Department of Defense, Office of the Secretary: TRICARE; Hospital Outpatient Prospective Payment System (OPPS), GAO-09-284R, December 22, 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 Defense (DOD), Office of the Secretary,
entitled “TRICARE; Hospital Outpatient Prospective Payment System (OPPS)” (RIN:
0720-AB19). We received the rule on
The final rule implements a prospective payment system for hospital outpatient services similar to that furnished to Medicare beneficiaries. The rule also recognizes applicable statutory requirements and changes arising from Medicare’s continuing experience with this system, including certain related provisions of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The final rule implements an existing statutory requirement for adoption of Medicare payment methods for institutional care which will ultimately provide incentives for hospitals to furnish outpatient services in an efficient and effective manner.
The final rule is effective on
Enclosed is our assessment of the DOD’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, except for the delay in the effective date, DOD 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 RULE
DEPARTMENT OF DEFENSE, OFFICE OF THE SECRETARY
"TRICARE; HOSPITAL OUTPATIENT PROSPECTIVE
PAYMENT SYSTEM (OPPS)"
(i) Cost-benefit analysis
DOD performed a cost-benefit analysis of the final rule. DOD estimates, for example, that in the April 2009 –March 2010 period, payments to hospitals for their outpatient facility charges will decrease by 25 percent under the OPPS compared to the pre-OPPS payments. DOD also estimates that the total reduction under the OPPS for its first year of implementation from revenue in the same period without the proposed OPPS changes to be approximately $460 million.
(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. sections 603-605, 607, and 609
DOD determined that the final rule will have a significant impact on a substantial number of small entitles. Therefore, DOD prepared a final regulatory flexibility analysis that complies with the requirements of the Act. DOD considered regulatory alternatives that would reduce the impact of the final rule on small hospitals, and, for example, implemented a phased-in transition period for emergency room and hospital clinic visits. 73 Fed. Reg. 74,961.
(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. sections 1532-1535
DOD determined that the final rule will not mandate any requirements for state, local, or tribal governments, as defined in Title II, of more than $130 million in any one year.
(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. On
73 Fed. Reg. 17,271. Ten timely items of correspondence were received on the final rule. DOD responds to those comments in the final rule. 73 Fed. Reg. 74,952.
Paperwork Reduction Act, 44 U.S.C. sections 3501-3520
DOD states that the final rule does not impose additional information collection or recordkeeping requirements.
Statutory authorization for the rule
The final rule was promulgated under the authority in 5 U.S.C. sect. 301 and 10 U.S.C. Chapter 55.
Executive Order No. 12,866
DOD determined that the final rule is “economically significant” and, therefore, submitted the rule to the Office of Management and Budget for review.
Executive Order No. 13,132 (Federalism)
DOD concluded that the final rule does not have federalism implications that would have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. For this reason, DOD determined that consultation with state and local officials was not required.