Proposed Rule2021-25364
Addressing Certain Types of Fraud Affecting Medicare Income Related Monthly Adjusted Amounts (IRMAA)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 23, 2021
Issuing agencies
Social Security Administration
Abstract
Certain Medicare beneficiaries may have their taxable income affected by fraudulent activity, which in turn could affect the amount of and their ability to afford their Medicare Part B (medical insurance) and Medicare Part D (prescription drug coverage) premiums. We are seeking information from the public on the type of information we should consider relating to evidence of life changing events (LCE) resulting from criminal fraud or theft. Information from the public will help us determine whether and how we should revise our rules to provide relief to beneficiaries affected by fraud.
Full Text
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<title>Federal Register, Volume 86 Issue 223 (Tuesday, November 23, 2021)</title>
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[Federal Register Volume 86, Number 223 (Tuesday, November 23, 2021)]
[Proposed Rules]
[Pages 66488-66491]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25364]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Part 418
[Docket No. SSA-2021-0006]
RIN 0960-AI55
Addressing Certain Types of Fraud Affecting Medicare Income
Related Monthly Adjusted Amounts (IRMAA)
AGENCY: Social Security Administration.
ACTION: Advance notice of proposed rulemaking (ANPRM).
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SUMMARY: Certain Medicare beneficiaries may have their taxable income
affected by fraudulent activity, which in turn could affect the amount
[[Page 66489]]
of and their ability to afford their Medicare Part B (medical
insurance) and Medicare Part D (prescription drug coverage) premiums.
We are seeking information from the public on the type of information
we should consider relating to evidence of life changing events (LCE)
resulting from criminal fraud or theft. Information from the public
will help us determine whether and how we should revise our rules to
provide relief to beneficiaries affected by fraud.
DATES: To be sure that we consider your comments, we must receive them
no later than January 24, 2022.
ADDRESSES: You may submit comments by any one of three methods--
internet, fax, or mail. Do not submit the same comments multiple times
or by more than one method. Regardless of which method you choose,
please state that your comments refer to Docket No. SSA-2021-0006 so
that we may associate your comments with the ANPRM.
CAUTION: You should be careful to include in your comments only
information that you wish to make publicly available. We strongly urge
you not to include in your comments any personal information, such as
Social Security numbers, financial account numbers, or medical
information.
1. Internet: We strongly recommend that you submit your comments
via the internet. Please visit the Federal eRulemaking portal at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Use the Search function to find docket
number SSA-2021-0006. Once you submit your comment, the system will
issue a tracking number to confirm your submission. You will not be
able to view your comment immediately because we must post each comment
manually. It may take up to a week for your comment to be viewable.
2. Fax: Fax comments to (410) 966-2830.
3. Mail: Address your comments to the Office of Regulations and
Reports Clearance, Social Security Administration, 3100 West High Rise
Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401.
Comments are available for public viewing on the Federal
eRulemaking portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> or in person, during
regular business hours, by arranging with the contact person identified
below.
FOR FURTHER INFORMATION CONTACT: Monica Nolan, Social Security
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401,
(410) 965-2075. 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
<a href="http://www.socialsecurity.gov">www.socialsecurity.gov</a>.
SUPPLEMENTARY INFORMATION:
Background
Medicare Part B as set forth in Title XVIII, Part B of the Social
Security Act (Act) \1\ and explained in 42 CFR part 407, is a voluntary
supplemental medical insurance program that provides coverage for
services such as physician's care, diagnostic services, and medical
supplies. Medicare Part D established by Title XVIII of the Act, Part D
\2\ and explained in 42 CFR part 423 is a voluntary program that covers
certain prescription drug costs.
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\1\ See 42 U.S.C. 1395j.
\2\ See 42 U.S.C. 1395w-101.
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Many beneficiaries enrolled in Part B and Part D pay deductibles,
co-insurances associated with covered services, and monthly premiums.
The Part B and Part D premiums are periodic payments that an enrolled
beneficiary makes to Medicare or a participating health care or
prescription drug plan in exchange for medical insurance and
prescription drug cost coverage.\3\ The Federal Government subsidizes
the Part B and Part D programs, and most enrollees pay a monthly
premium representing about roughly 25 percent of the estimated actual
cost for Part B and the cost of basic prescription drug coverage for
Part D.\4\ The Centers for Medicare & Medicaid Services (CMS)
administers the Medicare program and sets the standard and base monthly
premiums. The Social Security Administration in turn determines and
deducts the amount of certain Part B and Part D premiums from
beneficiaries' Social Security benefits.
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\3\ See 20 CFR 418.1010(b)(9), 418.2010(b)(7), and 42 CFR 408.20
through 408.28.
\4\ See 42 U.S.C. 1395r(a), 1395w-115(a).
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Beneficiaries with modified adjusted gross incomes (MAGI) \5\ above
a specified threshold \6\ must pay a higher percentage of the Medicare
Part B and Part D costs based on where their MAGI falls within certain
income ranges.\7\ CMS sets and publishes all MAGI threshold and range
amounts each year based on changes in the Consumer Price Index.\8\ We
refer to this subsidy reduction as the Income Related Monthly
Adjustment Amount (IRMAA), which is the amount of additional premiums
these beneficiaries must pay based on their income.\9\
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\5\ Modified Adjusted Gross Income is your adjusted gross income
as defined by the Internal Revenue Code, plus certain forms of tax-
exempt income set out in the regulations. See 20 CFR 418.1010(b)(6)
and 418.2010(b)(6).
\6\ See 20 CFR 418.1105 and 418.2105.
\7\ See 20 CFR 418.1115 and 418.2115.
\8\ See 20 CFR 418.1105(c), 418.1115(e), 418.2105(c), and
418.2115(e).
\9\ See 20 CFR 418.1101 and 418.2101.
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The Internal Revenue Service (IRS) provides us with MAGI
information each year. We use an individual's MAGI and Federal income
tax filing status for the tax year two years before the effective
year--the calendar year for which we make an IRMAA determination \10\--
to determine whether a beneficiary must pay an IRMAA, and if so, how
much.\11\ If information is not yet available for the tax year two
years before the effective year, we will use information from the tax
year three years before the effective year until the later information
becomes available to us.\12\
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\10\ See 20 CFR 418.1010(b)(2) and 418.2010(b)(2).
\11\ See 20 CFR 418.1120 and 418.2120.
\12\ See 20 CFR 418.1135(b) and 418.2135.
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As an example, we would use 2019 MAGI and Federal income tax filing
status information when making a determination for a beneficiary who
must pay an IRMAA beginning in January 2021 (2021 being the effective
year). This is because we use the most current tax data available from
the IRS, which is usually two years before the effective year. The
determination is generally made prior to the effective year, and thus
tax data from the prior year (2020 in this example) will generally not
be available to the Social Security Administration (SSA) at the time of
the determination. Consequently, we must use the latest tax data
available to us to make an IRMAA determination.
Beneficiaries who experience a major life-changing event may
request that we use information from a more recent tax year to make a
new IRMAA determination by completing an SSA-44 (Office of Management
and Budget (OMB) No. 0960-0784).\13\ Major life-changing events include
marriage, divorce or annulment, death of a spouse, work reduction or
stoppage, loss of income-producing property, loss of employer pension
or receipt of settlement payment from a current or former employer.\14\
If a beneficiary provides evidence that a qualifying major life-
changing event caused a significant reduction in MAGI, we will
determine the IRMAA based on data from a more recent tax year.\15\
During the annual verification process, SSA will verify MAGI for
beneficiaries for
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whom SSA has been temporarily using MAGI from the tax year 3 years
prior to the effective year, beneficiaries whom we are using a copy of
their 2 years prior or 1 year prior to the effective year tax return,
beneficiaries who supplied estimates for their MAGI in connection with
a life changing event, and for beneficiaries who attested to not
needing to file a tax return.\16\ We define a significant reduction in
MAGI as any change that results in a reduction or elimination of
IRMAA.\17\
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\13\ See 20 CFR 418.1201, 418.1205, 418.2201, and 418.2205.
\14\ See 42 U.S.C. 1395r (i)(4)(C)(ii)(II); 20 CFR 418.1205, and
418.2205.
\15\ See 20 CFR 418.1201; 418.1205, 418.2201, and 418.2205.
\16\ See 20 CFR 418.1140 and HI 01130.001.
\17\ See 20 CFR 418.1215 and 418.2215.
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Increase in Fraudulent Activities
Fraud impacts a greater number of Americans each year and to a
greater economic extent. The Federal Trade Commission (FTC) reported
receiving more than 2.2 million reports of fraud from consumers, who
reported losses of more than $3.3 billion in 2020 (an increase from
$1.8 billion in 2019). Just over a third of all consumers who filed a
fraud report with the FTC--34 percent--reported losing money, up from
23 percent in 2019.\18\ For example, among the increasing reports of
fraud, the FTC cites imposter fraud as the number one category of fraud
by loss amount.\19\ The ``imposter fraud'' category includes ``. . .
romance scams, people falsely claiming to be the government, a relative
in distress, a well-known business, or a technical support expert, to
get a consumer's money.'' \20\ Additionally, as the COVID-19 pandemic
continues to impact the United States, the Federal Communications
Commission has learned of new scam text-message campaigns and robocalls
that prey on virus-related fears,\21\ and the FTC has warned against
scammers attempting to cash in on confusion relating to COVID-19
vaccines.\22\
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\18\ Id.
\19\ The Federal Trade Commission's Consumer Sentinel Network:
Data Book 2020, page 8, available at: <a href="https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf">https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf</a>.
\20\ Id. at page 4.
\21\ Coronavirus Scams--Consumer Resources <a href="https://www.fcc.gov/covid-scams">https://www.fcc.gov/covid-scams</a>.
\22\ Scammers cash in on COVID-19 vaccination confusion (January
27, 2021) available at: <a href="https://www.consumer.ftc.gov/blog/2021/01/scammers-cash-covid-19-vaccination-confusion">https://www.consumer.ftc.gov/blog/2021/01/scammers-cash-covid-19-vaccination-confusion</a>.
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In addition to the above noted new and increased types of fraud, we
have also become aware of a significant increase in Social Security
number (SSN)-related fraud, and scammers who pose as government
employees to defraud unsuspecting victims of their personal information
and money.\23\ In January 2020, our Inspector General appeared before
Congress to address this matter. The Inspector General gave testimony
about a significant increase in complaints of callers impersonating
Social Security employees or alleging an SSN-related problem. She noted
that, in fiscal year (FY) 2018, our Office of the Inspector General
(SSA OIG) recorded about 15,000 related complaints, while in FY 2019,
the number of such complaints grew to over 478,000.\24\ For FY 2020,
SSA OIG recorded over 718,000 complaints related to Social Security
telephone scams,\25\ and in its most recent semiannual report to
Congress (for the period of October 1, 2020 through March 31, 2021),
SSA OIG reports having received more than 400,000 such complaints
during that 6-month period, which would exceed the rate for FY
2020.\26\ The FTC reports that Social Security-related phone scams are
the most common type of government imposter fraud targeting the
public.\27\ Recently, the U.S. Attorney's Office for the Northern
District of Georgia helped shut down a criminal ring that defrauded the
public of over $20 million by impersonating Social Security or IRS
employees.\28\ We note, however, that Social Security impersonation
scams are only one among many types of fraud that could result in
income changes that ultimately affect IRMAA amounts.
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\23\ That's Not the Government Calling: Protecting Seniors from
the Social Security Impersonation Scam: Hearing Before the Special
Committee on Aging, U.S. Senate, 116th Cong., 2nd Sess. (2020)
(Statement of Gail S. Ennis, Inspector General, Social Security
Administration) (<a href="https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security">https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security</a>).
\24\ Id. at 2 and Exhibit 1.
\25\ SSA OIG, Semiannual Report to Congress, October 1, 2019-
March, 31, 2020, at 10 (May 29, 2020) (<a href="https://oig.ssa.gov/sites/default/files/semiannual/SAR-Spring-2020.pdf">https://oig.ssa.gov/sites/default/files/semiannual/SAR-Spring-2020.pdf</a>); SSA OIG Semiannual
Report to Congress, April 1, 2020-September 30, 2020, at 11
(November 23, 2020) (<a href="https://oig.ssa.gov/sites/default/files/Fall_2020_SAR_1.pdf">https://oig.ssa.gov/sites/default/files/Fall_2020_SAR_1.pdf</a>).
\26\ SSA OIG, Semiannual Report to Congress, October 1, 2020-
March 31, 2021, at 12 (May 28, 2021) SPRING 2021 SAR_FINAL_0.pdf
(<a href="http://ssa.gov">ssa.gov</a>).
\27\ Federal Trade Commission: Consumer Protection Data
Spotlight, available at: <a href="https://www.ftc.gov/news-events/blogs/data-spotlight/2019/07/government-imposter-scams-top-list-reported-frauds">https://www.ftc.gov/news-events/blogs/data-spotlight/2019/07/government-imposter-scams-top-list-reported-frauds</a>.
\28\ SSA OIG India-Based VOIP Provider and Its Director Indicted
for Facilitating Millions of Scam Robocalls to Americans available
at: <a href="https://oig.ssa.gov/audits-and-investigations/investigations/nov17-ga-india-based-voip-provider-fraud-scam-robocalls">https://oig.ssa.gov/audits-and-investigations/investigations/nov17-ga-india-based-voip-provider-fraud-scam-robocalls</a> (November
17, 2020).
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During the January 2020 congressional hearing, the Inspector
General testified that scammers typically ``spoof'' or mimic legitimate
government telephone numbers, so those numbers appear on a victim's
caller ID, providing a veil of legitimacy. Scammers seek to deceive and
frighten victims by telling them that their SSNs have been linked to
crimes, or that their accounts are subject to a fine or debt which the
number holder needs to pay to receive or continue to receive their
Social Security benefits, or avoid legal action, including arrest. Some
scammers have even emailed fake letters and reports that appear to come
from Social Security, to further intimidate and convince potential
victims of their legitimacy. The scammers then demand payment in the
form of cash, retail gift cards, or pre-paid debit cards, wire
transfers, or digital currency, all of which are difficult for
authorities to trace.\29\
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\29\ That's Not the Government Calling: Protecting Seniors from
the Social Security Impersonation Scam: Hearing Before the Special
Committee on Aging, U.S. Senate, 116th Cong., 2nd Sess. (2020)
(Statement of Gail S. Ennis, Inspector General, Social Security
Administration) (<a href="https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security">https://oig.ssa.gov/newsroom/congressional-testimony/thats-not-government-calling-protecting-seniors-social-security</a>).
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Scams, regardless of whether they involve impersonation of SSA
employees, may severely harm our beneficiaries in numerous ways,
including with respect to our determinations regarding IRMAA. For
example, a beneficiary may be defrauded out of a significant amount of
money. In addition to losing money, the victim may engage in financial
transactions to pay scammers--such as withdrawing funds from tax-
advantaged retirement accounts or liquidating stock--that increase
their MAGI for the year in question. The higher reported income
appearing on the victim's tax return can result in an IRMAA assessment
or IRMAA increase two years later.
Our Existing Regulations
Under our current regulations, a significant reduction in income
due to a loss of income-producing property--including a loss due to
criminal fraud or theft--can qualify as an LCE.\30\ All beneficiaries
who seek to qualify for an LCE based on a loss of income-producing
property must provide evidence documenting the loss, such as an
insurance claim.\31\
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\30\ See 20 CFR 418.1205(e) and 418.2205.
\31\ See 20 CFR 418.1255(e) and 418.2255.
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The current regulations require victims of criminal fraud or theft
who have lost income-producing property to submit proof that a court
has convicted the perpetrator of a crime.\32\ While this requirement is
necessary to safeguard
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against unfounded or unproven allegations, convictions may be more
difficult to obtain in these types of fraud cases. Perpetrators of
these increasingly prevalent fraud schemes are employing new
technological means, and, as noted above, are seeking new forms of
payment which make them difficult to identify and convict. As Calvin A.
Shivers, the Assistant Director, Criminal Investigative Division,
Federal Bureau of Investigation noted in his June 2020 testimony before
the U.S. Senate Judiciary Committee:
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\32\ Id.
With the rise in the use of virtual assets and encrypted devices
and applications, the interconnectivity of communication platforms
and the ever-changing landscape of emerging payment systems, the
world is more connected today than ever. This also means it has
become increasingly difficult to track illicit finance flows and
identify the criminal actors behind them.\33\
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\33\ COVID-19 Fraud: Law Enforcement's Response to Those
Exploiting the Pandemic U.S. Senate Judiciary Committee (Statement
of Calvin A. Shivers, Assistant Director, Criminal Investigative
Division, Federal Bureau of Investigation June 9, 2020) available
at: <a href="https://www.fbi.gov/news/testimony/covid-19-fraud-law-enforcements-response-to-those-exploiting-the-pandemic">https://www.fbi.gov/news/testimony/covid-19-fraud-law-enforcements-response-to-those-exploiting-the-pandemic</a>.
Consequently, we are exploring whether and how we might change the
evidentiary standard in our regulations for showing a loss of income-
producing property due to criminal fraud or theft by a third party.
What is the purpose of this ANPRM?
We are seeking information on whether and how we should update our
regulations to provide for relief in cases where beneficiaries are
victims of criminal fraud or theft and their incomes are affected, but
no criminal convictions (or arrest) may have taken place.
We seek to aid beneficiaries adversely affected by fraud that has
affected their IRMAA status, while maintaining our commitment to
safeguard the public funds in our trust. Our current regulations
safeguard against unfounded or unproven allegations by requiring
evidence of fraud or loss, but may not address all situations. We are
seeking input from the public to more fully understand the new forms of
fraudulent activity affecting beneficiaries, to better understand the
types of evidence of fraudulent activities such victims can present, to
learn more about the types of financial transactions beneficiaries have
engaged in as a result of fraud, and to determine how we might revise
our rules to better assist victim-beneficiaries.
What We Will Consider When We Decide Whether To Propose Revisions to
Our Rules
We will consider the public comments and any research or data
identified in response to this solicitation. We will also consider any
information we obtain through research or other activities intended to
inform our policy decisions in this area.
What should the public comment about?
We are specifically asking the public to provide us with comments
on the following topics related to this ANPRM:
<bullet> Types of fraud that can affect IRMAA status--We seek to
learn more about the types of scams the public is experiencing,
including how affected persons were contacted; what was the technique
employed by the scammer; what kinds of property were targeted; what
kinds of financial transactions did affected persons engage in as a
result of the fraud; whether affected persons experienced an increase
in taxable income as a result; how much of a monetary loss if any did
affected persons sustain; were there any arrests or convictions; what
was the experience with law enforcement; etc.). As noted above, please
be certain not to include any personally identifiable information in
your comments;
<bullet> Types of evidence--What types of evidence should we seek
from affected beneficiaries to demonstrate that the loss was due to
criminal fraud or theft? How can we best balance evidentiary needs with
the burden evidence requirements impose on affected beneficiaries? We
are seeking information about forms of convincing evidence that would
be common among such victims.
How should we determine whether a loss of income-producing property
due to alleged criminal fraud or theft is ``a result of the ordinary
risk of investment,'' and thus may not be considered under existing
regulations [20 CFR 418.1205(e).]
Consideration of and Response to Public Comments
We will consider all relevant public comment we receive in response
to this ANPRM. If we decide to propose specific revisions to our rules,
we will publish a notice of proposed rulemaking in the Federal
Register, and you will have a chance to comment on any revisions we
propose.
List of Subjects in 20 CFR Part 418
Administrative practice and procedure, Aged, Blind, Disability
benefits, Medicare subsidies, Public assistance programs, Reporting and
recordkeeping requirements, Supplemental Security Income (SSI).
The Acting Commissioner of Social Security, Kilolo Kijakazi, having
reviewed and approved this document, is delegating the authority to
electronically sign this document to Faye I. Lipsky, who is the primary
Federal Register Liaison for the Social Security Administration, for
purposes of publication in the Federal Register.
Faye I. Lipsky,
Federal Register Liaison, Office of Legislative and Congressional
Affairs, Social Security Administration.
[FR Doc. 2021-25364 Filed 11-22-21; 8:45 am]
BILLING CODE 4191-02-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.