[Federal Register Volume 68, Number 143 (Friday, July 25, 2003)]
[Proposed Rules]
[Pages 43998-44000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19068]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 406

[CMS-4018-P]
RIN 0938-AK94


Medicare Program; Continuation of Medicare Entitlement When 
Disability Benefit Entitlement Ends Because of Substantial Gainful 
Activity

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would conform the existing Medicare 
eligibility regulations to reflect a change made by the Ticket to Work 
and Work Incentives Improvement Act of 1999. That statutory change, 
which was implemented effective October 1, 2000, provides working 
disabled individuals with continued Medicare entitlement for an 
additional 54 months beyond the previous limit of 24 months, for a 
total of 78 months of Medicare coverage following the 15th month of the 
reentitlement period.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on September 23, 2003.

ADDRESSES: In commenting, please refer to file code CMS-4018-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission. Mail written comments (one original and 
two copies) to the following address only: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, Attention: 
CMS-4018-P, P.O. Box 8010, Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver (by hand or courier) your written 
comments (one original and two copies) to one of the following 
addresses: Room 445-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201, or Room C5-14-03, 7500 Security 
Boulevard, Baltimore, MD 21244-8010. (Because access to the interior of 
the HHH Building is not readily available to persons without Federal 
Government identification, commenters are encouraged to leave their 
comments in the CMS drop slots located in the main lobby of the 
building. A stamp-in clock is available for persons wishing to retain a 
proof of filing by stamping in and retaining an extra copy of the 
comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Denise Cox, (410) 786-3195.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Comments 
received timely will be available for public inspection as they are 
received, generally beginning approximately 3 weeks after publication 
of a document,

[[Page 43999]]

at the headquarters of the Centers for Medicare & Medicaid Services, 
7500 Security Boulevard, Baltimore, Maryland 21244, Monday through 
Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment 
to view public comments, phone (410) 786-9994.

I. Background

    Before October 1, 2000, section 226(b) of the Social Security Act 
(the Act) provided that disabled beneficiaries who continued to engage 
in substantial gainful activity after completing a trial work period 
would receive Medicare coverage for 24 months following the 15th month 
of the reentitlement period.
    Effective October 1, 2000, section 202 of the Ticket to Work and 
Work Incentives Improvement Act of 1999 (Pub. L. 106-170) amended 
section 226(b) of the Act to extend the period of Medicare coverage to 
78 months after the 15th month of the reentitlement period. Because 
Section 202 was implemented effective October 1, 2000, Medicare 
coverage has already been extended to 78 months for all disabled 
individuals who continue to engage in substantial gainful activity 
after completing a trial work period. This regulation is intended to 
codify these statutory provisions.

II. Provisions of the Proposed Regulations

    We are proposing to revise Sec.  406.12(e)(2)(i) of our regulations 
to be consistent with the amended section 226(b) of the Act, which was 
implemented effective October 1, 2000. We are proposing to change the 
24 months of extended Medicare coverage to 78 months of Medicare 
coverage following the 15th month of the re-entitlement period.

III. Collection of Information Requirements

    This proposed rule 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).

IV. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the ``DATES'' 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the major comments in the preamble to that 
document.

V. Regulatory Impact Statement

A. Overall Impact

    We have examined the impact of this proposed 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. 
This proposed rule would essentially conform our regulations to the 
plain language of the statute.
    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). We estimate a 
cost of $100 million to the Medicare trust fund in 2005. This cost 
estimate includes Medicare payments for disabled beneficiaries who are 
currently working and entitled to Medicare coverage, as well as 
payments for individuals who will become entitled to disability 
benefits in the future and subsequently return to work with extended 
Medicare coverage. As noted above, the plain language of the statute 
leaves us no discretion in interpreting this provision, and these costs 
flow directly from the statute, with or without this proposed rule. 
Therefore, this proposed rule is not a major rule and does not have a 
significant economic effect.
    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 $6 to $29 
million in any 1 year. For purposes of the RFA, beneficiaries are not 
considered to be small entities. Individuals and States are not 
included in the definition of a small entity. This regulation proposes 
to codify provisions of the Ticket to Work and Work Incentives 
Improvement Act of 1999 that were implemented on October 1, 2000. 
Eligible working disabled individuals are already receiving this 
extended Medicare benefit. This regulation would merely codify 
statutory provisions that have already been implemented and would not 
impose any regulatory burdens on small entities. Therefore, we have 
determined, and we certify that this proposed rule 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 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. This proposed rule would 
not significantly affect the operations of a substantial number of 
small rural hospitals because it simply codifies a statutory extension 
of the period of Medicare entitlement for individuals who are already 
entitled to and receiving the coverage. Therefore, we have determined, 
and we certify, that this proposed rule will not have a significant 
impact on the operation of a substantial number of small rural 
hospitals.
    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. State, local, or tribal governments will not 
be affected since this proposed rule simply extends the length of time 
individuals who complete a trial work period and continue to work can 
receive Medicare benefits.
    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 proposed rule, which was implemented effective 
October 1, 2000, would not have a substantial effect on State or local 
governments because the extension of Medicare entitlement is for 
individuals already receiving the coverage.

[[Page 44000]]

B. Anticipated Effects

1. Effects on Beneficiaries
    Before October 1, 2000, disabled beneficiaries who returned to work 
received 24 additional months of Medicare coverage following the 15th 
month of their re-entitlement period. Effective October 1, 2000, these 
beneficiaries receive 78 months of Medicare coverage following the 15th 
month of the re-entitlement period.
2. Effects on the Medicare Programs
    Anticipated expenditures to the Medicare program have been 
projected over a 5-year period and are shown in the following chart:

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                                     Year                                           2004           2005           2006           2007           2008
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Cost \1\.....................................................................        100            110            130            140            160
Disabled individuals affected \2\............................................     35,000         39,000         42,000         45,000        48,000
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\1\ Rounded to the nearest 10 million.
\2\ Rounded to nearest thousand.

C. Alternatives Considered

    We considered excluding individuals whose disability benefit 
entitlement, and thus Medicare coverage, should have ended September 
30, 2001 or earlier, but determined that it would be appropriate to 
extend the additional Medicare coverage to all beneficiaries who were 
entitled to Medicare as of October 1, 2000. The aggregate economic 
effect of this approach is negligible.
    In accordance with the provisions of Executive Order 12866, this 
proposed regulation was reviewed by the Office of Management and 
Budget.

List of Subjects Affected in 42 CFR Part 406

    Health facilities, Medicare.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR, chapter 4, part 406, 
subpart B as set forth below:

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

Subpart B--Hospital Insurance Without Monthly Premiums

    1. The authority citation for part 406 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

    2. In Sec.  406.12, revise the introductory text to paragraph 
(e)(2) and revise paragraph (e)(2)(i) to read as follows:


Sec.  406.12  Individual under age 65 who is entitled to social 
security or railroad retirement disability benefits.

* * * * *
    (e) * * *
    (2) Duration of continued Medicare entitlement. If an individual's 
entitlement to disability benefits or status as a qualified disabled 
railroad retirement beneficiary ends because he or she engaged in, or 
demonstrated the ability to engage in, substantial gainful activity 
after the 36 months following the end of the trial work period, 
Medicare entitlement continues until the earlier of the following:
    (i) The last day of the 78th month following the first month of 
substantial gainful activity occurring after the 15th month of the 
individual's re-entitlement period or, if later, the end of the month 
following the month the individual's disability benefit entitlement 
ends.
* * * * *

    Authority: (Catalog of Federal Domestic Assistance Program No. 
93.773, Medicare--Hospital Insurance; and Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: November 1, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: March 26, 2003.
Tommy G. Thompson,
Secretary.
[FR Doc. 03-19068 Filed 7-24-03; 8:45 am]
BILLING CODE 4120-01-P