B-318864

November 6, 2009

The Honorable MaxBaucus
Chairman
The Honorable Charles E. Grassley
Ranking Minority Member
Committee on Finance
United States Senate

The Honorable Henry A.Waxman
Chairman
The Honorable Joe L. Barton
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

The Honorable Charles B. Rangel
Chairman
The Honorable Dave Camp
Ranking Minority Member
Committee on Ways and Means
House of Representatives

Subject: Department of Health and Human Services, Centers for Medicare andMedicaid Services: Medicare Program; Medicare Part B Monthly Actuarial Rates,Premium Rate, and Annual Deductible Beginning January 1, 2010

Pursuant to section801(a)(2)(A) of title 5, United States Code, this is our report on a major rulepromulgated by the Department of Health and Human Services, Centers forMedicare and Medicaid Services (CMS), entitled "Medicare Program; Medicare PartB Monthly Actuarial Rates, Premium Rate, and Annual Deductible BeginningJanuary 1, 2010" (RIN: 0938-AP48). Wereceived the rule on October 19, 2009.It was published in the FederalRegister as a notice on October 22, 2009.74 Fed. Reg. 54,571.

The notice announces the monthly actuarial rates for aged(age 65 and over) and disabled (under age 65) beneficiaries enrolled in Part Bof the Medicare Supplementary Medical Insurance (SMI) program beginning January1, 2010. The notice announces themonthly premium for aged and disabled beneficiaries as well as theincome-related monthly adjustment amounts to be paid by beneficiaries withmodified adjusted gross income above certain threshold amounts. The monthly actuarial rates for 2010 are$221.00 for aged enrollees and $270.40 for disabled enrollees. The standard monthly Part B premium rate for2010 is $110.50, which is equal to 50 percent of the monthly actuarial rate foraged enrollees or roughly 25 percent of the expected average total cost of PartB coverage for aged enrollees. (The 2009standard premium rate was $96.40.) ThePart B deductible for 2010 is $155.00 for all Part B beneficiaries. A beneficiary who has to pay anincome-related monthly adjustment may have to pay a total monthly premium ofroughly 35, 50, 65, or 80 percent of the total cost of Part B coverage.

Enclosed is our assessment of the CMS's compliance withthe procedural steps required by section 801(a)(1)(B)(i) through (iv) of title5 with respect to the rule. Our reviewof the procedural steps taken indicates that CMS complied with the applicablerequirements.

If you have any questions about this report or wish tocontact GAO officials responsible for the evaluation work relating to thesubject matter of the rule, please contact Shirley A. Jones, Assistant GeneralCounsel, at (202) 512-8156.

signed

Robert J. Cramer
Managing Associate General Counsel

Enclosure

cc: VivianStallion
Office Manager, Department of
Health and Human Services

ENCLOSURE

REPORT UNDER 5 U.S.C. sect.801(a)(2)(A) ON A MAJORRULE
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE AND MEDICAID SERVICES
ENTITLED
"MEDICARE PROGRAM; MEDICARE PART B MONTHLY
ACTUARIAL RATES, PREMIUM RATE, AND
ANNUAL DEDUCTIBLE BEGINNING JANUARY 1, 2010"
(RIN: 0938-AP48)

(i) Cost-benefit analysis

CMS estimated that the standard Part B premium rate of$110.50, which is $14.10 higher than the premium for 2009, will result in about$2 billion of additional costs in 2010 for the approximately 12 million Part Benrollees who pay the increase in the Part B premium.

(ii) Agency actions relevant to the RegulatoryFlexibility Act, 5 U.S.C. sections603-605, 607, and 609

CMS has determined that the notice will not have asignificant economic impact on a substantial number of small entities or on theoperations of a substantial number of small rural hospitals.

(iii) Agency actions relevant to sections 202-205 ofthe Unfunded Mandates Reform Act of 1995, 2 U.S.C. sections1532-1535

CMS determined that the notice will not impose spendingcosts on state, local, or tribal governments in the aggregate, or by the privatesector in any one year of $133 million or more.

(iv) Other relevant information or requirements underacts and executive orders

Administrative Procedure Act, 5 U.S.C. sections551 etseq.

In accordance with CMS's past practice regardingpublication of deductible and coinsurance amounts under Medicare where suchamounts are determined according to a statute, a general notice is used ratherthan notice and comment rulemaking procedures contained in section 553 of theAdministrative Procedure Act.

In addition, CMS noted good cause to waive the publicationof a proposed notice and solicitation of public comments because delayingpublication of the rates would be contrary to the public interest.

Paperwork Reduction Act, 44 U.S.C. sections3501-3520

The notice doesnot address the Paperwork Reduction Act. However, in past annual notices announcingthese rates, CMS has stated that the notice does not contain any informationcollection requirements subject to the Act.

Statutory authorization for the rule

The notice is issued pursuant to the authority containedin section 1839 of the Social Security Act (42 U.S.C. 1395r).

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

The notice was deemed economically significant underExecutive Order No. 12,866 and was reviewed by the Office of Management andBudget.

Executive Order No. 13,132 (Federalism)

CMS determined that the notice does not have federalismimplications.