GAO-01-956R

United States General Accounting Office

Washington, DC 20548

B-288298

August 1, 2001

The Honorable Max Baucus

Chairman

The Honorable Chuck Grassley

Ranking Minority Member

Committee on Finance

United States Senate

The Honorable W.J. “Billy” Tauzin

Chairman

The Honorable John D. Dingell

Ranking Minority Member

Committee on Energy and Commerce

House of Representatives

The Honorable Bill Thomas

Chairman

The Honorable Charles Rangel

Ranking Minority Member

Committee on Ways and Means

House of Representatives

Subject: Department of Health and Human Services, Health Care Financing

Administration: Medicare Program; Update to the Prospective Payment

System for Home Health Agencies for FY 2002

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, Health

Care Financing Administration (HCFA), entitled “Medicare Program; Update to the

Prospective Payment System for Home Health Agencies for FY 2002” (RIN: 0938-

AK51). We received the rule on July 23, 2001. It was published in the Federal

Register as a “notice with comment period” on June 29, 2001. 66 Fed. Reg. 34687.

The notice sets forth an update to the 60-day national episode rates and the national

per-visit amounts under the Medicare prospective payment system for home health

agencies.
Page 2 GAO-01-956R

Enclosed is our assessment of HCFA’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 HCFA 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

Enclosure

cc: Ms. Ann Stallion

Regulations Coordinator

Department of Health and

 Human Services
GAO-01-956R

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,

HEALTH CARE FINANCING ADMINISTRATION

ENTITLED

"MEDICARE PROGRAM; UPDATE TO THE

PROSPECTIVE PAYMENT SYSTEM

FOR HOME HEALTH AGENCIES FOR FY 2002”

(RIN: 0938-AK51)

(i) Cost-benefit analysis

HCFA prepared a regulatory impact analysis of the notice and has found that there

will be an additional $350 million in fiscal year 2002 expenditures attributable to the

FY 2002 market basket increase of 2.5 percent.

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

607, and 609

HCFA has examined the impact of the notice on small entities and has concluded

that there will be a significant positive economic impact. Therefore, since the

increase is mandated by statute and is positive, HCFA found it unnecessary to

consider alternatives to lessen the impact.

(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 than $100 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.

Because the annual updates are statutorily required and the methodology used has

previously been subject to public comment, HCFA has found “good cause” to forgo

the normal notice and comment procedures found at 5 U.S.C. 553. However,

comments will be accepted for 60 days after publication of the notice.

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

The notice does not contain any information collections that are subject to review by

the Office of Management and Budget (OMB) under the Paperwork Reduction Act.
Page 2 GAO-01-956R

Statutory authorization for the rule

The notice is issued pursuant to the authority contained in the Social Security Act, as

amended by the Balanced Budget Act of 1997 (Pub. L. 105-33); the Omnibus

Consolidated and Emergency Supplemental Appropriations Act for FY 1999 (Pub. L.

105-277); the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of

1999 (Pub. L. 106-113) and the Medicare, Medicaid, and SCHIP Benefits Improvement

and Protection Act of 2000 (Pub. L. 106-554).

Executive Order No. 12866

The notice was reviewed by OMB and found to be an “economically significant”

regulatory action.

Executive Order No. 13132 (Federalism)

The notice will not have a substantial direct effect on the rights, roles, and

responsibilities of states.