17052 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

August 10, 1999), because it merely 

proposes to approve a state rule 

implementing a Federal requirement, 

and does not alter the relationship or 

the distribution of power and 

responsibilities established in the Clean 

Air Act. This proposed rule also is not 

subject to Executive Order 13045 (62 FR 

19885, April 23, 1997), because it is not 

economically significant. 

In reviewing SIP submissions, EPA’s 

role is to approve state choices, 

provided that they meet the criteria of 

the Clean Air Act. In this context, in the 

absence of a prior existing requirement 

for the State to use voluntary consensus 

standards (VCS), EPA has no authority 

to disapprove a SIP submission for 

failure to use VCS. It would thus be 

inconsistent with applicable law for 

EPA, when it reviews a SIP submission, 

to use VCS in place of a SIP submission 

that otherwise satisfies the provisions of 

the Clean Air Act. Thus, the 

requirements of section 12(d) of the 

National Technology Transfer and 

Advancement Act of 1995 (15 U.S.C. 

272 note) do not apply. As required by 

section 3 of Executive Order 12988 (61 

FR 4729, February 7, 1996), in issuing 

this proposed rule, EPA has taken the 

necessary steps to eliminate drafting 

errors and ambiguity, minimize 

potential litigation, and provide a clear 

legal standard for affected conduct. EPA 

has complied with Executive Order 

12630 (53 FR 8859, March 15, 1988) by 

examining the takings implications of 

the rule in accordance with the 

‘‘Attorney General’s Supplemental 

Guidelines for the Evaluation of Risk 

and Avoidance of Unanticipated 

Takings’’ issued under the executive 

order. 

This proposed rule to approve 

revisions to the Virginia SIP that update 

the definition of ‘‘volatile organic 

compound’’ does not impose an 

information collection burden under the 

provisions of the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Ozone, Reporting and 

recordkeeping requirements, Volatile 

organic compounds. 

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

Dated: March 29, 2006. 

Donald S. Welsh, 

Regional Administrator, Region III. 

[FR Doc. E6–4940 Filed 4–4–06; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 405, 412, 422, and 489 

[CMS–4105–P] 

RIN 0938–AN85 

Medicare Program; Notification 

Procedures for Hospital Discharges 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule sets forth 

new requirements for hospital discharge 

notices under both original Medicare 

and the Medicare Advantage program. 

This proposed rule would require 

hospitals to comply with a two-step 

notice process when discharging 

patients from the hospital level of care 

that is similar to the notice requirements 

regarding service terminations 

applicable to home health agencies, 

skilled nursing facilities, comprehensive 

outpatient rehabilitation facilities, and 

hospices. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on June 5, 2006. 

ADDRESSES: In commenting, please refer 

to file code CMS–4105–P. 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 issues 

in this regulation to http:// 

www.cms.hhs.gov/eRulemaking. Click 

on the link ‘‘Submit electronic 

comments on CMS regulations with an 

open comment period.’’ (Attachments 

should be in Microsoft Word, 

WordPerfect, or Excel; however, we 

prefer Microsoft Word.) 

2. By regular mail. You may mail 

written comments (one original and two 

copies) to the following address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–4105–

P, P.O. Box 8010, Baltimore, MD 21244–

1850. 

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 (one 

original and two copies) to the following 

address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–4105–

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 (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

9994 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH 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.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by mailing 

your comments to the addresses 

provided at the end of the ‘‘Collection 

of Information Requirements’’ section in 

this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Eileen Zerhusen, (410) 786–7803, (For 

issues related to Original Medicare). 

Tim Roe, (410) 786–2006, (For issues 

related to Medicare Advantage). 

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–4105–P 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

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 


cchase on PROD1PC60 with PROPOSALS
Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 17053 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://www.cms.hhs.gov/ 

eRulemaking. Click on the link 

‘‘Electronic Comments on CMS 

Regulations’’ on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

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

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘BACKGROUND’’ at the 

beginning of your comments.] 

On April 4, 2003, we published a final 

rule (68 FR 16652) in the Federal 

Register implementing changes to the 

Medicare+Choice (now Medicare 

Advantage (MA)) program in connection 

with the 1993 Grijalva v. Shalala class 

action lawsuit, which was brought by 

beneficiaries enrolled in Medicare riskbased managed care organizations. That 

final rule requires home health agencies 

(HHAs), skilled nursing facilities 

(SNFs), and comprehensive outpatient 

rehabilitation facilities (CORFs) to 

comply with a two-step notice process 

in connection with the termination of 

Medicare coverage of services to an 

enrollee in an MA plan. HHAs, SNFs, 

and CORFs must deliver a standardized, 

largely generic notice that informs each 

MA plan enrollee when Medicare 

coverage ends and explains the 

enrollee’s appeal rights. If the enrollee 

is dissatisfied with the decision to 

terminate services, the MA organization 

is obligated to deliver a detailed notice 

providing specific information about the 

organization’s decision to terminate 

services. 

On November 26, 2004, as part of our 

implementation of changes to the 

Medicare appeals process required by 

the Medicare, Medicaid and SCHIP 

Benefits Improvement and Protection 

Act of 2000 (BIPA), we published a final 

rule in the Federal Register (69 FR 

69252), establishing a similar, two-step 

notice process for the termination of 

Medicare coverage of SNF, HHA, CORF, 

and hospice services to original 

Medicare beneficiaries. As specified 

under these rules, which took effect July 

1, 2005, HHAs, SNFs, CORFs, and 

hospices (and swing beds by 

instruction, see CMS Manual System 

Pub 100–04 Medicare Claims 

Processing, Transmittal 594, Change 

Request 3903, and dated June 24, 2005) 

must provide a standardized, largely 

generic notice to each beneficiary before 

a service termination. Similar to the MA 

notice, the standardized notice of noncoverage informs the beneficiary when 

Medicare coverage ends and includes 

information about the beneficiary’s 

appeal rights. In situations where a 

beneficiary chooses to exercise his or 

her right to an expedited appeal, a 

detailed notice is furnished before the 

termination of services. 

For both MA enrollees and 

beneficiaries in original Medicare, 

separate requirements apply for hospital 

discharges. (Note that in the hospital 

process, we generally use the term 

‘‘discharge’’ rather than the phrase 

‘‘termination of services,’’ as used in the 

non-hospital process.) In a proposed 

rule published in the Federal Register 

on January 24, 2001 (66 FR 7593), we 

had proposed to require hospitals to 

provide a notice of appeal rights and the 

reasons for the discharge to all hospital 

inpatients (including both original 

Medicare beneficiaries and MA 

enrollees) at least 1 day before the 

effective date of discharge. Hospitals 

opposed this proposal and commented 

that requiring hospitals to deliver a 

second, more detailed notice of appeal 

rights to all patients (the first being the 

‘‘Important Message from Medicare,’’

which is a standard notice issued at or 

about the time of the patient’s 

admission, as required under section 

1866(a)(1)(M) of the Social Security Act 

(the Act)) would pose a significant 

administrative burden. In response to 

those comments, we determined that a 

detailed notice was not necessary in 

every case. Therefore, in the April 4, 

2003 final rule, we eliminated the 

requirement that all patients receive a 

detailed notice. 

Currently, hospitals do not follow the 

same two-step discharge notice process 

that applies to HHAs, SNFs, CORFs, and 

hospices. In the November 26, 2004 

final rule, we left largely unchanged our 

longstanding requirement that, 

consistent with § 412.42(c)(3), a hospital 

must provide a hospital-issued notice of 

noncoverage (HINN) to any original 

Medicare beneficiary that expresses 

dissatisfaction with an impending 

hospital discharge. Hospitals also 

continue to be required to deliver the 

Important Message from Medicare to all 

Medicare beneficiaries at or about the 

time of admission. Similar to the policy 

in original Medicare, MA organizations 

are required to provide enrollees with a 

notice of noncoverage, known as the 

Notice of Discharge and Medicare 

Appeal Rights (NODMAR), only when a 

beneficiary disagrees with the discharge 

decision or when the MA organization 

(or hospital, if the MA organization has 

delegated to it the authority to make the 

discharge decision) is not discharging 

the enrollee, but no longer intends to 

cover the inpatient stay. 

II. Provisions of the Proposed Rule 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘PROVISIONS OF THE 

PROPOSED RULE’’ at the beginning of 

your comments.] 

Proposed Two-Step Notice Process 

This proposed rule would establish a 

two-step notice process for hospital 

discharges that is similar to the process 

in effect for service terminations in 

HHAs, SNFs, CORFs, and hospices. We 

propose this change because we believe 

that the two-step notice process, 

including a standardized, largely 

generic notice of non-coverage, is 

helpful to beneficiaries. We also believe 

that the new approach we are proposing 

would not be overly burdensome for 

providers or MA organizations. Further, 

because all Medicare beneficiaries who 

are hospital inpatients have the right to 

an expedited review, we also believe it 

is preferable that these beneficiaries 

have the same notice of appeal rights to 

which other beneficiaries are entitled. 

Extending the two-step notice process to 

inpatient hospitals would provide a 

more consistent approach to 

communicating appeal rights to 

beneficiaries in both original Medicare 

and MA and across provider settings. 

For these reasons, we are proposing to 

require hospitals to deliver, prior to 

discharge, a standardized, largely 

generic notice of non-coverage to each 

Medicare beneficiary whose physician 

concurs with the discharge decision. 

The notice would contain substantially 

the same information that is contained 

in the standardized notices that HHAs, 

SNFs, CORFs, and hospices must 

provide, including the prospective 

discharge date and a description of 

appeal rights. The notice processes as 

specified in § 405.1208, addresses the 

situation where the hospital requests a 

Quality Improvement Organization 

(QIO) review because the physician 

does not concur with the discharge 

decision, would remain unchanged. 

However, we are proposing one 

technical correction to § 405.1208(e)(1). 

HHAs, SNFs, and CORFs generally 

must provide the standardized notice to 

both original Medicare beneficiaries and 

MA enrollees at least 2 days in advance 

of the service termination. Hospices 


cchase on PROD1PC60 with PROPOSALS
17054 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

must provide the standardized notice to 

original Medicare beneficiaries in the 

same general timeframe. (Hospice 

services are not part of the benefits 

covered by MA plans, so MA rules for 

the delivery of a standardized service 

termination notice do not apply to 

hospices.) The 2-day rule is intended to 

balance the demands of provider 

practice patterns with potential 

beneficiary liability in those settings. 

However, section 1869(c)(3)(C)(iii)(III) 

of the Act provides that hospitals 

generally may not charge beneficiaries 

for services provided before noon of the 

day after a QIO issues its decision. 

Therefore beneficiary liability is not as 

significant an issue in this setting. Given 

the greater volatility of hospital 

discharge patterns, we propose that 

hospitals be required to provide the 

standardized notice on the day before 

the planned discharge from any 

inpatient hospital stay. As specified in 

section 1869(c)(3)(C)(iii)(III) of the Act, 

if a beneficiary requests a QIO review no 

later than noon of the day after receiving 

a notice, he or she is not financially 

liable (other than for cost sharing) until 

at least noon of the day after the QIO’s 

decision. Beneficiaries who do not 

dispute the discharge decision can be 

held liable as of the date given on the 

notice. 

In proposing to require a simple, 

standardized notice for hospital 

discharges, we would maintain the 

requirement for delivery of a more 

detailed notice in those relatively rare 

situations where beneficiaries wish to 

dispute the discharge. However, rather 

than using the NODMAR or the HINN 

as a discharge notice for MA enrollees 

and original Medicare beneficiaries, 

respectively, the hospitals would issue 

a single detailed notice similar to that 

used in the HHA, SNF, CORF and 

hospice settings. We also would leave 

unchanged beneficiaries’ claim appeal 

rights (both under original Medicare and 

MA) with respect to hospital discharges. 

Our proposal to require a two-step 

notice process is intended only to 

provide hospital inpatients with the 

same two-step notice of appeal rights 

afforded to beneficiaries in other 

settings. Similar to the expedited review 

procedures for other providers, a 

beneficiary would be instructed to 

contact the QIO to request an expedited 

review if he or she wishes to dispute the 

discharge, at which point the 

beneficiary would receive the second, 

more detailed notice. We welcome 

suggestions on the appropriate 

interaction between these notices and 

the QIO review process, given the 

proposed introduction of the new 

standardized notices. 

As noted above, we would require 

hospitals to deliver the notice on the 

day before discharge. We expect that the 

hospital would deliver the standardized 

notice as soon as the discharge decision 

is made (or in the case of a discharge 

decision by an MA organization, as soon 

as the discharge decision is 

communicated to the hospital). By 

requiring the standardized notice to be 

delivered on the day before discharge, a 

beneficiary would have at least 1 night 

to think about the discharge decision 

and decide whether to pursue an 

expedited review, consistent with 

1869(c)(3)(C)(iii)(III) of the Act. 

In proposing this approach, our goal 

is to design hospital notice procedures 

that balance a beneficiary’s need to be 

informed about his or her appeal rights 

in an appropriate manner, and at an 

appropriate time, without imposing 

unnecessary burdens on hospitals. The 

notification process also needs to 

accommodate the statutory 

requirements associated with the 

‘‘Important Message from Medicare’’, 

which now provides much of the same 

information about appeal rights, 

although earlier in the hospital stay and 

not in an individualized form. We 

welcome comments on ways to achieve 

an appropriate balance of interests. 

For example, we would appreciate 

comments on whether there are 

exceptional circumstances under which 

a hospital should be able to deliver the 

standardized notice on the day of 

discharge (for example, in cases of a 1- 

day stay). For an anticipated 2 or 3-day 

stay, would it be necessary to deliver 

both the ‘‘Important Message from 

Medicare’’ at admission and the 

standardized discharge notice just prior 

to discharge given that the notices 

would be delivered at virtually the same 

time? In addition, we welcome 

comments on the maximum time before 

the end of Medicare-covered services 

the discharge notice may be delivered. 

In general, we are interested in 

obtaining commenters’ input on all 

aspects of the hospital discharge notice 

process, both the process proposed here 

and the current process, in order to 

establish the most efficacious process 

possible for hospitals, beneficiaries, and 

MA plans. 

Although this proposal bears some 

resemblance to the provisions set forth 

in our January 24, 2001 proposed rule 

(66 FR 7593), the new proposal 

incorporates significant advantages. 

Most notably, this proposal would 

require the delivery of a standardized 

notice containing only three beneficiaryspecific elements—(1) the beneficiary’s 

name; (2) the date covered services 

would end; and (3) the date financial 

liability would begin—with all other 

information standardized. We believe 

that by proposing to require the delivery 

of a largely generic notice in all 

discharge situations, the notice delivery 

burden on hospitals would be 

substantially less than under our 

previous proposal, without any adverse 

effect on patient rights. Only when a 

beneficiary contacts the QIO to request 

immediate review would a detailed 

notice have to be provided. However, a 

hospital may provide a detailed notice 

to the beneficiary who requests more 

information before contacting the QIO. 

Proposed § 405.1205 

To implement the changes we are 

proposing, we would add a new 

§ 405.1205, to require hospitals to 

deliver a standardized, largely generic 

notice to original Medicare 

beneficiaries. The provisions of 

proposed § 405.1205 substantially 

parallel the provisions of § 405.1200, 

applicable to HHAs, SNFs, CORFs and 

hospices, as set forth in the November 

26, 2004 final rule. We are proposing in 

§ 405.1205 that hospitals would be 

required to deliver a standardized notice 

of non-coverage to beneficiaries on the 

day before discharge from an inpatient 

hospital stay. The notice would include: 

(1) The date that coverage ends; (2) the 

beneficiary’s right to an expedited 

determination including a description of 

the expedited determination process as 

specified in § 405.1206, and the 

availability of other appeal procedures if 

the beneficiary fails to meet the 

deadline for an expedited 

determination; (3) the beneficiary’s right 

to receive more information as provided 

in § 405.1206(e); (4) the date that 

financial liability for continued services 

begins; and (5) any other information 

required by CMS. Proposed § 405.1205 

would specify that if a beneficiary 

refuses to sign the standardized notice 

to acknowledge receipt, the hospital 

may annotate its notice to indicate the 

refusal. The date of refusal would be 

considered the date of receipt of the 

notice. The hospital would be required 

to maintain a copy of the signed or 

annotated notice. 

As with existing notice requirements, 

hospitals generally must determine 

whether a patient is capable of 

comprehending and signing the notice. 

Hospitals must comply with applicable 

State laws and CMS guidance regarding 

the use of representatives and have 

procedures in place to determine an 

appropriate representative. (See CMS 

Manual System Pub 100–04 Medicare 

Claims Processing, Transmittal 594, 

Change Request 3903, and dated June 

24, 2005.) 


cchase on PROD1PC60 with PROPOSALS
Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 17055 

Proposed § 405.1206 

Similarly, we propose to replace 

existing § 405.1206 with a new 

provision that is more consistent with 

the expedited process requirements for 

home health, hospice, skilled nursing, 

and CORF settings set forth in 

§ 405.1202. Proposed § 405.1206 

contains the responsibilities of the 

hospitals, QIOs, and beneficiaries 

relative to the expedited determination 

process. We believe that making these 

conforming changes to promote 

uniformity across provider types would 

be helpful to beneficiaries. 

In proposed § 405.1206, hospitals 

would be required to deliver a detailed 

notice to beneficiaries if beneficiaries 

exercise their right to an expedited 

review. The hospital would be required 

to deliver the detailed notice by the 

close of business of the day of the QIO’s 

notification of the beneficiary’s request 

for an expedited review. (Note that 

because hospitals operate 24 hours a 

day, ‘‘close of business’’ generally 

would be considered as the end of the 

administrative business day.) 

The detailed notice would include: (1) 

A detailed explanation why services are 

either no longer reasonable and 

necessary or are otherwise no longer 

covered; (2) 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; (3) 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 (4) 

any other information required by CMS. 

The information that is inserted on the 

detailed notice should be individualized 

and written in plain language to 

facilitate beneficiary understanding. 

Proposed Definitions Pertaining to 

§ 405.1206 and § 405.1206 

For purposes of § 405.1204, 

§ 405.1205, § 405.1206 and § 405.1208, 

we define the term ‘‘hospital’’ at 

proposed § 405.1205(a)(1) to mean any 

free-standing facility or unit providing 

services at the inpatient hospital level of 

care, whether that care is short term or 

long term, acute or non-acute, paid 

through a prospective payment system 

or other reimbursement basis, limited to 

specialty care, or providing a broader 

spectrum of services. This means all 

hospitals paid under the Inpatient Acute 

Prospective Payment System (IPPS), 

sole community hospitals/regional 

referrals centers or any other type of 

hospital receiving special consideration 

under IPPS (for example, Medicare 

dependent hospitals, Indian Health 

Service hospitals); hospitals not under 

IPPS, including, but not limited to: 

hospitals paid under State or United 

States territory waiver programs, 

hospitals paid under certain 

demonstration projects cited in 

regulation (§ 489.34), rehabilitation 

hospitals, long-term care hospitals, 

psychiatric hospitals, critical access 

hospitals, children’s hospitals, and 

cancer hospitals. Swing beds in 

hospitals are excluded, because they are 

considered to be a lower level of care. 

Religious nonmedical health care 

institutions are also excluded. 

We also propose defining the term 

‘‘discharge’’ at § 405.1205(a)(2) as a 

formal release from the hospital level of 

care. For purposes of § 405.1204, 

§ 405.1205, § 405.1206, and § 405.1208, 

a discharge from the inpatient hospital 

level of care is a formal release of a 

beneficiary from the inpatient hospital 

level of care or, a complete cessation of 

coverage of the inpatient hospital level 

of care. This includes when the patient 

is physically discharged from the 

hospital as well as when the patient is 

discharged ‘‘on paper’’—meaning the 

patient remains in the hospital but at a 

lower level of care (for example, moved 

to a swing bed). 

Proposed § 422.620 and § 422.622 

To implement these changes for MA 

enrollees, we propose to replace the 

existing NODMAR notice and review 

regulations in § 422.620 and § 422.622 

with new regulations substantially 

similar to the notice and review 

requirements for HHAs, SNFs, and 

CORFs under § 422.624 and § 422.626. 

In addition, we would reference the 

same definition of hospitals that is in 

proposed § 405.1205. We believe that 

the hospital is in a better position than 

the MA organization to carry out the 

routine delivery of the generic discharge 

notice to enrollees. 

However, we propose that 

responsibility for delivery of the 

detailed notice would still rest with the 

MA organization, who may delegate the 

authority for making the discharge 

decision, but not shift liability, to the 

hospital. For this reason, proposed 

§ 422.620 would require the hospitals to 

deliver the generic notice to all 

inpatient enrollees, and § 422.622 

would require the MA organization to 

deliver the detailed notice to those 

patients who request an immediate QIO 

review of the discharge decision. 

As specified in proposed § 422.620, 

hospitals would be required to deliver a 

standardized notice of non-coverage to 

MA enrollees on the day before 

discharge from an inpatient hospital 

stay. The notice would include: (1) The 

date that coverage ends; (2) a 

description of the enrollee’s right to an 

immediate QIO review as specified in 

§ 422.622, including information about 

how to contact the QIO, the availability 

of other MA appeal procedures if the 

enrollee fails to meet the deadline for 

immediate QIO review, and the fact that 

immediate QIO review would not be 

granted unless the enrollee disagrees 

with the discharge from the inpatient 

hospital level of care; (3) the enrollee’s 

right to receive more information as 

provided in § 422.622(c); and (4) the 

date that financial liability for 

continued services begins. 

Proposed § 422.620 also would 

specify that if an MA enrollee refuses to 

sign the standardized notice to 

acknowledge receipt, the hospital would 

annotate its notice to indicate the 

refusal. The date of refusal would be 

considered the date of receipt of the 

notice. The hospital would be required 

to maintain a copy of the signed or 

annotated notice. 

Again, hospitals should have 

procedures in place to determine if an 

enrollee is capable of comprehending 

and signing the notice, and follow 

applicable State law regarding use of a 

representative. Further instructions 

regarding use of a representative can be 

found in Chapter 13, Section 60 of the 

Medicare Managed Care Manual. 

As specified in proposed § 422.622, 

MA organizations would be required to 

deliver a detailed notice to enrollees if 

enrollees choose to exercise their right 

to an immediate QIO review. The 

detailed notice would include: (1) A 

detailed explanation why services are 

either no longer reasonable and 

necessary or are otherwise no longer 

covered; (2) 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 enrollee may obtain a 

copy of the Medicare policy; (3) facts 

specific to the enrollee and relevant to 

the coverage determination that are 

sufficient to advise the enrollee of the 

applicability of the coverage rule or 

policy to the enrollee’s case; and (4) any 

other information required by CMS. The 

MA organization would be required to 

deliver the detailed notice by the close 

of business of the day of the QIO’s 

notification of the enrollee’s request for 

an immediate QIO review. The 

information that is inserted on the 

detailed notice should be individualized 

and written in plain language to 

facilitate enrollee understanding. 


cchase on PROD1PC60 with PROPOSALS
17056 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

Furthermore, we also propose to 

replace existing § 422.622 with a new 

provision consistent with the expedited 

process requirements for home health, 

skilled nursing and CORF settings in 

§ 422.626. Proposed § 422.622 contains 

the procedural responsibilities of the 

MA organizations, hospitals, and QIOs 

as well as any possible liability for 

hospitals and MA organizations during 

the expedited determination process. 

We believe that making these 

conforming changes to promote 

uniformity across provider types would 

be helpful to beneficiaries. 

The notices proposed in this proposed 

rule would be subject to public review 

and comment through the Office of 

Management and Budget (OMB) 

Paperwork Reduction Act process before 

implementation. If you wish to 

comment on these notices see CMS–

10066, ‘‘Agency Information Collection 

Activities; Proposed Collection; 

Comment Request’’ published elsewhere 

in this issue. 

Conforming Changes Proposed to 

§ 489.27 and § 412.42 

In conjunction with the proposed 

hospital notice provisions, we are 

proposing to make conforming changes 

to two related existing regulatory 

provisions. First, we would amend the 

provider agreement requirements in 

§ 489.27(b) to cross-reference the 

proposed notice requirements. Thus, 

proposed § 489.27(b) would specify that 

delivery of the hospital discharge 

notices consistent with proposed 

§ 405.1205 and § 422.620 is required as 

part of the Medicare provider 

agreement. This parallels the 

implementation approach used for 

expedited review notices by other 

providers, such as HHAs and SNFs. The 

other conforming change would affect 

§ 412.42(c), which involves limitations 

on charges to beneficiaries in hospitals 

operating under the prospective 

payment system. 

As revised, proposed § 412.42(c)(3) 

would simply include a cross-references 

to the notice and appeal provisions set 

forth in § 405.1205 and § 405.1206. This 

change would clearly establish that the 

provision of the appropriate expedited 

review notices would be one of the 

prerequisites before a hospital could 

charge a beneficiary for continued 

hospital services. We welcome 

comments on these conforming changes. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995 (PRA), we are required to 

provide 60-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 PRA 

requires that we solicit comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

The information collection 

requirement associated with 

administering the hospital discharge 

notice is subject to the PRA. 

We are soliciting public comment on 

each of the issues for the following 

sections of this document that contain 

information collection requirements. 

Section 405.1205 Notifying 

Beneficiaries of Discharge From 

Inpatient Hospital Level of Care 

For any discharge from the inpatient 

hospital level of care, the hospital must 

notify the beneficiary in writing of the 

impending non-coverage and discharge. 

The hospital must use a standardized, 

largely generic notice, required by the 

Secretary, in accordance with the 

requirements and procedures set forth 

in this section. 

Since we have developed a 

standardized format for the notice, and 

the notice would be disseminated 

during the normal course of related 

business activities, we estimate that it 

would take hospitals 5 minutes to 

deliver each notice. In 2002 there were 

approximately 10.9 million fee-forservice Medicare inpatient hospital 

discharges. The total annual burden 

associated with this proposed 

requirement is 908,333 hours. 

Section 405.1206 Expedited 

Determination Procedures for Inpatient 

Hospital Level of Care 

Section 405.1206(b) requires any 

beneficiary wishing to exercise the right 

to an expedited determination to submit 

a request, in writing or by telephone, to 

the QIO that has an agreement with the 

hospital. We project that 2 percent of 

the 10.9 million fee-for-service 

beneficiaries, (that is, 218,000 

beneficiaries) will request an expedited 

determination. (We note that this 

estimate may be high since our 

experience with the non-hospital 

expedited determination process in both 

original Medicare and MA has shown 

that approximately 1 percent of patients 

request an expedited review.) 

The burden associated with this 

requirement is the time and effort it 

would take for the beneficiary to either 

write or call the QIO to request an 

expedited determination. We estimate it 

would take 5 minutes per request. 

Therefore, the total estimated burden 

hours associated with this requirement 

is 18,166 hours. 

Section 405.1206(e) requires hospitals 

to deliver a detailed notice of discharge 

to the beneficiary and to make available 

to the QIO (and to the beneficiary upon 

request) a copy of that notice and any 

necessary supporting documentation. 

For these 218,000 cases, we estimate 

that it would take providers 60 to 90 

minutes to prepare the detailed 

termination notice and to prepare a case 

file for the QIO. Based on 218,000 cases 

at 90 minutes, the total annual burden 

associated with this proposed 

requirement is approximately 327,000 

hours. 

Section 422.620 Notifying Enrollees of 

Discharge From Inpatient Hospital Level 

of Care 

For any discharge from an inpatient 

hospital, the hospital must notify the 

enrollee in writing of the impending 

non-coverage and discharge. The 

hospital must use a standardized, 

largely generic notice, required by the 

Secretary, in accordance with the 

requirements and procedures set forth 

in this section. 

Again, we estimate that it would take 

hospitals 5 minutes to deliver each 

notice. In 2002 there were 

approximately 1.6 million MA inpatient 

hospital discharges. The total annual 

burden associated with this proposed 

requirement is 133,333 hours. 

Section 422.622 Requesting Immediate 

QIO Review of Decision To Discharge 

From Inpatient Hospital Level of Care 

This section states that an enrollee 

who wishes to appeal a determination 

by an MA organization or hospital that 

inpatient care is no longer necessary, 

may request QIO review of the 

determination. On the date the QIO 

receives the enrollee’s request, it must 

notify the MA organization that the 

enrollee has filed a request for 

immediate review. The MA in turn must 

deliver a detailed notice to the enrollee. 

We project that 2 percent of affected 

individuals (that is, 32,000 

beneficiaries) will request an expedited 

determination. We estimate that it will 

take 5 minutes for an enrollee who 

chooses to exercise his or her right to an 


cchase on PROD1PC60 with PROPOSALS
Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 17057 

expedited determination to contact the 

QIO. For these 32,000 cases, the total 

estimated burden hours is 26,666 hours. 

As specified in § 422.622(c) and (d), 

MA plans would be required under this 

rule to deliver a detailed 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 would take plans 60 

to 90 minutes to prepare the detailed 

notice and to prepare a case file for the 

QIO. Based on 32,000 cases at 90 

minutes, the total annual burden 

associated with this proposed 

requirement is approximately 48,000 

hours. 

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 Group, Attn: Melissa 

Musotto, CMS–4105–P, Room C4–26–

05, 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: Carolyn Lovett, CMS Desk Officer, 

CMS–4105–P, 

carolyn_lovett@omb.eop.gov. Fax (202) 

395–6974. 

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 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘REGULATORY IMPACT’’ at 

the beginning of your comments.] 

A. Overall Impact 

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 (as amended 

by Executive Order 13258, which 

merely reassigns responsibility of 

duties) 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 in any 1 year). 

This rule would not reach the economic 

threshold and thus is not considered a 

major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and small 

government jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $6 million to $29 million in any 1 

year. For purposes of this RFA, all 

providers affected by this regulation are 

considered to be small entities. 

We are not preparing analyses for 

either the RFA or section 1102(b) of the 

Act because we have determined that 

this proposed rule would not have a 

significant economic impact on a 

substantial number of small entities. 

(We estimate a total cost of 

approximately $7000 a provider as 

discussed below.) Although a regulatory 

impact analysis is not mandatory for 

this proposed rule, we believe it is 

appropriate to discuss the possible 

impacts of the new discharge notice on 

beneficiaries, enrollees, and hospitals, 

regardless of the monetary threshold of 

that impact. Therefore, a brief voluntary 

discussion of the anticipated impact of 

this proposed rule is presented below. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis 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 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds. We do not expect 

these entities to be significantly 

impacted. 

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. 

That threshold level is currently 

approximately $120 million. This 

proposed rule does not require an 

assessment under the Unfunded 

Mandates Reform Act. 

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 would not impose 

any costs on State or local governments, 

the requirements of E.O. 13132 are not 

applicable. 

B. Overview of the Changes 

This proposed rule sets forth new 

requirements for hospital discharge 

notices for all Medicare inpatient 

hospital discharges. This proposed rule 

specifies that hospitals must issue a 

standardized, largely generic notice of 

non-coverage to all Medicare beneficiary 

inpatients, prior to discharge from the 

inpatient hospital level of care, followed 

by a detailed notice if the beneficiary 

requests QIO review of the decision. As 

discussed in detail above, these notices 

would replace existing notice 

requirements, under which beneficiaries 

receive detailed notices only when they 

express dissatisfaction with a hospital’s 

discharge decision. We also propose 

conforming changes to the expedited 

review process for hospitals to promote 

uniformity among requirements 

applicable to different provider types. In 

general, we believe that these changes 

would enhance the rights of Medicare 

beneficiaries without imposing any 

significant or undue financial burdens 

on hospitals. 

C. Notifying Beneficiaries and Enrollees 

of Discharge From the Inpatient 

Hospital Level of Care (§ 405.1205 and 

§ 422.620) 

We project that providers would be 

responsible for delivering a 

standardized, largely generic notice of 

non-coverage to approximately 12.5 

million Medicare beneficiaries a year. 

This includes about 10.9 million fee-forservice beneficiaries and 1.6 million MA 

enrollees. The generic notice of 

discharge would require only the 

insertion of the beneficiary or enrollee’s 

name, date that coverage ends, and date 

that financial liability for continued 

hospital services begins. We estimate 

that it would take no more than 5 

minutes to deliver a notice, at a pernotice 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 12.5 million 

notices annually, we estimate the 


cchase on PROD1PC60 with PROPOSALS
17058 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

aggregate cost of delivering these new 

notices to be roughly $31.2 million. 

Since there are roughly 6000 affected 

hospitals, the average costs associated 

with this provision would be about 

$5,200 per provider. 

D. Providing Beneficiaries and Enrollees 

With a Detailed Explanation of the 

Hospital Discharge Decision (§ 405.1206 

and § 422.622) 

We project that providers would be 

responsible for delivering detailed 

notices to approximately two percent of 

the 12.5 million Medicare recipients a 

year or 250,000 beneficiaries and 

enrollees. The detailed notice would 

require a detailed explanation of why 

services are either no longer reasonable 

and necessary or are no longer covered; 

a description of any relevant Medicare 

(and Medicare Advantage as applicable) 

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; 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 any 

other information required by CMS. 

We estimate that it would take 

approximately 60 to 90 minutes to fill 

out and deliver a detailed notice, and 

make available to the QIO (and to the 

beneficiary upon request) copies of the 

notices and any necessary supporting 

documentation. The per-notice cost 

would be no more than $45 and is based 

on a $30 per hour rate if the notice is 

prepared and delivered by health care 

personnel. Based on an estimated 

250,000 notices annually, we estimate 

the aggregate cost of delivering these 

notices to be roughly $11,250,000. This 

estimate may be high since, in many 

cases, non-professional staff would be 

asked to make copies of medical 

records. Since there are roughly 6000 

affected hospitals, the average costs 

associated with this provision would be 

about $1875 per provider. 

We do not anticipate that the 

provisions of this proposed rule would 

have a significant financial impact on 

individual hospitals. We note that the 

actual discharge notices must be 

approved through OMB’s Paperwork 

Reduction Act process and are also 

subject to public comment. We intend to 

publish the draft standardized notices 

concurrent with the publication of this 

proposed rule. For more information on 

the PRA process see Section III of this 

proposed rule. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects 

42 CFR Part 405 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medical 

devices, Medicare, Reporting and 

recordkeeping requirements, Rural 

areas, X-rays. 

42 CFR Part 412 

Administrative practice and 

procedure, Health facilities, Medicare, 

Puerto Rico, Reporting and 

recordkeeping requirements. 

42 CFR Part 422 

Administrative practice and 

procedure, Health facilities, Health 

maintenance organizations (HMO), 

Medicare Advantage, Penalties, Privacy, 

Provider-sponsored organizations (PSO), 

Reporting and recordkeeping 

requirements. 

42 CFR Part 489 

Health facilities, Medicare, Reporting 

and recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as set forth below: 

PART 405—FEDERAL HEALTH 

INSURANCE FOR THE AGED AND 

DISABLED 

1. The authority citation for part 405 

continues to read as follows: 

Authority: Secs. 1102, 1861, 1862(a), 1871, 

1874, 1881 and 1886(k) of the Social Security 

Act (42 U.S.C. 1302, 1395x, 1395y(a), 

1395hh, 1395kk, 1395rr and 1395ww(k)), and 

sec. 353 of the Public Health Service Act (42 

U.S.C. 263a). 

Subpart J—Expedited Determinations 

and Reconsiderations of Provider 

Service Terminations, and Procedures 

for Inpatient Hospital Discharges 

2. Section 405.1205 is added to read 

as follows: 

§ 405.1205 Notifying beneficiaries of 

discharge from inpatient hospital level of 

care. 

(a) Applicability and scope. (1) For 

purposes of §§ 405.1204, 405.1205, 

405.1206, and 405.1208, the term 

hospital is defined as any facility 

providing care at the inpatient hospital 

level, whether that care is short term or 

long term, acute or non acute, paid 

through a prospective payment system 

or other reimbursement basis, limited to 

specialty care or providing a broader 

spectrum of services. This definition 

also includes critical access hospitals. 

(2) For purposes of § 405.1204, 

§ 405.1205, § 405.1206, and § 405.1208, 

a discharge from the inpatient hospital 

level of care is a formal release of a 

beneficiary from the inpatient hospital 

level of care or, a complete cessation of 

coverage within the inpatient hospital 

level of care. 

(b) Advance written notice of noncoverage of services at the inpatient 

hospital level of care. Before any 

discharge from the inpatient hospital 

level of care, in cases where the 

physician concurs with the discharge 

decision, the hospital must deliver valid 

written notice of non-coverage and the 

hospital’s decision to discharge. The 

hospital must use a standardized, 

generic notice, as specified by CMS, in 

accordance with the following 

procedures: 

(1) Timing of notice. A hospital must 

notify the beneficiary of non-coverage 

and the hospital’s decision to discharge 

the beneficiary on the day before the 

planned discharge. 

(2) Content of the notice. The generic 

notice of non-coverage must include the 

following information: 

(i) The date that coverage of inpatient 

hospital services ends. 

(ii) The beneficiary’s right to request 

an expedited determination including a 

description of the process under 

§ 405.1206, and the availability of other 

appeals processes if the beneficiary fails 

to meet the deadline for an expedited 

determination. 

(iii) A beneficiary’s right to receive 

additional detailed information in 

accordance with § 405.1206(e). 

(iv) The date that the beneficiary’s 

financial liability for continued 

inpatient hospital services begins. 

(v) Any other information required by 

CMS. 

(3) When delivery of the notice is 

valid. Delivery of the generic notice of 

non-coverage described in this section is 

valid if—

(i) Except as provided in paragraph 

(b)(4) of this section, the beneficiary (or 

the beneficiary’s 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 hospital may annotate its 

notice to indicate the refusal, and the 

date of refusal is considered the date of 

receipt of the notice. 


cchase on PROD1PC60 with PROPOSALS
Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 17059 

3. Section § 405.1206 is revised to 

read as follows: 

§ 405.1206 Expedited determination 

procedures for inpatient hospital level of 

care. 

(a) Beneficiary’s right to an expedited 

determination by the QIO for an 

inpatient hospital discharge. A 

beneficiary has a right to 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. 

(b) Requesting an expedited 

determination. (1) A beneficiary who 

wishes to exercise the right to an 

expedited determination must submit a 

request to the QIO that has an agreement 

with the hospital as specified in 

§ 476.78 of this chapter. The request 

must be in writing or by telephone, by 

no later than noon of the day after 

receipt of the notice of non-coverage as 

set forth in § 405.1205. 

(2) The beneficiary, or his or her 

representative, upon request by the QIO, 

must be available to discuss the case. 

(3) The beneficiary may, but is not 

required to, submit written evidence to 

be considered by a QIO in making its 

decision. 

(4) A beneficiary who makes a timely 

request for an expedited QIO review in 

accordance with paragraph (b)(1) of this 

section is subject to the financial 

liability protections under paragraphs 

(f)(1) and (f)(2) of this section, as 

applicable. 

(5) A beneficiary who fails to make a 

timely request for an expedited 

determination by a QIO, as described in 

paragraph (b)(1) of this section, and 

remains in the hospital without 

coverage, still may request an expedited 

review at any time during the 

hospitalization. The QIO will issue a 

decision in accordance with paragraph 

(d)(6)(ii) of this section, however, the 

financial liability protection under 

paragraph (f)(1) and (f)(2) of this section 

does not apply. 

(6) A beneficiary who fails to make a 

timely request for an expedited 

determination in accordance with 

paragraph (b)(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 generic 

notice of non-coverage, or at any time 

for good cause. The QIO will issue a 

decision in accordance with paragraph 

(d)(6)(iii) of this section; however, the 

financial liability protection under 

paragraph (f)(1) and (f)(2) of this section 

does not apply. 

(c) Burden of proof. When a 

beneficiary requests an expedited 

determination by a QIO, the burden of 

proof rests with the hospital to 

demonstrate that discharge is the correct 

decision, either on the basis of medical 

necessity, or based on other Medicare 

coverage policies. The hospital should 

supply any and all information that a 

QIO requires to sustain the hospital’s 

discharge decision, consistent with 

paragraph (e)(2) of this section. 

(d) 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 hospital 

that a request for an expedited 

determination has been made. 

(2) The QIO determines whether the 

hospital delivered valid notice of noncoverage consistent with 

§ 405.1205(b)(3). 

(3) The QIO examines the medical 

and other records that pertain to the 

services in dispute. 

(4) The QIO must solicit the views of 

the beneficiary (or the beneficiary’s 

representative) who requested the 

expedited determination. 

(5) The QIO must provide an 

opportunity for the hospital to explain 

why the discharge is appropriate. 

(6) Notification. (i) When the 

beneficiary requests an expedited 

determination in accordance with 

paragraph (b)(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 day after it 

receives all requested pertinent 

information. 

(ii) When the beneficiary makes an 

untimely request consistent with 

paragraph (b)(5) 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 

calendar days following receipt of the 

request and pertinent information. 

(iii) When the beneficiary makes an 

untimely request for an expedited 

determination consistent with 

paragraph (b)(6) 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. 

(7) If the QIO does not receive the 

information needed to sustain a 

hospital’s decision to discharge, 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 hospital services, the 

hospital may be held financially liable 

for these services, as determined by the 

QIO. 

(8) When the QIO issues an expedited 

determination, the QIO must notify the 

beneficiary, the physician, and hospital 

of its decision by telephone, followed by 

a written notice that must include the 

following information: 

(i) The basis for the determination. 

(ii) A detailed rationale for the 

determination. 

(iii) An explanation of the Medicare 

payment consequences of the 

determination and the date a beneficiary 

becomes fully liable for the services. 

(iv) Information about the 

beneficiary’s right to a reconsideration 

of the QIO’s determination as set forth 

in § 405.1204, including how to request 

a reconsideration and the time period 

for doing so. 

(e) Responsibilities of hospitals. (1) 

When a QIO notifies a hospital that a 

beneficiary has requested an expedited 

determination, the hospital must deliver 

a detailed notice to the beneficiary by 

close of business of the day of the QIO’s 

notification. The detailed notice must 

include the following information: 

(i) A detailed explanation why 

services are either no longer reasonable 

and necessary or are otherwise 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. 

(iv) Any other information required 

by CMS. 

(2) Upon notification by the QIO of 

the request for an expedited 

determination, the hospital must supply 

all information that the QIO needs to 

make its expedited determination, 

including a copy of the notices required 

as specified in § 405.1205(b) and 

paragraph (e)(1) of this section. The 

hospital must furnish this information 

as soon as possible, but no later than by 

close of business of the day the QIO 

notifies the hospital of the request for an 

expedited determination. At the 

discretion of the QIO, the hospital must 

make the information available by 

phone or in writing (with a written 

record of any information not 

transmitted initially in writing). 


cchase on PROD1PC60 with PROPOSALS
17060 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

(3) At a beneficiary’s request, the 

hospital must furnish the beneficiary 

with a copy of, or access to, any 

documentation that it sends to the QIO, 

including written records of any 

information provided by telephone. The 

hospital may charge the beneficiary a 

reasonable amount to cover the costs of 

duplicating the documentation and/or 

delivering it to the beneficiary. The 

hospital must accommodate such a 

request by no later than close of 

business of the first day after the 

material is requested. 

(f) Coverage during QIO expedited 

review. (1) General rule and liability 

while QIO review is pending. If the 

beneficiary remains in the hospital past 

noon of the day after he or she received 

the generic notice of non-coverage, and 

the hospital, the physician who 

concurred in the hospital’s 

determination on which the generic 

notice 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 (other than applicable coinsurance 

and deductible) 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 in 

accordance with § 405.1205. 

(2) Timely filing and limitation on 

liability. If a beneficiary files a request 

for an expedited determination by the 

QIO in accordance with paragraph (b)(1) 

of this section, the beneficiary is not 

financially responsible for inpatient 

hospital services (other than applicable 

coinsurance and deductible) 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 and limitation on 

liability. When a beneficiary does not 

file a request for an expedited 

determination by the QIO in accordance 

with paragraph (b)(1) of this section, 

that beneficiary may be responsible for 

charges that extend beyond the date 

specified on the generic notice or as 

otherwise stated by the QIO. 

(4) Hospital requests expedited 

review. When the hospital requests 

review in accordance with § 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) Effect of an expedited QIO 

determination. The QIO determination 

is binding upon the beneficiary, 

physician, and hospital, except in the 

following circumstances: 

(1) When the 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 § 405.1204. 

(2) When the 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. 

§ 405.1208 [Amended] 

4. In § 405.1208(e)(1), after the words 

‘‘in accordance with,’’ remove the words 

‘‘paragraph (d)(1) of this section’’ and 

add in their place, ‘‘§ 405.1204(b)(1)’’. 

PART 412—PROSPECTIVE PAYMENT 

SYSTEM FOR INPATIENT HOSPITAL 

SERVICES 

5. The authority citation from part 412 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh), Sec. 124 of Pub. L. 106–113, 113 

Stat. 1515, and Sec. 405 of Pub. L. of 108–

173, 117 Stat. 2266, 42 U.S.C. 1305. 1395. 

6. Section 412.42(c) is amended by—

A. Republishing the introductory text. 

B. Revising paragraphs (c)(2) and 

(c)(3). 

The revisions read as follows: 

§ 412.42 Limitations on charges to 

beneficiaries. 

* * * * * 

(c) Custodial care and medical 

unnecessary inpatient hospital care. A 

hospital may charge a beneficiary for 

services excluded from coverage on the 

basis of § 411.15(g) of this chapter 

(custodial care) or § 411.15(k) of this 

chapter (medically unnecessary 

services) and furnished by the hospital 

after all of the following conditions have 

been met: 

* * * * * 

(2) The attending physician agrees 

with the hospital’s determination in 

writing (for example, by issuing a 

written discharge order). If the hospital 

believes that the beneficiary does not 

require inpatient hospital care but is 

unable to obtain the agreement of the 

physician, it may request an immediate 

review of the case by the QIO as 

described in § 405.1208 of this chapter. 

Concurrence by the QIO in the 

hospital’s determination will serve in 

lieu of the physician’s agreement. 

(3) The hospital (acting directly or 

through its utilization review 

committee) notifies the beneficiary (or 

his or her representative) in writing 

consistent with § 405.1205 and 

§ 405.1206 of this chapter (if applicable) 

that in the hospital’s opinion, and with 

the attending physician’s concurrence 

or that of the QIO, the beneficiary no 

longer requires inpatient hospital care. 

* * * * * 

PART 422—MEDICARE ADVANTAGE 

PROGRAM 

7. The authority citation for part 422 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

8. Section 422.620 is revised to read 

as follows: 

§ 422.620 Notifying enrollees of discharge 

from inpatient hospital level of care. 

(a) Applicability and scope. (1) For 

purposes of § 422.620 and § 422.622, the 

term hospital is defined as any facility 

providing care at the inpatient hospital 

level, whether that care is short term or 

long term, acute or non acute, paid 

through a prospective payment system 

or other reimbursement basis, limited to 

specialty care or providing a broader 

spectrum of services. This definition 

also includes critical access hospitals. 

(2) For purposes of § 422.620 and 

§ 422.622, a discharge from the inpatient 

hospital level of care is a formal release 

of a beneficiary from the inpatient 

hospital level of care or, a complete 

cessation of coverage within the 

inpatient hospital level of care. 

(b) Advance written notification of 

discharge from inpatient hospital level 

of care. Before any discharge from the 

inpatient hospital level of care, the 

hospital must deliver valid written 

notice of non-coverage of the MA 

organization’s or hospital’s discharge 

decision to the enrollee. A standardized, 

largely generic notice, as specified by 

CMS, must be used in accordance with 

the following procedures: 

(1) Timing of notice. The hospital 

must notify the enrollee of non-coverage 

and the MA organization’s or hospital’s 

decision to discharge the enrollee on the 

day before the planned discharge. 

(2) Content of the notice. The 

standardized, generic notice of noncoverage must include the following 

information: 

(i) The date that coverage of inpatient 

hospital services ends. 

(ii) A description of the immediate 

QIO review process as specified under 

§ 422.622, including information about 

how to contact the QIO, the availability 

of other MA appeal procedures if the 


cchase on PROD1PC60 with PROPOSALS
Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 17061 

enrollee fails to meet the deadline for 

immediate QIO review, and the fact that 

immediate QIO review will not be 

granted unless the enrollee disagrees 

with the discharge decision. 

(iii) The enrollee’s right to receive 

additional information in accordance 

with § 422.622(c). 

(iv) The date that the enrollee’s 

financial liability for continued 

inpatient hospital services begins. 

(v) Any other information required by 

CMS. 

(3) When delivery of notice is valid. 

Delivery of the generic notice of noncoverage described in this section is 

valid if—

(i) Except as provided in paragraph 

(b)(4) of this section, the enrollee (or the 

enrollee’s 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 an enrollee refuses to sign the 

notice. The hospital may annotate its 

notice to indicate the refusal, and the 

date of refusal is considered the date of 

receipt of the notice. 

(c) Physician concurrence required. 

Before discharging an enrollee from the 

inpatient hospital level of care, the MA 

organization must obtain concurrence 

from the physician who is responsible 

for the enrollee’s inpatient care. 

9. Section 422.622 is revised to read 

as follows: 

§ 422.622 Requesting immediate QIO 

review of decision to discharge from 

inpatient hospital level of care. 

(a) Enrollee’s right to an immediate 

review. (1) An enrollee who wishes to 

appeal a determination by an MA 

organization or hospital that inpatient 

care is no longer necessary may request 

immediate QIO review of the 

determination in accordance with 

paragraph (b) of this section. An 

enrollee who timely requests immediate 

QIO review in accordance with 

paragraph (b) of this section may remain 

in the hospital with no additional 

financial liability (other than applicable 

cost sharing) as described in paragraph 

(e) of this section. 

(2) When an enrollee fails to make a 

timely request in accordance with 

paragraph (b) of this section, he or she 

may request expedited reconsideration 

by the MA organization as described in 

§ 422.584, but the financial liability 

rules of paragraph (e)(1) of this section 

do not apply. 

(b) Procedures enrollee must follow. 

For the immediate QIO review process, 

the enrollee must submit the request for 

immediate review to the QIO, in writing 

or by telephone by noon of the first day 

after he or she receives written notice of 

non-coverage that the MA organization 

or hospital has made a decision to 

discharge the enrollee. 

(c) Notification responsibilities of the 

MA organization and the QIO. (1) On 

the date it receives the enrollee’s 

request, the QIO must notify the MA 

organization that the enrollee has filed 

a request for immediate review. 

(2) When the QIO notifies an MA 

organization that an enrollee has 

requested an immediate QIO review, the 

MA organization must deliver a detailed 

notice to the enrollee by close of 

business of the day of the QIO’s 

notification of the enrollee’s request. 

The detailed notice must include the 

following information: 

(i) A 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 the information about 

how the enrollee may obtain a copy of 

the Medicare policy from the MA 

organization. 

(iii) Any applicable MA organization 

policy, contract provision, or rationale 

upon which the discharge decision was 

based. 

(iv) Facts specific to the enrollee and 

relevant to the coverage determination 

sufficient to advise the enrollee of the 

applicability of the coverage rule or 

policy to the enrollee’s case. 

(v) Any other information required by 

CMS. 

(3) Upon an enrollee’s request, the 

MA organization must provide the 

enrollee a copy of, or access to, any 

documentation sent to the QIO by the 

MA organization, including records of 

any information provided by telephone. 

The MA organization may charge the 

enrollee a reasonable amount to cover 

the costs of duplicating the information 

for the enrollee and/or delivering the 

documentation to the enrollee. The MA 

organization must provide the enrollee 

a copy of, or access to, any 

documentation sent to the QIO no later 

than close of business of the first day 

after the day the material is requested. 

(4) Upon notification by the QIO of an 

immediate review, the MA organization 

must supply any and all information, 

including a copy of the notice sent to 

the enrollee, that the QIO needs to 

decide on the review. The MA 

organization must supply this 

information as soon as possible, but no 

later than by close of business of the day 

that the QIO notifies the MA 

organization that a request for 

immediate review has been received 

from the enrollee. The MA organization 

must make the information available by 

phone (with a written record made of 

any information not transmitted initially 

in writing) and/or in writing, as 

determined by the QIO. 

(5) An MA organization is financially 

responsible for coverage of services as 

provided in paragraph (e) of this 

section, regardless of whether it has 

delegated responsibility for authorizing 

coverage or discharge decisions to its 

providers. 

(6) If the QIO reverses an MA 

organization’s discharge decision, the 

hospital must provide the enrollee with 

a new notice consistent with 

§ 422.620(b). 

(d) Procedural responsibilities of the 

MA organization, hospital, and the QIO. 

(1) The MA organization must supply 

any information 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 day after the 

enrollee submits the request for review. 

(2) In response to a request from the 

MA organization, the hospital must 

submit medical records and other 

pertinent information to the QIO by 

close of business of the first day after 

the organization makes its request. 

(3) The QIO must solicit the views of 

the enrollee (or his or her 

representative) who requested the 

immediate QIO review. 

(4) The QIO must make a 

determination and notify the enrollee, 

the hospital, and the MA organization 

by close of business of the first day after 

it receives all necessary information 

from the hospital, or the organization, or 

both. 

(e) Liability for hospital costs. (1) 

When the MA organization determines 

that hospital services are not, or are no 

longer, covered. 

(i) Except as provided in paragraph 

(e)(1)(ii) of this section, if the MA 

organization authorized coverage of the 

inpatient admission directly or by 

delegation (or the admission constitutes 

emergency or urgently needed care, as 

described in § 422.2 and § 422.112(c)), 

the organization continues to be 

financially responsible for the costs of 

the hospital stay when a timely appeal 

is filed under paragraph (a)(1) of this 

section until noon of the day after the 

QIO notifies the enrollee of its review 

determination. If coverage of the 

hospital admission was never approved 

by the MA organization or the 

admission does not constitute 

emergency or urgently needed care as 

described in § 422.2 and § 422.112(c), 


cchase on PROD1PC60 with PROPOSALS
17062 Federal Register / Vol. 71, No. 65 / Wednesday, April 5, 2006 / Proposed Rules 

the MA organization is liable for the 

hospital costs only if it is determined on 

appeal that the hospital stay should 

have been covered under the MA plan. 

(ii) The hospital may not charge the 

MA organization (or the enrollee) if—

(A) It was the hospital (acting on 

behalf of the enrollee) that filed the 

request for immediate QIO review; and 

(B) The QIO upholds the noncoverage determination made by the MA 

organization. 

(2) When the hospital determines that 

hospital services are no longer required. 

If the hospital determines that inpatient 

hospital services are no longer 

necessary, and the enrollee could not 

reasonably be expected to know that the 

services would not be covered, the 

hospital may not charge the enrollee for 

inpatient services received before noon 

of the day after the QIO notifies the 

enrollee of its review determination. 

(f) Effect of an immediate QIO review. 

The QIO determination is binding upon 

the enrollee, physician, hospital, and 

MA organization except in the following 

circumstances: 

(1) When the enrollee remains in the 

hospital. If the enrollee 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 § 422.626(f). 

(2) When the enrollee is no longer an 

inpatient in the hospital. If the enrollee 

is no longer an inpatient in the hospital 

and is dissatisfied with this 

determination, the enrollee may appeal 

to an ALJ, the MAC, or a federal court, 

as provided for under this subpart. 

PART 489—PROVIDER AGREEMENTS 

AND SUPPLIER APPROVAL 

10. The authority citation for part 489 

continues 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, and 1395hh). 

11. Section 489.27(b) is revised to 

read as follows: 

§ 489.27 Beneficiary notice of discharge 

rights. 

(a) * * * 

(b) Notification by hospitals and other 

providers. Hospitals and other providers 

(as identified at 489.2(b)) that 

participate in the Medicare program 

must furnish each Medicare beneficiary, 

or representative, applicable CMS 

notices in advance of discharge or 

termination of Medicare services, 

including the notices required under 

§ 405.1205, § 422.620, § 405.1200, 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: February 15, 2006. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: March 7, 2006. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 06–3264 Filed 3–31–06; 4:02 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

[Docket No. 051128312–5312–01; I.D. 

111605A] 

RIN 0648–AS15 

Fisheries of the Caribbean, Gulf of 

Mexico, and South Atlantic; Shrimp 

Fishery of the Gulf of Mexico; 

Amendment 13 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: NMFS issues this proposed 

rule to implement Amendment 13 to the 

Fishery Management Plan for the 

Shrimp Fishery of the Gulf of Mexico 

(Amendment 13), as prepared and 

submitted by the Gulf of Mexico Fishery 

Management Council (Council). This 

proposed rule would establish a 10-year 

moratorium on issuance of Federal Gulf 

shrimp vessel permits; require owners 

of vessels fishing for or possessing royal 

red shrimp from the Gulf of Mexico 

exclusive economic zone (EEZ) to have 

a royal red shrimp endorsement; require 

owners or operators of all federally 

permitted Gulf shrimp vessels to report 

information on landings and vessel and 

gear characteristics; and require vessels 

selected by NMFS to carry observers 

and/or install an electronic logbook 

provided by NMFS. In addition, 

Amendment 13 would establish 

biological reference points for penaeid 

shrimp and status determination criteria 

for royal red shrimp. The intended 

effects of this proposed rule are to 

provide essential fisheries data, 

including bycatch data, needed to 

improve management of the fishery and 

to control access to the fishery. 

DATES: Written comments on this 

proposed rule must be received no later 

than 5 p.m., eastern time, on May 22, 

2006. 

ADDRESSES: You may submit comments 

on the proposed rule by any of the 

following methods: 

• E-mail: 0648–

AS15.Proposed@noaa.gov. Include in 

the subject line of the e-mail comment 

the following document identifier: 

0648–AS15. 

• Federal e-Rulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Steve Branstetter, Southeast 

Regional Office, NMFS, 263 13th

Avenue South, St. Petersburg, FL 33701. 

• Fax: 727–824–5308. 

Copies of Amendment 13, which 

includes an Environmental Assessment, 

an Initial Regulatory Flexibility 

Analysis (IRFA), and a Regulatory 

Impact Review, may be obtained from 

the Gulf of Mexico. 

Comments regarding the burden-hour 

estimates or other aspects of the 

collection-of-information requirements 

contained in this proposed rule may be 

submitted in writing to Jason Rueter at 

the Southeast Regional Office address 

(above) and to David Rostker, Office of 

Management and Budget (OMB), by email at DavidlRosker@omb.eop.gov, or 

by fax to 202–395–7285. 

FOR FURTHER INFORMATION CONTACT: 

Steve Branstetter, telephone: 727–551–

5796; fax: 727–824–5308; e-mail: 

Steve.Branstetter@noaa.gov. 

SUPPLEMENTARY INFORMATION: The 

shrimp fishery in the Gulf of Mexico is 

managed under the FMP. The FMP was 

prepared by the Council and is 

implemented under the authority of the 

Magnuson-Stevens Fishery 

Conservation and Management Act 

(Magnuson-Stevens Act) by regulations 

at 50 CFR part 622. 

Amendment 13 

Royal Red Shrimp Permit Endorsements 

For a person aboard a vessel to fish for 

royal red shrimp in the Gulf of Mexico 

EEZ or possess royal red shrimp in or 

from the Gulf of Mexico EEZ, this rule 

would require that a valid commercial 

vessel permit endorsement for royal red 

shrimp be issued to the vessel and be on 

board. Note that this would be in 

addition to the requirement to have a 

Federal commercial vessel permit for 

Gulf shrimp. 

An owner of a vessel who desires a 

commercial vessel permit endorsement 

for royal red shrimp would be required 

to obtain a permit application form from 

and submit it to the Regional 


cchase on PROD1PC60 with PROPOSALS