Department of Health and Human Services, Centers for Medicare and Medicaid Services, GAO-01-1047, B-288480, August 15, 2001

Department of Health and Human Services, Centers for Medicare and Medicaid Services, GAO-01-1047, B-288480, August 15, 2001

The Honorable Max Baucus Chairman The Honorable Chuck Grassley Ranking Minority Member Committee on Finance United States Senate

The Honorable W. J. "Billy" Tauzin Chairman The Honorable John D. Dingell Ranking Minority Member Committee on Energy and Commerce House of Representatives

The Honorable Bill Thomas 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, Centers for Medicare and Medicaid Services (CMS), entitled "Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities -- Update" (RIN: 0938-AK47). We received the rule on August 1, 2001. It was published in the Federal Register as a final rule on July 31, 2001. 66 Fed. Reg. 39562.

The final rule sets forth the updates required in section 1888(e) of the Social Security Act, as amended by the Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP) Balanced Budget Refinement Act of 1999 and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, related to Medicare payments and consolidated billing for skilled nursing facilities.

Enclosed is our assessment of the CMS' 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 the CMS 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, Managing Director, Health Care. Mr. Scanlon can be reached at (202) 512-7114.

signed

Kathleen E. Wannisky
Managing Associate General Counsel

Enclosure

cc: Ms. Ann Stallion
Regulations Coordinator
Department of Health and
Human Services

ANALYSIS UNDER 5 U.S.C. SEC. 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, CENTERS FOR
MEDICARE AND MEDICAID SERVICES ENTITLED "MEDICARE PROGRAM; PROSPECTIVE
PAYMENT SYSTEM AND CONSOLIDATED BILLING FOR SKILLED NURSING
FACILITIES -- UPDATE" (RIN: 0938-AK47)

(i) Cost-benefit analysis

CMS has estimated the budgetary impact of the final rule to result in
an increase in payments to skilled nursing facilities of approximately
$1.5 billion (a 10.3-percent increase) in fiscal year 2002.

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

CMS performed a Final Regulatory Flexibility Analysis as part of its
Regulatory Impact Analysis and concludes that the final rule will not
have a significant economic impact on a substantial number of small
entities. The final rule increases the payments made to skilled
nursing facilities.

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

The final rule does not contain either an intergovernmental or private
sector mandate, as defined in title II, of more than $100 million in
any one year.

(iv) Other relevant information or requirements under acts and
executive orders

Administrative Procedure Act, 5 U.S.C. Secs. 551 et seq.

CMS published a Notice of Proposed Rulemaking on May 10, 2001, in the
Federal Register (66 Fed. Reg. 23984) and received approximately 200
comments in response. CMS addresses the comments in the preamble to
the final rule.

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

The final rule contains an information collection that is subject to
review and approval by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act. The proposed rule contained the
information required by the Act and the preamble to the final rule
contains a discussion of the changes to the collection CMS has made
based on the comments it received. These include reducing the
collection from six pages to two pages and a 75-percent reduction in
the data items.

Statutory authorization for the rule

The final rule is issued pursuant to the authority in section 1888(e)
of the Social Security Act (42 U.S.C. 1395yy(e)).

Executive Order No. 12866

The final rule was reviewed and approved by OMB as complying with
Executive Order No. 12866.

Executive Order No. 13132 (Federalism)

CMS found that the final rule does not contain federalism implications
sufficient to warrant the preparation of a Federalism Assessment.