Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices 59715

must submit in justifying an exception

request to their composite rate for

outpatient dialysis services.; Frequency:

On occasion; Affected Public: Business

or other for-profit, Not-for-profit

institutions and Federal Government;

Number of Respondents: 275; Total

Annual Responses: 275; Total Annual

Hours: 13,200.

To obtain copies of the supporting

statement and any related forms for the

proposed paperwork collections

referenced above, E-mail your request,

including your address, phone number,

OMB number, and HCFA document

identifier, to Paperwork@hcfa.gov, or

call the Reports Clearance Office on

(410) 786–1326. Written comments and

recommendations for the proposed

information collections must be mailed

within 60 days of this notice directly to

the HCFA Paperwork Clearance Officer

designated at the following address:

HCFA, Office of Information Services,

Information Technology Investment

Management Group, Division of HCFA

Enterprise Standards, Attention: Louis

Blank, Room C2–26–17, 7500 Security

Boulevard, Baltimore, Maryland 21244–

1850.

Dated: October 28, 1997.

John P. Burke III,

HCFA Reports Clearance Officer, HCFA Office

of Information Services, Information

Technology Investment Management Group,

Division of HCFA Enterprise Standards.

[FR Doc. 97–29143 Filed 11–3–97; 8:45 am]

BILLING CODE 4120–03–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[OACT–055–N]

RIN 0938–AI03

Medicare Program; Monthly Actuarial

Rates and Monthly Supplementary

Medical Insurance Premium Rate

Beginning January 1, 1998

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice.

SUMMARY: As required by section 1839

of the Social Security Act, this notice

announces the monthly actuarial rates

for aged (age 65 or over) and disabled

(under age 65) enrollees in the Medicare

Supplementary Medical Insurance (SMI)

program for 1998. It also announces the

monthly SMI premium rate to be paid

by all enrollees during 1998. The

monthly actuarial rates for 1998 are

$87.90 for aged enrollees and $97.10 for

disabled enrollees. The monthly SMI

premium rate for 1998 is $43.80.

EFFECTIVE DATE: January 1, 1998.

FOR FURTHER INFORMATION CONTACT:

Carter S. Warfield, (410) 786–6396.

SUPPLEMENTARY INFORMATION:

I. Background

The Medicare Supplementary Medical

Insurance (SMI) program is the

voluntary Medicare Part B program that

pays all or part of the costs for

physicians’ services, outpatient hospital

services, 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 hospital

insurance (HI) (Medicare Part A). The

SMI program is available to individuals

who are entitled to HI and to U.S.

residents who have attained age 65 and

are citizens, or aliens who were lawfully

admitted for permanent residence and

have resided in the United States for 5

consecutive years. This program

requires enrollment and payment of

monthly premiums, as provided 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 from the general

revenues of the Federal government.

The Secretary of Health and Human

Services is required by section 1839 of

the Social Security Act (the Act) to issue

two annual notices relating to the SMI

program.

One notice announces two amounts

that, according to actuarial estimates,

will equal respectively, one-half the

expected average monthly cost of SMI

for each aged enrollee (age 65 or over)

and one-half the expected average

monthly cost of SMI for each disabled

enrollee (under age 65) during the year

beginning the following January. These

amounts are called ‘‘monthly actuarial

rates.’’

The second notice announces the

monthly SMI premium rate to be paid

by aged and disabled enrollees for the

year beginning the following January.

(Although the costs to the program per

disabled enrollee are different than for

the aged, the law provides that they pay

the same premium amount.) Beginning

with the passage of section 203 of the

Social Security Amendments of 1972

(Public Law 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)

(Public Law 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

(Public Law 98–21), section 2302 of the

Deficit Reduction Act of 1984 (DRA

1984) (Public Law 98–369), section 9313

of the Consolidated Omnibus Budget

Reconciliation Act of 1985 (COBRA

1985) (Public Law 99–272), section 4080

of the Omnibus Budget Reconciliation

Act of 1987 (OBRA 1987) (Public Law

100–203), and section 6301 of the

Omnibus Budget Reconciliation Act of

1989 (OBRA 1989) (Public Law 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

Reconciliation Act of 1990 (OBRA 1990)

(Public Law 101–508). In January 1996,

the premium determination basis would

have reverted to the method established

by the 1972 Social Security Act

Amendments. However, section 13571

of the Omnibus Budget Reconciliation

Act of 1993 (OBRA 1993) (Public Law

103–66) 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) for

1996 through 1998.

Section 4571 of the Balanced Budget

Act of 1997 (BBA 1997) (Public Law

105–33) permanently 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).

BBA 1997 included a further

provision affecting the calculation of the

SMI actuarial rates and premiums for

1998 though 2003. Section 4611 of BBA

1997 modified the home health benefit

payable under the HI program for

individuals enrolled in the SMI

program. In doing so, expenditures for

home health services not considered

‘‘post-institutional’’ will be payable

under the SMI program rather than the

HI program beginning in 1998.

However, section 4611(e)(1) of BBA

1997 requires there be a transition from

1998 through 2002 for the aggregate

amount of the expenditures transferred

from the HI program to the SMI
59716 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices

program. Section 4611(e)(2) also

provides a specific yearly proportion for

the transferred funds. The proportions

are 1⁄6 for 1998, 1⁄3 for 1999, 1⁄2 for 2000, 2⁄3 for 2001, and 5⁄6 for 2002. For

purposes of determining the correct

amount of financing from general

revenues of the federal government, it is

necessary to include only these

transitional amounts in the monthly

actuarial rates for both aged and

disabled enrollees, rather than the total

cost of the home health services being

transferred. Accordingly, the actuarial

rates shown in this announcement

reflect the net transitional cost only.

Section 4611(e)(3) of BBA 1997 also

specifies, for the purposes of

determining the premium, that the

monthly actuarial rate for aged enrollees

shall be computed as though the

transition would occur for 1998 through

2003 and that 1⁄7 of the cost would

transferred in 1998, 2⁄7 in 1999, 3⁄7 in

2000, 4⁄7 in 2001, 5⁄7 in 2002, and 6⁄7 in

2003. Therefore, the transition period

for incorporating this home health

transfer into the premium is 7 years

while the transition period for including

these services in the actuarial rate is 6

years. As a result, the premium rate for

this year and each of the next 5 years,

through 2003, will be less than 50

percent of the actuarial rate for aged

enrollees announced by the Secretary.

New section 1933(c)(2) of the Act, as

added by section 4732(c) of BBA 1997,

requires the Secretary to allocate money

from the SMI trust fund to the state

Medicaid programs for the purpose of

paying the SMI premiums from 1998

through 2002 for the section 1933 lowincome Medicaid beneficiaries. This

allocation, while not a benefit

expenditure, will be an expenditure of

the trust fund and has been included in

calculating the SMI actuarial rates for

this year. The allocation will be

included in calculating the SMI

actuarial rates through 2002.

As determined according to section

1839(a)(3) of the Act and section

4611(e)(3) of BBA 1997, the premium

rate for 1998 is $43.80.

A further provision affecting the

calculation of the SMI premium is

section 1839(f) of the Act, as amended

by section 211 of the Medicare

Catastrophic Coverage Act of 1988

(Public Law 100–360). (The Medicare

Catastrophic Coverage Repeal Act of

1989 (Public Law 101–234) did not

repeal the revisions to section 1839(f)

made by Public Law 100–360.) Section

1839(f) provides that if an individual is

entitled to benefits under section 202 or

223 of the Act (the Old-Age and

Survivors Insurance Benefit and the

Disability Insurance Benefit,

respectively) and has the SMI premiums

deducted from these benefit payments,

the premium increase will be reduced to

avoid causing a decrease in the

individual’s net monthly payment. This

occurs if the increase in the individual’s

social security benefit due to the costof-living adjustment under section

215(i) of the Act is less than the increase

in the premium. Specifically, the

reduction in the premium amount

applies if the individual is entitled to

benefits under section 202 or 223 of the

Act for November and December of a

particular year and the individual’s SMI

premiums for December and the

following January are deducted from the

respective month’s section 202 or 223

benefits. (A check for benefits under

section 202 or 223 is received in the

month following the month for which

the benefits are due. The SMI premium

that is deducted from a particular check

is the SMI payment for the month in

which the check is received. Therefore,

a benefit check for November is not

received until December, but has the

December’s SMI premium deducted

from it.) (This change, in effect,

perpetuates former amendments that

prohibited SMI premium increases from

reducing an individual’s benefits in

years in which the dollar amount of the

individual’s cost-of-living increase in

benefits was not at least as great as the

dollar amount of the individual’s SMI

premium increase.)

Generally, if a beneficiary qualifies for

this protection (that is, the beneficiary

must have been in current payment

status for November and December of

the previous year), the reduced

premium for the individual for that

January and for each of the succeeding

11 months for which he or she is

entitled to benefits under section 202 or

223 of the Act is the greater of the

following:

(1) The monthly premium for January

reduced as necessary to make the

December monthly benefits, after the

deduction of the SMI premium for

January, at least equal to the preceding

November’s monthly benefits, after the

deduction of the SMI premium for

December; or

(2) The monthly premium for that

individual for that December.

In determining the premium

limitations under section 1839(f) of the

Act, the monthly benefits to which an

individual is entitled under section 202

or 223 do not include retroactive

adjustments or payments and

deductions on account of work. Also,

once the monthly premium amount has

been established under section 1839(f)

of the Act, it will not be changed during

the year even if there are retroactive

adjustments or payments and

deductions on account of work that

apply to the individual’s monthly

benefits.

Individuals who have enrolled in the

SMI program late or have enrolled after

the termination of a coverage period are

subject to an increased premium under

section 1839(b) of the Act. That increase

is a percentage of the premium and is

based on the new premium rate before

any reductions under section 1839(f) are

made.

II. Notice of Monthly Actuarial Rates

and Monthly Premium Rate

The monthly actuarial rates

applicable for 1998 are $87.90 for

enrollees age 65 and over, and $97.10

for disabled enrollees under age 65.

Section III of this notice gives the

actuarial assumptions and bases from

which these rates are derived. The

monthly premium rate will be $43.80

during 1998.

III. Statement of Actuarial Assumptions

and Bases Employed in Determining the

Monthly Actuarial Rates and the

Monthly Premium Rate for the

Supplementary Medical Insurance

Program Beginning January 1998

A. Actuarial Status of the

Supplementary Medical Insurance Trust

Fund

Under the law, the starting point for

determining the monthly premium is

the amount that would be necessary to

finance the SMI program on an incurred

basis; that is, the amount of income that

would be sufficient to pay for services

furnished during that year (including

associated administrative costs) even

though payment for some of these

services will not be made until after the

close of the year. The portion of income

required to cover benefits not paid until

after the close of the year is added to the

trust fund and used when needed.

The rates are established

prospectively and are, therefore, subject

to projection error. Additionally,

legislation enacted after the financing

has been established, but effective for

the period for which the financing has

been set, may affect program costs. As

a result, the income to the program may

not equal incurred costs. Therefore,

trust fund assets should be maintained

at a level that is adequate to cover a

moderate degree of variation between

actual and projected costs (in addition

to the amount of incurred but unpaid

expenses). An appropriate level for

assets to cover a moderate degree of

variation between actual and projected

costs depends on numerous factors. The

most important of these factors are: (1)
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices 59717

The difference from prior years between

the actual performance of the program

and estimates made at the time

financing was established, and (2) the

expected relationship between incurred

and cash expenditures. Ongoing

analysis is made of both factors as the

trends vary over time.

Table 1 summarizes the estimated

actuarial status of the trust fund as of

the end of the financing period for 1996

and 1997.

TABLE 1.—ESTIMATED ACTUARIAL STATUS OF THE SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND AS OF THE END

OF THE FINANCING PERIOD

[In billions of dollars]

Financing period ending Assets Liabilities Assets less

liabilities

Dec. 31, 1996 ........................................................................................................................................... $28.332 $1.350 $26.982

Dec. 31, 1997 ........................................................................................................................................... 37.502 1.397 36.105

B. Monthly Actuarial Rate for Enrollees

Age 65 and Older

The monthly actuarial rate for

enrollees age 65 and older is one-half of

the monthly projected cost of benefits,

the Medicaid transfer (for 1998 through

2002), and administrative expenses for

each enrollee age 65 and older, adjusted

to allow for interest earnings on assets

in the trust fund and a contingency

margin. The contingency margin is an

amount appropriate to provide for a

moderate degree of variation between

actual and projected costs and to

amortize any surplus or unfunded

liabilities. As noted in section I. of this

announcement, section 4611(e)(2) of

BBA 1997 requires that only 1⁄6 of the

cost of the home health services being

transferred be included in the actuarial

rate for 1998, rather than the full cost of

such benefits.

The monthly actuarial rate for

enrollees age 65 and older for 1998 was

determined by first establishing perenrollee cost by type of service from

program data through 1995 and then

projecting these costs for subsequent

years. Although the actuarial rates are

now applicable for calendar years,

projections of per-enrollee costs were

determined on a July to June period,

consistent with the July annual fee

screen update used for benefits before

the passage of section 2306(b) of DRA

1984. Accordingly, the values for the 12-

month period ending June 30, 1995

were established from program data,

and subsequent periods were projected

using a combination of program data

and data from external sources. The

projection factors used are shown in

Table 2. Those per-enrollee values are

then adjusted to apply to a calendar year

period. The projected values for

financing periods from January 1, 1995,

through December 31, 1998, are shown

in Table 3.

The projected monthly rate required

to pay for one-half of the total of

benefits, the transfer to Medicaid, and

administrative costs for enrollees age 65

and over for 1998 is $106.46. Included

in the total of $106.46 is $15.44 for

home health services. The amount of

$15.44 includes (i) the full cost of the

home health services being transferred

from the HI program as a result of BBA

1997 as if the transition did not apply

($14.99) as well as (ii) the cost of

furnishing all home health services to

those individuals enrolled in SMI only

($0.45). Since section 4611(e)(2) of BBA

1997 requires that only 1⁄6 of the cost for

those services being transferred be

included in the actuarial rate for 1998,

the monthly actuarial rate provides for

an adjustment of ¥$12.49, representing 5⁄6 of the full cost of such services. The

monthly actuarial rate of $87.90 also

provides an adjustment of ¥$4.13 for

interest earnings and ¥$1.94 for a

contingency margin. Based on current

estimates, it appears that the assets are

more than sufficient to cover the

amount of incurred but unpaid expenses

and to provide for a moderate degree of

variation between actual and projected

costs. Thus, a negative contingency

margin is needed to reduce assets to a

more appropriate level.

C. Monthly Actuarial Rate for Disabled

Enrollees

Disabled enrollees are those persons

enrolled in SMI because of entitlement

(before age 65) to disability benefits for

more than 24 months or because of

entitlement to Medicare under the endstage renal disease program. Projected

monthly costs for disabled enrollees

(other than those suffering from endstage renal disease) are prepared in a

fashion exactly parallel to the projection

for the aged, using appropriate actuarial

assumptions (see Table 2). Costs for the

end-stage renal disease program are

projected differently because of the

different nature of services offered by

the program. The combined results for

all disabled enrollees are shown in

Table 4.

The projected monthly rate required

to pay for one-half of the total of

benefits, the transfer to Medicaid, and

administrative costs for disabled

enrollees for 1998 is $116.64. Included

in the total of $116.64 is $16.98 for

home health services. The amount of

$16.98 is the full cost of the home

health services being transferred from

the HI program as a result of BBA 1997

as if the transition did not apply. Since

section 4611(e)(2) of BBA 1997 requires

that only 1⁄6 of the cost for those services

being transferred be included in the

actuarial rate for 1998, the monthly

actuarial rate provides for an adjustment

of ¥$14.17, representing 5⁄6 of the full

cost of such services. The monthly

actuarial rate of $97.10 also provides an

adjustment of ¥$2.27 for interest

earnings and ¥$3.10 for a contingency

margin. Based on current estimates, it

appears that the assets are more than

sufficient to cover the amount of

incurred but unpaid expenses and to

provide for a moderate degree of

variation between actual and projected

costs. Thus, a negative contingency

margin is needed to reduce assets to a

more appropriate level.

D. Sensitivity Testing

Several factors contribute to

uncertainty about future trends in

medical care costs. In view of this, it is

appropriate to test the adequacy of the

rates announced here using alternative

assumptions. The most unpredictable

factors that contribute significantly to

future costs are outpatient hospital

costs, physician residual (as defined in

Table 2), and increases in physician fees

as governed by the program’s physician

fee schedule. Two alternative sets of

assumptions and the results of those

assumptions are shown in Table 5. One

set represents increases that are lower

and is, therefore, more optimistic than

the current estimate. The other set

represents increases that are higher and

is, therefore, more pessimistic than the

current version. The values for the

alternative assumptions were

determined by studying the average

historical variation between actual and

projected increases in the respective
59718 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices

increase factors. All assumptions not

shown in Table 5 are the same as in

Table 2.

Table 5 indicates that, under the

assumptions used in preparing this

report, the monthly actuarial rates

would result in an excess of assets over

liabilities of $32.371 billion by the end

of December 1998. This amounts to 31.3

percent of the estimated total incurred

expenditures for the following year.

Assumptions that are somewhat more

pessimistic (and, therefore, test the

adequacy of the assets to accommodate

projection errors) produce a surplus of

$22.836 billion by the end of December

1998, which amounts to 20.6 percent of

the estimated total incurred

expenditures for the following year.

Under fairly optimistic assumptions, the

monthly actuarial rates would result in

a surplus of $41.762 billion by the end

of December 1998, which amounts to

43.2 percent of the estimated total

incurred expenditures for the following

year.

E. Premium Rate

As determined by section 1839(a)(3)

of the Act and section 4611(e)(3) of BBA

1997, the monthly premium rate for

1998, for both aged and disabled

enrollees, is $43.80.

TABLE 2.—PROJECTION FACTORS 1 12-MONTH PERIODS ENDING JUNE 30 OF 1995–1999

[In Percent]

12-month period ending June 30

Physicians’ services Outpatient

hospital

services

Home

health

agency

services 4

Group practice prepayment plans

Independent

lab services Fees 2 Residual 3

Aged:

1995 ........................................................................... 5.7 2.0 17.7 91.0 17.4 1.2

1996 ........................................................................... 2.2 ¥1.6 3.3 30.6 24.2 ¥3.6

1997 ........................................................................... 0.5 2.2 3.2 15.3 22.1 ¥0.9

1998 ........................................................................... 1.7 2.4 4.7 (5) 33.9 7.1

1999 ........................................................................... 0.4 1.9 8.2 5 88.2 36.8 5.7

Disabled:

1995 ........................................................................... 5.7 6.6 2.7 0.0 15.0 10.7

1996 ........................................................................... 2.2 ¥3.2 0.0 0.0 14.4 2.7

1997 ........................................................................... 0.5 1.1 4.3 0.0 15.9 1.9

1998 ........................................................................... 1.7 0.6 1.2 (5) 34.8 8.7

1999 ........................................................................... 0.4 ¥1.0 8.3 5 97.1 37.5 6.2

1All values are per enrollee.

2As recognized for payment under the program.

3 Increase in the number of services received per enrollee and greater relative use of more expensive services.

4From July 1, 1981 to December 31, 1997, home health agency services have been provided by the SMI program only for those SMI enrollees not entitled to HI. Otherwise these services were provided by the HI program. Since all SMI disabled enrollees are entitled to HI, their coverage of these services has been provided by the HI program during this period. 5Effective January 1, 1998, the coverage of home health agency services not considered ‘‘post-institutional’’ for those individuals entitled to HI

and enrolled in SMI will be transferred from the HI program to the SMI program. As a result, as of January 1, 1998, there will be a large increase

in SMI expenditures for these services for the aged enrollees, and SMI coverage for these services will resume for disabled enrollees.

TABLE 3.—DERIVATION OF MONTHLY ACTUARIAL RATE FOR ENROLLEES AGE 65 AND OVER FINANCING PERIODS ENDING

DECEMBER 31, 1995 THROUGH DECEMBER 31, 1998

Financing periods

CY 1995 CY 1996 CY 1997 CY 1998

Covered services (at level recognized):

Physicians’ reasonable charges ................................................................................ $58.88 $59.82 $61.82 $63.55

Outpatient hospital and other institutions .................................................................. 21.26 21.95 22.85 24.06

Home health agencies .............................................................................................. 0.33 0.40 0.43 15.44 1

Group practice prepayment plans ............................................................................. 11.55 14.21 18.29 23.76

Independent lab ......................................................................................................... 2.44 2.38 2.46 2.51

Total services ..................................................................................................... 94.46 98.76 105.85 129.32

Cost-sharing:

Deductible .................................................................................................................. ¥3.71 ¥3.73 ¥3.74 ¥3.75

Coinsurance .............................................................................................................. ¥17.36 ¥18.24 ¥19.62 ¥21.61

Total benefits ...................................................................................................... 73.39 76.79 82.49 103.96

Transfer to Medicaid ......................................................................................................... 0.00 0.00 0.00 0.30 2

Administrative expenses ................................................................................................... 1.86 2.05 2.11 2.20

Incurred expenditures ................................................................................................ 75.25 78.84 84.60 106.46

Value of interest ............................................................................................................... ¥2.04 ¥2.40 ¥3.94 ¥4.13

Adjustment for home health agency services transferred from HI .................................. 0.00 0.00 0.00 ¥12.49 3

Contingency margin for projection error and to amortize the surplus or deficit .............. ¥0.11 8.46 6.94 ¥1.94

Monthly actuarial rate ................................................................................................ 73.10 84.90 87.60 87.90

1This amount includes the full cost of the home health services being transferred from the HI program as a result of BBA 1997 as if the transition did not apply, as well as the cost of furnishing all home health services to those individuals enrolled in SMI only.
Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices 59719

2Section 1933(c)(2) of the Act, as added by section 4732(c) of BBA 1997, allocates an amount to be transferred from the SMI trust fund to the

state Medicaid programs. This transfer is for the purpose of paying the SMI premiums for certain low-income beneficiaries. It is not a benefit expenditure but is used in determining the SMI actuarial rates since it is an expenditure of the trust fund. 3Section 4611 of BBA 1997 specifies that expenditures for home health services not considered ‘‘post-institutional’’ will be payable under the

SMI program rather than the HI program beginning in 1998. However, section 4611(e)(1) requires there be a transition from 1998 through 2002

for the aggregate amount of the expenditures transferred from the HI program to the SMI program. For 1998 the amount transferred is 1⁄6 of the

full cost for such services. Therefore, the adjustment for 1998 represents 5⁄6 of the full cost. This amount adjusts the actuarial rate to reflect the

correct amount attributable to home health services.

TABLE 4.—DERIVATION OF MONTHLY ACTUARIAL RATE FOR DISABLED ENROLLEES FINANCING PERIODS ENDING

DECEMBER 31, 1995 THROUGH DECEMBER 31, 1998

Financing periods

CY 1995 CY 1996 CY 1997 CY 1998

Covered services (at level recognized):

Physicians’ reasonable charges ................................................................................ $64.43 $65.21 $67.08 1 $67.96

Outpatient hospital and other institutions .................................................................. 42.61 43.89 45.45 47.26

Home health agencies .............................................................................................. 0.00 0.00 0.00 16.98

Group practice prepayment plans ............................................................................. 2.70 3.10 3.92 5.31

Independent lab ......................................................................................................... 3.00 3.09 3.27 3.44

Total services ..................................................................................................... 112.74 115.29 119.72 140.95

Cost-sharing:

Deductible .................................................................................................................. ¥3.55 ¥3.57 ¥3.58 ¥3.60

Coinsurance .............................................................................................................. ¥21.17 ¥21.69 ¥22.50 ¥23.40

Total benefits ...................................................................................................... 88.02 90.03 93.64 113.95

Transfer to Medicaid ......................................................................................................... 0.00 0.00 0.00 2 0.29

Administrative expenses ................................................................................................... 2.23 2.40 2.41 2.40

Incurred expenditures ................................................................................................ 90.25 92.43 96.05 116.64

Value of interest ............................................................................................................... ¥0.31 ¥0.29 ¥1.84 ¥2.27

Adjustment for home health agency services transferred from HI .................................. 0.00 0.00 0.00 3¥14.17

Contingency margin for projection error and to amortize the surplus or deficit .............. 15.86 12.96 16.19 ¥3.10

Monthly actuarial rate ................................................................................................ 105.80 105.10 110.40 97.10

1This amount includes the full cost of the home health services being transferred from the HI program as a result of BBA 1997 as if the transition did not apply. 2Section 1933(c)(2) of the Act, as added by section 4732(c) of BBA 1997, allocates an amount to be transferred from the SMI trust fund to the

state Medicaid programs. This transfer is for the purpose of paying the SMI premiums for certain low’income beneficiaries. It is not a benefit expenditure but is used in determining the SMI actuarial rates since it is an expenditure of the trust fund. 3Section 4611 of BBA 1997 specifies that expenditures for home health services not considered ‘‘post-institutional’’ will be payable under the

SMI program rather than the HI program beginning in 1998. However, section 4611(e)(1) requires there be a transition from 1998 through 2002

for the aggregate amount of the expenditures transferred from the HI program to the SMI program. For 1998 the amount transferred is 1⁄6 of the

full cost for such services. Therefore, the adjustment for 1998 represents 5⁄6 of the full cost. This amount adjusts the actuarial rate to reflect the

correct amount attributable to home health services.

TABLE 5.—ACTUARIAL STATUS OF THE SMI TRUST FUND UNDER THREE SETS OF ASSUMPTIONS FOR FINANCING PERIODS

THROUGH DECEMBER 31, 1998

Projection

This projection Low cost projection High cost

12-month period ending June 30 12-month period ending June 30 12-month period ending June 30

1997 1998 1999 1997 1998 1999 1997 1998 1999

Projection factors (in percent):

Physician fees 1

Aged ................................ 0.5 1.7 0.4 0.2 0.5 ¥1.4 0.8 2.9 2.2

Disabled ........................... 0.5 1.7 0.4 0.2 0.5 ¥1.4 0.8 2.9 2.2

Utilization of physician services 2

Aged ................................ 2.2 2.4 1.9 0.4 0.2 ¥0.5 4.0 4.6 4.4

Disabled ........................... 1.1 0.6 ¥1.0 ¥1.8 ¥2.4 ¥4.0 4.0 3.6 2.1

Outpatient hospital services

per enrollee

Aged ................................ 3.2 4.7 8.2 ¥1.2 0.1 3.3 7.6 9.3 13.2

Disabled ........................... 4.3 1.2 8.3 ¥1.0 ¥4.4 2.7 9.6 6.7 14.0

As of December 31 As of December 31 As of December 31

1996 1997 1998 1996 1997 1998 1996 1997 1998

Actuarial status (in billions):

Assets ..................................... $28.332 $37.502 $34.274 $28.332 $40.265 $42.540 $28.332 $34.753 $25.756

Liabilities ................................. 1.350 1.397 1.903 .441 .399 .778 2.134 2.275 2.920

Assets less liabilities ....... $26.982 $36.105 $32.371 $27.891 $39.866 $41.762 $26.198 $32.478 $22.836
59720 Federal Register / Vol. 62, No. 213 / Tuesday, November 4, 1997 / Notices

As of December 31 As of December 31 As of December 31

1996 1997 1998 1996 1997 1998 1996 1997 1998

Ratio of assets less liabilities to

expenditures (in percent) 3 ......... 35.8 38.0 31.3 38.4 44.5 43.2 33.5 32.3 20.6

1As recognized for payment under the program.

2 Increase in the number of services received per enrollee and greater relative use of more expensive services.

3 Ratio of assets less liabilities at the end of the year to total incurred expenditures during the following year, expressed as a percent.

IV. Waiver of Notice of Proposed

Rulemaking

The Medicare statute, as discussed

previously, requires publication of the

monthly actuarial rates and the Part B

premium amount in September. The

amounts are determined according to

the statute. As has been our custom, we

use general notices, rather than formal

notice and comment rulemaking

procedures, to make such

announcements. In doing so, we

acknowledge that, under the

Administrative Procedure Act,

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 formula used

to calculate the SMI premium is

statutorily directed, and we can exercise

no discretion in following that formula.

Moreover, the statute establishes the

time period for which the premium

rates will apply, and delaying

publication of the SMI premium rate

would be contrary to the public interest.

Therefore, we find good cause to waive

publication of a proposed notice and

solicitation of public comments.

In accordance with the provisions of

Executive Order 12866, this notice was

reviewed by the Office of Management

and Budget.

(Section 1839 of the Social Security Act; 42

U.S.C. 1395r)

(Catalog of Federal Domestic Assistance

Program No. 93.774, Medicare—

Supplementary Medical Insurance)

Dated: October 13, 1997.

Nancy-Ann Min DeParle,

Deputy Administrator, Health Care Financing

Administration.

Dated: October 21, 1997.

Donna E. Shalala,

Secretary.

[FR Doc. 97–29031 Filed 11–3–97; 8:45 am]

BILLING CODE 4120–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

National Institutes of Health

Notice of Availability of Environmental

Assessment and Finding of No

Significant Impact for Actions to be

Taken Under the NIH Guidelines for

Research Involving Recombinant DNA

Molecules

Notice is hereby given of the

availability of an Environmental

Assessment (EA) and Finding of No

Significant Impact (FONSI) for public

review. The EA is for actions to be taken

under the NIH Guidelines for Research

Involving Recombinant DNA Molecules

(59 FR 34496, amended 59 FR 40170, 60

FR 20726, 61 FR 1482, 61 FR 10004, 62

FR 4782). Under the actions, the

National Institutes of Health (NIH) will

relinquish its approval of individual

human gene transfer protocols to the

Food and Drug Administration, which

has statutory authority for such

approvals. Instead, the NIH will

emphasize its role as the focal point for

policy discussion and review of

scientific, safety, social, and ethical

issues arising from human gene transfer

research. The EA finds that these

actions will not significantly affect the

quality of the human environment.

Copies of the EA and FONSI can be

viewed in the NIH Environmental

Reading Room, Building 31, Room

2B04, 9000 Rockville Pike, Bethesda,

MD 20892. Additional copies of the EA

and FONSI are available for viewing in

the NIH Office of Recombinant DNA

Activities (ORDA), 6000 Executive

Boulevard, Suite 302, Bethesda, MD

20892–7010.

For further information, contact Debra

Knorr, Deputy Director, Office of

Recombinant DNA Activities, National

Institutes of Health, MSC 7010, 6000

Executive Boulevard, Suite 302,

Bethesda, Maryland 20892–7010, Phone

301–496–9838, FAX 301–496–9839.

Dated: October 26, 1997.

Lana Skirboll,

Associate Director for Science Policy,

National Institutes of Health.

[FR Doc. 97–29072 Filed 11–3–97; 8:45 am]

BILLING CODE 4140–01–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

National Institutes of Health

National Eye Institute; Notice of Closed

Meeting

Pursuant to Section 10(d) of the

Federal Advisory Committee Act, as

amended (5 U.S.C. Appendix 2), notice

is hereby given of the following

National Eye Institute Special Emphasis

Panel (SEP) meeting:

Name of SEP: Clinical Research.

Date: November 24, 1997.

Time: 8:30 a.m.

Place: National Eye Institute, Executive

Plaza South, Suite 350, 6120 Executive Blvd.,

Bethesda, MD 20892–7164.

Contact Person: Andrew P. Mariani, Ph.D.,

Executive Plaza South, Room 350, 6120

Executive Blvd., Bethesda, MD 20892–7164,

(303) 496–5561.

Purpose/Agenda: Review of Grant

Applications.

The meeting will be closed in accordance

with the provisions set forth in secs.

552b(c)(4) and 552b(c)(6), Title 5, U.S.C.

Applications and/or proposals and the

discussions could reveal confidential trade

secrets or commercial property such as

patentable material and personal information

concerning individuals associated with the

applications and/or proposals, the disclosure

of which would constitute a clearly

unwarranted invasion of personal privacy.

(Catalog of Federal Domestic Assistance

Program No. 93.867, Vision Research:

National Institutes of Health)

Dated: October 28, 1997.

LaVerne Y. Stringfield,

Committee Management Officer, NIH.

[FR Doc. 97–29076 Filed 11–3–97; 8:45 am]

BILLING CODE 4140–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

National Institutes of Health

National Heart, Lung, and Blood

Institute, Notice of Meeting of Board of

Scientific Counselors

Pursuant to Pub. L. 92–463, notice is

hereby given of the meeting of the Board

of Scientific Counselors, National Heart,

Lung, and Blood Institute at 8:00 a.m.

on December 11–12, 1997, National

Institutes of Health, 9000 Rockville