretary for Children and Families on 

issues regarding the Head Start program 

(including Early Head Start). OHS 

develops legislative and budgetary 

proposals; identifies areas for research, 

demonstration and developmental 

activities; presents operational planning 

objectives and initiatives relating to 

Head Start and Early Head Start to the 

Assistant Secretary; and oversees the 

progress of approved activities. It 

provides leadership and coordination 

for the activities of the Head Start 

program in the ACF Central Office 

including the Head Start Regional 

Program Units. OHS represents Head 

Start in inter-agency activities with 

other Federal and non-Federal 

organizations. 

KU.10 ORGANIZATION. OHS is 

headed by a director who reports 


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