Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar
Year 2004, GAO-04-266R, November 19, 2003




B-293224


November 19, 2003

The Honorable Charles E. Grassley

 Chairman

 The Honorable Max Baucus

 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 William M. Thomas

 Chairman

 The Honorable Charles B. Rangel

 Ranking Minority Member

 Committee on Ways and Means

 House of Representatives



 Subject: Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicare Program; Revisions to Payment Policies
 Under the Physician Fee Schedule for Calendar Year 2004

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; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2004
 (RIN: 0938-AL96). We received the rule on October 31, 2003. It was published in the Federal Register as a final rule with comment period on November 7, 2003. 68
 Fed. Reg. 63196.


 The final rule announces the physician fee schedule update for calendar year 2004 and refines the resource-based practice expense relative value units, among other changes to the Medicare Part B
 payment policy.


 The final rule has an announced effective date of January 1, 2004. The Congressional Review Act 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. 553(a)(3)(A). While the rule was received by Congress on October 31, 2003, it was not
 published in the Federal Register until November 7, 2003. Therefore, the rule does not have the required 60-day delay in its effective date.


 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, with the exception of the delay in the effective date, 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: Ann Stallion

 Regulations Coordinator

 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,

 CENTERS FOR MEDICARE AND MEDICAID SERVICES

 ENTITLED

 "MEDICARE PROGRAM; REVISIONS TO PAYMENT POLICIES UNDER THE PHYSICIAN FEE SCHEDULE FOR CALENDAR YEAR 2004"

 (RIN: 0938-AL96)



(i) Cost-benefit analysis


 CMS conducted a regulatory impact analysis that discusses the manner in which the changes in the fee schedule were calculated and the impact on various medical specialties. For calendar
 year (CY) 2004, the physician fee schedule update is -4.5 percent, the initial estimate of the sustainable growth rate for CY 2004 is 7.4 percent and the conversion factor is $35.1339.

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


 CMS prepared a Regulatory Flexibility Analysis that complies with the requirements of the Act, including the kinds and number of small entities affected (95 percent of the 900,000 physicians and
 other recipients of Medicare payments are considered small entities) and options that were considered to lessen the economic impact. Since the calculation of the payments is based on a
 statutory formula, CMS has very little discretion in considering other options.

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


 The final rule does not contain either an intergovernmental or private sector mandate, as defined in title II, of more than $110 million in any one year.

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


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


 The final rule was issued using the notice and comment procedures contained at 5U.S.C. 553. On August 15, 2003, CMS published a Notice of Proposed Rulemaking (68 Fed. Reg. 49030) in
 the Federal Register. In response, CMS received 2,433 comments, which were considered in issuing the final rule.


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


 The final rule does not include any information collections that are subject to review by the Office of Management and Budget under the Paperwork Reduction Act.


 Statutory authorization for the rule


 The final rule is promulgated under the authority contained in sections 1102, 1871, and 1881(b)(1) of the Social Security Act (42 U.S.C. 1302, 1395rr(b)(1), and 1395hh).


 Executive Order No. 12866


 The final rule was reviewed by OMB and found to be an economically significant regulatory action under the order.


 Executive Order No. 13132 (Federalism)


 The final rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment.