CMS Adjusts “Amount in Controversy” Threshold for 2012

Providers, physicians, suppliers, and beneficiaries that are dissatisfied with a qualified independent contractor (QIC) reconsideration relating to Medicare Part A, B, C, or D may appeal to an administrative law judge (ALJ) if the amount in controversy (AIC) reaches a specific threshold amount. The AIC threshold amounts are annually adjusted by the percentage increase in the medical care component of the consumer price index for all urban consumers (U.S. city average) for July 2003 to July of the year preceding the year involved and rounded to the nearest multiple of $10.

Each year’s AIC threshold is published as a Notice in the Federal Register — the amounts for 2012 appear at 76 FR 59138, published September 23, 2011.

The AIC threshold amount for ALJ hearing requests will remain at $130 for 2012 and the AIC threshold amount for judicial review will increase to $1,350, from $1,300 in 2011. These updated amounts are based on the 34.51 percent increase in the medical care component of the CPI from July 2003 to July 2011. The CPI level was at 297.600 in July 2003 and rose to 400.305 in July 2011. This change accounted for the 34.51 percent increase.

The AIC threshold amount for ALJ hearing requests changes to $134.51 based on the 34.51 percent increase. In accordance with section 940 of the Medicare Modernization Act (MMA), this amount is rounded to the nearest multiple of $10. Therefore, the 2012 AIC threshold amount for ALJ hearings is $130.

The AIC threshold amount for judicial review changes to $1,345.11 based on the 34.51 percent increase. This amount was rounded to the nearest multiple of $10, resulting in the 2012 AIC threshold amount of $1,350 for judicial review.