March 25,2005
March 25, 2005
The Honorable Michael O. Leavitt
Secretary
Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201
The Honorable Jo Anne B. Barnhart
Commissioner
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235
Dear Secretary Leavitt and Commissioner Barnhart:
We are writing to you as part of our continued oversight of the transfer of responsibilityfor Medicare appeals as mandated by section 931 of the Medicare Prescription Drug,Improvement, and Modernization Act of 2003 (MMA). The MMA requires that the transfer ofresponsibility for Medicare appeals from the Social Security Administration (SSA) to theDepartment of Health and Human Services (HHS) occur no earlier than July 1, 2005 and no laterthan October 1, 2005. In the Plan for the Transfer of Responsibility for Medicare Appeals(Transfer Plan) then-Secretary Thompson and Commissioner Barnhart submitted to Congress onMarch 25, 2004, the agencies stated their intention to transfer responsibility over the periodbeginning July 1, 2005 and ending October 1, 2005.
As we approach the one year anniversary of your Transfer Plan and the beginning of the100-day countdown to the transfer, we have serious concerns that the implementation of theTransfer Plan is replete with material and systematic problems that will hinder a successfultransfer. While our concerns are far reaching-and by no means limited to those discussedherein-we believe that six major components of the transfer need to be addressed. The six issueswe feel jeopardize your success are: the number and location of field offices, the extensive use ofvideo teleconferencing (VTC) and the availability of VTC sites, hiring and staffing of the officesfor the new appeals entity, the supervisory role of administrative law judges (ALJs), training ofall employees, as well as the establishment of sub-regulatory policies and procedures to governthe process. A failure in the implementation of any one of these areas threatens the integrity ofthe Medicare program and has serious consequences for each of the almost 42 million Americansthat has coverage under Medicare. While we recognize that each of your agencies bears its ownresponsibilities for the transfer, the law holds both of you responsible and we thought it onlyappropriate to share our concerns with both HHS and SSA.
We both work to ensure that access and fairness remain paramount in the appeals processas the Medicare program continues to expand and evolve. As the number of individualsreceiving medical care covered by Medicare continues to increase, especially withimplementation of the new prescription drug benefit, the volume of appeals will continue to riseas well. Faced with this pending increase in appeals, our concerns with ensuring access, fairnessand due process for beneficiaries have taken on an even greater sense of urgency. In an effort tominimize our concerns, we have been working closely to catalogue your progress inimplementing the transfer. Based upon information you have provided, we have some specificconcerns regarding the ability of both HHS and SSA to successfully and completely implementthe transfer by the statutorily mandated deadline and in accordance with your own Transfer Plan.
First, we are very concerned with the number and location of the field offices beingestablished as part of the Medicare appeals process at HHS. Section 931 of the MMA requiredan appropriate geographic distribution of ALJs that would allow "timely access" to such judges.It has been brought to our attention that current planning calls for only three field offices -located in Cleveland, OH, Irvine, CA, and Miami, FL - and a headquarters office, located inArlington, VA. While we understand the need to design the process with an eye on controllingcosts, we feel that three offices do not rise to the level of a geographic distribution as envisionedby Congress in enacting the MMA. Additionally, we believe three is so few offices that there isthe distinct possibility that many elderly and/or disabled Medicare beneficiaries will facesignificant difficulty in obtaining meaningful access to ALJs.
We have attempted to understand the rationale underlying your decisions regarding fieldoffices. So far, we are unaware of any specific reasons for limiting the number to three. Inrelation to the locations you selected and the areas of the country each office is intended to serve,you provided some information that was intended to support your choices of Cleveland, Irvineand Miami to us and the Government Accountability Office (GAO). Unfortunately, we believethat some of your information was incorrect. Specifically, HHS reported to the GAO that Region9, the San Francisco region, had the fewest cases. That is in direct conflict with information wehave received from SSA. Furthermore, HHS told the GAO that its Cleveland office and itsMiami office would have roughly equivalent workloads. Again, the information we have fromSSA does not lead us to the same conclusion.
In response to our concern and apparently conflicting information, we request that youprovide us with the details of how the decision to have only three field offices was made, why thethree cities were chosen, and how you intend to distribute staff and other resources toaccommodate the anticipated workloads in each office. Furthermore, we would like to knowhow your agencies have and can continue to work together to achieve a geographic distributionthat serves Medicare beneficiaries throughout the country and that satisfies the letter and spirit ofthe MMA.
The second concern we have is related to our first, in that the limited number of fieldoffices will inevitably require a majority of cases to be heard via VTC. We understand thefinancial and practical benefits that VTC can provide, however we are concerned with the abilityof HHS to implement full- scale VTC service to all areas of the country by the transfer deadline.
We are not convinced that HHS has made sufficient progress at this point to make VTC arealistic part of its initial operation. Our understanding is that several key steps remain beforeHHS can incorporate VTC into its process. Specifically, HHS has only 100 days to acquire thenecessary equipment and facilities to utilize such services, either on its own or by agreement withother agencies or entities; to ensure privacy on all ends of the VTC connection; to makeprovisions for evidence to be submitted or shared during the video-conference; to makeaccommodations for those who have disabilities (including hearing and visual impairments); tomake provisions for the record to be made available to the appellant prior to a VTC appeal; andto ensure its ability to formulate a complete record of proceedings conducted by VTC.
Both of you have informed us that you are working on a way by which HHS can shareSSA's existing VTC resources, but that no resolution has been reached. We hope that you cancome to an agreement soon, and we expect to be made aware of the details of any suchagreement. Furthermore, given SSA's extensive use of and apparent success with VTC, we aredisappointed that working together you have not progressed further on developing this aspect ofthe process HHS is establishing. With such anticipated heavy reliance on VTC, these are notissues that can wait to be resolved. Accordingly, we request that you provide us with a writtenplan detailing how each of these questions will be addressed as HHS prepares to include and relyon VTC hearings as part of its Medicare appeals operation.
Thirdly, we have concerns regarding the staffing of the three field offices and theheadquarters office. While you have discussed, generally, the types of employees that will behoused in the offices, we have yet to see an organization chart that documents the structure of thefield offices or the headquarters office, and any differences between and among them. Further, itis our understanding that no hiring has taken place yet. While we realize that there is a lengthyhiring process, especially for ALJ's, we are concerned that no staff, including management, is onboard yet. In fact, we understand that several of the position descriptions and vacancyannouncements have not even been written.
A separate but related concern regards the Supervisory ALJ position. Based on thevacancy announcement HHS posted, it appears that its ALJs will take on a significantsupervisory role. If true, that would be a notable departure from current ALJ positions at SSA.We would like to better understand exactly how HHS plans to use its ALJs, as we are extremelywary of the possibility of ALJs devoting their time to non-adjudicatory matters and not beingable to meet the statutorily-mandated decision-making timeframe. We request that HHS addressour staffing-related concerns by providing us with a detailed organizational chart for each fieldoffice and the headquarters office, an update on the hiring process for all positions you seek tofill and a complete description of the three different positions for ALJs at HHS - the Chief ALJ,the Managing ALJs and the Supervisory ALJs.
Our fifth concern relates to training. As you have indicated, many of the ALJs who willbe part of the new appeals system will have little or no experience with administrativeadjudication. In order to help ensure that there is as smooth a transition as possible, we believethat adequate time to educate new ALJs is vital. To help ease our concerns regarding the trainingof ALJs we request that you provide us with a calendar or timeline for training the ALJs and anoutline of the training curriculum, including the substance of the training, the location andmethod of training (i.e., in-person or web-based) and the identity of the trainer(s). Please alsoprovide this information for training other members of the staff, including attorneys, paralegalsand clerical staff. To the extent that staff in the headquarters office will receive different oradditional training, please provide that information as well.
The final concern we would like to raise relates to the policies and procedures to bedeveloped to provide managerial and administrative support for the Medicare appeals process.This "nuts and bolts" area is a potential pitfall to successful implementation and we believe it canbe avoided through careful and thoughtful planning. These sub-regulatory policies are anecessity and, all too often, get overlooked. In order to avoid any omissions in these policies, weask that your staffs provide a detailed briefing to our staffs regarding the sub-regulatory policiesthat will be implemented (such as managerial functions, accounting and other day-to-daymatters). In addition to policies, this briefing should include discussion of the contingencyplanning you are doing to prepare for the possibility that you will not be able to implement yourTransfer Plan as originally intended.
In closing, we would like to remind Secretary Leavitt of the commitment he made to usduring his confirmation hearing to ensure that HHS provides us current and detailed informationregarding decisions associated with the transfer and development of the new ALJ appeals entity.
We ask Commissioner Barnhart to similarly commit and to continue to work with us to ensure asmooth transition. We would interpret your commitments as extending to the GAO as well,which continues its work on this matter at our request. With both of you fully committed toestablishing an appeals process that ensures access and fairness, we look forward to a successfuloutcome to this endeavor.
Given that time is of the essence on this matter, please coordinate with our staffsregarding this letter by April 1, and provide responses no later than April 8. Thank you inadvance for your cooperation.
Sincerely,
Charles E. Grassley
Chairman
Max Baucus
Ranking Member
Grassley, Baucus work to ensure effective Medicare appeals process for beneficiaries
WASHINGTON – Sens. Chuck Grassley and Max Baucus continue their oversight of the transfer of responsibility for Medicare appeals from the Social Security Administration to theDepartment of Health and Human Services.
In a letter today, the senators spelled out specific concerns about the plans under way forthis transfer, including the accessibility of Medicare officials to beneficiaries pursuing appeals,the role of the administrative law judges who will adjudicate appeals, and adequate staffingresources.
Congress shifted responsibility for these appeals between the federal agencies as part ofthe Medicare Modernization Act enacted in 2003. The transfer is to be begin on July 1, 2005,and be completed by October 1, 2005.
Grassley is chairman and Baucus is ranking member of the Senate Committee on Finance.The text of their letter follows here.
March 25, 2005
The Honorable Michael O. Leavitt
Secretary
Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201
The Honorable Jo Anne B. Barnhart
Commissioner
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235
Dear Secretary Leavitt and Commissioner Barnhart:
We are writing to you as part of our continued oversight of the transfer of responsibilityfor Medicare appeals as mandated by section 931 of the Medicare Prescription Drug,Improvement, and Modernization Act of 2003 (MMA). The MMA requires that the transfer ofresponsibility for Medicare appeals from the Social Security Administration (SSA) to theDepartment of Health and Human Services (HHS) occur no earlier than July 1, 2005 and no laterthan October 1, 2005. In the Plan for the Transfer of Responsibility for Medicare Appeals(Transfer Plan) then-Secretary Thompson and Commissioner Barnhart submitted to Congress onMarch 25, 2004, the agencies stated their intention to transfer responsibility over the periodbeginning July 1, 2005 and ending October 1, 2005.
As we approach the one year anniversary of your Transfer Plan and the beginning of the100-day countdown to the transfer, we have serious concerns that the implementation of theTransfer Plan is replete with material and systematic problems that will hinder a successfultransfer. While our concerns are far reaching-and by no means limited to those discussedherein-we believe that six major components of the transfer need to be addressed. The six issueswe feel jeopardize your success are: the number and location of field offices, the extensive use ofvideo teleconferencing (VTC) and the availability of VTC sites, hiring and staffing of the officesfor the new appeals entity, the supervisory role of administrative law judges (ALJs), training ofall employees, as well as the establishment of sub-regulatory policies and procedures to governthe process. A failure in the implementation of any one of these areas threatens the integrity ofthe Medicare program and has serious consequences for each of the almost 42 million Americansthat has coverage under Medicare. While we recognize that each of your agencies bears its ownresponsibilities for the transfer, the law holds both of you responsible and we thought it onlyappropriate to share our concerns with both HHS and SSA.
We both work to ensure that access and fairness remain paramount in the appeals processas the Medicare program continues to expand and evolve. As the number of individualsreceiving medical care covered by Medicare continues to increase, especially withimplementation of the new prescription drug benefit, the volume of appeals will continue to riseas well. Faced with this pending increase in appeals, our concerns with ensuring access, fairnessand due process for beneficiaries have taken on an even greater sense of urgency. In an effort tominimize our concerns, we have been working closely to catalogue your progress inimplementing the transfer. Based upon information you have provided, we have some specificconcerns regarding the ability of both HHS and SSA to successfully and completely implementthe transfer by the statutorily mandated deadline and in accordance with your own Transfer Plan.
First, we are very concerned with the number and location of the field offices beingestablished as part of the Medicare appeals process at HHS. Section 931 of the MMA requiredan appropriate geographic distribution of ALJs that would allow "timely access" to such judges.It has been brought to our attention that current planning calls for only three field offices -located in Cleveland, OH, Irvine, CA, and Miami, FL - and a headquarters office, located inArlington, VA. While we understand the need to design the process with an eye on controllingcosts, we feel that three offices do not rise to the level of a geographic distribution as envisionedby Congress in enacting the MMA. Additionally, we believe three is so few offices that there isthe distinct possibility that many elderly and/or disabled Medicare beneficiaries will facesignificant difficulty in obtaining meaningful access to ALJs.
We have attempted to understand the rationale underlying your decisions regarding fieldoffices. So far, we are unaware of any specific reasons for limiting the number to three. Inrelation to the locations you selected and the areas of the country each office is intended to serve,you provided some information that was intended to support your choices of Cleveland, Irvineand Miami to us and the Government Accountability Office (GAO). Unfortunately, we believethat some of your information was incorrect. Specifically, HHS reported to the GAO that Region9, the San Francisco region, had the fewest cases. That is in direct conflict with information wehave received from SSA. Furthermore, HHS told the GAO that its Cleveland office and itsMiami office would have roughly equivalent workloads. Again, the information we have fromSSA does not lead us to the same conclusion.
In response to our concern and apparently conflicting information, we request that youprovide us with the details of how the decision to have only three field offices was made, why thethree cities were chosen, and how you intend to distribute staff and other resources toaccommodate the anticipated workloads in each office. Furthermore, we would like to knowhow your agencies have and can continue to work together to achieve a geographic distributionthat serves Medicare beneficiaries throughout the country and that satisfies the letter and spirit ofthe MMA.
The second concern we have is related to our first, in that the limited number of fieldoffices will inevitably require a majority of cases to be heard via VTC. We understand thefinancial and practical benefits that VTC can provide, however we are concerned with the abilityof HHS to implement full- scale VTC service to all areas of the country by the transfer deadline.
We are not convinced that HHS has made sufficient progress at this point to make VTC arealistic part of its initial operation. Our understanding is that several key steps remain beforeHHS can incorporate VTC into its process. Specifically, HHS has only 100 days to acquire thenecessary equipment and facilities to utilize such services, either on its own or by agreement withother agencies or entities; to ensure privacy on all ends of the VTC connection; to makeprovisions for evidence to be submitted or shared during the video-conference; to makeaccommodations for those who have disabilities (including hearing and visual impairments); tomake provisions for the record to be made available to the appellant prior to a VTC appeal; andto ensure its ability to formulate a complete record of proceedings conducted by VTC.
Both of you have informed us that you are working on a way by which HHS can shareSSA's existing VTC resources, but that no resolution has been reached. We hope that you cancome to an agreement soon, and we expect to be made aware of the details of any suchagreement. Furthermore, given SSA's extensive use of and apparent success with VTC, we aredisappointed that working together you have not progressed further on developing this aspect ofthe process HHS is establishing. With such anticipated heavy reliance on VTC, these are notissues that can wait to be resolved. Accordingly, we request that you provide us with a writtenplan detailing how each of these questions will be addressed as HHS prepares to include and relyon VTC hearings as part of its Medicare appeals operation.
Thirdly, we have concerns regarding the staffing of the three field offices and theheadquarters office. While you have discussed, generally, the types of employees that will behoused in the offices, we have yet to see an organization chart that documents the structure of thefield offices or the headquarters office, and any differences between and among them. Further, itis our understanding that no hiring has taken place yet. While we realize that there is a lengthyhiring process, especially for ALJ's, we are concerned that no staff, including management, is onboard yet. In fact, we understand that several of the position descriptions and vacancyannouncements have not even been written.
A separate but related concern regards the Supervisory ALJ position. Based on thevacancy announcement HHS posted, it appears that its ALJs will take on a significantsupervisory role. If true, that would be a notable departure from current ALJ positions at SSA.We would like to better understand exactly how HHS plans to use its ALJs, as we are extremelywary of the possibility of ALJs devoting their time to non-adjudicatory matters and not beingable to meet the statutorily-mandated decision-making timeframe. We request that HHS addressour staffing-related concerns by providing us with a detailed organizational chart for each fieldoffice and the headquarters office, an update on the hiring process for all positions you seek tofill and a complete description of the three different positions for ALJs at HHS - the Chief ALJ,the Managing ALJs and the Supervisory ALJs.
Our fifth concern relates to training. As you have indicated, many of the ALJs who willbe part of the new appeals system will have little or no experience with administrativeadjudication. In order to help ensure that there is as smooth a transition as possible, we believethat adequate time to educate new ALJs is vital. To help ease our concerns regarding the trainingof ALJs we request that you provide us with a calendar or timeline for training the ALJs and anoutline of the training curriculum, including the substance of the training, the location andmethod of training (i.e., in-person or web-based) and the identity of the trainer(s). Please alsoprovide this information for training other members of the staff, including attorneys, paralegalsand clerical staff. To the extent that staff in the headquarters office will receive different oradditional training, please provide that information as well.
The final concern we would like to raise relates to the policies and procedures to bedeveloped to provide managerial and administrative support for the Medicare appeals process.This "nuts and bolts" area is a potential pitfall to successful implementation and we believe it canbe avoided through careful and thoughtful planning. These sub-regulatory policies are anecessity and, all too often, get overlooked. In order to avoid any omissions in these policies, weask that your staffs provide a detailed briefing to our staffs regarding the sub-regulatory policiesthat will be implemented (such as managerial functions, accounting and other day-to-daymatters). In addition to policies, this briefing should include discussion of the contingencyplanning you are doing to prepare for the possibility that you will not be able to implement yourTransfer Plan as originally intended.
In closing, we would like to remind Secretary Leavitt of the commitment he made to usduring his confirmation hearing to ensure that HHS provides us current and detailed informationregarding decisions associated with the transfer and development of the new ALJ appeals entity.
We ask Commissioner Barnhart to similarly commit and to continue to work with us to ensure asmooth transition. We would interpret your commitments as extending to the GAO as well,which continues its work on this matter at our request. With both of you fully committed toestablishing an appeals process that ensures access and fairness, we look forward to a successfuloutcome to this endeavor.
Given that time is of the essence on this matter, please coordinate with our staffsregarding this letter by April 1, and provide responses no later than April 8. Thank you inadvance for your cooperation.
Sincerely,
Charles E. Grassley
Chairman
Max Baucus
Ranking Member
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