The Administrative Law Judge (ALJ) issued fifteen individual decisions in the subject cases, all dated September 26, 2001. The appellant by letter dated October 15, 2001, asked the Medicare Appeals Council to review these actions.

The Council grants the request for review because there is an error of law. 20 C.F.R. �� 404.967 and 404.970, incorporated by reference in 42 C.F.R. � 405.856. The Council hereby vacates the hearing decisions and remands these cases to an ALJ for further proceedings, including new decisions. See 20 C.F.R. � 404.977.

At issue in these cases is coverage of HCPCS code 00740 QK (physician directed general anesthesia services for upper gastrointestinal endoscopic procedures), HCPCS code 00740 QX (medically directed Certified Registered Nurse Anesthesiologist services for upper gastrointestinal endoscopic procedures), each billed at $740.00, and/or coverage of HCPCS code 00810 QK (physician directed general anesthesia services for lower intestinal endoscopic procedure), and HCPCS code 00810 QX (medically directed Certified Registered Nurse Anesthesiologist services for lower intestinal endoscopic procedures), each billed at $792.00. Exh. 1 - 4, and 6. ⁽¹⁾The carrier and carrier hearing officer denied the claims pursuant to a Local Medical Review Policy (LMRP) which stated that these services were not covered for the stated diagnosis.

The ALJ found that:

As a matter of law in claims such as this one, where the Medicare Hearing Officer, in reaching a decision, has followed prescribed directives issued by authority, I have no choice but to follow those directives as well, despite the fact that there may be instances where I do not agree with the substance of the directives....

I find nothing before me to warrant a finding that the Medicare Hearing Officer's decision was in error, and so that decision remains controlling.

The ALJ did not cite any authority for the proposition that he was required as a matter of law to follow all directives that bind a carrier hearing officer. We grant review because this is an error of law.

By regulation, a carrier hearing officer is bound by statutes enacted by Congress, regulations issued under title XVIII of the Social Security Act (Act), rulings issued by the Centers for Medicare & Medicaid Services (CMS), national coverage decisions, and other policy statements, instructions, and guides issued by CMS. 42 C.F.R. � 405.836. As stated in the hearing officer decisions, CMS also issued a policy statement which bound carrier hearing officers to LMRPs.

In contrast, the ALJ is bound only by statutes enacted by Congress, regulations issued under title XVIII of the Act, rulings issued by the CMS (42 C.F.R. � 404.108(c)), and national coverage decisions (section 1869(b)(3) of the Act, in effect during the period at issue). The ALJ should consider, but is not bound by, any other policy statements, instructions, and guides issued by CMS, or by any LMRP.

Moreover, the ALJ appeared to suggest that he performs appellate review of a carrier hearing officer decision, and could leave that decision as the "controlling," or final, decision of the Secretary. This is also an error of law.

An ALJ qualified and appointed pursuant to the Administrative Procedure Act acts as an independent finder of fact in conducting a hearing pursuant to section 1869 of the Act. This requires de novo consideration of the facts and law. The ALJ shall issue a written decision that gives findings of fact and the reasons for decision. The decision must be based on evidence offered at the ALJ hearing or otherwise included in the record. 42 C.F.R. � 405.801(c), 20 C.F.R. � 404.953. The carrier hearing decision loses any binding or final effect if a request for hearing is filed. 42 C.F.R. � 405.835. The Act and regulations do not provide for the ALJ to perform appellate review of the carrier hearing decision.

We accordingly remand for the ALJ to issue de novo decisions that independently analyze and apply the binding authorities to the facts. The ALJ should also consider other statements of policy but is not strictly bound by them.

The ALJ may take further action not inconsistent with this order.

Date: June 17, 2004

Clausen J. Krzywicki
Administrative Appeals Judge

Bruce P. Gipe
Administrative Appeals Judge

1. References to these exhibits apply to all individual beneficiary files except beneficiaries D. Z. and P. A. For these two files the corresponding exhibits are Exh. 1-3, and 5.