[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Proposed Rules]
[Pages 71920-71922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29994]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 17
RIN 2900-AN98
Payment for Home Health Services and Hospice Care by Non-VA
Providers
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
regulation and internal policy documents concerning the billing
methodology for non-VA providers of home health services and hospice
care. The proposed rulemaking would include home health services and
hospice care under the VA regulation governing payment for other non-VA
health care providers. Because the newly applicable methodology cannot
supersede rates for which VA has specifically contracted, this
rulemaking will only affect providers who do not have existing
negotiated contracts with VA. The proposed rule would also rescind
internal guidance documents that could be interpreted as conflicting
with the proposed rule.
DATES: Comment Date: Comments on the proposed rule must be received by
VA on or before December 21, 2011.
ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to the Director,
Regulations Management (02REG), Department of Veterans Affairs, 810
Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202)
273-9026. Comments should indicate that they are submitted in response
to ``RIN 2900-AN98--Payment for home health and services and hospice
care by non-VA providers.'' Copies of comments received will be
available for public inspection in the Office of Regulation Policy and
Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m.,
Monday through Friday (except holidays). Please call (202) 461-4902 for
an appointment. This is not a toll-free number. In addition, during the
comment period, comments may be viewed online at www.Regulations.gov
through the Federal Docket Management Systems (FDMS).
FOR FURTHER INFORMATION CONTACT: Holley Niethammer, Fee Policy Chief,
National Fee Program Office, Veterans Health Administration, Department
of Veterans Affairs, 3773 Cherry Creek Dr. N., East Tower, Ste 495,
Denver, CO 80209, (303) 370-5062. (This is not a toll-free number).
SUPPLEMENTARY INFORMATION: On December 17, 2010, VA published in the
Federal Register a rule amending 38 CFR 17.56 to update VA's payment
methodology for in- and outpatient health care professional services
provided at non-VA facilities, and other medical charges associated
with non-VA outpatient care, provided under 38 CFR 17.52 or 17.120. 75
FR 78901 (Dec. 17, 2010). In paragraph (a) of Sec. 17.56, as amended,
we state that the new methodology does not apply to ``non-contractual
payments for home health services and hospice care.'' 38 CFR 17.56(a).
As explained in the notice of final rulemaking, this exception is based
on practical, administrative considerations, and not based on a policy
decision that these services ought to be billed in a different manner.
See 75 FR 78901. We explained:
Home Health Care and Hospice Care
[T]he pricing methodology adopted by this rule would be used in
establishing payment rates for all non-VA inpatient and outpatient
health care professional services and other outpatient services,
including hospice care and home health services. However, in
reviewing implementation strategies and internal procedural
practices related to the payment of hospice care and home health
services through means other than a contract, we have encountered
significant practical problems that prevent immediate implementation
of this new methodology. These problems relate to separate
administration of hospice care and home health services by the
Veterans Health Administration's Office of Geriatrics and Extended
Care, which uses separate methods for forming agreements for these
services, and challenges regarding information technology systems
necessary to move to the new [Centers for] Medicare [and Medicaid]
rate, but do not relate to the actual payment amounts for these
services. Such amounts would generally be unchanged by this
rulemaking because the vast majority of these services are paid
through a contractual mechanism (and are therefore exempted under
Sec. 17.56(a)(1)). However, we estimate that there may be about 100
providers who are not paid through a contractual mechanism and
therefore who would have been affected by this rulemaking.
Given separate administration of hospice and home health
services under separate VA guidance, we have determined that these
providers did not receive adequate notice regarding the intended
effect of the proposed rule or of the need for some delay in
implementation of the rule so that VA may modify its systems. We
will promulgate, as soon as possible, a proposed rule to make Sec.
17.56, as revised by this notice, applicable to these providers.
Therefore, we have added to paragraph (a) of the final rule an
exception for these two services.
Id. at 78908.
This rulemaking would remove the exception so that the billing
methodology in Sec. 17.56 would apply to payments for home health
services and hospice care. The reasons that we would make the billing
methodology in Sec. 17.56 applicable to these exempted groups were
explained thoroughly in the proposed and final rulemakings that amended
Sec. 17.56. See 75 FR 7218 (Feb. 18, 2010); 75 FR 78901. We need not
repeat them here. Indeed, in the proposed rule we specifically stated
that that rationale should be applied to home health services and
hospice care, noting that we intended to adopt the ``Home Health
Prospective Payment System'' and ``Hospice'' Medicare schedules. 75 FR
at 7219. It was not until the final-rule notice that we recognized a
need to re-propose, for administrative reasons, making the methodology
applicable to home health and hospice care.
By this proposed rule, we also notify providers of home health
services and hospice care that by adopting Sec. 17.56 methodology, VA
would rescind all conflicting internal VA guidance that could be
interpreted as providing an alternate billing methodology applicable
only to these services. Due to VA's historically separate
administration of hospice and home health care from the other services
affected by Sec. 17.56, a VHA Handbook provides guidance specific to
payments for non-VA home health services and hospice care. See Veterans
Health Administration, U.S. Dep't of Veterans Affairs, VHA Handbook
1140.3, Home Health and Hospice Care Reimbursement Handbook (Aug. 16,
2004). VHA Handbook 1140.3 establishes maximum reimbursement rates for
non-VA home health services and hospice care when a payment methodology
has not been established under a negotiated contract, but also
authorizes exemptions from these maximum rates to negotiate contracts
with providers for home health services and hospice care. This Handbook
states the following on page 3 regarding establishing maximum rates for
home health services: ``VA uses locally calculated, discipline-
specific, Medicare LUPA [Low-Utilization Payment Amount] rates as the
maximum cap for skilled home care and home health aide services. In
those states that reimburse separately for homemaker services, VA's
rate will not exceed 110 percent of the established state rate for that
home care agency or geographic area.'' For establishing maximum rates
for hospice care, the Handbook also states on page 3: ``VA uses locally
calculated, Medicare hospice payment rates as the maximum reimbursement
rates to purchase a comprehensive package of bundled home hospice
services.'' These alternate
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pricing methodologies would be rescinded by this rulemaking. The prior
final rule and this proposed rule are intended to prescribe an
exclusive billing methodology for all covered services.
We explained in the final rule amending Sec. 17.56 that we
estimated only about 100 providers will be affected by this revision
because under Sec. 17.56(a)(1) any negotiated rate will prevail over
the other methodologies set forth in Sec. 17.56. See 75 FR at 78908.
However, a more accurate estimate is that about 8400 providers will be
affected. On average, each of these providers cares for 6 veterans at
VA expense, and the potential revenue loss is $1,346.28 per provider
annually. In addition, these providers without negotiated contracts for
payment may benefit from the ``phase-in'' of the new rates, which is
contemplated by the language in Sec. 17.56(a)(2)(i), where VA will
pay: ``[t]he applicable Medicare fee schedule or prospective payment
system amount (`Medicare Rate') for the period in which the service was
provided * * *''. 38 CFR 17.56(a)(2)(i).
Comment Period
Although under the rulemaking guidelines in Executive Order 12866,
VA ordinarily provides a 60-day comment period, the Secretary has
determined that there is good cause to limit the public comment period
on this proposed rule to 30 days. The application of the rates in Sec.
17.56 to non-VA providers of home health services and hospice care was
in fact proposed in February 2010. See 75 FR 7218. However, we exempted
these services in the final rule for the administrative reasons
discussed above, and indicated that we would soon propose once again to
include them in Sec. 17.56. See 75 FR 78901. Therefore, significant
public notice has already been provided, as has the opportunity to
comment on the applicability of Sec. 17.56 to home health and hospice
care payments. Accordingly, the Secretary has provided a 30-day comment
period for this proposed rule.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before developing any rule that may result in expenditure by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any given year. This rule would have no such effect on
State, local, or tribal governments, or the private sector.
Paperwork Reduction Act
This action contains no provisions constituting a collection of
information under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 12866 (Regulatory Planning and Review) defines a
``significant regulatory action,'' which requires review by the Office
of Management and Budget (OMB), as ``any regulatory action that is
likely to result in a rule that may: (1) Have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.''
The economic, interagency, budgetary, legal, and policy
implications of this regulatory action have been examined and it has
been determined not to be a significant regulatory action under
Executive Order 12866.
Regulatory Flexibility Act
The Secretary hereby certifies that this proposed regulatory
amendment would not have a significant economic impact on a substantial
number of small entities as they are defined in the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. We estimate that about 8400
providers without negotiated contracts offer home health care or
hospice care to veterans at rates that are equivalent to, or not
significantly higher than, those offered by the proposed amendment. VA
costs of purchased skilled home care were compared to Medicare Home
Health Prospective Payment System (HH-PPS) reimbursement for a 60-day
period. The average VA reimbursement level per veteran for a 60-day
period was $2,537.40 in FY 2010. The average Medicare reimbursement
level for skilled home care per beneficiary was $2,312.94 in FY 2010.
This difference would mean that providers would receive $3.74 less per
day from VA for a 60-day episode of care. On average, each of the 8400
providers cares for 6 veterans at VA expense, and the potential revenue
loss would be $1,346.28 per provider annually, an insignificant amount
of revenue for these providers. This total would be less than 100
million dollars annually. Therefore, pursuant to 5 U.S.C. 605(b), this
proposed amendment is exempt from the initial and final regulatory
flexibility analysis requirements of sections 603 and 604.
Signing Authority
The Secretary of Veterans Affairs, or designee, approved this
document and authorized the undersigned to sign and submit the document
to the Office of the Federal Register for publication electronically as
an official document of the Department of Veterans Affairs. John R.
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this
document on November 14, 2011, for publication.
List of Subjects in 38 CFR Part 17
Administrative practice and procedure, Alcohol abuse, Alcoholism,
Claims, Day care, Dental health, Drug abuse, Foreign relations,
Government contracts, Grant programs--health, Government programs--
veterans, Health care, Health facilities, Health professions, Health
records, Homeless, Medical and dental schools, Medical devices, Medical
research, Mental health programs, Nursing home care, Veterans.
Dated: November 16, 2011.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General
Counsel, Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs proposes to revise 38 CFR part 17 as follows:
PART 17--MEDICAL
1. The authority citation for part 17 continues to read as follows:
Authority: 38 U.S.C. 501, and as noted in specific sections.
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Sec. 17.56 [Amended]
2. Revise Sec. 17.56(a) by removing ``and except for non-
contractual payments for home health services and hospice care''.
[FR Doc. 2011-29994 Filed 11-18-11; 8:45 am]
BILLING CODE 8302-01-P