Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Fiscal Year 2005

GAO-04-1034R: Sep 10, 2004

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GAO reviewed the Centers for Medicare and Medicaid Services' (CMS) new rule on the Medicare Program's Inpatient Rehabilitation Facility Prospective Payment System for Fiscal Year 2005. GAO found that (1) the rule would establish the prospective payment rates for inpatient rehabilitation facilities for federal fiscal year 2005; and (2) CMS complied with applicable requirements in promulgating the rule.

Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Fiscal Year 2005, GAO-04-1034R, September 10, 2004

B-294416

September 10, 2004

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

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; Inpatient Rehabilitation Facility Prospective Payment System for Fiscal Year 2005

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; Inpatient Rehabilitation Facility Prospective Payment System for Fiscal Year 2005" (RIN: 0938-AM82). We received the notice on August 27, 2004. It was published in the Federal Register as a notice on July 30, 2004. 69 Fed. Reg. 45721.

The notice establishes the prospective payment rates for inpatient rehabilitation facilities (IRF) for federal fiscal year 2005.

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 indicates that 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 Ms. Marjorie Kanof, Managing Director, Health Care. Ms. Kanof can be reached at (202) 512-7101.

signed

Kathleen E. Wannisky
Managing Associate General Counsel

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; INPATIENT REHABILITATION
FACILITY PROSPECTIVE PAYMENT SYSTEM
FOR FISCAL YEAR 2005"
(RIN: 0938-AM82)

(i) Cost-benefit analysis

CMS projects that updating the IRF prospective payment system for fiscal year 2005 will result in increases of170 million over fiscal year 2004 levels.

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

The Administrator of CMS has certified that the notice will not have a significant economic impact on a substantial number of small entities.

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

The notice does not contain either an intergovernmental or private sector mandate, as defined in title II, of more than110 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 .

CMS has found "good cause" to waive the notice and comment procedures found at 5U.S.C. 553. CMS made this finding because the statute requires annual updates, and the notice does not make any substantive changes in policy but merely reflects the application of previously established methodologies.

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

The notice does not contain an information collection that is subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act.

Executive Order No. 12866

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

Executive Order No. 13132 (Federalism)

CMS has determined that the notice will not have any negative impact on the rights, roles, or responsibilities of state, local, or tribal governments.