August 20, 2010

Children's Health Insurance Program (CHIP); Redistribution of FY 2006 Unexpended SCHIP Funds and Children's Health Insurance Program Reauthorization Act (CHIPRA) Allotment Procedures

Proposed Rule
Summary

Score: 15 / 60

Key materials
Additional details
Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AP53
Agency Name
Department of Health and Human Services
Rule Publication Date
09/16/2009
Comment Closing Date
11/16/2009

RULE SUMMARY

This proposed rule describes the implementation of certain funding provisions under title XXI of the Social Security Act (the Act), the Children’s Health Insurance Program (CHIP), as amended by the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA), and by other related CHIP legislation. Specifically, this proposed rule addresses methodologies and procedures for determining States’ FY 2009 through FY 2013 allotments and payments in accordance with sections 2104 and 2105 of the Act, as amended by CHIPRA.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
0938-AP53 can be found from regulations.gov using RIN and keyword searches, but it is very difficult to find on the Department of Health and Human Service's website.
3/5
2. How verifiable are the data used in the analysis?
The analysis cites all the data in tables but do not provide links. Principal data are past Children's Health Insurance Program allotments to states (available from the Federal Register), growth rate of child population from the Census Bureau, and figures in formulas prescribed by legislation. An enterprising reader could eventually find all of these, but they are not linked.
3/5
3. How verifiable are the models and assumptions used in the analysis?
Calculations are prescribed by legislation, so they are verifiable by anyone who wants to read the legislation. But there are no real "models" or "assumptions" in an economic sense.
0/5
4. Was the analysis comprehensible to an informed layperson?
The RIA section itself is very brief and consists of two things: an assertion that HHS has no obligation to analyze alternatives because the formula is in statute, and the accounting statemen required by OMB. These statements are easy to understand but not very helpful in revealing the agency's thought processes. The brief analysis section says the methodology calculated in the regulation will be used to distribute up to $44 billion in funds, but the accounting statement only lists about $13.5 billion. This is puzzling. The preamble to the regulation essentially sets out the legislative formulas and indicates where the data come from; the calculations are not difficult and easy to follow. Most of the preamble discusses legislative requirements and is tough for outsiders to follow.
2/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
0/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The closest it comes is to say that the funds are supposed to expand health insurance availability for low-income children. This, however, does not address what seems to be the underlying preferred outcome of healthier children. Neither the preamble nor the RIA mention how many children are covered by CHIPS or will be covered under the new allotment system.
2/5
Does the analysis identify how these outcomes are to be measured?
The analysis makes no attempt to measure how much these funds will expand health insurance to low-income children.
0/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The analysis makes no attempt to assess effects of funding on the desired outcome, so there's no theory or evidence on this.
0/5
Does the analysis present credible empirical support for the theory?
See above.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
No relevant discussion.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
0/5
Does the analysis identify a market failure or other systemic problem?
No discussion of a systemic problem explaining why either CHIP or the proposed changes are necessary to expand health insurance for children.
0/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
No relevant discussion.
0/5
Does the analysis present credible empirical support for the theory?
No relevant discussion.
0/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
No relevant discussion.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
0/5
Does the analysis enumerate other alternatives to address the problem?
The RIA mentions that because the legislation did not allow for discretionary administrative policies, HHS did not consider other options.
0/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
No alternatives are considered.
0/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
No alternatives are considered.
0/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
No relevant discussion.
0/5
8. How well does the analysis assess costs and benefits?
1/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
Federal outlays that result from the option Congress mandates are calculated.
3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
Only federal outlays are considered. No discussion of how these changes might affect any other outlays. Surely this would affect costs to insurance companies, doctors, patients, hospitals, etc.
2/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
No relevant discussion.
0/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
No relevant discussion.
0/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
No relevant discussion.
0/5
Does the analysis identify the alternative that maximizes net benefits?
Outcomes are not measured, so net benefits cannot be calculated.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Outcomes are not measured, so cost-effectiveness cannot be quantified.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis only calculates costs to the federal government and shows how each state and territory's allotment will change.
2/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis identifies low-income children benefitting from greater opportunities for health care and the states, District of Columbia, commonwealths, and territories benefitting from greater information on how they can expend funds.
1/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
HHS explicitly said that it would not consider any alternatives because legislation determined what it had to do. The regulation used the analysis only in the narrow sense that the funding calculations determined each state's allotment of federal dollars.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
The analysis did not even calculate net benefits for the option chosen. However, HHS asserted its chosen option was mandated by law.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No measures or goals were established, and the only information in the analysis is state funding allotments. Measures and goals could be set for actual state usage of funding, but this would only measure costs, not benefits.
0/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
Costs could be tracked, but not benefits.
1/5
 
Total 15 / 60