[Federal Register Volume 77, Number 143 (Wednesday, July 25, 2012)]
[Rules and Regulations]
[Pages 43496-43498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17935]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Part 418
[Docket No. SSA-2010-0029]
RIN 0960-AH22
Regulations Regarding Income-Related Monthly Adjustment Amounts
to Medicare Beneficiaries' Prescription Drug Coverage Premiums
AGENCY: Social Security Administration.
ACTION: Final rule.
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SUMMARY: This final rule adopts, without change, the interim final rule
with request for comments we published in the Federal Register on
December 7, 2010, at 75 FR 75884. The interim final rule contained the
rules that we apply to determine the income-related monthly adjustment
amount for Medicare prescription drug coverage (also known as Medicare
Part D) premiums. This new subpart implemented changes made to the
Social Security Act (Act) by the Affordable Care Act. The interim final
rule allowed us to implement the provisions of the Affordable Care Act
related to the income-related monthly adjustment amount for Medicare
prescription drug coverage premiums when they went into effect on
January 1, 2011.
DATES: The interim final rule with request for comments published on
December 7, 2010 (75 FR 75884) is confirmed as final effective July 25,
2012.
FOR FURTHER INFORMATION CONTACT: Craig Streett, Office of Income
Security Programs, Social Security Administration, 2-R-24 Operations
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-
9793. For information on eligibility or filing for benefits, call our
national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or
visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Background
As we discussed in the interim final rule, in March 2010 Congress
passed the Affordable Care Act, which established an income-related
adjustment to Medicare prescription drug coverage premiums.\1\ The
interim final rule added a new subpart C, Income-Related Monthly
Adjustments to Medicare Prescription Drug Coverage Premiums, to part
418 of our rules. Subpart C contains the rules that we use to determine
when you will be required to pay an income-related monthly adjustment
amount in addition to your Medicare prescription drug coverage monthly
premium.
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\1\ Public Law 111-148 Sec. 3308(a).
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The interim final rule also amended our rules on the Medicare Part
B (supplementary medical insurance) income-related monthly adjustment
amounts to add section 418.1322. This section explains that if we make
an income-related monthly adjustment amount determination for you for
the effective year for purposes of the Medicare prescription drug
coverage program, we will apply the same income-related monthly
adjustment amount determination to your Medicare Part B premium for the
same effective year.
Public Comments
On December 7, 2010, we published an interim final rule with
request for comments in the Federal Register at 75 FR 75884 and
provided a 60-day comment period. We received one comment from a member
of the public, comments from one organization, and joint comments from
four other organizations. We carefully considered the concerns
expressed in these comments, but did not make any changes to the
interim final rule. We have summarized the commenters' views and have
responded to the significant comments that are within the scope of the
interim final rule.
Comment: One commenter stated that the reasoning behind charging
higher Medicare premiums is flawed because citizens who have
contributed more to the system should have access to the same products
and benefits at the same rate as other citizens. The commenter
considered the income-related monthly adjustment to be a tax that could
only be established by amending the tax code and suggested that a
better alternative would be to reduce Medicare premiums and apportion
the costs for primary coverage among the multiple health insurance
policies that he believes most beneficiaries have.
Response: We have not adopted this comment because the reduction of
Federal premium subsidies was legislated by Congress, and our
regulations must conform to the provisions of the law.
Comment: One organization suggested that we provide notices to
beneficiaries affected by the income-related monthly adjustment as
early as possible, for example, by October 31 for premium adjustments
beginning the following January. The commenter stated that early notice
would give enrollees time
[[Page 43497]]
to adjust their finances, raise any disagreements with income
determinations, and reduce the number of retroactive adjustments that
are required.
Response: We did not adopt this comment. The Internal Revenue
Service provides us with modified adjusted gross income data no later
than October 15 of each year, as required by law.\2\ We must then
process the data, verify our data processing, print, and mail the
notices. For this reason, we cannot provide notice to beneficiaries
regarding the income-related monthly adjustment amount as early as
October 31. We do strive to mail the notices promptly and believe that
delivery before December provides sufficient time for beneficiaries to
make suitable preparations.
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\2\ 42 U.S.C. 1395w-113(a)(7)(E)(ii).
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These notices contain information about beneficiaries' appeal
rights and notify the beneficiaries that they have 60 days to file an
appeal when they disagree with the determination. Our notices also
inform the beneficiaries of their right to request a new initial
determination.
Comment: Another comment encouraged us to develop materials to
explain what beneficiaries who pay an income-related monthly adjustment
can do if they experience a major life-changing event and a significant
reduction in income, but have not yet filed a tax return reflecting
that change.
Response: We already provide information to beneficiaries
concerning the issues the commenter raised. When we send a letter
telling a beneficiary that he or she must pay an income-related monthly
adjustment, we include comprehensive information about what the
beneficiary can do if he or she experiences a major life-changing event
with a significant reduction in income. We also make available at our
offices and on our web site, publications with information explaining
this issue.\3\ The Centers for Medicare & Medicaid Services (CMS) also
provides information on this subject on its Medicare Web site,
www.medicare.gov.
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\3\ See, e.g., Medicare Premiums: Rules for Higher-Income
Beneficiaries. Available at: http://www.socialsecurity.gov/pubs/10536.pdf.
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Comment: A comment submitted jointly by four organizations proposed
a change in regulations to clarify that a beneficiary's appeal of the
imposition of an income-related monthly adjustment on Medicare Part B
would automatically apply to an income-related monthly adjustment
imposed on Medicare prescription drug coverage, and vice versa. In
addition, the organizations suggested that if a beneficiary appeals
either a Medicare Part B or Medicare prescription drug coverage income-
related monthly adjustment initial determination, we should suspend
determinations for both parts until the appeals process is complete and
there is a final determination. The commenters proposed that joining
the appeals and determinations resulting from those appeals would be
beneficial in saving time and paperwork.
Response: We agree that 20 CFR 418.1322 and 418.2322 ensure that we
apply any income-related monthly adjustment decision made in one
program to the other. Under these provisions, if we make a new decision
or change a decision on appeal for one program, we will also apply the
decision to the other program.
Thus, if a beneficiary has both Medicare Part B and Medicare
prescription drug coverage, any changes to an income-related monthly
adjustment determination made on appeal will affect both programs and
separate appeals are not necessary. In the current income-related
monthly adjustment appeal process, we do not suspend the collection of
the income-related monthly adjustment while the beneficiary appeals the
determination. We make every effort possible to adjudicate the appeal
quickly and implement the decision immediately thereafter. If an appeal
decision results in an overpayment of premiums, we process refunds
without additional action by the beneficiary.
Comment: Another commenter proposed a change in regulations to
allow a request for a new initial determination when a beneficiary
believes that CMS has provided incorrect Medicare prescription drug
coverage information. The commenter stated that beneficiaries not
enrolled in a Medicare prescription drug coverage plan are entitled to
a workable Social Security Administration (SSA) process to establish
that an income-related monthly adjustment does not apply. In addition,
the commenter suggested that regulatory language include a requirement
that Medicare prescription drug plan sponsors, CMS, and SSA exchange
updated enrollment information frequently to decrease the probability
that beneficiaries are charged an income-related monthly adjustment
inappropriately.
Response: We are not involved in the Medicare prescription drug
coverage enrollment process and we cannot determine the absence of
coverage without CMS input. Additionally, adding a process to allow a
beneficiary to establish the absence of Medicare prescription drug
coverage could negatively affect beneficiaries who merely change plans
or re-enroll shortly thereafter. The income-related monthly adjustment
could be removed and result in the beneficiary owing a lump sum payment
when the new plan information is received. CMS provides us with
information about participation in Medicare-approved prescription drug
coverage, and we refund any incorrectly billed income-related monthly
adjustment for prescription drug coverage money as soon as possible.
Comment: The four organizations also suggested that we include the
language of the subpart B regulations in the subpart C regulations
rather than incorporating the text by cross-references.
Response: We have not adopted the comment. We believe that stating
the language one time promotes administrative simplicity. We use cross-
references in our regulations in other instances, and we are confident
that they do not confuse the reader or make it more difficult to use
our regulations. Guidelines issued by the Office of the Federal
Register authorize agencies to use cross-references in their rules in
appropriate situations, and we believe that the situations in which we
have used cross-references in these rules are necessary and
appropriate. Moreover, adding the subpart B text to our subpart C rules
would make the subpart C regulations more complicated and more
difficult to use.
Regulatory Procedures
Executive Order 12866 as supplemented by Executive Order 13563
We consulted with the Office of Management and Budget (OMB) and
determined that this final rule meets the criteria for a significant
regulatory action under Executive Order 12866 as supplemented by
Executive Order 13563. Thus, OMB reviewed the final rule.
Regulatory Flexibility Act
We certify that this rule will not have a significant economic
impact on a substantial number of small entities because it affects
individuals only. Therefore, a regulatory flexibility analysis is not
required under the Regulatory Flexibility Act, as amended.
Paperwork Reduction Act
These rules do not create any new or affect any existing
collections and, therefore, do not require Office of Management and
Budget approval under the Paperwork Reduction Act.
(Catalog of Federal Domestic Assistance Program Nos. 93.770 Medicare
Prescription
[[Page 43498]]
Drug Coverage; 93.774 Medicare Supplementary Medical Insurance;
96.002 Social Security--Retirement Insurance.)
List of Subjects in 20 CFR Part 418
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI), Medicare subsidies.
Michael J. Astrue,
Commissioner of Social Security.
Accordingly, the interim final rule amending 20 CFR chapter III,
part 418, subpart B and adding subpart C that was published at 75 FR
75884 on December 7, 2010, is adopted as a final rule without change.
[FR Doc. 2012-17935 Filed 7-24-12; 8:45 am]
BILLING CODE 4191-02-P