Re: Outlier Rule - Application of the Congressional Review Act

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Thursday, May 8th 2003

The Honorable Tommy G. Thompson
Secretary of Health and Human Services
200 Independence Avenue, SW
Hubert H. Humphrey Building
Washington, DC 20201

Dear Secretary Thompson:

On March 5, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would change the payment methodology for extraordinarily high-cost cases (cost outliers). As required under a variety of Congressional directives, CMS examined the impacts of the rule. While CMS did not publish the results of its impact analysis, the agency determined that the proposed rule was a "major rule" for purposes of the Congressional Review Act (CRA). As a result, Congress must be given a minimum of 60 days to review the final rule before it may take effect.

We understand that discussions are ongoing about whether the CRA 60-day review period would apply. The American Hospital Association agrees with the agency's position in the Notice of Proposed Rule Making that the proposed rule is a major rule, and we continue to believe that its impact will clearly be of the magnitude to make it a major rule. It will affect most of the hospitals in this country, with the majority being negatively affected, and will involve hundreds of millions of dollars. Compounding the adverse effect is that these changes will result in mid-year losses for hospitals that have budgeted for and are operating under the current payment parameters. The intent of the CRA is to provide Congress at least 60 days for review of rules with such significant consequences.

We urge that the final rule be issued with a minimum of a 60-day effective date, providing Congress the mandated review period. We are sending a similar letter to CMS Administrator Tom Scully. If you have any questions about this matter, feel free to contact me or Maureen Mudron, Washington counsel, at (202) 626-2301.


Rick Pollack
Executive Vice President

A version of this letter was also sent to Tom Scully, CMS Administrator

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