54664 Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Notices 

Medicare Part A inpatient hospital 

deductible and the hospital and 

extended care services coinsurance 

amounts for services for each calendar 

year. The amounts are determined 

according to the statute. As has been our 

custom, we use general notices, rather 

than notice and comment rulemaking 

procedures, to make the 

announcements. In doing so, we 

acknowledge that, under the 

Administrative Procedure Act (APA), 

interpretive rules, general statements of 

policy, and rules of agency organization, 

procedure, or practice are excepted from 

the requirements of notice and comment 

rulemaking. 

We considered publishing a proposed 

notice to provide a period for public 

comment. However, we may waive that 

procedure if we find good cause that 

prior notice and comment are 

impracticable, unnecessary, or contrary 

to the public interest. We find that the 

procedure for notice and comment is 

unnecessary because the formulae used 

to calculate the inpatient hospital 

deductible and hospital and extended 

care services coinsurance amounts are 

statutorily directed, and we can exercise 

no discretion in following those 

formulae. Moreover, the statute 

establishes the time period for which 

the deductible and coinsurance amounts 

will apply and delaying publication 

would be contrary to the public interest. 

Therefore, we find good cause to waive 

publication of a proposed notice and 

solicitation of public comments. 

VI. Regulatory Impact Statement 

We have examined the impacts of this 

notice as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Act, the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104–4), and 

Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). As stated in Section IV of 

this notice, we estimate that the total 

increase in costs to beneficiaries 

associated with this notice is about $640 

million due to: (1) The increase in the 

deductible and coinsurance amounts 

and (2) the change in the number of 

deductibles and daily coinsurance 

amounts paid. Therefore, this notice is 

a major rule as defined in Title 5, 

United States Code, section 804(2), and 

is an economically significant rule 

under Executive Order 12866. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6 

million to $29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

have determined that this notice will 

not have a significant economic impact 

on a substantial number of small 

entities. Therefore we are not preparing 

an analysis for the RFA. 

In addition, 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 100 beds. We have 

determined that this notice will not 

have a significant effect on the 

operations of a substantial number of 

small rural hospitals. Therefore, we are 

not preparing an analysis for section 

1102(b) of the Act. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule that may result in expenditures in 

any 1 year by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $120 million. This 

notice has no consequential effect on 

State, local, or tribal governments or on 

the private sector. However, States are 

required to pay premiums for duallyeligible beneficiaries. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

This notice has no consequential effect 

on State or local governments. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

Authority: Sections 1813(b)(2) of the Social 

Security Act (42 U.S.C. 1395e–2(b)(2)). 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance) 

Dated: September 11, 2006. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: September 12, 2006. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 06–7711 Filed 9–12–06; 4:00 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–5042–N] 

RIN 0938–ZA90 

Medicare Program: Solicitation for 

Proposals To Participate in the 

Medicare Hospital Gainsharing 

Demonstration Program Under Section 

5007 of the Deficit Reduction Act 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This notice is to inform 

interested parties of an opportunity to 

apply to participate in the Medicare 

Hospital Gainsharing Demonstration 

being implemented by CMS. The 

Medicare Hospital Gainsharing 

Demonstration authorized under 

Section 5007 of the Deficit Reduction 

Act (DRA) of 2005 was established to 

test and evaluate methodologies and 

arrangements between hospitals and 

physicians designed to govern the 

utilization of inpatient hospital 

resources and physician work. The 

purpose of this demonstration is to 

improve the quality and efficiency of 

care provided to Medicare beneficiaries 

and to develop improved operational 

and financial hospital performance with 

the sharing of remuneration payments 

between hospitals and physicians in six 

projects, each project consisting of one 

hospital. Two projects must be rural. 

This demonstration will be limited in 

scope: we intend to focus on the shortterm impacts of gainsharing programs. 

DATES: Applications will be considered 

timely if we receive them no later than 

5 p.m., Eastern Standard Time (E.S.T.), 

on November 17, 2006. 

FOR FURTHER INFORMATION CONTACT: Lisa 

Waters at (410) 786–6615 or 

GAINSHARING@cms.hhs.gov. 

Interested parties can obtain a complete 

solicitation, application, and supporting 

information on the following CMS Web 

sites at http://www.cms.hhs.gov/ 

DemoProjectsEvalRpts/MD/ 

itemdetail.asp?itemID=CMS1186805 or 


cprice-sewell on PROD1PC66 with NOTICES
Federal Register / Vol. 71, No. 180 / Monday, September 18, 2006 / Notices 54665 

http://www.cms.hhs.gov/ 

DemoProjectsEvalRpts/. 

Paper copies can be obtained by 

writing to Lisa Waters at the address 

listed in the ADDRESSES section of this 

notice. 

ADDRESSES: Mail or deliver applications 

to the following address: Centers for 

Medicare & Medicaid Services, 

Attention: Lisa Waters, Mail Stop: C4–

17–27, 7500 Security Boulevard, 

Baltimore, Maryland 21244. 

Because of staff and resource 

limitations, we cannot accept 

applications by facsimile (fax) 

transmission or by e-mail. 

Eligible Organizations: Section 5007 

of the DRA provides that hospitals 

receiving payment under section 

1886(d) of the Social Security Act are 

eligible to apply. 

For the purpose of this demonstration, 

hospitals may provide gainsharing 

payments to physicians (as defined in 

1861(r)(1) or (3) and practitioners (as 

described in 1842(b)(18)(C)). Section 

5007(g)(4) permits practitioners as 

described in section 1842(b)(18)(C) to 

participate in this demonstration. We 

believe that the reference to section 

1842(e)(18)(C) in DRA section 5007(g) is 

a scrivener’s error, and that the 

reference should be to section 

1842(b)(18)(C). Section 5007(g) 

explicitly provides that the reference to 

physicians who are permitted to 

participate in the demo is deemed to 

include certain practitioners, which we 

believe is clear evidence of Congress’

intent to include such practitioners in 

the demo. We also note the Conference 

Report language specifically refers to the 

inclusion of practitioners as part of the 

gainsharing arrangement. Since section 

1842(e)(18)(C) does not exist, and since 

section 1842(b)(18)(C) is, with the 

exception of substituting (b) for (e), 

identical to that section], specifically 

defines practitioners, we believe that 

section 1842(b)(18)(C) is the one that 

Congress actually intended to reference, 

and that the substitution of the (e) for 

the (b) is a scrivener’s error. We do not 

believe that this typographical error 

impedes any authority to otherwise 

implement this demonstration. 

Furthermore, a comprehensive list of all 

eligibility requirements can be found in 

the ‘‘Eligible Organizations’’ section of 

the solicitation. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 5007 of the Deficit Reduction 

Act of 2005 (DRA) requires the 

establishment of a qualified gainsharing 

demonstration program that will test 

and evaluate methodologies and 

arrangements between hospitals and 

physicians designed to govern the 

utilization of inpatient hospital 

resources and physician work to 

improve the quality and efficiency of 

care provided to beneficiaries and to 

develop improved operational and 

financial hospital performance with the 

sharing of remuneration as specified in 

the project. It will have a short-term 

focus given the limited size of the 

demonstration. 

II. Provisions of the Notice 

This notice solicits applications to 

participate in the DRA Section 5007 

Medicare Hospital Gainsharing 

Demonstration that will assist in 

determining if gainsharing can align 

incentives between hospitals and 

physicians to improve the quality and 

efficiency of care provided to 

beneficiaries, which will promote 

improved operational and financial 

performance of hospitals. The focus of 

each demonstration will be to link 

physician incentive payments to 

improvements in quality and efficiency. 

Each demonstration will provide 

measures to ensure that the quality and 

efficiency of care provided to 

beneficiaries is monitored and 

improved. 

Overall, we seek demonstration 

models that result in savings to 

Medicare. We will assure the 

demonstration is budget neutral. 

III. Collection of Information 

Requirements 

This information collection 

requirement is subject to the Paperwork 

Reduction Act of 1995 (PRA); however, 

the collection is currently approved 

under OMB control number 0938–0880 

entitled ‘‘Medicare Demonstration 

Waiver Application.’’

Authority: Section 5007 of the Deficit 

Reduction Act of 2005, Pub. L. 109–171. 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program; No. 93.773 Medicare—Hospital 

Insurance Program; and No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: August 7, 2006. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

[FR Doc. 06–7738 Filed 9–13–06; 3:58 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–8030–N] 

RIN 0938–A023 

Medicare Program; Medicare Part B 

Monthly Actuarial Rates, Premium 

Rates, and Annual Deductible for 

Calendar Year 2007 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This 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, 2007. In addition, this notice 

announces the standard monthly 

premium for aged and disabled 

beneficiaries, as well as the incomerelated monthly adjustment amounts to 

be paid by beneficiaries with modified 

adjusted gross income above certain 

threshold amounts, as required by 

section 811 of the Medicare Prescription 

Drug, Improvement, and Modernization 

Act of 2003, as modified by the Deficit 

Reduction Act of 2005. It also 

announces the annual deductible to be 

paid by all beneficiaries during 2007. 

The standard monthly Part B 

premium 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 any 

applicable income-related monthly 

adjustment amount. If a beneficiary has 

to pay an income-related monthly 

adjustment amount, they may have to 

pay a total monthly premium equal to 

35, 50, 65, or 80 percent of the total cost 

of Part B coverage, by the end of the 3- 

year transition period. However, for 

2007, the beneficiary is only responsible 

for one-third of any applicable incomerelated monthly adjustment amount. 

The monthly actuarial rates for 2007 

are $187.00 for aged enrollees and 

$197.30 for disabled enrollees. The 

monthly Part B premium rates to be 

paid in 2007, including the incomerelated monthly adjustment amounts, 

are $93.50 (the standard premium), 

$106.00, $124.70, $143.40, and $162.10. 

The specific amount payable by 

beneficiaries depends on their income 

level and income tax filing status. (The 

2006 premium rate paid by all 

beneficiaries was $88.50.) 

The Part B deductible for 2007 is 

$131.00 for all beneficiaries. 


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