22 October 2009
Three notices.
[Federal Register: October 22, 2009 (Volume 74, Number 203)]
[Notices]
[Page 54571-54579]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc09-59]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8039-N]
RIN 0938-AP48
Medicare Program; Medicare Part B Monthly Actuarial Rates,
Premium Rate, and Annual Deductible Beginning January 1, 2010
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the monthly actuarial rates for aged
(age 65 and over) and disabled (under age 65) beneficiaries enrolled in
Part B of the Medicare Supplementary Medical Insurance (SMI) program
beginning January 1, 2010. In addition, this notice announces the
monthly premium for aged and disabled beneficiaries as well as the
income-related monthly adjustment amounts to be paid by beneficiaries
with modified adjusted gross income above certain threshold amounts.
The monthly actuarial rates for 2010 are $221.00 for aged enrollees and
$270.40 for disabled 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
$155.00 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.
DATES: Effective Date: January 1, 2010.
FOR FURTHER INFORMATION CONTACT: M. Kent Clemens, (410) 786-6391.
SUPPLEMENTARY INFORMATION:
I. Background
Part B is the voluntary portion of the Medicare program that pays
all or part of the costs for physicians' services, outpatient hospital
services, certain home health services, services furnished by rural
health clinics, ambulatory surgical centers, comprehensive outpatient
rehabilitation facilities, and certain other medical and health
services not covered by Medicare Part A, Hospital Insurance. Medicare
Part B is available to individuals who are entitled to Medicare Part A,
as well as to U.S. residents who have attained age 65 and are citizens,
and aliens who were lawfully admitted for permanent residence and have
resided in the United States for 5 consecutive years. Part B requires
enrollment and payment of monthly premiums, as provided for in 42 CFR
part 407, subpart B, and part 408, respectively. Part B costs are met
by payments from the Part B account of the Supplementary Medical
Insurance Trust Fund, which is funded by the premiums paid by all
enrollees and general revenues of the Federal Government.
The Secretary of the Department of Health and Human Services (the
Secretary) is required by section 1839 of the Social Security Act (the
Act) to announce the Part B monthly actuarial rates for aged and
disabled beneficiaries as well as the monthly Part B premium. The Part
B annual deductible is included because its determination is directly
linked to the aged actuarial rate.
The monthly actuarial rates for aged and disabled enrollees are
used to determine the correct amount of general revenue financing per
beneficiary each month. These rates, according to actuarial estimates,
will initially equal, respectively, one-half the expected average
monthly cost of Part B for each aged enrollee (age 65 or over) and one-
half the expected average monthly cost of Part B for each disabled
enrollee (under age 65). The actuarial rates are then adjusted to
include any margin necessary to maintain an adequate contingency
reserve in the Part B account of the Supplementary Medical Insurance
Trust Fund.
The Part B deductible to be paid by enrollees is also announced.
Prior to the
[[Page 54572]]
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) (Pub. L. 108-173), the Part B deductible was set in statute.
After setting the 2005 deductible amount at $110.00, section 629 of the
MMA (amending section 1833(b) of the Act) requires that the Part B
deductible be indexed beginning in 2006. The inflation factor to be
used each year is the annual percentage increase in the Part B
actuarial rate for enrollees age 65 and over. Specifically, the 2010
Part B deductible is calculated by multiplying the 2009 deductible by
the ratio of the 2010 aged actuarial rate over the 2009 aged actuarial
rate. The amount determined under this formula is then rounded to the
nearest $1.
The monthly Part B premium rate to be paid by aged and disabled
enrollees is also announced. (Although the costs to the program per
disabled enrollee are different than for the aged, the statute provides
that they pay the same premium amount.) Beginning with the passage of
section 203 of the Social Security Amendments of 1972 (Pub. L. 92-603),
the premium rate, which was determined on a fiscal year basis, was
limited to the lesser of the actuarial rate for aged enrollees, or the
current monthly premium rate increased by the same percentage as the
most recent general increase in monthly Title II Social Security
benefits.
However, the passage of section 124 of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248) suspended this
premium determination process. Section 124 of TEFRA changed the premium
basis to 50 percent of the monthly actuarial rate for aged enrollees
(that is, 25 percent of program costs for aged enrollees). Section 606
of the Social Security Amendments of 1983 (Pub. L. 98-21), section 2302
of the Deficit Reduction Act of 1984 (DEFRA 84) (Pub. L. 98-369),
section 9313 of the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA 85) (Pub. L. 99-272), section 4080 of the Omnibus Budget
Reconciliation Act of 1987 (OBRA 87) (Pub. L. 100-203), and section
6301 of the Omnibus Budget Reconciliation Act of 1989 (OBRA 89) (Pub.
L. 101-239) extended the provision that the premium be based on 50
percent of the monthly actuarial rate for aged enrollees (that is, 25
percent of program costs for aged enrollees). This extension expired at
the end of 1990.
The premium rate for 1991 through 1995 was legislated by section
1839(e)(1)(B) of the Act, as added by section 4301 of the Omnibus
Budget Reconciliation Act of 1990 (OBRA 90) (Pub. L. 101-508). In
January 1996, the premium determination basis would have reverted to
the method established by the 1972 Social Security Act Amendments.
However, section 13571 of the Omnibus Budget Reconciliation Act of 1993
(OBRA 93) (Pub. L. 103-66) changed the premium basis to 50 percent of
the monthly actuarial rate for aged enrollees (that is, 25 percent of
program costs for aged enrollees) for 1996 through 1998.
Section 4571 of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-
33) permanently extended the provision that the premium be based on 50
percent of the monthly actuarial rate for aged enrollees (that is, 25
percent of program costs for aged enrollees).
The BBA included a further provision affecting the calculation of
the Part B actuarial rates and premiums for 1998 through 2003. Section
4611 of the BBA modified the home health benefit payable under Part A
for individuals enrolled in Part B. Under this section, beginning in
1998, expenditures for home health services not considered ``post-
institutional'' are payable under Part B rather than Part A. However,
section 4611(e)(1) of the BBA required that there be a transition from
1998 through 2002 for the aggregate amount of the expenditures
transferred from Part A to Part B. Section 4611(e)(2) of the BBA also
provided a specific yearly proportion for the transferred funds. The
proportions were \1/6\ for 1998, \1/3\ for 1999, \1/2\ for 2000, \2/3\
for 2001, and \5/6\ for 2002. For the purpose of determining the
correct amount of financing from general revenues of the Federal
Government, it was necessary to include only these transitional amounts
in the monthly actuarial rates for both aged and disabled enrollees,
rather than the total cost of the home health services being
transferred.
Section 4611(e)(3) of the BBA also specified, for the purpose of
determining the premium, that the monthly actuarial rate for enrollees
age 65 and over be computed as though the transition would occur for
1998 through 2003 and that \1/7\ of the cost be transferred in 1998,
\2/7\ in 1999, \3/7\ in 2000, \4/7\ in 2001, \5/7\ in 2002, and \6/7\
in 2003. Therefore, the transition period for incorporating this home
health transfer into the premium was 7 years while the transition
period for including these services in the actuarial rate was 6 years.
Section 811 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Pub. L. 108-173), also known as the Medicare
Modernization Act, or MMA), which amended section 1839 of the Act,
requires that, starting on January 1, 2007, the Part B premium a
beneficiary pays each month be based on his or her annual income.
Specifically, if a beneficiary's ``modified adjusted gross income'' is
greater than the legislated threshold amounts (for 2010, $85,000 for a
beneficiary filing an individual income tax return, and $170,000 for a
beneficiary filing a joint tax return) the beneficiary is responsible
for a larger portion of the estimated total cost of Part B benefit
coverage. In addition to the standard 25 percent premium, these
beneficiaries have to pay an income-related monthly adjustment amount.
The MMA made no change to the actuarial rate calculation, and the
standard premium, which will continue to be paid by beneficiaries whose
modified adjusted gross income is below the applicable thresholds,
still represents approximately 25 percent of the estimated total cost
to the program of Part B coverage for an aged enrollee. However,
depending on income and tax filing status, a beneficiary could be
responsible for 35, 50, 65 or 80 percent of the estimated total cost of
Part B coverage, rather than 25 percent. The end result of the higher
premium is that the Part B premium subsidy is reduced and less general
revenue financing is required for beneficiaries with higher income
because they are paying a larger share of the total cost with their
premium. That is, the premium subsidy will continue to be approximately
75 percent for beneficiaries with income below the applicable income
thresholds, but will be reduced for beneficiaries with income above
these thresholds. The MMA specified that there be a 5-year transition
to full implementation of this provision. However, section 5111 of the
Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171) modified the
transition to a 3-year period. The full reduction in the Part B premium
subsidy for beneficiaries with incomes above the applicable thresholds
is in effect for calendar years 2009 and later.
Section 4732(c) of the BBA added section 1933(c) of the Act, which
required the Secretary to allocate money from the Part B trust fund to
the State Medicaid programs for the purpose of providing Medicare Part
B premium assistance from 1998 through 2002 for the low-income Medicaid
beneficiaries who qualify under section 1933 of the Act. This
allocation, while not a benefit expenditure, was an expenditure of the
trust fund and was included in calculating the Part B actuarial rates
through 2002. For 2003 through 2010, the allocation was temporarily
extended.
A further provision affecting the calculation of the Part B premium
is
[[Page 54573]]
section 1839(f) of the Act, as amended by section 211 of the Medicare
Catastrophic Coverage Act of 1988 (MCCA 88) (Pub. L. 100-360). (The
Medicare Catastrophic Coverage Repeal Act of 1989 (Pub. L. 101-234) did
not repeal the revisions to section 1839(f) made by MCCA 88.) Section
1839(f) of the Act, referred to as the ``hold-harmless'' provision,
provides that if an individual is entitled to benefits under section
202 or 223 of the Act (the Old-Age and Survivors Insurance Benefit and
the Disability Insurance Benefit, respectively) and has the Part B
premiums deducted from these benefit payments, the premium increase
will be reduced, if necessary, to avoid causing a decrease in the
individual's net monthly payment. This decrease in payment occurs if
the increase in the individual's social security benefit due to the
cost-of-living adjustment under section 215(i) of the Act is less than
the increase in the premium. Specifically, the reduction in the premium
amount applies if the individual is entitled to benefits under section
202 or 223 of the Act for November and December of a particular year
and the individual's Part B premiums for December and the following
January are deducted from the respective month's section 202 or 223
benefits. The ``hold-harmless'' provision does not apply to
beneficiaries who are required to pay an income-related monthly
adjustment amount.
A check for benefits under section 202 or 223 of the Act is
received in the month following the month for which the benefits are
due. The Part B premium that is deducted from a particular check is the
Part B payment for the month in which the check is received. Therefore,
a benefit check for November is not received until December, but has
December's Part B premium deducted from it.
Generally, if a beneficiary qualifies for hold-harmless protection,
that is, if the beneficiary was in current payment status for November
and December of the previous year, the reduced premium for the
individual for that January and for each of the succeeding 11 months
for which he or she is entitled to benefits, under section 202 or 203
of the Act, is the greater of the following--
The monthly premium for January reduced as necessary to
make the December monthly benefits, after the deduction of the Part B
premium for January, at least equal to the preceding November's monthly
benefits, after the deduction of the Part B premium for December; or
The monthly premium for that individual for that December.
In determining the premium limitations under section 1839(f) of the
Act, the monthly benefits to which an individual is entitled under
section 202 or 223 of the Act do not include retroactive adjustments or
payments and deductions on account of work. Also, once the monthly
premium amount is established under section 1839(f) of the Act, it will
not be changed during the year even if there are retroactive
adjustments or payments and deductions on account of work that apply to
the individual's monthly benefits.
Individuals who have enrolled in Part B late or who have re-
enrolled after the termination of a coverage period are subject to an
increased premium under section 1839(b) of the Act. The increase is a
percentage of the premium and is based on the new premium rate before
any reductions under section 1839(f) of the Act are made.
II. Provisions of the Notice
A. Notice of Medicare Part B Monthly Actuarial Rates, Monthly Premium
Rates, and Annual Deductible
The Medicare Part B monthly actuarial rates applicable for 2010 are
$221.00 for enrollees age 65 and over and $270.40 for disabled
enrollees under age 65. Section II.B. of this notice below, presents
the actuarial assumptions and bases from which these rates are derived.
The Part B standard monthly premium rate for 2010 is $110.50. The Part
B annual deductible for 2010 is $155.00. Listed below are the 2010 Part
B monthly premium rates to be paid by beneficiaries who file an
individual tax return (including those who are single, head of
household, qualifying widow(er) with dependent child, or married filing
separately who lived apart from their spouse for the entire taxable
year), or a joint tax return. (The income thresholds are indexed to the
Consumer Price Index and rounded to the nearest $1,000.)
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly Total monthly
return with income: tax return with income: adjustment premium amount
amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000............... Less than or equal to $170,000 $0.00 $110.50
Greater than $85,000 and less than or equal Greater than $170,000 and less 44.20 154.70
to $107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 110.50 221.00
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 176.80 287.30
to $214,000. than or equal to $428,000.
Greater than $214,000....................... Greater than $428,000......... 243.10 353.60
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
listed below.
------------------------------------------------------------------------
Beneficiaries who are married and
lived with their spouse at any time Income-related Total monthly
during the year, but file a separate monthly adjust- premium amount
tax return from their spouse: ment amount
------------------------------------------------------------------------
Less than or equal to $85,000....... $0.00 $110.50
Greater than $85,000 and less than 176.80 287.30
or equal to $129,000...............
Greater than $129,000............... 243.10 353.60
------------------------------------------------------------------------
[[Page 54574]]
The Part B annual deductible for 2010 is $155.00 for all
beneficiaries.
B. Statement of Actuarial Assumptions and Bases Employed in Determining
the Monthly Actuarial Rates and the Monthly Premium Rate for Part B
Beginning January 2010
1. Actuarial Status of the Part B Account in the Supplementary Medical
Insurance Trust Fund
Under the statute, the starting point for determining the standard
monthly premium is the amount that would be necessary to finance Part B
on an incurred basis. This is the amount of income that would be
sufficient to pay for services furnished during that year (including
associated administrative costs) even though payment for some of these
services will not be made until after the close of the year. The
portion of income required to cover benefits not paid until after the
close of the year is added to the trust fund and used when needed.
The premium rates are established prospectively and are, therefore,
subject to projection error. Additionally, legislation enacted after
the financing was established, but effective for the period in which
the financing is set, may affect program costs. As a result, the income
to the program may not equal incurred costs. Therefore, trust fund
assets must be maintained at a level that is adequate to cover an
appropriate degree of variation between actual and projected costs, and
the amount of incurred, but unpaid, expenses. Numerous factors
determine what level of assets is appropriate to cover variation
between actual and projected costs. The three most important of these
factors are: (1) The difference from prior years between the actual
performance of the program and estimates made at the time financing was
established; (2) the likelihood and potential magnitude of expenditure
changes resulting from enactment of legislation affecting Part B costs
in a year subsequent to the establishment of financing for that year,
and (3) the expected relationship between incurred and cash
expenditures. These factors are analyzed on an ongoing basis, as the
trends can vary over time.
Table 1 summarizes the estimated actuarial status of the trust fund
as of the end of the financing period for 2008 and 2009.
Table 1--Estimated Actuarial Status of the Part B Account in the Supplementary Medical Insurance Trust Fund as
of the End of the Financing Period
----------------------------------------------------------------------------------------------------------------
Assets less
Financing period ending Assets Liabilities liabilities
(millions) (millions) (millions)
----------------------------------------------------------------------------------------------------------------
December 31, 2008............................................... $59,382 $12,490 $46,892
December 31, 2009............................................... 59,876 13,999 45,876
----------------------------------------------------------------------------------------------------------------
2. Monthly Actuarial Rate for Enrollees Age 65 and Older
The monthly actuarial rate for enrollees age 65 and older is one-
half of the sum of monthly amounts for: (1) The projected cost of
benefits; and (2) administrative expenses for each enrollee age 65 and
older, after adjustments to this sum to allow for interest earnings on
assets in the trust fund and an adequate contingency margin. The
contingency margin is an amount appropriate to provide for possible
variation between actual and projected costs and to amortize any
surplus assets or unfunded liabilities.
The monthly actuarial rate for enrollees age 65 and older for 2010
is determined by first establishing per-enrollee cost by type of
service from program data through 2008 and then projecting these costs
for subsequent years. The projection factors used for financing periods
from January 1, 2007 through December 31, 2010 are shown in Table 2.
As indicated in Table 3, the projected monthly rate required to pay
for one-half of the total of benefits and administrative costs for
enrollees age 65 and over for 2010 is $189.84. Based on current
estimates, the assets are not sufficient to cover the amount of
incurred, but unpaid, expenses and to provide for a significant degree
of variation between actual and projected costs. Thus, a positive
contingency margin is needed to increase assets to a more appropriate
level. The monthly actuarial rate of $221.00 provides an adjustment of
$34.32 for a contingency margin and -$3.16 for interest earnings.
The size of the contingency margin for 2010 is affected by several
factors. The first and largest factor involves current law formula for
physician fees, which will result in a reduction in physician fees of
approximately 21 percent in 2010 and is projected to cause additional
reductions in subsequent years. Smaller scheduled reductions in
physician payments have been legislatively avoided in every year since
2002. In recognition of the strong possibility of substantial increases
in Part B expenditures that would result from similar legislation to
override the decreases in physician fees in 2010 or later years, it is
appropriate to maintain a significantly larger Part B contingency
reserve than would otherwise be necessary. The asset level projected
for the end of 2009 is not adequate to accommodate this contingency.
A second, much smaller factor underlying the need for an adequate
contingency reserve, is the possibility for increased Part B costs in
2010 as a result of a serious flu season.
The third factor has a large impact on the level of the contingency
reserve. As noted previously, for most Part B beneficiaries the hold-
harmless provision prevents their benefits under section 202 or 223 of
the Act from decreasing as a result of an increase in the Part B
premium. The increase in the benefits under section 202 and 223 of the
Act is nearly certain to be 0 percent for 2010 and possibly for 2011.
As a result, the increase in the Part B premium for 2010 (the $14.10
increase from the 2009 standard monthly premium of $96.40 to the 2010
standard monthly premium of $110.50) will be paid by only a small
percentage of Part B enrollees. (Approximately 27 percent of
beneficiaries are not subject to the hold-harmless provision because
they are subject to the income-related additional premium amount (5
percent), they are new enrollees during the year (3 percent), or they
do not have their Part B premiums withheld from social security benefit
payments (19 percent), including those who qualify for both Medicare
and Medicaid and have their Part B premiums paid on their behalf by
Medicaid (17 percent).) In order for Part B to be adequately funded in
2010, the 2010 contingency margin has been increased to account for
this situation. However, the result is a larger-than-usual premium paid
by or on behalf of a minority of Part B enrollees.
The traditional goal for the Part B reserve has been that assets
minus liabilities at the end of a year should
[[Page 54575]]
represent between 15 and 20 percent of the following year's total
incurred expenditures. Within this range, 17 percent has been the
normal target. In view of the high probability that premiums and
matching general revenues in 2010 will be inadequate, due to the hold-
harmless provision, and the strong likelihood of actual expenditures
exceeding estimated levels, due to the enactment of legislation after
the financing has been set for a given year, a contingency reserve
ratio in excess of 20 percent of the following year's expenditures
would better ensure that the assets of the Part B account can
adequately cover the cost of incurred-but-not-reported benefits
together with variations between actual and estimated cost levels.
The actuarial rate of $221.00 per month for aged beneficiaries, as
announced in this notice for 2010, reflects the combined net effect of
the factors described above and the projection assumptions listed in
Table 2.
3. Monthly Actuarial Rate for Disabled Enrollees
Disabled enrollees are those persons under age 65 who are enrolled
in Part B because of entitlement to Social Security disability benefits
for more than 24 months or because of entitlement to Medicare under the
end-stage renal disease (ESRD) program. Projected monthly costs for
disabled enrollees (other than those with ESRD) are prepared in a
fashion parallel to the projection for the aged using appropriate
actuarial assumptions (see Table 2). Costs for the ESRD program are
projected differently because of the different nature of services
offered by the program.
As shown in Table 4, the projected monthly rate required to pay for
one-half of the total of benefits and administrative costs for disabled
enrollees for 2010 is $222.93. The monthly actuarial rate of $270.40
also provides an adjustment of -$3.64 for interest earnings and $51.11
for a contingency margin, reflecting the same factors described above
for the aged actuarial rate. Based on current estimates, the assets
associated with the disabled Medicare beneficiaries are not sufficient
to cover the amount of incurred, but unpaid, expenses and to provide
for a significant degree of variation between actual and projected
costs. Thus, a large contingency margin is needed to increase assets to
an appropriate level.
The actuarial rate of $270.40 per month for disabled beneficiaries,
as announced in this notice for 2010, reflects the combined net effect
of the factors described above for aged beneficiaries and the
projection assumptions listed in Table 2.
4. Sensitivity Testing
Several factors contribute to uncertainty about future trends in
medical care costs. It is appropriate to test the adequacy of the rates
using alternative assumptions. The results of those assumptions are
shown in Table 5. One set represents increases that are lower and,
therefore, more optimistic than the current estimate. The other set
represents increases that are higher and, therefore, more pessimistic
than the current estimate. The values for the alternative assumptions
were determined from a statistical analysis of the historical variation
in the respective increase factors.
As indicated in Table 5, the monthly actuarial rates would result
in an excess of assets over liabilities of $66,192 million by the end
of December 2010 under the assumptions used in preparing this report.
This amounts to 31 percent of the estimated total incurred expenditures
for the following year.
Assumptions that are somewhat more pessimistic (and that therefore
test the adequacy of the assets to accommodate projection errors)
produce a surplus of $42,525 million by the end of December 2010, which
amounts to 18 percent of the estimated total incurred expenditures for
the following year. Under fairly optimistic assumptions, the monthly
actuarial rates would result in a surplus of $89,783 million by the end
of December 2010, or 47 percent of the estimated total incurred
expenditures for the following year.
The above analysis indicates that the premium and general revenue
financing established for 2010, together with existing Part B account
assets would be adequate to cover estimated Part B costs for 2010 under
current law, even if actual costs prove to be somewhat greater than
expected.
5. Premium Rates and Deductible
As determined in accordance with section 1839 of the Act, listed
below are the 2010 Part B monthly premium rates to be paid by
beneficiaries who file an individual tax return (including those who
are single, head of household, qualifying widow(er) with dependent
child, or married filing separately who lived apart from their spouse
for the entire taxable year), or a joint tax return.
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly Total monthly
return with income: tax return with income: adjustment premium amount
amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000............... Less than or equal to $170,000 $0.00 $110.50
Greater than $85,000 and less than or equal Greater than $170,000 and less 44.20 154.70
to $107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 110.50 221.00
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 176.80 287.30
to $214,000. than or equal to $428,000.
Greater than $214,000....................... Greater than $428,000......... 243.10 353.60
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
listed below.
------------------------------------------------------------------------
Beneficiaries who are married and Income-related
lived with their spouse at any time monthly Total monthly
during the year, but file a separate adjustment premium amount
tax return from their spouse: amount
------------------------------------------------------------------------
Less than or equal to $85,000....... $0.00 $110.50
Greater than $85,000 and less than 176.80 287.30
or equal to $129,000...............
[[Page 54576]]
Greater than $129,000............... 243.10 353.60
------------------------------------------------------------------------
Table 2--Projection Factors\1\ 12-Month Periods Ending December 31 of 2007-2010
[In percent]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Physicians' services Durable Other Home Other
Calendar year ------------------------ medical Carrier carrier Outpatient health Hospital intermediary Managed
Fees\2\ Residual\3\ equipment LAB\4\ services\5\ hospital agency LAB\6\ services\7\ care
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aged:
2007.......................... -1.4 3.5 2.9 9.8 4.7 8.5 18.8 3.2 8.4 3.6
2008.......................... 0.4 3.8 7.6 7.9 4.7 4.9 11.6 3.9 5.0 5.1
2009.......................... 1.7 4.0 -2.1 11.1 7.4 8.9 13.4 9.3 8.9 2.0
2010.......................... -21.7 8.1 2.9 3.7 4.4 5.1 1.4 -1.7 5.1 -1.9
Disabled:
2007.......................... -1.4 3.4 3.6 13.1 6.7 8.8 20.7 6.1 8.8 4.5
2008.......................... 0.4 4.1 7.8 12.4 9.1 6.8 9.8 5.7 6.9 4.8
2009.......................... 1.7 5.5 1.3 15.6 10.0 9.6 14.2 10.4 9.6 1.9
2010.......................... -21.7 8.1 3.2 3.6 3.6 5.1 1.8 -1.7 5.1 -2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ All values for services other than managed care are per fee-for-service enrollee. Managed care values are per managed care enrollee.
\2\ As recognized for payment under the program.
\3\ Increase in the number of services received per enrollee and greater relative use of more expensive services.
\4\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\5\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, supplies,
etc.
\6\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
\7\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, rehabilitation and psychiatric
hospitals, etc.
Table 3--Derivation of Monthly Actuarial Rate for Enrollees Age 65 and Over for Financing Periods Ending
December 31, 2007 Through December 31, 2010
----------------------------------------------------------------------------------------------------------------
Financing periods
---------------------------------------------------------------
CY 2007 CY 2008 CY 2009 CY 2010
----------------------------------------------------------------------------------------------------------------
Covered services (at level recognized):
Physician fee schedule...................... 78.46 78.70 81.13 68.34
Durable medical equipment................... 9.65 9.99 9.53 9.75
Carrier lab \1\............................. 3.96 4.11 4.45 4.59
Other carrier services \2\.................. 19.74 19.88 20.81 21.60
Outpatient hospital......................... 29.87 30.18 32.03 33.48
Home health................................. 9.84 10.57 11.67 11.76
Hospital lab \3\............................ 2.80 2.79 2.98 2.91
Other intermediary services \4\............. 13.26 13.53 14.54 13.93
Managed care................................ 41.93 49.89 54.74 54.51
---------------------------------------------------------------
Total services.......................... 209.51 219.65 231.87 220.87
===============================================================
Cost sharing: ..............
Deductible.................................. -5.33 -5.49 -5.50 -6.32
Coinsurance................................. -30.74 -30.31 -31.42 -28.29
---------------------------------------------------------------
Total benefits.......................... 173.44 183.84 194.95 186.26
===============================================================
Administrative expenses......................... 5.68 2.95 3.41 3.58
Incurred expenditures........................... 179.12 186.79 198.36 189.84
Value of interest............................... -1.98 -3.35 -2.83 -3.16
Contingency margin for projection error and to 9.86 9.26 -2.83 34.32
amortize the surplus or deficit................
---------------------------------------------------------------
Monthly actuarial rate...................... 187.00 192.70 192.70 221.00
----------------------------------------------------------------------------------------------------------------
\1\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\2\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services,
parenteral and enteral drug costs, supplies, etc.
\3\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
\4\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health
centers, and rehabilitation and psychiatric hospitals, etc.
[[Page 54577]]
Table 4--Derivation of Monthly Actuarial Rate for Disabled Enrollees for Financing Periods Ending December 31,
2007 Through December 31, 2010
----------------------------------------------------------------------------------------------------------------
Financing periods
---------------------------------------------------------------
CY 2007 CY 2008 CY 2009 CY 2010
----------------------------------------------------------------------------------------------------------------
Covered services (at level recognized):
Physician fee schedule...................... 78.44 79.83 84.46 71.37
Durable medical equipment................... 16.95 17.76 17.76 18.29
Carrier lab \1\............................. 5.00 5.41 6.10 6.31
Other carrier services \2\.................. 23.11 24.47 26.57 27.45
Outpatient hospital......................... 40.10 41.44 44.75 46.92
Home health................................. 8.24 8.79 9.89 10.05
Hospital lab \3\............................ 4.37 4.47 4.85 4.75
Other intermediary services \4\............. 40.76 41.29 43.26 43.48
Managed care................................ 29.87 36.50 39.83 39.49
---------------------------------------------------------------
Total services.......................... 246.85 259.96 277.47 268.11
===============================================================
Cost sharing:
Deductible.................................. -5.00 -5.11 -5.15 -5.92
Coinsurance................................. -43.83 -44.25 -46.42 -43.08
---------------------------------------------------------------
Total benefits.......................... 198.03 210.60 225.90 219.11
===============================================================
Administrative expenses......................... 3.85 3.37 3.66 3.82
Incurred expenditures........................... 201.88 213.97 229.56 222.93
Value of interest............................... -3.37 -4.32 -3.29 -3.64
Contingency margin for projection error and to -1.21 0.05 -2.07 51.11
amortize the surplus or deficit................
---------------------------------------------------------------
Monthly actuarial rate...................... 197.30 209.70 224.20 270.40
----------------------------------------------------------------------------------------------------------------
\1\ Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab.
\2\ Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services,
parenteral and enteral drug costs, supplies, etc.
\3\ Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital.
\4\ Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health
centers, rehabilitation and psychiatric hospitals, etc.
Table 5--Actuarial Status of the Part B Account in the SMI Trust Fund Under Three Sets of Assumptions for
Financing Periods Through December 31, 2010
----------------------------------------------------------------------------------------------------------------
As of December 31, 2008 2009 2010
----------------------------------------------------------------------------------------------------------------
This projection:
Actuarial status (in millions):.......................... ............... ............... ...............
Assets................................................... 59,382 59,876 79,611
Liabilities.............................................. 12,490 13,999 13,419
--------------------------------------------------
Assets less liabilities.................................. 46,892 45,876 66,192
Ratio (in percent) \1\............................... 22.6 22.7 31.4
==================================================
Low cost projection: ............... ............... ...............
Actuarial status (in millions):.......................... ............... ............... ...............
Assets................................................... 59,382 67,931 102,532
Liabilities.............................................. 12,490 13,188 12,748
--------------------------------------------------
Assets less liabilities.................................. 46,892 54,744 89,783
Ratio (in percent) \1\............................... 23.6 29.2 47.4
==================================================
High cost projection: ............... ............... ...............
Actuarial status (in millions):.......................... ............... ............... ...............
Assets................................................... 59,382 52,148 56,681
Liabilities.............................................. 12,490 14,778 14,156
--------------------------------------------------
Assets less liabilities.................................. 46,892 37,370 42,525
Ratio (in percent)\1\................................ 21.8 17.2 18.2
----------------------------------------------------------------------------------------------------------------
\1\ Ratio of assets less liabilities at the end of the year to the total incurred expenditures during the
following year, expressed as a percent.
III. Regulatory Impact Analysis
We have examined the impacts of this notice as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub.
L. 96-354), section 1102(b) of the Social Security Act, section 202 of
the Unfunded
[[Page 54578]]
Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any one year).
We have examined the impact of this notice as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review) and the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity).
The RFA requires agencies to analyze options for regulatory relief
of small businesses, if a rule has a significant impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7 million to $34.5 million in any 1 year. Individuals and
States are not included in the definition of a small entity. Therefore,
the Secretary has determined that this notice will not have a
significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. The Secretary has
determined that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals. Therefore,
we are not preparing analyses for either the RFA or section 1102(b) of
the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2008, that
threshold is approximately $133 million. This notice does not contain
mandates that will impose spending costs on State, local or tribal
governments in the aggregate, or by the private sector in any one year
of $133 million or more.
Executive Order 13132 establishes certain requirements that an
agency must meet when it publishes a proposed rule (and subsequent
final rule) that imposes substantial direct compliance costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have determined that this notice does not
significantly affect the rights, roles, and responsibilities of States.
This notice announces that the monthly actuarial rates applicable
for 2010 are $221.00 for enrollees age 65 and over and $270.40 for
disabled enrollees under age 65. The Part B deductible for calendar
year 2010 is $155.00. The notice also announces the 2010 monthly Part B
premium rates to be paid by beneficiaries who file an individual tax
return (including those who are single, head of household, qualifying
widow(er) with a dependent child, or married filing separately who
lived apart from their spouse for the entire taxable year), or a joint
tax return.
----------------------------------------------------------------------------------------------------------------
Income-related
Beneficiaries who file an individual tax Beneficiaries who file a joint monthly adjust- Total monthly
return with income: tax return with income: ment amount premium amount
----------------------------------------------------------------------------------------------------------------
Less than or equal to $85,000............... Less than or equal to $170,000 $0.00 $110.50
Greater than $85,000 and less than or equal Greater than $170,000 and less 44.20 154.70
to $107,000. than or equal to $214,000.
Greater than $107,000 and less than or equal Greater than $214,000 and less 110.50 221.00
to $160,000. than or equal to $320,000.
Greater than $160,000 and less than or equal Greater than $320,000 and less 176.80 287.30
to $214,000. than or equal to $428,000.
Greater than $214,000....................... Greater than $428,000......... 243.10 353.60
----------------------------------------------------------------------------------------------------------------
In addition, the monthly premium rates to be paid by beneficiaries
who are married and lived with their spouse at any time during the
taxable year, but file a separate tax return from their spouse, are
also announced and listed below.
------------------------------------------------------------------------
Beneficiaries who are married and
lived with their spouse at any time Income-related Total monthly
during the year, but file a separate monthly adjust- premium amount
tax return from their spouse: ment amount
------------------------------------------------------------------------
Less than or equal to $85,000....... $0.00 $110.50
Greater than $85,000 and less than 176.80 287.30
or equal to $129,000...............
Greater than $129,000............... 243.10 353.60
------------------------------------------------------------------------
The standard Part B premium rate of $110.50 is $14.10 higher than
the premium for 2009, so there will be about $2 billion of additional
costs in 2010 to the approximately 12 million Part B enrollees who pay
the increase in the Part B premium. Therefore, this notice is a major
rule as defined in 5 U.S.C. 804(2) and is an economically significant
rule under Executive Order 12866.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
[[Page 54579]]
IV. Waiver of Proposed Notice
The statute requires publication of the monthly actuarial rates and
the Part B premium amounts. We ordinarily use general notices, rather
than notice and comment rulemaking procedures, to make such
announcements. In doing so, we note that, under the Administrative
Procedure Act, interpretive rules, general statements of policy, and
rules of agency organization, procedure, or practice are excepted from
the requirements of notice and comment rulemaking.
We considered publishing a proposed notice to provide a period for
public comment. However, we may waive that procedure if we find, for
good cause, that prior notice and comment are impracticable,
unnecessary, or contrary to the public interest. We find that the
procedure for notice and comment is unnecessary because the formulas
used to calculate the Part B premiums are statutorily directed, and we
can exercise no discretion in applying those formulas. Moreover, the
statute establishes the time period for which the premium rates will
apply, and delaying publication of the Part B premium rate such that it
would not be published before that time would be contrary to the public
interest. Therefore, we find good cause to waive publication of a
proposed notice and solicitation of public comments.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: October 14, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: October 16, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-25370 Filed 10-16-09; 4:15 pm]
BILLING CODE 4120-01-P
[Federal Register: October 22, 2009 (Volume 74, Number 203)]
[Notices]
[Page 54579-54581]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc09-60]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8037-N]
RIN 0938-AP42
Medicare Program; Inpatient Hospital Deductible and Hospital and
Extended Care Services Coinsurance Amounts for Calendar Year 2010
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2010 under Medicare's Hospital
Insurance Program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts. For CY 2010, the inpatient
hospital deductible will be $1,100. The daily coinsurance amounts for
CY 2010 will be--(a) $275 for the 61st through 90th day of
hospitalization in a benefit period; (b) $550 for lifetime reserve
days; and (c) $137.50 for the 21st through 100th day of extended care
services in a skilled nursing facility in a benefit period.
DATES: Effective Date: This notice is effective on January 1, 2010.
FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390 for
general information. Gregory J. Savord, (410) 786-1521 for case-mix
analysis.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires us to determine
and publish each year the amount of the inpatient hospital deductible
and the hospital and extended care services coinsurance amounts
applicable for services furnished in the following CY.
II. Computing the Inpatient Hospital Deductible for CY 2010
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by our best estimate of the payment-weighted
average of the applicable percentage increases (as defined in section
1886(b)(3)(B) of the Act) used for updating the payment rates to
hospitals for discharges in the fiscal year (FY) that begins on October
1 of the same preceding CY, and adjusted to reflect changes in real
case-mix. The adjustment to reflect real case-mix is determined on the
basis of the most recent case-mix data available. The amount determined
under this formula is rounded to the nearest multiple of $4 (or, if
midway between two multiples of $4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2010 for hospitals
paid under the inpatient prospective payment system is the market
basket percentage increase, otherwise known as the market basket
update. Under section 1886(b)(3)(B)(viii) of the Act, hospitals will
receive the full market basket update only if they submit quality data
as specified by the Secretary. The market basket update for hospitals
that do not submit this data is reduced by 2.0 percentage points. We
are estimating that after accounting for those hospitals receiving the
lower market basket update in the payment-weighted average update, the
calculated deductible will remain the same.
Under section 1886(b)(3)(B)(ii)(VIII) of the Act, the percentage
increase used to update the payment rates for FY 2010 for hospitals
excluded from the prospective payment system is the market basket
percentage increase, defined according to section 1886(b)(3)(B)(iii) of
the Act.
The market basket percentage increase for 2010 is 2.1 percent, as
announced in the final rule with comment period published in the
Federal Register on August 27, 2009 entitled, ``Medicare Program;
Changes to the Hospital Inpatient Prospective Payment Systems for Acute
Care Hospitals and Fiscal Year 2010 Rates; and Changes to the Long-Term
Care Hospital Prospective Payment System and Rate Years 2010 and 2009
Rates (IPPS/RY 2010 LTCH PPS) (74 FR 43754).'' Therefore, the
percentage increase for hospitals paid under the prospective payment
system is 2.1 percent. The average payment percentage increase for
hospitals excluded from the prospective payment system is 2.5 percent.
Weighting these percentages in accordance with payment volume, our best
estimate of the payment-weighted average of the increases in the
payment rates for FY 2010 is 2.15 percent.
To develop the adjustment to reflect changes in real case-mix, we
first calculated for each hospital an average case-mix that reflects
the relative costliness of that hospital's mix of cases compared to
those of other hospitals. We then computed the change in average case-
mix for hospitals paid under the Medicare prospective payment system in
FY 2009 compared to FY 2008. (We excluded from this calculation
hospitals whose payments are not based on the Acute care prospective
payment system because their payments are based on alternate
[[Page 54580]]
prospective payment systems or reasonable costs.) We used Medicare
bills from prospective payment hospitals that we received as of June
2009. These bills represent a total of about 9.0 million Medicare
discharges for FY 2009 and provide the most recent case-mix data
available at this time. Based on these bills, the change in average
case-mix in FY 2009 is 2.5 percent. Based on these bills and past
experience, we expect the overall case mix change to be 3.1 percent as
the year progresses and more FY 2009 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case-mix change that
is determined to be real. In the FY 2010 IPPS/RY 2010 LTCH PPS final
rule with comment period, we indicated that we believe the adoption of
the Medicare severity-based diagnosis-related groups (MS-DRGs) led to
increases in aggregate payments without a corresponding increase in
actual patient severity of illness due to the incentives for improved
documentation and coding. In that final rule with comment period, we
estimated that changes in coding or classification that do not reflect
real change in case-mix would be 2.3 percent for FY 2009. Therefore,
since we are expecting overall case mix to increase by 3.1 percent and
2.3 percent of that to be caused by coding changes, real case-mix
changes resulted in an increase of 0.8 percent for FY 2009.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
2.15 percent, and the real case-mix adjustment factor for the
deductible is 0.8 percent. Therefore, under the statutory formula, the
inpatient hospital deductible for services furnished in CY 2010 is
$1,100. This deductible amount is determined by multiplying $1,068 (the
inpatient hospital deductible for CY 2009) by the payment-weighted
average increase in the payment rates of 1.0215 multiplied by the
increase in real case-mix of 1.008, which equals $1,099.69 and is
rounded to $1,100.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2010
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2010, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$275 (one-fourth of the inpatient hospital deductible); the daily
coinsurance for lifetime reserve days will be $550 (one-half of the
inpatient hospital deductible); and the daily coinsurance for the 21st
through 100th day of extended care services in a skilled nursing
facility in a benefit period will be $137.50 (one-eighth of the
inpatient hospital deductible).
IV. Cost to Medicare Beneficiaries
Table 1 below summarizes the deductible and coinsurance amounts for
CYs 2009 and 2010, as well as the number of each that is estimated to
be paid.
Table 1--Part A Deductible and Coinsurance Amounts for Calendar Years 2009 and 2010
----------------------------------------------------------------------------------------------------------------
Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2009 2010 2009 2010
----------------------------------------------------------------------------------------------------------------
Inpatient hospital deductible................... $1068 $1100 8.70 8.80
Daily coinsurance for 61st-90th day............. 267 275 2.27 2.30
Daily coinsurance for lifetime reserve days..... 534 550 1.12 1.13
SNF coinsurance................................. 133.50 137.50 40.79 41.74
----------------------------------------------------------------------------------------------------------------
The estimated total increase in costs to beneficiaries is about
$730 million (rounded to the nearest $10 million) due to--(1) the
increase in the deductible and coinsurance amounts; and (2) the change
in the number of deductibles and daily coinsurance amounts paid.
V. Waiver of Proposed Notice and Comment Period
The Medicare statute, as discussed previously, requires publication
of the Medicare Part A inpatient hospital deductible and the hospital
and extended care services coinsurance amounts for services for each
CY. The amounts are determined according to the statute. As has been
our custom, we use general notices, rather than notice and comment
rulemaking procedures, to make the announcements. In doing so, we
acknowledge that, under the Administrative Procedure Act (APA),
interpretive rules, general statements of policy, and rules of agency
organization, procedure, or practice are excepted from the requirements
of notice and comment rulemaking.
We considered publishing a proposed notice to provide a period for
public comment. However, we may waive that procedure if we find good
cause that prior notice and comment are impracticable, unnecessary, or
contrary to the public interest. We find that the procedure for notice
and comment is unnecessary because the formulae used to calculate the
inpatient hospital deductible and hospital and extended care services
coinsurance amounts are statutorily directed, and we can exercise no
discretion in following the formulae. Moreover, the statute establishes
the time period for which the deductible and coinsurance amounts will
apply and delaying publication would be contrary to the public
interest. Therefore, we find good cause to waive publication of a
proposed notice and solicitation of public comments.
VI. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
VII. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub.
L. 96-354), section 1102(b) of the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the
[[Page 54581]]
Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). As stated in
section IV of this notice, we estimate that the total increase in costs
to beneficiaries associated with this notice is about $730 million due
to--(1) The increase in the deductible and coinsurance amounts; and (2)
the change in the number of deductibles and daily coinsurance amounts
paid. Therefore, this notice is a major rule as defined in Title 5,
United States Code, section 804(2), and is an economically significant
rule under Executive Order 12866.
The RFA requires agencies to analyze options for regulatory relief
of small businesses, if a rule has a significant impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and
government agencies. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7.0 million to $34.5 million in any 1 year. Individuals
and States are not included in the definition of a small entity. We
have determined that this notice will not have a significant economic
impact on a substantial number of small entities. Therefore, we are not
preparing an analysis under the RFA.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. The Secretary has
determined that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals. Therefore,
we are not preparing an analysis under section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2009, that
threshold is approximately $133 million. This notice has no
consequential effect on State, local, or Tribal governments or on the
private sector. However, States may be required to pay the deductibles
and coinsurance for dually-eligible beneficiaries.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This notice will not have a substantial effect on State
or local governments.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 1, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: September 17, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-25372 Filed 10-16-09; 4:15 pm]
BILLING CODE 4120-01-P
[Federal Register: October 22, 2009 (Volume 74, Number 203)]
[Notices]
[Page 54581-54583]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc09-61]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8038-N]
RIN 0938-AP43
Medicare Program; Part A Premium for Calendar Year 2010 for the
Uninsured Aged and for Certain Disabled Individuals Who Have Exhausted
Other Entitlement
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This annual notice announces Medicare's Hospital Insurance
(Part A) premium for uninsured enrollees in calendar year (CY) 2010.
This premium is paid by enrollees age 65 and over who are not otherwise
eligible for benefits under Medicare Part A (hereafter known as the
``uninsured aged'') and by certain disabled individuals who have
exhausted other entitlement. The monthly Part A premium for the 12
months beginning January 1, 2010 for these individuals will be $461.
The reduced premium for certain other individuals as described in this
notice will be $254.
DATES: Effective Date: This notice is effective on January 1, 2010.
FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1818 of the Social Security Act (the Act) provides for
voluntary enrollment in the Medicare Hospital Insurance Program
(Medicare Part A), subject to payment of a monthly premium, of certain
persons aged 65 and older who are uninsured under the Old-Age,
Survivors, and Disability Insurance (OASDI) program or the Railroad
Retirement Act and do not otherwise meet the requirements for
entitlement to Medicare Part A. (Persons insured under the OASDI
program or the Railroad Retirement Act and certain others do not have
to pay premiums for Medicare Part A.)
Section 1818A of the Act provides for voluntary enrollment in
Medicare Part A, subject to payment of a monthly premium of certain
disabled individuals who have exhausted other entitlement. These are
individuals who were entitled to coverage due to a disabling impairment
under section 226(b) of the Act, but are no longer entitled to
disability benefits and free Medicare Part A coverage because they have
gone back to work and their earnings exceed the statutorily defined
``substantial gainful activity'' amount (section 223(d)(4) of the Act).
Section 1818A(d)(2) of the Act specifies that the provisions
relating to premiums under section 1818(d) through section 1818(f) of
the Act for the aged will also apply to certain disabled individuals as
described above.
Section 1818(d) of the Act requires us to estimate, on an average
per capita basis, the amount to be paid from the Federal Hospital
Insurance Trust Fund for services incurred in the following calendar
year (CY) (including the associated administrative costs) on behalf of
individuals aged 65 and over who will be entitled to benefits under
Medicare Part A. We must then determine, during September of each year,
the monthly actuarial rate for the following year (the per capita
amount estimated above divided by 12) and publish the dollar amount for
the monthly premium in the succeeding CY. If the premium is not a
multiple of $1, the premium is rounded to the nearest multiple of $1
(or, if it is a multiple of
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50 cents but not of $1, it is rounded to the next highest $1).
Section 13508 of the Omnibus Budget Reconciliation Act of 1993
(Pub. L. 103-66) amended section 1818(d) of the Act to provide for a
reduction in the premium amount for certain voluntary enrollees
(section 1818 and section 1818A of the Act). The reduction applies to
an individual who is eligible to buy into the Medicare Part A program
and who, as of the last day of the previous month--
Had at least 30 quarters of coverage under Title II of the
Act;
Was married, and had been married for the previous 1-year
period, to a person who had at least 30 quarters of coverage;
Had been married to a person for at least 1 year at the
time of the person's death if, at the time of death, the person had at
least 30 quarters of coverage; or
Is divorced from a person and had been married to the
person for at least 10 years at the time of the divorce if, at the time
of the divorce, the person had at least 30 quarters of coverage.
Section 1818(d)(4)(A) of the Act specifies that the premium that
these individuals will pay for CY 2010 will be equal to the premium for
uninsured aged enrollees reduced by 45 percent.
II. Monthly Premium Amount for CY 2010
The monthly premium for the uninsured aged and certain disabled
individuals who have exhausted other entitlement for the 12 months
beginning January 1, 2010, is $461.
The monthly premium for those individuals subject to the 45 percent
reduction in the monthly premium is $254.
III. Monthly Premium Rate Calculation
As discussed in section I of this notice, the monthly Medicare Part
A premium is equal to the estimated monthly actuarial rate for CY 2010
rounded to the nearest multiple of $1 and equals one-twelfth of the
average per capita amount, which is determined by projecting the number
of Part A enrollees aged 65 years and over as well as the benefits and
administrative costs that will be incurred on their behalf.
The steps involved in projecting these future costs to the Federal
Hospital Insurance Trust Fund are:
Establishing the present cost of services furnished to
beneficiaries, by type of service, to serve as a projection base;
Projecting increases in payment amounts for each of the
service types; and
Projecting increases in administrative costs.
We base our projections for CY 2010 on--(1) current historical
data; and (2) projection assumptions derived from current law and the
Mid-Session Review of the President's Fiscal Year 2010 Budget.
We estimate that in CY 2010, 38,086,139 people aged 65 years and
over will be entitled to benefits (without premium payment) and that
they will incur about $210.795 billion in benefits and related
administrative costs. Thus, the estimated monthly average per capita
amount is $461.22 and the monthly premium is $461. The full monthly
premium reduced by 45 percent is $254.
IV. Costs to Beneficiaries
The CY 2010 premium of $461 is approximately 4 percent higher than
the CY 2009 premium of $443.
We estimate that approximately 558,000 enrollees will voluntarily
enroll in Medicare Part A by paying the full premium. We estimate an
additional 40,000 enrollees will pay the reduced premium. We estimate
that the aggregate cost to enrollees paying these premiums will be
about $125 million in CY 2010 more than the amount that they paid in CY
2009.
V. Waiver of Proposed Notice and Comment Period
We are not using notice and comment rulemaking in this notification
of Medicare Part A premiums for CY 2010, as that procedure is
unnecessary because of the lack of discretion in the statutory formula
that is used to calculate the premium and the solely ministerial
function that this notice serves. The Administrative Procedure Act
(APA) permits agencies to waive notice and comment rulemaking when
notice and public comment thereon are unnecessary. On this basis, we
waive publication of a proposed notice and a solicitation of public
comments.
VI. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub.
L. 96-354), section 1102(b) of the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). As stated in
section IV of this notice, we estimate that the overall effect of these
changes in the Part A premium will be an increased cost to voluntary
enrollees (section 1818 and section 1818A of the Act) of about $125
million. Therefore, this notice is a major rule as defined in Title 5,
United States Code, section 804(2) and is an economically significant
rule under Executive Order 12866.
The RFA requires agencies to analyze options for regulatory relief
of small businesses, if a rule has a significant impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and
government agencies. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $7 million to $34.5 million in any 1 year. Individuals and
States are not included in the definition of a small entity. We have
determined that this notice will not have a significant economic impact
on a substantial number of small entities. Therefore, we are not
preparing an analysis under the RFA.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. The Secretary has
determined that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals. Therefore,
we are not preparing an analysis under section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2009, that
threshold is approximately $133 million. This notice has no
consequential effect on State, local, or tribal governments or on the
private sector. However, States are required to
[[Page 54583]]
pay the premiums for dually-eligible beneficiaries.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This notice will not have a substantial effect on State
or local governments.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 1, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: September 17, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-25371 Filed 10-16-09; 4:15 pm]
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