SUPPLEMENTARY INFORMATION:

I. Background

In the February 2, 2011 Federal Register (76 FR 5862), we published a final rule with comment period titled “Medicare, Medicaid, and Children's Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers.” This rule finalized, among other things, provisions related to the submission of application fees as part of the Medicare, Medicaid, and CHIP provider enrollment processes.

As provided in section 1866(j)(2)(C)(i) of the Social Security Act (the Act) and in 42 CFR 424.514, “institutional providers” that are initially enrolling in the Medicare or Medicaid programs or CHIP, revalidating their enrollment, or adding a new Medicare practice location are required to submit a fee with their enrollment application. An “institutional provider” for purposes of Medicare is defined at § 424.502 as “any provider or supplier that submits a paper Medicare enrollment application using the CMS-855A, CMS-855B (not including physician and non-physician practitioner organizations), CMS-855S, or associated internet-based PECOS enrollment application.” As we explained in the February 2, 2011 final rule (76 FR 5914), in addition to the providers and suppliers subject to the application fee under Medicare, Medicaid-only and CHIP-only institutional providers would include nursing facilities, intermediate care facilities for persons with intellectual disabilities (ICF/IID), and psychiatric residential treatment facilities; they may also include other institutional provider types designated by a State in accordance with their approved State plan.

As indicated in § 424.514 and § 455.460, the application fee is not required for either of the following:

• A Medicare physician or non-physician practitioner submitting a CMS-855I.
• A prospective or revalidating Medicaid or CHIP provider—

++ Who is an individual physician or non-physician practitioner; or

++ That is enrolled as an institutional provider in Title XVIII of the Act or ( printed page 95216) another State's title XIX or XXI plan and has paid the application fee to a Medicare contractor or another State.

II. Provisions of the Notice

Section 1866(j)(2)(C)(i)(I) of the Act established a $500 application fee for institutional providers in CY 2010. Consistent with section 1866(j)(2)(C)(i)(II) of the Act, § 424.514(d)(2) states that for CY 2011 and subsequent years, the preceding year's fee will be adjusted by the percentage change in the consumer price index (CPI) for all urban consumers (all items; United States city average, CPI-U) for the 12-month period ending on June 30 of the previous year. Consequently, each year since 2011 we have published in the Federal Register an announcement of the application fee amount for the forthcoming CY based on this formula. Most recently, in the November 7, 2023 Federal Register (88 FR 76754), we published a notice announcing a fee amount for the period of January 1, 2024 through December 31, 2024 of $709.00. The $709.00 fee amount for CY 2024 was used to calculate the fee amount for 2025 as specified in § 424.514(d)(2).

According to Bureau of Labor Statistics (BLS) data, the CPI-U increase for the period of July 1, 2023 through June 30, 2024 was 3.0 percent. (See https://www.bls.gov/​news.release/​archives/​cpi_​07112024.htm.) As required by § 424.514(d)(2), the preceding year's fee of $709 will be adjusted by 3.0 percent. This results in a CY 2025 application fee amount of $730.27 ($709 × 1.03). As we must round this to the nearest whole dollar amount, the resultant application fee amount for CY 2025 is $730.

III. Collection of Information Requirements

This document does not impose information collection requirements (that is, reporting, recordkeeping, or third-party disclosure requirements). Accordingly, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. However, it does reference previously approved information collections. The CMS-855A, CMS-855B, CMS-855I, and CMS-855S applications are approved under, respectively, OMB control numbers 0938-0685, 0938-1377, 0938-1355, and 0938-1056.

IV. Regulatory Impact Statement

A. Overall Impact

We have examined the impacts of this notice as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), Executive Order 14094 titled “Modernizing Regulatory Review” (April 6, 2023), 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 (March 22, 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 Orders 12866 and 13563 direct 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 Executive Order 14094 titled “Modernizing Regulatory Review” amends section 3(f)(1) of Executive Order 12866 (Regulatory Planning and Review). The amended section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule (notice) that may: (1) have an annual effect on the economy of $200 million or more in any 1 year, (adjusted every 3 years by the Administrator of OMB's Office of Information and Regulatory Affairs (OIRA) for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in this Executive order, as specifically authorized in a timely manner by OIRA in each case.

A regulatory impact analysis (RIA) must be prepared for notices with significant regulatory action/s and/or with significant effects as per section 3(f)(1) of Executive Order 12866 ($200 million or more in any 1 year). Based on our estimates, OIRA has determined that this rulemaking is not significant per section 3(f)(1) as measured by the $200 million or more in any 1 year.

As explained in this section of the notice, we estimate that the total cost of the increase in the application fee will not exceed $200 million. Therefore, this notice does not reach the $200 million economic threshold and is not considered a significant notice.

B. Cost

The costs associated with this notice involve the increase in the application fee amount that certain providers and suppliers must pay in CY 2025. The CY 2025 cost estimates are as follows:

1. Medicare

Based on CMS data, we estimate that in CY 2025 approximately—

• 13,151 newly enrolling institutional providers will be subject to and pay an application fee; and
• 37,224 revalidating institutional providers will be subject to and pay an application fee.

Using a figure of 50,375 (13,151 newly enrolling + 37,224 revalidating) institutional providers, we estimate an increase in the cost of the Medicare application fee requirement in CY 2025 of $1,057,875 (or 50,375 × $21 (or $730 minus $709)) from our CY 2024 projections.

2. Medicaid and CHIP

Based on CMS and State statistics, we estimate that approximately 30,000 (9,000 newly enrolling + 21,000 revalidating) Medicaid and CHIP institutional providers will be subject to an application fee in CY 2025. Using this figure, we project an increase in the cost of the Medicaid and CHIP application fee requirement in CY 2025 of $630,000 (or 30,000 × $21 (or $730 minus $709)) from our CY 2024 projections.

3. Total

Based on the foregoing, we estimate the total increase in the cost of the application fee requirement for Medicare, Medicaid, and CHIP providers and suppliers in CY 2025 to be $1,687,875 ($1,057,875 + $630,000) from our CY 2024 projections.

We do not anticipate any negative impact on equity from the increase in the application fee amount, which we calculated in accordance with the requirements specified in statute and regulation. Prior application fee increases have had no such discernable effect, and we reiterate that the fee requirement does not apply to individual physicians and non-physician practitioners completing the CMS-855I, who represent the overwhelming preponderance of the more than 2 million Medicare-enrolled providers and suppliers. ( printed page 95217)

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 less than $9 million to $47 million in any 1 year. Individuals and States are not included in the definition of a small entity. As we stated in the RIA for the February 2, 2011 final rule (76 FR 5952), we do not believe that the application fee will have a significant impact on small entities.

In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule (notice) 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. We are not preparing an analysis for section 1102(b) of the Act, because the Secretary has certified that this notice 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 whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2024, that threshold is approximately $183 million. This notice would not impose a mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $183 million in any 1 year.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) (in this case a notice) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has federalism implications. Since this notice does not impose substantial direct costs on State or local governments, the requirements of Executive Order 13132 are not applicable.

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

The Administrator of the Centers for Medicare & Medicaid Services (CMS), Chiquita Brooks-LaSure, having reviewed and approved this document, authorizes Chyana Woodyard, who is the Federal Register Liaison, to electronically sign this document for purposes of publication in the Federal Register .