SBAS: Office of Advocacy - Health Care Financing Administration - 11/18/98

Office of Advocacy

Honorable Nancy-Ann Min DeParle
Administrator
Health Care Financing Administration
U.S. Department of Health & Human Services
Room 309-G, Hubert Humphrey Building
200 Independence Avenue, S.W.
Washington, DC 20201

Re: Failure to Comply With the Regulatory Flexibility Act in Promulgating the Final Rule on Revisions to Payment Policies and Adjustments to the Relative Value Unites Under the Physician Fee Schedule for Calendar Year 1999; 63 Fed. Reg. 58,814 (November 2, 1998).

Dear Administrator DeParle:

On November 2, 1998, the Health Care Financing Administration (HCFA) published the above-referenced final rule in the Federal Register. Among other things, this final rule attempts to address the comments and concerns raised in response to the June 5, 1998 proposed rule on the same subject.

On September 10, 1998, the Office of Advocacy commented on portions of the proposed rule dealing with payments to portable x-ray providers. After a careful review of the final rule, it appears that HCFA has not addressed (either directly or indirectly) Advocacy’s comments or those of the industry concerning portable x-ray providers.(1) Section 604(a)(2) of the Regulatory Flexibility Act (RFA) requires agencies to address all significant issues raised by the public comments:

"When an agency promulgates a final rule under section 553 of this title, after being required by that section or any other law to publish a general notice of proposed rulemaking . . . the agency shall prepare a final regulatory flexibility analysis. Each final regulatory flexibility analysis shall contain-- . . . a summary of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments."

Insofar as HCFA did not address the specific and significant comments raised concerning the impact of the proposed regulation on the portable x-ray industry, HCFA is in violation of the RFA. It could not possibly be argued that the comments submitted by the Office of Advocacy and the industry were generic or insignificant in nature. In fact, several of the comments were unique to the portable x-ray industry(2) and the impact of changing the transportation policy for portable equipment was the subject of a report by the General Accounting Office. (3)It is most important that HCFA realize that such a violation is judicially reviewable under section 611(a)(1) of the RFA. By failing to address the comments, HCFA may be opening the door to litigation by aggrieved small entities.

If HCFA is sued by aggrieved or adversely affected small entities, the court may remand all or part of the rule for further analysis by the agency or seek any other applicable remedy at law. Courts have demonstrated little tolerance for agencies that fail to adhere to the requirements of the RFA(4)

The Office of Advocacy urges HCFA to stay or withdraw the provisions of its rule relating to portable x-ray providers until proper RFA analyses can be prepared. It would not be sufficient for HCFA to merely publish a final regulatory flexibility analysis related to the impact on portable x-ray providers without first publishing an initial regulatory flexibility analysis—there is no short cut to a proper analysis.(5) Please do not hesitate to contact our office if your require assistance in your efforts to comply with the RFA, 202-205-6533.

Jere W. Glover
Chief Counsel for Advocacy

Shawne Carter McGibbon
Asst. Chief Counsel for Advocacy

ENDNOTES

1. Portable x-ray suppliers are non-physician x-ray technologists who drive portable equipment primarily to nursing homes and perform x-rays and EKGs at the patient’s bedside. The services prevent mostly frail patients from having to be transported in an ambulance to hospital emergency rooms for the procedure. This translates into less traumatic patient care and Medicare savings (resulting from otherwise high emergency room costs and ambulance transportation).

2. For instance, the set-up and transportation elements of the portable x-ray service are unique to the portable x-ray industry.

3. See, GAO, Medicare: Impact of Changing Transportation Policy for Portable Equipment Is Uncertain, GAO/HEHS-98-82 (May 1998).

4. For instance, in Southern Offshore Fishing Association v. Daley, 127 F.3d 104 (1^st Cir. 1997), the court remanded the RFA determinations of the National Marine Fishery Service (NMFS) to the Secretary of Commerce with instructions to undertake a rational consideration of the economic effects and potential alternatives the 1997 shark fishing quotas. NMFS essentially ignored industry comments that the rule reducing the shark fishing quota by 50% would have a significant economic impact.

5. See, Id., where the court determined that there could be no adequate final regulatory flexibility analysis without the benefit of public comment on an initial regulatory flexibility analysis.