oversight

Federal Rulemaking: Agencies Could Take Additional Steps to Respond to Public Comments

Published by the Government Accountability Office on 2012-12-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States Government Accountability Office

GAO             Report to Congressional Requesters




                FEDERAL
December 2012



                RULEMAKING

                Agencies Could Take
                Additional Steps to
                Respond to Public
                Comments




GAO-13-21
                                            December 2012

                                            FEDERAL RULEMAKING
                                            Agencies Could Take Additional Steps to Respond to
                                            Public Comments
Highlights of GAO-13-21, a report to
congressional requesters




Why GAO Did This Study                      What GAO Found
Agencies publish thousands of rules         Agencies did not publish a notice of proposed rulemaking (NPRM), enabling the
each year, with significant benefits and    public to comment on a proposed rule, for about 35 percent of major rules and
costs. Before issuing a final rule,         about 44 percent of nonmajor rules published during 2003 through 2010. A
agencies are generally required to
publish an NPRM in the Federal              major rule has significant economic impact and may, for example, have an
Register. Agencies must then respond        annual effect on the economy of $100 million or more. Agencies published a
to public comments when issuing final       total of 568 major rules from 2003 through 2010. Agencies also published about
rules. Agencies may use exceptions in       30,000 nonmajor rules during this period, which have less economic significance
certain circumstances to forgo this         and can involve routine administrative issues.
NPRM process to expedite rulemaking.
The Office of Management and Budget         Agencies frequently cited the “good cause” exception and other statutory
(OMB) has authority to provide              exceptions for publishing final rules without an NPRM. Agencies in GAO’s
guidance on regulatory issues. GAO          sample used the “good cause” exception for 77 percent of major rules and 61
was asked to provide information on         percent of nonmajor rules published without an NPRM. Agencies may use the
the rulemaking process. This report
addresses (1) how often agencies
                                            good cause exception when they find that notice and comment procedures are
issued final rules without an NPRM; (2)     “impracticable, unnecessary, or contrary to the public interest.” In practice,
which exceptions agencies used to do        agencies may find an NPRM “impracticable” when the rule must be issued by a
this; and (3) whether agencies took         statutory deadline, “unnecessary” when the rule pertains to technical corrections,
certain actions when issuing major          and “contrary to the public interest” in an emergency situation. To a lesser extent,
rules without an NPRM, including            agencies also used other statutory exceptions to issue a rule without an NPRM.
voluntarily requesting and responding       For example, in 84 of the 123 major rules that GAO analyzed, agencies
to public comments. GAO reviewed a
generalizable random sample of 1,338        described circumstances in which a statute: (1) either required or authorized
final rules published during calendar       them to issue the rule without an NPRM, (2) prescribed the content of the rule, or
years 2003 through 2010. The sample         (3) set a deadline for a rule or program which the agency stated did not allow
contained rules by 52 agencies,             sufficient time to issue an NPRM.
including all cabinet departments
issuing regulations. GAO completed          GAO found that agencies, though not required, often requested comments on
more detailed analyses of 123 major         major final rules issued without an NPRM, but they did not always respond to the
rules without an NPRM, including            comments received. Agencies may solicit comments through the Federal
every such rule published from 2007         Register when publishing a final rule without an NPRM, but the public does not
through 2010, to obtain additional          have an opportunity to comment before the rule’s issuance, nor is the agency
information to answer the objectives.
                                            obligated to respond to comments it has received. For example, agencies
What GAO Recommends                         requested comments on 77 of the 123 major rules issued without an NPRM in
                                            GAO’s sample. The agencies did not issue a follow-up rule or respond to
GAO recommends that OMB issue               comments on 26 of these 77 rules. This is a missed opportunity, because GAO
guidance to encourage agencies to
respond to comments on final major          found that when agencies did respond to public comments they often made
rules, for which the agency has             changes to improve the rules. In addition, each of these 26 rules is economically
discretion, that are issued without a       significant and some of these rules have an impact of a billion dollars a year or
prior NPRM. OMB disagreed that              more. These rules also cover important issues ranging from national health care
guidance would offer substantial            policies to manufacturing incentive programs. For example, in one of the 26
benefits. GAO believes the                  rules, an agency defined a pre-existing condition to implement the Patient
recommendation remains valid, as            Protection and Affordable Care Act and sought public comment. The agency
further discussed in the report.
                                            received 4,627 comments, but has not published a response to them. When
                                            agencies do not respond to comments requested, the public does not know
                                            whether the agency considered their comments, or if it intends to change the
                                            rule. As the courts have recognized, the opportunity to comment is meaningless
                                            unless the agency responds to significant points raised by the public.
View GAO-13-21. For more information,
contact Melissa Emrey-Arras at (617) 788-
0534 or emreyarrasm@gao.gov or Robert
Cramer at (202) 512-7227 or
cramerr@gao.gov.
                                                                                     United States Government Accountability Office
Contents


Letter                                                                                  1
               Background                                                               6
               Agencies Issued about 35 Percent of Major Rules and about 44
                 Percent of Nonmajor Rules without an NPRM from 2003 to 2010            8
               Agencies Most Often Invoked the Good Cause Exception When
                 Publishing Rules without an NPRM                                     15
               When Agencies Publish Major Rules without an NPRM, They Often
                 Provide Information on Economic Effects and Request
                 Comments, But Do Not Always Respond to Comments                      21
               Conclusions                                                            27
               Recommendation for Executive Action                                    28
               Agency Comments and Our Evaluation                                     28

Appendix I     Scope and Methodology                                                  31



Appendix II    Detailed Results of GAO Analyses of Final Rules Issued
               without an NPRM, 2003 through 2010                                     36



Appendix III   Frequency of Interim Rulemaking, 2003 through 2010                     41



Appendix IV    Summary Information on Final Major Rules Issued
               without an NPRM, in Whole or in Part—2003 through 2010                 45



Appendix V     Comments from the Office of Management and Budget                     110



Appendix VI    GAO Contacts and Staff Acknowledgments                                112



Tables
               Table 1: General Reasons Cited by Agencies when Invoking the
                        Good Cause Exception for Final Rules Published without
                        an NPRM from 2003 to 2010                                     17



               Page i                                         GAO-13-21 Federal Rulemaking
          Table 2: Specific Statutory Exceptions Cited by Agencies in Major
                   Rules without an NPRM from 2003 to 2010                        18
          Table 3: Disposition of Sample of Rules Published in Rules and
                   Regulations Section of the Federal Register, 2003 to 2010      32
          Table 4: How Often Agencies Published Final Rules without an
                   NPRM, in Whole or in Part, 2003 to 2010                        36
          Table 5: Exceptions Agencies Cited for Issuing Final Rules without
                   an NPRM, in Whole or in Part, 2003 to 2010                     37
          Table 6: Frequency with which Agencies Issued Interim Rules, 2003
                   to 2010                                                        43
          Table 7: Summary Information on Major Rules that We Reviewed
                   that Agencies Issued without an NPRM, in Whole or in
                   Part, from 2003 to 2010                                        45


Figures
          Figure 1: Percentages of Major and Nonmajor Rules That Were
                   Published Without an NPRM from 2003 to 2010                      9
          Figure 2: Frequency of Final Rules Issued without an NPRM from
                   2003 to 2010 Was Less Consistent for Major Rules than for
                   Nonmajor Rules                                                 11
          Figure 3: Agencies that Issued Major and Nonmajor Rules without
                   an NPRM from 2003 to 2010                                      12
          Figure 4: Agencies Used Interim Rulemaking More Often for Major
                   Rules without an NPRM than for Nonmajor Rules without
                   an NPRM from 2003 to 2010                                      13
          Figure 5: Agencies Cited the Good Cause Exception for Most Final
                   Rules without an NPRM from 2003 to 2010                        15
          Figure 6: Whether Selected Agencies Requested Comments and
                   Followed Up on 123 Major Rules without an NPRM                 25
          Figure 7: Whether and How Agencies in Our Sample Addressed
                   RFA in Major and Nonmajor Rules without an NPRM,
                   2003 to 2010                                                   38
          Figure 8: Whether and How Agencies in Our Sample Addressed
                   UMRA in Major and Nonmajor Rules without an NPRM,
                   2003 to 2010                                                   39
          Figure 9: Whether and How Agencies in Our Sample Addressed
                   Executive Order 12866 in Major and Nonmajor Rules
                   without an NPRM, 2003 to 2010                                  40
          Figure 10: Frequency of Interim Rulemaking Increased over Time
                   for Major Rules but was More Consistent for Nonmajor
                   Rules, 2003 to 2010                                            42


          Page ii                                         GAO-13-21 Federal Rulemaking
Abbreviations

ACUS              Administrative Conference of the United States
APA               Administrative Procedure Act
CRA               Congressional Review Act
DHS               Department of Homeland Security
DOD               Department of Defense
DOL               Department of Labor
DOT               Department of Transportation
EPA               Environmental Protection Agency
GPO               Government Printing Office
HHS               Department of Health and Human Services
NPRM              notice of proposed rulemaking
OIRA              Office of Information and Regulatory Affairs
OMB               Office of Management and Budget
RFA               Regulatory Flexibility Act
UMRA              Unfunded Mandates Reform Act
USDA              Department of Agriculture



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Page iii                                                    GAO-13-21 Federal Rulemaking
United States Government Accountability Office
Washington, DC 20548




                                   December 20, 2012

                                   The Honorable Lamar Smith
                                   Chairman
                                   Committee on the Judiciary
                                   House of Representatives

                                   The Honorable Darrell Issa
                                   Chairman
                                   Committee on Oversight and Government Reform
                                   House of Representatives

                                   The Honorable Ron Johnson
                                   Ranking Member, Subcommittee on Oversight
                                      and Government Management, the Federal
                                     Workforce, and the District of Columbia
                                   Committee on Homeland Security
                                      and Governmental Affairs
                                   United States Senate

                                   Agencies publish on average 3,000 to 4,000 final regulations each year to
                                   achieve goals such as ensuring the safety of food and products,
                                   controlling environmental pollution, and providing oversight of financial
                                   institutions and markets. Regulation is one of the primary tools federal
                                   agencies use to implement and enforce U.S. laws. Agencies also use
                                   regulations to implement programs that provide federal assistance,
                                   grants, and other subsidies. The total costs of these regulations are
                                   estimated to be in the hundreds of billions of dollars, and the estimated
                                   benefits are even higher. Given the significant costs and benefits of
                                   regulations, Congress and the President have focused considerable
                                   attention on the rulemaking process, especially in recent years, and
                                   lawmakers continue to consider legislative proposals to amend the
                                   process.

                                   The basic process by which agencies develop and issue regulations is
                                   spelled out in the Administrative Procedure Act (APA). 1 APA generally
                                   requires agencies to (1) publish a notice of proposed rulemaking (NPRM)



                                   1
                                    5 U.S.C. §§ 551–570a.




                                   Page 1                                          GAO-13-21 Federal Rulemaking
in the Federal Register; (2) allow interested persons an opportunity to
comment on the rulemaking process by providing “written data, views, or
arguments;” (3) issue a final rule accompanied by a statement of its basis
and purpose (including the agency’s response to comments received on
the NPRM); and (4) publish the final rule at least 30 days before it
becomes effective. This process, referred to as notice-and-comment
rulemaking, gives the public an opportunity to provide information to
agencies on the potential effects of a rule or to suggest alternatives for
agencies to consider. 2 The benefits of public participation in notice-and-
comment rulemaking have been cited by the courts and others to include:
generating higher quality rules; ensuring the fair treatment of persons
affected by the rules, since all parties potentially affected have a chance
to participate; and promoting the political accountability of the agency by
giving affected parties the ability to comment at an early stage and having
a public record of the agency’s response to those comments. 3

Prior notice and public comment is not always required, however.
Congress sometimes enacts laws that direct an agency to issue rules
without notice and comment. In addition, APA recognizes that there are
circumstances, such as responding to an emergency situation like a
natural disaster, when providing for notice and comment might not be
appropriate before issuing a final rule, because expediting the rulemaking
process is important to the efficiency and effectiveness of agencies’
activities. Therefore, APA allows agencies to issue final rules without the
use of an NPRM in certain cases, including when the agency determines
for “good cause” that notice and comment procedures are “impracticable,
unnecessary, or contrary to the public interest.” 4 Agencies often invoke
“good cause,” for example, when Congress prescribes the content of a
rule by law, such that prior notice and public comment could not influence
the agency’s action and would serve no useful function.



2
5 U.S.C. § 553.
3
 See Richard J. Pierce, Jr., Administrative Law § 6.8 (5th ed. 2011); Ellen R. Jordan, The
Administrative Procedure Act’s “Good Cause” Exemption, 36 Admin. L. Rev. 113, 116–17
(1984), “Agencies which listen and respond to public comment enhance their legitimacy
and accountability, both of critical importance when decisionmaking is delegated to a
nonrepresentative, politically insulated body.” See also United States v. Utesch, 596 F.3d
302, 308–09 (6th Cir. 2010) (quoting Dismas Charities, Inc. v. U.S. Dep’t of Justice, 401
F.3d 666, 678, 680 (6th Cir. 2005)).
4
5 U.S.C. § 553(b)(B).




Page 2                                                      GAO-13-21 Federal Rulemaking
In order to retain the benefits of public participation that may be lost when
issuing rules without an NPRM, agencies sometimes solicit public
comments on such rules, though not required to do so. If an agency
solicits comments in these cases, the public’s opportunity to comment
does not occur in advance of the rule’s issuance or, in some cases, the
effective date for complying with the rule’s provisions. One common type
of rule often issued without an NPRM is the interim final rule, which
generally is effective immediately but provides an opportunity for public
comment after the rule’s issuance. Also, while agencies are required to
respond to comments received on rules issued with an NPRM when
those rules are finalized, they have no obligation to respond to comments
received on final rules issued without an NPRM. 5

In 1998, we examined agencies’ publication of rules without an NPRM.
We found that 18 percent (11 of the 61) of the final major rules 6 and an
estimated 51 percent of all rules published during 1997 had been issued
without an NPRM, often because agencies invoked the good cause
exception. 7

You asked us to provide information on the frequency, reasons, and
potential effects of issuing final rules without an NPRM, and whether
these have changed over time. This report addresses the following
objectives for final rules published during calendar years 2003 through
2010:

1. Identify how often agencies issued final rules, including interim rules,
   without an NPRM, whether this changed over time, and which
   agencies most often issued such rules.




5
 See Indep. U. S. Tanker Owners Comm. v. Lewis, 690 F.2d 908, 918-21 (D.C. Cir. 1982),
for a discussion of agencies’ obligation to respond to public comments.
6
 A major rule is one that, among other things, has resulted in or is likely to result in an
annual effect on the economy of $100 million or more. See infra note 20 and
accompanying text.
7
 We are 95 percent confident that the estimated percent of all rules published in 1997
without an NPRM was between 44 and 58 percent. GAO, Federal Rulemaking: Agencies
Often Published Final Actions without Proposed Rules, GAO/GGD-98-126 (Washington,
D.C.: Aug. 31, 1998).




Page 3                                                         GAO-13-21 Federal Rulemaking
2. Identify which exceptions to the requirement for an NPRM agencies
   used when issuing such rules.

3. Assess whether agencies, when issuing final major rules without an
   NPRM (a) provided information on the rule’s economic effects, (b)
   solicited public comments, and (c) responded to public comments.

To address each of these objectives, we used the Government Printing
Office’s (GPO) Federal Digital System database on the Federal Register
to compile a list of final rules issued during calendar years 2003 through
2010 from which we drew a sample for our analysis. 8 We selected a
generalizable stratified random sample of 1,338 final rules published
during the 8-year period. Our sample included all major rules (those that
have a significant economic effect) issued during calendar years 2007
through 2010, a random sample of major rules published from 2003
through 2006, and a random sample of nonmajor rules published from
2003 through 2010. The sample contained rules by 52 different agencies,
including every cabinet-level agency issuing regulations and every
agency that published a major rule during the 8-year period.

We supplemented information from GPO’s Federal Register database
with information from our database on rules submitted to us under the
Congressional Review Act (CRA). 9 We tested the reliability of the
databases used to generate our list of all final rules by reviewing related
documentation, interviewing knowledgeable agency officials, testing for
missing data, and tracing a sample of entries to source documents. We
concluded that the data were sufficiently reliable for our purposes.

To address the first two objectives, we reviewed the published text of all
final rules in our sample to determine if they had been issued in whole or
in part without an NPRM (referred to in this report simply as rules without
an NPRM) and to identify which exceptions agencies cited when issuing
those rules. To address our third objective we focused primarily on
whether agencies issuing major rules without an NPRM: (1) provided
information on the economic effects of the rules, (2) solicited public


8
 Our analyses of major rules include final regulatory actions published in both the Rules
and Regulations and the Notices sections of the Federal Register. For simplicity, we use
the term “final rules” to apply to all final regulatory actions throughout this report.
9
 CRA requires agencies to submit rules to both Houses of Congress and the U.S.
Comptroller General before the rules can become effective. 5 U.S.C. § 801(a)(1)(A).




Page 4                                                      GAO-13-21 Federal Rulemaking
comments, and (3) had responded to comments received on major rules
without an NPRM by June 30, 2012.

We completed additional content analyses of the 123 major rules without
an NPRM that we identified in our sample to obtain more detailed
information on the reasons behind agencies’ use of exceptions to an
NPRM, how agencies described the economic effects of rules, and
whether they solicited and responded to public comments. These 123
rules included all major rules without an NPRM from 2007 through 2010
and a sample of major rules from 2003 through 2006. Results of these
content analyses are not generalizable to the entire population of rules;
they only represent the facts and circumstances of the specific rules we
reviewed.

We also met with officials from the Office of Management and Budget
(OMB) and the Administrative Conference of the United States (ACUS)
who are knowledgeable about federal regulatory and administrative law
procedures. 10 We reviewed ACUS recommendations and OMB guidance
to executive agencies on the regulatory process. We did not assess the
agencies’ decisions regarding claims of good cause and other exceptions
or their determinations regarding the effects of their rules. Instead, we are
providing information about what the agencies published in the Federal
Register as the basis for their findings. Detailed information on our scope
and methodology is included in Appendix I.

We conducted this performance audit from June 2011 to December 2012
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




10
  ACUS is an independent agency in the executive branch, established as an advisory
agency in administrative law and procedure. ACUS has broad authority to conduct studies
and make recommendations for improving the efficiency, adequacy, and fairness of the
procedures agencies use in carrying out administrative programs.




Page 5                                                   GAO-13-21 Federal Rulemaking
             APA outlines the process for informal rulemaking, commonly referred to
Background   as notice-and-comment rulemaking. 11 APA includes six broad categorical
             exceptions to this process, including, for example, rules dealing with
             agency organization and procedure (see sidebar). 12

             In addition, as noted earlier, APA provides that an agency may forego
             notice and comment when it finds “good cause” that notice and public
             comment are “impractical, unnecessary, or contrary to the public
             interest.” 13 In the 1946 Senate Judiciary Committee Report on APA, the
             Senate Judiciary Committee described the grounds for a good cause
             exception to include both situations where an agency’s mission would be
             hampered by notice and comment and where public comment would
             serve no useful purpose. 14 In creating these exceptions, the drafters of
             APA sought to balance the need for public input with competing societal
             interests favoring the efficient and expeditious conduct of certain
             government affairs. 15 When using the good cause exception, APA
             requires an agency to include in the issued rule a brief statement of its
             reasons for finding good cause. 16 Over the years courts have ruled on
             agencies’ uses of these exceptions, based on the specific facts and




             11
               5 U.S.C. § 553. APA also includes provisions on formal rulemaking (“on the record
             rulemaking”), which apply when rules are “required by statute to be determined on the
             record after opportunity for an agency hearing.” 5 U.S.C. § 554(a).
             12
              5 U.S.C. §§ 553(a) and (b).
             13
               5 U.S.C. § 553(b)(B). Agencies may also find “good cause” to exempt a rule from APA’s
             requirement for a 30-day delay of effective date. 5 U.S.C. § 553(d)(3). However, agencies’
             use of that good cause exception was not within the scope of this review.
             14
              Administrative Procedure Act: Legislative History, S. Doc. No. 79-248, at 200 (1946).
             15
               Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking, 5th edition (2012), 53. See
             also U.S. Dep’t of Labor v. Kast Metals Corp., 744 F.2d 1145, 1153 (5th Cir. 1984) (noting
             “tension” between agency efficiency and public input). In American Hospital Ass’n v.
             Bowen, 834 F.2d 1037, 1045 (D.C. Cir. 1987), the D.C. Circuit stated that “[t]he reading of
             the § 553 exemptions that seems most consonant with Congress’ purposes in adopting
             the APA is to construe them as an attempt to preserve agency flexibility in dealing with
             limited situations where substantive rights are not at stake.”
             16
               5 U.S.C. § 553(b)(B). When agencies invoke any other exception to the notice and
             comment requirement, they are not similarly required to cite the exception or explain their
             reasoning.




             Page 6                                                       GAO-13-21 Federal Rulemaking
circumstances presented in the rules. 17 In other cases, statutes, such as
the 2008 Farm Bill, have authorized or required agencies to issue rules
without notice and comment. 18 When agencies invoke any of these
exceptions they are not required to request comments from the public or
conduct certain regulatory analyses.

CRA, which applies to all agencies, distinguishes between two types of
rules, major and nonmajor. 19 CRA defines a “major” rule as one that,
among other things, has resulted in or is likely to result in an annual effect
on the economy of $100 million or more. 20 Throughout this report, we
present results using the CRA distinction between major and nonmajor
rules. The Office of Information and Regulatory Affairs (OIRA) within OMB
is responsible for determining whether a rule is major. 21

OIRA also is responsible for providing meaningful guidance and oversight
so that each agency’s regulations are consistent with applicable law, the
President’s priorities, and the principles set forth in executive orders, and
that decisions made by one agency do not conflict with the policies or
actions taken or planned by another agency. Under Executive Order
12866 (reaffirmed by Executive Order 13563), OIRA reviews significant
proposed and final rules from agencies, other than independent
regulatory agencies, before they are published in the Federal Register. 22
OIRA also provides guidance to agencies on regulatory requirements. For



17
  Courts have authority to review agencies’ decisions to exempt a rule from notice and
comment under any one of these exemptions, including good cause. 5 U.S.C. §§ 701-706.
See Clipper Cruise Line, Inc. v. United States, 855 F. Supp. 1 (D.D.C. 1994). For
examples of differing outcomes when a court reviews an agency’s decision to use “good
cause,” compare United States v. Dean, 604 F.3d 1275 (11th Cir. 2010) with United
States v. Utesch, 596 F.3d 302 (6th Cir. 2010).
18
  Food, Conservation, and Energy Act of 2008 (2008 Farm Bill), Pub. L. No. 110-246, §
1601(c)(2), 122 Stat. 1651, 1729.
19
  CRA was designed to give Congress an opportunity to review a rule before it takes
effect and to disapprove any rule to which Congress objects through the passage of a joint
resolution with presentment to the President. 5 U.S.C. § 801(a)(1)(A).
20
 5 U.S.C. § 804(2).
21
 Id.
22
  “Independent regulatory agencies” refers to the boards and commissions identified as
such in the Paperwork Reduction Act, for example, the Securities and Exchange
Commission. 44 U.S.C. § 3502(5).




Page 7                                                     GAO-13-21 Federal Rulemaking
                        example, on August 15, 2011, OIRA issued a primer instructing agencies
                        how best to conduct a regulatory impact analysis. In addition to OIRA’s
                        previously mentioned responsibilities, according to Executive Order
                        12866, OIRA is to be the “repository of expertise concerning regulatory
                        issues.” Executive Order 12866, other executive orders, and OIRA
                        guidance have all reiterated the importance of public participation and
                        regulatory analysis in rulemaking.


                        During calendar years 2003 through 2010, agencies published 568 major
Agencies Issued about   rules and about 30,000 nonmajor rules. As shown in figure 1, agencies
35 Percent of Major     published about 35 percent of major rules and about 44 percent of
                        nonmajor rules without an NPRM during those years. 23
Rules and about 44
Percent of Nonmajor
Rules without an
NPRM from 2003 to
2010




                        23
                          Sample estimates based on our review of 1,338 final rules are subject to sampling error
                        and are presented along with their 95 percent confidence intervals, if applicable.




                        Page 8                                                     GAO-13-21 Federal Rulemaking
Figure 1: Percentages of Major and Nonmajor Rules That Were Published Without
an NPRM from 2003 to 2010




Note: Margins of error for the percentage estimates are shown in parenthesis. For example, an
estimated 56 percent of nonmajor rules were published without an NPRM, and we are 95 percent
confident that the actual value is within plus or minus 4 percentage points of this estimate.
a
 Agencies published 568 major rules during calendar years 2003 through 2010. All of the variance in
this estimate for major rules is attributable to the sample of major rules reviewed for the period 2003
through 2006. We reviewed 100 percent of major rules issued from 2007 on, so results for those
years have no variance.
b
Agencies published about 30,000 nonmajor rules during calendar years 2003 through 2010.

Examples of major rules without an NPRM include a May 2010
Department of the Treasury final rule prohibiting certain consumer credit
practices, for which the agency invoked the good cause exception, and a
September 2008 Department of Health and Human Services (HHS)
notice that announced Medicare cost-sharing amounts, for which the
agency cited an exception in the Social Security Act and good cause. 24
As we observed in our 1998 report, many nonmajor rules without an
NPRM appeared to involve routine, administrative, or technical issues.


24
    75 Fed. Reg. 23,565 (May 4, 2010) and 73 Fed. Reg. 54,226 (Sept. 18, 2008).




Page 9                                                               GAO-13-21 Federal Rulemaking
Similar examples of nonmajor rules without an NPRM that we identified
during this review included a January 2007 Department of Homeland
Security (DHS) temporary final rule changing drawbridge operation hours
for certain bridges in Florida, and a July 2009 Federal Election
Commission rule allowing a committee that is being audited by the
Commission to have a hearing prior to the Commission’s adoption of a
final audit report. 25

As illustrated in figure 2, the percentage of nonmajor final rules without an
NPRM was very consistent across the 8-year period we reviewed; varying
only slightly among individual years, but the percentage of major rules
without an NPRM was less consistent. In particular, from 2008 to 2009,
the percentage of major rules without an NPRM increased from 26
percent to 40 percent. Agencies issued the largest numbers of major
rules without an NPRM in 2009 and 2010 (34 in each year), though the
percentage was higher in 2009 than in 2010. (See app. II for more
detailed results of the analyses we conducted during this review,
including numbers, percentages, and confidence intervals.)




25
 72 Fed. Reg. 3,366 (Jan. 25, 2007) and 74 Fed Reg. 33,140 (July 10, 2009).




Page 10                                                  GAO-13-21 Federal Rulemaking
Figure 2: Frequency of Final Rules Issued without an NPRM from 2003 to 2010 Was
Less Consistent for Major Rules than for Nonmajor Rules




Note: Percentages shown are estimates subject to sampling error. The 95 percent confidence
intervals for each of these estimates are displayed as error bars in the figure.
a
 Data points for major rules published from 2007 through 2010 are based on reviewing 100 percent of
the population, so have no variance. Our supplemental review of all major rules published in 2011
found that agencies issued 28 percent of those rules without an NPRM.


Two agencies, HHS and the Department of Agriculture (USDA), published
62 (plus or minus 11) percent of major rules in our sample without an
NPRM, as shown in figure 3. 26 Other agencies accounted for much lower


26
 Within HHS, the majority of these rules were published by the Centers for Medicare and
Medicaid Services. Within USDA, the majority of these rules were published by the
Commodity Credit Corporation or the Farm Service Agency.




Page 11                                                          GAO-13-21 Federal Rulemaking
percentages of the total, all 7 percent or less. The Environmental
Protection Agency (EPA) issued 30 major rules from 2003 through 2010,
but none of these were issued without an NPRM. 27 For the nonmajor
rules, the Department of Transportation (DOT), Department of
Commerce, DHS, and EPA together accounted for almost two-thirds of
nonmajor rules without an NPRM. All other agencies accounted for 7
percent or less of the total.

Figure 3: Agencies that Issued Major and Nonmajor Rules without an NPRM from
2003 to 2010




Note: Margins of error for the percentage estimates are shown in parenthesis.




27
  Our supplemental analysis of major rules in 2011 identified one case in which EPA
waived an NPRM for one part of a rule in response to a court decision (claiming good
cause because it had no discretion based on its obligation to comply with the court’s
decision). 76 Fed. Reg. 48,208 (Aug. 8, 2011).




Page 12                                                           GAO-13-21 Federal Rulemaking
a
 Agencies published 568 major rules during calendar years 2003 through 2010. All of the variance in
this estimate for major rules is attributable to the sample of major rules reviewed for the period 2003
through 2006. We reviewed 100 percent of major rules issued from 2007 on, so results for those
years have no variance.
b
Agencies published about 30,000 nonmajor rules during calendar years 2003 through 2010.

The agencies that published rules in our sample used interim rulemaking
for a substantial portion of final major rules without an NPRM. As noted
earlier, an interim rule becomes effective without an NPRM, but the public
generally may provide comments after the rule’s issuance. Across the 8-
year time period, agencies issued 47 percent of all major final rules and 8
percent of all nonmajor rules without an NPRM as interim rules. The
percentage of major rules without an NPRM that used interim rulemaking
increased from 2007 through 2010 but was more variable for nonmajor
rules (see fig. 4). Appendix III provides more information on the frequency
of agencies’ use of interim rulemaking in general.

Figure 4: Agencies Used Interim Rulemaking More Often for Major Rules without an
NPRM than for Nonmajor Rules without an NPRM from 2003 to 2010




Page 13                                                              GAO-13-21 Federal Rulemaking
Note: Percentages shown are estimates subject to sampling error. The 95 percent confidence
intervals for each of these estimates are displayed as error bars in the above figure.
a
 Data points for major interim rules published from 2007 through 2010 are based on reviewing 100
percent of the population, so have no variance. Our supplemental review of all major rules published
in 2011 found that 50 percent of the rules without an NPRM were interim rules.
b
 Our sample estimates for this time period were not sufficently reliable at a 95 percent confidence
level.


Across the 554 rules in our sample without an NPRM, agencies used 109
distinct terms, many of which had only slight wording variations within a
broad category, to identify the rulemaking action. The majority of these
terms were variations of five broad categories: final rules, interim rules,
temporary rules, direct final rules, and notices. In practice, however, there
may be little distinction between interim rules and certain other rules
without an NPRM that were described using different terminology. For
example, a “final rule, request for comments” and an “interim rule with
request for comments” both provide an opportunity for the public to
comment only after the rule has been published; these rules are in
essence the same type of rule. As a result of the inconsistent terminology,
it would be difficult for Congress to enact legislation on, or for the public to
easily identify, rules without an NPRM based on what agencies call those
rules. For example, in legislation to revise rulemaking procedures being
considered by the 112th Congress, certain provisions would apply when
agencies, for good cause, issue “interim rules.” 28 If the intent is to address
all rules using the good cause exception, this proposed legislation would
not achieve that goal since our analysis showed that not all rules for
which agencies claimed good cause were called “interim rules.” To
facilitate public participation in the rulemaking process, OMB officials told
us that they are working with the Office of the Federal Register to
standardize terminology for agencies to use when publishing rules in the
Federal Register.




28
    Regulatory Accountability Act of 2011, H.R. 3010, 112th Cong. (2011).




Page 14                                                             GAO-13-21 Federal Rulemaking
Agencies Most Often
Invoked the Good
Cause Exception
When Publishing
Rules without an
NPRM
Good Cause Exception   The agencies that published rules in our sample claimed the good cause
Commonly Used          exception in 77 (plus or minus 11) percent of major rules and 61 (plus or
                       minus 10) percent of nonmajor rules without an NPRM, as shown in figure
                       5 below.

                       Figure 5: Agencies Cited the Good Cause Exception for Most Final Rules without an
                       NPRM from 2003 to 2010




                       Note: Agencies can cite more than one exception for a given rule.




                       Page 15                                                             GAO-13-21 Federal Rulemaking
a
 APA exempts: rules dealing with military and foreign affairs; matters relating to agency management
or personnel, or to public property, loans, grants, benefits, or contracts; interpretative rules; general
statements of policy; and rules of agency organization, procedure, or practice.
b
 ”Other reason” includes those rules for which the agency cited a reason other than one of APA’s
exceptions or another statutory exception.


As discussed previously, there are three general reasons under APA why
an agency could invoke the good cause exception—impracticable,
unnecessary, or contrary to the public interest. Agencies tend not to
precisely distinguish among these reasons, although in practice, for
example, “impracticable” is used by agencies for rules subject to statutory
deadlines or time constraints; “contrary to the public interest” is used
when there are emergencies or threats to public safety; and
“unnecessary” is used for technical corrections, or for rules where
comments are unlikely to yield change, such as a rule pursuant to a
statute that prescribed the content of the rule. 29 Examples of these
situations and the grounds cited include:

•     Impracticable. The Department of Education issued a 2009 interim
      final rule without an NPRM to implement statutory provisions enacted
      in 2008 related to certain education grants. 30 The statutory provisions
      impacted grant eligibility. The department reported it did not have time
      to complete notice-and-comment procedures before the regulation’s
      effective date of July 1, 2009, which was established by statute.

•     Unnecessary. EPA published a 2010 final rule without an NPRM to
      update and correct the addresses for submitting information to the
      EPA’s Region IX office and certain state and local agency offices. 31

•     Contrary to the public interest. The Department of the Interior
      published a 2010 interim final rule without an NPRM to implement
      measures to improve the safety of offshore oil and gas drilling in




29
  An example of a rule where a statute prescribed the rule’s content was a final action
making annual rate increases under Medicare, “Medicare Program; Medicare Part B
Monthly Actuarial Rates, Premium Rate, and Annual Deductible Beginning January 1,
2011,” 75 Fed. Reg. 68,790 (Nov. 9, 2010).
30
    74 Fed. Reg. 20,210 (May 1, 2009).
31
    75 Fed. Reg. 69,348 (Nov. 12, 2010).




Page 16                                                               GAO-13-21 Federal Rulemaking
       federal waters. 32 The department published this rule in light of the
       Deepwater Horizon oil spill in the Gulf of Mexico on April 20, 2010.

For the rules in our sample, agencies most often said that issuing an
NPRM would be contrary to the public interest, but they also frequently
cited multiple grounds for invoking the good cause exception (see table
1). They cited multiple reasons more often for major rules than for
nonmajor rules—63 (plus or minus 14) percent of major rules and 44
(plus or minus) percent of the nonmajor rules.

Table 1: General Reasons Cited by Agencies when Invoking the Good Cause
Exception for Final Rules Published without an NPRM from 2003 to 2010

                                Major rules without an         Nonmajor rules without an
    General reason for       NPRM that cited the reason       NPRM that cited the reason
                                                       a                                a
    citing good cause                     (percentage)                     (percentage)
    Contrary to the public
    interest                                      68 (±14)                           58 (±8)
    Impracticable                                 55 (±14)                           50 (±8)
    Unnecessary                                   49 (±14)                           39 (±8)
Source: GAO.
a
 Percentages sum to more than100 percent because agencies sometimes cited more than one
reason for a given rule.


Ninety-two of the 123 major rules without an NPRM in our sample
invoked the good cause exception. In examining these 92 rules we
identified five primary categories of explanations (more than one category
sometimes applies to a given rule):

•      a law imposed a deadline either requiring the agency to issue a rule or
       requiring a program to be implemented by a date that agencies
       claimed would provide insufficient time to provide prior notice and
       comment—36 rules;

•      a law prescribed the content of the rule issued—31 rules;

•      the agency said it was responding to an emergency—19 rules;




32
     75 Fed. Reg. 63,346 (Oct. 14, 2010).




Page 17                                                      GAO-13-21 Federal Rulemaking
                                           •   the rule implemented technical changes—5 rules; and

                                           •   all other explanations (for example, an agency issued a final rule
                                               without an NPRM in response to a court decision)—14 rules.


Agencies’ Use of                           After good cause, agencies most often cited specific exceptions in
Exceptions in Statutes                     statutes other than APA. Such exceptions were cited in 9 (plus or minus
Other than APA                             4) percent of nonmajor rules and in 34 (plus or minus13) percent of all
                                           major rules without an NPRM. More specifically, in 38 of the 123 major
                                           rules in our sample, we identified 18 different statutory authorities that
                                           either required or authorized agencies to issue rules without notice and
                                           comment. For example, the 2008 Farm Bill required the issuance of final
                                           rules to implement provisions of the law without prior notice and
                                           comment. HHS, the Department of Labor (DOL), and the Department of
                                           the Treasury issued several joint rules to implement provisions in the
                                           Patient Protection and Affordable Care Act as interim rules. In another
                                           type of example, a provision of the Social Security Act provides an
                                           exception to notice-and-comment rulemaking when a statute establishes
                                           a specific deadline for implementation of a rule and the deadline is less
                                           than 150 days after its enactment. This provision allowed HHS to issue
                                           several Medicare rules without an NPRM because the Medicare
                                           Prescription Drug, Improvement, and Modernization Act of 2003 required
                                           some rules to be issued within shorter time frames than 150 days. Table
                                           2 provides additional information on all of the statutory exceptions that
                                           agencies cited for major rules in our sample.

Table 2: Specific Statutory Exceptions Cited by Agencies in Major Rules without an NPRM from 2003 to 2010

                                                                       Whether statute required or      Number of major
                                                                       authorized issuance of final   rules that cited the
                                                                                            a
Statute or combination of statutes                                     rule without an NPRM                    exception
Agriculture, Rural Development, Food and Drug Administration, and      Required                                         1
Related Agencies Appropriations Act, 2010
American Jobs Creation Act of 2004                                     Required                                         1
Consolidated Security, Disaster Assistance, and Continuing             Required                                         1
Appropriations Act of 2009
Consumer Assistance to Recycle and Save Act of 2009                    Required                                         1
Deficit Reduction Act of 2005                                          Authorized                                       1
Emergency Supplemental Appropriations Act for Defense, the Global      Required                                         1
War on Terror, and Hurricane Recovery, 2006
Energy Employees Occupational Illness Compensation Program Act of      Authorized                                       1
2000




                                           Page 18                                             GAO-13-21 Federal Rulemaking
                                                                                     Whether statute required or                 Number of major
                                                                                     authorized issuance of final              rules that cited the
                                                                                                          a
Statute or combination of statutes                                                   rule without an NPRM                               exception
Family Smoking Prevention and Tobacco Control Act                                    Required                                                        1
Farm Security and Rural Investment Act of 2002 (2002 Farm Bill)                      Required                                                        2
Food, Conservation and Energy Act of 2008 (2008 Farm Bill)                           Required                                                       12
Homeland Security Appropriations Act of 2007                                         Required                                                        1
Implementing Recommendations of the 9/11 Commission Act of 2007                      Authorized                                                      1
                                          b
Social Security Act, Section 1871(b)(1)(B)                                           Authorized                                                      4
Sudan Accountability and Divestment Act of 2007 (Amendment to the                    Authorized                                                      1
Federal Acquisition Regulation)
U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq                     Required                                                        2
Accountability Appropriations Act, 2007
                                                                                                                                                        c
Three statutory authorities cited: 26 U.S.C. § 9833; 29 U.S.C. § 1191c;              Authorized                                                     7
and 42 U.S.C. § 300gg-92
                                              Source: GAO.
                                              a
                                               If a statutory provision requires an agency to issue a final rule without an NPRM, the agency must do
                                              so. If a statutory provision authorizes issuance of a final rule without an NPRM, an agency may
                                              choose to do so at its discretion.
                                              b
                                               This provision authorizes an interim final rule to be issued “if a statute establishes a specific deadline
                                              for the implementation of a provision and the deadline is less than 150 days after the date of
                                              enactment of the statute.” These rules were issued as interim rules based on various statutes,
                                              including for example, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
                                              Pub. L. No. 108-173, 117 Stat. 2066, and the American Recovery and Reinvestment Act of 2009,
                                              Pub. L. No. 111-5, 123 Stat. 115.
                                              c
                                               Six of the rules were issued jointly by the Department of the Treasury, DOL, and HHS. All three of
                                              these statutory authorities include the following: “Consistent with section 104 of the Health Care
                                              Portability and Accountability Act of 1996, …[t]he Secretary may promulgate any interim final rules as
                                              the Secretary deems are appropriate.” One of the rules was issued by HHS alone.



Agencies’ Use of APA’s                        As mentioned earlier, in addition to the good cause exception, APA
Broad Categorical                             includes six broad categorical exceptions to notice-and-comment
Exceptions                                    rulemaking. Agencies that published rules in our sample invoked these
                                              broad categorical exceptions infrequently. They did so in 11 (plus or
                                              minus 5) percent of nonmajor rules (most often for rules of agency
                                              organization, procedure, or practice), and in 8 (plus or minus 11) percent
                                              of major rules (most often citing the exception for rules on public property,
                                              loans, grants, benefits, or contracts). These exceptions were cited in 8 of
                                              the 123 major rules without an NPRM in our sample. The following are
                                              examples of rules in which agencies cited the six APA categorical
                                              exceptions:




                                              Page 19                                                                GAO-13-21 Federal Rulemaking
•     Military and foreign affairs—cited by a Department of Commerce 2007
      final rule that made several corrections to the Export Administration
      Regulations regarding Libya and terrorist-supporting countries. 33

•     Agency management or personnel—cited by a General Services
      Administration 2005 rule regarding the Federal Travel Regulation to
      clarify various provisions on temporary duty travel. 34

•     Public property, loans, grants, benefits, or contracts—cited by the
      Board of Directors of the HOPE for Homeowners Program in a rule
      establishing a temporary Federal Housing Administration program
      providing mortgage insurance for refinanced loans made to avoid
      foreclosure. 35

•     Interpretative rules—cited by a DOL 2008 rule revising regulations
      implementing the nondiscrimination and affirmative action provisions
      of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974,
      as amended. 36 According to DOL, it published this rule to codify its
      interpretation of a mandatory job listing requirement.

•     General statements of policy—cited by an HHS 2010 rule revising
      standard federal rates and the extension of wage indexes under the
      Patient Protection and Affordable Care Act for Medicare payments in
      conformance with congressional policy. 37

•     Agency organization, procedure, or practice—cited by a DOL 2007
      rule amending Occupational Safety and Health Administration
      procedures for handling retaliation complaints. 38

In sum, our review of reasons agencies gave for issuing major rules in our
sample without an NPRM showed that they cited grounds relating to


33
    72 Fed. Reg. 20,221 (Apr. 24, 2007).
34
    70 Fed. Reg. 28,459 (May 18, 2005).
35
  Although published directly by the Board, this is a program under HUD. 73 Fed. Reg.
58,418 (Oct. 6, 2008).
36
    73 Fed. Reg. 18,712 (Apr. 7, 2008).
37
    75 Fed. Reg. 31,118 (June 2, 2010).
38
    72 Fed. Reg. 44,956 (Aug. 10, 2007).




Page 20                                                   GAO-13-21 Federal Rulemaking
                          statutes for most of the 123 rules we analyzed. Specifically, we found that
                          in 84 of the 123 major rules without an NPRM in our sample, agencies
                          described circumstances in which a statute: (1) required or authorized
                          them to issue the rule without an NPRM, (2) prescribed the content of the
                          rule, or (3) set a deadline for a rule or program which the agency stated
                          did not allow sufficient time to issue an NPRM. 39 About 70 percent of the
                          123 major rules in our sample involved, at least in part, the distribution of
                          federal payments to the public, such as disaster assistance and
                          reimbursement for health care costs. By foregoing notice and comment in
                          these cases, agencies expedited the flow of funds to beneficiaries.



When Agencies
Publish Major Rules
without an NPRM,
They Often Provide
Information on
Economic Effects and
Request Comments,
But Do Not Always
Respond to
Comments
Agencies Provided         Of the 123 major rules without an NPRM that we reviewed, 113 provided
Information on Economic   some estimates of economic effects, such as on the potential costs or
Effects of Most Major     benefits. Agencies do this because Executive Order 12866 directs non-
                          independent regulatory agencies to assess economic effects, including
Rules without an NPRM     costs and benefits for all significant rules, whether or not those rules are




                          39
                            For example, of the 34 major rules issued without an NPRM in 2009, 13 cited statutes
                          that required or authorized agencies to issue final rules without an NPRM, 10 were rules
                          where the underlying statutes prescribed the content of the rules, and 10 were rules
                          responding to statutes that contained deadlines. Sometimes agencies cited more than one
                          reason. Of the 13 rules that cited specific statutory exceptions, 9 cited the 2008 Farm Bill.




                          Page 21                                                      GAO-13-21 Federal Rulemaking
issued with an NPRM. 40 However, according to OMB officials, the
requirements of the Executive Order apply only “as practicable.” Of the
remaining 10 of the 123 rules that we sampled, 5 provided some
economic information but did not include estimates of the costs or
benefits, and 5 were issued by independent agencies which are not
required to comply with the Executive Order.

Costs and benefits include both quantifiable measures as well as
qualitative effects that may be difficult to quantify. The information
provided on costs and benefits in the 123 rules we reviewed varied, and
included both quantitative and qualitative information. Agencies gave
quantitative measures of effects for 104 rules, 41 and qualitative
information on effects for 44 rules included in our sample. 42 Appendix IV
provides summary information about each of the 123 major rules without
an NPRM, including the potential benefits, costs, and other economic
effects identified by the agencies. 43

Some rules involve monetary payments, known as “transfer payments.”
These include, for example, payments from the government to the public
in the form of federal grants, loans, disaster assistance, agricultural
subsidies, or reimbursements for health care costs. Eighty-six of the 123
major rules without an NPRM that we reviewed involved transfer




40
  Executive Order 12866 defines significant regulatory actions as those that are likely to
result in a rule that may: (1) have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or state, local, or tribal
governments or communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter the budgetary
impact of entitlements, grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates,
the President’s priorities, or the principles set forth in Executive Order 12866.
41
 Agencies quantified costs for 50 rules, benefits in 10, and transfers in 86.
42
  An example of a qualitative effect is an October 2009 Securities and Exchange
Commission rule that identified the qualitative benefit to regulated entities of having more
time to prepare for compliance with new regulations because the agency delayed their
effective date. 74 Fed. Reg. 53,628 (Oct. 19, 2009).
43
 The information in Appendix IV is generally based on GAO’s major rule reports to
Congress under CRA.




Page 22                                                      GAO-13-21 Federal Rulemaking
payments in whole or in part. In these cases, agencies typically reported
only the estimated budgetary impacts of transfer payments. 44

Additionally, rules that have a significant effect on the economy, whether
or not issued with an NPRM, are subject to review by OIRA. Agencies
must submit detailed economic analyses of the costs and benefits of all
reasonably feasible regulatory alternatives to OIRA for review. For 55 of
the 123 major rules we examined, the rule stated that the agency had
considered regulatory alternatives. 45 For example, in a June 2010 rule on
the Conservation Stewardship Program, USDA identified and provided
analyses on five policy options, as well as the option of no program. 46 Of
the 123 major rules we examined, all but 10 were subject to OIRA review.
The 10 rules not subject to OIRA review were issued by independent
regulatory agencies. 47

The Regulatory Flexibility Act of 1980 (RFA) and the Unfunded Mandates
Reform Act of 1995 (UMRA) also impose separate economic analysis
requirements for certain rules. RFA requires agencies to assess the
impact of their rules on “small entities,” such as small businesses. 48
UMRA requires agencies to prepare an assessment of the anticipated
costs and benefits of any rule that may result in the expenditure of $100
million or more in any 1 year by state, local, or tribal governments in the
aggregate or by the private sector. 49 These requirements do not apply
when agencies issue a rule without an NPRM, but we observed that
agencies discussed RFA in 119, and UMRA in 96, of the 123 major rules
we analyzed. This is consistent with our findings for RFA in 1998. See


44
  In some rules implementing budgetary transfers, the agency might have stated that the
amount of the transfer was a “cost” to the federal government and a “benefit” to
beneficiaries (such as states or providers of medical services), but if the agency
characterized all such effects as transfers, we counted them only as transfers.
45
  Agencies may have considered alternatives but did not summarize their findings in the
published final rules, so there may be other rules among the 123 for which agencies
considered regulatory alternatives.
46
  75 Fed. Reg. 31,610 (June 3, 2010).
47
  Statutes sometimes direct independent regulatory agencies to analyze certain economic
effects of their rules, such as effects on competition within a regulated industry.
48
  Small entities are defined as including small businesses, small governmental
jurisdictions, and certain small not-for-profit organizations. 5 U.S.C. §§ 601, 603.
49
  2 U.S.C. §§ 1531–1535.




Page 23                                                       GAO-13-21 Federal Rulemaking
                           Appendix II for detailed results on how agencies addressed the
                           requirements of Executive Order 12866, RFA and UMRA.


Although Not Required,     Of the 123 major rules without an NPRM in our sample, we found that
Agencies Often Requested   agencies requested comments for 77 rules where they had discretion
Comments on Major Final    over at least part of the regulation’s content. Agencies sometimes solicit
                           public comments through the Federal Register on such rules, though not
Rules Issued without an    required to do so. If an agency solicits comments in these cases, the
NPRM, but Did Not Always   public’s opportunity to comment does not occur in advance of the rule’s
Respond to Comments        issuance or, in some cases, the effective date for complying with the
Received                   rule’s provisions. Major rules in which the agency has some discretion
                           may benefit from consideration of public comments, because the public
                           could add value by identifying issues, information, and analyses that the
                           agency might not have initially considered. 50 However, agencies were not
                           obligated to respond to comments received on these rules, a key
                           difference from comments received on proposed rules when those rules
                           are finalized. In 26 of the 77 rules without an NPRM in our sample where
                           the agency had discretion, the agency did not publish a follow-up rule or
                           respond to any comments received (see figure 6).




                           50
                             Agencies requested comments in 34 percent (plus or minus 6) percent of nonmajor rules
                           without an NPRM. However, for these rules, the lack of prior notice and an opportunity to
                           comment appears to have had little effect. As noted earlier, many nonmajor rules without
                           an NPRM involved routine administrative or technical issues that public comments were
                           unlikely to affect. For other nonmajor rules without an NPRM, agencies sometimes used
                           alternative procedures to provide advance notice or obtain comments. Moreover, for
                           nonmajor “interim rules” in our sample that were subsequently finalized, agencies reported
                           receiving comments on about half of the rules and made changes to about 24 percent.




                           Page 24                                                    GAO-13-21 Federal Rulemaking
Figure 6: Whether Selected Agencies Requested Comments and Followed Up on
123 Major Rules without an NPRM




a
 Comments may have been received for more than these 15 rules, since certain agencies may not
have transferred all comments received to the regulations.gov system, which is what we used for our
analysis.


Typically, agency responses to comments received from the public are
published in the Federal Register when a follow-up rule is issued. We
analyzed each of these 77 major rules to determine whether, by the end
of June 2012, agencies had published a follow-up rule in the Federal
Register and, if so, whether the agencies reported receiving comments
and making changes to the original rules. 51 In 26 of these 77 rules, there



51
  We did not limit our search to final rules; we also searched for responses in subsequent
proposed rules and notices.




Page 25                                                           GAO-13-21 Federal Rulemaking
was no follow-up rule. We examined publicly available information and
found that the public submitted comments for at least 15 of these 26 rules
but the agencies did not respond to them. 52 Each of these 26 rules has
significant economic effects, with some of these rules having an impact of
a billion dollars a year or more. These rules also cover important issues
ranging from national health care policies to manufacturing incentive
programs. For example, in one of the 26 rules, an agency defined a pre-
existing condition to implement the Patient Protection and Affordable
Care Act, and sought public comment. The agency received 4,627
comments, but has not published a response to them. 53 When agencies
do not publish their response to any comments received, the public
record is incomplete. The public does not know whether the agency
considered the comments, accepted or rejected the views or evidence
presented, or if the agency intends to finalize and potentially change the
rule. As the courts have recognized, the opportunity to comment is
meaningless unless the agency responds to significant points raised by
the public. 54

We found that when agencies did respond to public comments they often
made changes to the rules. In the 51 major rules without NPRMs in our
sample for which the agencies had discretion and requested comments,
the agencies did issue a follow-up rule, and our analysis of those cases
illustrates the potential benefits of follow-up efforts. The agencies
reported receiving public comments on all but 3 of these 51 major rules,
which indicates that the public usually takes advantage of the opportunity
to comment on rules without an NPRM following publication. 55 In addition,
we found that agencies made changes to the text of 31 of the 51 rules,
most often in response to public comments. For example, DHS finalized a




52
  In 2003, the federal government launched the regulations.gov web site to enable
citizens to search, view, and comment on regulations issued. Comments may have been
received for more than these 15 rules, since certain agencies may not have transferred all
dockets or comments received to the regulations.gov system.
53
  Agency officials explained, however, that 4,100 of these comments were on a single
aspect of the rule and that public comments informed subsequent program guidance.
54
 See, e.g., Alabama Power Co. v. Costle, 636 F. 2d 323, 385 (D.C. Cir. 1979) (quoting
Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 (D.C. Cir.1977).
55
  However, in some cases, agencies might not have received comments until after the
original rules had taken legal effect.




Page 26                                                    GAO-13-21 Federal Rulemaking
              September 2009 interim rule on air cargo screening in August 2011. 56 In
              response to public comments, the agency removed two provisions of the
              original interim rule regarding air cargo screening requirements. These
              changes reduced the costs of the rule. In a similar example, in June 2011,
              the Department of the Treasury, DOL, and HHS followed up on a jointly-
              issued July 2010 rule on group health plans and health insurance
              issuers. 57 The agencies stated that the amendments in the subsequent
              rule were being made in response to public comments received on the
              prior rule and that the primary effect of the amendments was to reduce
              the costs of compliance.

              Over the years, the Administrative Conference of the United States
              (ACUS), an advisory agency in administrative law and procedure, has
              also highlighted the potential benefits of following up on final rules issued
              without an NPRM. In particular, to ensure public participation and limit
              undesirable effects regarding final rules issued without notice and
              comment, ACUS recommended that agencies request comments
              whenever they invoke the “impracticable” or “contrary to the public
              interest” reasons under the good cause exemption and publish a
              responsive statement on significant and relevant issues raised by such
              comments. 58 ACUS noted that in such cases public comments could
              provide both useful information to the agency and enhanced public
              acceptance of the rule. Although this recommendation has not been
              implemented, ACUS continues to support it in an effort to improve
              transparency and public participation in rulemaking.


              Agencies issue thousands of final rules each year that affect many
Conclusions   aspects of citizens’ lives. The rulemaking procedures that agencies follow
              balance the public’s right to be involved in the rulemaking process against
              agencies’ need to carry out their missions in an efficient and effective
              manner. When rulemaking is expedited, there is a trade-off between



              56
                74 Fed. Reg. 47,672 (Sept. 16, 2009). In this case, DHS was specifically required by law
              to issue an interim rule and then finalize the rule within a specified time frame.
              57
               75 Fed. Reg. 43,330 (July 23, 2010).
              58
                ACUS Recommendation 95-4, Procedures for Noncontroversial and Expedited
              Rulemaking, 60 Fed. Reg. 43,108 (Aug. 18, 1995). ACUS also suggested that agencies
              use such follow-up procedures for other rules issued initially without notice and comment,
              such as interpretative or procedural rules.




              Page 27                                                     GAO-13-21 Federal Rulemaking
                     obtaining the benefits of advanced notice and comment and the goal of
                     issuing the rule quickly. The consequences of such trade-offs could be
                     most significant for major rules issued without an NPRM, given their
                     substantial annual effects on society.

                     Agencies often lessened this trade-off by requesting public comments on
                     rules issued without an NPRM for which they had some discretion. This is
                     a positive practice that promotes the benefits of public participation.
                     However, if agencies and the public are to fully benefit from the process
                     of public comments, what matters is not simply providing an opportunity
                     for comment but also public understanding of whether comments were
                     considered. For more than a third of the major rules published without an
                     NPRM between 2003 and 2010 where agencies had discretion and
                     requested comments, the agencies did not respond to comments
                     received. Some of these rules related to significant national issues such
                     as health care. When agencies solicit but leave unclear whether
                     comments were considered, the public record is incomplete. Though such
                     follow-up is not required, agencies may be missing an opportunity to fully
                     obtain for themselves, and provide to the public, the benefits of public
                     participation. Further, agencies may create the perception that they are
                     making final decisions about the substance of major rules without
                     considering data, views, or arguments submitted in public comments. The
                     benefit of follow-up efforts is demonstrated by our finding that, when
                     agencies did issue follow-up rules, they often made substantive changes
                     to the original rules, usually in response to public comments.


                     To better balance the benefits of expedited rulemaking procedures with
Recommendation for   the benefits of public comments that are typically part of regular notice-
Executive Action     and-comment rulemakings, and improve the quality and transparency of
                     rulemaking records, we recommend that the Director of OMB, in
                     consultation with the Chairman of ACUS, issue guidance to encourage
                     agencies to respond to comments on final major rules, for which the
                     agency has discretion, that are issued without a prior notice of proposed
                     rulemaking.


                     We provided a draft of this report to the Director of OMB and the
Agency Comments      Chairman of ACUS for their review and comment. We received written
and Our Evaluation   comments on the draft report from OMB, which are reprinted in Appendix
                     V. OMB also provided a technical comment which we incorporated as
                     appropriate. ACUS provided technical comments, which we also
                     incorporated as appropriate.


                     Page 28                                           GAO-13-21 Federal Rulemaking
OMB disagreed with our recommendation to issue guidance to encourage
agencies to respond to comments on final major rules, for which the
agency has discretion, that are issued without a prior notice of prior
rulemaking. OMB stated that it does not believe it is necessary to issue
guidance on this topic at this time. In its response, OMB reiterated the
value of public participation during the rulemaking process and noted that
it routinely encourages agencies to establish procedures to consider
public comments received on interim final rules. However, OMB believes
that the timing and extent of an agency’s responses is a discretionary
matter that an agency must consider in the context of the nature and
substance of the particular rulemaking, as well as the particular agency’s
resource constraints and competing priorities. OMB further stated that this
case-specific approach is generally appropriate—especially given the
often unique circumstances faced by agencies issuing rules without a
prior notice of proposed rulemaking—and that it is not aware of
compelling evidence that a more general, undiscriminating policy, set out
in guidance, would offer substantial benefits.

We continue to believe that enhanced guidance would improve the quality
and transparency of rulemaking procedures. We recognize the fact that
OMB encourages agencies to establish procedures to consider public
comments but believe that OMB needs to go further to encourage all
agencies to respond to public comments on the record. We believe that
there is compelling evidence that such guidance would offer substantial
benefits. ACUS identified this as an issue of concern in 1995, and our
current review confirmed that agencies still do not always follow up on
rules issued without an NPRM. For more than a third of the major rules
published without an NPRM between 2003 and 2010 where agencies had
discretion and requested comments, we found that the agencies did not
respond to comments received. As our evidence demonstrated, some of
these rules had economic impacts in the billions of dollars, attracted over
4,000 comments, and addressed significant national issues, such as
health care. When it is unclear whether agencies considered comments,
rulemaking is less transparent to the public, and, as courts have
recognized, the opportunity to comment is meaningless unless the
agency responds to significant points raised by the public. Further, we
disagree with OMB’s characterization of the scope of our
recommendation. We are not suggesting an undiscriminating policy,
instead we are recommending that OMB work with ACUS to develop
appropriate guidance. Such guidance could maintain the flexibility for
agencies that OMB believes is necessary. Also, following up on rules
issued without an NPRM is not necessarily resource intensive. For



Page 29                                          GAO-13-21 Federal Rulemaking
example, an agency could simply post a summary response to public
comments on regulations.gov.


As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from the
report date. At that time, we will send copies to the Director of OMB, the
appropriate congressional committees, and other interested parties. In
addition, the report will be available at no charge on GAO’s website at
http://www.gao.gov.

If you or your staff has any questions concerning this report, please
contact Melissa Emrey-Arras at (617) 788-0534 or
emreyarrasm@gao.gov, or Robert Cramer at (202) 512-7227 or
cramerr@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report.
Key contributors are listed in Appendix VI.

Sincerely yours,




Melissa Emrey-Arras
Acting Director
Strategic Issues




Robert J. Cramer
Managing Associate General Counsel
Office of General Counsel




Page 30                                           GAO-13-21 Federal Rulemaking
Appendix I: Scope and Methodology
             Appendix I: Scope and Methodology




             For final rules published during calendar years 2003 through 2010, the
             objectives of this report were to:

             1. Identify how often agencies issued final rules, including interim rules,
                without a notice of proposed rulemaking (NPRM), whether this
                changed over time, and which agencies most often issued such rules.

             2. Identify which exceptions agencies used when issuing final rules
                without an NPRM.

             3. Assess whether agencies, when issuing final major rules without an
                NPRM (a) provided information on the rule’s economic effects, (b)
                solicited public comments, and (c) responded to public comments.

             To address each of these objectives, we selected and reviewed a
             representative sample of final regulatory actions published during
             calendar years 2003 through 2010 to estimate the prevalence of certain
             characteristics in this population. We used the Government Printing
             Office’s (GPO) Federal Digital System database on the Federal Register
             to compile a list of 30,583 final regulatory actions published in the Rules
             and Regulations section during those years. 1 We defined our units of
             analysis as “actions” rather than “final rules,” because not all of the
             individual documents published in the Rules and Regulations section of
             the Federal Register are rules (e.g., some extended comment periods or
             made editorial corrections). 2 Further, one published action may include
             multiple rules, and there is no way to determine the total number of rules
             published short of reviewing each action. 3 However, for simplicity of
             presentation, we use the term “final rules” instead of “final regulatory
             actions” throughout this report. We supplemented information from GPO’s
             Federal Register database with information from our database on rules



             1
              Published by the Office of the Federal Register, National Archives and Records
             Administration, the Federal Register is the official daily publication for rules, proposed
             rules, and notices of federal agencies and organizations, as well as executive orders and
             other presidential documents. The Rules and Regulations section contains final rules and
             regulations—those regulatory documents having general applicability and legal effect.
             2
              This is consistent with our approach in GAO/GGD-98-126.
             3
              For example, in November 2010, the Department of Health and Human Services’
             Centers for Medicare & Medicaid Services included one final rule with comment period,
             two final rules, and one interim final rule with comment period in the same action (75 Fed.
             Reg. 71,800, Nov. 24, 2010).




             Page 31                                                     GAO-13-21 Federal Rulemaking
Appendix I: Scope and Methodology




submitted to us under the CRA. 4 We tested the reliability of the databases
used to generate our list of all final rules by reviewing related
documentation, interviewing knowledgeable agency officials, testing for
missing data, and tracing a sample of entries to source documents. We
concluded that the data were sufficiently reliable for our purposes.

From this population of 30,583 final rules published in the Rules and
Regulations section from 2003 through 2010, we selected a
generalizeable stratified sample of 1,311 final rules. To ensure that we
reviewed the rules expected to have the most significant effects, we
selected all major rules, as identified under the CRA for calendar years
2007 through 2010. 5 The remaining rules during this period were stratified
and sampled by year (2007 through 2010) and by whether they contained
the term “interim” in the text of the Federal Register action. 6 We also
included rules for calendar years 2003-2006 in our sample. For this
period, we grouped the rules into three additional strata: major rules,
“interim” rules, and other rules. Table 3 summarizes the population and
sample size by stratum.

Table 3: Disposition of Sample of Rules Published in Rules and Regulations
Section of the Federal Register, 2003 to 2010
                                                                            a
                                                                   Sample
                                                          Total        In          Out of
                                              a                                         b
Rule stratum                     Population            selected     scope         scope
2007-2010 major rules                     313               313        313               0
2010 other (excluding interim)          2,889               144        144               0
               c
2010 interim                              594                 51        48               3




4
 CRA requires agencies to submit rules to both Houses of Congress and the Comptroller
General before the rules can become effective. 5 U.S.C. § 801(a)(1)(A).
5
 As defined by CRA, a major rule is a rule that the Administrator of the Office of
Information and Regulatory Affairs finds has resulted in or is likely to result in (1) an
annual effect on the economy of $100 million or more, (2) a major increase in costs or
prices, or (3) significant adverse effects on competition, employment, investment,
productivity, or innovation. CRA requires GAO to prepare a report to Congress on each
major rule. 5 U.S.C. § 804(2).
6
 Our preliminary research showed that we could not identify rules that were related to an
interim rulemaking based on rules’ titles or on how agencies named the actions. We
stratified on whether the word “interim” occurred in the text of the action to increase the
chance of capturing interim rules in our sample.




Page 32                                                      GAO-13-21 Federal Rulemaking
Appendix I: Scope and Methodology




                                                                                  a
                                                                         Sample
                                                               Total          In            Out of
                                                  a                                              b
    Rule stratum                     Population             selected       scope           scope
    2009 other (excluding interim)          2,801                 144         140                   4
                   c
    2009 interim                              579                   50          45                  5
    2008 other (excluding interim)          3,136                 147         146                   1
                   c
    2008 interim                              593                   50          48                  2
    2007 other (excluding interim)          2,971                 146         140                   6
                   c
    2007 interim                              569                   48          48                  0
    2003-2006 major                           207                   27          27                  0
    2003-2006 other (excluding             13,135                 157         155                   2
    interim)
                        c
    2003-2006 interim                       2,796                   34          33                  1
    Total                                  30,583               1,311       1,287                 24
Source: GAO.
a
 The population total excludes 48 major rules and the sample total excludes 27 major rules that
agencies published in the Notices section of the Federal Register.
b
 Rules that were outside of the scope of this review included those for which informal rulemaking
procedures under the Administrative Procedure Act did not apply, such as when an agency used
formal rulemaking procedures or when the published action was not a rule of general applicability.
Based on the 24 sample cases in this category, we estimate a total population of 587 such actions
published in the Rules and Regulations section of the Federal Register over the 8-year period, with a
95 percent confidence interval lower bound estimate of 315 actions and an upper bound estimate of
994 actions.
c
The “interim” strata was composed of rules whose text included the term interim. Not all of these
were interim rules.

Based on this sample, we are able to estimate characteristics of the
population of all final rules published in the Rules and Regulations section
of the Federal Register. To ensure that all the rules expected to have the
most significant effects were reviewed, we also included an additional 27
major rules that were not published in the Rules and Regulations section,
but instead were published as Notices (bringing the total number of rules
we reviewed to 1,338). 7 For this report, when we present estimates for all
major rules, we are projecting to the major rules published in both the
Rules and Regulations section and those published in Notices. All other
estimates presented in this report are estimates of the population of rules
published in the Rules and Regulations section for 2003 through 2010.



7
 To supplement our review for changes over time, we also conducted a limited analysis of
all 80 major rules published during calendar year 2011.




Page 33                                                            GAO-13-21 Federal Rulemaking
Appendix I: Scope and Methodology




Our sample contained rules by 52 different agencies, including every
cabinet-level agency issuing regulations and every agency that published
a major rule during the 8-year period.

Because this is a probability sample, our sample is only one of a large
number of samples that we might have drawn. Since each sample could
have provided different estimates, we express our confidence in the
precision of our particular sample’s results as a 95 percent confidence
interval (for example, plus or minus 7 percentage points). This is the
interval that would contain the actual population value for 95 percent of
the samples we could have drawn.

We reviewed the published text of all selected final rules to determine if
they had been published in whole or in part without NPRMs (referred to in
the rest of this report simply as rules without NPRMs). Our analysis
included rules where only a part of the rule was issued without an NPRM
to ensure that our results reflected all instances when agencies cited an
exception to notice and comment. To address our third objective we
focused primarily on whether agencies issuing major rules without an
NPRM: (a) provided information on the economic effects of the rules, (b)
solicited public comments when issuing final rules without an NPRM, and
(c) responded to comments received on major rules without an NPRM by
June 30, 2012. We used standardized data collection instruments and
applied criteria from the Administrative Procedure Act, Regulatory
Flexibility Act, Unfunded Mandates Act, and Executive Order 12866 to
collect and analyze information to address each key question. If the final
rule in our sample was not itself a rule, but was related to a rulemaking
(e.g., if it extended a comment period) we used the underlying rule to
address our questions if sufficient information was provided to identify the
underlying rule. In addition to using our sample to generate estimates for
the entire population on these objectives, we also did additional content
analyses of the major rules without NPRMs in our sample to help address
the objectives. Unlike the generalizable results from our reviews of the
broader sample of rules, the results of these content analyses are not
generalizable to the entire population. They only represent the facts and
circumstances of the specific rules we reviewed. We also met with
officials from the Office of Management and Budget (OMB) and
Administrative Conference of the United States (ACUS) who are
knowledgeable about federal regulatory and administrative law
procedures.

We did not assess the agencies’ decisions regarding claims of good
cause and other exceptions or their determinations regarding the effects


Page 34                                           GAO-13-21 Federal Rulemaking
Appendix I: Scope and Methodology




of their rules; instead, we are providing information about what the
agencies published in the Federal Register as the basis for their findings.
Further, we limited our analysis to only what agencies specifically stated
in Federal Register notices. For example, we counted a particular
exception only if the agency specifically cited it or quoted from part of
APA’s description. We did not assume that an agency meant to claim a
particular exemption based on the general content of the rule. Therefore,
our results may understate the frequency with which APA’s good cause
and categorical exceptions applied.

We conducted this performance audit from June 2011 to December 2012
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




Page 35                                           GAO-13-21 Federal Rulemaking
Appendix II: Detailed Results of GAO
                                           Appendix II: Detailed Results of GAO Analyses
                                           of Final Rules Issued without an NPRM, 2003
                                           through 2010


Analyses of Final Rules Issued without an
NPRM, 2003 through 2010
                                           Tables 4 and 5 in this appendix provide more detailed information on the
                                           results of various analyses we completed for this report, including the
                                           upper and lower bounds of confidence intervals for estimated values, as
                                           appropriate. Figures 7 through 9 in this appendix provide more detailed
                                           information on how agencies addressed the RFA, UMRA, and Executive
                                           Order 12866, reported by agencies under the Congressional Review Act
                                           (CRA), including confidence intervals for our estimates.

Table 4: How Often Agencies Published Final Rules without an NPRM, in Whole or in Part, 2003 to 2010

                                                                                        Estimated frequency (percentage)
                                                                                                       95 percent confidence intervals
Type of final rule and year(s) published            Population total           Point estimate              Lower bound          Upper bound
All major rules 2003-2010                                        568                       35%                         28%                 41%
                                                                                                                           a                   a
2010 major rules                                                 100                          34
                                                                                                                           a                   a
2009 major rules                                                  84                          40
                                                                                                                           a                   a
2008 major rules                                                  95                          26
                                                                                                                           a                   a
2007 major rules                                                  61                          33
2003-2006 major rules                                            228                          37                         20                  57
All nonmajor rules 2003-2010                                  30,063                          44                         39                  48
2010 nonmajor rules                                            3,483                          42                         35                  49
2009 nonmajor rules                                            3,380                          44                         37                  51
2008 nonmajor rules                                            3,729                          44                         37                  51
2007 nonmajor rules                                            3,540                          46                         39                  53
2003-2006 nonmajor rules                                      15,931                          43                         36                  50
                                           Source: GAO.

                                           Our supplemental analysis of the 80 major rules published in 2011 found that agencies issued 28
                                           percent in whole or in part without NPRMs.
                                           a
                                           Not applicable. The frequency for this time period was based on reviewing all rules in the population.




                                           Page 36                                                            GAO-13-21 Federal Rulemaking
                                               Appendix II: Detailed Results of GAO Analyses
                                               of Final Rules Issued without an NPRM, 2003
                                               through 2010




Table 5: Exceptions Agencies Cited for Issuing Final Rules without an NPRM, in Whole or in Part, 2003 to 2010

                                                                                    Estimated frequency (percentage)
                                                                                                       95 percent confidence intervals
Category of final rule/Exception cited                                        Point estimate                 Lower bound         Upper bound
                          a
Major rules, 2003—2010
APA good cause                                                                            77%                           65%                 86%
APA broad categorical                                                                        8                              2                 18
Military or foreign affairs function of the United States                                    1                              0                     1
Matter relating to agency management or personnel                                            0                              0                     0
Matter relating to public property, loans, grants,
benefits, or contracts                                                                       6                              1                 18
Interpretive rules                                                                           1                              0                     1
General statements of policy                                                                 1                              0                     1
Rules of agency organization, procedure, or practice                                         2                              2                     3
Other specific statutory exceptions                                                         34                            23                  47
               b
Other reason                                                                                 4                              3                     5
No reason                                                                                    0                              0                     0
                              c
Nonmajor rules 2003—2010
APA good cause                                                                              61                            55                  67
APA broad categorical                                                                       11                              7                 15
Military or foreign affairs function of the United States                                    2                              1                     4
Matter relating to agency management or personnel                                            2                              1                     5
Matter relating to public property, loans, grants,
benefits, or contracts                                                                       0                              0                     1
Interpretive rules                                                                           1                              0                     4
General statements of policy                                                                 0                              0                     0
Rules of agency organization, procedure, or practice                                         5                              3                     9
Other specific statutory exceptions                                                          9                              6                 13
               b
Other reason                                                                                12                              8                 16
No reason                                                                                   10                              6                 15
                                               Source: GAO.

                                               Note: An agency could have cited more than one exception or reason for a given rule.
                                               a
                                                   N = 547 final rules.
                                               b
                                                ”Other reason” includes those rules for which the agency cited a reason other than one of APA’s
                                               exceptions or another statutory exception.
                                               c
                                                N = 30,039 final rules.




                                               Page 37                                                           GAO-13-21 Federal Rulemaking
                                      Appendix II: Detailed Results of GAO Analyses
                                      of Final Rules Issued without an NPRM, 2003
                                      through 2010




Figure 7: Whether and How Agencies in Our Sample Addressed RFA in Major and Nonmajor Rules without an NPRM, 2003 to
2010




                                      a
                                       Percentages of responses for rules that addressed RFA exceed 100 percent, because agencies
                                      could have responded in more than one way.
                                      b
                                       For these estimates, the 95 percent confidence is within less than plus or minus 0.5 percentage
                                      points of the estimated percentage.


                                      RFA applies to all agencies, but the requirements under RFA to prepare
                                      initial and final regulatory flexibility analyses only apply to rules for which
                                      an agency is required to publish an NPRM. Nevertheless, agencies often
                                      discussed RFA in their rules without NPRMs.




                                      Page 38                                                            GAO-13-21 Federal Rulemaking
                                      Appendix II: Detailed Results of GAO Analyses
                                      of Final Rules Issued without an NPRM, 2003
                                      through 2010




Figure 8: Whether and How Agencies in Our Sample Addressed UMRA in Major and Nonmajor Rules without an NPRM, 2003
to 2010




                                      UMRA applies to agencies other than independent regulatory agencies,
                                      and UMRA’s requirements only apply to rules for which an agency
                                      published an NPRM. Nevertheless, agencies often discussed UMRA in
                                      their rules without NPRMs.




                                      Page 39                                            GAO-13-21 Federal Rulemaking
                                       Appendix II: Detailed Results of GAO Analyses
                                       of Final Rules Issued without an NPRM, 2003
                                       through 2010




Figure 9: Whether and How Agencies in Our Sample Addressed Executive Order 12866 in Major and Nonmajor Rules without
an NPRM, 2003 to 2010




                                       a
                                        For these estimates, the 95 percent confidence is within less than +/- 0.5 percentage points of the
                                       estimated percentage.


                                       Executive Order 12866 procedural and analytical requirements only apply
                                       to significant rules, and the requirement to provide the underlying analysis
                                       of benefits and costs only applies to rules that are economically
                                       significant (generally those with an annual impact of $100 million or
                                       more). The executive order does not apply to independent regulatory
                                       agencies.




                                       Page 40                                                             GAO-13-21 Federal Rulemaking
Appendix III: Frequency of Interim
              Appendix III: Frequency of Interim Rulemaking,
              2003 through 2010



Rulemaking, 2003 through 2010

              Interim final rules are rules that agencies often, but not always, issue
              without an NPRM and provide the public an opportunity to comment after
              the rule has taken effect. APA does not address interim rulemaking,
              although in 1995, ACUS recommended that agencies adopt a form of
              interim rulemaking, 1 and Congress has expressly authorized this
              procedure in legislation. 2 In our 1998 report on final actions without
              NPRMs, we had estimated that agencies published about 400 interim
              final rules per year from 1992 to 1997 (out of approximately 4,000 total
              final rules each of those years).

              Overall, agencies appeared to use interim rulemaking infrequently.
              Between 2003 and 2010, agencies published about 4 (plus or minus 2)
              percent of nonmajor rules as interim rules. There was relatively little
              variation across the individual years in the percentage of nonmajor interim
              rules (see fig. 14). However, for major rules, we found that 15 percent
              (actual) of all major rules from 2003 through 2010 were issued as interim
              rules. The number of major interim rules increased starting in 2008 and
              was highest in 2010, when 23 of 100 major rules were an interim rule or
              included an interim rule among other final rules. A few of the cases
              involving interim rules that we reviewed (17 of the 120) had prior
              proposed rules.




              1
               ACUS Recommendation 95-4, Procedures for Noncontroversial and Expedited
              Rulemaking, 60 Fed. Reg. 43,108, 43,110–113 (Aug. 18, 1995). See also Michael R.
              Asimow, Interim-Final Rules Making Haste Slowly, 51 Admin. L. Rev. 703 (1999).
              2
               See, for example, the Deficit Reduction Act of 2005, Pub. L. No. 109-171, § 6052(b), 120
              Stat. 4, 95 (2006).




              Page 41                                                    GAO-13-21 Federal Rulemaking
Appendix III: Frequency of Interim Rulemaking,
2003 through 2010




Figure 10: Frequency of Interim Rulemaking Increased over Time for Major Rules
but was More Consistent for Nonmajor Rules, 2003 to 2010




a
 Data points for major interim rules are based on reviewing 100 percent of the population, so have no
variance. Our supplemental review of all major rules published in 2011 found that 14 percent of those
rules were interim rules, or included interim rules along with other final rules.


We reviewed a total of 120 interim rules within our sample, 56 of which
were major and 64 nonmajor. Three agencies issued more than half of
the major interim rules we reviewed, with the Department of Health and
Human Services (HHS) accounting for 23 percent, the Department of
Agriculture (USDA) 18 percent, and the Department of Homeland
Security (DHS) 11 percent. All other agencies in our sample accounted
for less than 7 percent each of the total major interim rules we reviewed.
For the nonmajor interim rules, four agencies accounted for
approximately two-thirds of these rules, with USDA accounting for 22
percent, DHS 22 percent, the Department of Defense (DOD) 14 percent,
and HHS 11 percent. All others counted for less than 5 percent each of



Page 42                                                            GAO-13-21 Federal Rulemaking
                                        Appendix III: Frequency of Interim Rulemaking,
                                        2003 through 2010




                                        the total. There may be other agencies that issued interim rules that did
                                        not appear in our sample. Table 6 provides the detailed results of our
                                        analysis, by time period, with confidence intervals.

Table 6: Frequency with which Agencies Issued Interim Rules, 2003 to 2010

                                                                                      Estimated frequency (percentage)
                                                                                                     95 percent confidence intervals
Type of final rule and year(s)
published                                     Population total              Point estimate               Lower bound          Upper bound
                                                                                                                         a                   a
All major rules 2003-2010                                    568                        14%
                                                                                                                         a                   a
•   2010 major rules                                         100                          22
                                                                                                                         a                   a
•   2009 major rules                                           84                         13
                                                                                                                         a                   a
•   2008 major rules                                           95                         11
                                                                                                                         a                   a
•   2007 major rules                                           61                           8
                                                                                                                         a                   a
•   2006 major rules                                           56                         14
                                                                                                                         a                   a
•   2005 major rules                                           56                         16
                                                                                                                         a                   a
•   2004 major rules                                           66                         12
                                                                                                                         a                   a
•   2003 major rules                                           50                         12
All nonmajor rules 2003-2010                              30,063                            4                           3                    6
•   2010 nonmajor rules                                    3,483                            4                           2                    6
•   2009 nonmajor rules                                    3,380                            7                           5                    9
•   2008 nonmajor rules                                    3,729                            3                           2                    5
•   2007 nonmajor rules                                    3,540                            6                           4                    8
•   2003-2006 nonmajor rules                              15,931                            4                           2                    8
                                        Source: GAO.

                                        Note: Our supplemental analysis of the 80 major rules published in 2011 found that agencies issued
                                        14 percent as interim rules.
                                        a
                                         Not applicable. The frequency for this time period was based on reviewing all rules in the population.


                                        There is no general requirement for agencies to finalize interim rules, but
                                        we did a “look forward” analysis for each of the 120 interim rules in our
                                        sample to determine how many of those rules agencies had subsequently
                                        finalized and, if so, whether the agencies reported receiving comments or
                                        making changes to those rules. By the end of June 2012, agencies in our
                                        sample had finalized almost half of the interim rules—29 of the 56 major
                                        interim rules in our sample and 37 of the 64 nonmajor interim rules. It took




                                        Page 43                                                             GAO-13-21 Federal Rulemaking
Appendix III: Frequency of Interim Rulemaking,
2003 through 2010




these agencies on average 452 days (about 1 year, 3 months) after
publication of the original interim rules to finalize the rules, 3 so agencies
may eventually finalize additional interim rules from our sample. Agencies
in our sample frequently reported receiving comments on and making
changes to interim rules that they finalized, especially in the case of major
interim rules. These agencies received public comments on all but 2 of
the major interim rules that were subsequently finalized. In addition,
agencies in our sample made changes to the text of 15 of the 29 major
interim rules when they were finalized, most often in response to public
comments.




3
The range was from 63 days (about 3 months) to 2,307 days (about 6 years, 4 months).




Page 44                                                 GAO-13-21 Federal Rulemaking
Appendix IV: Summary Information on Final
                                          Appendix IV: Summary Information on Final
                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010


Major Rules Issued without an NPRM, in
Whole or in Part—2003 through 2010
                                          The following tables provide information about each of the 123 major
                                          rules issued without an NPRM from 2003 through 2010 that we reviewed
                                          for this report. Rules for which agencies waived NPRMs for only part of
                                          the rule are designated with (P) where we identify the exceptions to
                                          NPRMs that were cited. The narratives on each rule are summarized
                                          primarily from the relevant major rule reports that we submitted to
                                          Congress under CRA. CRA requires us to report on the issuing agency’s
                                          compliance with procedural steps required by various acts and executive
                                          orders governing the rulemaking process. Links to those reports are
                                          provided in the Rule column. In some cases where the published rule
                                          contained other relevant summary information on estimated economic
                                          effects that was not reflected in the major rule report, we added that
                                          information to the summary. The entries are sorted by agency and
                                          presented chronologically by the published date of the rule. Joint rules
                                          issued by more than one agency are listed at the end of each table.
                                          Because of differences in methods and assumptions (for example,
                                          discount rates, inflation), the agencies’ estimates may not be comparable.

Table 7: Summary Information on Major Rules that We Reviewed that Agencies Issued without an NPRM, in Whole or in Part,
from 2003 to 2010

                                                                                   Summary of benefits, costs, and other
     Rule                                 Description                              economic effects
     Department of Agriculture
     (USDA)
1    Rule title: 2002 Farm Bill—          The interim rule amends the              CCC performed a cost-benefit analysis of the
     Conservation Reserve Program—        Conservation Reserve Program (CRP)       interim rule. Total CRP outlays are estimated
     Long-Term Policy                     regulations to set forth the terms and   to increase $1.5 billion, while commodity
     Date: May 8, 2003                    conditions of enrolling acreage in the   program outlays are estimated to decline about
                                          CRP, update program eligibility          $1.7 billion during fiscal years 2003 through
     Sub-agency: Commodity Credit         requirements, eliminate unnecessary      2012, primarily due to a $1.5 billion counter-
     Corporation (CCC)                    regulations, and improve the remaining   cyclical payment decline. The additional 2.8
     Action: Interim rule                 regulations. The rule implements         million-acre enrollment is estimated to
     Exception(s) to NPRM cited:          changes made to the CRP by the 2002      decrease combined CRP and commodity
     Statutory                            Farm Bill.                               program outlays by $208 million annually
                                                                                   during the 10-year period. Total estimated
     GAO major rule report:
                                                                                   impacts for the additional CRP enrollment,
     http://www.gao.gov/products/GAO-03
                                                                                   including $326 million annual economic losses
     -785R
                                                                                   due to higher crop prices and reduced crop
                                                                                   supplies (buyers’ loss) and estimated average
                                                                                   annual economic benefits (increased farm
                                                                                   incomes and environmental benefits), results
                                                                                   in estimated net economic benefits of $131
                                                                                   million per year.




                                          Page 45                                                  GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
    Rule                                     Description                                 economic effects
2   Rule title: User Fees for Agricultural   The interim rule adjusts the user fees      USDA performed a cost-benefit analysis of the
    Quarantine and Inspection Services       charged for certain agricultural            interim rule. The analysis projects costs for
    Date: December 9, 2004                   quarantine and inspection (AQI)             fiscal years 2005 through 2010 based on fiscal
                                             services that are provided in connection    year 2004 costs of $327 million. It increased
    Sub-agency: Animal and Plant             with certain commercial vessels,            the amount by a factor of 1.5 percent for each
    Health Inspection Service                commercial trucks, commercial railroad      year for pay increases and general inflation
    Action: Interim rule and request for     cars, commercial aircraft, and              cost increases. In addition, a 25-percent factor
    comments                                 international airline passengers arriving   of the cost of the program was added to
    Exception(s) to NPRM cited: Good         at port in the customs territory of the     contribute to a reserve fund that USDA states
    cause                                    United States. The adjusted AQI user        is necessary to ensure continuity of services in
                                             fees cover fiscal years 2005 through        cases of fluctuation in volumes, bad debt,
    GAO major rule report:
                                             2010.                                       carrier insolvency, and other unforeseen
    http://www.gao.gov/products/GAO-05
                                                                                         events. USDA finds the projected revenue
    -217R
                                                                                         from the fees will range from $355.8 million in
                                                                                         fiscal year 2005 to $381.3 million in fiscal year
                                                                                         2010. Without the increases, USDA’s analysis
                                                                                         shows program-funding shortfalls of $112.5
                                                                                         million to $123.8 million.
3   Rule title: Tobacco Transition           The final rule provides regulations for     USDA estimates that payments to quota
    Payment Program                          the Tobacco Transition Payment              owners, based upon known payment rates and
    Date: April 4, 2005                      Program (TTPP), as required by the          applicable quota levels, will be about $6.7
                                             American Jobs Creation Act of 2004,         billion. Tobacco producers eligible for
    Sub-agency: Farm Service Agency          ending the tobacco marketing quota and      payments under the American Jobs Creation
    (FSA) and Commodity Credit               price support loan programs. The TTPP       Act of 2004 are estimated to receive about
    Corporation                              will continue to provide payments over a    $2.9 billion, based upon the specified payment
    Action: Final rule                       10-year period during the transition from   rate and known quota amounts.
    Exception(s) to NPRM cited:              the federally-regulated program.
    Statutory
    GAO major rule report:
    http://www.gao.gov/products/GAO-05
    -560R
4   Rule title: 2005 Section 32 Hurricane    The final rule provides for the             The named hurricanes and other related
    Disaster Programs; 2006 Livestock        establishment of four hurricane disaster    disasters severely limited the purchasing
    Assistance Grant Program                 programs and one grant program to           power of farmers engaged in the production of
    Date: January 9, 2007                    provide funds to eligible producers who     agricultural commodities. The final rule
                                             suffered eligible losses in counties        provides for the establishment of four
    Sub-agency: Farm Service Agency          affected by the 2005 hurricanes Katrina,    hurricane disaster programs to be
    Action: Final rule                       Ophelia, Rita, or Wilma, the drought        administered by FSA in order to provide funds
    Exception(s) to NPRM cited: Good         during March through August 2006; or a      to eligible producers who suffered eligible
    cause                                    related condition.                          losses, and a grant program to enable named
                                                                                         states to assist aquaculture producers who
    GAO major rule report:
                                                                                         suffered losses. One purpose of these
    http://www.gao.gov/products/GAO-07
                                                                                         programs is to reestablish these producers’
    -715R
                                                                                         purchasing power. FSA performed a cost-
                                                                                         benefit analysis of this final rule for each of the
                                                                                         four disaster programs and the grant program
                                                                                         under which funds are available.




                                             Page 46                                                       GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
    Rule                                    Description                                 economic effects
5   Rule title: 2006 Emergency              The final rule implements the               The named hurricanes severely limited the
    Agricultural Disaster Assistance        Emergency Agricultural Disaster             purchasing power of farmers engaged in the
    Programs                                Assistance Act of 2006 and establishes      production of agricultural commodities. The
    Date: February 12, 2007                 seven disaster programs to provide          final rule provides for the establishment of
                                            funds to eligible producers in counties     seven hurricane disaster programs to be
    Sub-agency: Commodity Credit            affected by the 2005 hurricanes Katrina,    administered by FSA in order to provide funds
    Corporation                             Ophelia, Rita, or Wilma, or a related       to eligible producers who suffered eligible
    Action: Final rule                      condition. To be eligible, counties must    losses, thus reestablishing these producers’
    Exception(s) to NPRM cited:             have been designated or declared a          purchasing power. FSA performed a cost-
    Statutory                               major disaster or emergency area, or be     benefit analysis of this final rule for each of the
                                            contiguous counties.                        seven disaster programs under which funds
    GAO major rule report:
                                                                                        are available.
    http://www.gao.gov/products/GAO-07
    -511R
6   Rule title: Prohibition of the Use of   The final rule affirms two interim final    FSIS analyzed costs and benefits of this rule in
    Specified Risk Materials for Human      rules published in January 2004. The        its regulatory impact analysis. The benefits of
    Food and Requirements for the           interim rules and this final rule are       the final rule primarily result from the relative
    Disposition of Non-Ambulatory           measures taken to minimize human            reduction in human exposure to BSE infectivity
    Disabled Cattle; Prohibition of the     exposure to cattle materials that could     and the restoration of beef exports. FSIS
    Use of Certain Stunning Devices         potentially contain the bovine              estimates that the total average annual cost of
    Used To Immobilize Cattle During        spongiform encephalopathy (BSE)             this final rule to be $171.2 million annualized
    Slaughter                               agent. This final rule designates certain   over 5 years. There are no costs associated
    Date: July 13, 2007                     materials from cattle as specified risk     with the prohibition of air-injection stunning
                                            materials, and, prohibits their use for     because that method is no longer used in the
    Sub-agency: Food Safety and             human food. The rule prohibits the          United States.
    Inspection Service (FSIS)               slaughter for human food of any non-
    Action: Affirmation of interim final    ambulatory disabled cattle. The rule
    rules with amendments                   also prohibits the use of “air-injection”
    Exception(s) to NPRM cited: Good        stunning.
    cause
    GAO major rule report:
    http://www.gao.gov/products/GAO-07
    -1123R




                                            Page 47                                                       GAO-13-21 Federal Rulemaking
                                          Appendix IV: Summary Information on Final
                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
    Rule                                  Description                                  economic effects
7   Rule title: Emergency Agricultural    The final rule established regulations for   FSA prepared a cost-benefit analysis and
    Assistance, 2007; Crop Disaster and   a Crop Disaster Program which applies        published a summary of the analysis with this
    Livestock Indemnity Programs          to 2005, 2006, and 2007 crop producers       final rule. FSA estimates that total crop
    Date: December 21, 2007               and a Livestock Indemnity Program            disaster payments will range from $1.6 billion
                                          (LIP) that applies to livestock producers    to $2. billion. FSA expects payment rates to be
    Sub-agency: Farm Service Agency       in counties designated as a major            lower than past crop disaster programs
    Action: Final rule                    disaster or emergency area between           because of program changes. Changes
    Exception(s) to NPRM cited:           January 1, 2005, and February 28,            include making insurable crops that were not
    Statutory                             2007.                                        insured and crops that were eligible for but not
                                                                                       covered by the Noninsured Crop Disaster
    GAO major rule report:
                                                                                       Assistance Program ineligible for payment and
    http://www.gao.gov/products/GAO-08
                                                                                       requiring at least 25-percent quality loss for
    -392R
                                                                                       compensation. FSA expects payment rates
                                                                                       may be higher due to provisions that allow
                                                                                       production of a commodity sold through
                                                                                       marketing contracts to be eligible for quality
                                                                                       loss assistance based on the prices specified
                                                                                       in the contracts. FSA estimates that claims
                                                                                       under the 2005-2007 LIP will be $14.4 million.
                                                                                       FSA does not expect the impact on any sector
                                                                                       of the economy to be measurable nor does it
                                                                                       expect any significant change in aggregate
                                                                                       social welfare. FSA expects that participants
                                                                                       and their local communities may benefit by
                                                                                       losses that are offset or reduced by the LIP
                                                                                       payments.
8   Rule title: 2005-2007 Livestock       The final rule implements legislation that   FSA prepared a cost-benefit analysis and
    Compensation and Catfish Grant        provides for the continuation of the         published a summary of the analysis with this
    Programs                              Livestock Compensation Program and           final rule. FSA estimates that claims under the
    Date: December 21, 2007               the Catfish Grant Program (CGP). The         2005-2007 Livestock Compensation Program
                                          programs will provide financial              (LCP) will be $684 million. FSA does not
    Sub-agency: Farm Service Agency       assistance to producers in counties          expect the impact on any sector of the
    Action: Final rule                    designated as a major or natural             economy to be measurable nor does it expect
    Exception(s) to NPRM cited:           disaster between January 1, 2005, and        any significant change in aggregate social
    Statutory                             February 28, 2007.                           welfare. FSA expects that participants and
                                                                                       their local communities may benefit by losses
    GAO major rule report:
                                                                                       that are offset or reduced by the LCP
    http://www.gao.gov/products/GAO-08
                                                                                       payments. FSA estimates that the expected
    -393R
                                                                                       value of the block grants necessary to
                                                                                       compensate expected feed losses under the
                                                                                       CGP will be $3.7 million. FSA expects that
                                                                                       grant assistance should help catfish producers
                                                                                       to restore their purchasing power from feed
                                                                                       losses incurred by disasters that occurred after
                                                                                       January 1, 2005, but before February 28,
                                                                                       2007.




                                          Page 48                                                       GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                   Description                                economic effects
9    Rule title: Cotton World Price         The final rule revises the Upland Cotton   CCC prepared a cost-benefit analysis of this
     Determination                          regulations to use the Far East (FE)       final rule. CCC states that the final rule
     Date: May 27, 2008                     prices instead of Northern Europe          changes its regulations to recognize the shift in
                                            prices in determining the adjusted world   world cotton trade to the FE market that has
     Sub-agency: Commodity Credit           price (AWP).                               occurred over time. In addition, it allows the
     Corporation and Farm Service                                                      program to operate in the manner that CCC
     Agency                                                                            and market participants have found
     Action: Final rules                                                               consistently provides a smooth transition
     Exception(s) to NPRM cited:                                                       between crop years, while reducing potential
     Statutory                                                                         CCC budgetary outlays. CCC states that the
                                                                                       switch to FE as the basis for determining the
     GAO major rule report:
                                                                                       cotton AWP is expected to generate modest
     http://www.gao.gov/products/GAO-08
                                                                                       savings as lower transportation costs to the
     -963R
                                                                                       FE. The net effect will likely raise the AWP,
                                                                                       reducing CCC’s exposure on marketing loan
                                                                                       benefits.
10   Rule title: Mandatory Country of       The interim final rule implements          USDA analyzed the costs and benefits of this
     Origin Labeling of Beef, Pork, Lamb,   requirements in the Farm Security and      interim final rule. USDA determined that the
     Chicken, Goat Meat, Perishable         Rural Investment Act of 2002 (the 2002     estimated benefits associated with this interim
     Agricultural Commodities, Peanuts,     Farm Bill) and the Food, Conservation,     final rule are likely to be small, difficult to
     Pecans, Ginseng, and Macadamia         and Energy Act of 2008 (the 2008 Farm      quantify, and accrue mainly to those
     Nuts                                   Bill). This interim final rule requires    consumers who desire country of origin
     Date: August 1, 2008                   retailers to notify customers of the       information. USDA estimated that the first-year
                                            country of origin of certain commodities   incremental costs for directly affected firms will
     Sub-agency: Agricultural Marketing     including muscle cuts of beef, lamb,       be $2.5 billion and the overall net costs to the
     Service                                chicken, goat, and pork; ground beef,      U.S. economy in the 10th year after
     Action: Interim final requirements;    lamb, chicken, goat, and pork;             promulgation to be $211.9 million.
     request for comments                   perishable agricultural commodities;
     Exception(s) to NPRM cited:            macadamia nuts; pecans; ginseng; and
     Good cause (P)                         peanuts.
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -1093R




                                            Page 49                                                      GAO-13-21 Federal Rulemaking
                                          Appendix IV: Summary Information on Final
                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                    Summary of benefits, costs, and other
     Rule                                 Description                               economic effects
11   Rule title: Direct and Counter-      The final rule implements provisions of   CCC performed a cost-benefit analysis in
     Cyclical Program and Average Crop    the 2008 Farm Bill regarding the direct   conjunction with the final rule. Overall, CCC
     Revenue Election Program             and counter-cyclical payment program      estimates that the final rule will result in an
     Date: December 29, 2008              for the 2008 through 2012 crop years as   increase of $487 million in average annual
                                          well as the Average Crop Revenue          government outlays for the payments in fiscal
     Sub-agency: Commodity Credit         Election (ACRE) program payments for      years 2008 through 2012. Direct payments are
     Corporation                          the 2009 through 2012 crop years.         projected to average $4.749 billion in fiscal
     Action: Final rule                                                             years 2008 through 2014 for crop years 2008
     Exception(s) to NPRM cited:                                                    through 2012. These payments represent a
     Statutory                                                                      decrease of about $0.484 billion each crop
                                                                                    year compared with direct payments under the
     GAO major rule report:
                                                                                    2002 Farm Bill. Counter-cyclical payments are
     http://www.gao.gov/products/GAO-09
                                                                                    projected to average $0.089 billion in FY 2008
     -890R
                                                                                    through 2014 for crop years 2008 through
                                                                                    2012, which represents a decrease of $0.043
                                                                                    billion compared with counter-cyclical
                                                                                    payments under the 2002 Farm Bill. ACRE
                                                                                    program payments are projected to average
                                                                                    $1.014 billion each crop year. The final rule
                                                                                    continues the policy of planting flexibility by
                                                                                    decoupling the payments from the production
                                                                                    decisions of individual farmers, and continues
                                                                                    marketing assistance loan provisions at higher
                                                                                    levels for some crops in some years.




                                          Page 50                                                    GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                      Description                                 economic effects
12   Rule title: Wetlands Reserve              The interim final rule sets forth how the   CCC prepared a cost-benefit analysis in
     Program                                   Wetlands Reserve Program will be            conjunction with this interim final rule. The
     Date: January 15, 2009                    implemented in response to changes          main program costs associated with the interim
                                               made by the 2008 Farm Bill and              final rule are for the purchase of easements
     Sub-agency: Commodity Credit              incorporates other changes for              and wetland restoration expenses with the
     Corporation                               clarification or program administration     program. CCC stated that approximately 89.8
     Action: Interim final rule with request   improvement. Those changes include          percent of the Wetlands Reserve Program
     for comment                               raising the enrollment cap to 3.04          funding has been used for permanent
     Exception(s) to NPRM cited:               million acres through 2012, limiting        easement projects, which have an associated
     Statutory                                 program eligibility to private lands and    fiscal year 2007 average per acre cost of
                                               acreage owned by Indian tribes, and         $3,000, about 7.9 percent for 30-year
     GAO major rule report:
                                               determining the rate of compensation        easement projects, with a fiscal year 2007
     http://www.gao.gov/products/GAO-09
                                               for easements of 30-year contracts          average per acre cost of almost $1,100, and
     -960R
                                               enrolled in the program.                    2.4 percent for restoration cost-share
                                                                                           agreement projects, with a fiscal year 2007
                                                                                           average per acre cost of nearly $670.
                                                                                           The benefits associated with the interim final
                                                                                           rule include creation of high-value wetlands,
                                                                                           control of sheet and rill erosion as lands are
                                                                                           converted from cropland to wetlands, creation
                                                                                           and protection of habitat for fish and wildlife,
                                                                                           improving water quality by filtering sediments
                                                                                           and chemicals, and providing opportunities for
                                                                                           educational, scientific, and recreational
                                                                                           activities. According to CCC, many of the
                                                                                           benefits are difficult to quantify. However, CCC
                                                                                           was able to conclude that the monetary and
                                                                                           non-monetary benefits from the Wetlands
                                                                                           Reserve Program, as discussed in the interim
                                                                                           final rule, can exceed total program costs.
13   Rule title: Environmental Quality         The interim final rule amends the           CCC prepared a cost-benefit analysis in
     Incentives Program                        Environmental Quality Incentives            conjunction with this interim final rule. For
     Date: January 15, 2009                    Program (EQIP) to incorporate changes       purposes of the analysis, CCC compared the
                                               authorized by the 2008 Farm Bill. Those     increased EQIP funding against previous
     Sub-agency: Commodity Credit              changes include extending EQIP’s            levels of EQIP funding. CCC stated that the
     Corporation                               implementation through Fiscal Year          expanded funding will result in an estimated
     Action: Interim final rule with request   2012, providing payments for                $10.4 in benefits over the period of fiscal year
     for comment                               conservation practices related to           2007 through 2012, with $0.8 billion
     Exception(s) to NPRM cited:               organic production, providing an            attributable to improved animal waste
     Statutory                                 increased payment rate to historically      management and $9.6 billion to land
                                               underserved producers, and                  treatment. Estimated net benefits for that
     GAO major rule report:
                                               establishing a national target to set       period were $57 million above total costs.
     http://www.gao.gov/products/GAO-09
                                               aside 5 percent of EQIP funds for           Ultimately, CCC determined that the interim
     -959R
                                               socially disadvantaged farmers or           final rule will provide $18 million in additional
                                               ranchers and an additional 5 percent of     net benefits due to the expansion of EQIP
                                               EQIP funds for beginning farmers or         funds in the 2008 Farm Bill.
                                               ranchers.




                                               Page 51                                                       GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                            Summary of benefits, costs, and other
     Rule                                      Description                                  economic effects
14   Rule title: Mandatory Country of          The final rule implements provisions in      USDA conducted a cost-benefit analysis of this
     Origin Labeling of Beef, Pork, Lamb,      the 2002 Farm Bill and 2008 Farm Bill        final rule. USDA concluded that the estimated
     Chicken, Goat Meat, Wild and Farm-        that require retailers to notify their       economic benefits of this final rule are difficult
     Raised Fish and Shellfish, Perishable     customers of the country of origin of        to quantify but likely to be small. The estimated
     Agricultural Commodities, Peanuts,        covered commodities. Covered                 first-year incremental costs for growers,
     Pecans, Ginseng, and Macadamia            commodities include muscle cuts of           producers, processors, wholesalers, and
     Nuts                                      beef (including veal), lamb, chicken,        retailers are $2.6 billion. The estimated cost to
     Date: January 15, 2009                    goat, and pork; ground beef, ground          the United States economy in higher food
                                               lamb, ground chicken, ground goat, and       prices and reduced food production in the 10th
     Sub-agency: Agricultural Marketing        ground pork; wild and farm-raised fish       year after implementation of the final rule is
     Service                                   and shellfish; perishable agricultural       $211.9 million.
     Action: Interim final rule with request   commodities; macadamia nuts; pecans;
     for comment                               ginseng; and peanuts.
     Exception(s) to NPRM cited: Good
     cause (P)
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -333R
15   Rule title: Sugar Program                 The final rule implements provisions in      CCC prepared a cost-benefit analysis of this
     Date: April 6, 2009                       the 2008 Farm Bill administering             final rule. CCC states that this final rule
                                               changes to the sugar loan and sugar          implements two major changes in the sugar
     Sub-agency: Farm Service Agency           marketing allotment program through          program resulting from the 2008 Farm Bill,
     and Commodity Credit Corporation          2012. The changes include new loan           higher loan rates and a guaranteed market
     Action: Final rule                        rates for raw cane sugar and beet            share. CCC concludes that these are expected
     Exception(s) to NPRM cited:               sugar, new provisions to guarantee           to have zero impact on federal costs for fiscal
     Statutory                                 domestic suppliers an 85 percent             years 2009 and 2010 because baseline
                                               market share, and revised procedures         assumptions project fiscal year 2011 to be the
     GAO major rule report:
                                               for granting allocations for new entrants.   first year of surplus sugar in the marketplace.
     http://www.gao.gov/products/GAO-09
                                                                                            However, over the course of fiscal years 2009
     -891R
                                                                                            through 2018, CCC concludes that federal net
                                                                                            expenditures are expected to be $1.055 billion
                                                                                            more than if the 2002 Farm Bill provisions
                                                                                            were still in place. CCC also concludes that the
                                                                                            loan rate increase is expected to increase
                                                                                            sugar costs to consumers and sugar users by
                                                                                            $1.4 billion from 2009 to 2018.




                                               Page 52                                                        GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                      Description                              economic effects
16   Rule title: Marketing Assistance          The final rule implements changes to     CCC prepared a cost-benefit assessment of
     Loans and Loan Deficiency                 the Marketing Assistance Loans (MAL)     the changes made by this final rule. The
     Payments                                  and Loan Deficiency Payments (LDP)       assessment includes discussions of the
     Date: April 7, 2009                       programs for wheat, feed grains          statutorily-mandated and discretionary
                                               soybeans, other oilseeds, peanuts,       changes for the MAL and LDP programs. CCC
     Sub-agency: Commodity Credit              pulse crops, honey, wool, and mohair.    expects the projected impacts from the use of
     Corporation                               CCC is making these changes to           its discretionary authority to be relatively minor.
     Action: Final rule                        comply with the 2008 Farm Bill. The      Projected outlays impacts were discussed in a
     Exception(s) to NPRM cited:               legislation extended the MAL and LDP     cost-benefit analysis completed for a prior
     Statutory                                 programs through 2012. This rule also    rulemaking. That analysis stated that the
                                               provides separate rates for long and     average annual change in government outlays
     GAO major rule report:
                                               medium grain rice beginning in crop      for fiscal years 2008 to 2012 would be $487
     http://www.gao.gov/products/GAO-09
                                               year 2008.                               million. CCC determined that the impacts of
     -892R
                                                                                        the regulatory changes addressed in this final
                                                                                        rule and the prior rule are inherently
                                                                                        interrelated and therefore did not address the
                                                                                        impact of the rules individually.
17   Rule title: Conservation Reserve          The interim rule amends the terms and    CCC analyzed the costs and benefits of this
     Program                                   conditions of enrolling acreage in the   interim rule. Based on estimates concerning
     Date: June 29, 2009                       Conservation Reserve Program to          the amount of land that will be eligible,
                                               implement provisions of the 2008 Farm    assumed participation rates and annual
     Sub-agency: Commodity Credit              Bill. This rule also updates other       enrollment, and estimated per-acre costs, CCC
     Corporation                               eligibility requirements to implement    estimates the costs of implementing the
     Action: Interim final rule with request   legislative changes.                     changes considered in the interim rule will total
     for comments                                                                       $79.6 million through fiscal year 2012 and
     Exception(s) to NPRM cited:                                                        $191.2 million through fiscal year 2018, which
     Statutory                                                                          averages to $19.1 million per year over 10
                                                                                        years. According to CCC, the extent of
     GAO major rule report:
                                                                                        environmental benefits derived from this rule
     http://www.gao.gov/products/GAO-10
                                                                                        will depend on participation rates and the
     -271R
                                                                                        specific conservation measures adopted. CCC
                                                                                        offers the following examples of benefits: (1)
                                                                                        tree thinning has the potential to enhance
                                                                                        wildlife habitat, provide for carbon
                                                                                        sequestration, and reduce the risk of wildfires;
                                                                                        (2) enrollment of aquaculture ponds and
                                                                                        flooded farmland and associated buffers can
                                                                                        increase migratory waterfowl and other wildlife
                                                                                        species populations, and potentially reduce
                                                                                        flood damage, protect water quality, and
                                                                                        provide for carbon sequestration; and (3)
                                                                                        constructed wetlands and buffers can reduce
                                                                                        nitrate loadings, reduce down-stream flood
                                                                                        damages, and increase wildlife habitat.




                                               Page 53                                                    GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                            Summary of benefits, costs, and other
     Rule                                      Description                                  economic effects
18   Rule title: Conservation Stewardship      This interim final rule implements           The National Resources Conservation Service
     Program                                   changes to policies, procedures, and         (NRCS) prepared a cost-effectiveness analysis
     Date: July 29, 2009                       requirements necessary to implement          (CEA) of this interim final rule. The CEA
                                               the Conservation Stewardship Program         describes how financial assistance and
     Sub-agency: Commodity Credit              as authorized by the 2008 Farm Bill.         technical assistance are made available
     Corporation                                                                            through the Conservation Stewardship
     Action: Interim final rule with request                                                Program, with the program objective being to
     for comment                                                                            have producers adopt additional conservation
     Exception(s) to NPRM cited:                                                            activities. The CEA attempts to compare the
     Statutory                                                                              impact of these activities in generating
                                                                                            environmental benefits with program costs.
     GAO major rule report:
                                                                                            Since the Conservation Stewardship Program
     http://www.gao.gov/products/GAO-09
                                                                                            is a voluntary program, it is not expected to
     -961R
                                                                                            impose any obligation or burden upon
                                                                                            agricultural producers and non-industrial
                                                                                            private forestland owners who chose not to
                                                                                            participate.
19   Rule title: Farm Storage Facility         The final rule amends the regulations        CCC prepared a cost-benefit analysis in
     Loan and Sugar Storage Facility           governing the Farm Storage Facility          conjunction with the final rule. CCC determined
     Loan Programs                             Loan (FSFL) and Sugar Storage Facility       that the changes to the FSFL program will add
     Date: August 18, 2009                     Loan (SSFL) programs. The final rule         costs of $6 million in 2009, $28 million in 2010,
                                               implements changes from the 2008             $30 million in 2011, and $32 million in 2012
     Sub-agency: Commodity Credit              Farm Bill including adding hay and           over the cost of the existing program. If the full
     Corporation                               renewable biomass as eligible FSFL           costs of the program are considered, rather
     Action: Final rule                        commodities, extending the maximum           than the changes made by the final rule, the
     Exception(s) to NPRM cited:               loan term to 12 years, and increasing        financial impact will be over $100 million per
     Statutory                                 the maximum loan amount to $500,000.         year.
                                               The final rule also adds fruits and
     GAO major rule report:
                                               vegetables (including nuts) as eligible
     http://www.gao.gov/products/GAO-10
                                               facility loan commodities and adds cold
     -169R
                                               storage facilities as eligible facilities.




                                               Page 54                                                        GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                    Description                                economic effects
20   Rule title: Livestock Forage Disaster   The final rule implements requirements     FSA analyzed the costs and benefits of this
     Program and Emergency Assistance        for the Emergency Assistance for           final rule. FSA estimates that the ELAP is likely
     for Livestock, Honeybees, and Farm-     Livestock, Honeybees, and Farm-            to result in costs of the entire authorized $50
     Raised Fish; Supplemental               Raised Fish Program (ELAP) and the         million per year each year, providing benefits
     Agricultural Disaster Assistance        Livestock Forage Disaster Program          of $50 million each year to producers of
     Date: September 11, 2009                (LFP) authorized by the 2008 Farm Bill.    livestock, honeybees, and farm-raised fish.
                                             LFP provides payments to eligible          The benefits of the honeybee loss
     Sub-agency: Farm Service Agency         livestock producers that have suffered     compensation aspect of the program could
     Action: Final rule                      livestock grazing losses due to            also include substantial indirect benefits to the
     Exception(s) to NPRM cited:             qualifying drought or fire. ELAP           agricultural sector as a whole, because
     Statutory                               provides emergency assistance to           honeybees pollinate more than $14 billion
                                             eligible producers of livestock,           worth of fruits, vegetables, and other crops in
     GAO major rule report:
                                             honeybees, and farm-raised fish that       the United States. The honeybee portion of the
     http://www.gao.gov/products/GAO-10
                                             have losses due to disease, adverse        program is expected to be the most expensive
     -272R
                                             weather, or other conditions, including    part of ELAP, due to losses resulting from
                                             losses due to blizzards and wildfires.     colony collapse disorder. The LFP is expected
                                             This rule specifies how LFP and ELAP       to cost about $409 million per year, providing
                                             payments are calculated, what losses       the same amount in benefits to livestock
                                             are eligible, and when producers may       producers. The indirect benefit of the program
                                             apply for payments.                        is to reduce income variability of livestock
                                                                                        producers due to drought and fire losses
                                                                                        beyond their control.
21   Rule title: Dairy Economic Loss         The final rule implements the new Dairy    FSA prepared a cost-benefit analysis in
     Assistance Payment Program              Economic Loss Assistance Payment           conjunction with the final rule. FSA expects
     Date: December 21, 2009                 (DELAP) program, which will assist         that the DELAP program will provide $290
                                             dairy producers by providing payments      million in payments to dairy producers during
     Sub-agency: Farm Service Agency         to producers who produced and              fiscal year 2010, which represents both the
     Action: Final rule                      marketed milk in the United States at      cost of the program and the benefit to the
     Exception(s) to NPRM cited:             some time from February through July       participants. All payments under the program
     Statutory                               2009. The payments are intended to         are expected to be made in fiscal year 2010.
                                             offset a portion of the dairy producers’
     GAO major rule report:
                                             losses resulting from milk prices that     The DELAP program provides payment to
     http://www.gao.gov/products/GAO-10
                                             were far below production costs.           dairy producers in fiscal year 2010 based on
     -397R
                                                                                        production in February through July 2009. FSA
                                                                                        does not expect that the final rule will result in
                                                                                        a significant change in the price of milk for
                                                                                        consumers, because it is not subsidizing the
                                                                                        cost of current production or providing price
                                                                                        support.




                                             Page 55                                                      GAO-13-21 Federal Rulemaking
                                                Appendix IV: Summary Information on Final
                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                              Summary of benefits, costs, and other
     Rule                                       Description                                   economic effects
22   Rule title: Supplemental Revenue           The final rule implements requirements        FSA prepared a cost-benefit analysis in
     Assistance Payments Program                for the new Supplemental Revenue              conjunction with the final rule. FSA expects
     Date: December 28, 2009                    Assistance Payments Program (SURE)            that payments from the SURE Program for
                                                authorized by the 2008 Farm Bill. SURE        2008 through 2011 will total $3.4 billion, an
     Sub-agency: Farm Service Agency            provides disaster assistance to eligible      average of $0.85 billion per crop year, which
     Action: Interim final rule; solicitation   participants who have experienced             represents both the cost of the program and
     of comments                                qualifying crop production losses or          the benefit to the participants. FSA states that
     Exception(s) to NPRM cited:                crop quality losses, or both, occurring in    this is less than the average of $1.14 billion per
     Statutory                                  crop year 2008 through September 30,          year for previous ad hoc crop disaster
                                                2011.                                         programs from 1998 to 2007. The overall costs
     GAO major rule report:
                                                                                              for SURE are expected to be less than the cost
     http://www.gao.gov/products/GAO-10
                                                                                              of previous ad hoc programs for several
     -398R
                                                                                              reasons. First, unlike ad hoc disaster
                                                                                              programs, SURE, in general, is additional
                                                                                              compensation for established losses under
                                                                                              crop insurance or noninsured crop disaster
                                                                                              assistance program (NAP), and is not a benefit
                                                                                              that replaces or duplicates previously received
                                                                                              crop insurance or NAP payments. Additionally,
                                                                                              SURE payments are based on farm revenue
                                                                                              losses, rather than losses in particular crops or
                                                                                              individual units; therefore, participants with
                                                                                              losses in one crop but not others may or may
                                                                                              not qualify for a SURE payment. Finally, the
                                                                                              SURE guarantee cap is 90 percent of
                                                                                              expected revenue, while previous programs
                                                                                              had a cap of 95 percent of normal crop value.
23   Rule title: Conservation Stewardship       The final rule makes changes to the           CCC prepared a cost-effectiveness analysis
     Program                                    Conservation Stewardship Program.             (CEA) of the final rule, which is an approach
     Date: June 3, 2010                         The program provides financial and            used when benefits are not well understood or
                                                technical assistance to eligible              difficult to measure, but activity costs are
     Sub-agency: Commodity Credit               producers to conserve and enhance             available. The CEA compares the impact of
     Corporation,                               soil, water, air, and related natural         these conservation activities in generating
     Natural Resources Conservation             resources on their land, which can            environmental benefits with program costs.
     Service                                    include cropland, grassland, rangeland,       The CEA describes how the improvements can
     Action: Final rule                         non-industrial private forest, and            produce beneficial impacts concerning onsite
                                                agricultural land under the jurisdiction of   resource conditions, such as conserving soil,
     Exception(s) to NPRM cited:
                                                an Indian tribe.                              and significant offsite benefits, such as cleaner
     Statutory
                                                                                              water, improved air quality, and enhanced
     GAO major rule report:                                                                   wildlife habitat. The total cumulative program
     http://www.gao.gov/products/GAO-10                                                       costs for four program ranking periods are
     -832R                                                                                    estimated to be $2.99 billion in constant 2005
                                                                                              dollars, discounted at 7 percent, or $3.52
                                                                                              billion in constant 2005 dollars discounted at 3
                                                                                              percent. Since the Conservation Stewardship
                                                                                              Program is a voluntary program, it is not
                                                                                              expected to impose any obligation or burden
                                                                                              upon agricultural producers and non-industrial
                                                                                              private forestland owners who chose not to
                                                                                              participate.




                                                Page 56                                                         GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
     Rule                                    Description                                  economic effects
24   Rule title: Conservation Reserve        The interim rule amends the                  CCC states that the changes to CRP in this
     Program                                 Conservation Reserve Program (CRP)           rule are expected to cost about $6.7 million per
     Date: July 28, 2010                     to implement provisions of the 2008          year over 10 years (2011–2020). CCC
                                             Farm Bill, including extending CRP           explains that this is a net cost that reflects
     Sub-agency: Commodity Credit            through 2012 and making some                 roughly $77 million in additional CRP
     Corporation                             changes in eligibility requirements. The     payments to participants over the next 10
     Action: Interim rule                    purpose of CRP is to cost-effectively        years for additional land enrolled through the
     Exception(s) to NPRM cited:             assist producers in conserving and           county maximum acreage waivers to exclude
     Statutory                               improving soil, water, wildlife, and other   certain acreage and revised cropping history
                                             natural resources by converting              requirements and payments for pollinator
     GAO major rule report:
                                             environmentally-sensitive acreage from       habitat practices, minus roughly $10 million in
     http://www.gao.gov/products/GAO-10
                                             the production of agricultural               reduced payments for the revised permissive
     -991R
                                             commodities to a long-term vegetative        uses. CCC states that the benefits to
                                             cover and to address issues raised by        participants will be the net additional $6.7
                                             state, regional, and national                million per year over the next 10 years. CCC
                                             conservation initiatives.                    notes that there are expected to be additional
                                                                                          non-quantifiable environmental benefits from
                                                                                          the waivers to exclude that will allow more
                                                                                          environmentally sensitive acres to be enrolled
                                                                                          through continuous signup, from additional
                                                                                          highly erodible land enrollment that could
                                                                                          result from making land in long-term hay
                                                                                          rotations eligible, and from the incentives for
                                                                                          pollinator habitat. Additionally, CCC states that
                                                                                          the other provisions in this rule, such as local
                                                                                          preference, are expected to have little to no
                                                                                          cost. CCC believes that these provisions will
                                                                                          largely substitute one CRP participant for
                                                                                          another or one practice for another, leading in
                                                                                          a shift in costs and benefits to different
                                                                                          participants and practices, but little net cost or
                                                                                          benefit for CRP as a whole.
25   Rule title: Crop Assistance Program     The interim rule provides emergency          FSA analyzed the costs and benefits of this
     Date: October 25, 2010                  assistance to reestablish the purchasing     interim rule. FSA estimated that the total cost
                                             of rice, cotton, soybeans, and sweet         to the government, and the corresponding
     Sub-agency: Farm Service Agency         potatoes in specified counties for which     benefit to producers, for the Crop Assistance
     Action: Interim rule                    a disaster designation was issued            Program will be between $137 million and
     Exception(s) to NPRM cited: Good        based on excessive moisture and              $543 million, depending on how many
     cause; matter relating to public        related conditions for the 2009 crop         producers in disaster counties apply for
     property, loans, grants, benefits, or   year. This rule specifies the eligibility    payment.
     contracts                               requirements, payment calculations,
                                             and application procedures for the Crop
     GAO major rule report:
                                             Assistance Program, which will provide
     http://www.gao.gov/products/GAO-11
                                             up to $550 million to eligible producers.
     -175R




                                             Page 57                                                        GAO-13-21 Federal Rulemaking
                                           Appendix IV: Summary Information on Final
                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                  Description                                   economic effects
     Department of Commerce
26   Rule title: Public Safety             The final rule implements a $1 billion        The final rule implements a grant program that
     Interoperable Communications          grant program to assist public safety         will make $968.39 million available in grant
     (PSIC) Grant Program                  agencies in the acquisition of,               awards. This is a one-time transfer program
     Date: July 23, 2007                   deployment of, or training for the use of     where funds will be awarded no later than
                                           interoperable communications systems          September 30, 2007.
     Sub-agency: National                  that utilize—or enable interoperability
     Telecommunications and Information    with communications systems that can
     Administration (NTIA)                 utilize—reallocated public spectrum for
     Action: Notice of Availability of     radio communications. This grant
     Funds                                 program was authorized by the Deficit
     Exception(s) to NPRM cited: Matter    Reduction Act of 2005 and the Call
     relating to public property, loans,   Home Act of 2006. This is a one-time
     grants, benefits or contracts         transfer program where funds will be
                                           awarded no later than September 30,
     GAO major rule report:
                                           2007.
     http://www.gao.gov/products/GAO-07
     -1141R
27   Rule title: Amendments to the         The final rule implements changes to          NTIA prepared a cost-benefit analysis in
     Digital-to-Analog Converter Box       the Digital-to-Analog Converter Box           conjunction with this final rule. As a baseline,
     Program to Implement the DTV Delay    Program Coupon Program to conform to          NTIA considered the effects if there were no
     Act                                   the DTV Delay Act which extended the          extension of the DTV Converter Box Coupon
     Date: March 12, 2009                  deadline for the digital conversion and       Request Deadline. NTIA noted that its waiting
                                           the coupon application period by four         list contained more than 4.2 million coupon
     Sub-agency: National                  months. The final rule also provided          requests, and that those combined
     Telecommunications and Information    NTIA additional flexibility in how it         households, without the extension, would incur
     Administration                        distributes coupons to households, so         a total cost exceeding $210 million if they had
     Action: Final rule                    that NTIA is no longer required to            to purchase converter boxes without the
     Exception(s) to NPRM cited: Good      distribute coupons via the United States      coupon subsidy. NTIA also cited a Nielson
     cause                                 Postal Service. The final rule also           Company study indicating that, as of February
                                           permits NTIA to prioritize the distribution   18, 2009, more than 5 million households were
     GAO major rule report:
                                           of coupons to over-the-air only               fully unprepared for the transition to fully digital
     http://www.gao.gov/products/GAO-09
                                           households in the event that a waiting        broadcasting, with the highest lack of
     -502R
                                           list becomes necessary.                       preparation among viewers under 35 years
                                                                                         old, African American and Hispanic
                                                                                         households. The total costs to these
                                                                                         households of purchasing a converter box
                                                                                         without subsidy would be $250 million.
                                                                                         NTIA notes that enactment of the DTV Delay
                                                                                         Act and the ARRA reflect a commitment to
                                                                                         assisting eligible households in retaining
                                                                                         access to broadcast television programming
                                                                                         following the digital television conversion.
                                                                                         Consistent with its responsibility to administer
                                                                                         the Coupon Program to achieve this goal,
                                                                                         NTIA’s final rule seeks to expedite coupon
                                                                                         distribution as effectively and efficiently as
                                                                                         possible. Therefore, NTIA concluded the
                                                                                         benefits of the final rule exceed its costs and
                                                                                         NTIA supported adoption of the final rule to
                                                                                         facilitate the digital transition for America’s
                                                                                         families.




                                           Page 58                                                          GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                   Description                                economic effects
28   Rule title: State Broadband Data and   The notice announces the availability of   NTIA did not prepare a cost-benefit analysis in
     Development Grant Program              funds pursuant to the American             conjunction with this final rule. However, the
     Date: July 8, 2009                     Recovery and Reinvestment Act of           final rule states that the program will make
                                            2009 and the Broadband Data                approximately $240 million available for
     Sub-agency: National                   Improvement Act for the State              eligible entities to develop and implement
     Telecommunications and Information     Broadband Data and Development             statewide initiatives to identify and track the
     Administration                         Grant Program. The Program is a            availability and adoption of broadband services
     Action: Notice of funds availability   competitive, merit-based matching grant    within each state.
     (Notice) and solicitation of           program that funds projects that collect
     applications.                          comprehensive and accurate state-level
     Exception(s) to NPRM cited: Good       broadband mapping data, develops
     cause                                  state-level broadband maps, aids in the
                                            development and maintenance of a
     GAO major rule report:
                                            national broadband map, and funds
     http://www.gao.gov/products/GAO-10
                                            statewide initiatives directed at
     -321R
                                            broadband planning.
     Department of Defense (DOD)
29   Rule title: Homeowners Assistance      The interim final rule expands the        The rule did not include estimates of the costs,
     Program—Application Processing         Homeowners Assistance Program             benefits, or transfer amounts.
     Date: September 30, 2009               (HAP) to provide assistance to wounded
                                            members of the Armed Forces (30
     Sub-agency: Office of the Secretary    percent or greater disability), surviving
     Action: Interim final rule             spouses of fallen warriors, wounded
     Exception(s) to NPRM cited: Other      DOD civilian homeowners reassigned in
     reason                                 furtherance of medical treatment or
                                            rehabilitation or due to retirement in
     GAO major rule report:
                                            connection with their disability.
     http://www.gao.gov/products/GAO-10
     -422R
30   Rule title: Retroactive Stop Loss      The interim final rule provides for        The Supplemental Appropriations Act, 2009
     Special Pay Compensation               retroactive stop loss special pay as       appropriated $534. 4 million to DOD, to remain
     Date: October 23, 2009                 authorized and appropriated by the         available for obligation until expended for the
                                            Supplemental Appropriations Act of         payment of claims specified by this law.
     Sub-agency: Office of the Secretary    2009.
     Action: Interim final rule
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -415R




                                            Page 59                                                     GAO-13-21 Federal Rulemaking
                                          Appendix IV: Summary Information on Final
                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                    Summary of benefits, costs, and other
     Rule                                 Description                               economic effects
31   Rule title: Retroactive Stop Loss    The final rule provides for retroactive   The Supplemental Appropriations Act, 2009
     Special Pay Compensation             stop loss special pay as authorized and   appropriated $534.4 million to DOD, to remain
     Date: April 16, 2010                 appropriated in the Supplemental          available for obligation until expended:
                                          Appropriations Act of 2009.               provided that such funds shall be available to
     Sub-agency: Office of the Under                                                the secretaries of the military departments only
     Secretary of Defense for Personnel                                             to make payment of claims specified by this
     and Readiness                                                                  law.
     Action: Final rule
     Exception(s) to NPRM cited: Good
     cause; other reason
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -683R
32   Rule title: Homeowners Assistance    The final rule continues to authorize the The rule did not include estimates of the costs,
     Program—Application Processing       Homeowners Assistance Program             benefits, or transfer amounts.
     Date: November 16, 2010              (HAP) to financially compensate eligible
                                          military and civilian federal employee
     Sub-agency: Office of the Deputy     homeowners when the real estate
     Under Secretary of Defense           market is adversely affected directly
     Action: Final rule                   related to the closure or reduction-in-
     Exception(s) to NPRM cited: Other    scope of operations due to Base
     reason                               Realignment and Closure (BRAC). The
                                          American Recovery and Reinvestment
     GAO major rule report:
                                          Act of 2009 expanded the HAP to
     http://www.gao.gov/products/GAO-11
                                          provide assistance to: wounded
     -222R
                                          members of the Armed Forces (30
                                          percent or greater disability), surviving
                                          spouses of fallen warriors, and
                                          wounded DOD civilian homeowners
                                          reassigned in furtherance of medical
                                          treatment or rehabilitation or due to
                                          medical retirement in connection with
                                          their disability; BRAC 2005 impacted
                                          homeowners relocating during the
                                          mortgage crisis; and service member
                                          homeowners undergoing Permanent
                                          Change of Station moves during the
                                          mortgage crisis.




                                          Page 60                                                     GAO-13-21 Federal Rulemaking
                                          Appendix IV: Summary Information on Final
                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                    Summary of benefits, costs, and other
     Rule                                 Description                               economic effects
     Department of Education (Education)
33   Rule title: Federal Student Aid      The interim final rule amends the         Education states that the interim final rule will
     Programs                             Federal Student Aid Program to            impose increased costs on some borrowers,
     Date: August 9, 2006                 implement changes made by the Higher      such as an increase in the loan interest rate for
                                          Education Reconciliation Act of 2005.     Federal Family Education Loans PLUS
     Sub-agency: Office of                                                          borrowers, the elimination of in-school and
     Postsecondary Education                                                        joint consolidation loans, and the mandatory
     Action: Interim final regulations;                                             imposition of the previously optional 1-percent
     request for comments                                                           guaranty agency default insurance premium.
     Exception(s) to NPRM cited: Good                                               Education estimates that the annualized
     cause                                                                          monetary transfers from the federal
                                                                                    government to postsecondary students and
     GAO major rule report:
                                                                                    from student aid program participants to the
     http://www.gao.gov/products/GAO-06
                                                                                    federal government will be $976 million.
     -1063R
34   Rule title: Federal Perkins Loan     The final rule makes a number of          Education analyzed the costs and benefits of
     Program, Federal Family Education    changes to the federal loan programs      this final rule. Education determined that, of
     Loan Program, and William D. Ford    authorized under title IV of the Higher   the regulatory changes in this final rule not
     Federal Direct Loan Program          Education Act of 1965 to strengthen and   implementing the CCRAA, only the mandatory
     Date: November 1, 2007               improve the administration of the         assignment of defaulted Perkins Loans will
                                          programs. This final rule also            have a substantial economic effect, with an
     Sub-agency: Office of                incorporates changes enacted in the       impact of approximately $23 million annually.
     Postsecondary Education              College Cost Reduction and Access Act     Education estimates that the provisions of this
     Action: Final Regulations            (CCRAA).                                  final rule implementing CCRAA which reduce
     Exception(s) to NPRM cited: Good                                               costs will decrease federal costs by $23.3
     cause                                                                          billion over fiscal years 2007 to 2012. The
                                                                                    Department also estimates that the provisions
     GAO major rule report:
                                                                                    of this final rule implementing CCRAA which
     http://www.gao.gov/products/GAO-08
                                                                                    expand benefits will increase federal costs by
     -293R
                                                                                    $5.9 billion over fiscal years 2007 to 2012.
35   Rule title: Federal Perkins Loan     The final rule amends the regulations     Education analyzed the costs and benefits of
     Program, Federal Family Education    governing the Federal Perkins Loan        this final rule. Education estimates that the
     Loan Program, and William D. Ford    Program, the Federal Family Education     parts of this final rule that implement provisions
     Federal Direct Loan Program          Loan Program, and the William D. Ford     of the College Cost Reduction and Access Act
     Date: October 23, 2008               Federal Direct Loan Program. This final   (CCRAA) will have a net budget impact of
                                          rule implements various provisions of     $650 million in 2008 and $9.2 billion over fiscal
     Sub-agency: Office of                the College Cost Reduction and Access     years 2008 to 2012.
     Postsecondary Education              Act, including the establishment of the
     Action: Final regulations            Income-Based Repayment plan and the
     Exception(s) to NPRM cited: Good     Public Service Loan Forgiveness
     cause                                Program.
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -191R




                                          Page 61                                                     GAO-13-21 Federal Rulemaking
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                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                      Description                                 economic effects
36   Rule title: Student Assistance            The interim final rule implements           Education prepared an accounting statement
     General Provisions; Teacher               changes to the Academic                     showing the classification of the expenditures
     Education Assistance for College and      Competitiveness Grant (ACG) and             associated with the interim final rule. The
     Higher Education (TEACH) Grant            National Science and Mathematics            Department estimates that the interim final rule
     Program; Federal Pell Grant               Access to Retain Talent Grant (National     will increase federal grant payments to
     Program; Academic Competitiveness         SMART Grant) programs. As required          students by $448 million.
     Grant Program and National Science        by recent amendments to the Higher
     and Mathematics Access To Retain          Education Act of 1965, the interim final
     Talent Grant Program                      rule makes ACGs and National SMART
     Date: May 1, 2009                         Grants available to eligible non-citizens
                                               and students enrolled at least half-time
     Sub-agency: Office of                     and provides that maximum awards for
     Postsecondary Education                   part-time students be proportionally
     Action: Interim final rule; request for   reduced consistent with the
     comments                                  requirements in the Federal Pell Grant
     Exception(s) to NPRM cited: Good          Program and that grant awards be
     cause                                     based on a student’s grade level rather
                                               than academic year.
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -756R




                                               Page 62                                                      GAO-13-21 Federal Rulemaking
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                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                      Summary of benefits, costs, and other
     Rule                                 Description                                 economic effects
37   Rule title: General and Non-loan     The final regulations implemented           Education has assessed the potential costs
     Programmatic Issues                  legislative changes to various general      and benefits and determined that the benefits
     Date: October 29, 2009               and non-loan provisions for institutional   justify the costs. Education states that benefits
                                          eligibility under the Higher Education      include greater transparency about consumer
     Sub-agency: Office of                Act of 1965, the Student Assistance         information and campus safety for prospective
     Postsecondary Education              General Provisions, the Federal Work-       and current students at institutions
     Action: Final regulations            Study (FWS) Programs, the Teacher           participating in the federal student financial
     Exception(s) to NPRM cited: Good     Education Assistance for College and        assistance programs, copyright infringement
     cause (P)                            Higher Education (TEACH) Grant              policies, requirements for readmission of
                                          Program, the Federal Pell Grant             service members, explanation of extenuating
     GAO major rule report:
                                          Program, and the Leveraging                 circumstances under which TEACH Grant
     http://www.gao.gov/products/GAO-10
                                          Educational Assistance Partnership          service obligations may be excused,
     -238R
                                          Program (LEAP).                             requirements for programs serving students
                                                                                      with intellectual disabilities, and additional
                                                                                      guidelines for federal grant and work-study
                                                                                      programs. Education states that costs include
                                                                                      requiring regulated entities to develop new
                                                                                      disclosures and other materials, as well as
                                                                                      accompanying dissemination processes in
                                                                                      order to implement the statutory provisions.
                                                                                      These changes are estimated to increase
                                                                                      burden on entities or individuals participating in
                                                                                      the federal student assistance programs by
                                                                                      253,718 hours. According to Education,
                                                                                      virtually all of the increased burden is
                                                                                      associated with institutions. A small amount,
                                                                                      384 hours, is associated with students. The
                                                                                      monetized cost of this additional burden, using
                                                                                      loaded wage data developed by the Bureau of
                                                                                      Labor Statistics, is $4.7 million.
                                                                                      [Education also estimated that this rule would
                                                                                      result in annualized monetized transfers from
                                                                                      the government to student loan borrowers of
                                                                                      $281 million (7 percent discount rate) or $277
                                                                                      million (3% discount rate).]




                                          Page 63                                                       GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                      Description                                 economic effects
38   Rule title: Student Assistance            The final rule adopts regulations for the   Education estimates that this final rule will
     General Provisions; Teacher               Academic Competitiveness and                result in 538,000 additional awards totaling
     Education Assistance for College and      National Science and Mathematics to         $448 million over award years 2009 through
     Higher Education (TEACH) Grant            Retain Talent Grant programs; Student       2010 and 2010 through 2011. These changes
     Program; Federal Pell Grant               Assistance General Provisions; Federal      will increase federal costs by the same
     Program; Academic Competitiveness         Pell Grant Program; and Teacher             amount.
     Grant Program and National Science        Education Assistance for College and
     and Mathematics Access To Retain          Higher Education Grant Program. This
     Talent Grant Program                      rule implements provisions of the Higher
     Date: November 23, 2009                   Education Act of 1965, as amended by
                                               the Ensuring Continued Access to
     Sub-agency: Office of                     Student Loans Act of 2008 and the
     Postsecondary Education                   Higher Education Opportunity Act of
     Action: Final regulations                 2008.
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -427R
39   Rule title: Race to the Top Fund          The interim final rule amends the Race      Education determined that this interim final rule
     Date: April 2, 2010                       to the Top Fund requirements to             will not impose additional costs to state
                                               establish the suggested budget ranges       applicants, grantees, or the federal
     Sub-agency: N/A                           as mandatory funding limits for Phase 2     government. A state applicant may take
     Action: Interim final requirements;       of the competition.                         additional time to create or revise its Race to
     request for comments                                                                  the Top budget so that it conforms to the
     Exception(s) to NPRM cited: Good                                                      required budget range if the state had intended
     cause                                                                                 to request more than the maximum in the
                                                                                           range. However, Education believes that the
     GAO major rule report:
                                                                                           benefits outweigh any potential burden that the
     http://www.gao.gov/products/GAO-10
                                                                                           interim final rule may cause.
     -641R
     Department of Energy
40   Rule title: Advanced Technology           The interim final rule establishes the      The Consolidated Security, Disaster
     Vehicles Manufacturing Incentive          Advanced Technology Vehicles                Assistance, and Continuing Appropriations Act
     Program                                   Manufacturing Incentive Program             of 2009 appropriated $7.5 billion for the
     Date: November 12, 2008                   authorized by statute, which provides       ‘‘Advanced Technology Vehicles
                                               for loans and grants to eligible            Manufacturing Loan Program Account’’ for the
     Sub-agency: Office of the Chief           automobile manufacturers and                cost of direct loans and states that
     Financial Officer                         component suppliers for projects that       commitments for direct loans using such
     Action: Interim final rule; request for   reequip, expand, and establish              amounts shall not exceed $25 billion in total
     comment                                   manufacturing facilities in the United      loan principal, and $10 million for DOE’s
     Exception(s) to NPRM cited:               States to produce light-duty vehicles       administrative expenses for implementing the
     Statutory                                 and provide improvements in fuel            program.
                                               economy performance beyond certain
     GAO major rule report:
                                               specified levels.
     http://www.gao.gov/products/GAO-09
     -196R




                                               Page 64                                                      GAO-13-21 Federal Rulemaking
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                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                      Description                                 economic effects
     Department of Health and Human
     Services (HHS)
41   Rule title: Medicare Program;             The final rule revises the estimates        CMS estimates that the changes to the
     Physician Fee Schedule Update for         used to establish the sustainable growth    physician fee schedule update will increase
     Calendar Year 2003                        rates for fiscal years 1998 and 1999 for    Medicare expenditures for physicians’ services
     Date: February 28, 2003                   the purposes of determining future          by $1.1 billion in fiscal year 2003, $2 billion in
                                               updates to the physician fee schedule. It   fiscal year 2004, and $2.8 billion in fiscal year
     Sub-agency: Centers for Medicare &        also announces a 1.6-percent increase       2005 or an estimated $15.7 billion over 5 years
     Medicaid                                  in the calendar year 2003 physician fee     and $49.6 billion over 10 years.
     Services (CMS)                            schedule conversion factor for March 1,
     Action: Final rule                        2003, to December 31, 2003.
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-03
     -533R
42   Rule title: Medicare Program;             The interim final rule implements           CMS estimates that the changes contained in
     Changes to Medicare Payment for           provisions of the Medicare Prescription     the interim final rule regarding the physician
     Drugs and Physician Fee Schedule          Drug, Improvement, and Modernization        fee schedule and drug payment rates to
     Payments for Calendar Year 2004           Act of 2003 that are applicable in 2004     increase Medicare spending by more than $1
     Date: January 7, 2004                     to Medicare payments for covered            billion in fiscal year 2004.
                                               drugs and physician fee schedule
     Sub-agency: Centers for Medicare &        services.
     Medicaid
     Services
     Action: Interim final rule with request
     for comments
     Exception(s) to NPRM cited: Good
     cause; statutory
     GAO major rule report:
     http://www.gao.gov/products/GAO-04
     -373R




                                               Page 65                                                       GAO-13-21 Federal Rulemaking
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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
     Rule                                    Description                                  economic effects
43   Rule title: Medicare Program; Health    The interim final rule sets forth the        The interim final rule has $142 million available
     Care Infrastructure Improvement         criteria for a loan program for qualifying   for the loan program from July 1, 2004,
     Program; Selection Criteria of Loan     hospitals engaged in research in the         through September 30, 2008. No more than $2
     Program for Qualifying Hospitals        causes, prevention, and treatment of         million may be used for the administration of
     Engaged in Cancer-Related Health        cancer as specified in the Medicare          the program during that time period.
     Care                                    Prescription Drug, Improvement, and
     Date: September 30, 2005                Modernization Act of 2003. The rule
                                             establishes a loan application process
     Sub-agency: Centers for Medicare &      by which qualifying hospitals may apply
     Medicaid                                for a loan for the capital costs of health
     Services                                care infrastructure improvement
     Action: Interim final rule with         projects.
     comment period
     Exception(s) to NPRM cited: Good
     cause; matter relating to public
     property, loans, grants, benefits, or
     contracts
     GAO major rule report:
     http://www.gao.gov/products/GAO-06
     -153R
44   Rule title: Medicare Program;           The final rule revises the Medicare          CMS estimates that the changes made by the
     Hospital Outpatient Prospective         hospital outpatient prospective payment      final rule will increase Medicare expenditures
     Payment System and CY 2007              system to implement applicable               for calendar year 2007 over the expenditures
     Payment Rates; CY 2007 Update to        statutory requirements and changes           for calendar year 2006 by $2.24 billion.
     the Ambulatory Surgical Center          arising from CMS’s continuing
     Covered Procedures List; Medicare       experience with the system, including
     Administrative Contractors; and         changes to the amounts and factors
     Reporting Hospital Quality Data for     used to determine Medicare’s
     FY 2008 Inpatient Prospective           payments. The final rule also revises
     Payment System Annual Payment           the current list of procedures that are
     Update Program—HCAHPS Survey,           covered when furnished in a Medicare-
     SCIP, and Mortality                     approved ambulatory surgical center
     Date: November 24, 2006                 and the emergency medical screening
                                             requirements for critical access
     Sub-agency: Centers for Medicare &      hospitals.
     Medicaid
     Services
     Action: Final rule with comment
     period and final rule
     Exception(s) to NPRM cited: Good
     cause (P)
     GAO major rule report:
     http://www.gao.gov/products/GAO-07
     -249R




                                             Page 66                                                        GAO-13-21 Federal Rulemaking
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                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                    Summary of benefits, costs, and other
     Rule                                 Description                               economic effects
45   Rule title: Medicare Program;        This notice updates the prospective       According to CMS’s estimate, the rate changes
     Inpatient Psychiatric Facilities     payment rates for Medicare inpatient      under this notice will increase payments by
     Prospective Payment System           psychiatric facilities (IPF). The changes approximately $130 million.
     Payment Update for Rate Year         are applicable to IPF discharges
     Beginning July 1, 2007 (RY 2008)     occurring during the year beginning July
     Date: May 4, 2007                    1, 2007, through June 30, 2008.
     Sub-agency: Centers for Medicare &
     Medicaid
     Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-07
     -864R
46   Rule title: Medicaid Program;        The final rule implements the statutory   CMS concluded that this rule will result in $80
     Citizenship Documentation            requirement that states obtain            million less spent by the federal government
     Requirements                         satisfactory documentary evidence of a    and $60 million less spent by state
     Date: July 13, 2007                  Medicaid applicant’s or recipient’s       governments per year for the next 5 years.
                                          citizenship and identity.                 Because the total is greater than $100 million
     Sub-agency: Centers for Medicare &                                             per year, this is a significant rule. The
     Medicaid                                                                       regulatory impact statement did not account for
     Services                                                                       the administrative costs on the states. With
     Action: Final rule                                                             respect to administrative costs, CMS states
                                                                                    that it provides federal match for administrative
     Exception(s) to NPRM cited: Good
                                                                                    expenditures. CMS expects states to
     cause
                                                                                    experience higher administrative costs during
     GAO major rule report:                                                         the first year of implementation as they adjust
     http://www.gao.gov/products/GAO-07                                             to the new requirements and expects these
     -1112R                                                                         costs to decrease in later years as current
                                                                                    recipients meet the requirements and only new
                                                                                    applicants are required to submit
                                                                                    documentation.
47   Rule title: Medicare Program;        The final rule updates the payment        CMS estimates that the impact of the final rule
     Prospective Payment System and       rates used under the prospective          will be to increase payments to SNFs by
     Consolidated Billing for Skilled     payment system for skilled nursing        approximately $690 million.
     Nursing Facilities for FY 2008       facilities (SNF) for fiscal year 2008. In
     Date: August 3, 2007                 addition, the final rule revises and
                                          rebases the SNF market basket and
     Sub-agency: Centers for Medicare &   modifies the threshold for the
     Medicaid                             adjustment to account for market basket
     Services                             forecast error.
     Action: Final rule
     Exception(s) to NPRM cited: Good
     cause (P)
     GAO major rule report:
     http://www.gao.gov/products/GAO-07
     -1181R




                                          Page 67                                                    GAO-13-21 Federal Rulemaking
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                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                   Description                                economic effects
48   Rule title: Medicare Program;          The final rule revises the Medicare        CMS determined that this rule will result in an
     Changes to the Hospital Inpatient      hospital inpatient prospective payment approximately $3.8 billion increase in fiscal
     Prospective Payment Systems and        system for operating and capital-related year 2008 operating and capital payments.
     Fiscal Year 2008 Rates                 costs. These changes arise from CMS’s
     Date: August 22, 2007                  continuing experience with these
                                            systems and implement provisions of
     Sub-agency: Centers for Medicare &     three statutes. The rule sets limits on
     Medicaid                               the rate of increase for certain hospitals
     Services                               and hospital units that are excluded
     Action: Final rule with comment        from the inpatient prospective payment
     period                                 system.
     Exception(s) to NPRM cited: Good
     cause (P)
     GAO major rule report:
     http://www.gao.gov/products/GAO-07
     -1200R
49   Rule title: Medicare Program;          The notice announces the monthly           A cost-benefit analysis was not conducted
     Medicare Part B Monthly Actuarial      actuarial rates for aged and disabled      because the increases were statutorily
     Rates, Premium Rate, and Annual        enrollees for the Part B Medicare          directed. CMS did estimate that the increase
     Deductible Medicare Program;           Supplementary Medical Insurance) trust     will cost approximately 41.5 million Part B
     Medicare Part B Monthly Actuarial      fund for January 1, 2008. It also          enrollees about $1.4 billion for 2008.
     Rates, Premium Rate, and Annual        announces the monthly Part B premium
     Deductible Beginning January 1,        to be paid by aged and disabled
     2008                                   beneficiaries, as well as the income-
     Date: October 5, 2007                  related monthly adjustment amounts to
                                            be paid by beneficiaries with modified
     Sub-agency: Centers for Medicare &     adjusted gross income above certain
     Medicaid Services                      threshold amounts.
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/decisions/majrule
     /d08176r.pdf
50   Rule title: Medicare Program;          The notice announces the inpatient         A cost-benefit analysis was not conducted
     Inpatient Hospital Deductible and      hospital deductible and the hospital and   because the increases were statutorily
     Hospital and Extended Care Services    extended care service coinsurance          directed. CMS did estimate that the total
     Coinsurance Amounts for Calendar       amounts for services furnished in          increase in cost to beneficiaries associated
     Year 2008                              calendar year 2008 under Medicare          with the notice to be approximately $870
     Date: October 5, 2007                  Part A. The statute specifies the          million.
                                            formulae used to determine these
     Sub-agency: Centers for Medicare &     amounts.
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -175R




                                            Page 68                                                     GAO-13-21 Federal Rulemaking
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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                    Description                                 economic effects
51   Rule title: Medicare Program;           The final rule makes changes to the         CMS prepared a regulatory impact analysis of
     Revisions to Payment Policies Under     Medicare Part B payment policy to           the final rule that concludes that the final rule
     the Physician Fee Schedule, and         implement provisions of the Tax Relief      will have an impact of reducing program
     Other Part B Payment Policies for CY    and Health Care Act of 2006. The            expenditures by $6 billion and a $140 million
     2008; Revisions to the Payment          changes are intended to ensure that         increase in payments for ambulance services
     Policies of Ambulance Services          payment systems are updated to reflect      over calendar year 2007.
     Under the Ambulance Fee Schedule        changes in medical practice and the
     for CY 2008; and the Amendment of       relative value of services. The rule also
     the E-Prescribing Exemption for         finalizes the calendar year 2007 interim
     Computer Generated Facsimile            relative value units (RVU) and issues
     Transmissions                           interim RVUs for new and revised
     Date: November 27, 2007                 procedure codes for calendar year
                                             2008. Finally, the rule announces that
     Sub-agency: Centers for Medicare &      (1) the physician fee schedule update
     Medicaid Services                       for calendar year 2008 is negative 10.1
     Action: Final rule with comment         percent, (2) the initial estimate for the
     period                                  sustainable growth rate for calendar
     Exception(s) to NPRM cited: Good        year 2008 is negative 0.1 percent, and
     cause                                   (3) the conversion factor (CF) for
                                             calendar year 2008 is $34.0682.
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -308R
52   Rule title: Medicare Program:           The final rule revises the Medicare         CMS estimates that the changes made by the
     Changes to the Hospital Outpatient      hospital outpatient prospective payment     final rule changing the outpatient prospective
     Prospective Payment System and CY       system to implement statutory               payment system (OPPS) payment rates will
     2008 Payment Rates, the Ambulatory      requirements and changes arising from       increase Medicare expenditures for calendar
     Surgical Center Payment System and      CMS’s continuing experience with the        year 2008 over the expenditures for calendar
     CY 2008 Payment Rates, the              system, including changes to the            year 2007 by $3.4 billion. The changes made
     Hospital Inpatient Prospective          amounts and factors used to determine       to the ASC payment system are expected to
     Payment System and FY 2008              Medicare’s payments. The final rule         have no net effect on Medicare expenditures in
     Payment Rates; and Payments for         sets forth the applicable relative          calendar year 2008. CMS estimates that the
     Graduate Medical Education for          payment weights and amounts for             changes in inpatient prospective payment
     Affiliated Teaching Hospitals in        services furnished in Ambulatory            system (IPPS) payment rates will increase
     Certain Emergency Situations            Surgical Centers (ASC). The final rule      Medicare payments to IPPS providers for
     Medicare and Medicaid Programs:         also includes changes made to the           calendar year 2008 over the expenditures for
     Hospital Conditions of Participation;   2008 hospital inpatient provider            calendar year 2007 by $4.635 billion.
     Necessary Provider Designations of      payment system as required by statute.
     Critical Access Hospitals               Finally, CMS has included an interim
     Date: November 27, 2007                 final rule modifying the regulations
                                             relating to graduate medical education
     Sub-agency: Centers for Medicare &      payments made to teaching hospitals
     Medicaid Services                       that have Medicare affiliation
     Action: Interim and final rule with     agreements for certain emergency
     comment period                          situations.
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -309R




                                             Page 69                                                       GAO-13-21 Federal Rulemaking
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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                    Description                                   economic effects
53   Rule title: Medicaid Program;           The interim final rule revises current        CMS prepared a cost-benefit analysis in
     Optional State Plan Case                Medicaid regulations concerning case          conjunction with the interim final rule with
     Management Services                     management and targeted case                  comment period. CMS estimates that between
     Date: December 4, 2007                  management services. The interim final        fiscal years 2008 and 2012, the regulation will
                                             clarifies the situations in which Medicaid    reduce federal Medicaid spending on case
     Sub-agency: Centers for Medicare &      will pay for case management activities.      management and targeted case management
     Medicaid Services                                                                     services by $1.28 billion and increase federal
     Action: Interim final rule with                                                       spending on title IV-E foster care services by
     comment period                                                                        $369 million.
     Exception(s) to NPRM cited:
     Statutory
     GAO major rule report:
     http://www.gao.gov/decisions/majrule
     /d08378r.pdf
54   Rule title: Medicare Program;           The final rule adopts uniform standards       CMS performed a cost-benefit analysis of the
     Standards for E-Prescribing Under       required by statute for medication            final rule. CMS contends that prescribers and
     Medicare Part D and Identification of   history, formulary and benefits, and fill     dispensers that are now e-prescribing have
     Backward Compatible Version of          status notification (RxFill) for the          already largely invested in the hardware,
     Adopted Standard for E-Prescribing      Medicare Part D electronic prescribing        software, and connectivity necessary to e-
     and the Medicare Prescription Drug      (e-prescribing) drug program. The final       prescribe. CMS does not anticipate that the
     Program (Version 8.1)                   rule also adopts the National Provider        retirement of NCPDP SCRIPT 5.0 in favor of
     Date: April 7, 2008                     Identifier (NPI) as a standard for            NCPDP SCRIPT 8.1 Medication History
                                             identifying health care providers in e-       Standard for the exchange of medication
     Sub-agency: Centers for Medicare &      prescribing transactions. It also finalizes   history information, the adoption of the NCPDP
     Medicaid Services                       an interim final rule that identified the     Formulary and Benefits 1.0 for formulary and
     Action: Final rule                      National Council for Prescription Drug        benefits transactions, the adoption of NPI for
     Exception(s) to NPRM cited: Good        Programs (NCPDP) Prescriber/                  use in e-prescribing transactions, and the
     cause                                   Pharmacist Interface SCRIPT standard          adoption of NCPDP SCRIPT 8.1 (RxFill) for
                                             as a backward compatible update of the        electronic fill status notification purposes will
     GAO major rule report:
                                             NCPDP SCRIPT 5.0 until April 1, 2009.         result in significant costs. CMS anticipates that
     http://www.gao.gov/products/GAO-08
                                                                                           the ability to utilize electronic formulary and
     -690R
                                                                                           benefits inquiries will result in administrative
                                                                                           efficiencies and increased prescribing of
                                                                                           generic drugs versus brand name drugs, and
                                                                                           the access to medication history at the point of
                                                                                           care will result in reduced adverse drug
                                                                                           events. The benefits accruing from using the
                                                                                           adopted standards in these transactions will
                                                                                           have an economically significant effect on
                                                                                           Medicare Part D program cost and patient
                                                                                           safety.
                                                                                           (The agency also concluded that the cost of
                                                                                           implementing these standards is minimal, with
                                                                                           quantifiable benefits reaped by dispensers,
                                                                                           prescribers, and beneficiaries. Over 5 years,
                                                                                           the agency expected these groups will see
                                                                                           average net benefits in a range from $218
                                                                                           million to $863.9 million from the utilization of
                                                                                           formulary and benefits and medication history
                                                                                           transactions, and the promulgation of these
                                                                                           standards.)




                                             Page 70                                                        GAO-13-21 Federal Rulemaking
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                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                     Description                                  economic effects
55   Rule title: Medicare Program;            The notice updates the prospective           CMS performed a cost-benefit analysis of this
     Inpatient Psychiatric Facilities         payment rates for Medicare inpatient         final rule. CMS concludes that the effect of the
     Prospective Payment System               psychiatric facilities (IPF). The changes    updates described in this notice results in an
     Payment Update for Rate Year             are applicable to IPF discharges             overall $120 million increase in payments from
     Beginning July 1, 2008 (RY 2009)         occurring during the rate year beginning     rate year 2008 to rate year 2009. CMS does
     Date: May 7, 2008                        July 1, 2008, through June 30, 2009.         not expect changes in the quality of care or
                                                                                           access to services for Medicare beneficiaries
     Sub-agency: Centers for Medicare &                                                    due to the rate changes. CMS contends that
     Medicaid Services                                                                     access to IPF services will be enhanced due to
     Action: Notice                                                                        patient and facility level adjustment factors, all
     Exception(s) to NPRM cited: Good                                                      of which are intended to adequately reimburse
     cause                                                                                 IPFs for expensive cases. Also, the outlier
                                                                                           policy in the final rule is intended to assist IPFs
     GAO major rule report:
                                                                                           that experience high-cost cases.
     http://www.gao.gov/products/GAO-08
     -777R
56   Rule title: State Children’s Health      The notice describes the                     CMS provides tables identifying SCHIP
     Insurance Program (SCHIP);               implementation of certain funding under      allotments for fiscal years 2008 and 2009.
     Retrospective Adjustment for             SCHIP as amended. The funding                However, since the availability of such
     Additional Allotments To Eliminate       provisions include retrospective             allotment funds were calculated based on
     Fiscal Year (FY) 2007 Funding            adjustment of the additional allotments      methodologies specified in statute and does
     Shortfalls; Final SCHIP Allotments for   to eliminate fiscal year 2007 SCHIP          not put forward any discretionary
     FYs 2008 and 2009; Redistribution of     funding shortfalls; the final fiscal years   administrative policies, CMS determined that
     Unused SCHIP FY 2005 Allotments          2008 and 2009 SCHIP allotments; the          there are no policy options that require an
     To Eliminate FY 2008 Funding             redistribution of the amounts of states’     analysis beyond that which is presented in the
     Shortfalls; Additional Allotments To     unused fiscal year 2005 allotments to        tables.
     Eliminate FY 2008 Funding                eliminate fiscal year 2008 SCHIP
     Shortfalls; and Provisions for           funding shortfalls; the provision of
     Continued Authority for Qualifying       additional allotments to eliminate fiscal
     States To Use a Portion of Certain       year 2008 SCHIP funding shortfalls; and
     SCHIP Funds for Medicaid                 the provision for ‘‘qualifying States’’ to
     Expenditures                             elect to use a portion of their available
     Date: May 23, 2008                       SCHIP allotments as increased federal
                                              matching funds for certain expenditures
     Sub-agency: Centers for Medicare &       in their Medicaid programs.
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -952R




                                              Page 71                                                        GAO-13-21 Federal Rulemaking
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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                  Description                                 economic effects
57   Rule title: Medicare Program;         The notice lists the final wage indices,    CMS examined the costs and benefits of this
     Changes to the Hospital Inpatient     hospital reclassifications, payment         notice. CMS projects that the increase in
     Prospective Payment Systems and       rates, impacts, and other related items     operating payments in fiscal year 2009, as
     Fiscal Year 2009 Rates; Payments      for fiscal year 2009 pursuant to the        compared to 2008, will be approximately $4.97
     for Graduate Medical Education in     Medicare Improvement for Patients and       billion and the increase in capital payments
     Certain Emergency Situations;         Providers Act of 2008.                      over the same period to be $60 million. CMS,
     Changes to Disclosure of Physician                                                therefore, expects a net increase of $5.03
     Ownership in Hospitals and                                                        billion in the operating and capital payments to
     Physician Self-Referral Rules;                                                    inpatient prospective payment system
     Updates to the Long-Term Care                                                     providers.
     Prospective Payment System;
     Updates to Certain IPPS-Excluded
     Hospitals; and Collection of
     Information Regarding Financial
     Relationships Between Hospitals
     Date: August 19, 2008
     Sub-agency: Centers for Medicare &
     Medicaid Services
     Action: Final rules
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -1119R
58   Rule title: Medicare Program;         The interim final rule changes the          CMS analyzed the costs and benefits of this
     Revisions to the Medicare Advantage   Medicare Advantage regulations to           interim final rule. CMS estimated the prompt
     and Prescription Drug Benefit         conform to statutory requirements           payment provisions of the rule to cost the
     Programs                              regarding special needs plans, private-     federal government a total of $670 million in
     Date: September 18, 2008              fee-for-service plans, regional preferred   calendar years 2010 to 2018. The other
                                           provider organizations plans, and           provisions will cost Medicare Advantage
     Sub-agency: Centers for Medicare &    Medicare medical savings accounts           organizations and prescription drug sponsors
     Medicaid Services                     plans. It also implements statutory         $26.7 million in 2010. CMS estimates that the
     Action: Interim final rule with       provisions governing cost-sharing for       rule will have an incurred savings in total
     comment period                        dual-eligible enrollees in the Medicare     (before the Part B premium offset) of $8.1
     Exception(s) to NPRM cited: Good      Advantage program prescription drug         billion in calendar years 2011 to 2018. CMS
     cause; statutory                      pricing, coverage, and payment              estimates that the rule will result in a net
                                           processes in the Part D program. The        savings in total of $7.43 billion to the federal
     GAO major rule report:
                                           interim final rule also sets forth new      government from 2010 to 2018.
     http://www.gao.gov/products/GAO-09
                                           requirements governing the marketing
     -51R
                                           of Part C and D plans.




                                           Page 72                                                       GAO-13-21 Federal Rulemaking
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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                      Summary of benefits, costs, and other
     Rule                                  Description                                economic effects
59   Rule title: Medicare Program; Part A The notice announces Medicare’s Part        CMS estimates that the aggregate cost to
     Premium for Calendar Year 2009 for A premium for uninsured enrollees in          enrollees paying the premiums will be about
     the Uninsured Aged and for Certain   calendar year 2009.                         $142 million in calendar year 2009 over the
     Disabled Individuals Who Have                                                    amount paid in 2008.
     Exhausted Other Entitlement
     Date: September 24, 2008
     Sub-agency: Centers for Medicare &
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/decisions/majrule
     /d0969r.pdf
60   Rule title: Medicare Program;         The notice announces the monthly        CMS estimated that the increase will cost
     Medicare Part B Monthly Actuarial     actuarial rates for aged and disabled   approximately 1.7 million Part B enrollees
     Rates, Premium Rate, and Annual       beneficiaries enrolled in Medicare Part about $770 million.
     Deductible Beginning January 1,       B beginning January 1, 2009. In
     2009                                  addition, this notice announces the
     Date: September 24, 2008              monthly premium for aged and disabled
                                           beneficiaries as well as the income-
     Sub-agency: Centers for Medicare &    related monthly adjustment amounts to
     Medicaid Services                     be paid by beneficiaries with modified
     Action: Notice                        adjusted gross income above certain
     Exception(s) to NPRM cited: Good      threshold amounts.
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -66R
61   Rule title: Medicare Program;         The notice announces the inpatient         CMS estimated that the total increase in costs
     Inpatient Hospital Deductible and     hospital deductible and the hospital and   to beneficiaries will be about $680 million, due
     Hospital and Extended Care Services   extended care services coinsurance         to the increase in the deductible and
     Coinsurance Amounts for Calendar      amounts for services furnished in          coinsurance amounts and the changes in the
     Year 2009                             calendar year 2009 under Medicare          number of deductibles and daily coinsurance
     Date: September 24, 2008              Part A.                                    amounts paid.
     Sub-agency: Centers for Medicare &
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -65R




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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                  Description                                 economic effects
62   Rule title: Medicare Program;         The notice lists the final wage indices,    CMS examined the costs and benefits of this
     Hospital Inpatient Prospective        hospital reclassifications, payment         notice. CMS projects that the increase in
     Payment Systems and Fiscal Year       rates, impacts, and other related items     operating payments in fiscal year 2009, as
     2009 Rates: Final Fiscal Year 2009    for fiscal year 2009 pursuant to the        compared to 2008, will be approximately $4.97
     Wage Indices and Payment Rates        Medicare Improvement for Patients and       billion and the increase in capital payments
     Including Implementation of Section   Providers Act of 2008.                      over the same period to be $60 million. CMS,
     124 of the Medicare Improvement for                                               therefore, expects a net increase of $5.03
     Patients and Providers Act of 2008                                                billion in the operating and capital payments to
     Date: October 3, 2008                                                             inpatient prospective payment system
                                                                                       providers.
     Sub-agency: Centers for Medicare &
     Medicaid Services
     Action: Final rule
     Exception(s) to NPRM cited: Other
     reason
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -97R
63   Rule title: Medicare Program:         This final rule revises the Medicare        CMS performed a cost-benefit analysis of the
     Changes to the Hospital Outpatient    hospital outpatient prospective payment     final rule. CMS estimates that the total
     Prospective Payment System and CY     system to implement changes made by         increase (from changes in this final rule as well
     2009 Payment Rates; Changes to the    the Medicare Improvement for Patients       as enrollment, utilization, and case-mix
     Ambulatory Surgical Center Payment    and Providers Act of 2008 and changes       changes) in expenditures under the hospital
     System and CY 2009 Payment            arising from experience with the system.    outpatient prospective payment system
     Rates; Hospital Conditions of         This final rule also revises the Medicare   (OPPS) for calendar year 2009 compared to
     Participation: Requirements for       ambulatory surgical center (ASC)            calendar year 2008 will be approximately $1.6
     Approval and Re-Approval of           payment system. These changes are           billion. CMS also estimates that the effects of
     Transplant Centers To Perform         applicable to services furnished on or      the changes to the ASC payment system
     Organ Transplants— Clarification of   after January 1, 2009.                      provisions for calendar year 2009 will have no
     Provider and Supplier Termination                                                 net effect on Medicare expenditures in CY
     Policy Medicare and Medicaid                                                      2009 compared to the level of expenditures in
     Programs: Changes to the                                                          CY 2008.
     Ambulatory Surgical Center
     Conditions for Coverage
     Date: November 18, 2008
     Sub-agency: Centers for Medicare &
     Medicaid Services
     Action: Final rule with comment
     period; final rules
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -211R




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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                  Description                                   economic effects
64   Rule title: Medicare Program;         The final rule revises the Medicare           CMS performed a cost-benefit analysis of the
     Payment Policies Under the            hospital inpatient prospective payment        final rule. CMS estimates that the final rule will
     Physician Fee Schedule and Other      system for operating and capital-related      increase expenditures for calendar year 2009
     Revisions to Part B for CY 2009; E-   costs. These changes arise from CMS’s         over the expenditures for calendar year 2008
     Prescribing Exemption for Computer-   continuing experience with these              by $3 billion.
     Generated Facsimile Transmissions;    systems and implement provisions of
     and Payment for Certain Durable       three statutes. This rule also describes
     Medical Equipment, Prosthetics,       changes to the amounts and factors
     Orthotics, and Supplies (DMEPOS)      used to determine the rates for
     Date: November 19, 2008               Medicare hospital inpatient services for
                                           operating costs and capital-related
     Sub-agency: Centers for Medicare &    costs. Further, the rule sets limits on the
     Medicaid Services                     rate of increase for certain hospitals and
     Action: Interim final rules with      hospital units that are excluded from the
     request for comments                  inpatient prospective payment system.
     Exception(s) to NPRM cited: Good
     cause (P)
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -218R
65   Rule title: Medicare Program;         The final rule revises the regulations        CMS estimates that the costs associated with
     Medicare Advantage and Prescription   governing the Medicare Advantage              revisions to the beneficiary cost sharing and
     Drug Benefit Programs: Negotiated     program (Part C) and prescription drug        reinsurance subsidy payments will be $30
     Pricing and Remaining Revisions       benefit program (Part D). The final rule      million in fiscal year 2010, with a total cost of
     Date: January 12, 2009                includes provisions regarding medical         $530 million in fiscal years 2010-2018. CMS
                                           savings account plans, cost-sharing for       estimates that the costs related to other
     Sub-agency: Centers for Medicare &    dual eligible enrollees enrolled in the       provisions in the final rule will be approximately
     Medicaid Services                     Medicare Advantage program, the               $4.38 million in fiscal year 2010 and $3.82
     Action: Final rule with comment       prescription drug payment and                 million per year in fiscal years 2011 through
     period                                innovation processes in the Part D            2018. CMS states that it has no reliable basis
     Exception(s) to NPRM cited: Good      program, and the enrollment and               for estimating the economic benefits of the
     cause                                 appeals processes for both programs.          final rule, but expects that the clarifications
                                           Also, the interim final rule relates to       included in the final rule could contribute to
     GAO major rule report:
                                           certain aspects of the Retiree Drug           greater plan efficiency and compliance with
     http://www.gao.gov/products/GAO-09
                                           Subsidy Program and reflects the new          program regulations.
     -311R
                                           statutory definitions relating to Special
                                           Needs Plans under Part C.




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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                  Description                                 economic effects
66   Rule title: Medicare Program:         The interim final rule revises the          CMS analyzed the costs and benefits of this
     Medicare Advantage and Prescription   regulations governing the Medicare          interim final rule. CMS estimates that the
     Drug Programs MIPPA Drug              prescription drug benefit program (Part     formulary requirements with respect to certain
     Formulary & Protected Classes         D). These provisions change the             categories or classes of drugs will be $4.2
     Policies                              definition of a covered Part D drug and     billion from 2010 to 2018. With respect to
     Date: January 16, 2009                add new requirements that apply to Part     economic benefits, CMS stated that it has no
                                           D formularies. This rule implements         reliable basis for estimating the effects of the
     Sub-agency: Centers for Medicare &    provisions Medicare Improvements for        proposals contained in this interim final rule.
     Medicaid Services                     Patients and Providers Act of 2008          Accordingly, CMS stated that, while there
     Action: Interim final rule with                                                   could be economic benefits associated with
     comment period                                                                    these proposals, such benefits are difficult to
     Exception(s) to NPRM cited: Good                                                  gauge at this time.
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -329R
67   Rule title: Medicare Program;         The notice updates the prospective          CMS estimates that the net effect of the
     Inpatient Psychiatric Facilities      payment rates for Medicare inpatient        updates described in this notice will result in an
     Prospective Payment System            psychiatric facilities (IPF). The changes   overall $87 million increase in payments from
     Payment Update for Rate Year          are applicable to IPF discharges            rate 2009 to rate year 2010. CMS does not
     Beginning July 1, 2009 (RY 2010)      occurring during the rate year beginning    expect changes in the quality of care or access
     Date: May 1, 2009                     July 1, 2009, through June 30, 2010.        to services for Medicare beneficiaries due to
                                                                                       this notice. CMS contends that access to IPF
     Sub-agency: Centers for Medicare &                                                services will be enhanced due to the patient-
     Medicaid Services                                                                 and facility-level adjustment factors, all of
     Action: Notice; request for                                                       which are intended to adequately reimburse
     comments                                                                          IPFs for expensive cases. Also, the outlier
     Exception(s) to NPRM cited: Good                                                  policy is intended to assist IPFs that
     cause                                                                             experience high-cost cases.
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -698R




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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                    Description                                   economic effects
68   Rule title: Medicare Program;           The final rule revises the Medicare           CMS analyzed the costs and benefits of this
     Changes to the Hospital Inpatient       hospital inpatient prospective payment        final rule. CMS estimates that the market
     Prospective Payment Systems for         systems for operating and capital-            basket update to the inpatient prospective
     Acute Care Hospitals and Fiscal Year    related costs of acute care hospitals to      payment systems rates will result in an
     2010 Rates; and Changes to the          implement changes arising from CMS’s          estimated $1.73 billion increase in fiscal year
     Long-Term Care Hospital                 continuing experience with those              2010 operating payments (or 1.6 percent
     Prospective Payment System and          systems. It also implements certain           increase), and $171 million increase in fiscal
     Rate Years 2010 and 2009 Rates          statutory provisions relating to              year 2010 capital payments (or 1.9 percent
     Date: August 27, 2009                   payments to long-term care hospitals          increase). In addition, long-term care hospitals
                                             (LTCH) and LTCH satellite facilities, the     are expected to experience an increase in
     Sub-agency: Centers for Medicare &      establishment of LTCHs and LTCH               payments by $153 million (or 3.3 percent).
     Medicaid Services                       satellite facilities, and increases in beds
     Action: Final rules and interim final   in existing LTCHs and LTCH satellite
     rule with comment period                facilities under the LTCH prospective
     Exception(s) to NPRM cited: Good        payment system.
     cause; statutory
     GAO major rule report:
     http://www.gao.gov/products/GAO-09
     -984R
69   Rule title: Medicare Program; Part A    The notice announces Medicare                 For calendar year 2010, CMS estimates that
     Premium for Calendar Year 2010 for      Hospital Insurance (Part A) premium for       the aggregate cost to enrollees paying the
     the Uninsured Aged and for Certain      uninsured enrollees in calendar year          premiums will be about $125 million more than
     Disabled Individuals Who Have           (CY) 2010. This premium is paid by            the amount they paid in calendar year 2009.
     Exhausted Other Entitlement             enrollees age 65 and over who are not         The premium for calendar year 2010 of $461 is
     Date: October 22, 2009                  otherwise eligible for benefits under         an increase of approximately 4 percent over
                                             Medicare Part A and by certain disabled       the calendar year 2009 premium of $443. CMS
     Sub-agency: Centers for Medicare &      individuals who have exhausted other          estimates that approximately 558,000
     Medicaid Services                       entitlement. The monthly Part A               enrollees will voluntarily enroll in Medicare Part
     Action: Notice                          premium for the 12 months beginning           A by paying the full premium and that an
     Exception(s) to NPRM cited: Good        January 1, 2010, for these individuals        additional 40,000 enrollees will pay the
     cause                                   will be $461. The reduced premium for         reduced premium.
                                             certain other individuals who qualify for
     GAO major rule report:
                                             a reduction of 45 percent will be $254.
     http://www.gao.gov/products/GAO-10
     -209R




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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                  Description                                  economic effects
70   Rule title: Medicare Program;         The notice announces the monthly             CMS estimated that the standard Part B
     Medicare Part B Monthly Actuarial     actuarial rates for aged (age 65 and         premium rate of $110.50, which is $14.10
     Rates, Premium Rate, and Annual       over) and disabled (under age 65)            higher than the premium for 2009, will result in
     Deductible Beginning January 1,       beneficiaries enrolled in Part B of the      about $2 billion of additional costs in 2010 for
     2010                                  Medicare Supplementary Medical               the approximately 12 million Part B enrollees
     Date: October 22, 2009                Insurance (SMI) program beginning            who pay the increase in the Part B premium.
                                           January 1, 2010. The notice announces
     Sub-agency: Centers for Medicare &    the monthly premium for aged and
     Medicaid Services                     disabled beneficiaries as well as the
     Action: Notice                        income-related monthly adjustment
     Exception(s) to NPRM cited: Good      amounts to be paid by beneficiaries with
     cause                                 modified adjusted gross income above
                                           certain threshold amounts. The monthly
     GAO major rule report:
                                           actuarial rates for 2010 are $221 for
     http://www.gao.gov/products/GAO-10
                                           aged enrollees and $270.40 for disabled
     -208R
                                           enrollees. The standard monthly Part B
                                           premium rate for 2010 is $110.50, which
                                           is equal to 50 percent of the monthly
                                           actuarial rate for aged enrollees or
                                           roughly 25 percent of the expected
                                           average total cost of Part B coverage
                                           for aged enrollees. (The 2009 standard
                                           premium rate was $96.40.) The Part B
                                           deductible for 2010 is $155 for all Part B
                                           beneficiaries. A beneficiary who has to
                                           pay an income-related monthly
                                           adjustment may have to pay a total
                                           monthly premium of roughly 35, 50, 65,
                                           or 80 percent of the total cost of Part B
                                           coverage.
71   Rule title: Medicare Program;         The notice announces the inpatient           CMS determined that the total increase in
     Inpatient Hospital Deductible and     hospital deductible and the hospital and     costs to beneficiaries will be about $730
     Hospital and Extended Care Services   extended care services coinsurance           million, due to the increase in the deductible
     Coinsurance Amounts for Calendar      amounts for services furnished in            and coinsurance amounts and the change in
     Year 2010                             calendar year 2010 under Medicare’s          the number of deductibles and daily
     Date: October 22, 2009                Hospital Insurance Program (Medicare         coinsurance amounts paid.
                                           Part A). For calendar year 2010, the
     Sub-agency: Centers for Medicare &    inpatient hospital deductible will be
     Medicaid Services                     $1,100. The daily coinsurance amounts
     Action: Notice                        for calendar year 2010 will be: (a) $275
     Exception(s) to NPRM cited: Good      for the 61st through 90th day of
     cause                                 hospitalization in a benefit period; (b)
                                           $550 for lifetime reserve days; and (c)
     GAO major rule report:
                                           $137.50 for the 21st through 100th day
     http://www.gao.gov/products/GAO-10
                                           of extended care services in a skilled
     -207R
                                           nursing facility in a benefit period.




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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                  Description                                   economic effects
72   Rule title: Medicare Program;         The final rule implements changes to          CMS performed a cost-benefit analysis of the
     Payment Policies Under the            the physician fee schedule and other          final rule. CMS estimates that the final rule will
     Physician Fee Schedule and Other      Medicare Part B payment policies to           decrease expenditures for calendar year 2010
     Revisions to Part B for CY 2010       ensure that payment systems are               over the expenditures for calendar year 2009
     Date: November 25, 2009               updated to reflect changes in medical         by more than $20 million. Therefore, CMS is
                                           practice and the relative value of            increasing the physician fee schedule
     Sub-agency: Centers for Medicare &    services. It also finalizes the calendar      conversion factor by 1.00103 to offset this
     Medicaid Services                     year 2009 interim relative value units        estimated decrease in Medicare physician
     Action: Final rule with comment       (RVU) and issues interim RVUs for             expenditures due to the calendar year 2010
     period                                calendar year 2010. As required by            RVU changes.
     Exception(s) to NPRM cited: Good      statute, the final rule announces that the
     cause; other reason                   physician fee schedule update is
                                           negative 21.2 percent for calendar year
     GAO major rule report:
                                           2010, the preliminary estimate for the
     http://www.gao.gov/products/GAO-10
                                           sustainable growth rate for calendar
     -305R
                                           year 2010 is negative 8.8 percent, and
                                           the conversion factor (CF) for calendar
                                           year 2010 is $28.4061.
73   Rule title: Regulations Restricting   The FDA is reissuing a final rule              The rule did not include estimates of the
     the Sale and Distribution of          restricting the sale, distribution, and use   costs, benefits, or transfer amounts..
     Cigarettes and Smokeless Tobacco      of cigarettes and smokeless tobacco.          (Because the Tobacco Control Act directed the
     To Protect Children and Adolescents   As required by the Family Smoking             Secretary of HHS to issue a final rule identical
     Date: March 19, 2010                  Prevention and Tobacco Control Act            in its provisions to the final rule issued on
                                           (Tobacco Control Act), FDA is issuing a       August 28, 1996, OMB did not require a
     Sub-agency: Food and Drug             final rule that is identical to the
     Administration (FDA)                                                                Regulatory Impact Analysis beyond that done
                                           provisions of the final rule on cigarettes    at that time.)
     Action: Final rule                    and smokeless tobacco published by
     Exception(s) to NPRM cited:           FDA in 1996, with certain required
     Statutory                             exceptions.
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -580R
74   Rule title: Medicare Program;         The notice updates the prospective            The net effect of the updates described in this
     Inpatient Psychiatric Facilities      payment rates for Medicare inpatient          notice results in an overall estimated $95
     Prospective Payment System            psychiatric facilities (IPF). The changes     million increase in payments from rate year
     Payment—Update for Rate Year          are applicable to IPF discharges              2010 to rate year 2011. CMS does not expect
     Beginning July 1, 2010 (RY 2011)      occurring during the rate year beginning      changes in the quality of care or access to
     Date: April 30, 2010                  July 1, 2010, through June 30, 2011.          services for Medicare beneficiaries due to this
                                                                                         notice. CMS contends that access to IPF
     Sub-agency: Centers for Medicare &                                                  services will be enhanced due to the patient-
     Medicaid Services                                                                   and facility-level adjustment factors, all of
     Action: Notice                                                                      which are intended to adequately reimburse
     Exception(s) to NPRM cited: Good                                                    IPFs for expensive cases. Also, the outlier
     cause                                                                               policy is intended to assist IPFs that
                                                                                         experience high-cost cases.
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -713R




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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                    Description                                economic effects
75   Rule title: Early Retiree Reinsurance   The interim final rule implements the      HHS analyzed the costs and benefits of this
     Program                                 Early Retiree Reinsurance Program,         interim final rule. HHS believes that the costs
     Date: May 5, 2010                       which was established by the Patient       imposed on sponsors that want to receive the
                                             Protection and Affordable Care Act. The    early retiree reimbursement will not be
     Sub-agency: Office of the Secretary     program provides reimbursement to          significant relative to the payments received.
     Action: Interim final rule with         participating employment-based plans       The costs will consist of staff or contractor time
     comment period                          for a portion of the cost of health        to complete the applications to participate, file
     Exception(s) to NPRM cited: Good        benefits for early retirees and their      claims for reimbursement, and to comply with
     cause                                   spouses, surviving spouses and             program requirements such as requests
                                             dependents. HHS will reimburse plans       related to an audit.
     GAO major rule report:
                                             for certain claims between $15,000 and     [Over the 4 year period for which funds are
     http://www.gao.gov/products/GAO-10
                                             $90,000 (with those amounts being          appropriated for this program, the agency
     -732R
                                             indexed for plan years starting on or      anticipated an overall positive transfer of $5
                                             after October 1, 2011).                    billion to eligible sponsors (and indirectly a
                                                                                        portion of those funds will be transferred for
                                                                                        the benefit of plan participants), less
                                                                                        administrative costs.]
76   Rule title: Medicare Program;           The notice contains the final wage         CMS conducted a cost-benefit analysis of this
     Hospital Inpatient Prospective          indices, hospital reclassifications,       notice. CMS estimates that the operating
     Payment Systems for Acute Care          payment rates, impacts, and other          payments to the IPPS will increase by
     Hospitals and Fiscal Year 2010          related tables effective for the fiscal    approximately $75.7 million in fiscal year 2010;
     Rates and to the Long-Term Care         year 2010 hospital inpatient prospective   the capital payments will increase by
     Hospital Prospective Payment            payment system (IPPS) and the rate         approximately $94.7 million in fiscal year 2010.
     System and Rate Year 2010 Rates:        year 2010 long-term care hospital          CMS estimates that payments to the LTCHs
     Final Fiscal Year 2010 Wage Indices     (LTCH) prospective payment system.         will decrease by approximately $11 million in
     and Payment Rates Implementing          CMS notes that the rates, tables, and      fiscal year 2010. Both of these estimates
     the Affordable Care Act                 impacts included in this notice reflect    reflect changes from the previously published
     Date: June 2, 2010                      changes required by or resulting from      estimates for fiscal year 2010.
                                             the implementation of several provisions
     Sub-agency: Centers for Medicare &      of the Affordable Care Act.
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause; interpretive rule; general
     statement of policy; and agency
     organization, procedure, or practice
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -830R




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                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
     Rule                                 Description                                     economic effects
77   Rule title: Medicare Program;        The notice updates the payment rates            CMS analyzed the costs and benefits of this
     Prospective Payment System and       used under the prospective payment              notice. CMS estimates that overall payments
     Consolidated Billing for Skilled     system for skilled nursing facilities for       for skilled nursing facilities will increase by
     Nursing Facilities for Fiscal Year   fiscal year 2011. In addition, this notice      $542 million, or 1.7 percent, in fiscal year 2011
     2011                                 also implements a provision of the              as compared to fiscal year 2010.
     Date: July 22, 2010                  Patient Protection and Affordable Care
                                          Act which postpones the
     Sub-agency: Centers for Medicare &   implementation of the Resource
     Medicaid Services                    Utilization Groups, Version 4 (RUG-IV)
     Action: Notice with comment period   case-mix classification system, but,
     Exception(s) to NPRM cited: Good     notwithstanding the postponement,
     cause                                requires the implementation of the parts
                                          of RUG-IV related to concurrent therapy
     GAO major rule report:
                                          and the look-back period.
     http://www.gao.gov/products/GAO-10
     -973R
78   Rule title: Medicare Program;        This notice updates the payment rates           CMS prepared a cost-benefit analysis for this
     Inpatient Rehabilitation Facility    for inpatient rehabilitation facilities (IRF)   notice and estimates that the total impact of
     Prospective Payment System for       for fiscal year 2011 (for discharges            these charges for fiscal year 2011 will be a net
     Federal Fiscal Year 2011             occurring on or after October 1, 2010,          increase of $135 million in payments to IRF
     Date: July 22, 2010                  and on or before September 30, 2011)            providers. Overall, the estimated payments per
                                          as required by statute. A statute               discharge for IRFs in fiscal year 2011 are
     Sub-agency: Centers for Medicare &   requires the Secretary to publish in the        projected to increase by 2.16 percent,
     Medicaid Services                    Federal Register on or before the               compared with revised estimated payments in
     Action: Notice                       August 1 that precedes the start of each        fiscal year 2010. IRF payments per discharge
     Exception(s) to NPRM cited: Good     fiscal year, the classification and             are estimated to increase 2.17 percent in
     cause                                weighting factors for the IRF                   urban areas, and 2.05 percent in rural areas,
                                          prospective payment system’s case-mix           compared with the revised estimated fiscal
     GAO major rule report:
                                          groups, and a description of the                year 2010 payments.
     http://www.gao.gov/products/GAO-10
                                          methodology and date used in
     -970R
                                          computing the prospective payment
                                          rates for that fiscal year.




                                          Page 81                                                           GAO-13-21 Federal Rulemaking
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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                  Description                                  economic effects
79   Rule title: Pre-Existing Condition    The interim final rule implements a          HHS analyzed the costs and benefits of this
     Insurance Plan Program                provision of the Patient Protection and      interim final rule. In assessing the benefits of
     Date: July 30, 2010                   Affordable Care Act which requires HHS       this rule, HHS stated that the Pre-existing
                                           to establish, either directly or through     Condition Insurance Plan (PCIP) will provide
     Sub-agency: Office of Consumer        contracts with states or nonprofit           uninsured Americans with pre-existing
     Information and Insurance Oversight   entities, a temporary high risk health       conditions and that have been denied
     (OCIIO)                               insurance pool program to provide            coverage or otherwise excluded from
     Action: Interim final rule with       affordable health insurance coverage to      purchasing insurance coverage an opportunity
     comment period                        uninsured individuals with pre-existing      to obtain coverage. HHS determined that
     Exception(s) to NPRM cited: Good      conditions. This program will continue       providing this insurance option will increase
     cause                                 until January 1, 2014. This rule             access to health care and reduce financial
                                           addresses issues such as                     strain for participants and will likely improve
     GAO major rule report:
                                           administration of the program, eligibility   health outcomes and worker productivity. HHS
     http://www.gao.gov/products/GAO-10
                                           and enrollment, benefits, premiums,          found that individuals who are especially
     -998R
                                           funding, and appeals and oversight           vulnerable as a result of existing health
                                           rules.                                       problems and financial status may receive the
                                                                                        greatest benefit from this program. HHS
                                                                                        estimated that the annual reporting and
                                                                                        recordkeeping costs associated with this
                                                                                        interim final rule will be $1.94 million. HHS
                                                                                        determined that, to the extent PCIP increases
                                                                                        access to health care services, increased
                                                                                        health care utilization and costs will result due
                                                                                        to increased uptake. HHS also identified
                                                                                        administrative costs of the rule, including the
                                                                                        cost of contractors to apply, the time cost for
                                                                                        individuals to apply, and the contractors’ costs
                                                                                        of complying with program rules (e.g.,
                                                                                        conducting appeals, preventing fraud). Finally
                                                                                        HHS estimates that under this rule $5 billion in
                                                                                        federal funds will be transferred to contractors
                                                                                        to aid in administering the program.




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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                    Description                                   economic effects
80   Rule title: Medicare Program;           The final rule revises the Medicare           CMS analyzed the costs and benefits of this
     Hospital Inpatient Prospective          hospital inpatient prospective payment        final rule. CMS estimated that the final
     Payment Systems for Acute Care          systems (IPPS) for operating and              applicable percentage increase to the inpatient
     Hospitals and the Long-Term Care        capital-related costs of acute care           prospective payment systems (IPPS) rates
     Hospital Prospective Payment            hospitals to implement changes arising        required by the statute, in conjunction with
     System Changes and FY2011 Rates;        from CMS’s continuing experience with         other final payment changes in this final rule,
     Provider Agreements and Supplier        these systems and to implement certain        will result in a $440 million decrease in fiscal
     Approvals; and Hospital Conditions of   statutory provisions. In addition, the rule   year 2011 operating payments (or negative 0.4
     Participation for Rehabilitation and    describes the changes to the amounts          percent decrease) and an estimated $21
     Respiratory Care Services; Medicaid     and factors used to determine the rates       million decrease in fiscal year 2011 capital
     Program: Accreditation for Providers    for Medicare acute care hospital              payments (or negative 0.5 percent change). In
     of Inpatient Psychiatric Services       inpatient services for operating costs        addition, long-term care hospitals (LTCHs) are
     Date: August 16, 2010                   and capital-related costs. The rule           expected to experience an increase in
                                             updates the rate-of-increase limits for       payments by $22.3 million (or 0.5 percent).
     Sub-agency: Centers for Medicare &      certain hospitals excluded from the
     Medicaid Services                       IPPS that are paid on a reasonable cost
     Action: Final rules and interim final   basis subject to these limits. Further,
     rule with comment period                this rule updates the payment policy
     Exception(s) to NPRM cited: Good        and the annual payment rates for the
     cause; statutory (P)                    Medicare prospective payment system
                                             (PPS) for inpatient hospital services
     GAO major rule report:
                                             provided by long-term care hospitals
     http://www.gao.gov/products/GAO-10
                                             (LTCH) and sets forth the changes to
     -1027R
                                             the payment rates, factors, and other
                                             payment rate policies under the LTCH
                                             PPS. In addition, the rule finalizes the
                                             implementation of statutory provisions
                                             relating to payments to LTCHs and
                                             LTCH satellite facilities and increases in
                                             beds in existing LTCHs and LTCH
                                             satellite facilities under the LTCH PPS.
81   Rule title: Medicare Program;           The notice announces the annual               CMS estimates that the total hospice
     Hospice Wage Index for Fiscal Year      update to the hospice wage index for          payments will increase by $220 million in fiscal
     2011                                    fiscal year 2011 and continues the            year 2010 when both the 2.6 percent hospital
     Date: October 1, 2010                   phase out of the wage index budget            market basket update and the 25 percent
                                             neutrality adjustment factor (BNAF),          reduction in the BNAF and updated wage data
     Sub-agency: Centers for Medicare &      with an additional 15 percent BNAF            are taken into account.
     Medicaid Services                       reduction, for a total BNAF reduction in
     Action: Notice with comment period      fiscal year 2011 of 25 percent. The
     Exception(s) to NPRM cited: Good        BNAF phase-out will continue with
     cause                                   successive 15 percent reductions from
                                             fiscal years 2012 through 2016.
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                  Description                                   economic effects
82   Rule title: Medicare Program;         The notice announces the monthly              CMS estimates the standard Part B premium
     Medicare Part B Monthly Actuarial     actuarial rates for aged and disabled         rate of $115.40 is $4.90 higher than the
     Rates, Premium Rate, and Annual       beneficiaries enrolled in Part B of the       premium for 2010, so there will be about $700
     Deductible Beginning January 1,       Medicare Supplementary Medical                million of additional costs in 2011 to the
     2011                                  Insurance program beginning January           approximately 12 million Part B enrollees who
     Date: November 9, 2010                1, 2011. In addition, this notice             pay the increase in the Part B premium.
                                           announces the monthly premium for
     Sub-agency: Centers for Medicare &    aged and disabled beneficiaries as well
     Medicaid Services                     as the income-related monthly
     Action: Notice                        adjustment amounts to be paid by
     Exception(s) to NPRM cited: Good      beneficiaries with modified adjusted
     cause; agency organization,           gross income above certain threshold
     procedure, or practice                amounts. The monthly actuarial rates
                                           for 2011 are $230.70 for aged enrollees
     GAO major rule report:
                                           and $266.30 for disabled enrollees. The
     http://www.gao.gov/products/GAO-11
                                           standard monthly Part B premium rate
     -214R
                                           for 2011 is $115.40, 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 2010 standard premium
                                           rate was $110.50.) The Part B
                                           deductible for 2011 is $162.00 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.
83   Rule title: Medicare Program;         The notice announces the inpatient            CMS estimates that the total increase in costs
     Inpatient Hospital Deductible and     hospital deductible and the hospital and      to beneficiaries is about $900 million due to the
     Hospital and Extended Care Services   extended care services coinsurance            increase in the deductible and coinsurance
     Coinsurance Amounts for CY 2011       amounts for services furnished in             amounts and the change in the number of
     Date: November 9, 2010                calendar year 2011 under Medicare’s           deductibles and daily coinsurance amounts
                                           Hospital Insurance Program (Medicare          paid.
     Sub-agency: Centers for Medicare &    Part A).
     Medicaid Services
     Action: Notice
     Exception(s) to NPRM cited: Good
     cause; agency organization,
     procedure, or practice
     GAO major rule report:
     http://www.gao.gov/products/GAO-11
     -215R




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                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
     Rule                                     Description                                 economic effects
84   Rule title: Medicare Program:            The final rule revises the Medicare         CMS performed a cost-benefit analysis of the
     Hospital Outpatient Prospective          hospital outpatient prospective payment     final rule with comment period. CMS estimates
     Payment System and CY 2011               system (OPPS) to implement applicable       that the total increase (from changes in the
     Payment Rates; Ambulatory Surgical       statutory requirements and changes          final rule with comment period as well as
     Center Payment System and CY             arising from CMS’s experience with this     enrollment, utilization, and case-mix changes)
     2011 Payment Rates; Payments to          system and to implement certain             in expenditures under the hospital OPPS for
     Hospitals for Graduate Medical           provisions of the Affordable Care Act.      calendar year 2011 compared to calendar year
     Education Costs; Physician Self-         The final rule describes the changes to     2010 will be approximately $3.2 billion. CMS
     Referral Rules and Related Changes       the amounts and factors used to             also estimates that the total increase (from
     to Provider Agreement Regulations;       determine the payment rates for             changes in the final rule with comment period
     Payment for Certified Registered         Medicare hospital outpatient services       as well as enrollment, utilization, and case-mix
     Nurse Anesthetist Services               paid under the prospective payment          changes) in expenditures under the ASC
     Furnished in Rural Hospitals and         system for services furnished on or after   payment system provisions for calendar year
     Critical Access Hospitals                January 1, 2011. In addition, this final    2011 compared to calendar year 2010 will be
     Date: November 24, 2010                  rule updates the revised Medicare           approximately $230 million.
                                              Ambulatory Surgical Center (ASC)
     Sub-agency: Centers for Medicare &       payment system to implement
     Medicaid Services                        applicable statutory requirements and
     Action: Final rule with comment          changes arising from CMS’s experience
     period; final rules; and interim final   with this system and to implement
     rule with comment period.                certain provisions of the Affordable Care
     Exception(s) to NPRM cited: Good         Act.
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-11
     -246R




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                                          Major Rules Issued without an NPRM, in Whole
                                          or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
     Rule                                 Description                                  economic effects
85   Rule title: Medicare Program;        This final rule addresses changes to the     CMS prepared a cost-benefit analysis of the
     Payment Policies Under the           physician fee schedule and other             final rule. CMS estimates that the final rule will
     Physician Fee Schedule and Other     Medicare Part B payment policies to          result in a decrease in expenditures of $17.6
     Revisions to Part B For CY 2011      ensure that payment systems are              billion for physician fee schedule (PFS)
     Date: November 29, 2010              updated to reflect changes in medical        conversion factor update. CMS estimates an
                                          practice and the relative value of           increase in expenditures of $1.97 billion for
     Sub-agency: Centers for Medicare &   services. It finalizes the calendar year     Affordable Care Act provisions.
     Medicaid Services                    2010 interim relative value units (RVU)
     Action: Final rule with comment      and issues interim RVUs for new and
     period                               revised procedure codes for calendar
     Exception(s) to NPRM cited: Good     year 2011. It also addresses,
     cause (P)                            implements, or discusses certain
                                          provisions of both the Affordable Care
     GAO major rule report:
                                          Act (ACA) and the Medicare
     http://www.gao.gov/products/GAO-11
                                          Improvements for Patients and
     -251R
                                          Providers Act of 2008 (MIPPA). In
                                          addition, this final rule discusses
                                          payments under the Ambulance Fee
                                          Schedule (AFS), the Ambulatory
                                          Surgical Center (ASC) payment system,
                                          and the Clinical Laboratory Fee
                                          Schedule (CLFS); payments to end-
                                          stage renal disease (ESRD) facilities;
                                          and payments for Part B drugs. Finally,
                                          this final rule also includes a discussion
                                          regarding the Chiropractic Services
                                          Demonstration program, the
                                          Competitive Bidding Program for
                                          durable medical equipment, prosthetics,
                                          orthotics, and supplies (CBP DMEPOS),
                                          and provider and supplier enrollment
                                          issues associated with air ambulances.




                                          Page 86                                                        GAO-13-21 Federal Rulemaking
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                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
     Rule                                      Description                              economic effects
86   Rule title: Health Insurance Issuers      The interim final rule implements the    In developing this interim final regulation, HHS
     Implementing Medical Loss Ratio           medical loss ratio (MLR) requirements    carefully considered its potential effects
     (MLR) Requirements Under the              for health insurance issuers under the   including both costs and benefits. Because of
     Patient Protection and Affordable         Public Health Service Act, as added by   data limitations, HHS did not attempt to
     Care Act                                  the Patient Protection and Affordable    quantify the benefits of this regulation.
     Date: December 1, 2010                    Care Act.                                Nonetheless, HHS was able to identify several
                                                                                        potential benefits. HHS believes one potential
     Sub-agency: Office of Consumer                                                     benefit to this regulation is greater market
     Information and Insurance Oversight                                                transparency and improved ability of
     Action: Interim final rule with request                                            consumers to make informed insurance
     for comments                                                                       choices. In addition, HHS states that issuers
     Exception(s) to NPRM cited: Good                                                   that would not otherwise meet the MLR
     cause; statutory                                                                   minimum defined by this regulation may
                                                                                        increase spending on quality-promoting
     GAO major rule report:
                                                                                        activities. According to HHS, these programs,
     http://www.gao.gov/products/GAO-11
                                                                                        which include case management, care
     -259R
                                                                                        coordination, chronic disease management,
                                                                                        and medication compliance, have the potential
                                                                                        to create a societal benefit by improving
                                                                                        outcomes and population health. HHS notes
                                                                                        that issuers that would not otherwise meet the
                                                                                        MLR minimum may also expand covered
                                                                                        benefits or reduce cost sharing. HHS believes
                                                                                        that to the extent that these changes result in
                                                                                        increased consumption of effective health
                                                                                        services, the regulation could result in
                                                                                        improved health outcomes, thereby creating a
                                                                                        societal benefit.

                                                                                        HHS has identified the primary sources of
                                                                                        costs associated with this regulation as the
                                                                                        costs associated with reporting, recordkeeping,
                                                                                        rebate notifications and payments, and other
                                                                                        costs. HHS estimates that issuers will incur
                                                                                        approximately $33 million to $67 million in one-
                                                                                        time administrative costs, and $11 million to
                                                                                        $29 million in annual ongoing administrative
                                                                                        costs related to complying with the
                                                                                        requirements of this interim final regulation
                                                                                        from 2011 through 2013. HHS notes that there
                                                                                        are two other potential types of costs
                                                                                        associated with this regulation: costs of
                                                                                        potential increases in medical care use, the
                                                                                        cost of additional quality-improving activities,
                                                                                        and costs to consumers if some issuers decide
                                                                                        to limit offered products as a result of this
                                                                                        interim final regulation.




                                               Page 87                                                   GAO-13-21 Federal Rulemaking
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                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                               Summary of benefits, costs, and other
     Rule                                       Description                                    economic effects
     Department of Homeland Security
     (DHS)
87   Rule title: Allocation of Additional H–    The interim rule implements statutory          USCIS estimates that the interim rule will
     1B Visas Created by the H–1B Visa          changes to the numerical limits of the H-      provide it with an additional $36,200,000 in
     Reform Act of 2004                         1B nonimmigrant visa category and the          fiscal year 2005 in annual fee revenue over the
     Date: May 5, 2005                          fees for filing H-1B petitions. The rule       fee revenue that would be collected under the
                                                also contains procedures to allocate the       current fee structure, based on a projected
     Sub-agency: U.S. Citizenship and           additional 20,000 H-1B numbers.                annual fee-paying volume of 20,000 approved
     Immigration Services (USCIS)               Finally, the rule announces the                petitions. In fiscal year 2006, there would be
     Action: Interim final rules with           additional fees that must be filed with        an additional $138,425,000 in fee revenue
     request for comments                       certain H-1B petitions.                        based on projected annual fee-paying volume
     Exception(s) to NPRM cited: Good                                                          of 85,000 approved petitions (20,000 new
     cause                                                                                     exemptions and 65,000 petitions).
     GAO major rule report:
     http://www.gao.gov/products/GAO-05
     -705R
88   Rule title: Chemical Facility Anti-        This interim final rule establishes risk-      DHS conducted a Regulatory Assessment that
     Terrorism Standards                        based performance standards for the            estimated the costs of this interim final rule.
     Date: April 9, 2007                        security of chemical facilities. It requires   DHS estimates the costs to be $3.6 billion over
                                                chemical facilities that pose a high-risk      the period 2006-2009 and $8.5 billion over the
     Sub-agency: N/A                            to prepare Security Vulnerability              period 2006-2015. DHS estimates that
     Action: Interim final rule                 Assessments and to develop and                 between 1,500 and 6,500 chemical facilities
     Exception(s) to NPRM cited:                implement Site Security Plans.                 will be impacted by this interim final rule and
     Statutory                                                                                 uses the estimate of 5,000 impacted facilities
                                                                                               to generate the cost estimates. According to
     GAO major rule report:
                                                                                               DHS, this interim final rule gives chemical
     http://www.gao.gov/products/GAO-07
                                                                                               facilities considerable flexibility, which will
     -747R
                                                                                               lower compliance costs. The benefit of this
                                                                                               interim final rule is decreased vulnerability of
                                                                                               high-risk chemical facilities to terrorist attack.
89   Rule title: Changes to the Visa            The interim final implements the               DHS conducted a cost-benefit analysis of this
     Waiver Program To Implement the            statutory requirements for the Electronic      interim final rule. DHS estimates that the
     Electronic System for Travel               System for Travel Authorization (ESTA)         annualized costs will be $16 million to $118
     Authorization (ESTA) Program               for aliens who wish to enter the United        million. These costs are for U.S. and foreign-
     Date: June 9, 2008                         States under the Visa Waiver Program           based air and sea carriers. Quantified benefits
                                                (VWP) at air or sea ports of entry.            of $17 million to $29 million to carriers and
     Sub-agency: Bureau of Customs                                                             CBP are for annual travel authorizations
     and Border Protection (CBP)                                                               denied by ESTA that prevent inadmissible
     Action: Interim final rule; solicitation                                                  persons from applying for admission under the
     of comments                                                                               VWP at a United States port of entry. Non-
     Exception(s) to NPRM cited: Good                                                          quantified benefits are enhanced security and
     cause; military or foreign affairs                                                        efficiency.
     function; and agency organization,
     procedure, or practice
     GAO major rule report:
     http://www.gao.gov/products/GAO-08
     -906R




                                                Page 88                                                          GAO-13-21 Federal Rulemaking
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                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                       Description                              economic effects
90   Rule title: Air Cargo Screening            The interim final rule implements a      TSA conducted a cost-benefit analysis of this
     Date: September 16, 2009                   statutory requirement to establish a     interim final rule. Over the 10-year period of
                                                system to screen 100 percent of cargo    the analysis, TSA estimates that the aggregate
     Sub-agency: Transportation Security        transported on passenger aircraft by     costs of this rulemaking to total approximately
     Administration (TSA)                       August 3, 2010.                          $2.8 billion, undiscounted. Discounted at 7
     Action: Interim final rules with                                                    percent, the cost is $1.9 billion, and discounted
     request for comments                                                                at 3 percent, the cost is $2.4 billion. The cost
     Exception(s) to NPRM cited: Good                                                    of this rule would be borne by five relevant
     cause; statutory                                                                    parties: certified cargo screening facilities
                                                                                         (CCSF), non-CCSF entities that receive
     GAO major rule report:
                                                                                         screened cargo from CCSFs, validation firms,
     http://www.gao.gov/products/GAO-09
                                                                                         aircraft operators, and TSA. Additionally,
     -1043R
                                                                                         industry will bear a cost for delayed shipment
                                                                                         of cargo estimated at $297.1 million over the
                                                                                         10-year analysis period ($203.1 million
                                                                                         discounted at 7 percent and $250.4 million
                                                                                         discounted at 3 percent). TSA anticipates
                                                                                         bearing costs to administer the provisions of
                                                                                         the rulemaking at $384 million over the 10-year
                                                                                         analysis period.
                                                                                         (Regarding benefits, the agency also said that
                                                                                         the interim final rule will allow for more
                                                                                         standard governance in cargo screening and
                                                                                         will provide benefits in terms of increased
                                                                                         security of commercial passenger aviation.)
91   Rule title: Electronic System for          The interim final rule requires ESTA     DHS conducted a cost-benefit analysis of this
     Travel Authorization (ESTA): Travel        applicants to pay a congressionally      interim final rule. DHS concluded that the
     Promotion Fee and Fee for Use of           mandated fee of $14. The fee is the      annualized cost to applicants, primarily in the
     the System                                 sum of two amounts: a $10 travel         form of transfers from foreign citizens to the
     Date: August 9, 2010                       promotion fee set by statute and a $4    U.S. government, is estimated between $152
                                                operational fee to ensure recovery of    million and $258 million. With respect to
     Sub-agency: U.S. Customs and               the full costs of providing and          benefits, DHS states that this interim final rule
     Border Protection                          administering the ESTA system.           allows DHS to comply with the Travel
     Action: Interim final rule; solicitation                                            Promotion Act of 2009 and enhances security.
     of comments
     Exception(s) to NPRM cited: Good
     cause
     GAO major rule report:
     http://www.gao.gov/products/GAO-10
     -1010R




                                                Page 89                                                    GAO-13-21 Federal Rulemaking
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                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
     Rule                                  Description                                   economic effects
92   Rule title: U.S. Citizenship and      The final rule adjusts the USCIS fee          The final rule will provide DHS with an average
     Immigration Services Fee Schedule     schedule to fully recover costs and           of $209 million in fiscal years 2010 and 2011
     Date: September 24, 2010              maintain adequate service. The final          annual fee revenue, based on a projected
                                           rule increases the fees by a weighted         annual fee-paying volume of 4.4 million
     Sub-agency: U.S. Citizenship and      average of 10 percent; establishes three      immigration benefit requests and 1.9 million
     Immigration Services                  new fees and adjusts the premium              requests for biometric services, over the fee
     Action: Final rule                    processing service by the percentage          revenue that would be collected under the
     Exception(s) to NPRM cited: Good      increase in inflation according to the        current fee structure. The increased revenue
     cause                                 Consumer Price Index-Urban                    will be used to fund the full cost of processing
                                           Consumers, published as of July 2010.         immigration benefit applications and
     GAO major rule report:
                                           The final rule also finalizes the interim     associated support benefits; the full cost of
     http://www.gao.gov/products/GAO-11
                                           rule that established the premium             providing similar benefits to asylum and
     -104R
                                           processing service and fees.                  refugee applicants; and the full cost of similar
                                                                                         benefits provided to others at no charge.
     Department of Housing and Urban
     Development (HUD)
93   Rule title: HOPE for Homeowners       The final rule sets forth the core            The Board of Directors for the HOPE for
     Program: Program Regulations          requirements for the HOPE for                 Homeowners Program prepared an economic
     Date: October 6, 2008                 Homeowners Program, a temporary               analysis in conjunction with this final rule. The
                                           program to insure refinanced loans for        Board of Directors anticipates that the net
     Sub agency: Board of Directors of     homeowners who are at risk of losing          economic benefits will exceed the costs. The
     the HOPE for Homeowners Program       their homes to foreclosure.                   Program has the potential to have significant
     Action: Final rule                                                                  economic benefits, but it is difficult to quantify
     Exception(s) to NPRM cited: Matter                                                  the benefits because the rate of participation is
     relating to public property, loans,                                                 unknown. The Board of Directors estimates
     grants, benefits or contracts                                                       that the net benefit to the lender will be
                                                                                         $10,000, but it may be higher; communities will
     GAO major rule report:
                                                                                         also experience an economic benefit by
     http://www.gao.gov/products/GAO-09
                                                                                         preventing foreclosures.
     -101R
94   Rule title: HOPE for Homeowners       The interim rule implements statutory         According to HUD, it did not prepare an
     Program; Statutory Transfer of        changes made to the HOPE for                  analysis of the costs and benefits of this
     Program Authority to HUD and          Homeowners program. These changes             interim rule. HUD did prepare an Economic
     Conforming Amendments To Adopt        include transferring responsibility for the   Analysis for this rule. HUD found that the
     Recently Enacted Statutory Changes    program to HUD, establishing an               economic impacts from the changes in this
     Date: January 12, 2010                exemption for a mortgagor who has             interim rule stem largely from increased
                                           inherited property, and revising required     participation in the H4H program. HUD
     Sub-agency: Office of the Assistant   mortgagor representations. This rule          estimates that, with 10,000 participants
     Secretary for Housing-Federal         also requires borrowers’ debt-to-income       annually, the H4H program will generate $273
     Housing Commissioner                  ratio to be calculated based on               million in net benefits to society and that H4H
     Action: Interim rule                  mortgages existing at the time of             participation could be as high as 137,500
     Exception(s) to NPRM cited: Good      application to the program. In addition,      households over the life of the program, with
     cause                                 the rule makes changes to the loan-to-        commensurately higher benefits.
                                           value thresholds, the allowable total
     GAO major rule report:
                                           monthly payments, the appreciation
     http://www.gao.gov/products/GAO-10
                                           sharing and upfront payment provisions,
     -372R
                                           the upfront and annual mortgage
                                           insurance premium requirements, and
                                           the property preservation exception to
                                           subordinate lien restrictions.




                                           Page 90                                                         GAO-13-21 Federal Rulemaking
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                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
     Rule                                      Description                                 economic effects
     Department of the Interior
95   Rule title: Oil and Gas and Sulphur       The interim final rule implements certain   BOEMRE states that the cost-benefit analysis
     Operations in the Outer Continental       safety measures recommended in the          for this rule was conducted using a scenario
     Shelf—Increased Safety Measures           report entitled, “Increased Safety          analysis. BOEMRE explains that the cost-
     for Energy Development on the Outer       Measures for Energy Development on          benefit analysis considers a regulation
     Continental Shelf                         the Outer Continental Shelf” dated May      designed to reduce the likelihood of a
     Date: October 14, 2010                    27, 2010. BOEMRE is amending drilling       catastrophic oil spill, while the costs are the
                                               regulations related to well control,        compliance costs of imposed regulation.
     Sub-agency: Bureau of Ocean               including sub-sea and surface blowout       BOEMRE notes that if another catastrophic oil
     Energy Management, Regulation and         preventers, well casing and cementing,      spill is prevented, the benefits are the avoided
     Enforcement (BOEMRE)                      secondary intervention, unplanned           costs associated with a catastrophic oil spill
     Action: Interim final rule with request   disconnects, recordkeeping, well            (e.g., reduction in expected natural resource
     for comments                              completion, and well plugging.              damages owing to the reduction in likelihood of
     Exception(s) to NPRM cited: Good                                                      failure).
     cause
     GAO major rule report:                                                                Noting that the estimated costs of this
     http://www.gao.gov/products/GAO-11                                                    rulemaking, as reflected in the compliance
     -155R                                                                                 costs of the enumerated requirements of
                                                                                           approximately $180 million per year, have a
                                                                                           strong foundation and are based on surveys of
                                                                                           public and industry sources, BOEMRE states
                                                                                           that quantification of the benefits is uncertain.
                                                                                           BOEMRE believes the benefits are
                                                                                           represented by the avoided costs of a
                                                                                           catastrophic spill, which are estimated under
                                                                                           the stipulated scenario as being $16.3 billion
                                                                                           per spill avoided. According to BOEMRE,
                                                                                           these regulations will reduce the likelihood of
                                                                                           another blowout and associated spill, but the
                                                                                           risk reduction associated with the specific
                                                                                           provisions of this rulemaking cannot be
                                                                                           quantified because there are many complex
                                                                                           factors that affect the risk of a blowout event.




                                               Page 91                                                       GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
     Rule                                    Description                                  economic effects
     Department of Labor (DOL)
96   Rule title: Performance of Functions;   The rule finalizes an interim final rule     DOL performed a cost-benefit analysis of the
     Claims for Compensation Under the       published on June 8, 2005. The rule          final rule that resulted in the following
     Energy Employees Occupational           provided for compensation payable by         estimates of the aggregate cost of benefits and
     Illness Compensation Program Act of     statute.                                     administrative costs (in millions of dollars):
     2000, as Amended
     Date: December 29, 2006                                                              Fiscal Year   Administrative Cost    Benefits
     Sub-agency: Office of Workers’                                                       2007                        $162       $1,123
     Compensation Programs,                                                               2008                        $163       $   861
     Employment Standards
     Administration                                                                       2009                        $147       $   752
                                                                                          2010                        $127       $ 656
     Action: Final rule
     Exception(s) to NPRM cited: Good                                                     2011                        $111       $ 579
     cause; Statutory
     GAO major rule report:
     http://www.gao.gov/products/GAO-07
     -330R
97   Rule title: Annual Reporting and        The final rule amends the annual             DOL concluded that the use of the 5500 Forms
     Disclosure                              reporting and disclosure requirements        will relieve plans subject to the annual
     Date: November 16, 2007                 under the Employee Retirement Income         reporting requirements from increased costs
                                             Security Act of 1974, as amended             and unreasonable administrative burdens by
     Sub-agency: Employee Benefits           (ERISA). The amendments are                  providing a standardized format that facilitates
     Security Administration                 necessary to conform the annual              reporting, eliminates duplicative reporting
     Action: Interim final rules with        reporting and disclosure regulations to      requirements, and simplifies the content of the
     request for comments                    revisions to the Form 5500, filed for        annual report in general. The 5500 Forms are
     Exception(s) to NPRM cited: Good        employee pensions and welfare benefit        intended to reduce further the administrative
     cause; other reason (P)                 plans under ERISA and the Internal           burdens and costs attributable to compliance
                                             Revenue Code. The Form 5500                  with the annual reporting requirements. Over
     GAO major rule report:
                                             changes are intended to facilitate the       the next 10 years, DOL anticipates an average
     http://www.gao.gov/products/GAO-08
                                             transition to an electronic filing system;   annual reduction in costs of more than $97
     -310R
                                             reduce and streamline annual reporting       million.
                                             burdens, especially for small
                                             businesses; and update the annual
                                             reporting forms to reflect current issues,
                                             agency priorities, and new requirements
                                             under the Pension Protection Act of
                                             2006.




                                             Page 92                                                       GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                             Summary of benefits, costs, and other
     Rule                                      Description                                   economic effects
     Department of State (State)
98   Rule title: Schedule of Fees for          The interim final rule revises the            The Department of State performed a cost-
     Consular Services, Department of          Schedule of Fees for Consular Services        benefit analysis in conjunction with this interim
     State and Overseas Embassies and          to reflect an increase in the surcharge       final rule. State determined that the net
     Consulates                                related to consular services in support       increase per application would provide State
     Date: January 29, 2008                    of enhanced border security and a             with an estimated additional $232 million in
                                               reduction in the execution fee for the        fiscal year 2008. State estimates that the
     Sub-agency: N/A                           passport book.                                increased cost of a passport book over its 10-
     Action: Interim final rule                                                              year lifetime will be minimal. Finally, State
     Exception(s) to NPRM cited: Good                                                        estimates that the interim final rule will have
     cause                                                                                   the non-quantifiable benefit of enabling State
                                                                                             to advance its goal of enhancing border
     GAO major rule report:
                                                                                             security while simultaneously investing in
     http://www.gao.gov/products/GAO-08
                                                                                             infrastructure and other developments needed
     -575R
                                                                                             to meet projected level of passport book
                                                                                             demand in fiscal year 2008 and beyond.
     Department of Transportation
99   Rule title: Hours of Service of           The interim final rule allows commercial      FMCSA updated the cost-benefit analysis it
     Drivers                                   motor vehicle drivers up to 11 hours of       had prepared for the 2005 hours of service of
     Date: December 17, 2007                   driving time within a 14-hour, non-           drivers rule [70 Fed. Reg. 49,978 (Aug. 25,
                                               extendable window from the start of the       2005)] and included the analysis with the
     Sub-agency: Federal Motor Carrier         workday, following 10 consecutive             interim final rule. FMSCA determined that the
     Safety Administration (FMCSA)             hours off duty (11-hour limit). The           analysis, as updated, continued to support
     Action: Interim final rule; request for   interim final rule also allows motor          setting the driving limit at 11 hours. FMCSA
     comments                                  carriers and drivers to restart calculation   determined that setting the driving-limit at 10
     Exception(s) to NPRM cited: Good          of the weekly on-duty time limits after       hours, as opposed to 11 hours, would have a
     cause                                     the driver has at least 34 consecutive        benefit of reducing fatigue crash risk by 5.1
                                               hours off duty (34-hour restart). The         percent, with an estimated value of $85 million
     GAO major rule report:
                                               interim final rule was made in response       per year, but that the costs in terms of
     http://www.gao.gov/products/GAO-08
                                               to a decision by the United States Court      productivity would be almost 2 percent, or an
     -390R
                                               of Appeals for the District of Columbia       estimated $586 million, leaving a net cost of
                                               Circuit to vacate the portions of the         $501 million per year by eliminating the 11th
                                               2005 rule setting the 11-hour limit and       hour.
                                               the 34-hour restart.




                                               Page 93                                                         GAO-13-21 Federal Rulemaking
                                           Appendix IV: Summary Information on Final
                                           Major Rules Issued without an NPRM, in Whole
                                           or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
      Rule                                 Description                                 economic effects
100   Rule title: Hours of Service of      The final rule adopts as final provisions   FMCSA prepared a cost-benefit analysis
      Drivers                              of an interim final rule concerning hours   comparing the current rule, which allows up to
      Date: November 19, 2008              of service for commercial motor vehicle     11 hours of driving, allows a new 7 or 8 day
                                           drivers. The final rule allows drivers to   period to begin after a 34-hour restart break,
      Sub-agency: Federal Motor Carrier    continue to drive up to 11 hours within a   and some splitting of off-duty periods using
      Safety Administration                14-hour, non-extendable window from         sleeper berths, to a second option that would
      Action: Final rule                   the start of the workday, following at      limit driving to 10 hours in a tour of duty and
      Exception(s) to NPRM cited: Good     least 10 consecutive hours off duty. The    eliminate the 34-hour restart provision. FMCSA
      cause                                final rule also allows drivers to restart   estimated that the second option would result
                                           calculation of the weekly on-duty limits    in decreased productivity yielding $2,443
      GAO major rule report:
                                           after a driver has at least 34              million in annual costs, and that it would
      http://www.gao.gov/products/GAO-09
                                           consecutive hours off duty.                 reduce crash risk by approximately 0.63
      -222R
                                                                                       percent yielding a value of $214 million per
                                                                                       year. Based on this analysis FMCSA
                                                                                       concluded that the total annual net costs
                                                                                       resulting from the second option would be
                                                                                       approximately $2,229 million. FMCSA also
                                                                                       conducted a series of sensitivity analyses,
                                                                                       where it revised its assumptions regarding the
                                                                                       percentage of all large truck crashes that are
                                                                                       fatigue related, the value of a statistical life,
                                                                                       and the relative risk of a fatigue-related crash
                                                                                       in the 11th hour of driving. FMCSA combined
                                                                                       all of the new assumptions in a way that
                                                                                       makes the elimination of driving in the 11th
                                                                                       hour more favorable from a cost-benefit
                                                                                       analysis perspective, and the exercise still
                                                                                       found the annual net costs of the second
                                                                                       option to be $71 million. Based on its cost-
                                                                                       benefit analysis and its sensitivity analyses,
                                                                                       FMCSA concluded that eliminating the 11th
                                                                                       hour of driving is unlikely to be cost-effective
                                                                                       under any reasonable set of circumstances.




                                           Page 94                                                      GAO-13-21 Federal Rulemaking
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                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                         Summary of benefits, costs, and other
      Rule                                   Description                                 economic effects
101   Rule title: Part 121 Pilot Age Limit   The final rule amends certain               FAA performed a cost-benefit analysis in
      Date: July 15, 2009                    regulations to conform with the “Fair       conjunction with the final rule, analyzing the
                                             Treatment for Experienced Pilots Act”       costs and benefits of the final rule over a 15-
      Sub-agency: Federal Aviation           by raising the upper age limit for pilots   year period and summarizing the net benefits
      Administration (FAA)                   serving in domestic, flag, and              as the discounted present value of the stream
      Action: Final rule                     supplemental operations from age 60 to      of benefits and costs. FAA determined that the
      Exception(s) to NPRM cited: Good       age 65.                                     increase in the mandatory retirement age to
      cause                                                                              age 65 will result in airlines and consumers
                                                                                         incurring ‘‘real costs’’ (which reflect real
      GAO major rule report:
                                                                                         resource use) and ‘‘transfer payments’’ (which
      http://www.gao.gov/products/GAO-09
                                                                                         are monetary payments from one group to
      -972R
                                                                                         another that do not affect total resources
                                                                                         available to society) totaling $1.8 billion
                                                                                         (present value) over 15 years. FAA determined
                                                                                         that society will have a cost savings or net
                                                                                         benefit of $334 million in terms of real resource
                                                                                         use. In addition to the quantified benefits, FAA
                                                                                         estimates that the final rule will result in an
                                                                                         increase in the supply of pilots of
                                                                                         approximately 12 percent over 5 years.
102   Rule title: Requirements and           The final rule sets forth the               NHTSA analyzed the costs and benefits of this
      Procedures for Consumer Assistance     requirements and procedures for the         final rule. NHTSA stated that it plans to hire 30
      To Recycle and Save Program            voluntary vehicle trade-in and              employees and more than 200 contractor
      Date: July 29, 2009                    purchase/lease program under the            employees to administer the program over 6
                                             Consumer Assistance to Recycle and          months. NHTSA determined that the impact of
      Sub-agency: National Highway           Save Act of 2009 (commonly known as         the program governed by this rule will most
      Traffic Safety Administration          the Cash-for-Clunkers program). This        likely not be large enough to increase
      (NHTSA)                                program helps consumers pay for new,        production by manufacturers and that dealers
      Action: Final rule                     more fuel efficient cars and trucks from    will only be selling on average 12 additional
      Exception(s) to NPRM cited: Good       a participating dealer when they trade in   vehicles. NHTSA identified the improved fuel
      cause; statutory                       a less fuel efficient car or truck.         efficiency of the on-road vehicle fleet as
                                                                                         another benefit. NHTSA noted that this will
      GAO major rule report:
                                                                                         decrease greenhouse gases and certain
      http://www.gao.gov/products/GAO-09
                                                                                         pollutants by decreasing fuel consumption,
      -981R
                                                                                         resulting in air pollution benefits. However,
                                                                                         these benefits will be dependent upon which
                                                                                         types of vehicles consumers purchase.
                                                                                         According to NHTSA, dealers may incur
                                                                                         certain costs, but that they may retain up to
                                                                                         $50 from the scrap value of trade-in vehicles to
                                                                                         offset administrative costs. Also, some related
                                                                                         industries, such as automotive repair shops,
                                                                                         may lose some profit due to foregone repairs.




                                             Page 95                                                       GAO-13-21 Federal Rulemaking
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                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
      Rule                                      Description                                economic effects
      Department of the Treasury
103   Rule title: Unfair or Deceptive Acts      The final rule amends the regulations on   The rule did not include estimates of the costs,
      or Practices; Amendment                   Prohibited Consumer Credit Practices,      benefits, or transfer amounts.
      Date: May 4, 2010                         to avoid duplication and inconsistency     OTS previously provided a regulatory impact
                                                with the Credit Card Accountability        analysis under Executive Order 12,866. 74
      Sub-agency: Office of Thrift              Responsibility and Disclosure Act of
      Supervision (OTS)                                                                    Fed. Reg. at 5551—5558. OTS notes that the
                                                2009 and the rules of the Board of         analysis addressed the impact of the
      Action: Final rule                        Governors of the Federal Reserve           consumer credit card practices in subpart C to
      Exception(s) to NPRM cited: Good          implementing that statute.                 part 535. Since this final rule removes subpart
      cause                                                                                C, OTS states that its impact will be
      GAO major rule report:                                                               eliminated.
      http://www.gao.gov/products/GAO-10
      -912R
      Department of Veterans Affairs
      (VA)
104   Rule title: Traumatic Injury              The final rule implements a statutory      VA included a cost benefit analysis with the
      Protection Rider to Servicemembers’       requirement to establish an automatic      publication of the interim final rule. VA
      Group Life Insurance                      traumatic injury protection rider to the   estimated that the final rule will produce
      Date: March 8, 2007                       Service members’ Group Life Insurance      federal budgetary costs consisting of
                                                program for any insured service            approximately $400 million in retroactive
      Sub-agency: N/A                           member who sustains certain serious        insurance payments, $68 million in start-up
      Action: Final rule                        traumatic injuries.                        costs, and annual operating costs of
      Exception(s) to NPRM cited: Good                                                     approximately $68 million. The final rule will
      cause                                                                                also increase the premium for service
                                                                                           members by $1 per month. The final rule will
      GAO major rule report:
                                                                                           provide benefits between $25,000 and
      http://www.gao.gov/products/GAO-07
                                                                                           $100,000 to qualifying service members who
      -619R
                                                                                           suffer a traumatic injury.
      Federal Reserve System
105   Rule title: Capital Adequacy              The interim final rule permits bank        The Federal Reserve did not prepare a cost-
      Guidelines: Treatment of Perpetual        holding companies that issue new           benefit analysis. However, the interim final rule
      Preferred Stock Issued to the United      senior perpetual preferred stock to the    does explain that the Federal Reserve finds
      States Treasury Under the                 Treasury under the capital purchase        strong public policy considerations to allow
      Emergency Economic Stabilization          program to include such capital            Senior Perpetual Preferred Stock issued to
      Act of 2008                               instruments in Tier 1 capital for          Treasury under the Troubled Asset Relief
      Date: October 22, 2008                    purposes of the Federal Reserve’s risk-    Program to be included as Tier 1 capital for the
                                                based and leverage capital rules and       purposes of the Federal Reserve’s risk-based
      Sub-agency: N/A                           guidelines for bank holding companies.     and leverage capital rules and guidelines, as
      Action: Interim final rule with request                                              an exception to its longstanding stance
      for public comment.                                                                  regarding the unacceptability of a rate step-up
      Exception(s) to NPRM cited: Good                                                     in other regulatory capital instruments.
      cause
      GAO major rule report:
      http://www.gao.gov/products/GAO-09
      -167R




                                                Page 96                                                     GAO-13-21 Federal Rulemaking
                                                Appendix IV: Summary Information on Final
                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                            Summary of benefits, costs, and other
      Rule                                      Description                                 economic effects
106   Rule title: Capital Adequacy              The interim final rule permits bank       The Board did not prepare a cost-benefit
      Guidelines; Small Bank Holding            holding companies that have made a        analysis in conjunction with the interim final
      Company Policy Statement:                 valid election to be taxed under          rule.
      Treatment of Subordinated Securities      Subchapter S of Chapter 1 of the U.S.
      Issued to the United States Treasury      Internal Revenue Code (S-Corp BHC)
      Under the Emergency Economic              and bank holding companies organized
      Stabilization Act of 2008                 in mutual form (Mutual BHC) to include
      Date: June 1, 2009                        the full amount of any new subordinated
                                                debt securities issued to the Treasury
      Sub-agency: Board of Governors of         under the capital purchase program in
      the Federal Reserve System (Board)        Tier 1 capital for purposes of the
      Action: Interim final rule with request   Board’s risk-based and leverage capital
      for public comment.                       guidelines for bank holding companies,
      Exception(s) to NPRM cited: Good          provided that the Subordinated
      cause                                     Securities will count toward the limit on
                                                the amount of other restricted core
      GAO major rule report:
                                                capital elements includable in Tier 1
      http://www.gao.gov/products/GAO-09
                                                capital.
      -1033R
107   Rule title: Capital Adequacy              The final rule permits bank holding         The Federal Reserve did not prepare a cost-
      Guidelines: Treatment of Perpetual        companies that issue new senior             benefit analysis. However, the final rule does
      Preferred Stock Issued to the United      perpetual preferred stock to the            explain that the Federal Reserve finds strong
      States Treasury Under the                 Treasury under the capital purchase         public policy considerations to allow Senior
      Emergency Economic Stabilization          program announced by the Secretary of       Perpetual Preferred Stock issued to Treasury
      Act of 2008                               to include such capital instruments in      under the Troubled Asset Relief Program to be
      Date: June 1, 2009                        Tier 1 capital for purposes of the          included as tier 1 capital for the purposes of
                                                Federal Reserve’s risk-based and            the Federal Reserve’s risk-based and leverage
      Sub-agency: Board of Governors of         leverage capital rules and guidelines for   capital rules and guidelines, as an exception to
      the Federal Reserve System (Board)        bank holding companies.                     its longstanding stance regarding the
      Action: Final rule                                                                    unacceptability of a rate step-up in other
      Exception(s) to NPRM cited: Good                                                      regulatory capital instruments.
      cause
      GAO major rule report:
      http://www.gao.gov/products/GAO-09
      -1034R
108   Rule title: Truth in Lending              The interim final rule amends               The Board did not prepare a cost-benefit
      Date: July 22, 2009                       Regulation Z in order to implement          analysis. However, the core provisions of this
                                                provisions of the Credit Card               interim final rule implement the statutory
      Sub-agency: Board of Governors of         Accountability Responsibility and           requirements of section 102 of the Credit Card
      the Federal Reserve System (Board)        Disclosure Act of 2009 that are effective   Act that are effective on August 20, 2009.
      Action: Interim final rule; request for   on August 20, 2009. The interim final
      public comment.                           rule pertains to advance notices of rate
      Exception(s) to NPRM cited: Good          increases and changes in terms and the
      cause                                     time consumers are given to make
                                                payments.
      GAO major rule report:
      http://www.gao.gov/products/GAO-09
      -945R




                                                Page 97                                                      GAO-13-21 Federal Rulemaking
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                                                Major Rules Issued without an NPRM, in Whole
                                                or in Part—2003 through 2010




                                                                                               Summary of benefits, costs, and other
      Rule                                      Description                                    economic effects
109   Rule title: Electronic Fund Transfers     The interim final rule amends                  In its submission to the Comptroller General,
      Date: August 17, 2010                     Regulation E, which implements the             the Board did not include a cost-benefit
                                                Electronic Fund Transfer Act, and the          analysis.
      Sub-agency: Board of Governors of         official staff commentary to the
      the Federal Reserve System (Board)        regulation, in order to implement
      Action: Interim final rule; request for   legislation that modifies the effective
      public comment.                           date of certain disclosure requirements
      Exception(s) to NPRM cited: Good          in the gift card provisions of the Credit
      cause                                     Card Accountability Responsibility and
                                                Disclosure Act of 2009.
      GAO major rule report:
      http://www.gao.gov/products/GAO-11
      -164R
      Securities and Exchange
      Commission (SEC)
110   Rule title: Amendments to                 The interim final temporary rule               SEC prepared a cost-benefit analysis in
      Regulation SHO                            addresses abusive “naked” short selling        conjunction with the interim final temporary
      Date: October 17, 2008                    in all equity securities by requiring that     rule. The rule will help maintain fair and orderly
                                                participants of a clearing agency deliver      markets against the threat of sudden and
      Sub-agency: N/A                           securities by settlement date, or if the       excessive fluctuations of securities prices.
      Action: Interim final temporary rule;     participants have not delivered shares         SEC believes the interim final temporary rule
      request for comments                      by settlement date, immediately                will benefit investors by facilitating the receipt
      Exception(s) to NPRM cited: Good          purchase or borrow securities to close         of shares so that more investors receive the
      cause                                     out the fail to deliver position by no later   benefits associated with ownership and
                                                than the beginning of regular trading          ensuring confidence that trading can be
      GAO major rule report:
                                                hours on the settlement day following          conducted without the influence of illegal
      http://www.gao.gov/products/GAO-09
                                                the day the participant incurred the fail      manipulation. SEC believes the interim final
      -236R
                                                to deliver position.                           temporary rule will benefit issuers by
                                                                                               increasing investor confidence in the market
                                                                                               for their securities which will facilitate
                                                                                               investments in their securities. SEC notes that
                                                                                               the interim final temporary rule may result in
                                                                                               increased short selling costs for investors and
                                                                                               the securities lending market. However, SEC
                                                                                               believes that the costs are justified by the fact
                                                                                               that the temporary rule may help restore,
                                                                                               maintain, and enhance investor confidence in
                                                                                               the market by preventing potentially abusive
                                                                                               “naked” short selling.




                                                Page 98                                                          GAO-13-21 Federal Rulemaking
                                              Appendix IV: Summary Information on Final
                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                           Summary of benefits, costs, and other
      Rule                                    Description                                  economic effects
111   Rule title: Disclosure of Short Sales   The interim final temporary rule adopts      SEC prepared a cost-benefit analysis in
      and Short Positions by Institutional    Exchange Act Rule 10a-3T which               conjunction with the interim final temporary
      Investment Managers                     requires institutional investment            rule. SEC expects that Rule 10a-3T and Form
      Date: October 17, 2008                  managers that exercise investment            SH will help restore investor confidence in the
                                              discretion with respect to accounts          markets and reduce manipulative behavior,
      Sub-agency: N/A                         holding section 13(f) securities having      which should help to alleviate any undue crisis
      Action: Final rule                      an aggregate fair market value of at         of investor confidence and may strengthen the
      Exception(s) to NPRM cited: Good        least $100 million to file Form SH           market’s ability to correctly incorporate
      cause                                   following a calendar week in which it        accurate information into securities prices.
                                              effected a short sale in a section 13(f)     Also, the Form SH disclosure will enable staff
      GAO major rule report:
                                              security, with some exceptions.              to study the impact of short selling on the
      http://www.gao.gov/products/GAO-09
                                                                                           market in times of financial crisis. SEC
      -137R
                                                                                           estimates the costs will be $93.5 million in
                                                                                           filing costs for the 1,000 Form SH Reports that
                                                                                           will be filed with SEC each week through
                                                                                           August 1, 2009. In addition, SEC notes that
                                                                                           many institutional managers faced costs
                                                                                           associated with creating a reporting
                                                                                           mechanism to capture the data required by
                                                                                           Form SH and will face association
                                                                                           implementation costs.
112   Rule title: Internal Control Over       The final rule amends temporary rules1       The Commission states the benefits of this rule
      Financial Reporting in Exchange Act     which extended compliance dates under        are that non-accelerated filers will be required
      Periodic Reports of Non-Accelerated     the Sarbanes-Oxley Act of 2002. Under        to complete only management’s assessment of
      Filers                                  Section 404(b) of the act, companies         compliance with the Section 404 requirements
      Date: October 19, 2009                  that are non-accelerated filers are          during the deferral period. The final rule also
                                              required to include in their annual          allows non-accelerated filers more time to
      Sub-agency: N/A                         reports an attestation report of their       better prepare for compliance with the Section
      Action: Final rules                     independent auditor on internal control      404(b) requirements and for the Section 404(b)
      Exception(s) to NPRM cited: Good        over financial reporting (ICFR) for fiscal   audit to be properly planned, scoped and
      cause                                   years ending on or after December 15,        executed. The Commission states the cost of
                                              2009. The final rule postpones for an        this rule is that investors in non-accelerated
      GAO major rule report:
                                              additional 6 months the date by which a      filers will have to wait longer than they would in
      http://www.gao.gov/products/GAO-10
                                              non-accelerated filer must begin to          the absence of the deferral for the assurances
      -177R
                                              include an auditor’s attestation report on   provided by the auditor’s attestation report and
                                              ICFR with its annual report.                 the added investor confidence that could result
                                                                                           from obtaining an independent Section 404(b)
                                                                                           attestation.




                                              Page 99                                                        GAO-13-21 Federal Rulemaking
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                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
      Rule                                    Description                                 economic effects
113   Rule title: Reporting of Security-      The interim final temporary rule requires   SEC performed a preliminary cost-benefit
      Based Swap Transaction Data             specified counterparties to pre-            analysis in conjunction with the interim final
      Date: October 20, 2010                  enactment security-based swap               temporary rule and requested comments on
                                              transactions to report certain              the costs and benefits. SEC determined that
      Sub-agency: N/A                         information relating to pre-enactment       the interim final temporary rule will provide a
      Action: Interim final temporary rule;   security-based swaps to a registered        means for SEC to gain a better understanding
      request for comments                    security-based swap data repository or      of the security-based swap markets and help
      Exception(s) to NPRM cited: Good        to SEC by the compliance date               SEC analyze the security-based swap market
      cause (P)                               established in the security-based swap      as a whole and identify risks. The interim final
                                              reporting rules required under sections     temporary rule will also facilitate the reports
      GAO major rule report:
                                              3C(e) and 13A(a) of the Securities          SEC is required to provide to Congress on
      http://www.gao.gov/products/GAO-11
                                              Exchange Act of 1934 (‘‘Exchange            security-based swaps and the security-based
      -173R
                                              Act’’), or within 60 days after a           swaps marketplace, along with having possible
                                              registered security-based swap data         benefits in encouraging management review of
                                              repository commences operations to          internal procedures and controls by market
                                              receive and maintain data concerning        participants. SEC preliminarily estimates that
                                              such security-based swaps, whichever        the interim final temporary rule could affect
                                              occurs first and report information         more than 1,000 market participants and cover
                                              relating to pre-enactment security-         approximately 2.4 million security-based swap
                                              based swaps to SEC upon request.            transactions. SEC preliminarily estimates that
                                                                                          amending internal procedures, reprogramming
                                                                                          systems, and implementing compliance
                                                                                          processes to ensure that pre-enactment
                                                                                          security-based swap transaction data is
                                                                                          preserved could result in a cost to each
                                                                                          respondent of approximately $6.236 and an
                                                                                          aggregate cost of approximately $6.24 million.
                                                                                          SEC preliminarily estimates that the
                                                                                          requirement to report the transaction
                                                                                          confirmation and time, if available, of execution
                                                                                          could result in a cost to each reporting entity of
                                                                                          approximately $43,900 and an aggregate cost
                                                                                          of approximately $43.9 million. Finally, SEC
                                                                                          preliminarily estimates that responding to SEC
                                                                                          requests for information and documents could
                                                                                          result in a cost to each reporting entity of
                                                                                          approximately $6,352 and an aggregate cost
                                                                                          of approximately $6.35 million.




                                              Page 100                                                      GAO-13-21 Federal Rulemaking
                                              Appendix IV: Summary Information on Final
                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
      Rule                                    Description                               economic effects
114   Rule title: Regulation SHO              The final rule extends for a limited      SEC generally considers the costs and
      Date: November 9, 2010                  period of time the compliance date for    benefits of its rules. According to the
                                              the amendments to Rule 201 and Rule       Commission, the delay of the compliance date
      Sub-agency: N/A                         200(g) of Regulation SHO from             for the amendments to Rule 201 and Rule
      Action: Final rule; extension of        November 10, 2010, to February 28,        200(g) of Regulation SHO will delay the
      compliance date                         2011.                                     benefits of the rules, but will also delay the
      Exception(s) to NPRM cited: Good                                                  ongoing costs of complying with the
      cause                                                                             amendments. SEC determined that the limited
                                                                                        extension is necessary and appropriate
      GAO major rule report:
                                                                                        because it will provide certain exchanges
      http://www.gao.gov/products/GAO-11
                                                                                        additional time to modify their current
      -212R
                                                                                        procedures for conducting single-priced
                                                                                        transactions for covered securities that have
                                                                                        triggered Rule 201’s circuit breakers in a
                                                                                        manner that is consistent with the goals and
                                                                                        requirements of Rule 201, and industry
                                                                                        participants additional time for programming
                                                                                        and testing for compliance with the
                                                                                        requirements of Rule 201 and Rule 200(g).
      Joint rulemakings
115   Department of Defense; General          The interim rule requires every contract The rule did not include estimates of the costs,
      Services Administration; National       entered into by an executive branch       benefits, or transfer amounts.
      Aeronautics and Space                   agency to contain a certification stating
      Administration                          that the contractor does not conduct
      Rule title: Federal Acquisition         certain business operations in Sudan. In
      Regulation; FAR Case 2008–004,          addition, this interim rule adds Burma to
      Prohibition on Restricted Business      the list of countries from which most
      Operations in Sudan and Imports         imports are prohibited.
      from Burma
      Date: June 12, 2008
      Sub-agency: N/A
      Action: Interim rule with request for
      comments
      Exception(s) to NPRM cited:
      Statutory
      GAO major rule report:
      http://www.gao.gov/products/GAO-08
      -949R




                                              Page 101                                                   GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
      Rule                                   Description                                  economic effects
116   Department of the Treasury;            The final rule provides protections for      EBSA and CMS analyzed the costs and
      Department of Labor; Department of     mothers and their newborn children with      benefits of this final rule. EBSA and CMS
      Health and Human Services              regard to the lengths of hospital stays      identified the primary economic benefit of the
      Rule title: Final Rules for Group      following childbirth. By statute, group      minimum length stays under this rule as
      Health Plans and Health Insurance      health plans and health insurance            deriving from the reduction in complications
      Issuers Under the Newborns’ and        issuers generally may not restrict           linked to the premature discharge of mothers
      Mothers’ Health Protection Act         mothers’ and newborns’ benefits for a        and newborns. ESBA and CMS estimate the
                                             hospital stay in connection with             cost of enacting federal minimum stay
      Date: October 20, 2008                 childbirth to less than 48 hours following   requirements to be between $139 and $279
      Sub-agency: Internal Revenue           a vaginal delivery or 96 hours following     million annually. However, because this final
      Service; Employee Benefits Security    a delivery by cesarean section.              rule implements an already established
      Administration (EBSA); Centers for                                                  statutory requirement, EBSA and CMS
      Medicare & Medicaid Services (CMS)                                                  conclude that the implementation costs of this
      Action: Final rule                                                                  final rule should be negligible.
      Exception(s) to NPRM cited:
      Statutory
      GAO major rule report:
      http://www.gao.gov/products/GAO-09
      -143R
117   Department of Agriculture;             The notice announces general policy          RUS and NTIA prepared a cost-benefit
      Department of Commerce                 and application procedures for               analysis for the broadband initiatives
      Rule title: Broadband Initiatives      broadband initiatives established            announced in the notice. The costs associated
      Program; Broadband Technology          pursuant to the American Recovery and        with the notice were set by the Recovery Act in
      Opportunities Program                  Reinvestment Act of 2009. In the notice,     its appropriations for the programs. The
                                             RUS establishes the Broadband                Recovery Act appropriated $4.7 billion to NTIA
      Date: July 9, 2009                     Initiatives Program (BIP) which may          for broadband grants and other programs. The
      Sub-agency: Rural Utilities Service    extend loans, grants, and loan/grant         Recovery Act also appropriated $2.5 billion to
      (RUS), Agriculture and National        combinations to facilitate broadband         RUS for broadband grants and loans. The
      Telecommunications and Information     deployment in rural areas. In the notice,    benefits include contributing toward stimulating
      Administration, Commerce (NTIA)        the NTIA establishes the Broadband           the American economy by creating a variety of
      Action: Notice of Funds Availability   Technology Opportunities Program             jobs for broadband equipment manufacturers
      (NOFA) and solicitation of             (BTOP), which makes available grants         and others. Also, the development of a faster,
      applications                           for deploying broadband infrastructure       more extensive broadband infrastructure will
                                             in unserved and underserved areas in         help U.S. businesses operate more efficiently
      Exception(s) to NPRM cited: Good
                                             the United States, enhancing                 and better compete with businesses in foreign
      cause
                                             broadband capacity and public                countries. In addition, the grants to public
      GAO major rule report:                 computer centers, and promoting              computer centers will allow vulnerable
      http://www.gao.gov/products/GAO-09     sustainable broadband adoption               populations to take advantage of the benefits
      -907R                                  programs.                                    of broadband. Finally, the overall outreach
                                                                                          efforts will help to alleviate the
                                                                                          disenfranchisement of certain populations who
                                                                                          are currently unaware of the benefits of
                                                                                          broadband, cannot afford it, or do not know
                                                                                          how to use a computer.




                                             Page 102                                                      GAO-13-21 Federal Rulemaking
                                              Appendix IV: Summary Information on Final
                                              Major Rules Issued without an NPRM, in Whole
                                              or in Part—2003 through 2010




                                                                                          Summary of benefits, costs, and other
      Rule                                    Description                                 economic effects
118   Department of the Treasury;             The interim final rule requires parity      The departments analyzed the costs and
      Department of Labor; Department of      between mental health or substance          benefits of the rule. According to the
      Health and Human Services               use disorder benefits and                   departments, the costs include costs
      Rule title: Interim Final Rules Under   medical/surgical benefits with respect to   associated with increased utilization of mental
      the Paul Wellstone and Pete             financial requirements and treatment        health and substance use disorder benefits
      Domenici Mental Health Parity and       limitations under group health plans and    and costs associated with cumulative financial
      Addiction Equity Act of 2008            health insurance coverage offered in        requirements and quantitative treatment
                                              connection with a group health plan.        limitations, including deductibles. Additionally,
      Date: February 2, 2010                  The interim final rule also makes           the departments include compliance review
      Sub-agency: Internal Revenue            conforming changes to reflect statutory     costs and costs associated with Paul
      Service; Employee Benefits Security     modifications regarding parity in           Wellstone and Pete Domenici Mental Health
      Administration; Centers for Medicare    aggregate lifetime and annual dollar        Parity and Addiction Equity Act of 2008
      & Medicaid Services                     limits, and incorporates new parity         (MHPAEA) disclosures. The departments
      Action: Interim final rules with        standards.                                  expect that the largest benefit associated with
      request for comments                                                                MHPAEA and these regulations will be derived
                                                                                          from applying parity to cumulative quantitative
      Exception(s) to NPRM cited: Good
                                                                                          treatment limitations such as annual or lifetime
      cause
                                                                                          day or visit limits (visit limitations) to help
      GAO major rule report:                                                              ensure that vulnerable populations—those
      http://www.gao.gov/products/GAO-10                                                  accessing substantial amounts of mental
      -512R                                                                               health and substance use disorder services—
                                                                                          have better access to appropriate care. The
                                                                                          departments cannot estimate how large this
                                                                                          benefit will be, because sufficient data is not
                                                                                          available to estimate the number of covered
                                                                                          individuals that had their benefits terminated
                                                                                          because they reached their coverage limit. The
                                                                                          departments state that another potential
                                                                                          benefit associated with MHPAEA and these
                                                                                          regulations is that use of mental health and
                                                                                          substance use disorder benefits could
                                                                                          improve. The departments note that the finding
                                                                                          that treatment can help increase the
                                                                                          productivity of those suffering from mental
                                                                                          illness suggests that increasing access to
                                                                                          treatment of mental disorders could have a
                                                                                          beneficial impact on lost productivity cost and
                                                                                          lost earnings that stem from untreated and
                                                                                          under treated mental health conditions and
                                                                                          substance use disorders. The departments,
                                                                                          however, do not have sufficient data to
                                                                                          determine whether this result will occur, and, if
                                                                                          it does, the extent to which lost productivity
                                                                                          cost and lost earnings could improve.
                                                                                          According to the departments, because
                                                                                          expenditures on mental health and substance
                                                                                          use disorder benefits only comprise 3-6
                                                                                          percent of the total benefits covered by a




                                              Page 103                                                      GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
      Rule                                  Description                                economic effects
                                                                                       group health plan and 8 percent of overall
                                                                                       healthcare costs, the departments expect that
                                                                                       group health plans will lower cost-sharing on
                                                                                       mental health and substance use disorder
                                                                                       benefits instead of raising cost-sharing on
                                                                                       medical/surgical benefits. (Over the 10-year
                                                                                       period of 2010 to 2019, the total undiscounted
                                                                                       cost of the rule is estimated to be $115 million
                                                                                       in 2010 dollars. The departments also
                                                                                       estimated a transfer of $25.6 billion over the
                                                                                       10-year period.)
119   Department of the Treasury;           These interim final rules implement        The Internal Revenue Service, EBSA, and
      Department of Labor; Department of    statutory requirements for group health    Department of Health and Human Services,
      Health and Human Services             plans and health insurance issuers in      Office of the Secretary, analyzed the costs and
      Rule title: Interim Final Rules for   the group and individual markets under     benefits of these interim final rules. The
      Group Health Plans and Health         provisions of the Patient Protection and   agencies determined that the benefits are
      Insurance Issuers Relating to         Affordable Care Act regarding              expected to outweigh the costs to the
      Dependent Coverage of Children to     dependent coverage of children who         regulated community. For 2011, the agencies
      Age 26 Under the Patient Protection   have not attained age 26. This rule        estimated the number of previously uninsured
      and Affordable Care Act               clarifies that, with respect to children   individuals who will be covered under their
                                            who have not attained age 26, a plan or    parents’ coverage. The agencies estimated
      Date: May 13, 2010                    issuer may not define dependent for the    that under their low-range assumptions,
      Sub-agency: Internal Revenue          purposes of eligibility for dependent      190,000 such individuals would be covered;
      Service (IRS); Employee Benefits      coverage of children other than in terms   under their mid-range assumptions, 650,000
      Security Administration (EBSA); &     of the relationship between the child      such individuals; and under their high-range
      Office of the Secretary               and the participant (in the individual     assumptions, 1.64 million such individuals.
      Action: Interim final rules with      market, the primary subscriber).           According to the agencies, expanding
      request for comments                                                             coverage options for the 19 - to - 25 year old
                                                                                       population should decrease the number
      Exception(s) to NPRM cited: Good
                                                                                       uninsured, which in turn should decrease the
      cause; statutory
                                                                                       cost-shifting of uncompensated care onto
      GAO major rule report:                                                           those with coverage, increase the receipt of
      http://www.gao.gov/products/GAO-10                                               preventive health care, and provide more
      -760R                                                                            timely access to high quality care, resulting in
                                                                                       a healthier population. In particular, the
                                                                                       agencies predict children with chronic
                                                                                       conditions or other serious health issues will
                                                                                       be able to continue coverage through a
                                                                                       parents’ plan until age 26. The agencies also
                                                                                       expect that allowing extended dependent
                                                                                       coverage will permit greater job mobility for this
                                                                                       population as their health coverage will no
                                                                                       longer be tied to their own jobs or student
                                                                                       status. The agencies estimated the annual
                                                                                       monetized costs of these interim final rules for
                                                                                       2011 through 2013 to be $11.2 million at a
                                                                                       discount rate of 7 percent and $10.4 million at
                                                                                       a discount rate of 3 percent.




                                            Page 104                                                     GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                       Summary of benefits, costs, and other
      Rule                                  Description                                economic effects
120   Department of the Treasury;           The interim final rules implement          With an estimated 2.2 million grandfathered
      Department of Labor; Department of    statutory requirements for group health    plans in 2011, EBSA and the Internal Revenue
      Health and Human Services             plans and health insurance coverage in     Service estimate an hour burden of
      Rule title: Interim Final Rules for   the group and individual markets under     approximately 538,000 hours with equivalent
      Group Health Plans and Health         provisions of the Affordable Care Act      costs of $30.7 million. The departments have
      Insurance Coverage Relating to        regarding status as a grandfathered        estimated this as a one-time cost incurred in
      Status as a Grandfathered Health      health plan. These interim final           2011, because after the first year, the
      Plan Under the Patient Protection     regulations allow family members of        departments anticipate that any future costs
      and Affordable Care Act               individuals already enrolled in a          will be de minimis. Overall, for both the
                                            grandfathered health plan to enroll in     grandfathering notice and the recordkeeping
      Date: June 17, 2010                   the plan after March 23, 2010; in such     requirement, the departments expect there to
      Sub-agency: Internal Revenue          cases, the plan or coverage is also a      be a total hour burden of 1.1 million hours and
      Service, Employee Benefits Security   grandfathered health plan with respect     a cost burden of $291,000. With an estimated
      Administration, Office of Consumer    to the family members. New employees       98,000 grandfathered plans and 7,400
      Information and Insurance Oversight   (whether newly hired or newly enrolled)    grandfathered individual insurance products in
      Action: Interim final rules with      and their families can enroll in a         2011, HHS estimates an hour burden of
      request for comments                  grandfathered group health plan after      approximately 26,000 hours with equivalent
                                            March 23, 2010, without affecting status   costs of $1.5 million. HHS has estimated this
      Exception(s) to NPRM cited: Good
                                            as a grandfathered health plan.            as a one-time cost incurred in 2011, because
      cause; statutory
                                                                                       after the first year, HHS assumes any future
      GAO major rule report:                                                           costs will be de minimis. Overall, for both the
      http://www.gao.gov/products/GAO-10                                               grandfathering notice and the recordkeeping
      -878R                                                                            requirement, HHS expects there to be a total
                                                                                       hour burden of 53,000 hours and a cost
                                                                                       burden of $318,000.

                                                                                       (The departments also identified qualitative
                                                                                       benefits including that the existence of
                                                                                       grandfathered health plans will provide
                                                                                       individuals with the benefits of plan continuity,
                                                                                       could potentially slow the rate of premium
                                                                                       growth, depending on the extent to which their
                                                                                       current plan does not include the benefits and
                                                                                       protections of the new law, and could also
                                                                                       provide incentives to employers to continue
                                                                                       coverage, potentially reducing new Medicaid
                                                                                       enrollment and spending and lowering the
                                                                                       number of uninsured individuals. According to
                                                                                       the departments, these interim final regulations
                                                                                       also provide greater certainty for plans and
                                                                                       issuers about what changes they can make
                                                                                       without affecting their grandfather status. The
                                                                                       departments concluded that, as compared with
                                                                                       alternative approaches, these regulations
                                                                                       provide significant economic and noneconomic
                                                                                       benefits to both issuers and beneficiaries,
                                                                                       though these benefits cannot be quantified at
                                                                                       this time)




                                            Page 105                                                     GAO-13-21 Federal Rulemaking
                                             Appendix IV: Summary Information on Final
                                             Major Rules Issued without an NPRM, in Whole
                                             or in Part—2003 through 2010




                                                                                        Summary of benefits, costs, and other
      Rule                                   Description                                economic effects
121   Department of the Treasury;            These interim final rules implement the    The Internal Revenue Service, EBSA, and
      Department of Labor; Department of     requirements for group health plans and    HHS analyzed the costs and benefits of these
      Health and Human Services              health insurance coverage in the group     interim final rules. The agencies stated that
      Rule title: Patient Protection and     and individual markets under provisions    they crafted these interim final rules in the
      Affordable Care Act: Preexisting       of the Patient Protection and Affordable   most economically efficient manner possible.
      Condition Exclusions, Lifetime and     Care Act regarding preexisting condition   The agencies estimate that these interim final
      Annual Limits, Rescissions, and        exclusions, lifetime and annual dollar     rules will have an annual monetized cost of
      Patient Protections                    limits on benefits, rescissions, and       $4.9 million from 2011 to 2013.
                                             patient protections.                       The agencies expect these interim final rules
      Date: June 28, 2010
                                                                                        will expand coverage for children with
      Sub-agency: Internal Revenue                                                      preexisting conditions and individuals who face
      Service, Department of the Treasury;                                              rescissions, lifetime limits, and annual limits as
      Employee Benefits Security                                                        a result of high health care costs. The
      Administration, Department of Labor;                                              agencies expect these benefits to manifest in a
      Office of Consumer Information and                                                number of ways including: (1) increasing
      Insurance, Department of Health and                                               access to health care, improving health
      Human Services                                                                    outcomes, improving worker productivity, and
      Action: Interim final rules with                                                  reducing family financial strain and “job lock”;
      request for comments.                                                             (2) promoting equity, in the sense that the
      Exception(s) to NPRM cited: Good                                                  benefits will be enjoyed by those who are
      cause; statutory                                                                  especially vulnerable as a result of health
                                                                                        problems and financial status; (3) building
      GAO major rule report:
                                                                                        better, sustained patient-provider relationships
      http://www.gao.gov/products/GAO-10
                                                                                        through choice of physician, resulting in
      -897R
                                                                                        decreased malpractice claims and improved
                                                                                        medication adherence and health promotion;
                                                                                        and (4) reducing administrative and time
                                                                                        burdens on both patients and physicians while
                                                                                        improving health outcomes by allowing quicker
                                                                                        access to medical services when necessary by
                                                                                        removing referrals and prior authorizations for
                                                                                        primary care, obstetrical and gynecological
                                                                                        care, and emergency services.




                                             Page 106                                                     GAO-13-21 Federal Rulemaking
                                            Appendix IV: Summary Information on Final
                                            Major Rules Issued without an NPRM, in Whole
                                            or in Part—2003 through 2010




                                                                                      Summary of benefits, costs, and other
      Rule                                  Description                               economic effects
122   Department of the Treasury;           These interim final rules implement the   The agencies analyzed the potential costs and
      Department of Labor; Department of    rules for group health plans and health   benefits of these interim final regulations. The
      Health and Human Services             insurance coverage in the group and       agencies anticipate the qualitative costs from
      Rule title: Interim Final Rules for   individual markets under provisions of    2011 to 2013 to include new costs to the
      Group Health Plans and Health         the Patient Protection and Affordable     health care system resulting when
      Insurance Issuers Relating to         Care Act regarding preventive health      beneficiaries increase their use of preventive
      Coverage of Preventive Services       services. These interim final rules       services in response to the changes in
      Under the Patient Protection and      generally apply to group health plans,    coverage and cost-sharing requirements of
      Affordable Care Act                   group health insurance issuers, and       preventive services. The agencies note that
                                            individual health insurance issuers for   the magnitude of this effect on utilization
      Date: July 19, 2010                   plan years beginning on or after          depends on the price elasticity of demand and
      Sub-agency: Internal Revenue          September 23, 2010.                       the percentage change in prices facing those
      Service; Employee Benefits Security                                             with reduced cost sharing or newly gaining
      Administration; Office of Consumer                                              coverage. The agencies anticipate four
      Information and Insurance Oversight                                             qualitative benefits from 2011 to 2013. First,
      Action: Interim final rules with                                                individuals will experience improved health as
      request for comments                                                            a result of reduced transmission, prevention or
                                                                                      delayed onset, and earlier treatment of
      Exception(s) to NPRM cited: Good
                                                                                      disease. Second, healthier workers and
      cause; statutory
                                                                                      children will be more productive with fewer
      GAO major rule report:                                                          missed days of work or school. Third, some of
      http://www.gao.gov/products/GAO-10                                              the recommended preventive services will
      -958R                                                                           result in savings due to lower health care
                                                                                      costs. Fourth, the cost of preventive services
                                                                                      will be distributed more equitably.




                                            Page 107                                                   GAO-13-21 Federal Rulemaking
                                               Appendix IV: Summary Information on Final
                                               Major Rules Issued without an NPRM, in Whole
                                               or in Part—2003 through 2010




                                                                                            Summary of benefits, costs, and other
      Rule                                     Description                                  economic effects
123   Department of the Treasury;              These interim final rules implement the      The Internal Revenue Service, EBSA, and
      Department of Labor; Department of       requirements regarding internal claims       HHS analyzed the costs and benefits of this
      Health and Human Services                and appeals and external review              final rule. In assessing the benefits of this rule,
      Rule title: Interim Final Rules for      processes for group health plans and         the agencies found the following: A more
      Group Health Plans and Health            health insurance coverage in the group       uniform, rigorous, and consumer friendly
      Insurance Issuers Relating to Internal   and individual markets. The regulations      system of claims and appeals processing will
      Claims and Appeals and External          will generally affect health insurance       provide a broad range of direct and indirect
      Review Processes Under the Patient       issuers; group health plans; and             benefits that will accrue to varying degrees to
      Protection and Affordable Care Act       participants, beneficiaries, and enrollees   all of the affected parties. These interim final
                                               in health insurance coverage and in          regulations could improve the extent to which
      Date: July 23, 2010                      group health plans. These rules will         employee benefit plans provide benefits
      Sub-agency: Internal Revenue             generally apply to group health plans,       consistent with the established terms of
      Service; Employee Benefits Security      group health insurance issuers, and          individual plans. While payment of these
      Administration; and Office of            individual insurance issuers for plan        benefits will largely constitute transfers, the
      Consumer Information; Insurance          years beginning on or after September        transfers will be welfare improving, because
      Oversight                                23, 2010.                                    incorrectly denied benefits will be paid. Greater
      Action: Interim final rules with                                                      certainty and consistency in the handling of
      request for comments                                                                  benefit claims and appeals and improved
                                                                                            access to information about the manner in
      Exception(s) to NPRM cited: Good
                                                                                            which claims and appeals are adjudicated
      cause; statutory
                                                                                            should lead to efficiency gains in the system,
      GAO major rule report:                                                                both in terms of the allocation of spending
      http://www.gao.gov/products/GAO-10                                                    across plans and enrollees as well as
      -989R                                                                                 operational efficiencies among individual
                                                                                            plans. This certainty and consistency can also
                                                                                            be expected to benefit, to varying degrees, all
                                                                                            parties within the system, particularly
                                                                                            consumers, and to lead to broader social
                                                                                            welfare gains.
                                                                                            The agencies estimated the costs of this rule
                                                                                            to (1) administer and conduct the internal and
                                                                                            external review process, (2) prepare and
                                                                                            distribute required disclosures and notices,
                                                                                            and (3) bring plan and issuers’ internal and
                                                                                            external claims and appeals procedures into
                                                                                            compliance with the new requirements. The
                                                                                            agencies estimate these costs to be between
                                                                                            $51.2 million and $51.6 million per year for the
                                                                                            period 2011 to 2013, depending on the
                                                                                            discount rate. The agencies also estimated the
                                                                                            dollar amount of claim denials reversed in the
                                                                                            external review process. While this amount is a
                                                                                            cost to plans, it represents a payment of
                                                                                            benefits that should have previously been paid
                                                                                            to participants, but was denied. Part of this
                                                                                            amount is a transfer from plans and issuers to
                                                                                            those now receiving payment for denied
                                                                                            benefits. These transfers will improve equity,
                                                                                            because incorrectly denied benefits will be
                                                                                            paid. Part of the amount could also be a cost if
                                                                                            the reversal leads to services and hence




                                               Page 108                                                       GAO-13-21 Federal Rulemaking
       Appendix IV: Summary Information on Final
       Major Rules Issued without an NPRM, in Whole
       or in Part—2003 through 2010




                                                Summary of benefits, costs, and other
Rule   Description                              economic effects
                                                resources being utilized now that had been
                                                denied previously. The agencies estimated the
                                                amount attributable to reversals to be between
                                                $24.4 million and $24.7 million per year for the
                                                period 2011 to 2013, depending on the
                                                discount rate.
       Source: GAO.




       Page 109                                                  GAO-13-21 Federal Rulemaking
Appendix V: Comments from the Office of
              Appendix V: Comments from the Office of
              Management and Budget



Management and Budget




              Page 110                                  GAO-13-21 Federal Rulemaking
Appendix V: Comments from the Office of
Management and Budget




Page 111                                  GAO-13-21 Federal Rulemaking
Appendix VI: GAO Contacts and Staff
                  Appendix VI: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Melissa Emrey-Arras, (617) 788-0534 or emreyarrasm@gao.gov
GAO Contacts      Robert Cramer, (202) 512-7227 or cramerr@gao.gov

                  In addition to the individuals named above, Tom Beall, Tim Bober, Sara
Staff             Daleski, Janet Dolen, Clifton G. Douglas Jr., Denise Fantone, Rob
Acknowledgments   Gebhart, Tim Guinane, Lois Hanshaw, Shirley Jones, Andrea Levine,
                  Donna Miller, Mark Ramage, Beverly Ross, Cynthia Saunders, Wesley
                  Sholtes, Lou V.B. Smith, Andrew Stephens, and Sabrina Streagle made
                  key contributions to this report.




(450906)
                  Page 112                                       GAO-13-21 Federal Rulemaking
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