Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare Program; CY 2017 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts

B-328576

November 28, 2016

The Honorable Orrin G. Hatch
Chairman
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate

The Honorable Kevin Brady
Chairman
The Honorable Sander M. Levin
Ranking Member
Committee on Ways and Means
House of Representatives

Subject: Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare Program; CY 2017 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts

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 & Medicaid Services (CMS) entitled “Medicare Program; CY 2017 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts” (RIN: 0938-AS70).  We received the rule on November 14, 2016.  It was published in the Federal Register as a notice on November 15, 2016.  81 Fed. Reg. 80,060.

The notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2017 under Medicare's Hospital Insurance Program (Medicare Part A).  The Medicare statute specifies the formulae used to determine these amounts.  For CY 2017, the inpatient hospital deductible will be $1,316.  The daily coinsurance amounts for CY 2017 will be: (1) $329 for the 61st through 90th day of hospitalization in a benefit period; (2) $658 for lifetime reserve days; and (3) $164.50 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.

The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later.  5 U.S.C. § 801(a)(3)(A).  This notice has a stated effective date of January 1, 2017.  The notice was received by the Senate, House of Representatives, and GAO on November 14, 2016, and published in the Federal Register on November 15, 2016.  162 Cong. Rec. H6269 (Nov. 16, 2016); 162 Cong. Rec. S6469 (Nov. 17, 2016); 81 Fed. Reg. 80,060.  Therefore, this notice does not have a 60-day delay in effective date.  The 60-day delay in effective date can be waived, however, if the agency finds for good cause that delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and their reasons in the rule issued.  5 U.S.C. § 553(d)(3), 808(2).  CMS found that a delay is unnecessary because the formulae used to calculate the inpatient hospital deductible and hospital and extended care services coinsurance amounts are statutorily directed, and CMS could exercise no discretion in following the formulae.  Moreover, CMS found that the statute establishes the time period for which the deductible and coinsurance amounts will apply and delaying publication would be contrary to the public interest.  CMS states that it found good cause to waive publication of a proposed notice and solicitation of public comments

Enclosed is our assessment of 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 of the procedural steps taken 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.

signed

Robert J. Cramer
Managing Associate General Counsel

Enclosure

cc: Agnes Thomas
Regulations Coordinator
Department of Health and Human Services

ENCLOSURE

REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE & MEDICAID SERVICES
ENTITLED
"MEDICARE PROGRAM; CY 2017 Inpatient Hospital
Deductible and Hospital and Extended Care
Services Coinsurance Amounts"
(RIN: 0938-AS70)

(i) Cost-benefit analysis

The Centers for Medicare & Medicaid Services (CMS) estimates that the total increase in costs to beneficiaries associated with this notice is about $740 million due to (1) the increase in the deductible and coinsurance amounts, and (2) the increase in the number of deductibles and daily coinsurance amounts paid.  CMS determined the increase in costs to beneficiaries by calculating the difference between the 2016 and 2017 deductible and coinsurance amounts multiplied by the estimated increase in the number of deductible and coinsurance amounts paid.

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

CMS determined that this notice will not have a significant economic impact on a substantial number of small entities.  CMS also determined that this notice will not have a significant impact on the operations of a substantial number of small rural hospitals.

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

CMS determined that this notice does not impose mandates that will have a consequential effect of $146 million ($100 million adjusted for inflation) or more on state, local, or tribal governments or on the private sector.

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

Administrative Procedure Act (APA), 5 U.S.C. §§ 551 et seq.

CMS did not publish a proposed notice to provide a period for public comment.  CMS waived that procedure because it found good cause that prior notice and comment were impracticable, unnecessary, or contrary to the public interest.  Specifically, CMS found that the procedure for notice and comment was unnecessary here, because the formulae used to calculate the inpatient hospital deductible and hospital and extended care services coinsurance amounts are statutorily directed, and CMS could exercise no discretion in following the formulae.  Moreover, CMS found that the statute establishes the time period for which the deductible and coinsurance amounts will apply and delaying publication would be contrary to the public interest.

Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3520

CMS determined that this notice does not impose any information collection requirements under the Act.

Statutory authorization for the rule

CMS published this notice under the authority of section 1813(b)(2) of the Social Security Act.  42 U.S.C. § 1395e-2(b)(2).

Executive Order No. 12,866 (Regulatory Planning and Review)

CMS determined that this notice is economically significant under the Order and noted that the notice was reviewed by the Office of Management and Budget.

Executive Order No. 13,132 (Federalism)

CMS determined that this notice does not impose any costs on state or local governments, preempt state law, or have federalism implications.