The Administrative Law Judge (ALJ) issued an order of dismissal dated December 24, 2003. The appellant has asked the Medicare Appeals Council to review this action.

The Council grants the request for review because the action, findings or conclusions of the ALJ are not supported by substantial evidence, and 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.

This case concerns home health services rendered to the beneficiary from November 11, 2002 and January 8, 2003. The intermediary denied coverage for a skilled nursing visit on December 9, 2002, and the beneficiary, represented by the home health agency, appealed. The ALJ dismissed the case because the amount in controversy did not exceed $100. The ALJ calculated that the amount in controversy for the one denied visit was $92.48, which was "the amount for each of the three visits reimbursed by Medicare" in the period at issue.

After reviewing the record and the request for review, the Council finds that the ALJ erred in calculating the amount in controversy. According to section 1869 of the Social Security Act, the required amount in controversy for appeals to an Administrative Law Judge in a Medicare Part A case is $100. Medicare regulations at 42 C.F.R. � 405.740(a)(1) define the amount in controversy as "the actual amount charged the individual for the items and services in question, less any amount for which payment has been made by the intermediary and less any deductible and coinsurance amounts applicable in the particular case" (emphasis added). In this case, the billed amount for the single denied visit on December 9, 2002 was $160. There are no deductible and coinsurance amounts. Therefore, the amount in controversy is $160. Exh. 5. Accordingly, the appellant meets the amount in controversy requirement for a hearing. The Council hereby vacates the order of dismissal and remands this case to an ALJ for further proceedings.

At the hearing on November 12, 2003, and in the request for review, the home health agency argued that, because it was being paid under Medicare's prospective payment system, the amount in controversy was actually the difference between the amount it would have been reimbursed for the period had Medicare covered five visits (the episode payment) and the amount it was reimbursed for four visits (a per-visit payment) - a difference of more than $700. We acknowledge that, under the prospective payment system, providers are reimbursed for each 60-day episode at a per-episode rate, unless they bill four or less visits during that episode. In that case, they receive a lower, per-visit payment, referred to as the low utilization payment adjustment (LUPA). See 42 C.F.R. �� 484.205(a)(1), 484.230. However, we note that there is inconsistent evidence as to whether the agency actually billed for four or five visits originally. Exh. 5. On remand, the ALJ shall determine the number of visits that were rendered, correctly billed, and reimbursed during the period at issue.

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

Date: June 17, 2004

Clausen J. Krzywicki
Administrative Appeals Judge

Thomas E. Herrmann
Administrative Appeals Judge