**GAO-04-266R**                      Nov 19, 2003                  

-   
-   
-   
-   

    Jump To:  
-  Elder Abuse 
-  Services for Older Adults 
-  State and Local-Level Drivers and Trends 
-  State and Local Fiscal Projections 
-  Federal Borrowing 
-  Managing the Debt 
-  Summary of Funding Provisions 
-  Auditing the Government's Books 
-  Unpacking the Financial Report 
-  Highlights 
-  Recommendations 
-  Background 
-  About This Work 
-  About This Work 
-  Trends 
-  About the Center 
-  Why It's High Risk 
-  What Remains To Be Done 
-  Key Reports 
-  Newest COVID-Related Reports 
-  AI Use Cases 
-  Flood Insurance 
-  Past Pandemic-Related Reports 
-  CARES Act Oversight Reports 
-  All COVID-19 Reports 
-  Report Suspected Fraud 
-  Subjects 
-  How to Get Notified 
-  Past Reports 
-  Public Health Threats 
-  Explore the FY 2022 and 2023 Funds 
-  Status of FY22 Projects 
-  Lessons Learned 
-  Agency Reports 
-  Recent Reports 
-  Recommendations 
-  Supplemental Material 
-  Full Report 
-  Additional Data 
-  View Decision 
-  Downloads 
-  Previously Identified Actions 
-  Related Pages 
-  Associated Agencies 
-  Tough Choices and Opportunities Ahead 
-  Americas Fiscal Future Key Areas 
-  Retirement Security Key Areas 
-  Current List 
-  About The High Risk List 
-  Area Ratings 
-  Previous High Risk Products 
-  Search Federal Vacancies 
-  Past Federal Vacancies 
-  Violation Letters 
-  About the Yellow Book 
-  Advisory Council 
-  Related Resources 
-  Comment Letters 
-  Related Publications 
-  Contacts and Resources 
-  Major Issues Facing the Nation 
-  Meeting Strategic Challenges 
-  Additional Resources 
-  Resources 
-  GAO Contacts 
-  Mission Teams 
-  Operations and Staff Offices  
-  Organization Chart  
-  Why a Career at GAO? 
-  Am I Qualified? 
-  Company Culture 
-  Reasonable Accommodations 
-  Video Gallery 
-  Paid Internships 
-  Student Volunteers 
-  Professional Development Program 
-  Advancement 
-  Executive Candidate Program 
-  Summer Associates 
-  Externships 
-  Benefits 
-  Contacts 

Skip to Highlights

## Highlights

GAO reviewed the Centers for Medicare and Medicaid Services (CMS) new rule on payment policies. GAO found that (1) the 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 and (2) CMS, with the exception of the delay in the effective date, complied with all applicable requirements.

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

B-293224November 19, 2003The Honorable Charles E. Grassley     Chairman     The Honorable Max Baucus     Ranking Minority Member     Committee on Finance     United States SenateThe 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     Enclosurecc: 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 etseq.     The final rule was issued using the notice and comment procedures contained at 5 U.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.

## Downloads

Full Report (4 pages)

## GAO Contacts

### 

Shirley A. Jones
jonessa@gao.gov

(202) 512-5400

## Office of Public Affairs

### Media Inquiries

Sarah Kaczmarek
kaczmareks@gao.gov

(202) 512-4800

### Public Inquiries

Public Affairs
PublicAffairs@gao.gov

(202) 512-4800

## Related Pages

RelatedAppropriations LawRelatedBid ProtestsRelatedDecisions & FAQsRelatedThe Red BookRelatedContract Appeals BoardRelatedFederal Vacancies Reform ActRelatedCongressional Review Act - archivedReceive GAO Updates
    Stay informed as we add new reports & testimonies.  
        U.S. Government Accountability Office           v3.3.27 -  Column 1     -  Press Center 
  -  Contact Us 
  -  Inspector General 
  -  Restricted Reports 
-  Column 2     -  Copyright & Terms of Use 
  -  Privacy Policy 
  -  Accessibility 
  -  Sitemap 
-  Column 3     -  FOIA Requests 
  -  Scam Alerts 
  -  No FEAR Act Data 
  -  Health Care Advisory Committees