CMS-4040 - Supporting Statement part A [rev 9-9-2013 by OSORA PRA]

Supporting Statement Part A

Request for Enrollment in Supplementary Medical Insurance (SMI) and Supporting Regulations

CMS-4040, OCN 0938-0245

Background

Supporting Statement for the CMS-4040; Request for Enrollment in Supplementary Medical Insurance (SMI) and Supporting Regulations in 42 CFR §§ 407.10, 407.11 and 408.40(a)(2)

On July 30, 1965, P.L. 89-97 created Title XVIII of the Social Security Act. Title XVIII established the hospital insurance program (also referred to as Part A) and the supplementary medical insurance (SMI) program (also referred to as Part B).

The Social Security Act at §226(a) provides that individuals who are age 65 or older and eligible for, or entitled to, Social Security or Railroad Retirement Board (RRB) benefits shall be entitled to premium-free Part A upon filing an application for such benefits.

Part B is a voluntary program and is financed from premium payments by enrollees together with contributions from funds appropriated by the Federal government. All individuals age 65 or older who are entitled to Part A can enroll in Part B. There are some individuals, age 65 and over who are not entitled to or eligible for premium-free Part A. These individuals may, however, enroll in Part B only.

The form CMS-4040 (and the Spanish version CMS-4040-SP) is the form used by individuals who wish to enroll in Part B only.

_{A. Justification}

1. Need and Legal Basis

Section 1836(2) of the Social Security Act, and CMS regulations at 42 CFR §407.10, provide the eligibility requirements for enrollment in Part B for individuals age 65 and older who are not entitled to premium-free Part A. The individual must be a resident of the United States, and either a U.S. Citizen or an alien lawfully admitted for permanent residence that has lived in the US continually for 5 years.

CMS regulations 42 CFR §407.11 lists the CMS-4040 as the application to be used by individuals who are not eligible for monthly Social Security/Railroad Retirement Board benefits or free Part A.

Section 1840(d)(1) of the Social Security Act and 42 CFR §408.40(a)(2) requires that the Part B premium be deducted from a Federal Civil Service Retirement Act annuity if the individual is receiving such benefits. The statute also permits the Part B premium of a spouse to be deducted from the individual’s annuity.

The CMS-4040 and the CMS-4040SP elicit the information that the Social Security Administration (SSA) and Centers for Medicare & Medicaid Services (CMS) need to determine entitlement to Part B and to allow for the deduction of a beneficiary’s Part B premium from his/her spouse’s annuity.

2. Information Users

The CMS-4040 (and the CMS-4040SP) is used to establish entitlement to and enrollment in Medicare Part B for beneficiaries who file for Part B only. The CMS-4040 forms were previously approved under OMB number 0938-0245.

The CMS-4040 solicits the information that is used to determine entitlement for individuals who meet the requirements in §1836(2) as well as the entitlement of the applicant or their spouses to an annuity paid by OPM for premium deduction purposes. The application follows the application questions and requirements used by SSA. This is done not only for consistency purposes but to comply with other Title II and Title XVIII requirements because eligibility to Title II benefits and free Part A under Title XVIII must be ruled out in order to qualify for SMI only entitlement.

The form provides an explanation of Part B premium payments to ensure the applicant understands a premium is due for Part B enrollment.

There are six questions that must be answered to determine eligibility and premium deductions.

Items 1 and 2: Request the information necessary to identify the applicant: name, sex, date and place of birth. The applicant’s Social Security number is requested to allow SSA to access their earnings system to determine if the applicant is eligible for or entitled to premium-free Part A.

Item 3: Requests information on prior claims filed with SSA to determine potential or existing entitlement under Title II or Title XVIII under a different claim number.

Item 4: Requests Federal Civil Service Retirement Act annuity information on the applicant or their spouse for the purpose of deducting SMI premiums from the annuity paid by the Office of Personnel Management. One of the questions asks for the Civil Service Annuity number (CSA). If a CSA number is not available the SSN is requested as an alternate identifier.

Items 5 and 6: Request citizenship and residency information pertinent to the requirement that the applicant be either a citizen, or an alien, lawfully admitted for permanent residence who has resided in the U.S. continuously for 5 years before the first month of entitlement.

The form is completed by the individual with assistance from an SSA claims representative or field representative. Applications are processed and directly input into the SSA Master Beneficiary Record (MBR). The data is then passed to the CMS master record, the Enrollment Database (EDB). A health insurance record showing entitlement/enrollment is established, and if applicable, a Medicare card is issued.

If this information were not collected, it would be impossible to establish entitlement/enrollment for individuals not covered under Title II of the Social Security Act and subsequently process Medicare claims for them.

3. Use of Information Technology

The collection of this information does not involve the use of information technology.

_{4. Duplication of Efforts}

Item 3 requests information pertaining to previous applications for benefits. It is elicited to ensure that a previous claim has not already been filed and, if it has, to ensure that the proper action will be taken by SSA.

If no duplication in filing has occurred, this information is not available from any other source.

5. Small Businesses

_{Use of this form does not involve small businesses.}

_{6. Less Frequent Collection}

This information is collected once, for each individual respondent, at the time the individual files for Part B of Medicare. If this information is not collected, the applicant cannot establish entitlement to SMI. Because there is a legal requirement to apply for benefits either on paper or electronically, the burden cannot be minimized.

7. Special Circumstances

The collection of this information is consistent with the guidelines in 5 CFR 1320.6. There are no special circumstances.

_{8. Federal Register/Outside Consultations}

The 60 day Federal Register notice published on June 21, 2013 (78 FR 37542). No comments were received.

The gathering of this information is a necessary part of the Medicare entitlement process. This form was developed in 1966. Appropriate comments were solicited at that time. There have been no problems associated with the use of this form or the procedures established. Since the data is collected only once, there is no need for ongoing consultations.

9. Payments/Gift to Respondents

_{There were no payments/gifts to respondents.}

_{10. Confidentiality}

The information collected is protected under the provisions of the Privacy Act and this is stated on the application.

11. Sensitive Questions

_{There are no questions of a sensitive nature asked on this form.}

_{12. Burden Estimate (Hours and Wages)}

There are approximately 10,000 respondents annually requesting enrollment in Part B on the CMS-4040. The average interview and completion time for the CMS-4040 is 15 minutes based on actual experience.

The burden is computed as follows:

There are 10,000 respondents taking 15 minutes per response. 10,000 x 0.25 (15 minutes) = 2,500 total burden hours.

There is no cost to the respondents. Individuals who complete this form have not worked and there is no appropriate wage category to use to annualize any cost to the respondent for 15 minutes.

13. Capital Costs

There are no additional costs. SSA is the record keeper and the collection and storage of this data represents no additional cost. It is part of their normal claims activity

_{14. Cost to Federal Government}

Printing Costs

The form is not pre-printed, but made available to Social Security claims representatives and field representatives to print and provide to the individual upon request. The printing cost associated with the CMS-4040 is $375.00 for the English version and $375.00 for the CMS-4040(SP). The total printing cost is $750.00.

Processing Costs

Interviews are conducted by SSA claims and field representatives (average pay scale is GS 11, step 5) whose 2013 hourly rate of pay (without locality pay) is $27.31. The approximate number of respondents is 10,000. We estimate is takes a SSA claims and/or field representative 15 minutes to manage/input the information on this form. The 2013 GS-11, step 5 hourly rate of $27.31 x 0.25 hours (15 minutes) x 10,000 (number of forms) = $68,275.

Total Federal Cost including printing and processing costs = $69,025.

15. Changes to Burden

Regarding the cost to the Federal Government, the increase in the cost is due to an increase in the hourly rate of pay for SSA _{employees who process the CMS-4040. More specifically, the burden increased by $2,900 over the last submission because of the salary increase.}

Also, due to a typographical error of the OMB number on form CMS-4040, the OMB number has been changed to reflect the correct number, OMB 0938-0245. This is an unsubstantial change that will not have any effect on the burden estimates or the respondents’ requirements.

16. Publication/Tabulation Dates

_{This information is not published or tabulated.}

_{17. Expiration Date}

CMS would like to display the expiration date.

18. Certification Statement

_{There are no exceptions to the certification statement.}

_{B. Collection of Information Employing Statistical Methods}

There have been no statistical methods employed in this collection.