Initial Final Rules Implementing the Patient
Protection and Affordable Care Act
Curtis W. Copeland
Specialist in American National Government
December 10, 2010
Congressional Research Service
7-5700
www.crs.gov
R41346
CRS Report for Congress
P
repared for Members and Committees of Congress
Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Summary
More than 40 provisions in the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148,
March 23, 2010, as amended) specifically require or permit federal agencies to issue regulations
to implement the act’s requirements. This report describes the final rules implementing PPACA
that had been published in the
Federal Register during the first 8½ months of implementation.
As of December 7, 2010, at least 18 final rules had been issued implementing certain provisions
in PPACA. An
Appendix to this report lists these 18 final rules, including a summary of their
requirements and their effective dates. PPACA specifically required that some of the rules be
published. Other rules cited particular sections of PPACA as the statutory authority, but those
sections did not specifically require the agencies to accomplish the underlying policy objectives
through the rulemaking process. Most of the final rules were issued without a prior notice of
proposed rulemaking, with the agencies often invoking the “good cause” exception in the
Administrative Procedure Act (APA, 5 U.S.C. §551
et seq.) for not allowing the public to
comment before the final rules were issued. In several of the rules, the issuing agencies also
stated that Congress had specifically authorized the issuance of final rules without first issuing a
proposed rule. Most of the final rules permitted post-promulgation public comments, with the
comment periods ending on or after the dates that the rules took effect. Most of the rules were
considered “economically significant” (i.e., with an annual impact on the economy of at least
$100 million), so the agencies provided estimates of their costs, benefits, and transfers.
This report will not be updated; its intent is to describe the initial rules being issued pursuant to
PPACA, not to serve as an ongoing compendium of all PPACA-related rules.
Congressional Research Service
Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Contents
Introduction ................................................................................................................................ 1
Final Rules to Implement PPACA ............................................................................................... 1
Most Final Rules Not Specifically Required by PPACA ........................................................ 2
No Prior Opportunity to Comment ........................................................................................ 5
Costs, Benefits, and Transfers ............................................................................................... 7
Concluding Observations .......................................................................................................... 11
Congressional Oversight Options ........................................................................................ 11
Tables
Table 1. Effective Dates and Comment Periods for PPACA Interim Final Rules........................... 7
Table 2. Cost, Benefit, and Transfer Estimates of PPPACA Final Rules ....................................... 9
Appendixes
Appendix. Final Rules Implementing PPACA (as of December 7, 2010).................................... 14
Contacts
Author Contact Information ...................................................................................................... 18
Congressional Research Service
Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Introduction
As discussed in a previous CRS report,1 more than 40 provisions in the Patient Protection and
Affordable Care Act (PPACA, P.L. 111-148, March 23, 2010, as amended) specifically require or
permit federal agencies to issue regulations to implement the act’s policy objectives. A number of
these PPACA regulatory provisions require that the rules be issued or take effect by a certain date,
and some of those deadlines occurred during the first several months of the act’s implementation.
For example:
• Section 10501(l) of the act requires the Secretary of the Department of Health
and Human Services (HHS) to establish a grant program to (among other things)
assist in the recruitment of students in underserved rural communities. The
section also states “Not later than 60 days after the date of enactment of this
section [i.e., by May 22, 2010], the Secretary shall by regulation define
‘underserved rural community’ for the purposes of this section.”
• Section 1332(a)(4)(b) states that “the Secretary shall promulgate regulations
relating to waivers under this section,” and requires that the rule be promulgated
within 180 days of enactment (i.e., by September 19, 2010).
• Section 10201(i) of PPACA states that the Secretary of the Department of Health
and Human Services (HHS) “shall promulgate regulations relating to applications
for, and renewals of, a demonstration project…,” and requires that the rule be
issued within 180 days of enactment (i.e., by September 19, 2010).
Federal agencies have begun issuing the regulations that were called for in PPACA. Also,
agencies have issued other regulations citing the act’s authority, even though PPACA does not
specifically require or otherwise mention rulemaking in those areas.
This report describes the final rules that were published in the
Federal Register within the first
8½ months of the act’s implementation (i.e., as of December 7, 2010).2 An
Appendix to this
report lists these rules, including summaries of their requirements and their effective dates. The
report will not be updated; its intent is to describe the initial rules being issued pursuant to
PPACA, not to serve as an ongoing compendium of all PPACA-related rules.
Final Rules to Implement PPACA
As of December 7, 2010, federal agencies had issued at least 18 final rules implementing certain
provisions in PPACA. The act specifically required that some of the rules be issued. For example:
1 See CRS Report R41180,
Regulations Pursuant to the Patient Protection and Affordable Care Act (PPACA), by
Curtis W. Copeland, for a summary of the provisions that required or permitted rulemaking. Shortly after PPACA was
enacted, Congress passed and the President signed the Health Care and Education Reconciliation Act of 2010
(HCERA, P.L. 111-152, March 30, 2010), which amended various health care and revenue provisions in PPACA. This
report considers both acts under the general heading of PPACA.
2 To identify these rules and documents, CRS conducted searches through the electronic
Federal Register at GPO
Access (http://www.gpoaccess.gov/fr/advanced.html) using the term “Patient Protection and Affordable Care Act.”
Rules in which PPACA was mentioned but not cited as the statutory authority were eliminated from the search results.
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
• Section 6402(a) of PPACA required the Secretary of HHS to “promulgate a
regulation that requires, not later than January 1, 2011, all providers of medical
or other items or services and suppliers under the programs under titles XVIII
and XIX that qualify for a national provider identifier to include their national
provider identifier on all applications to enroll in such programs and on all claims
for payment submitted under such programs.” On May 5, 2010, the Centers for
Medicare and Medicaid Services (CMS) within HHS published a final rule
implementing this requirement.3 The rule took effect on July 6, 2010.
• Section 1001 of PPACA added a new Section 2714 to the Public Health Service
Act. Subsection (a) of the new section states that a “group health plan and a
health insurance issuer offering group or individual health insurance coverage
that provides dependent coverage of children shall continue to make such
coverage available for an adult child (who is not married) until the child turns 26
years of age.” Subsection (b) then states that “The Secretary shall promulgate
regulations to define dependents to which coverage shall be made available under
subsection (a).” On May 13, 2010, the Internal Revenue Service (IRS), the
Employee Benefits Security Administration (EBSA) within the Department of
Labor, and HHS jointly published a final rule implementing this requirement.4
The rule took effect on July 12, 2010, and it was generally applicable to group
health plans, and to group and individual health insurance issuers, for plan years
beginning on or after September 23, 2010.
• As noted previously in this report, Section 10501(l) of the act required the
Secretary to issue a rule by May 22, 2010, defining the term “underserved rural
community” for the purposes of a grant program designed to assist in the
recruitment of students to those communities. On May 26, 2010, the Health
Resources and Services Administration (HRSA) within HHS published a final
rule pursuant to this directive.5 The rule was effective on June 25, 2010.
Most Final Rules Not Specifically Required by PPACA
Other final rules cited particular sections of PPACA as the statutory authority, but those sections
did not specifically require the agencies to accomplish the stated objectives through the
rulemaking process. For example:
• On May 5, 2010, HHS published a final rule implementing the early retiree
reinsurance program that was established by Section 1102 of PPACA.6 Although
3 U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, “Medicare and
Medicaid Programs; Changes in Provider and Supplier Enrollment, Ordering and Referring, and Documentation
Requirements; and Changes in Provider Agreements,” 75
Federal Register 24437, May 5, 2010.
4 U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, “Group Health Plans and Health Insurance Issuers
Relating to Dependent Coverage of Children to Age 26 Under the Patient Protection and Affordable Care Act; Interim
Final Rule and Proposed Rule,” 75
Federal Register 27122, May 13, 2010.
5 U.S. Department of Health and Human Services, Health Resources and Services Administration, “Publish Health
Service Act, Rural Physician Training Grant Program, Definition of ‘Underserved Rural Community,’” 75
Federal
Register 29447, May 26, 2010.
6 U.S. Department of Health and Human Services, Office of the Secretary, “Early Retiree Reinsurance Program,” 75
Federal Register 24450, May 5, 2010. This program provides reimbursement to participating employment-based plans
(continued...)
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
that section of the act required the Secretary to establish this reinsurance program
within 90 days after enactment (i.e., by June 21, 2010), it did not specifically
state that the program had to be implemented through regulations. The rule took
effect on June 1, 2010.
• Also on May 5, 2010, HHS published a final rule implementing a requirement in
Section 1103(a) of PPACA (as amended by Section 10102(b) of the act) that the
Secretary establish a mechanism, including an internet website, through with
individuals in any state could identify affordable health insurance coverage
options.7 Although the act required the agency to develop a “standardized
format” to be used in the presentation of this information, PPACA did not require
that this mechanism and format be established through rulemaking. The rule took
effect on May 10, 2010, and the website became active on July 1, 2010.
• On June 15, 2010, the IRS published a final rule providing guidance on the
indoor tanning services excise tax imposed through Section 10907 of PPACA.8
That section of the act requires that the tax be remitted “at such time and in such
manner as provided by the Secretary,” but it does not specifically require the
issuance of regulations.9 The IRS rule took effect the day it was published, and
applies to amounts paid after June 30, 2010. The rule expires on or before June
11, 2013.
• Section 1251 of PPACA states that certain provisions of the statute (subtitles A
and C of Title I on “Immediate Improvements in Health Care Coverage for All
Americans” and “Quality Health Insurance Coverage for All Americans,”
respectively) do not apply to group health plans and health insurance coverage in
existence as of the date that the legislation was enacted (March 23, 2010).
Although Section 1251 does not specifically require that new regulations be
issued with regard to these “grandfathered” health plans, on June 17, 2010, the
IRS, EBSA, and HHS jointly published a final rule implementing this section.10
The rule became effective on June 14, 2010 (three days before it was published),
although certain amendments took effect on July 12, 2010.
• On June 28, 2010, IRS, EBSA, and HHS jointly published a final rule
implementing several new sections of the Public Health Service Act that were
added by Section 1001 of PPACA: (1) Section 2704 (prohibiting preexisting
condition exclusions); (2) Section 2711 (regarding lifetime and annual dollar
limits on benefits); (3) Section 2712 (prohibiting rescissions); and (4) Section
(...continued)
for a portion of the cost of health benefits for early retirees and their spouses, surviving spouses, and dependents.
7 U.S. Department of Health and Human Services, Office of the Secretary, “Health Care Reform Insurance Web Portal
Requirements,” 75
Federal Register 24470, May 5, 2010. The address of this website is http://www.healthcare.gov/.
8 U.S. Department of the Treasury, Internal Revenue Service, “Indoor Tanning Services; Cosmetic Services; Excise
Taxes,” 75
Federal Register 33683, June 15, 2010.
9 It does, however, state that every person receiving a payment for services on which a tax is imposed “shall collect the
amount of the tax from the individual on whom the service is performed and remit such tax quarterly to the Secretary at
such time and in such manner as provided by the Secretary.”
10 U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, “Group Health Plans and Health Insurance Coverage
Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act; Interim Final
Rule and Proposed Rule,” 75
Federal Register 34538, June 17, 2010.
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
2719A (regarding patient protections).11 None of these four sections specifically
required that new regulations be issued. The final rule takes effect on August 27,
2010, and is generally applicable to group health plans and group health issuers
for plan years beginning on or after September 23, 2010. It is applicable to
individual health insurance issuers for policy years beginning on or after January
1, 2014, except that for enrollees under the age of 19, the regulations apply for
policy years starting on or after September 23, 2010.
• Section 1001 of PPACA also added a new Section 2713 to the Public Health
Service Act on “Coverage of Preventive Health Services.” On July 19, 2010, IRS,
EBSA, and HHS published a final rule implementing this new section. Although
PPACA required the Secretary of HHS to take certain actions (e.g., establishing
when certain statutory provisions would take effect), the legislation did not
specifically require that those actions be accomplished through the rulemaking
process. The rule takes effect on September 17, 2010, and applies to group health
plans and insurers for plan years starting on or after September 23, 2010.
• In addition, Section 1001 of PPACA (and amendments in Section 10101) added a
new Section 2719 to the Public Health Service Act regarding internal claims and
appeals and external appeals processes for group health plans and health issuers
that are not grandfathered plans. On July 23, 2010, IRS, EBSA, and HHS
published a final rule implementing this new section.12 Although PPACA allowed
the Secretary of HHS to deem an existing external review process to be in
compliance, it did not specifically require regulations. The rule takes effect on
September 21, 2010, and applies to group health plans and insurers for plan years
starting on or after September 23, 2010.
Although PPACA did not specifically require the agencies to issue any of these rules, the
agencies’ use of rulemaking to accomplish the underlying statutory objectives does not appear to
be either improper or unusual. In fact, to the extent that those requirements were intended to be
binding on the public, rulemaking may have been the agencies only viable option to implement
the statutory provisions. For example, if an agency issues a guidance document, policy statement,
or other non-rule document with the intent of legally binding the public, it could be subject to a
possible judicial challenge for not having properly promulgated the policy through the APA
rulemaking process. Case law and guidance from OMB indicate that agencies should not attempt
to bind affected parties through policy statements and other non-rule documents.13 Also, to the
11 U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, “Patient Protection and Affordable Care Act: Preexisting
Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections,” 75
Federal Register 37188,
June 28, 2010.
12 U.S. Department of the Treasury, Internal Revenue Service; Department of Labor, Employee Benefits Security
Administration; Department of Health and Human Services, “Interim Final Rules for Group Health Plans and Health
Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the Patient Protection
and Affordable Care Act,” 75
Federal Register 43330, July 23, 2010.
13 See, for example,
Appalachian Power Co. v. Environmental Protection Agency, 208 F.3d 1015 (D.C. Cir. 2000); and
Office of Management and Budget, “Final Bulletin for Agency Good Guidance Practices,” 72
Federal Register 3432,
January 25, 2007, which states (on p. 3433) that “The courts, Congress, and other authorities have emphasized that
rules which do not merely interpret existing law or announce tentative policy positions but which establish new policy
positions that the agency treats as binding must comply with the (Administrative Procedure Act’s) notice-and-comment
requirements, regardless of how they initially are labeled.”
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
extent that PPACA changed existing regulatory requirements, new rules would have to be issued
to amend those regulations.
No Prior Opportunity to Comment
The Administrative Procedure Act (APA, 5 U.S.C. §551
et seq.) establishes the basic
requirements for the rulemaking process, and generally requires that federal agencies publish a
notice of proposed rulemaking (NPRM) in the
Federal Register, give “interested persons” an
opportunity to comment on the proposed rule (usually at least 30 days), and after considering the
public comments, publish a final rule. The APA also provides certain exceptions to the NPRM
requirement. For example, 5 U.S.C. §553(b)(3)(B) permits agencies to issue final rules without a
prior NPRM when the agency finds, for “good cause,” that notice and comment procedures are
“impracticable, unnecessary, or contrary to the public interest.”14 A process known as “interim
final” rulemaking can be viewed as a particular application of the good cause exception, in which
an agency issues a final rule without an NPRM, but with a post-promulgation opportunity for the
public to comment. If the public comments persuade the agency that changes are needed in the
interim final rule, the agency may revise the rule by publishing a final rule reflecting those
changes.15
Most of the PPACA-related final rules that had been published as of December 7, 2010, were
issued without pre-publication public comment. Twelve of the 18 final rules were issued as
interim final rules. The issuing agencies frequently said that they invoked the APA’s “good cause”
exception to notice and comment because of the tight time constraints set by PPACA, and for
other reasons. For example:
• In the May 5, 2010, rule on the early retiree insurance program, HHS noted that
PPACA required the program to be established by June 21, 2010, but said that in
a practical sense, the program had to begin operations by June 1, 2010. Because
of the short time frame provided after the enactment of PPACA on March 23,
2010, HHS said “we find good cause to waive the notice of proposed rulemaking
and to issue this final rule on an interim basis without prior comment.”16
• In the May 26, 2010, rule on underserved rural communities, HHS stated that
issuing a prior proposed rule and taking comments was “impractical” because the
department was required to publish the rule within 60 days after the enactment of
PPACA, and “those procedures take significantly longer than 60 days.”17 HHS
also said that it believed it was unnecessary to undertake notice and comment
because the rule would have limited impact, and because the funds for the
program “might become available with little notice and awarding the funds
quickly would serve an important public interest.”18
14 5 U.S.C. §553(b).
15 For more information, see Michael Asimow, “Interim Final Rulemaking: Making Haste Slowly,”
Administrative Law
Review, 51 (Summer 1999), pp. 703-755.
16 75
Federal Register 24460.
17 75
Federal Register 29448.
18 Ibid.
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
In five final rules jointly issued by IRS, EBSA, and HHS,19 the agencies indicated that Congress
had specifically authorized the use of interim final rulemaking. All five of the rules contained the
following language.
Section 9833 of the Code, section 734 of ERISA (the Employee Retirement Income Security
Act), and section 2792 of the (Public Health Service or PHS) Act authorize the Secretaries of
the Treasury, Labor, and HHS (collectively, the Secretaries) to promulgate any interim final
rules that they determine are appropriate to carry out the provisions of chapter 100 of the
Code, part 7 of subtitle B of title I of ERISA, and part A of title XXVII of the PHS Act,
which include PHS Act sections 2701 through 2728 and the incorporation of those sections
into ERISA section 715 and Code section 9815.20
Even without specific statutory permission to issue these interim final rules, the agencies
indicated that they would have done so under the “good cause” exception in Section 553(b) of the
APA. For example, in the June 17 rule on “grandfathered health plans,” the agencies said that
even if the specific authorization for interim final rulemaking had not existed, “the Secretaries
have determined that it would be impracticable and contrary to the public interest to delay putting
the provisions in these interim final regulations in place until a full public notice and comment
process was completed.”21 The agencies pointed out that numerous provisions of PPACA were
applicable for plan years beginning on or after September 23, 2010 (six months after enactment),
and that there was not sufficient time to draft and publish proposed rules, receive and consider
comments, and draft and publish final regulations before that date.22
In most cases, the agencies issuing the rules provided explanations for why final rules were being
issued without an NPRM. However, in the IRS rule on the indoor tanning services excise tax, the
agency simply said that it had “been determined” that the notice and comment requirements of
the Administrative Procedure Act did not apply to these regulations, but provided no further
explanation (e.g., who made that determination, or why).23
All 12 of the interim final rules permitted the public a post-promulgation opportunity to
comment. As
Table 1 below indicates, all of these rules took effect on or before the dates that the
comment periods expired.
19 These were the May 13 rule on dependent coverage of children to age 26; the June 17 rule on “grandfathered” health
plans; the June 28 rule on preexisting condition exclusions and other matters; the July 19 rule on preventive services;
and the July 23 rule on internal claims and appeals and external review processes.
20 See, for example, 75
Federal Register 2715; 75
Federal Register 34545; 75
Federal Register 37195; and 75
Federal
Register 41729.
21 75
Federal Register 34545.
22 Agencies often publish final rules without prior proposed rules, and frequently cite the “good cause” exception. For
example, in 1998, GAO determined that about half of the 4,000 final rules published that year had no prior NPRM, and
that the agencies most commonly cited the “good cause” exception. See U.S. General Accounting Office,
Federal
Rulemaking: Agencies Often Published Final Actions Without Proposed Rules, GAO-98-126, August 31, 1998.
23 75
Federal Register33685. IRS also said that it had “been determined” that the rule was not a “significant regulatory
action” as defined in Executive Order 12866, so a regulatory assessment was not required. The rule was not reviewed
by the Office of Information and Regulatory Affairs at the Office of Management and Budget prior to publication.
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Table 1. Effective Dates and Comment Periods for PPACA Interim Final Rules
End of
Publication Date
Agency/Agencies
Subject
Effective Date
Comment Period
05/05/10 HHS/CMS National
Provider
07/06/10 07/06/10
Identifier
05/05/10 HHS
Web
Portal 05/10/10 06/04/10
Requirements
05/05/10 HHS
Early
Retiree
06/01/10 06/04/10
Insurance Program
05/13/10 IRS/EBSA/HHS
Coverage
of 07/12/10 08/11/10
Children to Age 26
05/26/10 HHS
Underserved
Rural
06/25/10 07/26/10
Communities
06/17/10 IRS/EBSA/HHS
Grandfathered
06/14/10a 08/16/10
Health Plans
06/28/10 IRS/EBSA/HHS
Preexisting 08/27/10 08/27/10
Condition Exclusions
07/19/10 IRS/EBSA/HHS
Preventive
Services
09/17/10 09/17/10
07/23/10 IRS/EBSA/HHS
Internal
Claims/
09/21/10 09/21/10
Appeals and External
Review Processes
07/30/10 HHS/OCIIO
Pre-Existing 07/30/10 09/28/10
Condition Insurance
Plan Program
11/17/10 Treasury/IRS;
Amendment to
11/15/10 12/17/10
DOL/EBSA;
Grandfathered
HHS/OCIIO
Health Plans Rule
12/01/10 HHS/OCIIO
Medical
Loss
Ratio
01/01/11 01/31/11
Requirements
Source: CRS, using information provided in the preambles to the agencies’ rules.
a. Certain amendments took effect July 12, 2010.
Costs, Benefits, and Transfers
Executive Order 12866 on “Regulatory Planning and Review” requires that covered agencies
(generally, all executive branch agencies except independent regulatory agencies like the
Securities and Exchange Commission) prepare a cost-benefit analysis before publishing any rule
that the administrator of the Office of Information and Regulatory Affairs (OIRA) within the
Office of Management and Budget (OMB) determines to be “economically significant.”24 The
executive order defines a regulatory action as economically significant if it is expected to have at
least a $100 million annual impact on the economy or “adversely affect in a material way the
economy, productivity, competition, jobs, the environment, public health or safety, or State, local,
24 The President, Executive Order 12866, “Regulatory Planning and Review,” 58
Federal Register 51735. The cost-
benefit requirements are in Section 6(a)(3)(C) of the order. The definition of an “economically significant” rule is in
Section 3(f)(1) of the order.
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or tribal government or communities.” OMB Circular A-4 requires agencies to present the
information in a standardized accounting statement, showing costs, benefits, and transfers
separately.25
IRS did not indicate whether the June 15, 2010, rule on the indoor tanning services excise tax was
economically significant or not, and did not provide any estimates of the rule’s costs, benefits, or
transfers. Several of the other final rules issued pursuant to PPACA were not considered
economically significant, so the issuing agencies did not conduct a formal cost-benefit analysis or
accounting statement. For example:
• In the May 5, 2010, rule on web portal requirements, HHS estimated that the
total cost of the rule would be about $17 million in 2010, and about $15 million
per year thereafter—well below the $100 million threshold to be considered
economically significant.26
• CMS said that the May 5, 2010, rule requiring the use of National Provider
Identification numbers was not economically significant because most providers
and suppliers were already meeting the requirements.27
• HHS said that the May 26, 2010, rule on “underserved rural communities” was
“technical in nature” and “will not change grant or funding eligibility for any
other grant program.”28
• CMS said that the November 15, 2010, rule on upper reimbursement limits
withdrew those regulatory provisions that were superseded by PPACA, and was
not economically significant.29
• OCIIO said that the November 17, 2010, rule amending the previously issued
rule on “grandfathered” health plans was significant, but not economically
significant.
However, other final rules issued pursuant to PPACA were considered economically significant
by either OIRA or the issuing agencies because they were expected to have at least a $100 million
impact on the economy. The issuing agencies provided information on their estimated costs,
benefits, and transfers in the preambles to the rules.
Table 2 below summarizes that information.
25 See http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf for a copy of OMB Circular A-4. Transfers occur when
wealth or income is redistributed without any direct change in aggregate social welfare (e.g., federal Medicare
payments to doctors and hospitals).
26 75
Federal Register 24480.
27 75
Federal Register 24447.
28 75
Federal Register 29450.
29 75
Federal Register 69596.
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Table 2. Cost, Benefit, and Transfer Estimates of PPPACA Final Rules
Agency/Subject/Date
Annual Costs
Annual Benefits
Annual Transfers
HHS
$39.8 million (paperwork
HHS said the benefits were
$1,250 million (from the
costs).
“not estimated.”
federal government to
Early retiree reinsurance
eligible sponsors and for
program
the administration of the
05/05/10
program).
IRS/EBSA/HHS
$10.4 million (in 2010
Qualitative benefits of
$5,275 million (mid-range
dol ars). Also, to the extent expanding coverage options estimate; range from
Dependent coverage of
that the rule results in
for the 19-25 population
$3,483 million to $6,895
children who have not
increased use of health care (mid-range estimate of 0.65 million). If premiums
attained age 26
services, there will be
million), which should
increase, there will be a
05/13/10
additional costs to achieve
decrease the cost-shifting
transfer from individuals
the health benefits.
of uncompensated care
with family coverage who
onto those with insurance,
do not have dependents
increase preventive health
ages 19 to 25 from those
care, and result in a
who do have such
healthier population. Also,
dependents.
greater job mobility.
IRS/EBSA/HHS
$24.7 million (mid-range
Qualitative benefits of plan
Cost-sharing provisions
estimate in 2010 dol ars;
continuity; potentially
may lead to transfers of
Grandfathered health
range of $21.2 million to
slower rate of premium
wealth from premium
plans
$26.9 million), due to the
growth; incentives to
payers overall to individuals
06/17/10
requirement to notify
employers to continue
using covered services.
participants and
coverage; greater certainty
Subsequent changes could
beneficiaries, and to
about what changes can be
lead to transfers from non-
maintain documents.
made without affecting
grandfathered to
grandfather status.
grandfathered plans.
IRS/EBSA/HHS
$4.9 million (in 2010
Qualitative benefits of
Smal transfer from those
dollars).
expanded coverage for
paying premiums in the
Preexisting condition
children with preexisting
group market to those
exclusions, lifetime and
conditions and individuals
obtaining the increased
annual dol ar limits on
who face rescissions,
protections.
benefits, rescissions, and
lifetime limits, and annual
patient protections
limits as a result of high
06/28/10
health costs. Also,
improved health outcomes,
improved worker
productivity, and reduced
financial strain.
IRS/EBSA/HHS
Qualitative discussion of
Qualitative benefits of
Qualitative discussion of
new costs to health care
expanding coverage and
transfers expected to the
Coverage of preventive
system when beneficiaries
eliminating cost sharing,
extent that costs previously
services under PPACA
increase use of preventive
resulting in increased
paid out-of-pocket now
07/19/10
services. Magnitude of
access and utilization of
covered by group health
increased use depends on
services, which are
plans and insurers. Risk
“price elasticity of demand” expected to result in
pooling will result in higher
and percentage change in
reduced illnesses, reduced
average premiums. Rule
prices facing those with
morbidity and mortality,
expected to result in small
reduced cost sharing or
increased productivity, and
transfer from those who
newly gaining coverage.
savings from lower health
use less preventive services
care costs.
to those who use more.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Agency/Subject/Date
Annual Costs
Annual Benefits
Annual Transfers
IRS/EBSA/HHS
$51.6 million
Qualitative benefits include
Reversals estimated at
a more uniform, rigorous,
$24.4 million, part of which
Internal claims and
and consumer friendly
is a transfer from plans and
appeals and external
system of claims and
issuers to those receiving
review processes
appeals processing, which
payments for denied
07/23/10
will lead to a range of
benefits.
direct and indirect benefits
(e.g., providing benefits
consistent with the
established terms of plans).
HHS/OCIIO
$1,939,020 for reporting
Qualitative benefits of
$5 billion in federal funds
and recordkeeping
increasing access to health
to contractors to aid in
Pre-existing condition
care and reduced financial
administering the program
insurance plan program
strain for participants. Also
from 07/01/10 to 12/31/13.
07/30/10
likely to improve health
outcomes and worker
productivity.
HHS/CMS
N/A
N/A
$440 million decrease in
FY2011 operating payments
Hospital inpatient
and $21 million decrease in
prospective payment
FY2011 capital payments.
systems for acute care
Long-term care hospitals
hospitals
expected to have an
08/16/10
increase in payments of
$22.5 million.
HHS/CMS
N/A
N/A
Net savings estimated at
$960 million in calendar
Updates the Home
year 2011.
Health Prospective
Payment System outlier
policy
11/17/10
HHS/CMS
N/A N/A Increased
expenditures
of
about in FY2011 from
Hospital outpatient
OPPS provisions of $3.2
prospective payment
billion, and $230 million
systems
from ASC provisions.
11/24/10
HHS/CMS
N/A N/A PPACA
provisions
estimated to increase
Payment policies under
expenditures by $1.97
the physicians fee
billion.
schedule
11/29/10
HHS/OCIIO
Mid-range estimated costs
Qualitative benefits of
Mid-range estimated
of $34.7 to $37.4 million
increased transparency,
transfers of $863.5 million
Medical loss ratio
per year in 2011 to 2013
increased quality of medical to $930 million in 2011 to
requirements
for capturing and reporting
care, and improved health.
2013 from shareholders or
12/01/10
data, and providing rebate
stakeholders to enrollees.
notifications.
Source: CRS, using information provided in the preambles to the agencies’ rules.
Notes: Unless otherwise indicated, estimates are in 2010 dol ars and reflect a 3% discount rate.
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Concluding Observations
Although Congress sometimes specifically requires or permits federal agencies to issue
regulations on particular issues, the agencies can also decide to issue regulations to accomplish
statutory requirements when not directed to do so. The initial regulations pursuant to PPACA are
a clear illustration of that principle. The legislation contained more than 40 provisions that either
required or permitted federal agencies to issue regulations, but most of the final rules issued
pursuant to PPACA during the first 8½ months after enactment were not specifically mentioned in
the act. The agencies may be choosing to use rulemaking as opposed to other possible
implementation mechanisms (e.g., guidance documents or policy memoranda) to carry out
PPACA provisions because only regulations developed through the APA rulemaking process carry
the force of law and can be binding on the public. If an agency attempts to bind the public
through some mechanism other than a rule, the agency’s actions could be subject to judicial
review and possible reversal.
Similarly, although PPACA requires that certain final rules be issued without prior notice and
comment,30 federal agencies are also doing so without such requirements. The agencies frequently
invoked the “good cause” exception to notice and comment provided in the APA, stating that the
requirements in PPACA that certain programs be quickly implemented made it impractical for
them to develop and publish a proposed rule, take comments on the proposal, and then develop
and publish the final rule. The agencies also frequently said that it was similarly impractical for
them to wait 30 days after publication to put those rules into effect (as is also generally required
by the APA).
Although most of the PPACA-related final rules were issued without a prior opportunity for
comment, the agencies did allow the public to comment on most of those rules after they were
published. And even though the comment periods for these rules ended on or before the rules took
effect, the agencies may still be persuaded to change them at some point in the future.
Nevertheless, comments on final rules are generally believed to be less likely to result in changes
to the rules than if comments were permitted prior to the final rules being published and made
effective.31 Because the agencies said that they were using interim final rulemaking because of
tight deadlines in PPACA for rulemaking and implementation, as those deadlines become longer,
it is possible that the agencies may be more willing to permit full notice and comment
rulemaking.
Congressional Oversight Options
Congress has a range of tools available to oversee the rules that federal agencies are expected to
issue to implement PPACA, including oversight hearings and confirmation hearings for the heads
of regulatory agencies. Individual Members of Congress may also participate in the rulemaking
30 For example, Section 1104(b)(2) of PPACA requires that the Secretary of HHS promulgate two interim final rules.
31 For example, although the Administrative Conference of the United States endorsed the use of interim final and
direct final rulemaking, it also said that “prepromulgation comment is generally considered preferable because agencies
are perceived by commenters as more likely to accept changes in a rule that has not been promulgated as a final rule—
and potential commenters are more likely to file comments in advance of the agency’s ‘final’ determination.” See
“Recommendation 95-4, Procedures for Noncontroversial and Expedited Rulemaking,” available at
http://www.law.fsu.edu/library/admin/acus/305954.html.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
process by, among other things, meeting with agency officials and filing public comments.32 As
one author indicated,
[I]nvestigations conducted by congressional committees constitute another powerful device
of formal political supervision.... The public legislative hearings, in which administrative
action is carefully scrutinized and a commissioner or staff member is plied with questions,
symbolizes the unparalleled sophistication of American congressional control over
administrative action, in general and by [independent regulatory agencies], in particular.
Individual oversight by representatives or senators also takes place. Through correspondence
or meetings, the latter convey the concerns of their constituents.33
Another option is the Congressional Review Act (CRA, 5 U.S.C. §§801-808), which was enacted
in 1996 in an attempt to reestablish a measure of congressional authority over rulemaking
“without at the same time requiring Congress to become a super regulatory agency.”34 The act
generally requires federal agencies to submit all of their covered final rules to both houses of
Congress and GAO before they can take effect.35 It also established expedited legislative
procedures (primarily in the Senate) by which Congress may disapprove agencies’ final rules by
enacting a joint resolution of disapproval.36 The definition of a covered rule in the CRA is quite
broad, arguably including any type of document (e.g., legislative rules, policy statements,
guidance, manuals, and memoranda) that the agency wishes to make binding on the affected
public.37 After these rules are submitted, Congress can use the expedited procedures specified in
the CRA (particularly in the Senate) to disapprove any of the rules. CRA resolutions of
disapproval must be presented to the President for signature or veto.
For a variety of reasons, however, the CRA has been used to disapprove only one rule in the 14
years since it was enacted.38 Perhaps most notably, it is likely that a President would veto a
resolution of disapproval to protect rules developed under his own administration, and it may be
difficult for Congress to muster the two-thirds vote in both houses needed to overturn the veto.
Congress can also use regular (i.e., non-CRA) legislative procedures to disapprove agencies’
rules, but such legislation may prove even more difficult to enact than a CRA resolution of
32 In
Sierra Club v. Costle (657 F.2d 298, D.C. Cir. 1981), the D.C. Circuit concluded (at 409) that it was “entirely
proper for congressional representatives vigorously to represent the interests of their constituents before administrative
agencies engaged in informal, general policy rulemaking, so long as the individual Members of Congress do not
frustrate the intent of Congress as a whole as expressed in statute, nor undermine applicable rules of procedure.”
33 Dominique Custos, “The Rulemaking Power of Independent Regulatory Agencies,”
The American Journal of
Comparative Law, vol. 54 (Fall 2006), p. 633.
34 Joint statement of House and Senate Sponsors, 142
Cong. Rec. E571, at E571 (daily ed. April 19, 1996); 142
Cong.
Rec. S3683, at S3683 (daily ed. April 18, 1996).
35 If a rule is considered “major” (e.g., has a $100 million annual effect on the economy), then the CRA generally
prohibits it from taking effect until 60 days after the date that it is submitted to Congress.
36 For a detailed discussion of CRA procedures, see CRS Report RL31160,
Disapproval of Regulations by Congress:
Procedure Under the Congressional Review Act, by Richard S. Beth.
37 For more on the potential scope of the definition of a “rule” under the CRA, see CRS Report RL30116,
Congressional Review of Agency Rulemaking: An Update and Assessment of The Congressional Review Act after a
Decade, by Morton Rosenberg.
38 The rule overturned in March 2001 was the Occupational Safety and Health Administration’s ergonomics standard.
This reversal was the result of a unique set of circumstances in which the incoming President (George W. Bush) did not
veto the resolution disapproving the outgoing President’s (William J. Clinton’s) rule. See CRS Report RL30116,
Congressional Review of Agency Rulemaking: An Update and Assessment of The Congressional Review Act after a
Decade, by Morton Rosenberg, for a description of several possible factors affecting the CRA’s use, and for other
effects that the act may have on agency rulemaking.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
disapproval (primarily because of the lack of expedited procedures in the Senate), and if enacted
may also be vetoed by the President.
Although the CRA has been used only once to overturn an agency rule, Congress has regularly
included provisions in the text of agencies’ appropriations bills directing or preventing the
development of particular regulations. Such provisions include prohibitions on the finalization of
particular proposed rules, restrictions on certain types of regulatory activity, and restrictions on
implementation or enforcement of certain provisions.39 Appropriations provisions can also be
used to prompt agencies to issue certain regulations, or to require that certain procedures be
followed before or after their issuance. The inclusion of regulatory provisions in appropriations
legislation as a matter of legislative strategy appears to be prompted by two factors: (1)
Congress’s ability via its “power of the purse” to control agency action, and (2) the fact that
appropriations bills are considered “must pass” legislation. Congress’s use of regulatory
appropriations restrictions has fluctuated somewhat over time, and previous experience suggests
that they may be somewhat less frequent when Congress and the President are of the same party.40
39 See CRS Report RL34354,
Congressional Influence on Rulemaking and Regulation Through Appropriations
Restrictions, by Curtis W. Copeland.
40 Ibid., p. 35. This report indicated that some appropriations restrictions were repeated every year for 10 years, some
were repeated several years in a row but then stopped, and some appeared in only one appropriations bill. Some
restrictions appeared to be intended to stop particular rules issued at the end of presidential administrations.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Appendix. Final Rules Implementing PPACA (as of
December 7, 2010)
Publication
Department/Agency
Date/Citation
or Office
Summary Dates
May 5, 2010
Department of Health and
Interim final rule
Effective on July 6, 2010.
Human Services
implementing the
(HHS)/Centers for
requirement in Section
Comment period ended
July 7, 2010.
75
Federal Register 24437 Medicare and Medicaid
6402(a) of PPACA that
Services (CMS)
providers of medical or
other items or services to
include their National
Provider Identifier (NPI) on
all applications to enroll
and on all claims for
payment. The rule also
requires physicians and
eligible professionals to
order and refer covered
items to be enrolled in
Medicare, and adds
requirement to provide
documentation on referrals
to programs at high risk of
waste and abuse.
May 5, 2010
HHS/Office of the
Interim final rule
Effective on May 10, 2010.
Secretary
implementing the
The initial version of the
requirement in Section
website became available
75
Federal Register 24470
1103(a) of PPACA to
July 1, 2010.
establish a website through
which individuals and small
Comment period ended
businesses can obtain
June 4, 2010.
information about the
insurance coverage options
available in their state. The
rule adopts the categories
of information that will be
collected and displayed, and
the data required from
issuers and requested from
states, associations, and
high risk pools.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Publication
Department/Agency
Date/Citation
or Office
Summary Dates
May 5, 2010
HHS/Office of the
Interim final rule
Effective on June 1, 2010.
Secretary
implementing the Early
75
Federal Register 24450
Retiree Reinsurance
Comment period ended
Program in Section 1102 of
June 4, 2010.
PPACA. This temporary
program (ends by January
1, 2014) provides
reimbursement to
participating employment-
based plans for a portion of
the cost of health benefits
for early retirees and their
spouses/dependents
(certain claims between
$15,000 and $90,000).
May 13, 2010
Department of the
Interim final rule
Effective on July 12, 2010.
Treasury(Treasury)/Internal implementing the
The requirements generally
75
Federal Register 27122 Revenue Service (IRS);
requirements in Section
apply for plan years
Department of Labor
1001 of PPACA for group
beginning on or after
(DOL)/Employee Benefits
health plans and health
September 23, 2010.
Security Administration
insurance coverage in the
(EBSA); HHS
group and individual
Comment period ended
markets regarding
August 11, 2010.
dependent coverage of
children who have not
attained age 26.
May 26, 2010
HHS
Interim final rule (required
Effective on June 25, 2010.
by Section 10501(l) of
75
Federal Register 2944
7
PPACA) defining
Comment period ended
“underserved rural
July 26, 2010.
community” for purposes
of the Rural Physician
Training Grant Program in
Section 749B of the Public
Health Service Act.
June 15, 2010
Treasury/IRS
Final and temporary rules
Effective on June 15, 2010
providing guidance on the
The tax applies to
75
Federal Register 33683
indoor tanning services
payments after June 30,
excise tax imposed by
2010.
Section 10907 of PPACA.
No comments requested.
June 17, 2010
Treasury/IRS; DOL/EBSA;
Interim final rule
Effective on June 14, 2010,
HHS
implementing the rules for
except that certain
75
Federal Register 34538
group health plans and
amendments are effective
health insurance coverage
July 12, 2010.
in the group and individual
markets regarding status as
Comment period ended
a “grandfathered” health
August 10, 2010.
plan (Section 1251 of
PPACA).
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Publication
Department/Agency
Date/Citation
or Office
Summary Dates
June 28, 2010
Treasury/IRS; DOL/EBSA;
Interim final rule
Effective on August 27,
HHS
implementing the rules for
2010. Some of the
75
Federal Register 37188
group health plans and
requirements apply for plan
health insurance coverage
years starting on or after
in the group and individual
September 23, 2010, while
markets regarding
other requirements begin
preexisting condition
for plan years starting on
exclusions, lifetime and
or after January 1, 2014.
annual dol ar limits on
benefits, rescissions, and
Comment period ended
patient protections
August 27, 2010.
(Sections 2704, 2711, 2712,
and 2719A of PPACA).
July 19, 2010
Treasury/IRS; DOL/EBSA;
Interim final rule
Effective on September 17,
HHS
implementing the
2010. Applicable to group
75
Federal Register 41726
requirements for group
health plans and group
health plans and health
health insurers for plan
insurance coverage in the
years beginning on or after
group and individual
September 23, 2010.
markets (Section 2713 of
the Public Health Service
Comment period ended
Act as revised by PPACA).
September 17, 2010.
July 23, 2010
Treasury/IRS; DOL/EBSA;
Interim final rule
Effective September 21,
HHS
implementing the
2010. Applicable to group
75
Federal Register 43330
requirements regarding
health plans and group
internal claims and appeals
health insurers for plan
and external review
years beginning on or after
processes for group health
September 23, 2010.
plans and health insurance
coverage in the group and
Comment period ended
individual markets (Section
September 21, 2010.
2719 of the Public Health
Service Act as revised by
PPACA).
July 30, 2010
HHS/Office of Consumer
Interim final rule
Effective on July 30, 2010.
Information and Insurance
implementing the
75
Federal Register 45014 Oversight (OCIIO)
requirement in Section
Comment period ended
1101 of PPACA regarding
September 28, 2010.
the establishment of a
temporary high risk
insurance pool program to
provide coverage to
uninsured individuals with
pre-existing conditions.
August 16, 2010
HHS/CMS
Final rule revising the
Effective on October 1,
Medicare hospital inpatient
2010. (Proposed rule was
75
Federal Register 50042
prospective payment
published May 4, 2010.)
systems for operating and
capital-related costs of
acute care hospitals to
(among other things)
implement certain
provisions in PPACA.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Publication
Department/Agency
Date/Citation
or Office
Summary Dates
November 15, 2010
HHS/CMS
Final rule implementing
Effective on December 15,
Section 2503(a) of PPACA
2010. (Proposed rule was
75
Federal Register 69591
by withdrawing provisions
published September 3,
on upper reimbursement
2010.)
limits and other matters.
November 17, 2010
Treasury/IRS; DOL/EBSA;
Interim final rule amending
Effective on November 15,
HHS/OCIIO
the June 17, 2010, interim
2010.
75
Federal Register 70114
final rule on “grand-
fathered” health plans. The
Comment period ended
amendment permits certain December 17, 2010.
changes in policies,
certificates, or contracts of
insurance without loss of
“grandfathered” status.
November 17, 2010
HHS/CMS
Final rule that (among
Effective on January 1,
other things) updates the
2011. (Proposed rule was
75
Federal Register 70372
Home Health Prospective
published July 23, 2010.)
Payment System outlier
policy in accordance with
Section 3131 of PPACA.
November 24, 2010
HHS/CMS
Final rule implementing
Effective on January 1,
PPACA provisions
2011, except certain
75
Federal Register 71800
regarding (1) the Medicare
provisions effective on
hospital outpatient
December 2, 2010. Various
prospective payment
applicability dates.
system, (2) the Medicare
ambulatory surgical center
payment system, (3)
Comment period ends
payments to hospitals for
January 3, 2011.
direct graduate medical
education and indirect
medical education costs,
and (4) limitations on
certain physician referrals
to hospitals in which they
have a financial interest.
November 29, 2010
HHS/CMS
Final rule with comment
Effective on January 1,
period addressing changes
2011.
75
Federal Register 73170
to the physician fee
schedule and other
Comment period ends
Medicare Part B policies.
January 3, 2011.
Among other things, the
rule “addresses,
implements, or discusses”
provisions in PPACA.
December 1, 2010
HHS/OCIIO Interim
final
rule
Effective on January 1,
implementing medical loss
2011.
75
Federal Register 74864
ratio requirements for
health insurers under
Comment period ends
Section 2718(a)-(c) of the
January 31, 2011.
Public Health Service Act
as amended by PPACA.
Source: CRS, using information provided in the preambles to the agencies’ rules.
Congressional Research Service
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Initial Final Rules Implementing the Patient Protection and Affordable Care Act
Author Contact Information
Curtis W. Copeland
Specialist in American National Government
cwcopeland@crs.loc.gov, 7-0632
Congressional Research Service
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