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Medicare Program; Competitive Acquisition of Outpatient Drugs and Biologicals Under Part B: Interpretation and Correction

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Information about this document as published in the Federal Register.

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AGENCY:

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

ACTION:

Interim final rule; interpretation and correction.

SUMMARY:

This interim final rule clarifies our timeline for implementation of the competitive acquisition program under section 1847B of the Social Security Act and corrects technical errors that appeared in the addenda to the interim final rule with comment period published in the Federal Register on July 6, 2005 entitled “Competitive Acquisition of Outpatient Drugs and Biologicals Under Part B.”

EFFECTIVE DATE:

This rule is effective September 6, 2005.

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FOR FURTHER INFORMATION CONTACT:

Lia Prela, (410) 786-0548.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

I. Background

A. Clarification of Timeline for Implementation of CAP

On July 6, 2005, we published an interim final rule with comment period (70 FR 39022) in the Federal Register with respect to provisions of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) that require the implementation of a competitive acquisition program (CAP) for certain Medicare Part B drugs not paid on a cost or prospective payment system basis. Physicians will generally be given a choice between obtaining these drugs from vendors selected through a competitive bidding process or directly purchasing these drugs and being paid under the average sales price (ASP) system.

In the July 6, 2005 interim final rule, we stated that implementation of the CAP would take place on January 1, 2006 to coordinate the CAP physician election process with the Medicare participating physician election process described in section 1842(h) of Social Security Act (the Act). Subsequent to the publication of the July 6, 2005 interim final rule, we received comments requesting a delay in implementation of the CAP from a variety of sources including written public comments as well as comments voiced during the conference call for potential vendors that we held on July 8, 2005.

Effective August 3, 2005, we suspended the vendor bidding process that began with publication of the interim final rule on July 6, 2005, to allow us more time to fully review public comments on the interim final rule and also to further refine the bidding process. We provided notification of the suspension on the CMS Web site http://www.cms.hhs.gov/​providers/​drugs/​compbid/​ and through the pharmacy and physician Listservs. We will publish a final rule for implementing the CAP after we analyze the additional comments on the interim final rule and determine the best manner for improving the efficiency of the CAP and increasing potential participation of both vendors and physicians in the program.

We will announce the dates for the new vendor bidding period concurrent with the publication of the final rule. We also will be announcing a special physician election period. Currently, we expect that drugs will first be delivered through the CAP by July 2006. During the special election period, physicians will have the opportunity to elect to participate in the CAP from its start date in 2006 through the end of calendar year 2006.

As we specified in the July 2005 Federal Register document, we will continue to accept comments on the interim final rule until September 6, 2005.

In section II of this document, we provide clarification of the timeline for implementation of the CAP as well as further interpretation of what will Start Printed Page 52931constitute an “exigent circumstance” for purposes of allowing a physician to elect to participate in the CAP and select a CAP vendor at a time other than the annual election period.

B. Corrections to the July 6, 2005 Interim Final Rule

In FR Doc. 05-12938 of July 6, 2005 (70 FR 39022), we identified errors to Addendum A and Addendum B that are corrected under “Correction of Addenda Errors” in section III of this document. These corrections are effective as if they had been included in the document published July 6, 2005.

II. Delay in Implementation Date

On March 4, 2005, we published a proposed rule (70 FR 10746) to implement a CAP program, as required by section 1847B of the Act, as added by section 303(d) of the MMA, for certain Medicare Part B drugs not paid on a cost or prospective payment system basis. In response to the proposed rule, commenters expressed concern about the short timeframe for implementation of the CAP, that is, the proposed January 1, 2006 effective date stated in the July 6, 2005 interim final rule. These commenters suggested we delay the effective date of the CAP to allow us to fully structure the CAP to meet congressional objectives and benefit physicians without compromising beneficiary access to drug therapies and treatment.

We responded to those comments in the July 6, 2005 interim final rule (70 FR 39025) by stating that we recognized that the timeframe for implementation was ambitious but we believed that the regulatory framework provided a firm basis for implementing the CAP in January 2006.

We also stated that the statute requires that we coordinate the physicians' election to participate in the CAP with the Medicare Participating Physician Process described in section 1842(h) of the Act.

However, upon further consideration of these comments, as well as additional feedback we have received from potential participants in the program, we have concluded that more time is needed to further refine the program before implementation. After reviewing public comments, we agree that a short delay in implementing the CAP will allow us to improve the efficiency of the program and increase interest in participating in the program. Therefore, in accordance with our authority to phase-in the program as appropriate during 2006, we are delaying implementation of the CAP. The CAP program will not begin on January 1, 2006, and the initial physician election process will not occur in 2005.

As noted above, we intend to implement the CAP during 2006 and we expect that the CAP program will begin sometime in or around July 2006. In addition, we expect the initial physician election period to occur in the spring of 2006 rather than in fall 2005. We consider the initial implementation of the CAP program to constitute an “exigent circumstance” for purposes of section 1847B(a)(5)(A)(i) of the Act and § 414.908(a)(2) of our regulations, which allow for a physician election period at times other than the regular, annual election period. We are specifying the initial election period as an “exigent circumstance” because we intend the program to run on a calendar year basis, as stated in the July 2005 interim final rule, after the initial implementation of the CAP in 2006. In later years, the annual CAP election period will be coordinated with the annual Medicare Participating Physician Enrollment Process described in section 1842(h) of the Act, which occurs in the fall of each year, as specified in the July 2005 interim final rule.

We believe that, after the initial election period in 2006, an annual election period that ends on November 15 before the beginning of each CAP year is still necessary to allow time for the carrier, the designated carrier, the vendors, and our claims processing system to complete tasks in preparation for that CAP year. We expect to include the dates of the initial physician election period in the final rule. Physicians will then be provided with a second election period in 2006 for participation in the CAP in 2007.

In the July 6, 2005 interim final rule, we stated in several other places in the preamble that the CAP would begin on January 1, 2006.

For example, we referred to a January 1, 2006 start date in our discussion of the activities that would be necessary to implement the CAP on that date. These included CAP operations, analysis and coding of the CAP claims processing system, and educating beneficiaries and physicians about the program. In the July 2005 interim final rule, we specified that in response to the March 2005 proposed rule, several commenters expressed concern about introducing the CAP so quickly without any formal testing or analysis of the program. Other commenters expressed concern about education and outreach efforts relating to the CAP. Our decision to suspend the current vendor bidding process and delay the start date of the CAP will allow time for refining CAP operations, additional testing of the claims processing system, and for further beneficiary, physician, and vendor applicant educational efforts. We believe this additional preparation time will greatly improve and ease the implementation process.

III. Correction of Addenda Errors

In the July 6, 2005 interim final rule, Addendum A “Single Drug Category List” does not include the column reflecting the weights assigned to each CAP drug that will be used in computing the composite bids. In this interim final rule, we are correcting the error by republishing Addendum A in its entirety, with the third column included. In addition, in Addendum B, “New Drugs for CAP Bidding for 2006,” we inadvertently included J7518 (mycophenolic acid), which should be excluded from this list because it is an orally administered immunosuppressive agent rather than a physician-administered drug. We are correcting this error by republishing Addendum B, which reflects the omission of J7518 (mycophenolic acid).

In FR Doc. 05-12938 of July 6, 2005 (70 FR 39022), make the following corrections:

1. On pages 39099 through 39102, Addendum A is corrected to read as follows:

Addendum A—Single Drug Category List

HCPCSLong descriptionWeight
J0150INJECTION, ADENOSINE FOR THERAPEUTIC USE, 6 MG0.00069338
J0152INJECTION, ADENOSINE FOR DIAGNOSTIC USE, 30 MG0.00455133
J0170INJECTION, ADRENALIN, EPINEPHRINE, 1 ML AMPULE0.00007823
J0207INJECTION, AMIFOSTINE, 500 MG0.00015946
J0215INJECTION, ALEFACEPT, 0.5 MG0.00082595
J0280INJECTION, AMINOPHYLLIN, 250 MG0.00081312
J0290INJECTION, AMPICILLIN SODIUM, 500 MG0.00012537
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J0475INJECTION, BACLOFEN, 10 MG0.00024410
J0540INJECTION, PENICILLIN G BENZATHINE AND PENICILLIN G PROCAINE, 1,200,000 UNITS0.00007140
J0550INJECTION, PENICILLIN G BENZATHINE AND PENICILLIN G PROCAINE, 2,400,000 UNITS0.00001814
J0570INJECTION, PENICILLIN G BENZATHINE, 1,200,000 UNITS0.00004561
J0585BOTULINUM TOXIN TYPE A, PER UNIT0.03707810
J0587BOTULINUM TOXIN TYPE B, PER 100 UNITS0.00149279
J0600INJECTION, EDETATE CALCIUM DISODIUM, 1000 MG0.00004417
J0637INJECTION, CASPOFUNGIN ACETATE, 5 MG0.00008403
J0640INJECTION, LEUCOVORIN CALCIUM, PER 50 MG0.01054437
J0670INJECTION, MEPIVACAINE HYDROCHLORIDE, PER 10 ML0.00038034
J0690INJECTION, CEFAZOLIN SODIUM, 500 MG0.00042009
J0692INJECTION, CEFEPIME HYDROCHLORIDE, 500 MG0.00024611
J0696INJECTION, CEFTRIAXONE SODIUM, PER 250 MG0.00662508
J0698INJECTION, CEFOTAXIME SODIUM, PER GM0.00014738
J0702INJECTION, BETAMETHASONE ACETATE & BETAMETHASONE SODIUM PHOSPHATE, PER 3 MG0.00284989
J0704INJECTION, BETAMETHASONE SODIUM PHOSPHATE, PER 4 MG0.00056519
J0735INJECTION, CLONIDINE HYDROCHLORIDE, 1 MG0.00033826
J0800INJECTION, CORTICOTROPIN, 40 UNITS0.00360503
J0880INJECTION, DARBEPOETIN ALFA, 5 MCG0.11998845
J0895INJECTION, DEFEROXAMINE MESYLATE, 500 MG0.00024217
J1000INJECTION, DEPO-ESTRADIOL CYPIONATE, 5 MG0.00020815
J1020INJECTION, METHYLPREDNISOLONE ACETATE, 20 MG0.00126125
J1030INJECTION, METHYLPREDNISOLONE ACETATE, 40 MG0.00587530
J1040INJECTION, METHYLPREDNISOLONE ACETATE, 80 MG0.00522812
J1051INJECTION, MEDROXYPROGESTERONE ACETATE, 50 MG0.00006464
J1094INJECTION, DEXAMETHASONE ACETATE, 1 MG0.00347947
J1100INJECTION, DEXAMETHASONE SODIUM PHOSPHATE, 1MG0.05440123
J1190INJECTION, DEXRAZOXANE HYDROCHLORIDE, PER 250 MG0.00002421
J1200INJECTION, DIPHENHYDRAMINE HCL, 50 MG0.00214443
J1212INJECTION, DMSO, DIMETHYL SULFOXIDE, 50%, 50 ML0.00008395
J1245INJECTION, DIPYRIDAMOLE, PER 10 MG0.00379554
J1250INJECTION, DOBUTAMINE HYDROCHLORIDE, PER 250 MG0.00052679
J1260INJECTION, DOLASETRON MESYLATE, 10 MG0.01720675
J1335INJECTION, ERTAPENEM SODIUM, 500 MG0.00013138
J1440INJECTION, FILGRASTIM (G-CSF), 300 MCG0.00191741
J1441INJECTION, FILGRASTIM (G-CSF), 480 MCG0.00403536
J1450INJECTION FLUCONAZOLE, 200 MG0.00001593
J1580INJECTION, GARAMYCIN, GENTAMICIN, 80 MG0.00039560
J1600INJECTION, GOLD SODIUM THIOMALATE, 50 MG0.00005560
J1626INJECTION, GRANISETRON HYDROCHLORIDE, 100 MCG0.01469700
J1631INJECTION, HALOPERIDOL DECANOATE, PER 50 MG0.00020506
J1642INJECTION, HEPARIN SODIUM, (HEPARIN LOCK FLUSH), PER 10 UNITS0.06362003
J1644INJECTION, HEPARIN SODIUM, PER 1000 UNITS0.00351209
J1645INJECTION, DALTEPARIN SODIUM, PER 2500 IU0.00011417
J1650INJECTION, ENOXAPARIN SODIUM, 10 MG0.00134336
J1655INJECTION, TINZAPARIN SODIUM, 1000 IU0.00046724
J1710INJECTION, HYDROCORTISONE SODIUM PHOSPHATE, 50 MG0.00006029
J1720INJECTION, HYDROCORTISONE SODIUM SUCCINATE, 100 MG0.00013201
J1745INJECTION INFLIXIMAB, 10 MG0.02736596
J1750INJECTION, IRON DEXTRAN, 50 MG0.00244189
J1756INJECTION, IRON SUCROSE, 1 MG0.01017283
J1885INJECTION, KETOROLAC TROMETHAMINE, PER 15 MG0.00326961
J1940INJECTION, FUROSEMIDE, 20 MG0.00064751
J1956INJECTION, LEVOFLOXACIN, 250 MG0.00008548
J2001INJECTION, LIDOCAINE HCL FOR INTRAVENOUS INFUSION, 10 MG0.00076795
J2010INJECTION, LINCOMYCIN HCL, 300 MG0.00061870
J2150INJECTION, MANNITOL, 25% IN 50 ML0.00028934
J2260INJECTION, MILRINONE LACTATE, 5 MG0.00004912
J2300INJECTION, NALBUPHINE HYDROCHLORIDE, PER 10 MG0.00026092
J2324INJECTION, NESIRITIDE, 0.25 MG0.00027147
J2353INJECTION, OCTREOTIDE, DEPOT FORM FOR INTRAMUSCULAR INJECTION, 1 MG0.00193262
J2354INJECTION, OCTREOTIDE, NON-DEPOT SUBCUTANEOUS OR INTRAVENOUS INJECTION, 25 MCG0.00008332
J2405INJECTION, ONDANSETRON HYDROCHLORIDE, PER 1 MG0.01360054
J2430INJECTION, PAMIDRONATE DISODIUM, PER 30 MG0.00155307
J2505INJECTION, PEGFILGRASTIM, 6 MG0.00064498
J2550INJECTION, PROMETHAZINE HCL, 50 MG0.00068031
J2680INJECTION, FLUPHENAZINE DECANOATE, 25 MG0.00014971
J2765INJECTION, METOCLOPRAMIDE HCL, 10 MG0.00011029
J2780INJECTION, RANITIDINE HYDROCHLORIDE, 25 MG0.00087713
J2820INJECTION, SARGRAMOSTIM (GM-CSF), 50 MCG0.00215849
J2912INJECTION, SODIUM CHLORIDE, 0.9%, PER 2 ML0.00673579
J2916INJECTION, SODIUM FERRIC GLUCONATE COMPLEX IN SUCROSE INJECTION, 12.5 MG0.00060556
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J2920INJECTION, METHYLPREDNISOLONE SODIUM SUCCINATE, 40 MG0.00030935
J2930INJECTION, METHYLPREDNISOLONE SODIUM SUCCINATE, 125 MG0.00076469
J2997INJECTION, ALTEPLASE RECOMBINANT, 1 MG0.00012123
J3260INJECTION, TOBRAMYCIN SULFATE, 80 MG0.00018119
J3301INJECTION, TRIAMCINOLONE ACETONIDE, PER 10 MG0.02146050
J3302INJECTION, TRIAMCINOLONE DIACETATE, PER 5 MG0.00171576
J3303INJECTION, TRIAMCINOLONE HEXACETONIDE, PER 5 MG0.00093708
J3315INJECTION, TRIPTORELIN PAMOATE, 3.75 MG0.00000707
J3370INJECTION, VANCOMYCIN HCL, 500 MG0.00083391
J3396INJECTION, VERTEPORFIN, 0.1 MG0.05387196
J3410INJECTION, HYDROXYZINE HCL, 25 MG0.00040617
J3420INJECTION, VITAMIN B-12 CYANOCOBALAMIN, UP TO 1000 MCG0.01191674
J3475INJECTION, MAGNESIUM SULFATE, PER 500 MG0.00107478
J3480INJECTION, POTASSIUM CHLORIDE, PER 2 MEQ0.00213669
J3487INJECTION, ZOLEDRONIC ACID, 1 MG0.00333297
J7030INFUSION, NORMAL SALINE SOLUTION , 1000 CC0.00101862
J7040INFUSION, NORMAL SALINE SOLUTION, (500 STERILE ML=1 UNIT)0.00240866
J70425% DEXTROSE/NORMAL SALINE (500 ML = 1 UNIT)0.00049401
J7050INFUSION, NORMAL SALINE SOLUTION , 250 CC0.00983951
J7051STERILE SALINE OR WATER, 5 CC0.00695398
J70605% DEXTROSE/WATER (500 ML = 1 UNIT)0.00101887
J7070INFUSION, D5W, 1000 CC0.00015744
J7120RINGERS LACTATE INFUSION, 1000 CC0.00016820
J7317SODIUM HYALURONATE, PER 20 TO 25 MG DOSE FOR INTRA-ARTICULAR INJECTION0.00189786
J7320HYLAN G-F 20, 16 MG, FOR INTRA ARTICULAR INJECTION0.00148437
J9000DOXORUBICIN HCL, 10 MG0.00233616
J9001DOXORUBICIN HYDROCHLORIDE, ALL LIPID FORMULATIONS, 10 MG0.00032228
J9031BCG (INTRAVESICAL) PER INSTILLATION0.00048801
J9040BLEOMYCIN SULFATE, 15 UNITS0.00003692
J9045CARBOPLATIN, 50 MG0.00564705
J9050CARMUSTINE, 100 MG0.00000881
J9060CISPLATIN, POWDER OR S0LUTION, PER 10 MG0.00094491
J9062CISPLATIN, 50 MG0.00025190
J9065INJECTION, CLADRIBINE, PER 1 MG0.00008065
J9070CYCLOPHOSPHAMIDE, 100 MG0.00062098
J9080CYCLOPHOSPHAMIDE, 200 MG0.00004921
J9090CYCLOPHOSPHAMIDE, 500 MG0.00008048
J9091CYCLOPHOSPHAMIDE, 1.0 GRAM0.00005001
J9092CYCLOPHOSPHAMIDE, 2.0 GRAM0.00000525
J9093CYCLOPHOSPHAMIDE, LYOPHILIZED, 100 MG0.00091804
J9094CYCLOPHOSPHAMIDE, LYOPHILIZED, 200 MG0.00009103
J9095CYCLOPHOSPHAMIDE, LYOPHILIZED, 500 MG0.00017529
J9096CYCLOPHOSPHAMIDE, LYOPHILIZED, 1.0 GRAM0.00013845
J9097CYCLOPHOSPHAMIDE, LYOPHILIZED, 2.0 GRAM0.00001347
J9098CYTARABINE LIPOSOME, 10 MG0.00000809
J9100CYTARABINE, 100 MG0.00012887
J9110CYTARABINE, 500 MG0.00002056
J9130DACARBAZINE, 100 MG0.00009340
J9140DACARBAZINE, 200 MG0.00006957
J9150DAUNORUBICIN, 10 MG0.00000485
J9170DOCETAXEL, 20 MG0.00254788
J9178INJECTION, EPIRUBICIN HCL, 2 MG0.00120764
J9181ETOPOSIDE, 10 MG0.00229277
J9182ETOPOSIDE, 100 MG0.00052610
J9185FLUDARABINE PHOSPHATE, 50 MG0.00030358
J9190FLUOROURACIL, 500 MG0.00392446
J9200FLOXURIDINE, 500 MG0.00000405
J9201GEMCITABINE HCL, 200 MG0.00491490
J9202GOSERELIN ACETATE IMPLANT, PER 3.6 MG0.00285868
J9206IRINOTECAN, 20 MG0.00316077
J9208IFOSFAMIDE, 1 GM0.00007818
J9209MESNA, 200 MG0.00036520
J9211IDARUBICIN HYDROCHLORIDE, 5 MG0.00000315
J9213INTERFERON, ALFA-2A, RECOMBINANT, 3 MILLION UNITS0.00008006
J9214INTERFERON, ALFA-2B, RECOMBINANT, 1 MILLION UNITS0.00668813
J9219LEUPROLIDE ACETATE IMPLANT, 65 MG0.00006464
J9245INJECTION, MELPHALAN HYDROCHLORIDE, 50 MG0.00000157
J9250METHOTREXATE SODIUM, 5 MG0.00184935
J9260METHOTREXATE SODIUM, 50 MG0.00050963
J9263INJECTION, OXALIPLATIN, 0.5 MG0.07249359
J9265PACLITAXEL, 30 MG0.00551428
J9268PENTOSTATIN, PER 10 MG0.00000639
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J9280MITOMYCIN, 5 MG0.00004038
J9290MITOMYCIN, 20 MG0.00003448
J9291MITOMYCIN, 40 MG0.00006085
J9293INJECTION, MITOXANTRONE HYDROCHLORIDE, PER 5 MG0.00024882
J9310RITUXIMAB, 100 MG0.00405692
J9320STREPTOZOCIN, 1 GM0.00000666
J9340THIOTEPA, 15 MG0.00002429
J9350TOPOTECAN, 4 MG0.00018095
J9355TRASTUZUMAB, 10 MG0.00538210
J9360VINBLASTINE SULFATE, 1 MG0.00035474
J9370VINCRISTINE SULFATE, 1 MG0.00019564
J9375VINCRISTINE SULFATE, 2 MG0.00011406
J9390VINORELBINE TARTRATE, PER 10 MG0.00109985
J9395INJECTION, FULVESTRANT, 25 MG0.00125472
J9600PORFIMER SODIUM, 75 MG0.00000029
Q0136INJECTION, EPOETIN ALPHA, (FOR NON ESRD USE), PER 1000 UNITS0.24898913
Q0137INJECTION, DARBEPOETIN ALFA, 1 MCG (NON-ESRD USE)0.03803750
Q3025INJECTION, INTERFERON BETA-1A, 11 MCG FOR INTRAMUSCULAR USE0.00077522

2. On page 39102, Addendum B is corrected to read as follows:

Addendum B—New Drugs for CAP Bidding for 2006

CODE2005 Description
J0128Abarelix injection.
J0180Agalsidase beta injection.
J0878Daptomycin injection.
J1931Laronidase injection.
J2357Omalizumab injection.
J2469Palonosetron HCl.
J2794Risperidone, long acting.
J9035Bevacizumab injection.
J9041Bortezomib injection.
J9055Cetuximab injection.
J9305Pemetrexed injection.

IV. Waiver of Delay in Effective Date

We ordinarily provide an effective date 30 days after the publication of an interim final rule in the Federal Register. We can waive this delay, however, if we find good cause that it is impracticable, unnecessary, or contrary to the public interest and incorporate a statement of the finding and the reasons for it into the notice issued.

We find a delay in the effectiveness of this rule unnecessary because this rule merely provides further clarification of and technical corrections to the interim final rule with comment published July 6, 2005. We also find that a delay in the effectiveness of this interpretation would be contrary to the public interest: a delay in the effectiveness of this rule would defeat the purpose of this rule, which is to delay the implementation of the CAP in order to consider further public comment and issue a final rule before beginning this major new payment system. Therefore, for all of these reasons, we find good cause to waive the delay in the effective date of this rule. It will take effect on the same day as the July 6, 2005 interim final rule with comment.

V. 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).

VI. Regulatory Impact Statement

We have examined the impact of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), 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). This rule does not reach the economic threshold and thus is not considered a major rule.

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 small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year. Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined that this 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 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 Core-Based Statistical Area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined that this rule will not have a significant impact on the operations 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. This rule will have no consequential effect on the governments mentioned or on the private sector.

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 Start Printed Page 52935governments, preempts State law, or otherwise has Federalism implications. Since this regulation does not impose any costs on State or local governments, the requirements of E.O. 13132 are not applicable.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

Start Signature

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

Dated: August 23, 2005.

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.

Approved: August 31, 2005.

Michael O. Leavitt,

Secretary.

End Signature End Supplemental Information

[FR Doc. 05-17655 Filed 9-1-05; 9:14 am]

BILLING CODE 4120-01-P