Health Care Financing Administration: Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2000

Published by the Government Accountability Office on 1999-11-15.

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

United States General Accounting Office                               Office of the General Counsel
Washington, DC 20548


          November 15, 1999

          The Honorable William V. Roth
          The Honorable Daniel Patrick Moynihan
          Ranking Minority Member
          Committee on Finance
          United States Senate

          The Honorable Thomas J. Bliley, Jr.
          The Honorable John D. Dingell
          Ranking Minority Member
          Committee on Commerce
          House of Representatives

          The Honorable Bill Archer
          The Honorable Charles Rangel
          Ranking Minority Member
          Committee on Ways and Means
          House of Representatives

          Subject: Department of Health and Human Services, Health Care Financing
                   Administration: Medicare Program; Revisions to Payment Policies Under the
                   Physician Fee Schedule for Calendar Year 2000

          Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a
          major rule promulgated by the Department of Health and Human Services, Health
          Care Financing Administration (HCFA), entitled “Medicare Program; Revisions to
          Payment Policies Under the Physician Fee Schedule for Calendar Year 2000” (RIN:
          0938-AJ61). We received the rule on November 4, 1999. It was published in the
          Federal Register as a final rule on November 2, 1999. 64 Fed. Reg. 59380.

          The final rule makes several changes affecting Medicare Part B payment. The
          changes include, among others, implementation of resource-based malpractice
          insurance relative value units (RVUs), refinement of resource-based practice
          expense RVUs, and payment for physician pathology and independent laboratory

Enclosed is our assessment of HCFA’s compliance with the procedural steps
required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule.
Our review indicates that HCFA complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers,
Assistant General Counsel, at (202) 512-8210. The official responsible for GAO
evaluation work relating to the subject matter of the rule is William Scanlon,
Director, Health Financing and Public Health Issues. Mr. Scanlon can be reached at
(202) 512-7114.

Sincerely yours,

Robert P. Murphy
General Counsel


cc: Ms. Jacquelyn Y. White
    Deputy Executive Secretary
     to the Department
    Department of Health and
     Human Services

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        ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
                              ISSUED BY THE
                       FOR CALENDAR YEAR 2000"
                             (RIN: 0938-AJ61)

(i) Cost-benefit analysis

HCFA prepared cost-benefit analyses for each of the provisions of the final rule,
which are discussed in the Final Regulatory Flexibility Analysis contained in the final
rule’s preamble.

HCFA reports that the changes in the Medicare physician fee schedule are, for the
most part, budget neutral.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,
607, and 609

Because HCFA determined that this rule will have a significant economic impact on
a substantial number of small entities,1 it prepared an Initial Regulatory Flexibility
Analysis, which it published in connection with its proposed rule.

The preamble to the final rule contains the Final Regulatory Flexibility Analysis. It
explains the rationale for and purposes of the final rule, details the costs and
benefits of the rule, analyzes alternatives, and presents the measures HCFA
proposed to minimize the burden on small entities.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform
Act of 1995, 2 U.S.C. §§ 1532-1535

The final rule will not impose either an intergovernmental or private sector mandate
in any one year of $100 million or more.

 For purposes of the Regulatory Flexibility Analysis, all physicians are considered to
be small entities. There are about 700,000 physicians and other practitioners who
receive Medicare payments under the physician fee schedule.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

HCFA promulgated this rule using the notice and comment procedures of
5 U.S.C. 553. On July 22, 1999, HCFA published a Notice of Proposed Rulemaking
in the Federal Register (64 Fed. Reg. 39609) and received 2,050 comments in
response to the Notice. In the preamble to the final rule, HCFA responds to the
comments and discusses the actions it took as a result of the comments.

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

The final rule does not contain an information collection which is subject to review
by the Office of Management and Budget under the Paperwork Reduction Act.

Statutory authorization for the rule

This rule was issued under the authority of sections 1302, 1395a, and 1395hh of
Title 42 of the United States Code.

Executive Order No. 12866

The final rule was determined to be an “economically significant” regulatory action
and was reviewed and approved by the Office of Management and Budget as
complying with the requirements of the executive order.

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