Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicaid Program; State Flexibility for Medicaid Benefit Packages, GAO-09-259R, December 16, 2008
Pursuant to section
801(a)(2)(A) of title 5, United States Code, this is our report on a major rule
promulgated by the Department of Health and Human Services, Centers for
Medicare and Medicaid Services (CMS), entitled “Medicaid Program; State
Flexibility for Medicaid Benefit Packages” (RIN: 0938-AO48). We received the rule on
The final rule implements provisions of section 6044 of
the Deficit Reduction Act of 2005 (Pub. L No. 109 – 171, 120 Stat. 4, 88 (Feb.
8, 2006)), which amends the Social Security Act by adding a new section 1937
related to the coverage of medical assistance under approved state plans. It also provides states increased flexibility
under an approved state plan to define the scope of covered medical assistance
by offering coverage of benchmark or benchmark-equivalent benefit packages to
certain Medicaid recipients. The final
rule has an effective date of
Enclosed is our assessment of the CMS’s compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Our review indicates that CMS complied with the applicable requirements.
If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Shirley A. Jones, Assistant General Counsel, at (202) 512-8156.
Robert J. Cramer
Associate General Counsel
REPORT UNDER 5 U.S.C. sect. 801(a)(2)(A) ON A MAJOR
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE AND MEDICAID SERVICES
"MEDICAID PROGRAM; STATE FLEXIBILITY FOR
MEDICAID BENEFIT PACKAGES"
(i) Cost-benefit analysis
CMS performed a cost-benefit analysis of the final rule. CMS projects that the use of benchmark plans under the final rule will result in $2.3 billion in federal savings from 2006 – 2010. The actual savings will depend on the number of states that implement these plans, the number of beneficiaries states cover with these plans, and the specific design and selection of benchmark plans.
(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. sections 603-605, 607, and 609
CMS certified that the final rule would not have a significant impact on a substantial number of small entities, and, therefore, did not prepare a Final Regulatory Flexibility Analysis.
(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. sections 1532-1535
CMS concluded that, because the final rule does not mandate state participation in using beneficiary plans, there is no obligation for states to make any change in their Medicaid programs. For this reason, the final rule does not mandate expenditures in excess of the threshold in the Unfunded Mandates Reform Act of approximately $127 million.
(iv) Other relevant information or requirements under acts and executive orders
Administrative Procedure Act, 5 U.S.C. sections 551 et seq.
The final rule was issued using the notice and comment
procedures found at 5 U.S.C. sect. 553. CMS
published a proposed rule in the Federal
Paperwork Reduction Act, 44 U.S.C. sections 3501-3520
The final rule does not contain new information collection requirements subject to review by the Office of Management and Budget (OMB) under the Act.
Statutory authorization for the rule
The final rule implements provisions of sections 6044 of
the Deficit Reduction Act of 2005, Pub. L No. 109 – 171, 120 Stat. 4, 88 (
Executive Order No. 12,866
The final rule was reviewed by OMB and found to be an “economically significant” regulatory action under the Order.
Executive Order No. 13,132 (Federalism)
CMS determined that the final rule would not impose direct requirement costs on states or local governments or preempt state law. CMS noted that the final rule will provide states the option to implement alternative Medicaid benefits through a Medicaid state plan amendment.