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Proposed Rule

Medicare Program; Provider Bad Debt Payment; Extension of Timeline for Publication of Final Rule

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


Extension of timeline.


Section 1871(a)(3)(A) of the Social Security Act (the Act) requires us to publish a Medicare final rule no later than 3 years after the publication date of the proposed rule. This notice announces an extension of the timeline for publication of a Medicare final rule in accordance with section 1871(a)(3)(B) of the Act, which allows us to extend the timeline for publication of the “Medicare Program; Provider Bad Debt Payment” final rule under exceptional circumstances.


Effective Date: This notice is effective on February 10, 2006.

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Jill Keplinger, (410) 786-4550.

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On February 10, 2003 (68 FR 6682), we published a proposed rule that would revise existing regulations governing reimbursement for bad debts for all providers or entities, other than hospitals, currently eligible for bad debt reimbursement under the Medicare program. These proposed revisions were intended to provide for a consistent bad debt reimbursement policy for all providers currently eligible to receive payments from Medicare for bad debt. The proposed revisions also would remove a cap on End Stage Renal Disease (ESRD) bad debt reimbursement, which limits payment of allowable bad debts to the facility's unrecovered costs. In addition, the Start Printed Page 6992proposed rule would clarify that bad debts are not allowable for entities paid under a reasonable-charge or fee schedule methodology.

This notice announces an extension of the timeline for publication of a final rule responding to comments on the above proposed rule. Section 1871(a)(3)(B) of the Social Security Act (the Act) requires us generally to publish a Medicare final rule no later than 3 years after the publication date of the proposed rule. To meet this 3-year timeframe, the final rule at issue here would have to be published by February 10, 2006.

Section 1871(a)(3)(B) also provides, however, that under “exceptional circumstances” the Secretary may extend the initial targeted publication date of a final regulation, if the Secretary provides public notice of this extension, including a brief explanation of the justification for the variation, no later than the regulation's previously established proposed publication date.

This notice extends the timeline based on the following exceptional circumstances, which we believe justify such an extension in this case. On February 1, 2006, the Congress completed action on final legislation (S. 1932) that affects the provisions that would be modified under the proposed rule at issue here. Section 5004 of this bill, also known as the Deficit Reduction Act (DRA), generally provides for a 30 percent reduction in bad debt reimbursement to Skilled Nursing Facilities (SNFs), but only with respect to debt attributable to non-dual eligibles. Bad debt payment for dual eligibles would remain at 100 percent. By contrast, the proposed rule applied the 30 percent reduction to all providers other than hospitals, and had no exception for debt attributable to dual-eligibles.

If we were to finalize the SNF bad debt provisions of the proposed rule at issue here before the enactment of section 5004 of the DRA, these provisions could be superseded by contrary legislation very shortly after publication. This would require a new round of rulemaking to address the impact of the new legislation. By extending the deadline for publication of a final rule, we would hope to avoid needless and duplicative rulemaking, and confusion of the public, by responding to comments on this proposed rule, and addressing the effects of section 5004 of the DRA on the proposed rule, in one rulemaking document.

In order to allow time for the President to act on the DRA, and for us to fully assess the impact of this legislation on the provisions in the proposed rule, we are extending the timeline for this rulemaking for up to one year, and intend to publish the final rule no later than February 10, 2007. As required under section 1871(a)(3)(D), we will include a discussion of this extension in a report to Congress.

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Authority: Section 1871 of the Social Security Act (42 U.S.C. 1395hh).

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

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Dated: February 3, 2006.

Ann C. Agnew,

Executive Secretary to the Department.

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[FR Doc. E6-1821 Filed 2-9-06; 8:45 am]