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Statement of Need: This regulation is necessary to implement section 1869 of the Social Security Act (the Act). Major provisions include the following: 1. The implementation of identical rules for Medicare part A and B claims appeals. 2. The establishment of qualified independent contractors (QICs), with panels of physicians making medical necessity determinations. 3. Shorter time frames at all appeal levels. 4. Other improvements to the Medicare claims appeals process. Key components of the final rule include new notice and evidence submission standards, the procedures for adjudicating escalated cases, the promulgation of Medicare-specific regulations for administrative law judge hearings, the feasibility of telephone and in-person appeals under the new BIPA timeframes, reopening rules, and transition policies for the move from the existing appeals procedures.

Summary of the Legal Basis: Section 1869(b) of the Act, as amended by section 521 of Benefits Improvement & Protection Act of 2000, requires the Secretary to implement claims appeal procedures by October 1, 2002.

Alternatives: None, the changes are required by the statute.

Anticipated Costs and Benefits: None, the changes are required by the statute.

Risks: None, the changes are required by the statute.