[Federal Register Volume 69, Number 227 (Friday, November 26, 2004)]
[Rules and Regulations]
[Pages 69252-69268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26133]



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Part V





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 405 and 489



Medicare Program; Expedited Determination Procedures for Provider 
Service Terminations; Final Rule

Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405 and 489

[CMS-4004-FC]
RIN 0938-AL67


Medicare Program; Expedited Determination Procedures for Provider 
Service Terminations

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

ACTION: Final rule with comment period.

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SUMMARY: This final rule with comment period responds to comments on 
one discrete aspect of the proposed rule published in the Federal 
Register on November 15, 2002. The portion of that proposed rule 
addressed here involves the expedited determination and reconsideration 
procedures available to beneficiaries when a provider informs them of a 
decision that Medicare coverage of their provider services is about to 
end.

DATES: Effective date: This final rule with comment period is effective 
on July 1, 2005.
    Comment date: We will consider comments if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on January 
25, 2005.

ADDRESSES: In commenting, please refer to file code CMS-4004-FC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (fax) transmission. Submit electronic comments to http://www.cms.hhs.gov/regulations/ecomments or to http://www.regulations.gov. 
Mail written comments (one original and three copies) to the following 
address only: Centers for Medicare & Medicaid Services, Attention: CMS-
4004-FC, P.O. Box 8016, Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver, by hand or courier, your written 
comments (one original and two copies) to one of the following 
addresses:

Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.

(Because access to the interior 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 comments being filed.) Comments mailed to 
the addresses used for hand or courier delivery may be delayed and 
could be considered late.
    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. After the close of the comment period, CMS posts all 
electronic comments received before the close of the comment period on 
its public Web site.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Janet Miller, (410) 786-1588.

SUPPLEMENTARY INFORMATION:
    Submitting Comments: We welcome comments from the public on all 
issues set forth in this rule to assist us in fully considering issues 
and developing policies. You can assist us by referencing the file code 
CMS 4004-FC and the specific ``issue identifier'' that precedes the 
section on which you choose to comment.
    Inspection of Public Comments: Comments received timely will be 
available for public inspection as they are received, generally 
beginning approximately 3 weeks after publication of a document, at the 
headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Blvd., 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 (410) 786-7197.
    Copies: To order copies of the Federal Register containing this 
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and at many other public and academic libraries throughout the country 
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    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. The Web site address is: http://www.access.gpo.gov/nara/index.html.

I. Overview of the Statutory Changes to the Appeals Process

[If you choose to comment on issues in this section, please include the 
caption ``Overview--Statutory Changes'' at the beginning of your 
comments.]
    Section 521 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA), Public Law 106-554, 
amended section 1869 of the Social Security Act (the Act) to require 
significant changes to the Medicare appeals procedures. Among these 
changes is a new requirement under section 1869(b)(1)(F) of the Act 
that the Secretary establish a process by which a beneficiary may 
obtain an expedited determination in response to the termination of 
provider services. (Note that other aspects of the changes required 
under BIPA 2000 were discussed in detail in our November 15, 2002 
proposed rule (67 FR 69312), and will be addressed in a forthcoming 
final rule.) Currently this right to an expedited review exists only 
with respect to inpatient hospital discharges (under sections 1154 and 
1155 of the Act). Specifically, section 1869(b)(1)(F)(i) of the Act 
provides for an expedited determination process when a beneficiary 
receives notice from a provider of services that the provider plans to: 
(1) Terminate services provided to the individual and a physician 
certifies that failure to continue services is likely to place the 
beneficiary's health at significant risk; or (2) discharge the 
beneficiary from the provider of services. The statute mandates that a 
beneficiary who receives notice may request an expedited determination 
on whether these services should end. If a beneficiary is dissatisfied 
with this determination, the beneficiary may request an expedited 
reconsideration of this determination. The statute does not specify 
what entity must carry out the expedited determination process, but we 
intend to contract with the Quality Improvement Organizations (QIOs) in 
each State for this purpose. QIOs currently conduct similar expedited 
reviews for inpatient hospital discharges.
    Section 1869(c)(3)(C)(iii) of the Act sets forth the requirements 
for expedited reconsiderations. It specifies that Qualified Independent 
Contractors (QICs) conduct expedited

[[Page 69253]]

reconsiderations. This section also states that the QICs must provide 
their reconsideration decisions no later than 72 hours after receiving 
the appeal request and related medical records. The decisions must be 
provided by telephone and in writing to the provider of services, the 
beneficiary requesting the appeal, and the attending physician of the 
beneficiary. Further, the QIC must solicit the views of the beneficiary 
requesting the appeal.

II. Provisions of the Proposed Rule

[If you choose to comment on issues in this section, please include the 
caption ``Provisions of Proposed Rule'' at the beginning of your 
comments.]
    On November 15, 2002, we published a proposed rule in the Federal 
Register (67 FR 69312) that set forth proposed regulations for 
implementing the changes to the Medicare appeals process required by 
BIPA, including both new claims appeal procedures and procedures for 
expedited determinations and reconsiderations associated with provider 
discharges and terminations of services. This final rule codifies only 
those portions (Sec. Sec.  405.1200 et seq.) of the proposed rule that 
dealt with expedited determinations and reconsiderations. Thus, this 
final rule sets forth the provisions addressing the rights of a 
beneficiary who is dissatisfied with a provider termination or 
discharge to an expedited determination and reconsideration. The 
proposed rule provisions are summarized below, followed by a discussion 
of the comments we received on the proposed rule and the changes made 
based on those comments.

A. Expedited Determinations (Proposed Sec.  405.1200)

[If you choose to comment on issues in this section, please include the 
caption ``Expedited Determinations'' at the beginning of your 
comments.]
    Under Sec.  405.1200(a), we proposed that the new expedited 
determination procedures be applicable to providers listed in section 
1861(u) of the Act. We proposed under Sec.  405.1200(b) that in order 
for a beneficiary to request an expedited review, the beneficiary must 
have received notice that: (1) A provider intends to terminate services 
and a physician must certify that termination of services is likely to 
place the beneficiary's health at significant risk; or (2) the provider 
intends to discharge the beneficiary from an inpatient provider 
setting. Rather than establish a notice specifically for this purpose, 
we explained that we intended to use advance beneficiary notices (ABNs) 
to serve as the appropriate triggers for expedited determinations under 
section 1869 of the Act. We stated that we would revisit the content of 
the existing ABNs to ensure that they conformed to the requirements of 
the proposed rule. (See section III of this preamble for a discussion 
of this issue.) We proposed that if a beneficiary does not file a 
timely request for an expedited determination, the beneficiary may not 
later access this expedited review process.
    Under Sec.  405.1200(c), we identified Quality Improvement 
Organizations (QIOs) as the appropriate entities to conduct these 
expedited determinations of provider terminations. We then proposed the 
procedures a beneficiary must follow in order to make a valid request 
to a QIO. We specified that beneficiaries may make their request either 
in writing or by telephone no later than noon of the day following the 
beneficiary's receipt of the provider's notice. Beneficiaries or their 
representatives must be available to answer questions by the QIO, upon 
request.
    Proposed Sec.  405.1200(d) and (e) set forth the procedures that 
the QIO must follow when it receives a beneficiary's request for an 
expedited determination. The QIO must: (1) Notify the provider of the 
disputed services that an expedited determination request has been 
made; (2) request the medical record and if necessary, other pertinent 
records from the provider; (3) examine the requested necessary medical 
information; (4) solicit the views of the provider and the beneficiary; 
and (5) make a decision within 72 hours after receipt of the request 
for the QIO expedited review. We proposed that the provider be required 
to submit the information needed for a QIO determination no later than 
close of business on the day after the beneficiary requested an 
expedited determination. The QIO must immediately notify the 
beneficiary, physician and provider of its expedited determination, 
first by telephone and then following up with a written notice that 
would explain the decision and inform the beneficiary of his or her 
right to an expedited reconsideration.
    We proposed under Sec.  405.1200(f) that the QIO's expedited 
determination would be binding upon the beneficiary and the provider of 
the disputed services or stay, absent a beneficiary's request for a QIC 
reconsideration. Proposed Sec.  405.1200(g) discussed the financial 
liability aspects of the QIO expedited review process. We proposed that 
a provider cannot bill a beneficiary for the disputed stay or services 
until the beneficiary has received either an expedited QIO 
determination or an expedited QIC reconsideration determination, if 
requested. In this situation, if the QIO determines that the services 
or stay in dispute were medically necessary, the beneficiary is not 
responsible for the services or stay, as stipulated by the QIO. 
However, if the QIO determines that the services or stay in dispute 
were not medically necessary, the beneficiary is responsible for 
services that extend beyond the appropriate covered services or stay, 
or as otherwise stated by the QIO.

B. Expedited QIC Reconsiderations (Proposed Sec.  405.1202)

[If you choose to comment on issues in this section, please include the 
caption ``Expedited QIC Reconsiderations'' at the beginning of your 
comments.]
    Consistent with the statute, we proposed that upon receipt of an 
expedited determination from a QIO, a beneficiary who is dissatisfied 
with that determination may request an expedited QIC reconsideration. A 
beneficiary who desires an expedited QIC reconsideration must make that 
request no later than noon of the next calendar day following receipt 
of the QIO expedited determination. A beneficiary or authorized 
representative must be available to talk with the QIC about his or her 
case if the QIC solicits the beneficiary's views.
    Proposed Sec.  405.1202(c) set forth the procedures that the QIC 
must follow in conducting its expedited reconsideration. These are 
generally identical to those followed by the QIO except as noted below. 
Thus, consistent with section 1869(c)(3)(C)(iii) of the Act, we 
proposed that the QIC must make a decision within 72 hours from receipt 
of the request for an expedited reconsideration and the requested 
information. Unlike for a QIO determination, however, if a QIC does not 
render its decision 72 hours from receipt of the request and 
information, a beneficiary has the right to have the case escalated to 
an Administrative Law Judge (ALJ). Therefore, we proposed that a QIC 
must inform the beneficiary of this right, assuming that the amount 
remaining in controversy after the QIO's expedited determination was at 
least $100.
    We proposed under Sec.  405.1202(d) that the QIC's notice of its 
expedited reconsideration determination must be issued first by 
telephone and then followed up with a written notice to the 
beneficiary, provider, and physician responsible for the beneficiary's 
care. The written notice would include the detailed rationale for the 
decision, a

[[Page 69254]]

statement that explains the beneficiary's subsequent appeal rights (an 
ALJ Hearing), and the timeframe for filing for the ALJ hearing request. 
The notice should also include a statement explaining the Medicare 
payment consequences of the reconsidered determination and the 
beneficiary's date of liability. A QIC reconsideration determination is 
binding on the beneficiary, subject to an ALJ hearing if the 
beneficiary is dissatisfied with the QIC's decision.
    We proposed under Sec.  405.1200(f) that a beneficiary may not be 
billed for the disputed services or stay until that beneficiary 
receives the expedited reconsideration decision from the QIC. (As we 
discuss further below, we expect that QICs will be in place at the time 
the expedited reviews are available under these regulations. However, 
in the event QICs have not been established at the time of 
implementation, we believe it would be in the public's interest to 
provide for expedited reconsiderations through some other means. 
Therefore, if QICs are not in place at time of implementation, QIOs 
will carry out this reconsideration function as they do now for 
expedited reviews of disputed discharges from inpatient hospitals. As 
discussed below, we believe that we have the administrative authority, 
for a short period of time, to allow for a reconsideration process that 
differs slightly from that imposed under section 1869(c)(3)(C)(iii).)

C. Special Rules for Inpatient Hospital Discharges (Proposed Sec. Sec.  
405.1204 and 405.1206)

[If you choose to comment on issues in this section, please include the 
caption ``Inpatient Hospital Discharges'' at the beginning of your 
comments.]
    The proposed regulations for these sections essentially mirrored 
the longstanding existing procedures under which QIOs conduct reviews 
of disputed discharges from inpatient hospitals. We believe it is 
appropriate and convenient to consolidate the procedures for expedited 
reviews of all provider service terminations and discharges in one 
location in the regulations. The proposed provisions were drawn from 
the following sources: section 1154(e) of the Act, Sec.  412.42(c) and 
(g), Chapter 414 of the Medicare hospital manual and section 7000 et 
seq. of the QIO manual. In proposing to consolidate these provisions, 
we made no changes to the substance of existing rules for expedited 
initial determinations. We did, however, propose that when a 
beneficiary remains an inpatient in the hospital, the expedited 
reconsideration process would parallel the process for other types of 
provider discharges. See proposed 42 CFR 405.1204(g)(1). This was in 
keeping with section 1869(c)(3)(C)(iii), which would now require the 
QIC to conduct the reconsideration of hospital discharge 
determinations. We recognize that section 1155 of the Act continues to 
require QIO reconsiderations of QIO initial determinations. However, 
Congress's passage of 1869(c)(3)(C)(iii) supersedes that provision, as 
the provisions are inconsistent, and later-enacted provisions are 
generally viewed as taking precedence over earlier-enacted provisions. 
We do not believe it would be possible for both QIOs and QICs to 
simultaneously provide reconsiderations of hospital discharge 
determinations. Moreover, section 1869(c)(2) defines a QIC as an 
organization ``independent of any organization under contract with the 
Secretary that makes initial determinations [under section 
1869(a)(1)].'' We therefore believe Congress intended to provide that 
reconsiderations of hospital discharges be performed in a similar 
manner to other provider discharges, that is by the QIC.

III. Analysis of and Responses to Public Comments on the November 15, 
2002 Proposed Rule

[If you choose to comment on issues in this section, please include the 
caption ``Analysis and Response to Public Comments'' at the beginning 
of your comments.]
    We received 39 timely comments on the November 15, 2002 proposed 
rule, 6 of which addressed the expedited determination procedures. 
These commenters included representatives of provider organizations and 
beneficiary advocacy groups. These comments and our responses are 
discussed below.

A. Comments on the Expedited Determination Procedures Required by 
Section 1869 of the Act

    Comment: Several commenters questioned whether ABNs were the 
appropriate vehicle for notifying beneficiaries of their statutory 
right to an expedited determination. They stated that we would need to 
carefully review the existing ABNs to ensure that they provide clear, 
adequate notice of this right. One commenter recommended that the 
regulations include a specific requirement for providers to provide a 
written discharge or termination notice to beneficiaries before 
services end. This commenter also noted that a beneficiary should be 
entitled to an expedited determination even if he or she does not 
receive such a discharge notice. Another commenter noted that there are 
significant potential liability implications associated with tying the 
expedited determination process to the delivery of the ABN; they 
pointed out that shielding beneficiaries from liability during the 
review process would require that the ABN be issued up to 5 days before 
the scheduled termination of service.
    Response: We have carefully reexamined the proposed provisions in 
light of these comments, particularly with respect to whether existing 
ABNs are the appropriate vehicle for notifying beneficiaries of the 
right to an expedited determination when their services are about to 
end. As commenters suggested, we have conducted a thorough review of 
the existing ABNs that are used in the provider settings and how they 
would need to be revised to accommodate the statutory expedited 
determination requirements. In addition, we have taken into account the 
procedures set forth in our April 4, 2003 (67 FR 16652) final rule that 
established a similar expedited review process for Medicare Advantage 
(MA) enrollees whose provider services are about to end. The provisions 
of the April 4, 2003 final rule were the product of extended 
litigation, followed by notice and comment rulemaking, and produced a 
largely parallel expedited review process that went into effect for MA 
enrollees on January 1, 2004.
    Based on this review, we determined that extensive revisions to 
several different ABNs, and to the timing of ABN delivery, would be 
required if ABNs were to serve as the notice contemplated by the 
statute for initiating the expedited determination process. The primary 
purpose of all existing provider ABNs is to enable beneficiaries to 
make informed decisions as to whether they wish to receive continuing 
medical services when a provider believes that the services are 
unlikely to be covered by Medicare. Providers may deliver ABNs at any 
time before the planned termination of covered services. A beneficiary 
who chooses to continue receiving provider services following delivery 
of an ABN acknowledges that he or she may be financially liable for the 
services. If a beneficiary chooses to accept this potential liability 
and continue receiving the services in question, the provider submits a 
``demand bill'' to its Medicare claims contractor. Contractors then 
process demand bill claims in the same manner that they would process 
other manual claims. Also, currently ABNs are not required in every 
termination situation

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where a beneficiary may request an expedited determination (for 
example, a service termination that is in accordance with an approved 
plan of care); conversely, the existing ABN is designed to be delivered 
in some situations where expedited determinations are not available 
(such as at the outset of services). Thus, we believe that it would not 
serve the best interests of either beneficiaries or providers to 
attempt to adapt the ABN to meet both its existing purpose and the 
purposes of the expedited review process.
    Instead, we concluded that that using ABNs to implement the 
expedited determinations for original Medicare beneficiaries is 
impractical, and that, as a result, several changes are needed to the 
proposed regulations. The primary change involves the establishment of 
a requirement for a simple, standardized, largely generic notice to 
each beneficiary before a discharge or service termination. We believe 
that this termination notice will ensure that all beneficiaries know 
that Medicare coverage of their provider services is about to end and 
are aware of their associated appeal rights. In situations where a 
beneficiary chooses to exercise the right to an expedited 
determination, a detailed notice similar to the existing ABN will still 
be furnished before the termination of services. The detailed notice 
will explain how Medicare coverage rules apply in individual 
situations, address liability issues, and facilitate the expedited 
review process by providing the patient-specific information needed by 
both a beneficiary and the QIO conducting the process. Consistent with 
the MA program requirements, this two-step notification process should 
best meet the needs of the large majority of beneficiaries who need to 
know only when coverage of their services will end and what their 
appeal rights are, as well as the small minority of beneficiaries who 
want more specific information about why their services are ending.
    We believe that this approach will alleviate potential beneficiary 
and provider confusion and ensure that providers are not faced with 
unnecessary administrative burdens. All beneficiaries will receive a 
clear, simple notice of the impending end of Medicare coverage of their 
provider services and their right to an expedited review of this 
decision. Then, as under the existing ABN process, any beneficiary who 
objects to the service termination will receive a detailed notice of 
the reason for this decision before being deprived of the services in 
question. Beneficiaries will receive a binding expedited initial 
determination on the coverage of their services no later than 1 day 
after the date the services were scheduled to end. This will reduce the 
beneficiary's potential liability for any services that are denied on 
appeal.
    Section 405.1200(b) establishes the requirement for an advance 
written notice of termination of Medicare coverage of services in an 
HHA, SNF, CORF, or hospice. This section also addresses the timing of 
the notice, the required content, and the financial liability 
implications. Like in the MA context, providers will be required under 
Sec.  405.1200(b)(1) to deliver the termination notice no later than 2 
days before the proposed end of covered services. If, in a non-
residential setting, the span of time between services exceeds 2 days, 
the provider must notify the beneficiary no later than the next to last 
time services are delivered. Also consistent with the parallel MA 
regulations, we are including a cross-reference to this notification 
requirement in Sec.  489.27(b), the section of the Medicare provider 
agreement regulations that sets forth provider notification 
requirements.
    As a commenter pointed out, the only way to fully ameliorate 
financial liability concerns associated with the expedited 
determination would be to require a termination notice as much as 5 
days before services were to end, and then conduct the review process 
during the time span between the notice and the service termination. 
However, as we learned in the process of establishing the parallel MA 
process, requiring providers to furnish termination notices that far in 
advance generally is not practical from a medical decision-making 
standpoint. On the other hand, employing the existing ABN process, 
which permits ABN delivery at any time before service termination, 
would mean that the expedited determination procedures generally would 
not even begin until after services had ended. Thus, as discussed in 
detail in our April 4, 2003 final rule on expedited determinations 
under the MA program (68 FR 16655), we believe that the 2-day advance 
notice requirement strikes an appropriate balance between the realities 
of medical decision-making practices and the need to ensure that a 
beneficiary has an opportunity to an expedited determination while 
minimizing financial exposure for either the individual or the 
provider.
    Section 405.1200(b)(2) describes the required content of the 
notice. Unlike an ABN, the initial discharge notice will not include 
detailed information about Medicare coverage policies or how they 
relate to the individual's particular health needs or conditions. We 
recognize that in the vast majority of cases, beneficiaries are in 
agreement with their care providers' determinations that Medicare-
covered services should end and that the service termination is 
consistent with the plan of care; thus, a more detailed explanation of 
the underlying reasons for the termination would serve no purpose and 
impose an unnecessary burden on providers. Instead, the only patient-
specific elements of the termination notice will be the beneficiary's 
name and the date that coverage of services will end. Other required 
elements of the notice, such as a description of the beneficiary's 
right to an expedited determination and how to exercise that right, 
will constitute entirely standardized information. When a beneficiary 
does not object to the termination decision, no further notice is 
required. Again, however, if a beneficiary disputes the discharge or 
termination of services, the subsequent detailed notice will provide 
the critical, patient-specific information relevant to the individual 
coverage termination decision. We will develop both of these pre-
termination notices through the Office of Management and Budget's 
Paperwork Reduction Act Process.
    Section 405.1200(c) establishes that valid delivery of a 
termination notice requires that a beneficiary sign the notice. This 
requirement codifies longstanding policy for valid ABN delivery and is 
consistent with Sec.  422.624(c) of the parallel MA regulations. We 
note that the associated provider manual provisions for ABNs and the MA 
program permit exceptions to this rule in situations where a 
beneficiary refuses to sign a properly delivered notice, and we 
incorporate a similar policy into 405.1200(b)(4). As explained in the 
April 4, 2003 final rule with comment period (68 FR 16658), if a 
beneficiary refuses to sign the notice, the provider may annotate its 
notice to indicate the refusal, and the date of refusal is considered 
the date of receipt of the notice.
    Section 405.1200(d) explains that a provider is financially liable 
for continued services until 2 days after valid delivery of the 
termination notice or until the service termination date specified on 
the notice, whichever is later. This provision serves two purposes. 
First, it ensures that a beneficiary has at least 2 days after 
receiving a notice before he or she can be liable for additional 
services, thus limiting beneficiary liability as the expedited 
determination process plays out. In addition, it accommodates 
situations where a provider is able to

[[Page 69256]]

identify the service termination date and deliver notice more than 2 
days in advance. Under those circumstances, it is possible that the 
expedited determination process (and a subsequent discharge, if 
applicable) could take place entirely during the period between 
notification and the planned service termination date, permitting a 
beneficiary to incur no additional liability despite an unfavorable 
decision from a QIO.
    As noted above, the new process will still rely on a detailed 
notice similar to the existing ABN, but only in those instances where a 
beneficiary requests an expedited determination. The circumstances in 
which this more detailed notice will be required, and the contents of 
that notice, are set forth under Sec.  405.1202(f), ``Responsibilities 
of Providers.'' The content requirements are very similar to those of 
the existing ABN, including a specific and detailed explanation of why 
services are no longer considered reasonable and necessary or otherwise 
covered by Medicare, a description of applicable Medicare coverage 
rules, and any applicable beneficiary-specific information that is 
relevant to the coverage determination. As under the MA expedited 
review process, this notice will be furnished to both the QIO and the 
beneficiary who requested the expedited review since the QIO will need 
the information to make its determination and the beneficiary will need 
it in order to make an informed decision on whether to introduce any 
evidence into the expedited proceedings.
    Finally, as explained in the November 15, 2002 proposed rule (67 FR 
69337), we agree that if a provider fails to deliver a notice to a 
beneficiary, a beneficiary retains the right to an expedited 
determination with respect to the discharge. We have made minor changes 
to the regulation text that addresses the beneficiary's right to an 
expedited determination, to ensure that the right to a determination is 
not premised strictly on the delivery of a termination notice, although 
we anticipate that this will be the situation in most cases.
    As noted at the beginning of this final rule, the effective date 
for these new provisions is July 1, 2005. In the interim, we will 
obtain public comment on the new provider notices and work closely with 
the provider community to make sure that they are aware of their notice 
delivery obligations. We also intend to review CMS beneficiary 
education materials and conduct beneficiary outreach to inform Medicare 
beneficiaries of the right to a review. Finally, we are reviewing both 
CMS surveying protocols and QIO review protocols to identify changes 
that may be needed to facilitate effective implementation, monitoring, 
and enforcement of these requirements.
    Comment: Commenters indicated that the organization of the proposed 
provisions was confusing and asked for further clarification in the 
provisions describing notification to beneficiaries, the procedure for 
requesting a determination, and the responsibilities of providers under 
the new process.
    Response: As explained in the previous response, we have revised 
the proposed regulations to incorporate a requirement that providers 
routinely notify beneficiaries before discharging them or terminating 
covered services. This change necessitated several structural changes 
to the proposed provisions, and results in a process that is in most 
ways the same as that set forth in the April 4, 2003 final rule on 
expedited reviews of provider service terminations (68 FR 16652). Given 
these similarities, as well as the comments concerning the lack of 
clarity in the proposed rules, we have reorganized the proposed 
regulations to address these concerns. We have clarified that the rules 
in 405.1200 through 405.1204 apply only to non-hospital providers, 
since hospitals have their own special set of rules that apply to them 
through the application of section 1869(c)(3)(C)(iii)(III) of the Act, 
as well as section 1154(e). Wherever possible, we have adopted the 
wording and structure of the parallel MA regulations that describe the 
expedited review procedures (Sec. Sec.  422.624 and 422.626), unless 
there is a substantive reason to vary from those regulations.
    Thus, Sec.  405.1200 describes how and when beneficiaries must be 
notified of impending service terminations. Section 405.1202 then 
details a beneficiary's right to an expedited determination (paragraph 
(a)), how to request a determination (paragraph (b)), rules on when 
coverage of provider services ends (paragraph (c)), and on the ``burden 
of proof'' for an expedited determination (paragraph (d)), the 
procedures a QIO follows (paragraph (e)), a provider's responsibilities 
during the review process (paragraph (f)), and the billing limitation 
during the review process (paragraph (g)). We believe that this 
organizational approach, in combination with the substantive changes 
explained above, will produce a clear understanding of the procedural 
requirements associated with these provisions.
    We note that Sec.  405.1202(d), concerning the ``burden of proof'' 
during an expedited determination largely consolidates proposed 
requirements regarding the information a QIO considers in making its 
determination. For example, this section restates the proposed 
requirement (previously under proposed Sec.  405.1200(d)(2)) that a 
provider must supply the information a QIO needs to makes its 
determination, and explicitly acknowledges a beneficiary's potential 
role in the process. It is also intended to clarify that it is the 
responsibility of a provider, who has an obligation to be familiar with 
Medicare coverage rules, to explain its decision that Medicare coverage 
is no longer warranted. This is a necessary procedural rule that 
reflects the reality that a provider who intends to discharge a 
beneficiary or terminate a beneficiary's services must be able to 
establish for the record the reasoning behind the discharge or 
termination decision. The QIO will then make its determination on the 
basis of this record. This provision is not intended to limit the QIO's 
discretion in making its determination, nor does it materially change 
the provider's role. The provision does not impact the substantive 
standards for QIO review and does not imply a working assumption by a 
QIO that coverage of care must continue.
    In concert with this clarification of the QIO review process, we 
have also specified under Sec.  405.1202(e) that the deadline for the 
QIO's expedited determination is 72 hours from the receipt of the 
request for a review, rather than from the ``receipt of the request for 
an expedited determination and the requested information.'' This change 
lends a greater degree of certainty to the timing of the process and 
thus benefits both providers and beneficiaries. A QIO may delay its 
decision if it has not yet received necessary information, but the 
provider may be held financially liable for continued services 
resulting from the delay. Again, these refinements parallel the 
requirements for expedited reviews under the MA program.
    Comment: One commenter suggested that the ``timely manner'' 
requirement (that is, the provision at proposed Sec.  405.1200(b)(2) 
that prohibited use of the expedited review process absent a timely 
request for review) for beneficiary appeals be more specific. The 
commenter also recommended that additional time be available in special 
circumstances.
    Response: We agree that the provision in question (under proposed 
Sec.  405.1200(b)(2)) was unclear. As part of the changes in the 
organization of the regulation, we have eliminated the proposed 
``timely manner'' reference

[[Page 69257]]

and simply specified under Sec.  405.1202(b)(1) that a beneficiary must 
request an expedited determination by noon of the calendar day 
following receipt of the discharge notice. We believe that this 
deadline allows a beneficiary adequate time to request an expedited 
determination, given that a beneficiary need only make a telephone call 
to initiate the review process, and there are no financial or 
documentation obligations on the part of the beneficiary. The notice 
requirements set forth at Sec.  405.1200(b)(2) will ensure that that 
each beneficiary will receive a simple discharge notice that will 
contain clear, consistent information on their rights and how they may 
contact the QIO to request an expedited determination.
    We have added a provision to Sec.  405.1202(b)(1) specifying that 
if for some reason a QIO is unavailable to receive a beneficiary's 
request for an expedited determination, he or she has until noon of the 
next day the QIO is available to accept the request to submit the 
request for a review. In other situations where a beneficiary fails to 
meet the noon deadline for requesting an expedited determination, we 
will instruct QIOs, consistent with Sec.  405.1202(b)(4), to accept the 
request and notify the beneficiary and the provider of its 
determination as soon as possible following receipt of the request. 
This is similar to the process now in effect for untimely requests for 
a hospital review. However, note that the financial liability 
protections of Sec.  405.1202(g) (prohibiting billing during the 
expedited appeal process) would not apply. Finally, beneficiaries will 
retain the option of receiving services after their scheduled discharge 
date, and then accessing the standard claims appeal process for billed 
services.
    Comment: One commenter questioned whether providers would still be 
required to submit bills for appealed services. The commenter noted the 
example of a demand bill.
    Response: In general, these regulations do not affect a provider's 
responsibility to submit bills for beneficiary services, and the usual 
requirements for claim submission would continue to apply. However, a 
QIO's expedited determination constitutes a binding Medicare 
determination as to whether an individual's provider services are 
covered. Medicare contractors will be informed of the expedited QIO 
determinations in all these situations, and contractors' payment 
determinations will reflect the results of the QIO's review, absent 
very unusual circumstances (such as an eligibility error). An 
individual would retain the right to appeal the contractor's payment 
determination through the claims appeal process.
    In addition, the ``demand bill'' process will continue to be 
available for determinations that are not subject to these procedures, 
such as when a provider informs an individual before initiating 
services (through an ABN) that the provider does not believe the 
services are covered by Medicare.
    Comment: Commenters questioned which discharge situations would 
provide a beneficiary the right to appeal. Specifically, the commenter 
asked if beneficiaries could appeal if their rehabilitation was 
discontinued, even as their Part A coverage continued. Another 
commenter recommended that we clarify whether reductions in service are 
subject to the expedited determination process.
    Response: Section 1869(b)(1)(F) of the Act specifies that the right 
to expedited proceedings applies to individuals whose services are 
terminated by a provider or who are discharged from a provider of 
services. We believe it was the intent of Congress to apply these 
rights to the traditional provider service settings of SNFs, CORFs, 
HHAs, and hospice, rather than to apply these rights more broadly, such 
as to stand-alone rehabilitation services furnished by an outpatient 
department of a hospital. We note that the proposed rule erroneously 
included hospitals in the definition of the providers for which these 
expedited determination procedures would apply, although inpatient 
hospitals continue to be subject to the existing expedited review 
procedures established under section 1154(e) of the Act (and 
incorporated into BIPA under the ``Special Rule for Hospitals'' at 
section 1869(c)(3)(C)(iii)(III) of the Act), as discussed in the next 
section of this preamble.
    To clarify these points, we have revised Sec.  405.1200(a) 
regarding applicability of the expedited determination procedures to 
specify that the new notice and appeal provision apply only to SNFs, 
HHAs, CORFs, and hospices, and that they do not include reductions in 
services, as discussed below. If a beneficiary continues to receive 
Part A services in a skilled nursing facility provider, but some Part B 
services have been discontinued, we will consider this to be a 
reduction and not a termination of services.
    As discussed in the proposed rule, the BIPA requirements concerning 
provider notice and expedited determination procedures are not 
applicable to reductions in service. The statute specifically refers 
only to service termination and discharges, and we do not believe the 
authority exists to extend these provisions further. In most settings, 
care reductions are a continuing, expected, and generally positive part 
of the care delivery continuum. We believe that providing an expedited 
appeal right for service reductions would be unwieldy and 
inappropriate. However, in no way does this final rule reduce a 
beneficiary's existing appeal rights for reduction in care situations. 
For example, home health agencies will continue to provide ABNs for 
reductions in services that are not consistent with the original plan 
of care, and these types of situations will still be subject to the 
existing notice and appeal procedures.
    Comment: One commenter pointed out an inconsistency between the 
summary section of the proposed rule and the proposed regulation text. 
Specifically, the commenter noted that hospice providers were not 
included in the discussion of those providers affected by the expedited 
appeal provisions, but were included in the text of the proposed rule.
    Response: In this final rule, we have corrected the inconsistency 
regarding hospice providers. Thus, we have continued to specify under 
Sec.  405.1200(a) that hospices are considered providers for purposes 
of the expedited proceedings provisions. Although we expect situations 
where beneficiaries object to their discharge from a hospice to be 
rare, these individuals may exercise the right to an expedited 
determination. We have also clarified under Sec.  405.1202(a) that, 
like beneficiaries who request an expedited determination for 
discharges from residential providers, beneficiaries who request an 
expedited determination for hospice coverage terminations are not 
required to obtain a physician certification that failure to continue 
provision of the services will place the individual's health at 
significant risk. We believe that the all-inclusive nature of hospice 
care is generally akin to a residential setting.
    Comment: Two commenters raised questions regarding what triggers a 
beneficiary's right to an expedited determination in response to a 
provider termination or discharge. They asked for additional 
clarification in situations where services are being terminated because 
there are no physician's orders or appropriate certifications to 
continue care. One commenter suggested that ``technical'' requirements, 
such as certification of homebound status for home health patients, be 
established before the right to an expedited

[[Page 69258]]

determination can be exercised. The commenter noted that although a 
strict reading of the proposed regulations would permit an expedited 
determination without these requirements being met, allowing an 
expedited review under these circumstances raises important questions 
about the provider's authority to continue to deliver care and to be 
reimbursed for that care by the Medicare program. Another commenter 
recommended that a beneficiary be able to appeal a denied request for 
an expedited review.
    Response: These comments raise two key issues with respect to both 
the availability of the statutory right to an expedited determination 
and the appropriate remedy available to a beneficiary who exercises 
that right. Section 1869(b)(1)(F) of the Act provides only limited 
direction on these issues, specifying that the Secretary must provide 
an expedited determination at a beneficiary's written or oral request, 
providing that an individual may request an expedited determination 
when he or she has received notice that a provider plans: (1) To 
terminate services provided to an individual, and a physician certifies 
that failure to continue provision of such services is likely to place 
the individual's health at significant risk; or (2) to discharge the 
individual from the provider of services. Given this construction, we 
do not believe it was the intent of Congress to prohibit a beneficiary 
from requesting an expedited determination in situations where Medicare 
coverage requirements are not met. Thus, Sec.  405.1202(a) of this 
final rule essentially establishes that any individual whose Medicare-
covered provider services are being terminated may request an expedited 
determination.
    We generally do not intend to place restrictions on a beneficiary's 
right to request an expedited review when coverage of their provider 
services is about to end. In all termination situations where Medicare 
coverage requirements are at issue, beneficiaries must receive notice 
of the provider's decision to terminate Medicare-covered services and 
have an opportunity to dispute the decision if they so choose. The QIO 
will then have an obligation to deal with these requests in an 
appropriate manner.
    A provider cannot be reimbursed for Medicare services unless the 
customary Medicare-required elements are in place. These include both 
technical requirements (such as the existence of a physician's order 
for the services or the requirement that an HHA patient be homebound), 
as well as the medical necessity requirement that the services in 
question be reasonable and necessary for the given beneficiary under 
the given set of circumstances. Even under the existing claims appeals 
process a beneficiary typically has the right to appeal a determination 
by a contractor that the technical requirements are not in place, and 
the beneficiary may prevail in this appeal if he or she can demonstrate 
that these requirements were in fact met.
    Similarly, we believe that Congress intended that the expedited 
determination process offer beneficiaries an opportunity for an 
independent review of the provider's decision on the impending coverage 
termination. The absence of a physician's order for additional 
services, or of a plan of care establishing that a patient is confined 
to the home, cannot be used to prove that a patient does not need care. 
Instead, the provider must explain to the QIO the reasoning behind the 
lack of the Medicare-required elements.
    The QIO will consider this and other relevant information in making 
its determination, including, where applicable, the physician 
certification that failure to continue providing services may place the 
individual's health at significant risk. The QIO will be fully aware of 
the necessary ``technical'' requirements for coverage and will have the 
authority to make a determination both for these threshold coverage 
requirements and for whether continued services are reasonable and 
necessary for the individual. When a QIO determines that coverage of 
care should continue, a provider may rely on the QIO's determination as 
dispositive evidence that all needed elements of Medicare coverage are 
met and that the care will be reimbursed appropriately by Medicare. No 
matter what a QIO's decision on a case, however, an individual will 
have an opportunity to request an expedited reconsideration from a QIC.
    Comment: One commenter expressed concern about the use of 
``calendar days'' in establishing the deadline for a beneficiary to 
request an expedited determination. (see proposed Sec.  
405.1202(b)(1)). The commenter noted that beneficiaries informed of a 
service termination on a Friday or Saturday could encounter 
difficulties and would have little access to assistance to make their 
request. They asserted that using a next ``working day'' requirement 
would be more realistic for the use of QIO resources.
    Response: Our experience with deadlines tied to ``working days'' is 
that they are often interpreted differently by different entities 
involved in the appeals process and consequently tend to add ambiguity 
and uncertainty to the process. Our general regulatory approach in 
recent years has been to eliminate deadlines based on ``working days'' 
whenever possible and instead rely on a ``calendar day'' approach. We 
believe this measure provides greater clarity and reduces delays and 
potential additional liability risks generally associated with 
extending deadlines to accommodate the working day approach.
    At the same time though, we recognize that there are also problems 
associated with the use of calendar days. Although QIOs are expected to 
be available to receive requests, notify providers of the requests, and 
conduct reviews on a daily basis, providers may have difficulty in 
furnishing the necessary records on weekends. Thus, we agree that this 
is a valid concern: This is why we have tried to build as much 
flexibility as possible into these regulations to help ameliorate 
potential problems. For example, these regulations give providers the 
flexibility to notify beneficiaries of a planned termination more than 
2 days in advance, which can serve both to avoid the need for weekend 
notifications and to ensure that the ensuing parts of the expedited 
review process (such as providing documentation to QIOs) can be 
accomplished during normal working hours. We intend to work with 
provider and consumer organization representatives and with the QIOs to 
identify ways to reduce the need for a beneficiary to be given notice 
on a weekend, as well as to develop uniform procedures to deal with 
those relatively infrequent situations where this is unavoidable.
    We use ``working days'' in the context of inpatient hospital 
discharges because this standard is required by section 1154(e) of the 
Act. This section specifically uses the phrase ``working days'' when 
establishing deadlines for parties involved in expedited appeals of 
hospital discharges.
    Comment: One commenter expressed concern with the provider 
requirements for submitting medical records during an expedited appeal. 
The commenter asked whether the timeframe was realistic, and questioned 
how weekends would affect the timeframe.
    Response: Under Sec.  405.1202(f)(2), providers are required to 
submit records to the QIO by close of business of the day they are 
informed by the QIO of the beneficiary's request for an expedited 
review. Although we recognize that this is a rigorous standard, we 
believe that

[[Page 69259]]

this deadline for provider submission of necessary information is 
necessary to carry out Congressional intent for an expedited 
determination process without subjecting beneficiaries to unneeded 
liability. Therefore, in both our April 4, 2003 final rule and this 
regulation, we have revised the appeals process (by adjusting the time 
frame for records to be sent to the QIO) to ensure that the process is 
completed within 3 days of the notice of termination. The effect of 
these changes is that a Medicare beneficiary should face a maximum of 1 
day of financial liability if a QIO rules that the disputed discharge 
date is appropriate.
    We strongly encourage providers to distribute termination notices 
as early as possible (that is, as soon as the service termination date 
is known) to ameliorate difficulties associated with the need to 
furnish records promptly. Similarly, QIOs need to exercise discretion 
and good judgment in obtaining needed documentation from providers, 
and, as made explicit in the regulations, we anticipate that in some 
circumstances QIOs will rely on telephone evidence that can be followed 
up with written confirmation. Because we recognize that weekend 
discharges may cause difficulties in meeting the record submission 
deadlines, we intend to issue further guidance on this issue. Finally, 
we note that this documentation deadline is the same as the one 
established by section 1154(e) of the Act for QIO reviews of hospital 
discharges, and as the deadline established by regulation for expedited 
proceedings under the MA program (Sec.  422.626(e)).
    Comment: One commenter questioned the consequences of a provider 
not submitting requested documentation on time. The commenter 
questioned who would be responsible for payment in these instances.
    Response: As discussed above, a provider is responsible for 
submitting needed documentation to support the termination decision by 
close of business of the day following the day it is notified by the 
QIO of the request for an expedited determination. If the QIO does not 
receive the information needed to sustain a provider's decision to 
terminate services, it may make its determination based on the evidence 
available, or it may defer a decision until it receives the necessary 
information. If a provider does not fulfill this obligation, it may be 
liable for any excess continued Medicare coverage of the individual's 
provider services due to the provider's delay, as determined by the 
QIO. To address this issue, we have set forth these principles in Sec.  
405.1202(e)(7), under the procedures the QIO follows in making its 
determination.
    Comment: One commenter raised the issue of beneficiaries' access to 
their own case information. The commenter recommended that the QIO and 
provider be required to ensure that all necessary medical and social 
service information be available to beneficiaries.
    Response: In this final rule, under Sec.  405.1202(f), if a 
beneficiary requests an appeal, a provider must present a beneficiary 
with a detailed notice that will include an explanation of why services 
are no longer needed. This detailed notice will include the specific 
information from the beneficiary's situation used to make the discharge 
decision. Section 405.1202(f)(3) explicitly establishes that a 
beneficiary has the right to request a copy of the information sent by 
the provider to the QIO and that the information should be made 
available by no later than close of business of the day after the 
material is requested. We do not believe this final rule is the 
appropriate vehicle to address the availability of social service 
information to beneficiaries; these requirements are traditionally 
included in the discharge planning conditions of participation for the 
appropriate provider.
    Comment: Two commenters expressed concern about when beneficiary 
liability begins and how beneficiaries will be informed of their 
financial liability. They questioned whether QIO notification marks the 
beginning of beneficiary liability. They also suggested that 
beneficiaries be informed of financial liability through the ``initial 
determination''.
    Response: Although we are somewhat unclear as to the commenter's 
reference to an ``initial determination'' in this context, we fully 
agree that a beneficiary must be informed of potential liability as 
soon as possible. Therefore, we have required under Sec.  405.1200(b) 
that each beneficiary receive a standardized termination notice that 
specifies the date on which beneficiary liability begins. This notice 
also will inform beneficiaries that financial liability for noncovered 
care will exist in unsuccessful expedited review requests. Also, under 
Sec.  405.1202(e)(8), the QIO's notice of its determination decision 
must inform beneficiaries of the consequences of the QIO decision, such 
as the potential liability if they continue services after their 
discharge date. We believe these provisions will ensure that all 
beneficiaries are fully apprised of their potential financial liability 
before and during the expedited determination process.
    Comment: One commenter raised issue with the reimbursement rates 
for providers whose beneficiaries appeal discharges. The commenter was 
concerned that providers were at financial risk because they would be 
unable to bill beneficiaries until the expedited QIO determination was 
completed. The commenter was also concerned about providers incurring 
bad debts from unsuccessful appeals. The commenter suggested that 
payment rates to providers with bad debts resulting from unfavorable 
QIO decisions be adjusted.
    Response: Under Sec.  405.1202(g) and Sec.  405.1204(f), providers 
are precluded from billing beneficiaries for disputed services only 
during the brief expedited process. Even for expedited proceedings that 
include an expedited reconsideration, the entire decision making 
process will encompass less than one week from the originally scheduled 
discharge. Thus, we do not believe that this final rule will have a 
significant effect on providers' financial risk. If providers can 
furnish evidence of a pattern of beneficiary failure to pay money due 
after an unsuccessful expedited determination request, we will assess 
such evidence and related information to determine the appropriateness 
of proposing policy changes consistent with existing statutory 
authority or seeking legislative changes.
    We note that the preclusion on billing pending the expedited 
determination is consistent with current procedures for SNFs, under 
Sarrassat v. Sullivan, 1989 WL 208444 (N.D. Cal. 1989), aff'd 961 F.2d 
217 (9th Cir. 1992). In Sarrassat, the plaintiffs asserted that SNF 
beneficiaries were not adequately notified that the SNF believed 
Medicare would not cover care, and that beneficiaries were not 
permitted to appeal the SNF's assertion to the fiscal intermediary. The 
court affirmed a settlement agreement providing that SNFs would be 
unable to bill beneficiaries until their initial determination was 
complete, a process that is much longer than the expedited proceedings 
established under this final rule. Thus, we believe that building this 
type of temporary protection from billing into the new expedited 
appeals process is an appropriate step, particularly given the short 
time periods involved.
    Comment: One commenter questioned whether QIO appeal rights would 
be included on the Notice of Discharges required by Nursing Home Reform 
Law. The commenter also questioned

[[Page 69260]]

whether QIO review is a mandatory or permissive alternative to State 
review.
    Response: Information about an individual's expedited review rights 
will be part of the standardized portion of the provider termination 
notice required under this final rule. Although this information may be 
furnished through other vehicles as well, we will not deem the 
inclusion of the appeal right information on any other notice to 
satisfy this regulatory requirement. The QIO expedited review process 
implements a Medicare statutory requirement, and we cannot determine 
whether States will consider this process an acceptable alternative to 
an existing State review requirement.
    Comment: One commenter stated that the proposed rule was not clear 
with regard to whether particular QIO initial determinations are 
subject to redeterminations. They questioned whether the new expedited 
determinations were subject to the redetermination rights set forth in 
Sec.  405.940 of the proposed rule of November 15, 2002.
    Response: QIO expedited determinations are not subject to the 
redetermination rights set forth under BIPA and addressed at proposed 
Sec.  405.940 of our November 15, 2002 proposed rule. (We note that 
section 1869(a)(3)(A) of the Act states that redeterminations must 
exist for fiscal intermediary and carrier initial determinations, but 
does not discuss QIO initial determinations.) Instead, a beneficiary 
may request an expedited reconsideration of that expedited 
determination. A beneficiary who misses the deadline for an expedited 
reconsideration would retain access to the standard claims appeal 
procedures.
    Comment: One commenter raised concerns with a cost to the Medicare 
program not discussed in the proposed rule. The commenter suggested 
that there would be a necessary cost of educating beneficiaries and 
providers about their rights and obligations. In particular, the 
commenter stated that beneficiaries would need education regarding the 
use of ABNs as a part of the appeals system.
    Response: We agree that these expedited provisions, as well as all 
other aspects of the implementation of BIPA, will require extensive 
provider and beneficiary education. We will work to achieve that end. 
In addition, as discussed in detail above, a new notice will be used 
instead of ABNs to inform beneficiaries of their expedited appeal 
rights. We believe that the use of a distinct and standardized notice 
will simplify the notification process and promote understanding by 
beneficiaries.
    Comment: One commenter requested clarification regarding 
beneficiary costs for access to medical and other information. They 
wanted copying and associated charges to reflect actual expenses.
    Response: We agree with the commenter that clarification of 
beneficiary charges for documentation is needed and have changed the 
regulation text accordingly. Section 405.1202(f)(3) states that a 
provider may charge the beneficiary a reasonable amount to cover the 
costs of duplicating such documentation or delivering it to the 
beneficiary. We note that this requirement is consistent with our 
policy for managed care enrollees as contained in our April 4, 2003 
final rule (68 FR 16660).

B. Comments on Procedures for Expedited Reviews of Inpatient Hospital 
Discharges

    As noted above, the proposed rule did not include substantive 
changes to the procedures used by QIOs to conduct expedited initial 
determinations of disputed hospital discharges, although it did specify 
that reconsiderations will be performed by QICs, rather than QIOs. We 
continue to believe that incorporating the relevant procedures into the 
same regulatory subpart that will contain the expedited determination 
procedures for other providers (as well as the new appeals procedures 
required under BIPA when they are made final) will prove convenient for 
all parties. As a result of the organizational changes to the 
requirements for other provider services terminations, the hospital-
related requirements are now set forth at Sec. Sec.  405.1206 and 
405.1208. Section 405.1206 sets forth the expedited review procedures 
for beneficiary-initiated appeals, and Sec.  405.1208 covers hospital-
initiated appeals. We note that, in keeping with our current policies, 
QIO determinations are binding on hospitals, without further appeal, 
but beneficiaries may request reconsiderations of unfavorable QIO 
decisions. Under our current policies, and consistent with section 1155 
of the Act, QIOs, rather than QICs, conduct reconsiderations of 
expedited determinations concerning inpatient hospital discharges. As 
stated above, we recognize that section 1869(c)(3)(C)(iii)(III) 
requires QICs to now perform expedited reconsiderations of expedited 
determinations, and we expect that QICs will be fully established by 
the date of implementation. However, in the event QICs have not yet 
been established at the implementation date, our plan is to have the 
QIOs continue to perform the reconsiderations. Since section 1155 
already authorizes QIOs to perform reconsiderations, but does not 
otherwise govern the process for such reconsiderations, we believe we 
will have the authority, until QICs are operational, to allow QIOs to 
hear the reconsiderations in accordance with the QIC procedures.
    In Sec. Sec.  405.1206 and 405.1208 we continue to cross-reference 
the expedited reconsideration process for non-hospital providers. We 
believe that Congress' intent in incorporating section 1154(e)(2) 
through (4) into section 1869(c)(3)(C)(iii)(III) was to ensure that 
statutory time frames and financial liability protections applicable to 
QIO reviews of hospital discharges continue to apply. Therefore, we 
have continued to apply those financial protections and time frames to 
the QIO initial determinations, while creating a uniform process at the 
QIC reconsideration stage.
    We also recognize that the new QIC reconsideration process for 
hospital discharges may now conflict with some of the provisions 
governing reconsiderations under 42 CFR part 478. For example, 42 CFR 
478.40 requires a $200 amount in controversy for an ALJ hearing, 
whereas the QIC reconsideration procedures would require only a $100 
amount in controversy. We plan to issue conforming amendments to part 
478 in the future to take into account the changes made by BIPA. 
However, to the extent there is a direct inconsistency between the part 
478 regulations and either the statute or the regulations announced in 
this final rule, the statute and the regulations announced by the final 
rule would govern.
    Only one commenter addressed these provisions.
    Comment: One commenter suggested that the hospital discharge review 
provisions at proposed Sec.  405.1204(a) define ``inpatient hospital 
discharge'', as it applies to these reviews. The commenter asked for a 
reference to the Code of Federal Regulation (CFR) or statutory 
provision for the definition. The commenter also questioned how 
physician concurrence is to be documented and included in the patient 
record.
    Response: Consistent with Sec.  412.4(a) of the regulations 
concerning the inpatient hospital prospective payment system, a 
hospital inpatient is considered to be discharged when the patient is 
formally released from the hospital. For expedited review purposes, a 
discharge does not include a death or a transfer to another hospital. 
Hospitals must continue to comply with

[[Page 69261]]

the relevant Medicare conditions of participation under part 482 of the 
CFR concerning documentation requirements. We view physician 
concurrence as a routine element of the hospital discharge process, and 
do not believe any change to the medical records and discharge planning 
procedures are warranted.
    Comment: The commenter requested specification of how beneficiaries 
would receive the notice of non-coverage required under proposed Sec.  
405.1204(a). The commenter expressed concern that beneficiaries in 
hospitals may be unable to exercise their right to appeal due to their 
health condition. The commenter recommended that the regulations 
regarding hospital discharge appeals reflect this concern.
    Response: The requirements for providing beneficiaries with the 
Hospital Issued Notice of Non-coverage (HINN) continue long-standing 
practice under the original Medicare program, as discussed in detail in 
our April 4, 2003 final rule (68 FR 16660). In brief, hospitals must 
issue the ``Important Message from Medicare'' upon admission to all 
Medicare inpatients. Hospitals issue HINNs to any beneficiary that 
expresses dissatisfaction with an impending discharge, and a hospital 
may not bill the beneficiary or his/her representative without issuance 
of the HINN. We have added under Sec.  405.1206(b) the requirement that 
delivery of a notice of non-coverage is valid only if a beneficiary has 
signed and dated the notice to indicate that he or she both received 
the notice and understood its contents. This policy is consistent with 
our other CMS requirements governing the delivery of similar notices, 
such as those set forth in CMS program memoranda A-99-52 and A-99-54 
for advanced beneficiary notices under original Medicare. We have no 
indication that this standard has proven problematic. Note that this 
requirement for successful delivery does not permit a beneficiary to 
extend coverage indefinitely by refusing to sign a notice of 
termination. If a beneficiary refuses to sign a notice, the provider 
can annotate its copy of the notice to indicate the refusal, and the 
date of the refusal will be considered the date of receipt of the 
notice. This standard has already been articulated in our hospital 
manual provisions at section 414.5.
    By the time that termination notices are issued, providers will 
have already needed to assess a beneficiary's ability to accept 
delivery of a notice, based on typical admission assessments, care 
planning evaluations and discharge planning activities that have taken 
place during the course of treatment. In the event a provider believes 
that a beneficiary is not capable to receive the notice, providers must 
be well acquainted enough with the beneficiary's particular situation 
to make alternative arrangements, if necessary, to deliver a valid 
notice. For example, an incapacitated beneficiary is not able to act on 
his or her rights and, therefore, cannot validly receive the notice. 
This situation can be remedied through the use of an authorized 
representative under Federal or State law. This issue is also discussed 
in section 414.5 of the Hospital Manual.
    Comment: The commenter raised several issues regarding coverage 
during review. In particular, the commenter expressed concern with 
coverage with the use of calendar days as the standard, and wanted more 
specificity for when the beneficiary failed to file timely and 
continued their hospital stay.
    Response: The provisions at Sec.  405.1206(f), which specify that a 
beneficiary is responsible for services furnished after noon of the 
calendar day after the beneficiary receives the QIO determination, are 
consistent with section 1154(e)(4) of the Act regarding expedited 
reviews of inpatient hospital stays. Although the statute refers to 
``working days'' for most aspects of this process, it does not use that 
terminology in establishing liability; therefore, we believe it is 
reasonable to conclude that the calendar days, and not working days, 
should be used.
    We believe that Sec.  405.1206(e)(3) clearly explains that if a 
beneficiary does not make a timely request for an expedited review, the 
beneficiary may bear financial liability. That is, the beneficiary may 
be responsible for charges beyond the date on the hospital issued 
notice of non-coverage (HINN). Again, beneficiaries generally receive a 
HINN only when they express dissatisfaction with a hospital's decision 
to discharge them from inpatient care.
    Comment: The commenter asked whether beneficiaries could face 
charges from hospitals for providing medical record data, and what 
documentation procedures are associated with notice requirements.
    Response: We agree, particularly where notification takes place by 
telephone. Hospitals may charge beneficiaries a reasonable amount for 
providing them with copies of their medical records. Hospitals may not, 
however, charge beneficiaries for providing the medical records to the 
QIO or QIC.

IV. Provisions of this Final Rule With Comment Period

A. Summary of Provisions

    For the convenience of the reader, listed below are the major 
elements of the regulations concerning the new expedited proceedings 
that are set forth in this final rule with comment period. This listing 
is intended solely as a reference aid rather than as a comprehensive 
statement of the policies set forth in the regulation text.
    Section 405.1200 describes the applicability of the expedited 
determination and reconsideration provisions and establishes an advance 
notification requirement for all provider service terminations and 
discharges. Section 405.1200(a) specifies that for purposes of these 
provisions in 405.1200 through 405.1204, the term provider includes the 
non-hospital providers of SNFs, HHAs, CORFs, and hospices. Hospitals 
have their own special rules that apply by virtue of section 1154(e) of 
the Act, which was incorporated into section 1869(c)(3)(C)(iii)(III) of 
the Act.
    Section 405.1200(b) sets forth the notification requirement that 
applies when a beneficiary's SNF, HHA, CORF, or hospice services are 
being terminated. These procedures require that the provider deliver, 
generally no later than 2 days before the termination of services, a 
standardized notice that informs the beneficiary of the date of 
discharge and how to file an appeal.
    Section 405.1202(a) describes a beneficiary's right to an expedited 
determination of a non-hospital provider's decision to terminate 
services.
    Section 405.1202(b) explains how a beneficiary must request an 
expedited determination: A beneficiary must make a request to the QIO 
by no later than noon of the next calendar day following receipt of the 
notice of termination. The beneficiary must be available to answer 
questions by the QIO and may submit evidence to be used in the 
decision-making process.
    Section 405.1202(c) and (d) sets forth the coverage rules 
associated with the expedited determination process and the procedural 
burden of proof rules.
    Section 405.1202(e) describes the procedures a QIO must follow from 
the time it receives a beneficiary's request for an expedited 
determination through the issuance of its decision. These include 
immediately informing a provider of a beneficiary's request for an 
expedited determination, assessing the validity of the discharge 
notice, examining pertinent medical records, offering the beneficiary, 
provider, and

[[Page 69262]]

physician an opportunity to present their views, and reaching a 
decision and informing the appropriate parties of its decision. All of 
these activities must be carried out within 72 hours of the 
beneficiary's request for an expedited determination.
    Section 405.1202(f) and (g) detail the responsibilities of 
providers. Upon learning that a beneficiary has requested an expedited 
determination, the provider, by close of business of the day of the 
QIO's notification, must send a detailed notice to the beneficiary 
containing the reasons why the services are no longer covered and 
applicable Medicare coverage rules or policy. Providers may not bill a 
beneficiary who has requested an expedited determination for any 
disputed services until the expedited appeals process is complete 
(including an expedited reconsideration, if applicable).
    Section 405.1204 sets forth a beneficiary's right to an expedited 
reconsideration by a QIC regarding a QIO expedited determination. This 
right is established under Sec.  405.1204(a), and the procedures to be 
followed by beneficiaries, the QIC, the QIO, and the provider are 
described in the following sections. We believe that QICs will be 
operational at the time we implement the reconsiderations established 
in this final rule. However, in the event the QICs are not yet 
operational at the time of implementation, QIOs will perform expedited 
reconsiderations. We believe it would be contrary to the public 
interest to delay implementation of these expedited review procedures 
until the QICs have been fully established. QIOs are well suited to 
administer expedited reconsiderations and currently perform this 
function for expedited appeals of inpatient hospital discharges. In 
addition, we believe that even had BIPA not been passed, we would have 
had the administrative authority to create a procedural rule 
establishing a pretermination review process, to be conducted by the 
QIOs under sections 1102 and 1154(a) of the Act. If QIOs do perform the 
expedited reconsiderations until QICs are established, they will use 
the same procedures to be used by QICs, although we would formally view 
the process as a process separate from the process fully implementing 
BIPA expedited reviews using QICs to process reconsiderations.
    Section 405.1206 outlines longstanding procedures regarding a 
beneficiary's right to an expedited determination in response to an 
inpatient hospital discharge. Consistent with Sec.  1154(e)(4) of the 
Act, if a beneficiary files a timely request for such a determination, 
the beneficiary is not financially responsible for inpatient hospital 
services before noon of the calendar day after receiving the written 
expedited QIO determination. Consistent with the statute, we note that 
412.42(c)(3) specifies that a hospital cannot charge a beneficiary 
until and unless the hospital provides the beneficiary with a notice of 
noncoverage.
    Section 405.1208 outlines longstanding rules concerning the right 
of a hospital to request an expedited QIO review. In short, a hospital 
may request QIO review if it believes the beneficiary does not need 
further inpatient care but is unable to obtain physician agreement.

B. Decision To Issue a Final Rule With Comment Period

    Section 1869(b)(1)(F) of the Act, as revised by section 521 of 
BIPA, requires that the Secretary establish a process by which a 
beneficiary may obtain an independent, expedited determination if he or 
she receives a notice from a provider of services that the provider 
plans to terminate the services or discharge the individual from the 
provider. Currently, this right to an expedited review exists only with 
respect to hospital discharges (under sections 1154 and 1155 of the 
Act). In the November 15, 2002 proposed rule we set forth the 
procedures needed to implement this statutory directive.
    As discussed above, the new expedited review process set forth in 
this final rule is closely modeled on the process now in effect for MA 
enrollees under our April 4, 2003 final rule. Some commenters on the 
November 15 proposed rule recognized the close relationship between the 
two processes, and thus, they recommended changes to the proposed rule 
notice and appeal procedures that would make the procedures largely 
parallel. We strongly agree that making the notice and appeal 
procedures available to MA enrollees and original Medicare 
beneficiaries as similar as possible is prudent public policy, and will 
minimize confusion among beneficiaries and providers as we implement 
the new expedited appeal rights for provider service terminations. 
However, although the provisions implemented here are clearly a logical 
outgrowth of the proposed provisions and the comments on them, some of 
the changes are fairly significant, such as the introduction of a 
standard coverage termination notice, rather than use of the existing 
ABN. Moreover, the public's familiarity with the issues involved here 
has now been informed both by this final rule and our April 4, 2003 
final rule on the MA process, as well as with actual experience with 
the MA process (which began on January 1, 2004). Thus we believe it 
would be in the public interest to welcome further comments on the 
changes set forth in this final rule. If these comments warrant changes 
to these requirements, we will carry out further rulemaking.

V. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the comments in the preamble to the 
document.

VI. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    The PRA exempts the majority of the information collection 
activities referenced in this Final Rule with Comment, including 
collections associated with SNFs. In addition, 5 CFR 1320.4 excludes 
collection activities during the conduct of redeterminations, 
reconsiderations, appeals, and other administrative actions. However, 
the information collection requirement associated with the initial 
request to seek an expedited determination, in a non-SNF setting, is 
subject to the PRA.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements:

[[Page 69263]]

Section 405.1200 Notifying Beneficiaries of Provider Service 
Terminations

[If you choose to comment on issues in this section, please include the 
caption ``Notifying Beneficiaries of Provider Service Terminations'' at 
the beginning of your comments.]
    For any termination of Medicare-covered services, the provider of 
the service must notify the beneficiary in writing of its decision to 
terminate services. The provider must use a standardized notice, 
required by the Secretary, in accordance with the requirements and 
procedures set forth in this section.
    Given that CMS has developed standardized formats for these 
notices, and notices will be disseminated during the normal course of 
related business activities, we estimate that it will take providers 
(HHAs, CORFs, and Hospices) 5 minutes to deliver each notice. In 2002, 
there were approximately 4.2 million Medicare HHA discharges. (Note 
that the amount of Medicare business with CORFs is so small that 
Medicare statistical summaries do not include a separate line item for 
patient encounters with these facilities. Similarly, while we do not 
have precise estimates of hospice discharges, the number is considered 
to be an extremely small percentage of the 0.5 million number of annual 
hospice patients. Thus, our analysis is necessarily limited to HHA 
services.) We estimate that HHA providers will be required to give an 
estimated 4.2 million notices to beneficiaries. The total annual burden 
associated with this requirement is 350,000 hours.
    If you wish to view the proposed standardized notices and the 
supporting documentation, you can download a copy from the CMS Web site 
at http://www.cms.hhs.gov/regulations/pra/.

Section 405.1202 Expedited Determination Procedures

[If you choose to comment on issues in this section, please include the 
caption ``Expedited Determination Procedures'' at the beginning of your 
comments.]
    A beneficiary who desires an expedited determination must submit a 
request for an appeal to the QIO, in writing or by telephone, by no 
later than noon of the effective date of the written termination 
notice. If, due to an emergency the QIO is closed on the day the 
beneficiary requests an expedited determination, the beneficiary must 
file a request by noon of the next day that the QIO is open for 
business.
    The right to an expedited review of the termination of HHA/CORF/
hospice services has never been available to Medicare beneficiaries. 
Consistent with our estimate of the proportion of MA enrollees who are 
likely to request QIO reviews of HHA/CORF/hospice services, we are 
estimating that approximately 1-2 percent of Medicare fee-for-service 
beneficiaries who receive termination notices will request an expedited 
review. We believe this is a reasonable estimate of the maximum number 
of HHA/CORF/hospice enrollees who are likely to file appeals with the 
IRE. Thus, we estimate the annual number of fee-for-service reviews at 
no more than 2 percent of the approximately 4.2 million HHA/CORF/
hospice discharges (FY 2002 data), meaning that the maximum number of 
beneficiaries that are likely to request an expedited determination by 
the QIO is about 84,000 annually. It is estimated that it will take 
84,000 beneficiaries 15 minutes to file an appeal on an annual basis. 
The total annual burden associated with this requirement is 21,000 
hours.
    The beneficiary may submit evidence to be considered by the QIO in 
making its decision and may be required by the QIO to authorize access 
to his or her medical records in order to pursue the appeal. It is 
likely that no more than 10 percent of the 84,000 beneficiaries who 
file appeals will also submit additional evidence. It is estimated that 
it will take 8,400 beneficiaries 60 minutes to submit evidence on an 
annual basis. That is, since beneficiaries may not be functioning at 
their maximum capacity, they may need to contact family members, 
friends, or their personal physicians who might provide assistance in 
gathering additional evidence. The total annual burden associated with 
this requirement is 8,400 hours.
    It should be noted that requirements are currently captured and 
accounted for in currently approved information collection under OMB 
numbers 0938-0045 ``Requirements for Reconsideration for Part A Health 
Insurance Benefits''.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic 
Operations and Regulatory Affairs, Regulations Development and 
Issuances Group, Attn: Dawn Willinghan, CMS-4004-FC, Room C5-14-03, 
7500 Security Boulevard, Baltimore, MD 21244-1850 and,
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn.: Christopher Martin, CMS Desk Officer.

    Comments submitted to OMB may also be e-mailed to the following 
address: e-mail: <a href="/cdn-cgi/l/email-protection#d093b8a2b9a3a4bfa0b8b5a28f9db1a2a4b9be90bfbdb2feb5bfa0feb7bfa6"><span class="__cf_email__" data-cfemail="77341f051e040318071f1205283a1605031e1937181a155912180759101801">[email protected]</span></a>; or faxed to OMB at 
(202) 395-6974.

VII. Regulatory Impact Statement

[If you choose to comment on issues in this section, please include the 
caption ``Regulatory Impact Statement'' at the beginning of your 
comments.]

A. Introduction

    We have examined the impact of this rule under the criteria of 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
section 1102(b) of the Social Security Act, the Regulatory Flexibility 
Act (RFA), Public Law No. 96-354, the Unfunded Mandates Reform Act of 
1995, Public Law 104-4, and Executive Order 13132. Executive Order 
12866 directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more annually). This rule would not meet the $100 million 
threshold and therefore is not a major rule. In accordance with the 
provisions of Executive Order 12866, this regulation was reviewed by 
the Office of Management and Budget.
    The RFA requires agencies, in issuing certain rules, to analyze 
options for regulatory relief of small businesses. For purposes of the 
RFA, small entities include small businesses, nonprofit organizations 
and government agencies. Most SNFs and HHAs are small entities, either 
by nonprofit status or by having revenues of $25 million or less 
annually. For purposes of the RFA, all providers affected by this 
regulation are considered to be small entities. Individuals and States 
are not included in the definition of a small entity.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis for a final rule that 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 603 
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

[[Page 69264]]

Statistical Area and has fewer than 100 beds.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined, and we certify, that this rule 
would not have a significant economic impact on a substantial number of 
small entities or a significant impact on the operations of a 
substantial number of small rural hospitals, since as we explain in C., 
below, we estimate a cost of about $200 a provider. Although a 
regulatory impact analysis is not mandatory for this final rule, we 
believe it is appropriate to discuss the possible impacts of the new 
appeals procedures on beneficiaries and providers, regardless of the 
monetary threshold of that impact. Therefore, a brief voluntary 
discussion of the anticipated impact of this rule is presented below.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that would include any Federal mandate that may result 
in expenditure in any one year by State, local, or tribal governments, 
in the aggregate, or by the private sector, of $110 million. This rule 
would not have such an effect on State, local, or tribal governments, 
or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that would impose 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. This rule 
does not have a substantial effect on State and local governments.

B. Overview of the Changes

    This final rule implements the requirement under section 
1869(b)(1)(F) of the Act that a beneficiary has a right to an expedited 
determination upon notification by a provider of the provider's 
decision to discharge the beneficiary or to terminate services. This 
rule specifies that providers (that is, SNFs, HHAs, CORFs and hospices) 
must issue a standardized termination notice before all discharges or 
service terminations to inform beneficiaries of these new appeal 
rights. In general, we believe that these changes will enhance the 
rights of Medicare beneficiaries, without imposing any significant 
financial burden on these individuals. Most notably, the new 
requirements will significantly reduce a beneficiary's potential 
liability in situations where disputed provider services are denied on 
appeal.

C. Expedited Determination and Reconsideration Procedures for Provider 
Terminations (Sec.  405.1200 Through Sec.  405.1204)

    We project that providers will be responsible for delivering short 
standardized termination notices to approximately 5.3 million 
beneficiaries a year. This includes about 1.1 million SNF discharges 
and 4.2 million HHA discharges. The required termination notices will 
be largely standardized, requiring only the insertion of the 
beneficiary's name and discharge date. We estimate that it will take no 
more than 5 minutes to deliver a notice, at a per-notice cost of no 
more than $2.50 (based on a $30 per hour rate if the notice is 
delivered by health care personnel). Based on an estimated 5.3 million 
notices annually, we estimate the aggregate cost of delivering these 
notices to be roughly $13 million. Given that there are roughly 24,000 
affected providers, the average costs associated with this provision 
will be less than $600 per provider.
    At most, we believe that 2 percent of affected individuals (that 
is, 106,000 beneficiaries) will request an expedited determination. For 
these 106,000 cases, providers will be required under this final rule 
to deliver a detailed termination notice to the beneficiary and to make 
a copy of that notice and any necessary supporting documentation 
available to the QIO (and to the beneficiary upon request). We estimate 
that it will take providers 60 to 90 minutes to prepare the detailed 
termination notice and to prepare a case file for the QIO. At an 
estimated cost of $30 per hour, we project an aggregate cost of $3.2 
million to $4.8 million to approximately 24,000 providers, or about 
$200 per provider.
    Thus, we believe that the total financial impact of the new notice 
and expedited determination requirements is less than $20 million 
annually. We do not anticipate that the provisions of this final rule 
will have a significant financial impact on individual providers. We 
note that both the advance termination notice and the detailed 
termination notice will be developed through OMB's Paperwork Reduction 
Act process and thus will be the subject of further opportunity for 
public comment. The only other significant costs associated with this 
provision will result from the Secretary's commitment to contract with 
QIOs and QICs to conduct these expedited reviews. We are projecting 
first year costs, including training and start costs for QIOs, to the 
Medicare Trust Fund of about $32 million to carry out this function.

List of Subjects in 42 CFR Parts 405 and 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority: Secs. 1102, 1861, 1862(a), 1869, 1871, 1874, 1881, 
and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 
353 of the Public Health Service Act (42 U.S.C. 263a).


0
2. Add a new subpart J to read as follows:

Subpart J--Expedited Determinations and Reconsiderations of 
Provider Service Terminations, and Procedures for Inpatient 
Hospital Discharges


Sec.  405.1200  Notifying beneficiaries of provider service 
terminations.

    (a) Applicability and scope. (1) For purposes of Sec. Sec.  
405.1200 through 405.1204, the term, provider, is defined as a home 
health agency (HHA), skilled nursing facility (SNF), comprehensive 
outpatient rehabilitation facility (CORF), or hospice.
    (2) For purposes of Sec. Sec.  405.1200 through 405.1204, a 
termination of Medicare-covered service is a discharge of a beneficiary 
from a residential provider of services, or a complete cessation of 
coverage at the end of a course of treatment prescribed in a discrete 
increment, regardless of whether the beneficiary agrees that the 
services should end. A termination does not include a reduction in 
services. A termination also does not include the termination of one 
type of service by the provider if the beneficiary continues to receive 
other Medicare-covered services from the provider.
    (b) Advance written notice of service terminations. Before any 
termination of services, the provider of the service must deliver valid 
written notice to the beneficiary of the provider's decision to 
terminate services. The provider must use a standardized notice, as 
specified by CMS, in accordance with the following procedures:
    (1) Timing of notice. A provider must notify the beneficiary of the 
decision to terminate covered services no later than

[[Page 69265]]

2 days before the proposed end of the services. If the beneficiary's 
services are expected to be fewer than 2 days in duration, the provider 
must notify the beneficiary at the time of admission to the provider. 
If, in a non-residential setting, the span of time between services 
exceeds 2 days, the notice must be given no later than the next to last 
time services are furnished.
    (2) Content of the notice. The standardized termination notice must 
include the following information:
    (i) The date that coverage of services ends;
    (ii) The date that the beneficiary's financial liability for 
continued services begins;
    (iii) A description of the beneficiary's right to an expedited 
determination under Sec.  405.1202, including information about how to 
request an expedited determination and about a beneficiary's right to 
submit evidence showing that services must continue;
    (iv) A beneficiary's right to receive the detailed information 
specified under Sec.  405.1202(f); and
    (v) Any other information required by CMS.
    (3) When delivery of the notice is valid. Delivery of the 
termination notice is valid if--
    (i) The beneficiary (or the beneficiary's authorized 
representative) has signed and dated the notice to indicate that he or 
she has received the notice and can comprehend its contents; and
    (ii) The notice is delivered in accordance with paragraph (b)(1) of 
this section and contains all the elements described in paragraph 
(b)(2) of this section.
    (4) If a beneficiary refuses to sign the notice. The provider may 
annotate its notice to indicate the refusal, and the date of refusal is 
considered the date of receipt of the notice.
    (5) Financial liability for failure to deliver valid notice. A 
provider is financially liable for continued services until 2 days 
after the beneficiary receives valid notice as specified under 
paragraph (b)(3) of this section, or until the service termination date 
specified on the notice, whichever is later. A beneficiary may waive 
continuation of services if he or she agrees with being discharged 
sooner than the planned service termination date.


Sec.  405.1202  Expedited determination procedures.

    (a) Beneficiary's right to an expedited determination by the QIO. A 
beneficiary has a right to an expedited determination by a QIO under 
the following circumstances:
    (1) For services furnished by a non-residential provider, the 
beneficiary disagrees with the provider of those services that services 
should be terminated, and a physician certifies that failure to 
continue the provision of the service(s) may place the beneficiary's 
health at significant risk.
    (2) For services furnished by a residential provider or a hospice, 
the beneficiary disagrees with the provider's decision to discharge the 
beneficiary.
    (b) Requesting an expedited determination. (1) A beneficiary who 
wishes to exercise the right to an expedited determination must submit 
a request for a determination to the QIO in the State in which the 
beneficiary is receiving those provider services, in writing or by 
telephone, by no later than noon of the calendar day following receipt 
of the provider's notice of termination. If the QIO is unable to accept 
the beneficiary's request, the beneficiary must submit the request by 
noon of the next day the QIO is available to accept a request.
    (2) The beneficiary, or his or her representative, must be 
available to answer questions or to supply information that the QIO may 
request to conduct its review.
    (3) The beneficiary may, but is not required to, submit evidence to 
be considered by a QIO in making its decision.
    (4) If a beneficiary makes an untimely request for an expedited 
determination by a QIO, the QIO will accept the request and make a 
determination as soon as possible, but the 72-hour time frame under 
paragraph (e)(6) and the financial liability protection under paragraph 
(g) of this section do not apply.
    (c) Coverage of provider services. Coverage of provider services 
continues until the date and time designated on the termination notice, 
unless the QIO reverses the provider's service termination decision. If 
the QIO's decision is delayed because the provider did not timely 
supply necessary information or records, the provider may be liable for 
the costs of any additional coverage, as determined by the QIO in 
accordance with paragraph (e)(7) of this section. If the QIO finds that 
the beneficiary did not receive valid notice, coverage of provider 
services continues until at least 2 days after valid notice has been 
received. Continuation of coverage is not required if the QIO 
determines that coverage could pose a threat to the beneficiary's 
health or safety.
    (d) Burden of proof. When a beneficiary requests an expedited 
determination by a QIO, the burden of proof rests with the provider to 
demonstrate that termination of coverage is the correct decision, 
either on the basis of medical necessity, or based on other Medicare 
coverage policies.
    (1) In order for the QIO to determine whether the provider has met 
the burden of proof, the provider should supply any and all information 
that a QIO requires to sustain the provider's termination decision, 
consistent with paragraph (f) of this section.
    (2) The beneficiary may submit evidence to be considered by a QIO 
in making its decision.
    (e) Procedures the QIO must follow. (1) On the day the QIO receives 
the request for an expedited determination under paragraph (b) of this 
section, it must immediately notify the provider of those services that 
a request for an expedited determination has been made.
    (2) The QIO determines whether the provider delivered valid notice 
of the termination decision consistent with Sec.  405.1200(b) and 
paragraph (f) of this section.
    (3) The QIO examines the medical and other records that pertain to 
the services in dispute. If applicable, the QIO determines whether a 
physician has certified that failure to continue the provision of 
services may place the beneficiary's health at significant risk.
    (4) The QIO must solicit the views of the beneficiary who requested 
the expedited determination.
    (5) The QIO must provide an opportunity for the provider/
practitioner to explain why the termination or discharge is 
appropriate.
    (6) No later than 72 hours after receipt of the request for an 
expedited determination, the QIO must notify the beneficiary, 
beneficiary's physician, and the provider of services of its 
determination whether termination of Medicare coverage is the correct 
decision, either on the basis of medical necessity or based on other 
Medicare coverage policies.
    (7) If the QIO does not receive the information needed to sustain a 
provider's decision to terminate services, it may make its 
determination based on the evidence at hand, or it may defer a decision 
until it receives the necessary information. If this delay results in 
extended Medicare coverage of an individual's provider services, the 
provider may be held financially liable for these services, as 
determined by the QIO.
    (8) The QIO's initial notification may be by telephone, followed by 
a written notice including the following information:

[[Page 69266]]

    (i) The rationale for the determination;
    (ii) An explanation of the Medicare payment consequences of the 
determination and the date a beneficiary becomes fully liable for the 
services; and
    (iii) Information about the beneficiary's right to a 
reconsideration of the QIO's determination, including how to request a 
reconsideration and the time period for doing so.
    (f) Responsibilities of providers. (1) When a QIO notifies a 
provider that a beneficiary has requested an expedited determination, 
the provider must send a detailed notice to the beneficiary by close of 
business of the day of the QIO's notification. The detailed termination 
notice must include the following information:
    (i) A specific and detailed explanation why services are either no 
longer reasonable and necessary or are no longer covered;
    (ii) A description of any applicable Medicare coverage rule, 
instruction, or other Medicare policy, including citations to the 
applicable Medicare policy rules or information about how the 
beneficiary may obtain a copy of the Medicare policy;
    (iii) Facts specific to the beneficiary and relevant to the 
coverage determination that are sufficient to advise the beneficiary of 
the applicability of the coverage rule or policy to the beneficiary's 
case; and
    (iv) Any other information required by CMS.
    (2) Upon notification by the QIO of the request for an expedited 
determination, the provider must supply all information that the QIO 
needs to make its expedited determination, including a copy of the 
notices required under Sec.  405.1200(b) and under paragraph (f)(1) of 
this section. The provider must furnish this information as soon as 
possible, but no later than by close of business of the day the QIO 
notifies the provider of the request for an expedited determination. At 
the discretion of the QIO, the provider may make the information 
available by phone or in writing (with a written record of any 
information not transmitted initially in writing).
    (3) At a beneficiary's request, the provider must furnish the 
beneficiary with a copy of, or access to, any documentation that it 
sends to the QIO including records of any information provided by 
telephone. The provider may charge the beneficiary a reasonable amount 
to cover the costs of duplicating the documentation and/or delivering 
it to the beneficiary. The provider must accommodate such a request by 
no later than close of business of the first day after the material is 
requested.
    (g) Coverage during QIO review. When a beneficiary requests an 
expedited determination in accordance with the procedures required by 
this section, the provider may not bill the beneficiary for any 
disputed services until the expedited determination process (and 
reconsideration process, if applicable) has been completed.


Sec.  405.1204  Expedited reconsiderations.

    (a) Beneficiary's right to an expedited reconsideration. A 
beneficiary who is dissatisfied with a QIO's expedited determination 
may request an expedited reconsideration by the appropriate QIC.
    (b) Requesting an expedited reconsideration. (1) A beneficiary who 
wishes to obtain an expedited reconsideration must submit a request for 
the reconsideration to the appropriate QIC, in writing or by telephone, 
by no later than noon of the calendar day following initial 
notification (whether by telephone or in writing) receipt of the QIO's 
determination. If the QIC is unable to accept the beneficiary's 
request, the beneficiary must submit the request by noon of the next 
day the QIC is available to accept a request.
    (2) The beneficiary, or his or her representative, must be 
available to answer questions or supply information that the QIC may 
request to conduct its reconsideration.
    (3) The beneficiary may, but is not required to, submit evidence to 
be considered by a QIC in making its decision.
    (4) A beneficiary who does not file a timely request for an 
expedited QIC reconsideration subsequently may request a 
reconsideration under the standard claims appeal process, but the 
coverage protections described in paragraph (f) of this section would 
not extend through this reconsideration, nor would the timeframes or 
the escalation process described in paragraphs (c)(3) and (c)(5) of 
this section, respectively.
    (c) Procedures the QIC must follow. (1) On the day the QIC receives 
the request for an expedited determination under paragraph (b) of this 
section, the QIC must immediately notify the QIO that made the 
expedited determination and the provider of services of the request for 
an expedited reconsideration.
    (2) The QIC must offer the beneficiary and the provider an 
opportunity to provide further information.
    (3) Unless the beneficiary requests an extension in accordance with 
paragraph (c)(6) of this section, no later than 72 hours after receipt 
of the request for an expedited reconsideration, and any medical or 
other records needed for such reconsideration, the QIC must notify the 
QIO, the beneficiary, the beneficiary's physician, and the provider of 
services, of its decision on the reconsideration request.
    (4) The QIC's initial notification may be done by telephone, 
followed by a written notice including:
    (i) The rationale for the reconsideration decision;
    (ii) An explanation of the Medicare payment consequences of the 
determination and the beneficiary's date of liability; and
    (iii) Information about the beneficiary's right to appeal the QIC's 
reconsideration decision to an ALJ, including how to request an appeal 
and the time period for doing so.
    (5) Unless the beneficiary requests an extension in accordance with 
paragraph (c)(6) of this section, if the QIC does not issue a decision 
within 72 hours of receipt of the request, the QIC must notify the 
beneficiary of his or her right to have the case escalated to the ALJ 
hearing level if the amount remaining in controversy after the QIO 
determination is $100 or more.
    (6) A beneficiary requesting an expedited reconsideration under 
this section may request (either in writing or orally) that the QIC 
grant such additional time as the beneficiary specifies (not to exceed 
14 days) for the reconsideration. If an extension is granted, the 
deadlines in paragraph (c)(3) of this section do not apply.
    (d) Responsibilities of the QIO. (1) When a QIC notifies a QIO that 
a beneficiary has requested an expedited reconsideration, the QIO must 
supply all information that the QIC needs to make its expedited 
reconsideration as soon as possible, but no later than by close of 
business of the day that the QIC notifies the QIO of the request for an 
expedited reconsideration.
    (2) At a beneficiary's request, the QIO must furnish the 
beneficiary with a copy of, or access to, any documentation that it 
sends to the QIC. The QIO may charge the beneficiary a reasonable 
amount to cover the costs of duplicating the documentation and/or 
delivering it to the beneficiary. The QIO must accommodate the request 
by no later than close of business of the first day after the material 
is requested.
    (e) Responsibilities of the provider. A provider may, but is not 
required to, submit evidence to be considered by a QIC in making its 
decision. If a provider fails to comply with a QIC's request for 
additional information beyond that furnished to the QIO for purposes of 
the expedited determination, the QIC makes

[[Page 69267]]

its reconsideration decision based on the information available.
    (f) Coverage during QIC reconsideration process. When a beneficiary 
requests an expedited reconsideration in accordance with the deadline 
specified in (b)(1) of this section, the provider may not bill the 
beneficiary for any disputed services until the QIC makes its 
determination.


Sec.  405.1206  Expedited determinations for inpatient hospital 
discharges.

    (a) Beneficiary's right to an expedited determination for an 
inpatient hospital discharge. A beneficiary who has received a notice 
of noncoverage under section 1154(e)(1) of the Act and 42 CFR 
412.42(c)(3) may request an expedited determination by the QIO when a 
hospital (acting directly or through its utilization review committee), 
with physician concurrence, determines that inpatient care is no longer 
necessary. A beneficiary who timely requests an expedited QIO review in 
accordance with paragraph (d)(1) of this section and who meets the 
conditions of section 1879(a)(2) of the Social Security Act (that is, 
the individual did not know, and could not reasonably have been 
expected to know, that payment would not be made for such items or 
services under part A or part B) may remain in the hospital with no 
additional financial liability until the QIO makes its determination.
    (b) When delivery of the notice is valid. (1) Except as provided in 
paragraph (b)(2) of this section, valid delivery of the notice of non-
coverage requires that the beneficiary (or the beneficiary's authorized 
representative) has signed and dated the notice to indicate that he or 
she has received the notice and can comprehend its contents.
    (2) If a beneficiary refuses to sign the notice, the provider may 
annotate its notice to indicate the refusal, and the date of refusal is 
considered the date of receipt of the notice.
    (c) Beneficiary's right to other review. (1) A beneficiary who 
fails to request an expedited determination in accordance with 
paragraph (d)(1) of this section, and remains in the hospital, may 
request an expedited review at any time during the course of his or her 
inpatient hospital stay. The QIO will issue a decision in accordance 
with paragraph (e)(5)(ii) of this section. The escalation procedures 
described in Sec.  405.1204(c)(5) and the financial liability rules of 
paragraph (f)(2) of this section do not apply.
    (2) A beneficiary who fails to request an expedited determination 
in accordance with paragraph (d)(1) of this section, and who is no 
longer an inpatient in the hospital, may request QIO review within 30 
calendar days after receipt of the notice of noncoverage as provided 
under section 1154(e)(1) or at any time for good cause. The QIO will 
issue a decision in accordance with paragraph (e)(5)(iii) of this 
section. The escalation procedures described in Sec.  405.1204(c)(5) 
and the financial liability rules of paragraph (f)(2) of this section 
do not apply.
    (d) Procedures the beneficiary must follow. For the expedited 
appeal process, the following rules apply:
    (1) The beneficiary must submit the request for an expedited 
determination--
    (i) To the QIO that has an agreement with the hospital under part 
475 of this chapter;
    (ii) In writing or by telephone; and
    (iii) By noon of the first working day after he or she receives 
written notice that the hospital has determined that the hospital stay 
is no longer necessary.
    (2) The beneficiary (or his or her authorized representative), upon 
request by the QIO, must be prepared to discuss the case with the QIO.
    (e) Procedures the QIO must follow. On the date that the QIO 
receives the beneficiary's request:
    (1) The QIO must notify the hospital that the beneficiary has filed 
a request for immediate review.
    (2) The hospital must supply any information, including medical 
records, that the QIO requires to conduct its review and must make it 
available, by phone or in writing, by the close of business of the 
first full working day after the day the beneficiary receives notice of 
the planned discharge.
    (3) The QIO must examine the pertinent records pertaining to the 
services.
    (4) The QIO must solicit the views of the beneficiary (or the 
beneficiary's authorized representative) who requested the expedited 
determination.
    (5)(i) When the beneficiary requests an expedited determination in 
accordance with paragraph (d)(1) of this section, the QIO must make a 
determination and notify the beneficiary, the hospital, and physician 
of its determination by close of business of the first working day 
after it receives all requested pertinent information.
    (ii) When the beneficiary does not request an expedited 
determination in accordance with paragraph (d)(1) of this section, and 
remains an inpatient in the hospital, the QIO will make a determination 
and notify the beneficiary, the hospital, and physician of its 
determination within 2 working days following receipt of the request 
and pertinent information.
    (iii) When the beneficiary does not request an expedited initial 
determination in accordance with paragraph (d)(1) of this section, and 
is no longer an inpatient in the hospital, the QIO will make a 
determination and notify the beneficiary, the hospital, and physician 
of its determination within 30 calendar days after receipt of the 
request and pertinent information.
    (f) Coverage during QIO expedited review. (1) In general, if the 
beneficiary remains in the hospital after receiving the hospital issued 
notice of noncoverage, and the hospital, the physician who concurred in 
the hospital's determination on which the advanced written notice of 
termination was based, or the QIO subsequently finds that the 
beneficiary requires an acute level of inpatient hospital care, the 
beneficiary is not financially responsible for continued care until the 
hospital once again determines that the beneficiary no longer requires 
inpatient care, secures concurrence from the physician responsible for 
the beneficiary's care or the QIO and notifies the beneficiary.
    (2) Timely filing and limitation on liability. If a beneficiary 
both files a request for an expedited determination by the QIO in 
accordance with paragraph (d)(1) of this section, and meets the 
conditions of section 1879(a)(2) of the Social Security Act (that is, 
the individual did not know, and could not reasonably have been 
expected to know, that payment would not be made for such items or 
services under part A or part B), the beneficiary is not financially 
responsible for inpatient hospital services furnished before noon of 
the calendar day after the date the beneficiary (or his or her 
representative) receives notification (either orally or in writing) of 
the expedited determination by the QIO.
    (3) Untimely filing. When a beneficiary does not file a request for 
an expedited determination by the QIO in accordance with paragraph 
(d)(1) of this section, that beneficiary may be responsible for charges 
that extend beyond the date specified on the hospital's advance written 
notice of termination or as otherwise stated by the QIO.
    (4) Hospital requests expedited review. When the hospital requests 
review in accordance with Sec. 405.1208, and the QIO concurs with the 
hospital's decision, a hospital may not charge a beneficiary until the 
date specified by the QIO.
    (g) Notice of an expedited determination. (1) When a QIO issues an 
expedited determination in accordance with paragraph (e)(5) of this 
section, the

[[Page 69268]]

QIO must notify the beneficiary, physician, and hospital of its 
decision, by telephone and subsequently in writing.
    (2) A written notice of the expedited determination must contain 
the following:
    (i) The basis for the determination;
    (ii) A detailed rationale for the determination;.
    (iii) A statement explaining the Medicare payment consequences of 
the expedited determination and date of liability, if any;
    (iv) A statement informing the beneficiary of his or her subsequent 
appeal rights, and the timeframe for requesting a reconsideration by 
the QIC.
    (h) Effect of an expedited QIO determination. The QIO determination 
is binding upon the beneficiary, physician, and hospital, except in the 
following circumstances:
    (1) When beneficiary remains in the hospital. If the beneficiary is 
still an inpatient in the hospital and is dissatisfied with the 
determination, he or she may request a reconsideration according to the 
procedures described in Sec.  405.1204. If the beneficiary does not 
make a request in accordance with paragraph (d)(1) of this section, the 
timeframes described in Sec.  405.1204(c)(3), the escalation procedures 
described in Sec.  405.1204(c)(5), and the coverage rule described in 
Sec.  405.1204(f) will not apply.
    (2) When beneficiary is no longer an inpatient in the hospital. If 
the beneficiary is no longer an inpatient in the hospital and is 
dissatisfied with this determination, the determination is subject to 
the general claims appeal process.


Sec.  405.1208  Hospital requests expedited QIO review.

    (a) General rule. If the hospital (acting directly or through its 
utilization review committee) believes that the beneficiary does not 
require further inpatient hospital care but is unable to obtain the 
agreement of the physician, it may request an expedited determination 
by the QIO.
    (b) Procedures hospital must follow. (1) The hospital must (acting 
directly or through its utilization review committee) notify the 
beneficiary (or his or her representative) that it has requested that 
review.
    (2) The hospital must supply any pertinent information the QIO 
requires to conduct its review and must make it available by phone or 
in writing, by close of business of the first full working day 
immediately following the day the hospital submits the request for 
review.
    (c) Procedures the QIO must follow. (1) The QIO must notify the 
hospital that it has received the request for review and must notify 
the hospital if it has not received all pertinent records.
    (2) The QIO must examine the pertinent records pertaining to the 
services.
    (3) The QIO must solicit the views of the beneficiary in question.
    (4) The QIO must make a determination and notify the beneficiary, 
the hospital, and physician within 2 working days of the hospital's 
request and receipt of any pertinent information submitted by the 
hospital.
    (d) Notice of an expedited determination. (1) When a QIO issues an 
expedited determination as stated in paragraph (c)(4) of this section, 
it must notify the beneficiary, physician, and hospital of its 
decision, by telephone and subsequently in writing.
    (2) A written notice of the expedited initial determination must 
contain the following:
    (i) The basis for the determination;.
    (ii) A detailed rationale for the determination;
    (iii) A statement explaining the Medicare payment consequences of 
the expedited determination and date of liability, if any; and
    (iv) A statement informing the beneficiary of his or her appeal 
rights and the timeframe for requesting an appeal.
    (e) Effect of an expedited determination. The expedited 
determination under this section is binding upon the beneficiary, 
physician, and hospital, except in the following circumstances:
    (1) When a beneficiary remains in the hospital. If the beneficiary 
is still an inpatient in the hospital and is dissatisfied with this 
determination, he or she may request a reconsideration according to the 
procedures described in Sec.  405.1204. The procedures described in 
Sec.  405.1204 will apply to reconsiderations requested under this 
section. If the beneficiary does not make a request in accordance with 
paragraph (d)(1) of this section, the timeframes described in Sec.  
405.1204(c)(3), the escalation procedures described in Sec.  
405.1204(c)(5), and the coverage rule described in Sec.  405.1204(f) 
will not apply.
    (2) When a beneficiary is no longer an inpatient in the hospital. 
If the beneficiary is no longer an inpatient in the hospital and is 
dissatisfied with this determination, this determination is subject to 
the general claims appeal process.

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
Part 489 is amended as set forth below:
0
1. The authority citation for part 489 is revised to read as follows:

    Authority: Secs. 1102, 1819, 1861, 1864(m), 1866, 1869, and 1871 
of the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x, 
1395aa(m), 1395cc, 1395ff, and 1395hh).

0
2. Section 489.27(b) is revised as follows:


Sec.  489.27  Beneficiary notice of discharge rights.

* * * * *
    (b) Notification by other providers. Other providers that 
participate in the Medicare program must furnish each Medicare 
beneficiary, or authorized representative, applicable CMS notices in 
advance of the termination of Medicare services, including the notices 
required under Sec. Sec.  405.1202 and 422.624 of this chapter.

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

    Dated: December 23, 2003.
Dennis G. Smith,
Acting Administrator, Centers for Medicare & Medicaid Services.

    Approved: July 12, 2004.
Tommy G. Thompson,
Secretary.

    Editorial note: The Office of the Federal Register received this 
document on November 19, 2004.

[FR Doc. 04-26133 Filed 11-24-04; 8:45 am]
BILLING CODE 4120-01-P


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