Skip Navigation

Department of Health and Human Services
Medicare Appeals Council
Commissioner, New Jersey Department of Human Services

Hospital Insurance Benefits (Part A)



United Government Services (Contractor)

(Appeal Number)



The Administrative Law Judge (ALJ) issued a decision dated November 14, 2005. The appellant has asked the Medicare Appeals Council to review this action.

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. � 405.724. The Council hereby vacates the hearing decision and remands this case to an ALJ for further proceedings, including a new decision. See 20 C.F.R. � 404.977.


The issue presented in this case is Medicare coverage of home health services the VNA furnished to the beneficiary from April 23, 2002, through October 19, 2002. The Medicare intermediary denied coverage, and the appellant requested a redetermination. (1) Exh. 9. The intermediary redetermination, dated March 30, 2005, upheld the denial of Medicare coverage, and found the provider liable under section 1879 of the Social Security Act ("Act"). Exh. 11, at 6-7.

The appellant filed a request for an ALJ hearing dated June 24, 2005, which the Medicare intermediary stamped as received on June 27, 2005, requesting the opportunity "to appear in person." Exh. 12. The intermediary sent an acknowledgment letter, advising that it was forwarding the request to the Office of Medicare Hearings and Appeals (OMHA). Exh. 13. After resolving a jurisdictional issue (Exhs. 13-17), the ALJ issued a "Notice of Telephonic Hearing," dated October 6, 2005 ("notice"). Exh. 18. The notice set forth the date and time of a scheduled telephone hearing and information on various procedural issues. Id. The notice did not indicate that the ALJ sent a copy to any other individual or entity. Exh. 18, at 6.

The appellant responded by letter dated October 11, 2005, stating:

I am writing to request an in-person hearing in New Jersey in this matter because the Medicare statute does not authorize mandatory [video teleconferencing] or telephone hearings and because [video teleconferencing] or telephone hearings, such as the one proposed in this matter, that are mandatory . . . violate due process.

Exh. 19, at 1-2.

The ALJ nonetheless proceeded with the scheduled telephone hearing on November 1, 2005, in which counsel for the appellant participated. Dec. at 1. On November 14, 2005, the ALJ issued a decision in the case.

In her decision, the ALJ addressed the appellant's request for an in-person hearing. She concluded, in relevant part, that telephone hearings in Medicare cases do not violate due process, citing 42 C.F.R. � 405.1020 as authority. She noted that, while the Medicare statute did not provide for mandatory video teleconferencing or telephone hearings, "the regulations do not set forth mandatory in-person hearings either." She found that a telephone hearing "was more convenient for the parties in this matter." The ALJ also determined that the appellant had not demonstrated good cause for holding an in-person hearing. She specifically noted the right of a party to request an in-person hearing and that "[t]he ALJ may grant the request, with the concurrence of the Managing Field Office ALJ, upon a finding of good cause and will reschedule the hearing for a time and place when the party may appear in person before the ALJ." Dec. at 2-4, quoting 42 C.F.R. � 405.1020(e),(i)(5).

The ALJ concluded, based on the testimony and evidence of record, that the services at issue were not medically reasonable and necessary, as required by section 1862(a)(1)(A) of the Social Security Act (Act). Further, the ALJ found VNA liable for the non-covered services under section 1879 of the Act. Dec. at 19-20. The appellant timely filed a request for review by the Medicare Appeals Council.


Section 521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA)(Pub. L. 106-554) amended section 1869 of the Act to change the Medicare claim appeals process. Title IX of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)(Pub. L. 108-73) further changed the appeals process. The Centers for Medicare & Medicaid Services (CMS) issued an Interim Final Rule implementing the statutory changes on March 8, 2005. Interim Final Rule with Comment Period, 70 Fed. Reg. 11420 (March 8, 2005). (2) These regulations are codified at 42 C.F.R. part 405, subpart I. Id. at 11472.

The Interim Final Rule specified an effective date of May 1, 2005. 70 Fed. Reg. 11420. However, CMS also noted that not all sections of the new regulation can be implemented simultaneously. Accordingly, the regulation included an implementation schedule, setting forth different dates for implementation of specified portions of the regulation. Id. at 11420, 11425. The implementation schedule stated that 42 C.F.R. � 405.1020, governing the time and place of ALJ hearings, is effective "July 1, 2005 for all ALJ hearing requests." Id. at 11425.

Regulations for Medicare Part A appeals in effect prior to the enactment and implementation of the new appeals provisions are codified at 42 C.F.R. part 405, subpart G. These regulations incorporate by reference the procedural regulations in 20 C.F.R. part 404, subparts J and R, into the regulations governing Medicare appeals. 42 C.F.R. � 405.701(c).

Under the pre-BIPA/MMA regulations, parties to an ALJ hearing include parties to the initial and reconsidered determinations by the intermediary, (3) and any other person who shows in writing that their interests may be adversely affected. 20 C.F.R. � 404.932(b); see also 42 C.F.R. �� 405.710, 405.708 (individuals and providers as parties). When an individual files a request for a reconsidered determination, "the provider of services who furnished the items or services shall . . . be made a party thereto." 42 C.F.R. � 405.715 (emphasis supplied).

Parties "may appear [before the ALJ] in person or by video teleconferencing." 20 C.F.R. � 404.929. The ALJ shall provide the parties with written notice of the time and place of the hearing, and determine whether the parties will appear in person or by video teleconferencing. 20 C.F.R. � 404.936(a),(c). A party may object to the time and place of the hearing set forth in the notice, and the ALJ may grant the objection for good cause shown. 20 C.F.R. � 404.936(d). When a party objects to appearing by video teleconference,

the [ALJ] will find your wish not to appear by video teleconferencing to be a good reason for changing the time or place of your scheduled hearing and will reschedule your hearing for a time and place at which you may make your appearance before the [ALJ] in person.

20 C.F.R. � 404.936(e)(emphasis supplied).


The Council finds that the ALJ erred in applying the CMS Interim Final Rule to the appellant's request for an in-person hearing. Dec. at 2-3, citing 42 C.F.R. � 405.1020.

As noted above, the Medicare intermediary issued a redetermination on March 30, 2005. Exh. 11. There was no reconsideration by a Qualified Independent Contractor (QIC) in this case. Further, the record indicates that the appellant filed the request for an ALJ hearing on June 27, 2005.

The CMS implementation timetable provides that the regulations governing the ALJ hearing, 42 C.F.R. �� 405.1000 - 405.1018 and 405.1022 - 405.1064, are "[e]ffective for all appeal requests stemming from a QIC reconsideration." 70 Fed. Reg. at 11425. The schedule also specifies that one regulation, 42 C.F.R. � 405.1020 ("Time and place for a hearing before an ALJ.") is effective "July 1, 2005 for all ALJ hearing requests." Id. The Council finds that this regulation applies to all ALJ hearing requests filed on or after July 1, 2005. Thus, in accordance with CMS' implementation schedule, the Council determines that the ALJ erred in applying 42 C.F.R. � 405.1020 in this case. Instead, the Council finds that the regulations set forth at 42 C.F.R., part 405, subpart G are applicable in this case.

The regulation at 42 C.F.R. � 405.701(c) incorporates by reference the Social Security procedural regulations for hearings. As noted above, these regulations provide that a party "may appear in person or by video teleconferencing, submit new evidence, examine the evidence used in making the determination or decision under review, and present and question witnesses." 20 C.F.R. � 404.929.

The pre-BIPA/MMA regulations provide that a party may appear either in person or by video teleconference. If the party objects to appearing by video teleconference, the regulations require that the ALJ find "good reason" for scheduling an in-person hearing. In this case, the appellant objected to the telephone hearing scheduled by the ALJ and requested to appear in person. Exh. 19. The ALJ erred in applying 42 C.F.R. � 405.1020 and not rescheduling the hearing for a time and place at which the appellant could appear in person.

Further, as referenced above, the parties to the ALJ hearing are the "parties to the initial, reconsidered, or revised determination." 20 C.F.R. � 404.932(b). Both the appellant and the provider were parties to the intermediary's reconsidered determination, and the provider was found liable for the non-covered services. Yet, the notice of telephone hearing in this case was only sent to the appellants' counsel. Exh. 18. The Council finds that the ALJ erred in not notifying the provider of the scheduled hearing in this case, as it is a party to the hearing whose interests may be adversely affected.


The ALJ will offer the parties the opportunity for an in-person hearing. The ALJ shall schedule and provide notice of the date, time, and place of any in-person hearing to the appellant (as subrogee for the beneficiary) and to the provider.

The ALJ may also, in her discretion, obtain a medical expert to examine the record and provide testimony on whether the beneficiary required and received skilled services under 42 C.F.R. � 409.44. Based on the augmented record, the ALJ shall issue a decision regarding whether the services at issue meet the Medicare requirements for coverage of home health services, e.g., 42 C.F.R. �� 409.40 - 409.49. If the ALJ determines that the services are not covered, pursuant to section 1862(a)(1)(A) of the Act, the ALJ shall determine whether liability shall be limited under section 1879 of the Act. See also CMS Ruling 95-1 and 42C.F.R. �� 411.400 - 411.406.

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

DATE: April 24, 2006


Thomas E. Herrmann
Administrative Appeals Judge

Clausen J. Krzywicki
Administrative Appeals Judge


1. See infra note 3.

2. CMS issued technical corrections to the Interim Final Rule on June 30, 2005. Correcting Amendment to an Interim Final Rule, 70 Fed. Reg. 37700 (June 30, 2005).

3. Pre-BIPA/MMA regulations use the term "reconsidered determination" to describe first level appeals by Medicare contractors. Effective October 1, 2004, CMS refers to all first level contractor appeals as "redeterminations." 70 Fed. Reg. at 11425-26, citing CMS Transmittal 97, Change Request 2620, Medicare Claims Processing (Pub. 100-4) (February 6, 2004).