CMS-10394.SupportingStatementPart-A

Supporting Statement – Part A
Application To Be a Qualified Entity to Receive Medicare Data for Performance
Measurement (ACA Section 10332)

A. Background
Section 10332 of the Patient Protection and Affordable Care Act (ACA) requires the Secretary
to make standardized extracts of Medicare claims data under Parts A, B, and D available to
“qualified entities” for the evaluation of the performance of providers of services and
suppliers. The statute provides the Secretary with discretion to establish criteria to determine
whether an entity is qualified to use claims data to evaluate the performance of providers of
services and suppliers. We are proposing at section CFR 401.703 to evaluate an
organization’s eligibility across three areas: organizational and governance capabilities,
addition of claims data from other sources (as required in the statute), and data privacy and
security. This is the application through which organizations will provide information to CMS
to determine whether they will be approved as a qualified entity.
B. Justification
1 . Need and Legal Basis
The Patient Protection and Affordable Care Act (ACA) was enacted on March 23, 2010 (Pub.
L. 111-148). ACA amends section 1874 of the Social Security Act by adding a new
subsection (e) to make standardized extracts of Medicare claims data under Parts A, B, and D
available to qualified entities to evaluate the performance of providers of services and
suppliers. This is the application needed to determine an organization’s eligibility as a
qualified entity.
2.

Information Users
The information from the collection will be used by CMS to determine whether an
organization meets the criteria required to be considered a qualified entity to receive Medicare
claims data under ACA Section 10332. CMS will evaluate the organization’s eligibility in
terms of organizational and governance capabilities, addition of claims data from other
sources, and data privacy and security.

3.

Use of Information Technology
The initial plan is to use electronic submission. We anticipate that all applications will be
submitted by this means.

4.

Duplication of Efforts
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This information collection does not duplicate any other effort and the information cannot be
obtained from any other source.
5.

Small Businesses
No special considerations are given to small businesses. The same information is needed to
assess the qualifications of all organizations.

6.

Less Frequent Collection
Data are collected once at the time of application. Entities that are initially approved would
need to reapply for qualified entity status after two years. Recertification after two years is
needed to ensure that appropriate standards of organizational capacity, governance, data
security and confidentiality are maintained.

7.

Special Circumstances
No special circumstances.

8.

Federal Register/Outside Consultation
Public input on how CMS might implement the requirements of ACA section 10332 was
sought in an Open Door Forum listening session on September 20, 2010. Using this input, a
Notice of Proposed Rule Making (NPRM) was drafted and will be published in the Federal
Register, which proposes to amend 42 CFR, Chapter IV, Part 401 by adding Subpart G –
Availability of Medicare Data for Performance Measurement. The NPRM includes a
description of the proposed information collection requirements.

9.

Payments/Gifts to Respondents
There are no payments/gifts to respondents.

10. Confidentiality
We pledge privacy to the extent allowed by law. The applications will be kept secure. No
proprietary data or information will be disclosed outside the Government and will not be
duplicated, used, or disclosed – in whole or in part – for any purpose other than to evaluate the
application. Files containing the applications or information from these forms will be
safeguarded in accordance with Departmental standards and National Institute of Standards
and Technology (NIST) Special Publication 800-53, Recommended Security Controls for
Federal Information Systems and Organizations which limits access to only authorized
personnel. The safeguards shall provide a level of security as required by Office of
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Management and Budget (OMB) Circular No. A-130 (revised), Appendix III – Security of
Federal Automated Information Systems.

11. Sensitive Questions
No sensitive questions are part of this information collection.
12. Burden Estimates (Hours & Wages)
Because section 1874(e) establishes a new program, there is little quantitative information
available to inform our estimates. However, we believe that many or most qualified entities
are likely to resemble community quality collaborative programs such as participants in the
CMS Better Quality Information for Medicare Beneficiaries pilot (https://www.cms.gov/BQI/)
and the AHRQ Chartered Value Exchange (CVE) program
(http://www.ahrq.gov/qual/value/lncveover.htm). Community quality collaboratives are
community-based organizations of multiple stakeholders that work together to transform
health care at the local level by promoting quality and efficiency of care, and by measuring
and publishing quality information. Consequently, we have examined available information
related to those programs to inform our assumptions, although there is only limited available
data that is directly applicable to this analysis.
We estimate that 35 organizations will submit applications to participate as qualified entities.
We anticipate that the majority of applicants will be nonprofit organizations such as existing
community collaboratives. In estimating qualified entity impacts, we used hourly labor costs
in several labor categories reported by the Bureau of Labor Statistics (BLS) at
http://data.bls.gov/pdq/querytool.jsp?survey=ce. We used the annual rates for 2009 and added
33 percent for overhead and fringe benefit costs. These rates follow:
Labor
2009 hourly
Category
wage rate
Professional & technical $34.08
services
Legal services
$35.35

Overhead/
Total
fringe (33%) hourly cost
$11.25
$45.33
$11.67

$47.02
.

We estimate that the initial preparation of an application will require a total of 500 hours of
effort, requiring a combination of staff in the professional and technical services and the legal
labor categories, as follows:
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Activity
Prepare draft
application

Hours
360

Hourly
cost
$45.33

Cost per
applicant
$16,319

Legal review

40

$47.02

$1,881

Revisions to
draft application

60

$45.33

$2,720

Senior management 40
review and sign-off

$45.33

$1,813

Total

500

$22,733

Number of
applicants

35

Total
costs .

$795,641
.

From this, we estimate that the cost per organization for applying initially to be a qualified
entity will be $22,733, and we estimate that 35 organizations will apply. The initial total
annual hour burden will be 17,500 hours and the total annual cost will be $795,641.
Organizations initially approved to be qualified entities will need to re-apply every two years.
We estimate that the re-application will require a total of 120 hours of effort, requiring a
combination of staff in the professional and technical services legal labor categories, as
follows:

Activity
Prepare draft
application

Hours
86

Hourly
cost
$45.33

Legal review

10

$47.02

$470

Revisions to
draft application

14

$45.33

$635

Senior management 10
review and sign-off

$45.33

$453

Total

120

Cost per
applicant
$3,898

$5,456
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Number of
applicants

25

Total
costs .

$136,400

.
From this, we estimate that the cost per organization for re-applying to be a qualified entity
will be $5,456, and we estimate that 25 organizations will be initially approved and re-apply.
The total hour burden for re-applying will be 3,000 hours and the total cost will be $136,400.
13. Capital Costs
There are no capital costs associated with preparing the application to be a qualified entity.
14. Cost to Federal Government
It is estimated that CMS costs for managing the information collection will include one full
time equivalent at the GS-13 step 4 level with an annual fully loaded salary of $158,000, and
$585,000 in contractor support, for a total of $743,000.
15. Changes to Burden
None, this is a new information collection.
16. Publication/Tabulation Dates
There are no publication/tabulation dates associated with this collection.
17. Expiration Date
CMS would like an exemption from displaying the expiration date as these forms are used on
a continuing basis. To include an expiration date would result in having to discard a
potentially large number of forms.
18. Certification Statement
There are no exceptions to the certification statement.

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