67570 Federal Register / Vol. 76, No. 211 / Tuesday, November 1, 2011 / Notices 

notice will not have a significant 

economic impact on a substantial 

number of small entities. Therefore, we 

are not preparing an analysis under the 

RFA. 

In addition, section 1102(b) of the 

Social Security 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 for Medicare payment 

regulations and has fewer than 100 

beds. The Secretary has determined that 

this notice will not have a significant 

impact on the operations of a substantial 

number of small rural hospitals. 

Therefore, we are not preparing an 

analysis under 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 whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2011, that threshold is approximately 

$136 million. This notice will have no 

consequential effect on State, local, or 

tribal governments or on the private 

sector. However, States may be required 

to pay the deductibles and coinsurance 

for dually-eligible 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 will not have a substantial 

effect on State or local governments. 

In accordance with the provisions of 

Executive Order 12866, this notice was 

reviewed by the Office of Management 

and Budget. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance) 

Dated: September 22, 2011 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: October 25, 2011. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2011–28187 Filed 10–27–11; 11:15 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–8044–N] 

RIN 0938–AQ15 

Medicare Program; Part A Premiums 

for CY 2012 for the Uninsured Aged 

and for Certain Disabled Individuals 

Who Have Exhausted Other 

Entitlement 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This annual notice announces 

Medicare’s Hospital Insurance (Part A) 

premium for uninsured enrollees in 

calendar year (CY) 2012. This premium 

is paid by enrollees age 65 and over who 

are not otherwise eligible for benefits 

under Medicare Part A (hereafter known 

as the ‘‘uninsured aged’’) and by certain 

disabled individuals who have 

exhausted other entitlement. The 

monthly Part A premium for the 12 

months beginning January 1, 2012, for 

these individuals will be $451. The 

reduced premium for certain other 

individuals as described in this notice 

will be $248. 

DATES: Effective Date: This notice is 

effective on January 1, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Clare McFarland, (410) 786–6390. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1818 of the Social Security 

Act (the Act) provides for voluntary 

enrollment in the Medicare Hospital 

Insurance Program (Medicare Part A), 

subject to payment of a monthly 

premium, of certain persons aged 65 

and older who are uninsured under the 

Old-Age, Survivors, and Disability 

Insurance (OASDI) program or the 

Railroad Retirement Act and do not 

otherwise meet the requirements for 

entitlement to Medicare Part A. These 

‘‘uninsured aged’’ individuals are 

uninsured under the OASDI program or 

the Railroad Retirement Act, because 

they do not have 40 quarters of coverage 

under Title II of the Act (or are/were not 

married to someone who did). (Persons 

insured under the OASDI program or 

the Railroad Retirement Act and certain 

others do not have to pay premiums for 

Medicare Part A.) 

Section 1818A of the Act provides for 

voluntary enrollment in Medicare Part 

A, subject to payment of a monthly 

premium for certain disabled 

individuals who have exhausted other 

entitlement. These are individuals who 

were entitled to coverage due to a 

disabling impairment under section 

226(b) of the Act, but who are no longer 

entitled to disability benefits and free 

Medicare Part A coverage because they 

have gone back to work and their 

earnings exceed the statutorily defined 

‘‘substantial gainful activity’’ amount 

(section 223(d)(4) of the Act). 

Section 1818A(d)(2) of the Act 

specifies that the provisions relating to 

premiums under section 1818(d) 

through section 1818(f) of the Act for 

the aged will also apply to certain 

disabled individuals as described above. 

Section 1818(d) of the Act requires us 

to estimate, on an average per capita 

basis, the amount to be paid from the 

Federal Hospital Insurance Trust Fund 

for services incurred in the following 

calendar year (CY) (including the 

associated administrative costs) on 

behalf of individuals aged 65 and over 

who will be entitled to benefits under 

Medicare Part A. We must then 

determine, during September of each 

year, the monthly actuarial rate for the 

following year (the per capita amount 

estimated above divided by 12) and 

publish the dollar amount for the 

monthly premium in the succeeding CY. 

If the premium is not a multiple of $1, 

the premium is rounded to the nearest 

multiple of $1 (or, if it is a multiple of 

50 cents but not of $1, it is rounded to 

the next highest $1). 

Section 13508 of the Omnibus Budget 

Reconciliation Act of 1993 (Pub. L. 103– 

66) amended section 1818(d) of the Act 

to provide for a reduction in the 

premium amount for certain voluntary 

enrollees (section 1818 and section 

1818A of the Act). The reduction 

applies to an individual who is eligible 

to buy into the Medicare Part A program 

and who, as of the last day of the 

previous month— 

• Had at least 30 quarters of coverage 

under Title II of the Act; 

• Was married, and had been married 

for the previous 1-year period, to a 

person who had at least 30 quarters of 

coverage; 

• Had been married to a person for at 

least 1 year at the time of the person’s 

death if, at the time of death, the person 

had at least 30 quarters of coverage; or 

• Is divorced from a person and had 

been married to the person for at least 

10 years at the time of the divorce if, at 

the time of the divorce, the person had 

at least 30 quarters of coverage. 

Section 1818(d)(4)(A) of the Act 

specifies that the premium that these 

individuals will pay for CY 2012 will be 

equal to the premium for uninsured 

aged enrollees reduced by 45 percent. 


emcdonald on DSK5VPTVN1PROD with NOTICES2
Federal Register / Vol. 76, No. 211 / Tuesday, November 1, 2011 / Notices 67571 

II. Monthly Premium Amount for CY 

2012 

The monthly premium for the 

uninsured aged and certain disabled 

individuals who have exhausted other 

entitlement for the 12 months beginning 

January 1, 2012, is $451. 

The monthly premium for those 

individuals subject to the 45 percent 

reduction in the monthly premium is 

$248. 

III. Monthly Premium Rate Calculation 

As discussed in section I of this 

notice, the monthly Medicare Part A 

premium is equal to the estimated 

monthly actuarial rate for CY 2012 

rounded to the nearest multiple of $1 

and equals one-twelfth of the average 

per capita amount, which is determined 

by projecting the number of Part A 

enrollees aged 65 years and over as well 

as the benefits and administrative costs 

that will be incurred on their behalf. 

The steps involved in projecting these 

future costs to the Federal Hospital 

Insurance Trust Fund are: 

• Establishing the present cost of 

services furnished to beneficiaries, by 

type of service, to serve as a projection 

base; 

• Projecting increases in payment 

amounts for each of the service types; 

and 

• Projecting increases in 

administrative costs. 

We base our projections for CY 2012 

on—(1) Current historical data; and (2) 

projection assumptions derived from 

current law and the Mid-Session Review 

of the President’s Fiscal Year 2012 

Budget. 

We estimate that in CY 2012, 

40,787,939 people aged 65 years and 

over will be entitled to benefits (without 

premium payment) and that they will 

incur about $220.656 billion in benefits 

and related administrative costs. Thus, 

the estimated monthly average per 

capita amount is $450.82 and the 

monthly premium is $451. The full 

monthly premium reduced by 45 

percent is $248. 

IV. Costs to Beneficiaries 

The CY 2012 premium of $451 is 

approximately 0.22 percent higher than 

the CY 2011 premium of $450. 

We estimate that approximately 

590,000 enrollees will voluntarily enroll 

in Medicare Part A by paying the full 

premium. We estimate an additional 

45,000 enrollees will pay the reduced 

premium. We estimate that the aggregate 

cost to enrollees paying these premiums 

in CY 2012, compared to the amount 

that they paid in CY 2011, will be about 

$7 million. 

V. Waiver of Proposed Notice and 

Comment Period 

We use general notices, rather than 

notice and comment rulemaking 

procedures, to make announcements 

such as this premium notice. 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. The agency may also waive 

notice and comment if there is ‘‘good 

cause,’’ as defined by the statute. We 

considered publishing a proposed 

notice to provide a period for public 

comment. However, under the APA, 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 are not using notice and comment 

rulemaking in this notification of 

Medicare Part A premiums for CY 2011 

as that procedure is unnecessary 

because of the lack of discretion in the 

statutory formula that is used to 

calculate the premium and the solely 

ministerial function that this notice 

serves. The APA permits agencies to 

waive notice and comment rulemaking 

when notice and public comment 

thereon are unnecessary. On this basis, 

we waive publication of a proposed 

notice and a solicitation of public 

comments. 

VI. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 35). 

VII. Regulatory Impact Statement 

We have examined the impact of this 

notice as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999) and the Congressional 

Review Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 

direct 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). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). As 

stated in section IV of this notice, we 

estimate that the overall effect of these 

changes in the Part A premium will be 

a cost to voluntary enrollees (section 

1818 and section 1818A of the Act) of 

about $7 million. Therefore, this notice 

is a not a major action as defined in 

Title 5, United States Code, section 

804(2) and is not an economically 

significant action 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 small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $7.0 million to $34.5 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 under the 

RFA. 

In addition, section 1102(b) of the 

Social Security 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 for Medicare payment 

regulations and has fewer than 100 

beds. The Secretary has determined that 

this notice will not have a significant 

impact on the operations of a substantial 

number of small rural hospitals. 

Therefore, we are not preparing an 

analysis under 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 whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2011, that threshold is approximately 

$136 million. This notice will have no 


emcdonald on DSK5VPTVN1PROD with NOTICES2
67572 Federal Register / Vol. 76, No. 211 / Tuesday, November 1, 2011 / Notices 

consequential effect on State, local, or 

tribal governments or on the private 

sector. However, States are required to 

pay the premiums for dually-eligible 

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 will not have a substantial 

effect on State or local governments. 

In accordance with the provisions of 

Executive Order 12866, this notice was 

reviewed by the Office of Management 

and Budget. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance) 

Dated: September 22, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: October 25, 2011. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2011–28188 Filed 10–27–11; 11:15 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–8045–N] 

RIN 0938–AQ16 

Medicare Program; Medicare Part B 

Monthly Actuarial Rates, Premium 

Rate, and Annual Deductible 

Beginning January 1, 2012 

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, 2012. In addition, this notice 

announces the monthly premium for 

aged and disabled beneficiaries as well 

as the income-related monthly 

adjustment amounts to be paid by 

beneficiaries with modified adjusted 

gross income above certain threshold 

amounts. The monthly actuarial rates 

for 2012 are $199.80 for aged enrollees 

and $192.50 for disabled enrollees. The 

standard monthly Part B premium rate 

for 2012 is $99.90, which 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. (The 2011 standard premium 

rate was $115.40) The Part B deductible 

for 2012 is $140.00 for all Part B 

beneficiaries. If a beneficiary has to pay 

an income-related monthly adjustment, 

they may have to pay a total monthly 

premium of about 35, 50, 65, or 80 

percent of the total cost of Part B 

coverage. 

DATES: Effective Date: January 1, 2012. 

FOR FURTHER INFORMATION CONTACT: M. 

Kent Clemens, (410) 786–6391. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Part B is the voluntary portion of the 

Medicare program that pays all or part 

of the costs for physicians’ services, 

outpatient hospital services, certain 

home health services, services furnished 

by rural health clinics, ambulatory 

surgical centers, comprehensive 

outpatient rehabilitation facilities, and 

certain other medical and health 

services not covered by Medicare Part 

A, Hospital Insurance. Medicare Part B 

is available to individuals who are 

entitled to Medicare Part A, as well as 

to U.S. residents who have attained age 

65 and are citizens, and aliens who were 

lawfully admitted for permanent 

residence and have resided in the 

United States for 5 consecutive years. 

Part B requires enrollment and payment 

of monthly premiums, as described in 

42 CFR part 407, subpart B, and part 

408, respectively. The difference 

between the premiums paid by all 

enrollees and total incurred costs is met 

by transfers from the general fund of the 

Treasury. 

The Secretary of the Department of 

Health and Human Services (the 

Secretary) is required by section 1839 of 

the Social Security Act (the Act) to 

announce the Part B monthly actuarial 

rates for aged and disabled beneficiaries 

as well as the monthly Part B premium. 

The Part B annual deductible is 

included because its determination is 

directly linked to the aged actuarial rate. 

The monthly actuarial rates for aged 

and disabled enrollees are used to 

determine the correct amount of general 

revenue financing per beneficiary each 

month. These amounts, according to 

actuarial estimates, will equal, 

respectively, one-half of the expected 

average monthly cost of Part B for each 

aged enrollee (age 65 or over) and onehalf of the expected average monthly 

cost of Part B for each disabled enrollee 

(under age 65). 

The Part B deductible to be paid by 

enrollees is also announced. Prior to the 

Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) (Pub. L. 108–173), the Part 

B deductible was set in statute. After 

setting the 2005 deductible amount at 

$110.00, section 629 of the MMA 

(amending section 1833(b) of the Act) 

requires that the Part B deductible be 

indexed beginning in 2006. The 

inflation factor to be used each year is 

the annual percentage increase in the 

Part B actuarial rate for enrollees age 65 

and over. Specifically, the 2012 Part B 

deductible is calculated by multiplying 

the 2011 deductible by the ratio of the 

2012 aged actuarial rate over the 2011 

aged actuarial rate. The amount 

determined under this formula is then 

rounded to the nearest $1. 

The monthly Part B premium rate to 

be paid by aged and disabled enrollees 

is also announced. (Although the costs 

to the program per disabled enrollee are 

different than for the aged, the statute 

provides that they pay the same 

premium amount.) Beginning with the 

passage of section 203 of the Social 

Security Amendments of 1972 (Pub. L. 

92–603), the premium rate, which was 

determined on a fiscal year basis, was 

limited to the lesser of the actuarial rate 

for aged enrollees, or the current 

monthly premium rate increased by the 

same percentage as the most recent 

general increase in monthly Title II 

social security benefits. 

However, the passage of section 124 

of the Tax Equity and Fiscal 

Responsibility Act of 1982 (TEFRA) 

(Pub. L. 97–248) suspended this 

premium determination process. 

Section 124 of TEFRA changed the 

premium basis to 50 percent of the 

monthly actuarial rate for aged enrollees 

(that is, 25 percent of program costs for 

aged enrollees). Section 606 of the 

Social Security Amendments of 1983 

(Pub. L. 98–21), section 2302 of the 

Deficit Reduction Act of 1984 (DEFRA 

84) (Pub. L. 98–369), section 9313 of the 

Consolidated Omnibus Budget 

Reconciliation Act of 1985 (COBRA 85) 

(Pub. L. 99–272), section 4080 of the 

Omnibus Budget Reconciliation Act of 

1987 (OBRA 87) (Pub. L. 100–203), and 

section 6301 of the Omnibus Budget 

Reconciliation Act of 1989 (OBRA 89) 

(Pub. L. 101–239) extended the 

provision that the premium be based on 

50 percent of the monthly actuarial rate 

for aged enrollees (that is, 25 percent of 

program costs for aged enrollees). This 

extension expired at the end of 1990. 

The premium rate for 1991 through 

1995 was legislated by section 

1839(e)(1)(B) of the Act, as added by 

section 4301 of the Omnibus Budget 


emcdonald on DSK5VPTVN1PROD with NOTICES2