Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare Program; Medicare Part B Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1, 2017

GAO-17-249R: Nov 28, 2016

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GAO reviewed the Department of Health and Human Services, Centers for Medicare and Medicaid Services' new rule on the Medicare Program; Medicare Part B monthly actuarial rates, premium rate, and annual deductible beginning January 1, 2017. GAO found that (1) the notice (a) announces the monthly actuarial rates for aged (age 65 and over) and disabled (under age 65) beneficiaries enrolled in Part B of the Medicare Supplementary Medical Insurance (SMI) program beginning January 1, 2017; and (b) announces the monthly premium for aged and disabled beneficiaries, the deductible for 2017, and the income-related monthly adjustment amounts to be paid by beneficiaries with modified adjusted gross income above certain threshold amounts; and (2) CMS complied with the applicable requirements in promulgating the rule.

B-328581

November 28, 2016

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

The Honorable Fred Upton
Chairman
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives

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; Medicare Part B Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1, 2017

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; Medicare Part B Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1, 2017” (RIN: 0938-AS72).  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. 80,063.

The notice announces the monthly actuarial rates for aged (age 65 and over) and disabled (under age 65) beneficiaries enrolled in Part B of the Medicare Supplementary Medical Insurance (SMI) program beginning January 1, 2017.  In addition, the notice announces the monthly premium for aged and disabled beneficiaries, the deductible for 2017, and the income-related monthly adjustment amounts to be paid by beneficiaries with modified adjusted gross income above certain threshold amounts.

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).  The notice has a stated effective date of January 1, 2017.  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. 80,063.  Therefore, this rule does not have a
60-day delay in effective date.  The 60-day delay in effective date can be waived, however, if the agencies find for good cause that delay is impracticable, unnecessary, or contrary to the public interest, and the agencies incorporate a statement of the findings and their reasons in the rule issued.  5 U.S.C. § 553(d)(3), 808(2).  CMS found good cause to waive notice of proposal and comment as unnecessary because the formulas used to calculate the Part B premiums are statutorily directed, and it would be contrary to the public interest to delay publication of the Part B premium rate.

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; Medicare Part B Monthly
Actuarial Rates, Premium Rate, and Annual Deductible
 Beginning January 1, 2017"

(RIN: 0938-AS72)

(i) Cost-benefit analysis

The Centers for Medicare & Medicaid Services (CMS) described the costs and rates for beneficiaries enrolled in Part B of the Medicare Supplementary Medical Insurance (SMI) program.  The monthly actuarial rates for 2017 are $261.90 for aged enrollees and $254.20 for disabled enrollees.  The standard monthly Part B premium rate for all enrollees for 2017 is $134.00, which is equal to 50 percent of the monthly actuarial rate for aged enrollees (or approximately 25 percent of the expected average total cost of Part B coverage for aged enrollees) plus $3.00.  (The 2016 standard premium rate was $121.80.)  The Part B deductible for 2017 is $183.00 for all Part B beneficiaries.  If a beneficiary has to pay an income-related monthly adjustment, they will have to pay a total monthly premium of about 35, 50, 65, or 80 percent of the total cost of Part B coverage plus $4.20, $6.00, $7.80, or $9.60.  

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

CMS determined that the notice will not have a significant economic impact on a substantial number of small entities.  CMS also determined that the notice will not have a significant effect on 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 will not impose mandates that will have a consequential effect of the statutory threshold 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, 5 U.S.C. §§ 551 et seq.

CMS found good cause to waive the notice of proposed rulemaking for the notice and incorporated a statement of the finding and its reasons.  An agency may waive the notice and comment rulemaking procedures if an agency finds, for good cause, that prior notice and comment are impracticable, unnecessary, or contrary to the public interest.  CMS determined that delaying publication of the Part B premium rate such that it would not be published before the time period established in the statute for which the premium rates will apply would be contrary to the public interest.  CMS found that notice and comment are unnecessary because the formulas used to calculate the Part B premiums are statutorily directed.  Therefore, CMS found good cause to waive publication of a proposed notice and solicitation of public comments.

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

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

Statutory authorization for the rule

CMS promulgated this notice under the authority of sections 1833(b), 1839, and 1933(c) of the Social Security Act, as amended.  42 U.S.C. §§ 1395l(b), 1395r, 1396u-3.

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

CMS determined that the notice is economically significant under the Order as it is anticipated to have an annual effect on the economy of $100 million or more.

Executive Order No. 13,132 (Federalism)

CMS determined that the notice does not significantly affect the rights, roles, and responsibilities of the states.

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