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CMS Small Entity Compliance Guides

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, Pub. L. 104-121, as amended by Pub. L. 110-28, May 25, 2007) contains specific requirements for issuance of “small entity compliance guides.” Guides are to explain what actions affected entities must take to comply with agency rules. The following apply to the guides: (1) Guides must be prepared when agencies issue final rules for which agencies were required to prepare a Final Regulatory Flexibility Analysis under the Regulatory Flexibility Act; (2) Agencies are required to publish these compliance guides in easily identifiable locations on their websites, and distribute the guides to affected entities; (3) Guides must be published not later than when the final rule requirements become effective; (4) Guides must explain the actions a small entity must take to meet the requirements of a rule and may include a description of possible procedures that could assist a small entity in meeting these requirements; and (5) Agencies are encouraged to assure that guides are understandable by affected entities and are allowed to group issue related guides together when they cover related rules.

The head of each agency must also submit an annual report to the Congress describing the status of its compliance with these requirements. The first report is due by May 25, 2008, the anniversary of the amendments to these provisions.

The programs CMS administers, including original Medicare, Medicare Advantage, Medicare Part D, Medicaid, and the Children's Health Insurance Program, as well as delegated functions under HIPAA, directly or indirectly affect more than one million health care providers and suppliers. The great majority of these entities are technically “small” within the established SBA revenue size guidelines, or because they are non-profit, or both. However, CMS has no means to determine which specific entities are “small” and as a practical matter generally treats all providers and suppliers affected by a rule as small entities. Nor do most affected entities themselves know whether or not they are “small entities” as defined in law and regulation.

Many program functions involve some form of regulation of providers and suppliers and, in some cases, States. These functions include issuance of provider numbers, regulation of facility quality and safety, payment rules and limits, and many others. It is long-standing CMS policy to minimize the burden of its rules on all affected entities, whether technically “small” or not. To this end, CMS uses a number of mechanisms, such as the Open Door Forums described below, to minimize the burdens of its proposed regulations before publication and before issuance as final rules. As a result, the majority of CMS rules do not create a “significant impact on a substantial number” of small entities and hence do not require either a Regulatory Flexibility Analysis or a compliance guide.

However, the entire body of rules for these programs is substantial, and their effects on providers and suppliers pervasive, whether or not any particular rule has significant impacts. Accordingly, CMS has over time developed the www.cms.hhs.gov website to serve the needs of providers, suppliers, and others for compliance-related information. The various guidance and procedure documents on this website number approximately 37,000, comprising over 7 million pages. While all of these website documents do not provide compliance-related assistance, the majority of them do. In fact, CMS has consciously designed this website to provide a comprehensive, thorough, and useful guide to compliance with every CMS rule by every type of provider or supplier. Taken as a whole, this website constitutes a system of “small entity compliance guides.”

As a primary informational tool for providers and suppliers, CMS sponsors a “Medicare Learning Network” (MLN) that provides educational compliance information for Medicare fee-for-service providers. Medicare providers are often faced with uncertainty when it comes to keeping up with changes in Medicare policy. While policies are communicated through different media and by various parties, it is still hard to determine "How does this apply to me?" The Medicare Learning Network aims to solve that problem by providing a variety of training and educational materials that break down Medicare policy into plain language with actionable tips to use in day-to-day work. The MLN uses a variety of mechanisms, such as the Internet, national educational articles, brochures, fact sheets, web-based training courses, and videos, to deliver a planned and coordinated provider education program. The Network uses these different mechanisms to provide educational opportunities that accommodate healthcare professionals' busy schedules, with the least amount of disruption to normal business functioning. Its goal is to provide timely, easy-to-understand educational materials to accompany the release of new or revised Medicare Program policies. MLN provides yet another organized system performing the functions of “small entity compliance guides.”

As another informational assistance tool, CMS has created a comprehensive manual system that presents compliance information on virtually all CMS regulations. The manual chapters pull together all the issuances on particular topics (whether or not any particular issuance resulted from a rule with significant impacts) and provide integrated and cohesive statements of operational policy. These chapters are frequently updated to reflect the latest rules. The manual chapters serve in part as a system of “small entity compliance guides” meeting the letter and spirit of the SBREFA requirements.

CMS has created a Quarterly Provider Update system as another tool to assist affected entities. The Quarterly Provider Update system. The QPU is intend to make it easier for providers, suppliers, and the general public to understand the changes we are proposing or making in the programs we administer. CMS publishes the QPU at the beginning of each quarter to inform the public about regulations currently under development during each quarter.

CMS uses still other mechanisms to facilitate compliance with its rules, and to improve the rules themselves. CMS provides Open Door Forums on almost all major regulatory issues, with particular emphasis on those that impact providers in new or burdensome ways. We conduct about 100 of these forums annually. Providers and other stakeholders can attend by telephone from anywhere in the United States. These forums provide small entities an opportunity to obtain information, ask questions, and express their views to senior CMS officials. They focus strongly on ideas to reduce unnecessary burden or costs. These forums often result in improvements in CMS policies, regulations, and practices that benefit all our stakeholders. The Open Door Forums thereby serve in part the functions of “small entity compliance guides.”

These and many other sources of information on the CMS website provide compliance guides or the functional equivalent. They deliberately overlap in specific purpose, delivery mechanism, and level of detail because different providers need different kinds of assistance, and informational needs change over time and across provider types. CMS attempts to provide the informational tools needed by all those affected by its rules, regardless of whether the effect of a particular rule on them is direct or indirect, or whether they need an in depth understanding or only a general idea of effects, and whether or not they are technically “small.”

While some CMS policies are promulgated through rules that have “significant impacts on substantial numbers” on small entities, and are accompanied by Regulatory Flexibility Analyses, most of these rules do not create new compliance burdens as such. For example, CMS annually updates its many “prospective payment” rules to provide for changes needed to accommodate inflation, advances in medical classification systems, improvements in weighting factors, and other needed changes. These are the rules that specify the amounts that providers will be reimbursed for the services they provide. These updates sometimes have major financial consequences on payment levels. However, providers already know how to submit bills. They have to “comply” with updates only in the sense that when they submit bills those updated rules determine how much they will be paid for particular procedures. These payment rules do not ordinarily create regulatory “compliance” burden as such, even though they often trigger the requirement for a Regulatory Flexibility Analysis because their effects are so substantial.

The vast majority of CMS regulatory issuances involve modifications to prior regulations. Compliance systems and instructions already exist for the prior regulations, and are revised as regulations are amended. For example, there are rules establishing “Conditions of Participation” for most types of Medicare providers. These rules are intended to assure patient safety and quality care. Although rules are periodically modified, affected providers are already used to, and competent in complying with the existing rules, and the inspection and other administrative mechanisms used in their enforcement. Genuinely new regulatory requirements that create brand new sets of “compliance” burdens on providers are rare.

Some of the most important CMS rules do not create any direct requirements on small entities. For example, the rule establishing the Medicare Part D program did not directly regulate pharmacies, but was expected to have major (and mostly positive) effects on pharmacy finances as explained in the Regulatory Flexibility Analysis contained in the preamble of that rule.

Of course, when a rule does create new compliance requirements with a significant economic impact, CMS provides substantial informational assistance. As a recent example, in April of 2007, CMS published a final rule creating a new system of competitive bidding for certain durable medical equipment and supplies. In order to assist small entities to compete within this system, CMS has created an extensive special website on the DMEPOS Competitive Bidding Program, operated by a CMS contractor, at www.dmecompetitivebid.com. CMS also held a special Open Door Forum and an educational Web cast that April.

CMS does not normally entitle its many informational and educational services “small entity compliance guides.” That term would become meaningless if applied to a multitude of documents, would be misleading or confusing to most affected entities, and would mischaracterize both the nature of the rules and of the educational and other assistance we provide. However, to provide even more guidance to affected entities, and to comply with SBREFA, we are now including at this location on our Web site a “small entity compliance guide” for each regulation for which a Final Regulatory Flexibility Analysis has been prepared since enactment of the changes to SBREFA. In the usual case where no new or direct compliance requirements are imposed on small entities, we explain this as well as describing other actions small entities might take to minimize any adverse effects.

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