GAO-01-456R

United States General Accounting Office

Washington, DC 20548

B-287288

February 28, 2001

The Honorable Chuck Grassley

Chairman

The Honorable Max Baucus

Ranking 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; Expanded Coverage for Outpatient

Diabetes Self-Management Training and Diabetes Outcome Measurements

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; Expanded

Coverage for Outpatient Diabetes Self-Management Training and Diabetes Outcome

Measurements” (RIN: 0938-AI96). We received the rule on February 13, 2001. It was

published in the Federal Register as a final rule on December 29, 2000. 65 Fed. Reg.

83130.

The final rule expands Medicare coverage for outpatient diabetes self-management

training and establishes outcome measurements for evaluating the improvement of

the health status of Medicare beneficiaries with diabetes.
Page 2 GAO-01-456R

Enclosed is our assessment of the 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.

The final rule has an announced effective date of February 27, 2001. Since the rule

was not submitted to Congress until February 13, 2001, HCFA has not allowed the

required 60-day delay in the effective date of a major rule required by 5 U.S.C.

801(a)(3) for congressional review. The 60-day delay computation starts when

Congress receives the rule or it is published in the Federal Register, whichever is

later.

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. Catherine P. Beck

Deputy Executive Secretary to

 the Department

Department of Health and Human Services
GAO-01-456R

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; EXPANDED COVERAGE FOR

OUTPATIENT DIABETES SELF-MANAGEMENT TRAINING

AND DIABETES OUTCOME MEASUREMENTS"

(RIN: 0938-AI96)

(i) Cost-benefit analysis

HCFA conducted a cost-benefit analysis of the final rule. The projected budget

impact of the final rule is estimated to be $150 million in fiscal year (FY) 2001, $200

million in FY 2002, $270 million in FY 2003, $270 million in FY 2004, and $280 million

in FY 2005.

The benefits are expected to be substantial because diabetes is the fourth-leading

cause of death by disease in the United States. It also causes other medical

problems such as heart disease, stroke, kidney disease, and blindness. Proper health

care and self-management can circumvent these problems or slow their onset.

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

607, and 609

HCFA prepared a Final Regulatory Flexibility Analysis in connection with the final

rule which discusses the steps taken to reduce the impact of the rule on small

entities. The major impact will be the completion of the accreditation process, and

HCFA has allowed 3 years for implementation of the requirement for a Certified

Diabetes Educator and for an exception to the team approach in rural areas.

(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 will not impose 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.

The final rule was issued using the notice and comment procedures contained at

5 U.S.C. 553. On February 11, 1999, HCFA published a Notice of Proposed
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Rulemaking in the Federal Register. 64 Fed. Reg. 6827. HCFA received 1,900

comments on the proposed rule and responds to those comments in the preamble to

the final rule.

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

The final rule contains several information collections that are subject to review by

the Office of Management and Budget (OMB) under the Paper Reduction Act. HCFA

has submitted the required information to OMB for approval and summarizes the

information, including the estimated annual burden, in the preamble to the final rule.

Statutory authorization for the rule

The final rule is promulgated pursuant to the authority contained in sections 1102,

1871, and 1881(b)(1) of the Social Security Act (42 U.S.C. 1302, 1395hh, and

1395rr(b)(1)) and section 4105 of the Balanced Budget Act of 1997.

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)

HCFA has noted that the final rule does not significantly affect the rights, roles, and

responsibilities of the states under the order.