78802 Federal Register / Vol. 78, No. 249 / Friday, December 27, 2013 / Proposed Rules 

of the maintenance plan. Therefore, 

when a conformity determination is 

prepared which assesses conformity for 

the years before 2021, the 2021 MVEB 

and the underlying assumptions 

supporting it would have to be 

considered. Finally, 40 CFR 93.110 

requires the use of the latest planning 

assumptions in conformity 

determinations. Thus, the most current 

motor vehicle and road dust emission 

factors would need to be used, and we 

expect the analysis would show greatly 

reduced PM10 motor vehicle and road 

dust emissions from those calculated in 

the first maintenance plan. In view of 

the above, EPA is proposing to approve 

the 2021 PM10 MVEB of 946 lbs/day. 

V. Proposed Action 

We are proposing to approve the 

revised Pagosa Springs PM10

Maintenance Plan that was submitted to 

us on March 31, 2010, with one 

exception. We are proposing to 

disapprove the listing of ‘‘voluntary coal 

and/or wood burning curtailment’’ as a 

potential contingency measure in 

section 5.F.3 of the revised Pagosa 

Springs PM10 Maintenance Plan. We are 

proposing to approve the remainder of 

the revised maintenance plan because it 

demonstrates maintenance through 2021 

as required by CAA section 175A(b), 

retains the control measures from the 

initial PM10 maintenance plan that EPA 

approved on June 15, 2001, and meets 

other CAA requirements for a section 

175A maintenance plan. We are 

proposing to exclude from use in 

determining that Pagosa Springs 

continues to attain the 24-hour PM10

NAAQS exceedances of the 24-hour 

PM10 NAAQS that were recorded at the 

Pagosa Springs PM10 monitor on March 

22, 2009, April 3, 2009, April 5, 2010, 

April 28, 2010, April 29, 2010, May 11, 

2010, and May 22, 2010 because they 

meet the criteria for exceptional events 

caused by high wind natural events. We 

are also proposing to approve the 

revised maintenance plan’s 2021 

transportation conformity MVEB for 

PM10 of 946 lbs/day.

VI. Statutory and Executive Orders 

Review 

Under the CAA, the Administrator is 

required to approve a SIP submission 

that complies with the provisions of the 

Act and applicable federal regulations. 

42 U.S.C. 7410(k), 40 CFR 52.02(a). 

Thus, in reviewing SIP submissions, 

EPA’s role is to approve state choices, 

provided that they meet the criteria of 

the CAA. This proposed action merely 

proposes to approve state law as 

meeting federal requirements and does 

not propose to impose additional 

requirements beyond those imposed by 

state law. For that reason, this proposed 

action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

USC 3501 et seq.); 

• is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

USC 601 et seq.); 

• does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• does not have federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 USC 272 note) because 

application of those requirements would 

be inconsistent with the CAA; and, 

• does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed action does 

not have tribal implications as specified 

by Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP 

would not be approved to apply in 

Indian country located in the state, and 

EPA notes that it will not impose 

substantial direct costs on tribal 

governments or preempt tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Intergovernmental relations, 

Nitrogen dioxide, Ozone, Particulate 

matter, Reporting and recordkeeping 

requirements, Volatile Organic 

Compounds. 

Authority: 42 U.S.C. 7401 et seq. 

Dated: December 16, 2013. 

Shaun L. McGrath, 

Regional Administrator, Region 8. 

[FR Doc. 2013–31110 Filed 12–26–13; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 405 

[CMS–6055–P] 

RIN 0938–AS03 

Medicare Program; Right of Appeal for 

Medicare Secondary Payer 

Determination Relating to Liability 

Insurance (Including Self-Insurance), 

No Fault Insurance, and Workers’ 

Compensation Laws and Plans 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement provisions of the 

Strengthening Medicare and Repaying 

Taxpayers Act of 2012 (SMART Act) 

which require us to provide a right of 

appeal and an appeal process for 

liability insurance (including selfinsurance), no-fault insurance, and 

workers’ compensation laws or plans 

when Medicare pursues a Medicare 

Secondary Payer (MSP) recovery claim 

directly from the liability insurance 

(including self-insurance), no fault 

insurance, or workers’ compensation 

law or plan. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided, no later than 5 

p.m. on February 25, 2014. 

ADDRESSES: In commenting, please refer 

to file code CMS–6055–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed). 

1. Electronically. You may submit 

electronic comments on this regulation 

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

the instructions under the ‘‘More Search 

Options’’ tab. 

2. By regular mail. You may mail 

written comments to the following 

address only: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–6055– 

P, P.O. Box 8013, Baltimore, MD 21244– 

8013. 


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Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address only: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–6055– 

P, Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

1066 in advance to schedule your 

arrival with one of our staff members. 

Comments erroneously mailed to the 

addresses indicated as appropriate for 

hand or courier delivery may be delayed 

and received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Barbara Wright, (410) 786–4292. 

Cynthia Ginsburg, (410) 786–2579. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will be 

also 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 Boulevard, 

Baltimore, MD 21244–1850, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

please phone 1–800–743–3951. 

I. Overview and Background 

A. Overview 

When the Medicare program was 

enacted in 1965, Medicare was the 

primary payer for all medically 

necessary covered and otherwise 

reimbursable items and services, with 

the exception of those items and 

services covered and payable by 

workers’ compensation. In 1980, the 

Congress enacted the Medicare 

Secondary Payer (MSP) provisions of 

the Social Security Act (the Act), which 

added section 1862(b) to the Act and 

established Medicare as the secondary 

payer to certain primary plans. Primary 

plan, as defined in section 1862(b)(2)(A) 

of the Act, means a group health plan 

or large group health plan, workers’ 

compensation law or plan, automobile 

or liability insurance policy or plan 

(including self-insured plan) or no fault 

insurance. 

Section 1862(b)(2) of the Act, in part, 

prohibits Medicare from making 

payment where payment has been made 

or can reasonably be expected to be 

made by a primary plan. If payment has 

not been made or cannot reasonably be 

expected to be made by a primary plan, 

Medicare may make conditional 

payments with the expectation that the 

payments will be reimbursed to the 

appropriate Medicare Trust Fund. That 

is, Medicare may pay for medical claims 

with the expectation that it will be 

repaid if the beneficiary obtains a 

settlement, judgment, award, or other 

payment (hereafter referred to as 

‘‘settlement’’). Section 1862(b)(2)(B) of 

the Act provides authority for Medicare 

to make conditional payments and 

requires the primary plan, if it is 

responsible for the payment, to 

reimburse Medicare. A primary plan 

and any entity that receives payment 

from a primary plan shall reimburse the 

appropriate Medicare Trust Fund for 

Medicare’s payments for items and 

services if it is demonstrated that such 

primary plan has or had responsibility 

to make payment with respect to such 

items and services. 

The responsibility for payment on the 

part of workers’ compensation, liability 

insurance (including self-insurance), 

and no-fault insurance is generally 

demonstrated by ‘‘settlements.’’ When a 

‘‘settlement’’ occurs, the ‘‘settlement’’ is 

subject to the Act’s MSP provisions 

because a ‘‘payment has been made’’ 

with respect to medical care of a 

beneficiary related to that ‘‘settlement.’’ 

Section 1862(b)(2)(B)(iv) of the Act 

provides the Federal government 

subrogation rights to any right under 

MSP of an individual or any other entity 

to payment for items or services under 

a primary plan, to the extent Medicare 

payments were made for such medical 

items and services. Moreover, section 

1862(b)(2)(B)(iii) of the Act provides the 

Federal government a direct right of 

action to recover conditional payments 

made by Medicare. This direct right of 

action, which is separate and 

independent from Medicare’s statutory 

subrogation rights, may be brought to 

recover conditional payments against 

any or all entities that are or were 

responsible for making payment for the 

items and services under a primary 

plan. Under the direct right of action, 

the Federal government may also 

recover from any entity that has 

received payment from a primary plan 

or the proceeds of a primary plan’s 

payment to any entity. 

B. Background 

The Strengthening Medicare and 

Repaying Taxpayers Act of 2012 (the 

SMART Act) was signed into law by 

President Obama on January 10, 2013, 

and amends the Act’s MSP provisions 

(found at 42 U.S.C. 1395y(b)). 

Specifically, section 201 of the SMART 

Act added subparagraph (viii) to section 

1862(b)(2)(B) of the Social Security Act. 

This new clause requires Medicare to 

promulgate regulations establishing a 

right of appeal and an appeals process, 

with respect to any determination for 

which the Secretary is seeking to 

recover payments from an applicable 

plan (as defined in the MSP provisions), 

under which the applicable plan 

involved, or an attorney, agent, or thirdparty administrator on behalf of the 

applicable plan, may appeal such a 

determination. Further, the individual 

furnished such an item and/or service 

shall be notified of the applicable plan’s 

intent to appeal such a determination. 

For purposes of this provision, the term 

applicable plan refers to liability 

insurance (including self-insurance), nofault insurance, or a workers’ 

compensation law or plan as defined at 

section 1862(b)(8)(F) of the Act. (We 

note that the industry has expressed 

interest in an appeal process for 

determinations regarding proposed 

Workers’ Compensation Medicare SetVerDate Mar<15>2010 19:07 Dec 26, 2013 Jkt 232001 PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 E:\FR\FM\27DEP1.SGM 27DEP1

tkelley on DSK3SPTVN1PROD with PROPOSALS
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Aside Arrangement (WCMSA) amounts. 

This proposed rule does not address this 

issue. It will be addressed separately.) 

Currently, if an MSP recovery demand 

is issued to the beneficiary as the 

identified debtor, the beneficiary has 

formal administrative appeal rights and 

eventual judicial review as set forth in 

subpart I of part 405. If the recovery 

demand is issued to the applicable plan 

as the identified debtor, currently the 

applicable plan has no formal 

administrative appeal rights or judicial 

review. CMS’ recovery contractor 

addresses any dispute raised by the 

applicable plan, but there is no 

multilevel formal appeal process. 

Subpart I of part 405, provides for a 

multilevel process including a 

redetermination by the contractor 

issuing the recovery demand, a 

reconsideration by a Qualified 

Independent Contractor (QIC), an 

Administrative Law Judge (ALJ) hearing, 

a review by the Departmental Appeals 

Board’s (DAB) Medicare Appeals 

Council (MAC), and eventual judicial 

review. The regulations set forth details 

on the process including filing 

requirements, amount in controversy 

requirements, and other requirements, 

as appropriate. We propose to include 

appeals for applicable plans where 

Medicare is pursuing recovery directly 

from the applicable plan in this process. 

The debts at issue involve recovery of 

the same conditional payments that 

would be at issue if recovery were 

directed at the beneficiary. Given this, 

we believe it is appropriate to utilize the 

same multilevel appeals process for 

applicable plans. 

II. Provisions of the Proposed 

Regulations 

After review of the existing 

regulations in subpart I of 42 CFR Part 

405, we are proposing the following 

changes, as appropriate, in order to 

include the applicable plan as a party 

when we pursue recovery directly from 

the applicable plan. 

We propose to amend § 405.900, Basis 

and Scope, by revising paragraph (a) to 

add section 1862(b)(2)(B)(viii) of the Act 

as part of the statutory basis for Subpart 

I. Section 1862(b)(2)(B)(viii) of the Act 

requires an appeals process for 

applicable plans when Medicare 

pursues recovery directly from the 

applicable plan. 

In § 405.902, Definitions, we propose 

to add a definition of the term 

‘‘applicable plan’’ for purposes of 

Subpart I. We would adopt the statutory 

definition of ‘‘applicable plan’’ in 

section 1862(b)(8)(F) of the Act, which 

states that an applicable plan means 

liability insurance (including selfinsurance), no-fault insurance, or a 

workers’ compensation law or plan. 

We propose to amend § 405.906, 

Parties to initial determinations, 

redeterminations, reconsiderations, 

hearings and reviews by adding 

§ 405.906(a)(4) to include the applicable 

plan as a party for an initial 

determination where Medicare is 

pursuing recovery directly from the 

applicable plan. By ‘‘pursuing recovery 

directly from the applicable plan,’’ we 

mean that the applicable plan would be 

the identified debtor, with a recovery 

demand letter requiring repayment 

issued to the applicable plan (or its 

agent or representative). Sending an 

applicable plan a courtesy copy of a 

recovery demand letter issued to a 

beneficiary does not qualify as 

‘‘pursuing recovery directly from the 

applicable plan’’ and does not confer 

party status on the applicable plan. We 

are also proposing a technical change in 

the section heading for § 405.906 

(adding a comma before the phrase ‘‘and 

reviews’’). 

Based upon this proposed change to 

§ 405.906, the applicable plan’s party 

status would continue at subsequent 

levels of appeal. Consistent with section 

1862(b)(2)(B)(viii) of the Act, the 

beneficiary, provider, and/or supplier 

are not considered parties to an appeal 

by an applicable plan. Thus, we propose 

to remove the beneficiary, as well as the 

provider or supplier, as a party at the 

redetermination level where Medicare is 

pursuing recovery directly from the 

applicable plan. This would also, in 

effect, remove the beneficiary and the 

provider or supplier as a party at 

subsequent levels of appeal where 

Medicare is pursuing recovery directly 

from the applicable plan. To implement 

our proposed changes, we would revise 

§ 405.906 (a) to specify: (1) The 

circumstances under which an 

applicable plan is a party to an initial 

determination; and (2) when an 

applicable plan is a party to an initial 

determination, it is the sole party with 

respect to that determination. Finally, as 

providers and suppliers would 

specifically be excluded from party 

status for an initial determination with 

respect to an applicable plan, we would 

make it clear that the special rule for 

provider or supplier party status in 

§ 405.906(c) does not apply to an initial 

determination with respect to an 

applicable plan. 

In proposed § 405.910, Appointed 

representatives, we would add a new 

paragraph (e)(4) to provide the 

applicable plan with parallel rights to a 

beneficiary’s rights or a provider or 

supplier’s rights regarding the duration 

of an appointment of representation 

with respect to an MSP recovery claim. 

We also propose to revise § 405.910(i)(4) 

so that the special provision that 

beneficiaries as well as their 

representatives must receive notices or 

requests in a MSP recovery case 

continues to apply only to beneficiaries. 

For all other parties, including an 

applicable plan, we would continue to 

follow the regulatory provisions in 

§ 405.910(i)(1) through (3). 

In § 405.921, Notice of initial 

determination, we propose to add a 

paragraph (c) to provide specific 

language regarding requirements for 

notice to an applicable plan. This 

language would parallel the existing 

language in this section regarding the 

notice to beneficiaries. In addition to 

these changes, for consistency we have 

made a number of technical and 

formatting changes. 

In order for an action to be subject to 

the appeal process set forth in subpart 

I of 42 CFR Part 405, there must be an 

‘‘initial determination.’’ We propose, in 

§ 405.924, Actions that are initial 

determinations, to add a new paragraph 

§ 405.924(b)(15) providing that a 

determination that Medicare has a 

recovery claim where Medicare is 

pursuing recovery directly from an 

applicable plan is an initial 

determination with respect to the 

amount of or existence of the MSP 

recovery claim. This addition would 

generally parallel the existing 

provisions in § 405.924(b)(14) 

addressing pursuing MSP recovery 

claims from a beneficiary, provider or 

supplier. In addition to these changes, 

for consistency we have made a number 

of technical and formatting changes. 

The MSP provisions in section 

1862(b) of the Act establish that 

Medicare has a direct right of recovery 

against a primary payer. Currently 

under § 405.926(k), determinations 

under these provisions that Medicare 

has a recovery against a particular 

primary payer, are not initial 

determinations for purposes of part 405 

subpart I. Consequently, although the 

primary payer may dispute the recovery 

claim where Medicare pursues recovery 

against the applicable plan, it has no 

formal appeal rights. We propose to 

revise § 405.926(k) by creating an 

exception to the broad rule in 

§ 405.926(k) to reflect the proposed 

addition of § 405.924(b)(15). The 

proposed revision would provide an 

exception to § 405.926(k) where there is 

an initial determination under 

§ 405.924(b)(15) (where Medicare is 

pursuing recovery directly from an 

applicable plan). We also propose to 

add a new § 405.926(a)(3) to clarify that 

Medicare’s determination regarding 


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who/what entity it will pursue with 

respect to an MSP recovery claim is not 

an initial determination for purposes of 

part 405 subpart I. Because Medicare 

has the right to recover conditional 

payments from the beneficiary, the 

primary payer, or any other entity that 

has the proceeds from payment by the 

primary plan, Medicare’s decision 

regarding who/what entity it is pursuing 

recovery from is not subject to appeal. 

We also propose to add the word 

‘‘facilitates’’ to the existing ‘‘sponsors or 

contributes to’’ language in § 405.926(k) 

in recognition of our longstanding 

position that the concept of employer 

sponsorship or contribution has always 

included facilitation efforts. Finally for 

consistency, we are proposing several 

technical changes. 

We propose to add a new § 405.947, 

Notice to the beneficiary of an 

applicable plan’s request for a 

redetermination, to add language 

satisfying the requirement at section 

1862(b)(2)(B)(viii) of the Act that the 

beneficiary receive notice of the 

applicable plan’s intent to appeal where 

Medicare is pursuing recovery directly 

from the applicable plan. As the 

beneficiary would not be a party to the 

appeal at the redetermination level or 

subsequent levels of appeal, we believe 

that a single notice at the 

redetermination level satisfies the intent 

of this provision. We also propose that 

the required notice be issued by the 

contractor adjudicating the 

redetermination request in order to 

ensure clarity and consistency in the 

wording of the notice. 

III. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, 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, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (February 2, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999) and the Congressional 

Review Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 

direct 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 in any 1 year). We 

have determined that the effect of this 

proposed rule on the economy and the 

Medicare program is not economically 

significant. The proposed rule would 

provide a formal administrative appeal 

process for MSP recovery claims where 

the applicable plan is the identified 

debtor, as opposed to the current 

process which requires a CMS 

contractor to consider any defense 

submitted by an applicable plan but 

does not provide formal administrative 

appeal rights. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $7.0 million to $35.5 

million in any 1 year. Individuals and 

States are not included in the definition 

of a small entity. We have determined 

and we certify that this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities because there is and will be no 

change in the administration of the MSP 

provisions. The proposed changes 

would simply expand or formalize 

existing rights with respect to MSP 

recovery claims pursued directly from 

an applicable plan. Therefore, we are 

not preparing an analysis for the RFA. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis (RIA) if a rule may have 

a significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 for 

proposed rules of the RFA. For purposes 

of section 1102(b) of the Act, we define 

a small rural hospital as a hospital that 

is located outside of a Metropolitan 

Statistical Area for Medicare payment 

regulations and has fewer than 100 

beds. We have determined that this 

proposed rule would not have a 

significant effect on the operations of a 

substantial number of small rural 

hospitals because it would simply 

expand and/or formalize existing rights 

with respect to MSP recovery claims 

pursued directly from an applicable 

plan. Therefore, we are not preparing an 

analysis for section 1102(b) of the Act. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2013, that threshold is approximately 

$141 million. This proposed rule has no 

consequential effect on State, local, or 

tribal governments or on the private 

sector because it would simply expand 

and/or formalize existing rights with 

respect to MSP recovery claims pursued 

directly from an applicable plan. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 405 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medical 

devices, Medicare, Reporting and 

recordkeeping requirements, Rural 

areas, X-rays. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR Part 405 as set forth below: 

PART 405—FEDERAL HEALTH 

INSURANCE FOR THE AGED AND 

DISABLED 

■ 1. The authority citation for part 405 

reads as follows: 

Authority: Secs. 205(a), 1102, 1861, 

1862(a), 1869, 1871, 1874, 1881, 1886(k) of 

the Social Security Act (42 U.S.C. 405(a), 


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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) 

■ 2. Amend § 405.900 by revising 

paragraph (a) to read as follows: 

§ 405.900 Basis and scope. 

(a) Statutory basis. This subpart is 

based on the following provisions of the 

Act: 

(1) Section 1869(a) through (e) and (g) 

of the Act. 

(2) Section 1862(b)(2)(B)(viii) of the 

Act. 

* * * * * 

■ 3. Amend § 405.902 by adding the 

definition ‘‘Applicable plan’’ in 

alphabetical order to read as follows: 

§ 405.902 Definitions. 

* * * * * 

Applicable plan means liability 

insurance (including self-insurance), nofault insurance, or a workers’ 

compensation law or plan. 

* * * * * 

■ 4. Amend § 405.906 as follows: 

■ A. Revising the section heading. 

■ B. Adding new paragraph (a)(4). 

■ C. Amending paragraph (c) by adding 

a sentence at the end of the paragraph. 

The additions and revision read as 

follows: 

§ 405.906 Parties to the initial 

determinations, redeterminations, 

reconsiderations, hearings, and reviews. 

(a) * * * 

(4) An applicable plan for an initial 

determination under § 405.924(b)(15) 

where Medicare is pursuing recovery 

directly from the applicable plan. The 

applicable plan is the sole party to an 

initial determination under 

§ 405.924(b)(15) (that is, where 

Medicare is pursuing recovery directly 

from the applicable plan). 

* * * * * 

(c) * * *. This paragraph (c) does not 

apply to an initial determination with 

respect to an applicable plan under 

§ 405.924(b)(15). 

■ 4. Amend § 405.910 as follows: 

■ A. Adding paragraph (e)(4). 

■ B. Revising paragraph (i)(4). 

The addition and revision read as 

follows: 

§ 405.910 Appointed representatives. 

* * * * * 

(e) * * * 

(4) For an initial determination of a 

Medicare Secondary Payer recovery 

claim, an appointment signed by an 

applicable plan which has party status 

in accordance with § 405.906(a)(1)(iv) is 

valid from the date that appointment is 

signed for the duration of any 

subsequent appeal, unless the 

appointment is specifically revoked. 

* * * * * 

(i) * * * 

(4) For initial determinations and 

appeals involving Medicare Secondary 

Payer recovery claims where the 

beneficiary is a party, the adjudicator 

sends notices and requests to both the 

beneficiary and the beneficiary’s 

representative, if the beneficiary has a 

representative. 

* * * * * 

■ 5. Amend § 405.921 as follows: 

■ A. In paragraph (a)(1), removing ‘‘;’’ 

and adding in its place ‘‘.’’ 

■ B. In paragraph (a)(2) introductory 

text, removing the phrase ‘‘must 

contain—’’ and adding in its place the 

phrase ‘‘must contain all of the 

following:’’ 

■ C. In paragraphs (a)(2)(i) and (a)(2)(ii), 

removing ‘‘;’’ and adding in its place ‘‘.’’ 

■ D. In paragraph (a)(2)(iii), removing ‘‘; 

and’’ and adding in its place ‘‘.’’ 

■ E. Redesignating the second and third 

sentences of paragraph (b)(1) as 

paragraph (b)(1)(i) and (ii), respectively. 

■ F. In paragraph (b)(2) introductory 

text, removing the phrase ‘‘must 

contain:’’ and adding in its place the 

phrase ‘‘must contain all of the 

following:’’ 

■ G. In paragraphs (b)(2)(i) through 

(b)(2)(iv), removing ‘‘;’’ and add in its 

place ‘‘.’’ 

■ H. In paragraph (b)(2)(v), removing ‘‘; 

and’’ and add in its place ‘‘.’’ 

■ I. Adding paragraph (c) to read as 

follows: 

§ 405.921 Notice of initial determination. 

* * * * * 

(c) Notice of initial determination sent 

to an applicable plan—(1) Content of 

the notice. The notice of initial 

determination under § 405.924(b)(15) 

must contain all of the following: 

(i) The reasons for the determination. 

(ii) The procedures for obtaining 

additional information concerning the 

contractor’s determination, such as a 

specific provision of the policy, manual, 

law or regulation used in making the 

determination. 

(iii) Information on the right to a 

redetermination if the liability 

insurance (including self-insurance), nofault insurance, or workers’ 

compensation law or plan is dissatisfied 

with the outcome of the initial 

determination and instructions on how 

to request a redetermination. 

(iv) Any other requirements specified 

by CMS. 

(2) [Reserved] 

■ 6. Amend § 405.924 as follows: 

■ A. In paragraph (b) introductory text, 

removing the phrase ‘‘with respect to:’’ 

and add in its place the phrase ‘‘with 

respect to any of the following:’’ 

■ B. In paragraph (b)(1) through (b)(11) 

removing ‘‘;’’ and adding in its place ‘‘.’’ 

■ D. In paragraph (b)(12) introductory 

text, removing the ‘‘:’’ and adding in its 

place ‘‘—’’. 

■ C. Adding paragraph (b)(15). 

The addition reads as follows: 

§ 405.924 Actions that are initial 

determinations. 

* * * * * 

(b) * * * 

(15) Under the Medicare Secondary 

Payer provisions of section 1862(b) of 

the Act that Medicare has a recovery 

claim if Medicare is pursuing recovery 

directly from an applicable plan. That 

is, there is an initial determination with 

respect to the amount and existence of 

the recovery claim. 

* * * * * 

■ 7. Amend § 405.926 as follows: 

■ A. In the introductory text, removing 

the phrase ‘‘not limited to –’’ and 

adding in its place the phrase ‘‘not 

limited to the following:’’ 

■ B. In the introductory text of 

paragraph (a), removing the phrase ‘‘for 

example –’’ and adding in its place the 

phrase ‘‘for example one of the 

following:’’ 

■ C. In paragraphs (a)(1) and (a)(2), 

removing ‘‘;’’ and adding in its place ‘‘.’’ 

■ D. Adding paragraph (a)(3). 

■ E. In paragraphs (b) through (j), 

removing ‘‘;’’ and adding in its place ‘‘.’’ 

■ F. Revising paragraph (k). 

■ G. In paragraphs (l) through (q), 

removing ‘‘;’’ and adding in its place ‘‘.’’ 

■ H. In paragraph (r), removing ‘‘; and’’ 

and adding in its place ‘‘.’’ 

The addition and revision read as 

follows: 

§ 405.926 Actions that are not initial 

determinations. 

* * * * * 

(a) * * * 

(3) Determination under the Medicare 

Secondary Payer provisions of section 

1862(b) of the Act of the debtor for a 

particular recovery claim. 

* * * * * 

(k) Except as specified in 

§ 405.924(b)(15), determinations under 

the Medicare Secondary Payer 

provisions of section 1862(b) of the Act 

that Medicare has a recovery against an 

entity that was or is required or 

responsible (directly, as an insurer or 

self-insurer; as a third party 

administrator; as an employer that 

sponsors, contributes to or facilitates a 

group health plan or a large group 

health plan; or otherwise) to make 

payment for services or items that were 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 249 / Friday, December 27, 2013 / Proposed Rules 78807 

already reimbursed by the Medicare 

program. 

* * * * * 

■ 8. Add a new § 405.947 to subpart I to 

read as follows: 

§ 405.947 Notice to the beneficiary of 

applicable plan’s request for a 

redetermination. 

(a) The contractor adjudicating the 

redetermination request must send 

notice of the applicable plan’s appeal to 

the beneficiary. 

(b) Issuance and content of the notice 

must comply with CMS instructions. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: August 29, 2013. 

Marilyn Tavenner, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: November 12, 2013. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2013–30661 Filed 12–26–13; 8:45 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of Inspector General 

42 CFR Part 1001 

Solicitation of New Safe Harbors and 

Special Fraud Alerts 

AGENCY: Office of Inspector General 

(OIG), HHS. 

ACTION: Notice of intent to develop 

regulations. 

SUMMARY: In accordance with section 

205 of the Health Insurance Portability 

and Accountability Act of 1996 

(HIPAA), this annual notice solicits 

proposals and recommendations for 

developing new and modifying existing 

safe harbor provisions under the Federal 

anti-kickback statute (section 1128B(b) 

of the Social Security Act), as well as 

developing new OIG Special Fraud 

Alerts. 

DATES: To ensure consideration, public 

comments must be delivered to the 

address provided below by no later than 

5 p.m. on February 25, 2014. 

ADDRESSES: In commenting, please refer 

to file code OIG–122–N. Because of staff 

and resource limitations, we cannot 

accept comments by facsimile (fax) 

transmission. 

You may submit comments in one of 

three ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific 

recommendations and proposals 

through the Federal eRulemaking Portal 

at http://www.regulations.gov. 

2. By regular, express, or overnight 

mail. You may send written comments 

to the following address: Patrice Drew, 

Office of Inspector General, 

Congressional and Regulatory Affairs, 

Department of Health and Human 

Services, Attention: OIG–122–N, Room 

5541C, Cohen Building, 330 

Independence Avenue SW., 

Washington, DC 20201. Please allow 

sufficient time for mailed comments to 

be received before the close of the 

comment period. 

3. By hand or courier. If you prefer, 

you may deliver, by hand or courier, 

your written comments before the close 

of the comment period to Patrice Drew, 

Office of Inspector General, Department 

of Health and Human Services, Cohen 

Building, Room 5541C, 330 

Independence Avenue SW., 

Washington, DC 20201. Because access 

to the interior of the Cohen Building is 

not readily available to persons without 

Federal Government identification, 

commenters are encouraged to schedule 

their delivery with one of our staff 

members at (202) 619–1368. For 

information on viewing public 

comments, please see the 

Supplementary Information section. 

FOR FURTHER INFORMATION CONTACT: 

Patrice Drew, Congressional and 

Regulatory Affairs Liaison, Office of 

Inspector General, (202) 619–1368. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on 

recommendations for developing new or 

revised safe harbors and Special Fraud 

Alerts. Please assist us by referencing 

the file code OIG–122–N. 

Inspection of Public Comments: All 

comments received before the end of the 

comment period are available for 

viewing by the public. All comments 

will be posted on http://

www.regulations.gov as soon as possible 

after they have been received. 

Comments received timely will also be 

available for public inspection as they 

are received at Office of Inspector 

General, Department of Health and 

Human Services, Cohen Building, 330 

Independence Avenue SW., 

Washington, DC 20201, Monday 

through Friday from 9:30 a.m. to 5 p.m. 

To schedule an appointment to view 

public comments, phone (202) 619– 

1368. 

I. Background 

A. OIG Safe Harbor Provisions 

Section 1128B(b) of the Social 

Security Act (the Act) (42 U.S.C. 1320a– 

7b(b)) provides criminal penalties for 

individuals or entities that knowingly 

and willfully offer, pay, solicit, or 

receive remuneration to induce or 

reward business reimbursable under the 

Federal health care programs. The 

offense is classified as a felony and is 

punishable by fines of up to $25,000 

and imprisonment for up to 5 years. OIG 

may also impose civil money penalties, 

in accordance with section 1128A(a)(7) 

of the Act (42 U.S.C. 1320a–7a(a)(7)), or 

exclusion from the Federal health care 

programs, in accordance with section 

1128(b)(7) of the Act (42 U.S.C. 1320a– 

7(b)(7)). 

Since the statute on its face is so 

broad, concern has been expressed for 

many years that some relatively 

innocuous commercial arrangements 

may be subject to criminal prosecution 

or administrative sanction. In response 

to the above concern, section 14 of the 

Medicare and Medicaid Patient and 

Program Protection Act of 1987, Public 

Law 100–93 § 14, the Act, § 1128B(b), 42 

U.S.C. 1320a–7b(b), specifically 

required the development and 

promulgation of regulations, the socalled ‘‘safe harbor’’ provisions, 

specifying various payment and 

business practices that, although 

potentially capable of inducing referrals 

of business reimbursable under the 

Federal health care programs, would not 

be treated as criminal offenses under the 

anti-kickback statute and would not 

serve as a basis for administrative 

sanctions. OIG safe harbor provisions 

have been developed ‘‘to limit the reach 

of the statute somewhat by permitting 

certain non-abusive arrangements, while 

encouraging beneficial and innocuous 

arrangements’’ (56 FR 35952, July 29, 

1991). Health care providers and others 

may voluntarily seek to comply with 

these provisions so that they have the 

assurance that their business practices 

will not be subject to liability under the 

anti-kickback statute or related 

administrative authorities. The OIG safe 

harbor regulations are found at 42 CFR 

1001.952. 

B. OIG Special Fraud Alerts 

OIG has also periodically issued 

Special Fraud Alerts to give continuing 

guidance to health care providers with 

respect to practices OIG finds 

potentially fraudulent or abusive. The 

Special Fraud Alerts encourage industry 

compliance by giving providers 

guidance that can be applied to their 

own practices. OIG Special Fraud Alerts 


tkelley on DSK3SPTVN1PROD with PROPOSALS