25664 Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 414

[HCFA–1111–IFC]

RIN 0938–AK14

Medicare Program; Criteria for

Submitting Supplemental Practice

Expense Survey Data

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Interim final rule with comment

period.

SUMMARY: This interim final rule

establishes criteria for physician and

non-physician specialty groups for

submitting supplemental practice

expense survey data for use in

determining payments under the

physician fee schedule. This interim

final rule solicits public comments on

the criteria for supplemental surveys.

DATES: Effective Date: This regulation is

effective May 3, 2000.

Comment Period: We will consider

comments concerning criteria for

supplemental surveys if we receive the

comments at the appropriate address, as

provided below, no later than 5 p.m. on

July 3, 2000.

ADDRESSES: Mail written comments (one

original and three copies) to the

following address ONLY: Health Care

Financing Administration, Department

of Health and Human Services, Attn:

HCFA–1111–IFC, P.O. Box 8013,

Baltimore, MD 21244–8013.

If you prefer, you may deliver by

courier, your written comments (one

original and three copies) to one of the

following addresses: Room 443–G,

Hubert H. Humphrey Building, 200

Independence Avenue, SW.,

Washington, DC 20201 or C5–14–03,

Central Building, 7500 Security

Boulevard, Baltimore, MD 21244–1850.

Comments mailed to those addresses

may be delayed and could be

considered late.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–1111–IFC.

Comments received timely will be

available for public inspection as they

are received, generally beginning

approximately 3 weeks after publication

of a document, in Room 443–G of the

Department’s offices at 200

Independence Avenue, SW.,

Washington, DC 20201, on Monday

through Friday of each week from 8:30

a.m. to 5 p.m. (phone: (202) 690–7890).

FOR FURTHER INFORMATION CONTACT:

Kenneth Marsalek, (410) 786–4502.

SUPPLEMENTARY INFORMATION:

I. Background

A. Legislative History

Since January 1, 1992, Medicare has

paid for physicians’ services under

section 1848 of the Social Security Act

(the Act), ‘‘Payment for Physicians’

Services.’’ The Act requires that

payments under the fee schedule be

based on national uniform relative value

units (RVUs) based on the relative

resources used in furnishing a service.

Section 1848(c) of the Act requires that

national RVUs be established for

physician work and practice and

malpractice expenses.

Under the formula set forth in section

1848(b)(1) of the Act, the amount paid

for each service under the physician fee

schedule is the product of three

factors—(1) A nationally uniform

relative value for the service; (2) a

geographic adjustment factor (GAF) for

each physician fee schedule area; and

(3) a nationally uniform conversion

factor (CF) for the service. The CF

converts the relative values into

payment amounts.

For each physician fee schedule

service, there are three RVU

components—(1) Physician work; (2)

practice expense; and (3) malpractice

expense. In addition, each RVU

component has a corresponding

geographic practice cost index (GPCI)

for each fee schedule area. The GPCIs

reflect the relative costs of practice

expense and malpractice insurance, and

of one quarter of the physician work in

an area compared to the national

average.

The general formula for calculating

the Medicare fee schedule amount for a

given service in a given fee schedule

area is as follows:

Payment = [(RVU work × GPCI work) +

(RVU practice expense × GPCI practice

expense) + (RVU malpractice × GPCI

malpractice)] × CF.

Section 121 of the Social Security Act

Amendments of 1994 (Pub. L. 103–432)

required us to develop a methodology

for a resource-based system for

determining practice expense RVUs for

each physician’s service beginning in

1998.

The Balanced Budget Act of 1997 was

enacted on August 5, 1997, before

publication of the October 1997 final

rule on the physician fee schedule (62

FR 59103). Section 4505(a) of the BBA

delayed the effective date of the

resource-based practice expense RVUs

until January 1, 1999, while section

4505(b) provided for a 4-year transition,

with resource-based practice expense

RVUs becoming fully effective in 2002.

In addition, section 4505(d)(1)(A) and

(d)(1)(B) of the BBA required us to

develop new resource-based practice

expense RVUs, and section

4505(d)(1)(C) of the BBA required us to

develop a refinement process to be used

during each of the 4 years of the

transition period.

Section 212 of the Balanced Budget

Refinement Act of 1999 (BBRA) requires

us to establish a process under which

we will accept and use, to the maximum

extent practicable and consistent with

sound data practices, data collected or

developed by entities and organizations

to supplement the data we normally

collect in determining the practice

expense component of the physician fee

schedule. Section 212(b) states that the

process must be available for payments

for the 2001 and 2002 physician fee

schedules. This time period is

consistent with the last years of the 4-

year transition period, noted above.

Therefore, we are establishing a process

for submission of data in calendar years

(CY) 2000 and 2001 for use in

computing practice expense RVUs for

CYs 2001 and 2002 physician fee

schedule, respectively. Section 212(a)

requires that we promulgate an interim

final regulation that permits submission

of data for payment rates for 2001.

B. Current Methodology for Computing

Practice Expense Relative Value Units

Effective for services furnished

beginning January 1, 1999, we

established a new methodology for

computing resource-based practice

expense RVUs. The methodology uses

practice expense data from two

significant, accessible sources—HCFA’s

Clinical Practice Expert Panel (CPEP)

data and the American Medical

Association’s (AMA’s) Socioeconomic

Monitoring System (SMS) data. Current

aggregate specialty practice costs are

used in the methodology to establish

initial estimates of relative resources

used in physicians’ services across

specialties and allocate them to specific

procedures.

The SMS collects information on

aggregate practice expenses from a

random national survey of

approximately 4,000 physicians who

spend the greatest proportion of their

time in patient care activities. The

survey includes AMA member and nonAMA member physicians and office and

hospital-based physicians. Actual

practice expense data by specialty,

derived from the 1995 through 1997

Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations 25665

SMS survey data, were used to create

six cost pools—administrative labor,

clinical labor, medical supplies, medical

equipment, office supplies, and all other

expenses. The three steps used to create

cost pools were as follows:

(1) Determination of practice expenses

per hour by cost category, using the

SMS survey of actual cost data. The

practice expense per hour for each

physician respondent’s practice was

calculated as the practice expenses for

the practice divided by the total number

of hours spent in patient care activities

by the physicians in the practice.

(2) Determination of the total number

of physician hours, by specialty, spent

treating Medicare patients, using

physician time data for each procedure

code and Medicare claims data.

(3) Calculation of the practice expense

pools by specialty and by cost category

by multiplying the practice expenses

per hour for each category by the total

physician hours.

Since many specialties identified in

our Medicare claims data did not

correspond exactly to the specialties

included in the practice expense tables

from the SMS survey data, we

crosswalked these specialties to the

most appropriate SMS specialty

category. (For a more detailed

discussion of the methodology, you may

refer to the June 1998 proposed rule (63

FR at 30826) and the November 1998

final rule with comment (63 FR at

58816).)

C. Refinement of Practice Expense RVUs

In the June 5, 1998 proposed rule (63

FR 30818) and the November 2, 1998

final rule (63 FR 58814), we established

the parameters for a refinement process

and indicated that RVUs for all codes

would be considered interim for CY

1999 and during the transition (through

CY 2001). In the November 1998 final

rule, we outlined the initial refinement

process and the steps we are taking to

resolve outstanding general

methodological issues.

In the July 22, 1999 proposed rule (64

FR 39609), we stated that we awarded

a one-year contract, beginning May 24,

1999, to The Lewin Group to provide

technical assistance in evaluating

various aspects of the practice expense

methodology. These aspects include the

following:

• Evaluation of the validity and

reliability of the SMS data for specialty

and subspecialty groups.

• Identification and evaluation of

alternative and supplementary data

from sources such as specialty and

multi-specialty societies.

• Development of criteria for

accepting other surveys and

determination of the appropriate form of

these surveys.

In the November 2, 1999 final rule (64

FR 59380), we noted the steps our

contractor had taken to date, including

issuance of its first draft report,

‘‘Practice Expense Methodology,’’ dated

September 24, 1999. This report, which

contains recommendations about a

variety of methodology issues and use of

oversampling and supplemental

surveys, is discussed below. (The report

has been placed on our homepage under

the title ‘‘Practice Expense Methodology

Report.’’ Our homepage can be accessed

through the HCFA Internet site at http:/

/www.hcfa.gov/medicare/pfsmain.htm.)

Also, in the final rule, we indicated that

for CY 2000 we would use supplemental

survey data from thoracic surgeons to

calculate practice expense because this

oversample followed the SMS format

and was collected by the AMA

contractor, thus helping to assure data

consistency.

In the September 24, 1999 report, the

contractor recommended that we

consider supplemental survey data

furnished by physician and nonphysician specialty groups that have

conducted independent surveys that

adhere to uniformity of format, sample

frame, contractor, and data analysis of

information on practice expense and

hours spent in patient care. Specifically,

the contractor recommended the

following criteria:

• Draw the sample from the AMA

Physician Masterfile when possible.

• Survey a large enough number of

individuals to assure an adequate

number of usable responses.

• Conduct the survey based on the

SMS survey instruments and protocols,

including administration and follow-up

efforts.

• Use the same contractor as the SMS

and field the survey during the same

timeframe.

• Consistently define, throughout the

SMS and all additional surveys, practice

expense and hours spent in patient care.

• Assign responsibility for data

editing and analysis to the AMA’s SMS

project team.

II. Provisions of the Interim Final Rule

We are amending the Medicare

regulations in § 414.22(b) (Relative

value units (RVUs)) to add paragraph

(b)(6) to establish criteria for physician

and non-physician specialty groups for

submitting practice expense surveys

that may be used for establishing

payments in the 2001 physician fee

schedule. We use practice expense

survey data to establish the specialtyspecific practice expense per-hour, and

we will consider supplemental data that

is obtained through surveys. We are

adopting the criteria recommended by

The Lewin Group, with some

modifications, for supplemental survey

data submitted to us by August 1, 2000

for consideration for use in our

computation of RVUs for the 2001

physician fee schedule. In addition, we

are soliciting public comment on the

criteria that we will consider for survey

data submitted between August 2, 2000

and August 1, 2001 for use in

computing RVUs for the 2002 physician

fee schedule.

Any HCFA-designated specialty group

may submit supplemental survey data.

(Please see the list below for designated

specialties.) However, for survey data

submitted for payments in 2001, we will

give priority consideration to specialties

that are not represented or are

underrepresented in the SMS data.

HCFA Specialty Code and Description

01—General Practice

02—General Surgery

03—Allergy/Immunology

04—Otology, Laryn., Rhino

05—Anesthesiology

06—Cardiology

07—Dermatology

08—Family Practice

10—Gastroenterology

11—Internal Medicine

12—Manip. Therapy

13—Neurology

14—Neurosurgery

16—OB-GYN

18—Ophthalmology

19—Oral Surgery

20—Orthopedic Surgery

22—Pathology

24—Plastic Surgery

25—Physical Medicine

26—Psychiatry

28—Colorectal Surgery

29—Pulmonary Disease

30—Radiology

33—Thoracic Surgery

34—Urology

35—Chiropractor, Licensed

36—Nuclear Medicine

37—Pediatrics

38—Geriatrics

39—Nephrology

40—Hand Surgery

41—Optometrist

43—CRNA/AA

44—Infectious Disease

46—Endocrinology

48—Podiatry

50—Nurse Practitioners

62—Psychologist (Billing

Independently)

65—Physical Therapist (Indep. Practice)

66—Rheumatology

67—Occupational Therapist

68—Clinical Psychologist

69—Independent Laboratory

25666 Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations

70—Clinic or Other Group

76—Peripheral Vascular Disease

77—Vascular Surgery

78—Cardiac Surgery

79—Addiction Medicine

80—Clinical Social Worker

81—Critical Care (Intensivists)

82—Hematology

83—Hematology/Oncology

84—Preventive Medicine

85—Maxillofacial Surgery

86—Neuropsychiatry

89—Clinical Nurse Practitioner

90—Medical Oncology

91—Surgical Oncology

92—Radiation Oncology

93—Emergency Medicine

94—Interventional Radiology

95—Indep. Physiological Lab

97—Gynecology/Oncology

We will use several criteria for

evaluating supplemental surveys

submitted by August 1, 2000. Our

criteria expand upon some of our

contractor’s recommendations,

primarily by adopting more specific

sampling criteria. We have not accepted

several of our contractor’s

recommendations, but have modified

them; we do not require that physician

specialties use only the same contractor

as the SMS, or that the AMA’s SMS

project team be assigned responsibility

for data editing and analysis. In

addition, as discussed below, it is not

possible for the AMA to oversample a

specialty in time to affect payments for

CYs 2001 and 2002. Following are the

specific criteria we will use:

• Physician groups must draw their

sample from the AMA Physician

Masterfile to ensure a nationally

representative sample that includes both

members and non-members of a

physician specialty group. Physician

groups must arrange for the AMA to

send the sample directly to their survey

contractor to ensure confidentiality of

the sample; that is, to ensure

comparability in the methods and data

collected, specialties must not know the

names of the specific individuals in the

sample. (To request a sample from the

Masterfile, contact Scott Birkhead of the

AMA at (312) 464–2569. We understand

that there is an approximate 1-week

response time and a nominal charge for

drawing the sample.)

• Non-physician specialties not

included in the AMA’s SMS must

develop a method to draw a nationally

representative sample of members and

non-members. At a minimum, these

groups must include former members in

their survey sample. The sample must

be drawn by the non-physician group’s

survey contractor, or another

independent party, in a way that

ensures the confidentiality of the

sample; that is, to ensure comparability

in the methods and data collected,

specialties must not know the names of

the specific individuals in the sample.

• A group (or its contractors) must

conduct the survey based on the SMS

survey instruments and protocols,

including administration and follow-up

efforts, and definitions of practice

expense and hours in patient care. In

addition, any cover letters or other

information furnished to survey sample

participants must be comparable to such

information previously supplied by the

SMS contractor to its sample

participants. (A copy of the guidelines

and procedures may be obtained by

contacting Kenneth Marsalek at (410)

786–4502.)

• Use a contractor that has experience

with the SMS or a survey firm with

experience successfully conducting

national multi-specialty surveys of

physicians using nationally

representative random samples.

• Submit raw survey data to us,

including all complete and incomplete

survey responses as well as any cover

letters and instructions that

accompanied the survey, by August 1,

2000 for data analysis and editing to

ensure consistency. All personal

identifiers in the raw data must be

eliminated. (Send data to Health Care

Financing Administration, Department

of Health and Human Services, Attn:

Kenneth Marsalek, C4–03–06, 7500

Security Boulevard, Baltimore, MD

21244–8013.)

• Raw survey data submitted to us

between August 2, 2000 and August 1,

2001 will be considered for use in

computing practice expense RVUs for

CY 2002.

• The physician practice expense

data from surveys that we use in our

code-level practice expense calculations

are the practice expenses per physician

hour in the six practice expense

categories—clinical labor, medical

supplies, medical equipment,

administrative labor, office overhead,

and other. Supplemental survey data

must include data for these categories.

Ideally, we would like to calculate

practice expense values with precision;

however, we recognize that we must

achieve a balance because conducting

surveys is expensive and there is a

tension between achieving large sample

sizes, which increases precision, and

smaller ones, which conserves costs.

Based on our review of existing

physician practice expense surveys, we

believe an achievable level of precision

is a coefficient of variation, that is, the

ratio of the standard error of the mean

to the mean expressed as a percent, not

greater than 10 percent, for overall

practice expenses or practice expenses

per hour. For existing surveys the

standard deviation is frequently the

same magnitude as the mean. If the

standard deviation equals the mean,

then a usable sample size of 100 will

yield a coefficient of variation of 10

percent. For small, homogeneous

subspecialties, the variations in practice

expenses may be lower because a

smaller sample size achieves this level

of precision. Other ways of expressing

precision (for example, 95 percent

confidence intervals) are also acceptable

if they are approximately equivalent to

a coefficient of variation of 10 percent

or better. We will consider surveys for

which the precision of the practice

expenses are equal to or better than this

level of precision and that meet the

other survey criteria. Also, we will

require documentation regarding how

the practice expenses were calculated

and will verify the calculations. Of

course, we have the statutory authority

to determine the final practice expense

RVUs.

Since the physician fee schedule is a

national fee schedule, we require that

the survey be representative of the target

population of physicians nationwide.

We can presume national

representativeness if a random sample is

drawn from a complete nationwide

listing of the physician specialty or

subspecialty and the response rate, the

percent of usable responses received

from the sample, is high, for example,

80 to 90 percent. If any of these

conditions (random sample, complete

nationwide listing, and high response

rate) are not achieved, then the potential

impacts of the deviations upon national

representativeness must be explored

and documented. For example, if the

response rate is low, then justification

must be furnished to demonstrate that

the responders are not significantly

different from non-responders with

regard to factors affecting practice

expense. Differential weighting of

subsamples may improve the

representativeness. Minor deviations

from national representativeness may be

acceptable.

We believe that it is impossible and

impractical to set rigid cutoffs for most

of these criteria, especially for national

representativeness. We are attempting to

be as flexible as possible consistent with

our goal of obtaining new surveys of

practice expense data that are

scientifically sound and

methodologically consistent with our

existing estimates. For instance, a

specialty may include different types of

physician practices (for example, urban

versus rural, academic versus nonacademic, interventional versus nonVerDate 27<APR>2000 08:25 May 02, 2000 Jkt 190000 PO 00000 Frm 00044 Fmt 4700 Sfmt 4700 E:\FR\FM\03MYR1.SGM pfrm08 PsN: 03MYR1
Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations 25667

interventional) that exhibit different

patterns of practice expense. Similarly,

a stratified sampling of these different

types of practices may be a more

efficient sampling strategy than a simple

random sample of the entire specialty.

We welcome surveys with more

sophisticated designs and these types of

survey variations if relevance to our

criteria is documented.

We would need to make the

supplemental survey data that we

determine complies with the above

criteria consistent with the SMS data we

are using. Specifically, we are currently

using 1994 through 1996 specialty

practice expense per-hour data from the

SMS. Thus, we would deflate

supplemental survey data to be

consistent with the timeframe of the

data from other specialties from the

SMS. For example, since the midpoint

of the SMS data we currently use is

1995, we would deflate supplemental

survey data to 1995 using the Medicare

Economic Index. Therefore, any

comparison between supplemental

survey information and the SMS

practice expense per-hour data we are

currently using should take into account

that the data should be deflated to 1995

costs. We will make comparable

adjustments to bring future

supplemental surveys into the same

timeframe as SMS data used in the

future.

In addition, if a specialty is

represented in the SMS data, we will

weight average (based on the number of

survey responses) the supplemental data

with the existing SMS data already

being used. If the specialty is not

represented in the SMS data, we will

substitute the new data for the

crosswalked SMS data currently being

used for the specialty. Specialties may

also wish to consider that under our

methodology for determining practice

expenses, we calculate specialty specific

practice expense RVUs based on

estimates of practice expenses for

specific procedures in combination with

the SMS data. The specialty specific

practice expense RVUs are weight

averaged based on the frequency of

allowed services performed by a given

specialty. Thus, supplemental data from

a specialty that represents a small

proportion of the allowed services for a

given procedure code will have little

influence on the procedure’s final value

in the weighted averaging.

Also, some practitioner services

(services of certified registered nurse

anesthetists, nurse practitioners, clinical

nurse specialists, physician assistants,

and certified nurse mid-wives) are paid

based on a percentage of the physician

fee schedule amount. Since the payment

under the physician fee schedule for a

service performed by a practitioner is

required to be based on a percentage of

the amount paid to a physician for a

service, we are considering whether to

use only physician practice expense

data in determining the practice

expense RVUs for each practitioner

service.

The AMA has provided us with

information on its plans for collecting

future data on physicians’ practice

expenses. (We are including this

information so that physician specialty

groups can take it into account in their

plans.) The AMA indicated that most

experts agree that the optimal method of

obtaining practice expense data is to

survey physician practices instead of

surveying individual physicians about

their share of a practice’s expenses, as

does the SMS. In addition, the AMA has

found that it has become increasingly

difficult and expensive to collect

practice expense data through the SMS.

For example, physicians tend to relocate

more frequently, are increasingly

unwilling to spend 25 to 30 minutes on

the telephone to complete the SMS

survey, and are increasingly unlikely to

have access to the detailed financial

information requested in SMS. Based on

these considerations, last year the AMA

began developing a new practice-level

survey. In designing the new practice

survey, the AMA is seeking to address

some of the limitations of the SMS

survey and the questions regarding its

appropriateness for use in developing

practice expense RVUs.

Drafts of the practice expense survey

have been reviewed with outside

experts, potential users of the data, and

representatives from specialty societies,

including the AMA’s Specialty Society

Relative Value Update Committee and

group practices. The AMA is currently

conducting a limited pilot of the

practice survey with physician-owned

practices. The pilot excludes single

specialty practices in radiology,

anesthesiology, pathology, and

emergency medicine. Accounting for

these specialties is more complicated,

and separate instrumentation will be

required. Collection of practice-level

data for these specialties will not be

implemented in the first practice

survey, unless staff from these specialty

societies are able to design a survey

instrument that the AMA can use. If the

pilot of the survey is successful, the

AMA plans to conduct the practice

survey initially in 2000 and, in alternate

years thereafter, the practice expense

survey and the SMS survey.

If the CY 2000 practice expense

survey is successful, the AMA plans to

drop the expense questions from the

SMS beginning with the calendar 2001

SMS survey. If the practice expense

survey is unsuccessful, the AMA will

reconsider its plans for CY 2001 and

future years. Under those

circumstances, it may be necessary to

retain the expense questions in the

SMS. However, cost factors may

constrain the extent to which the AMA

can conduct a complete SMS survey

with practice expense questions in CY

2001. Regardless, there are still 2 years

of data from the 1998 and 1999 SMS

surveys that we can use in updating

future practice expense RVUs.

III. Response to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, we are not able

to acknowledge or respond to them

individually. We will consider all

comments we receive by the date and

time specified in the DATES section of

this preamble, and, when we proceed

with a subsequent document, we will

respond to the comments in the

preamble to that document.

IV. Use of Interim Final Rule

We ordinarily publish a notice of

proposed rulemaking in the Federal

Register and invite public comment on

the proposed rule. The notice of

proposed rulemaking includes a

reference to the legal authority under

which the rule is proposed, and the

terms and substance of the proposed

rule or a description of the subjects and

issues involved.

In this instance, however, the need to

engage in proposed rulemaking is

obviated by section 212 of BBRA that

requires that we promulgate this

regulation on an interim final basis. We

are providing a 60-day period for public

comment.

V. Information Collection Requirements

Under the Paperwork Reduction Act

of 1995 (PRA), we are required to

provide 60-day notice in the Federal

Register and solicit public comment

before a collection of information

requirement is submitted to the Office of

Management and Budget (OMB) for

review and approval. In order to fairly

evaluate whether an information

collection should be approved by OMB,

section 3506(c)(2)(A) of the PRA

requires that we solicit comment on the

following issues:

• The need for the information

collection and its usefulness in carrying

out the proper functions of our agency.

• The accuracy of our estimate of the

information collection burden.

25668 Federal Register / Vol. 65, No. 86 / Wednesday, May 3, 2000 / Rules and Regulations

• The quality, utility, and clarity of

the information to be collected.

• Recommendations to minimize the

information collection burden on the

affected public, including automated

collection techniques.

This interim final rule requests

HCFA-designated specialty groups to

submit supplemental survey data to us,

which meets the requirements of this

section, by August 1, 2000, for

consideration for payments in 2001.

However, for survey data submitted for

payments in 2001, we will give priority

consideration to specialties that are not

represented or are under represented in

the SMS data. The burden associated

with these requirements is the time

necessary for the provider to submit the

required data. However, due to the

nature of the request, we estimate the

number of submissions to average fewer

than 10 on an annual basis. Therefore,

these requirements are not subject to the

PRA, as defined under 5 CFR 1320.3(c).

We have submitted a copy of this

interim final rule to OMB for its’ review

of the information collection and

requirements.

If you comment on these information

collection and recordkeeping

requirements, please mail copies

directly to the following: Health Care

Financing Administration, Office of

Information Services, Information

Technology Investment Management

Group, Attn: John Burke, HCFA–1111–

IFC, Room N2–14–26, 7500 Security

Boulevard, Baltimore, MD 21244–1850,

and, Office of Information and

Regulatory Affairs, Office of

Management and Budget, Room 10235,

New Executive Office Building,

Washington, DC 20503, Attn: Allison

Eydt, HCFA Desk Officer, HCFA–1111–

IFC.

VI. Regulatory Impact Statement

We have examined the impacts of this

interim final rule as required by

Executive Order of 1993 (E.O.) 12866,

the Unfunded Mandates Reform Act of

1995 (E.O.) 12875 (UMRA) (Pub. L. 104–

4), and the Regulatory Flexibility Act of

1980 (RFA) (Pub. L. 96–354), and the

Federalism Executive Order of 1999

(E.O.) 13132. E.O. 12866 directs

agencies to assess all costs and benefits

of available regulatory alternatives and,

when regulation is necessary, to select

regulatory approaches that maximize

net benefits (including potential

economic, environmental, public health

and safety effects, distributive impacts,

and equity). The RFA requires agencies

to analyze options for regulatory relief

of small businesses. For purposes of the

RFA, small entities include small

businesses, non-profit organizations,

and government agencies. Most

hospitals and most other providers and

suppliers are small entities, either by

non-profit status or by having revenues

of $5 million or less annually. For

purposes of the RFA, all physicians and

non-physician providers are considered

to be small entities. Individuals and

States are not included in the definition

of a small entity.

Section 1102(b) of the Act requires us

to prepare a regulatory impact analysis

if a rule may have a significant impact

on the operations of a substantial

number of small rural hospitals. This

analysis must conform to the provisions

of section 604 of the RFA. For purposes

of section 1102(b) of the Act, we define

a small rural hospital as a hospital that

is located outside of a Metropolitan

Statistical Area and has fewer than 50

beds.

Since this rule only provides criteria

for physicians and non-physicians who

wish to provide data to us in computing

RVUs under the physician fee schedule,

there are no budgetary implications

arising from this rule. Furthermore, this

rule is required by statute and, thus,

reflects the Congress’s view of

appropriate agency action.

The UMRA also requires (in section

202) that agencies prepare an

assessment of anticipated costs and

benefits before developing any rule that

may result in an expenditure by State,

local, or tribal governments, in the

aggregate, or by the private sector, of

$100 million or more in any year. This

final rule with comment will have no

consequential effect on State, local, or

tribal governments. We believe the

private sector cost of this rule falls

below these thresholds as well.

For these reasons, we are not

preparing analyses for either the RFA or

section 1102(b) of the Act because we

have determined, and we certify, that

this rule will not have a significant

economic impact on a substantial

number of small entities or a significant

impact on the operations of a substantial

number of small rural hospitals.

In accordance with the provisions of

E.O. 12866, this regulation was

reviewed by the Office of Management

and Budget.

VII. Federalism

We have examined this rule in

accordance with E.O. 13132 and have

determined that this final rule will not

have any negative impact on the rights,

roles, or responsibilities of State, local,

or Tribal governments.

List of Subjects in 42 CFR Part 414

Administrative practice and

procedure, Health facilities, Health

professions, Kidney diseases, Medicare,

Reporting and record keeping

requirements, Rural areas, X-rays.

For the reasons set forth in the

preamble, 42 CFR chapter IV is

amended as follows:

PART 414—PAYMENT FOR PART B

MEDICAL AND OTHER HEALTH

SERVICES

Part 414 is amended as set forth

below:

1. The authority citation for part 414

continues to read as follows:

Authority: Secs. 1102, 1871, and 1881(b)(1)

of the Social Security Act (42 U.S.C. 1302,

1395(hh), and 1395rr(b)(1)).

2. In § 414.22, the introductory text is

republished and a new paragraph (b)(6)

is added to read as follows:

§ 414.22 Relative value units (RVUs).

HCFA establishes RVUs for

physicians’ work, practice expense, and

malpractice insurance.

* * * * *

(b) Practice expense RVUs. ***

* * * * *

(6)(i) HCFA establishes criteria for

supplemental surveys regarding

specialty practice expenses submitted to

HCFA by August 1, 2000 that may be

used in determining practice expense

RVUs for the 2001 physician fee

schedule.

(ii) Any HCFA-designated specialty

group may submit a supplemental

survey.

(iii) Survey data and related materials

submitted to HCFA between August 2,

2000 and August 1, 2001 will be

considered for use in determining

practice expense RVUs for the 2002

physician fee schedule.

(Catalog of Federal Domestic Assistance

Program No. 93.774, Medicare—

Supplementary Medical Insurance Program)

Dated: March 20, 2000.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Approved: April 10, 2000.

Donna E. Shalala,

Secretary.

[FR Doc. 00–10971 Filed 5–2–00; 8:45 am]

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