[Federal Register Volume 78, Number 30 (Wednesday, February 13, 2013)]
[Proposed Rules]
[Pages 10117-10122]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02993]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AO15


Use of Medicare Procedures To Enter Into Provider Agreements for 
Extended Care Services

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This rulemaking proposes to amend the medical regulations of 
the Department of Veterans Affairs (VA) to allow VA to use Medicare or 
State procedures to enter into provider agreements to obtain extended 
care services from non-VA providers. In addition, this rulemaking 
proposes to include home health care, palliative care, and 
noninstitutional hospice care services as extended care services, when 
provided as an alternative to nursing home care. Under this proposed 
rule, VA would be able to obtain extended care services for veterans 
from providers who are closer to veterans' homes and communities.

DATES: Comments must be received by VA on or before March 15, 2013.

ADDRESSES: Written comments may be submitted by email through http://www.regulations.gov; by mail or hand-delivery to 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-AO15, Use of Medicare Procedures to Enter Into Provider Agreements 
for Extended Care Services.'' Copies of comments received will be 
available for public inspection in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8:00 a.m. and 4:30 p.m. 
Monday through Friday (except holidays). Please call (202) 461-4902 for 
an appointment. In addition, during the comment period, comments may be 
viewed online through the Federal Docket Management System (FDMS) at 
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Daniel Schoeps, Office of Geriatrics 
and Extended Care (10P4G), Department of Veterans Affairs, 810 Vermont 
Avenue NW., Washington, DC 20420; (202) 461-6763. (This is not a toll-
free number.)

SUPPLEMENTARY INFORMATION: Subsection (a) of 38 U.S.C. 1710B authorizes 
VA to provide extended care services to eligible veterans, including 
geriatric evaluation, nursing home care, domiciliary services, and 
adult day health care. Subsection (a) of 38 U.S.C. 1720 authorizes VA 
to pay for the nursing home care in non-VA facilities of eligible 
veterans and eligible members of the Armed Forces. Section 1720(f) 
authorizes VA to furnish (in VA and non-VA facilities) adult day health 
care to enrolled veterans who would otherwise need nursing home care. 
Contracts between VA and these non-VA facilities are currently 
negotiated under Federal contract statutes and regulations (including 
the Federal Acquisition Regulation, which is set forth at 48 CFR 
chapter 1; and VA Acquisition Regulations, which are set forth at 48 
CFR chapter 8).
    We propose to establish a new 38 CFR 17.75, which would implement 
VA's authority to use Medicare procedures to enter into provider 
agreements. Section 105 of the Veterans Health Care, Capital Asset, and 
Business Improvement Act of 2003 (Pub. L. 108-170) amended section 1720 
to authorize VA to use these procedures. This amendment, which is 
codified at 38 U.S.C. 1720(c)(1), authorizes VA to enter into 
agreements with providers of nursing home care, adult day health care, 
and other community-based extended care services under ``the procedures 
available for entering into provider agreements under section 1866(a) 
of the Social Security Act.'' Section 1866(a) (codified at 42 U.S.C. 
1395cc(a)) authorizes the Department of Health and Human Services to 
enter into agreements with participating Medicare providers, and 
specifies the terms of those agreements.
    The plain language of 38 U.S.C. 1720(c)(1)(B) authorizes VA, in its 
discretion, to furnish extended care services through non-VA providers 
using the above-described noncontractual mechanism. Moreover, the 
legislative history of Public Law 108-170 further shows that its 
purpose was to improve VA's ability to furnish eligible veterans with 
extended care services of non-VA providers by using a noncontractual 
mechanism. A Senate committee report explains that Medicare procedures 
are simpler and less burdensome than VA contracting procedures. The 
report includes the following discussion of this provision:

    Under current law, VA is authorized to enter into contractual 
arrangements with private providers of extended care services to 
serve the needs of veterans. Federal reporting requirements relating 
to the demographics of contractor employees and applicants are 
required to be submitted to the Department of Labor under these 
contractual arrangements. The Committee has learned that, due to 
these reporting requirements,

[[Page 10118]]

many small providers of extended care services are unable, or they 
are unwilling, to admit VA patients. Many such providers have 
apparently concluded that reimbursement from VA for caring for one 
or two veterans is not worth the cost of compiling and reporting the 
data required by general Federal contract law.
    The Social Security Act allows the Centers for Medicare and 
Medicaid Services (hereinafter, ``CMS'') to enter into provider 
agreements for the provision of care to both Medicare and Medicaid 
beneficiaries. Such agreements require that contractors comply with 
Federal laws concerning hiring practices. But they do not require 
that providers prepare reports of such compliance. Nor do they 
subject providers to annual audits like most Federal contracts do. 
Not surprisingly, CMS is more successful than VA in inducing smaller 
providers to provide care to its beneficiaries.
    Section 102 of the Committee bill places VA contractors in a 
similar position as CMS contractors with respect to Federal 
reporting requirements. By this action, the Committee seeks to 
encourage VA to bring care closer to veterans' homes and community 
support structures by contracting with small community-based 
providers. Even so, however, the Committee fully anticipates and 
expects that VA will require compliance with all applicable Federal 
laws concerning employment and hiring practices.

S. Rep. No. 108-193, at 6 (2003), as reprinted in 2003 U.S.C.C.A.N. 
1783, 1788. To clarify the above quotation, the Social Security Act 
allows for the Centers for Medicare and Medicaid Services (CMS) to 
enter into provider agreements with Medicare providers only. States, 
not CMS, enter into provider agreements with Medicaid providers. 
Medicare agreements enable a provider to bill and receive reimbursement 
for Medicare-covered services furnished by the provider. The terms of 
those agreements often concern the kind and quality of care to be 
provided. Although those CMS and State agreements do not involve the 
provision of care, Congress specifically authorized VA to use provider 
agreements under 38 U.S.C. 1720(c)(1)(B) ``for furnishing'' care. 
Accordingly, we propose to establish a VA regulation regarding use of 
provider agreements. We believe that by using these agreements, VA 
would be able to obtain services from providers who are closer to 
veterans' homes and community support structures.
    Proposed Sec.  17.75(a) would define ``[e]xtended care services'' 
as ``geriatric evaluation; nursing home care; domiciliary services; 
adult day health care; noninstitutional palliative care, 
noninstitutional hospice care, and home health care when they are 
noninstitutional alternatives to nursing home care; and respite care.'' 
The proposed definition is derived from 38 U.S.C. 1710B(a), which 
requires VA to ``operate and maintain a program to provide extended 
care services,'' and requires that such extended care services include 
geriatric evaluation, nursing home care, domiciliary services, adult 
day health care, respite care, and ``[s]uch other noninstitutional 
alternatives to nursing home care as the Secretary may furnish as 
medical services under [38 U.S.C. 1701(10)].'' 38 U.S.C. 1710B(a)(1)-
(6).
    We propose to include home health care in the definition of 
``[e]xtended care services'' as a noninstitutional alternative to 
nursing home care because in many circumstances it would be a 
noninstitutional alternative to nursing home care. For example, a 
veteran applying for nursing home care would receive a person-centered 
assessment by a VA health care team. The team, working with the veteran 
and caregiver, would explore care needs and how these needs could be 
met. In this process, they may decide that a combination of skilled 
nursing, home health aide, and respite services would meet the 
veteran's needs and allow the veteran to remain at home. In this case, 
home health services would avert a nursing home placement. We also 
propose to include noninstitutional palliative and noninstitutional 
hospice care in the definition because they would always be 
alternatives to nursing home care.
    We understand that Medicare and States do not necessarily enter 
into provider agreements for all the services listed under the proposed 
definition for ``extended care services.'' We are proposing only to 
enter into provider agreements with providers that do have a Medicare 
or State provider agreement for the services listed in this proposed 
rule as ``extended care services.'' VA would continue to use contracts 
and other mechanisms to ensure that veterans receive needed health care 
services for which they are eligible, but for which there is no 
available provider agreement. Additionally, many States enter into 
provider agreements for a broader array of services than those listed 
in this proposed rule. We do not intend to enter into agreements that 
would expand beyond the scope of those services specifically listed in 
the proposed definition of extended care services.
    Including home health care, noninstitutional palliative care, and 
noninstitutional hospice care in the definition of extended care 
services would not require VA to consider these services as extended 
care services for purposes of determining whether a copayment is 
required. Noninstitutional hospice care is exempt from both outpatient 
and extended care copayments. 38 U.S.C. 1710(g)(1), 1710B(c)(2)(B). 
Noninstitutional palliative care is a form of home health care, and the 
law currently requires VA to charge the outpatient copayment for home 
health care. 38 U.S.C. 1710(g)(1).
    As noted above, under 38 U.S.C. 1710B(a)(5), VA is required to 
``operate and maintain a program to provide extended care services'' 
that includes ``[s]uch * * * noninstitutional alternatives to nursing 
home care as the Secretary may furnish as medical services under [38 
U.S.C. 1701(10)]''. 38 U.S.C. 1710B(a)(5). However, section 1701 no 
longer contains a subsection (10).
    Prior to enactment of section 801 of Public Law 110-387, 38 U.S.C. 
1701(10) defined medical services to include noninstitutional extended 
care services provided through December 31, 2008, and defined such 
services as follows: ``[T]he term `noninstitutional extended care 
services' means such alternatives to institutional extended care which 
[VA] may furnish (i) directly, (ii) by contract, or (iii) (through 
provision of case management) by another provider or payer.'' See 38 
U.S.C. 1710(10) (2008). With the enactment of Public Law 110-387 in 
2008, section 1701 was amended to essentially move subsection (10) to 
subsection (6)(E) of section 1701 which provides that medical services 
include ``[n]oninstitutional extended care services, including 
alternatives to institutional extended care that [VA] may furnish 
directly, by contract, or through provision of case management by 
another provider or payer.'' Public Law 110-387, title VIII, Sec.  801 
(Oct. 10, 2008). Thus, the language of former subsection (10) and 
current subsection (6)(E) is virtually identical, except that 
subsection (6)(E) does not contain the 2008 sunset provision. We 
therefore believe that the reference to section 1701(10) in 38 U.S.C. 
1710B(a)(5) must now be read as a reference to section 1701(6)(E).
    Consistent with section 1720(c)(1), we would define ``[p]rovider'' 
in Sec.  17.75(a) to mean any non-VA entity that provides extended care 
services and is participating in Medicare under title XVIII of the 
Social Security Act or a State Medicaid plan under title XIX of the 
Social Security Act (42 U.S.C. 1396 et seq.) pursuant to a valid 
provider agreement. This could include physicians and other providers 
who provide extended care services to veterans in non-VA nursing homes.
    In proposed paragraph (b), we would implement VA's authority under 
section 1720(c)(1) to obtain extended care

[[Page 10119]]

services from non-VA providers, and would set forth the conditions 
under which such services may be obtained. Paragraph (b)(1) would 
prescribe that VA may enter into provider agreements for extended care 
services with non-VA providers who have a Medicare provider agreement 
with CMS. Paragraph (b)(2) would prescribe that VA may also enter into 
provider agreements for extended care services with non-VA providers 
who do not have a Medicare provider agreement with CMS if the provider 
is participating in a State Medicaid plan. Section 1720(c)(1) clearly 
authorizes VA to enter into provider agreements with non-VA providers 
of extended care services that participate in the Medicare program or a 
State Medicaid plan. A number of States enter into provider agreements 
related to services not otherwise covered by Medicare. For example, 
States often enter into provider agreements with Medicaid adult day 
health care providers, which are not eligible for similar agreements 
under Medicare.
    Proposed paragraph (c)(1) would establish the procedure that VA 
would use to notify a provider of the agreement that VA proposes to use 
to obtain extended care services from the provider. The Director of the 
VA medical center of jurisdiction would provide written notification 
identifying the applicable Medicare or State Medicaid provider 
agreement to be used and the changes and additional terms that would 
apply to the agreement with VA, and would request written acceptance of 
the agreement from the provider. This documentation would serve as a 
record for both VA and the provider that an agreement is in place and 
of the parties' acceptance of all the terms of the adopted agreement. 
Therefore, VA would not attempt to obtain services under a provider 
agreement from the provider until after the provider's acceptance is 
received. For providers with both Medicare and State Medicaid 
agreements, the letter would clarify which of the two provider 
agreements would be used as the basis for VA's provider agreement.
    Paragraph (c)(2) would establish that the terms and rates of a 
provider's agreement with VA would be the same as the terms and rates 
of the provider's separate Medicare provider agreement with CMS or 
agreement under a State Medicaid plan, or, if a provider has agreements 
with both Medicare and under a State Medicaid plan, the terms and rates 
would be the same as the agreement with the highest rates. VA's payment 
under the agreement with the highest rates would serve as an incentive 
to encourage providers to enter into agreements with VA for the care of 
veterans. We interpret VA's authority under section 1720(c)(1)(B) to 
use Medicare procedures as also authorizing the use of rates 
established under the appropriate Medicare fee schedule or payment 
system because there are no procedures for rate negotiation in 
obtaining Medicare provider agreements.
    Although a provider's agreement with VA would generally contain the 
same terms as the provider's separate Medicare provider agreement or 
agreement under a State Medicaid plan, VA would need unique terms for 
purposes of identifying VA as the Government agency entering into the 
agreement with the provider and paying for the provider's services for 
veterans. Since the purpose of this proposed rule is to address the 
needs of specific veterans or groups of veterans based upon location 
and the availability of VA resources, VA might also need unique 
agreement terms to limit the scope of the agreement consistent with 
VA's authority under section 1720(c)(1)(B). Accordingly, proposed 
paragraph (c)(3) would clarify that a provider's agreement with VA will 
not be the same as the provider's agreement with CMS under Medicare or 
under a State Medicaid plan to the extent that the provider's agreement 
with VA will identify VA as the Government agency entering into the 
agreement and specify that the provider's services are for specific 
veterans or groups of veterans. It would also make clear that the 
provider's agreement with VA would be administered by VA according to 
the procedures in this proposed rule and not under the rules applicable 
to the administration of Medicare provider agreements with CMS or 
agreements under a State Medicaid plan. In all other respects, VA 
intends that a provider's agreement with VA will be the same as the 
provider's Medicare provider agreement with CMS or under a State 
Medicaid plan.
    Proposed paragraph (d) would delegate to the Director of the VA 
medical center of jurisdiction (or a designee) the authority to enter 
into an agreement under the proposed rule. Under paragraph (d)(1), we 
would also establish that the criteria for whether to enter into an 
agreement under this section will be based on the needs of local 
veterans and the ability of VA to provide for those needs. For example, 
where VA does not provide equivalent care in a particular locality, or 
where providing VA care would be more expensive than providing care 
through a non-VA provider, VA would enter into agreements under this 
section. Similarly, if resources permit, wherever possible VA would 
enter into an agreement with a provider selected by the veteran. This 
is consistent with the purpose of section 1720(c)(1)(B), which is to 
help veterans receive the care that they require from providers in 
their own communities, as well as to improve the efficiency of care 
delivery from an economic perspective. However, we do not interpret 
section 1720(c)(1) as creating any right to care pursuant to a provider 
agreement or any right to enter into a provider agreement with VA. We 
interpret the statute as authorizing care pursuant to an agreement when 
a Director, based upon medical judgment and evaluation of available 
resources, determines that an agreement is in the best interest of the 
veteran under the Director's care.
    Under proposed paragraph (d)(2), VA would empower the veteran to 
select his or her preferred provider, should more than one provider 
exist within a given region, subject to the provider's determination to 
accept the veteran, clinical appropriateness and available resources at 
the VA medical center of jurisdiction. VA understands the significance 
of placing such an important life decision in the hands of the veteran 
and would only intervene if a provider was not able to provide the care 
clinically required by the veteran, or the VA medical center of 
jurisdiction is simply unable to accommodate the veteran's selection 
due to limited resources. Foreseeable strains on resources that might 
prevent VA from accommodating a veteran's request could include whether 
the veteran has special needs that can be addressed by resources in 
that region or whether VA has sufficient staff to monitor the veteran 
in a particular facility due to the facility being remote or because VA 
is monitoring several veterans at another facility that is distant from 
the veteran's preferred provider. The decision to approve or deny a 
particular provider for an agreement with VA would be made by the 
Director (or designee) according to the criteria prescribed in 
paragraphs (d)(2)(A), (B), and (C).
    Proposed paragraph (d)(3) would establish that the factual 
determination of whether a provider is eligible to enter into an 
agreement with VA to provide extended care services for veterans will 
be made based on evidence of an existing Medicare provider agreement or 
agreement under a State Medicaid plan as verified through Web sites 
maintained by CMS or the appropriate State office.
    Proposed paragraph (e) would govern termination of a VA provider 
agreement. Under paragraph (e)(1), we would allow

[[Page 10120]]

a provider to voluntarily terminate an agreement but we would require 
the provider to notify VA at least 15 days in advance of the planned 
termination and provide the intended date of termination. The 15-day 
requirement would provide VA with a reasonable amount of time to secure 
alternative arrangements for affected veterans. VA would require 15 
days to find an arrangement that is suitable for the veteran and 
provides a potential for long-term care. We determined that a notice of 
termination period of less than 15 days would likely require an 
unsatisfactory short-term solution. Such a solution might require 
multiple relocations of, or multiple caregiver changes for, an affected 
veteran in order to meet their immediate health care needs. We have 
determined that the 15-day notice requirement would allow VA to protect 
veterans from the physical, mental, and emotional health risks caused 
by multiple changes in their care plan and/or living arrangement.
    Proposed paragraph (e)(2) would set forth when VA may terminate an 
agreement. VA would also be required to give providers at least 15 days 
notice before terminating an agreement. If, however, VA finds that the 
health of the veteran is in immediate jeopardy, VA would be authorized 
to terminate the agreement with only 2 days notice. The termination of 
the agreement should not be confused with VA's ability to physically 
remove the veteran from a dangerous situation, which can be done as 
soon as necessary in order to protect the health of the veteran. 
Proposed paragraph (e)(2) thus would assert VA's right to remove a 
veteran from a dangerous situation prior to terminating the applicable 
provider agreement.
    Proposed paragraph (f) would establish procedures for appeal of a 
Director's decision not to enter into a VA provider agreement or to 
terminate an agreement. A provider may appeal a decision issued by the 
Director by filing a written request for review with the Chief 
Consultant, Office of Geriatrics and Extended Care. An appeal must be 
filed in writing within 90 days after the date of the Director's 
decision. The Chief Consultant would provide written notice of the 
determination, which would constitute the final agency decision 
regarding eligibility for or termination of a VA provider agreement. 
The notice would explain why the decision is appropriate.
    Proposed paragraph (g) would state that providers need not comply 
with the Service Contract Act of 1965 (set forth at 41 U.S.C. 351, et 
seq.). This is the law referred to in the legislative history that 
requires contractors to report to the Department of Labor. While this 
Act applies to contracts entered into by the United States for services 
through the use of service employees, it does not apply to Medicare 
providers because they do not enter into contracts with the United 
States--Medicare provider agreements with CMS are used instead of 
contracts. However, proposed paragraph (g) would require that providers 
comply with all other applicable Federal laws concerning employment and 
hiring practices including the Fair Labor Standards Act, National Labor 
Relations Act, the Civil Rights Acts, the Age Discrimination in 
Employment Act of 1967, the Vocational Rehabilitation Act of 1973, 
Worker Adjustment and Retraining Notification Act, Sarbanes-Oxley Act 
of 2002, Occupational Health and Safety Act of 1970, Immigration Reform 
and Control Act of 1986, Consolidated Omnibus Reconciliation Act, the 
Family and Medical Leave Act, the Americans with Disabilities Act, the 
Uniformed Services Employment and Reemployment Rights Act, the 
Immigration and Nationality Act, the Consumer Credit Protection Act, 
the Employee Polygraph Protection Act, and the Employee Retirement 
Income Security Act. This is consistent with the legislative history 
set forth above.
    We would rescind all conflicting internal VA guidance that could be 
interpreted as providing an alternate benefit pertaining to extended 
care services. Specifically, we would rescind Veterans Health 
Administration (VHA) Handbooks 1143.2, ``VHA Community Nursing Home 
Oversight Procedures''; 1140.6, ``Purchased Home Health Care Services 
Procedures''; and 1140.5, ``Community Hospice Care: Referral and 
Purchase Procedures''; and VHA Manual M-5 Part III, Chapter 6, 
pertaining to Community Residential Care. This policy guidance would be 
reissued in connection with the final rule.

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 to be a significant regulatory action under the 
Executive Order.

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. VA does not expect to receive a large 
number of comments on this proposed rule, particularly comments that 
are negative or that oppose this rule, because it would increase the 
opportunity for veterans to obtain non-VA extended care services from 
local providers that furnish vital and often life-sustaining medical 
services. Accordingly, VA has provided that comments must be received 
within 30 days of publication in the Federal Register.

Paperwork Reduction Act

    The proposed rule does not contain any collections of information 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

    The Secretary hereby certifies that the provisions of this proposed 
rule 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. 601-612. The proposed rule would not have a 
significant economic impact on any small entities because such entities 
would obtain only an insignificant

[[Page 10121]]

portion of their business from VA. Therefore, pursuant to 5 U.S.C. 
605(b), this rulemaking is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
issuing any rule that may result in an expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. This 
proposed rule would have no such effect on State, local, and tribal 
governments, or on the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers and 
titles affected by this rulemaking are 64.007, Blind Rehabilitation 
Centers; 64.009, Veterans Medical Care Benefits; 64.010, Veterans 
Nursing Home Care; 64.011, Veterans Dental Care; 64.013, Veterans 
Prosthetic Appliances; 64.018, Sharing Specialized Medical Resources; 
64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 
64.022, Veterans Home Based Primary Care.

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 February 5, 2013, 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, Grant programs-veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and record-keeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Dated: February 6, 2013.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, VA proposes to amend 38 
CFR Part 17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read as follows:

    Authority:  38 U.S.C. 501, and as noted in specific sections.

0
2. Add an undesignated center heading and Sec.  17.75 immediately after 
Sec.  17.74 to read as follows:

Agreements for Extended Care Services


Sec.  17.75  Agreements for extended care services.

    (a) Definitions. For purposes of this section:
    Extended care services means geriatric evaluation; nursing home 
care; domiciliary services; adult day health care; noninstitutional 
palliative care, noninstitutional hospice care, and home health care 
when they are noninstitutional alternatives to nursing home care; and 
respite care.
    Provider means any non-VA entity that provides extended care 
services and is participating in Medicare or a State plan under title 
XIX of the Social Security Act pursuant to a valid provider agreement.
    (b) Eligible providers from whom VA may obtain extended care 
services. Subject to paragraph (d) of this section, VA may obtain 
extended care services from providers under this section only if:
    (1) The provider has entered into a Medicare provider agreement 
under 42 U.S.C. 1395cc(a) with the Centers for Medicare & Medicaid 
Services (``CMS agreement''); or
    (2) If the provider has not entered into a Medicare provider 
agreement, but the provider is participating in an agreement under a 
State plan under title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.).
    (c) Terms of agreements. (1) The Director of the VA medical center 
of jurisdiction, or designee, will send to a provider written 
notification that identifies the Medicare provider agreement or 
agreement under a State Medicaid plan that VA proposes to use as the 
basis for its agreement to obtain extended care services, identifies 
the changes and any additional terms that would apply to the provider 
agreement, and requests written acceptance from the provider of that 
agreement. VA will not obtain extended care services from the provider 
through a provider agreement until such acceptance is received.
    (2) Provider agreements with VA under this section must reflect the 
following:
    (i) For a provider with a valid Medicare provider agreement, the 
terms of the provider's agreement with VA, including the payment rates, 
will be the same as the terms of the provider's agreement with CMS 
pursuant to the Medicare Enrollment Application for Institutional 
Providers (OMB No. 0938-0685).
    (ii) For providers with no Medicare provider agreement but one or 
more agreements under a State plan, the terms of the provider's 
agreement with VA, including the payment rates, will be the same as the 
terms of the provider's agreement with the State that pays the highest 
rates.
    (iii) For providers with both a Medicare provider agreement and an 
agreement under a State Medicaid plan, the terms of the provider's 
agreement with VA, including the payment rates, will be the same as the 
CMS or State agreement that provides for the higher rates.
    (iv) The provider shall not charge any individual, insurer, or 
entity (other than VA) for the items or services obtained by VA under 
this section.
    (3) The terms of the provider's agreement with VA will be different 
from the provider's separate agreement with CMS or a State only to the 
extent that the non-VA agreement prescribes terms or procedures 
inconsistent with this section and that it is necessary to identify VA 
as the Government agency entering into the agreement with the provider 
and paying for the provider's services for veterans.
    (d) Decisions regarding agreements. (1) The Director of the VA 
medical center of jurisdiction, or designee, will decide, based upon 
medical judgment regarding the health care needs of veterans in the 
community and the availability and feasibility of VA or local resources 
to efficiently provide for those needs, whether it is necessary to 
enter into provider agreements for extended care services.
    (2) If there is more than one provider in a given region, the 
veteran will select his or her preferred provider, subject to:
    (i) The provider's determination to accept the veteran;
    (ii) The availability and feasibility of resources at the VA 
medical center of jurisdiction; and
    (iii) The determination of the Director of the VA medical center of 
jurisdiction, or designee, that the services offered by

[[Page 10122]]

the provider would be clinically appropriate for the care of the 
veteran.
    (3) Factual determination of whether a provider has a Medicare 
provider agreement or an agreement under a State Medicaid plan will be 
based on verification of an existing agreement. Medicare provider 
agreements will be verified using CMS Web sites, which list providers 
with agreements. State agreements will be verified using appropriate 
State Web sites, which list providers with agreements, or using records 
maintained by the appropriate State office.
    (e) Termination of agreements. (1) A provider that wishes to 
terminate its agreement with VA must send written notice of its intent 
at least 15 days before the effective date of termination of the 
agreement. The notice shall include the intended date of termination.
    (2) VA may terminate an agreement with any provider if the Director 
of the VA medical center of jurisdiction, or designee, determines that 
the provider's service is no longer required or that the provider is 
not complying with a provision of the provider agreement, and must 
terminate an agreement with a provider that no longer has a Medicare 
provider agreement with CMS or no longer participates under a State 
Medicaid plan. VA will provide written notice of termination at least 
15 days before the effective date of termination of the provider 
agreement. If the Director of the VA medical center of jurisdiction, or 
designee, determines the health of the veteran to be in immediate 
jeopardy, VA will provide notice of termination at least 2 days before 
the effective date of termination of the provider agreement. VA may 
physically remove a veteran from a dangerous situation at any time in 
order to protect the health of the veteran prior to terminating the 
applicable provider agreement.
    (f) Appeals. Appeals of a determination by the Director of the VA 
medical center of jurisdiction, or designee, not to enter into or to 
terminate a VA provider agreement must be made in writing to the Chief 
Consultant, Office of Geriatrics and Extended Care, no later than 90 
days after the date of the decision being appealed. The decision of the 
Chief Consultant will constitute a final agency decision.
    (g) Compliance with Federal laws. Under agreements entered into 
under this section, providers are not required to comply with reporting 
and auditing requirements imposed under the Service Contract Act of 
1965, as amended (41 U.S.C. 351, et seq.); however, providers must 
comply with all other applicable Federal laws concerning employment and 
hiring practices including the Fair Labor Standards Act, National Labor 
Relations Act, the Civil Rights Acts, the Age Discrimination in 
Employment Act of 1967, the Vocational Rehabilitation Act of 1973, 
Worker Adjustment and Retraining Notification Act, Sarbanes-Oxley Act 
of 2002, Occupational Health and Safety Act of 1970, Immigration Reform 
and Control Act of 1986, Consolidated Omnibus Reconciliation Act, the 
Family and Medical Leave Act, the Americans with Disabilities Act, the 
Uniformed Services Employment and Reemployment Rights Act, the 
Immigration and Nationality Act, the Consumer Credit Protection Act, 
the Employee Polygraph Protection Act, and the Employee Retirement 
Income Security Act.

(Authority: 38 U.S.C. 501, 1720; 42 U.S.C. 1395cc)


[FR Doc. 2013-02993 Filed 2-12-13; 8:45 am]
BILLING CODE 8320-01-P