Subject: Department of Health and Human Services, Health Care Financing Administration: Medicare Program; Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts for 2000 File: B-284156 Date: December 13, 1999

Subject: Department of Health and Human Services, Health Care Financing Administration: Medicare Program; Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts for 2000 File: B-284156 Date: December 13, 1999

The Honorable William V. Roth Chairman

The Honorable Daniel Patrick Moynihan Ranking Minority Member Committee on Finance United States Senate

The Honorable Thomas J. Bliley, Jr. Chairman

The Honorable John D. Dingell Ranking Minority Member Committee on Commerce House of Representatives

The Honorable Bill Archer Chairman

The Honorable Charles Rangel Ranking Minority Member Committee on Ways and Means House of Representatives

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, Health Care Financing Administration, entitled "Medicare Program; Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts for 2000" (RIN: 0938-AB52). We received the rule on November 26, 1999. It was published in the Federal Register as a final rule on October 22, 1999. 64 Fed. Reg. 57103.

The notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year 2000 under Medicare's hospital insurance program (Medicare Part A). The Medicare statute specifies the formula used to determine these amounts.

The inpatient hospital deductible will be $776. The daily coinsurance amounts will be: (a) $194 for the 61 st through the 90 th day of hospitalization in a benefit period; (b) $388 for lifetime reserve days; and (c) $97 for the 21 st through 100 th day of extended care services in a skilled nursing facility in a benefit period.

Enclosed is our assessment of HCFA's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Many of the various statutes and executive orders which normally apply to the issuance of a final rule were found by HCFA to be inapplicable because the notice merely announces amounts required by legislation. Our review indicates that HCFA complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210. The official responsible for GAO evaluation work relating to the subject matter of the rule is William Scanlon, Director, Health Financing and Public Health Issues. Mr. Scanlon can be reached at (202) 512-7114.

Sincerely yours,

Robert P. Murphy General Counsel

Enclosure

cc: Ms. Jacquelyn Y. White Deputy Executive Secretary to the Department Department of Health and Human Services

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE ISSUED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, HEALTH CARE FINANCING ADMINISTRATION ENTITLED "MEDICARE PROGRAM; INPATIENT HOSPITAL DEDUCTIBLE AND HOSPITAL AND EXTENDED CARE SERVICES COINSURANCE AMOUNTS FOR 2000" (RIN: 0938-AB52)

(i) Cost-benefit analysis

While a cost-benefit analysis was not conducted because the increases were statutorily directed, the cost to beneficiaries is discussed in the notice. Due to the increase in the deductible and coinsurance amounts and the change in the number of deductibles and daily coinsurance amounts paid, HCFA estimates that the total increase in cost to beneficiaries will be $360 million.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. Sec. 603-605, 607, and 609

HCFA has reviewed the notice and has found that no analyses under the Act are required. Since states and individuals are not considered small entities, there will be no significant impact on a substantial number of small entities.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532-1535

The notice will not impose a federal mandate under Title II of the Act for state, local, or tribal governments or the private sector.

(iv) Other relevant information or requirements under acts and executive orders Administrative Procedure Act, 5 U.S.C. Sec. 551 et seq.

In accordance with HCFA's past practice regarding publication of deductible and coinsurance amounts under Medicare where such amounts are determined according to the statute, general notice rather than notice and comment rulemaking procedures contained in section 553 of the Administrative Procedure Act are used. HCFA states that it found good cause to waive publication of a proposed notice and solicitation of public comments because, as noted, the amounts and the time period for which the deductibles and coinsurance amounts will apply were statutorily directed.

While Congress did not receive the notice until November 22, 1999, and therefore the required 60-day delay in the effective date mandated by the Congressional Review Act (5 U.S.C. 801(a)(3)(A)) would not have elapsed before the announced January 1, 2000, effective date, the notice is eligible for waiver of the delay requirement. Under 5 U.S.C. 804, when an agency finds for good cause that notice and public procedure are unnecessary, a major rule may go into effect at such time as the promulgating agency determines.

Paperwork Reduction Act, 44 U.S.C. 3501-3520

The notice does not contain any information collections which are subject to review by the Office of Management and Budget under the Paperwork Reduction Act. Statutory authorization for the rule The notice was issued under the authority of Section 1813(b)(2) of the Social Security Act (42 U.S.C. 1395(b)(2)).

Executive Order No. 12866

The notice was reviewed by the Office of Information and Regulatory Affairs, Office of Management and Budget, and was determined to be "economically significant" under the Order.