[Federal Register Volume 67, Number 84 (Wednesday, May 1, 2002)]
[Proposed Rules]
[Pages 21617-21618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10648]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414

[CMS-1084-WN]
RIN 0938-AK50


Medicare Program; Payment for Upgraded Durable Medical Equipment; 
Withdrawal

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule; withdrawal.

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SUMMARY: This document withdraws all provisions of the proposed rule 
pertaining to upgraded durable medical equipment (DME) that we 
published in the Federal Register on April 27, 2000. The proposed rule 
was based on a discretionary provision of the Balanced Budget Act (BBA) 
of 1997. We solicited comments on a methodology that would have 
permitted suppliers to charge Medicare beneficiaries more than the 
Medicare allowed payment amount for certain upgraded DME and bill the 
Medicare program on an assignment basis.

DATES: The proposed rule published on April 27, 2000 at 65 FR 24666 is 
withdrawn.

FOR FURTHER INFORMATION CONTACT: William Long, (410) 786-5655.

SUPPLEMENTARY INFORMATION:

I. Background

    Historically, to bill DME claims under Medicare's assignment rules, 
suppliers were required to accept the Medicare allowed amount as 
payment-in-full. Under the proposed rule, Medicare payment would have 
been made to the supplier as if the DME were DME without the upgrade 
features. The beneficiary purchasing or renting the upgraded DME would 
pay the supplier an amount equal to the difference between the 
supplier's charge for the upgraded DME and the amount paid by Medicare 
for the DME without the upgraded features.
    We are withdrawing this proposed rule because we recently 
implemented a process by which suppliers may bill on an assignment 
basis for upgraded DME. The supplier can now use Advance Beneficiary 
Notice (ABN), based on section 1879 of the Social Security Act (the 
Act), to inform beneficiaries they may be responsible for payment for 
items since the supplier expects Medicare payment for these items to be 
denied. Under the ABN process, the supplier would be permitted to bill 
on an assigned or unassigned basis for the item that would be covered 
by Medicare. The supplier would bill the beneficiary the difference 
between Medicare's allowed amount and the cost of the upgraded feature. 
The ABN nondiscretionary authority is broader than section 4551(c) of 
the BBA of 1997. Therefore, we are not implementing section 4551(c) of 
the BBA.

II. Regulatory Impact Statement

    We have examined the impacts of this rule 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), 
section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132. 
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).
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. 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 $5 to $25 million 
in any 1 year. For purposes of the RFA, all suppliers of DME are 
considered to be small entities. Individuals and States are not 
included in the definition of a small entity.
    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 603 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.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million.
    This document withdraws all provisions of the proposed rule 
pertaining to upgraded durable medical equipment (DME) that we 
published in the Federal Register on April 27, 2000.

[[Page 21618]]

This withdrawal document will not have an impact of $110 million or 
more annually. Neither is this document expected to impose an unfunded 
mandate on States exceeding $110 million annually. Therefore, we have 
not prepared an analysis of cost and benefits as required by E.O. 12866 
and the Unfunded Mandates Act for rules with significant economic 
impacts or that impose significant unfunded mandates on States. Also, 
we believe this withdrawal document will have very little direct impact 
on small entities as defined under the RFA or on small rural hospitals 
as defined under section 1102(b) of the Social Security Act. For these 
reasons, we are not preparing analyses for either the RFA or section 
1102(b) of the Act because we have determined, and we certify, that 
this rule will not have a significant economic impact on a substantial 
number of small entities or a significant impact on the operations of a 
substantial number of small rural hospitals.
    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 document will not have a substantial effect on State 
or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

III. Collection of Information Requirements

    As stated above, we are withdrawing this proposed rule because we 
recently implemented the ABN process by which suppliers may bill on an 
assignment basis for upgraded DME. The supplier can now use ABN to 
inform beneficiaries they may be responsible for payment for items 
since the supplier expects Medicare payment for these items to be 
denied. On October 12, 2001 and February 19, 2002 we published notices 
in the Federal Register announcing that we are seeking Paperwork 
Reduction Act reapproval of the ABN, approved under OMB number 0938-
0566, with a current expiration date of April 31, 2002.

(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: November 21, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: February 22, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-10648 Filed 4-26-02; 12:04 pm]
BILLING CODE 4120-01-P