[Federal Register Volume 79, Number 207 (Monday, October 27, 2014)]
[Rules and Regulations]
[Pages 63819-63821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25454]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 17
RIN 2900-AP15
Copayments for Medications in 2015
AGENCY: Department of Veterans Affairs.
ACTION: Interim final rule.
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SUMMARY: The Department of Veterans Affairs (VA) amends its medical
regulations concerning the copayment required for certain medications.
But for this rulemaking, beginning on January 1, 2015, the copayment
amount would increase based on a formula set forth in regulation. The
maximum annual copayment amount payable by veterans would also
increase. This rulemaking freezes copayments for 2015 at the current
rate for veterans in priority categories 2 through 8, and thereafter
resumes increasing copayments in accordance with the regulatory
formula.
DATES: Effective Date: This rule is effective on October 27, 2014.
Comment date: Comments must be received on or before December 26,
2014.
ADDRESSES: Written comments may be submitted by email through http://www.regulations.gov; by mail or hand-delivery to Director, Regulation
Policy and Management (02REG), Department of Veterans Affairs, 810
Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202)
273-9026. (This is not a toll-free number.) Comments should indicate
that they are submitted in response to ``RIN 2900-AP15--Copayments for
Medications in 2015.'' Copies of comments received will be available
for public inspection in the Office of Regulation Policy and
Management, Room 1068, 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. (This is not a toll-free number.) 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: Kristin Cunningham, Director, Business
Policy, Chief Business Office, Department of Veterans Affairs, 810
Vermont Avenue NW., Washington, DC 20420, (202) 382-2508. (This is not
a toll-free number.)
SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 1722A(a), VA must require
veterans to pay a $2 copayment for each 30-day supply of medication
furnished on an outpatient basis for the treatment of a non-service-
connected disability or condition unless a veteran has a service-
connected disability rated 50 percent or more, is a former prisoner of
war, or has an annual income at or below the maximum annual rate of VA
pension that would be payable if the veteran were eligible for pension.
Under 38 U.S.C. 1722A(b), VA ``may,'' by regulation, increase that
copayment amount and establish a maximum annual copayment amount (a
``cap''). We have consistently interpreted section 1722A(b) to mean
that VA has discretion to determine the appropriate copayment amount
and annual cap amount for medication furnished on an outpatient basis
for covered treatment, provided that any decision by VA to increase the
copayment amount or annual cap amount is the subject of a rulemaking
proceeding. We have implemented this statute in 38 CFR 17.110.
Under 38 CFR 17.110(b)(1), veterans are obligated to pay VA a
copayment for each 30-day or less supply of medication provided by VA
on an outpatient basis (other than medication administered during
treatment). Under the current regulation, for the period from July 1,
2010, through December 31, 2014, the copayment amount for veterans in
priority categories 2 through 6 of VA's health care system is $8. 38
CFR 17.110(b)(1)(i). For the period July 1, 2010, through December 31,
2014, the copayment amount for veterans in priority categories 7 and 8
is $9. 38 CFR 17.110(b)(1)(ii). Thereafter, the copayment amount for
all affected veterans is to be established using a formula based on the
prescription drug component of the Medical Consumer Price Index (CPI-
P), set forth in 38 CFR 17.110(b)(1)(iii).
Current Sec. 17.110(b)(2) also includes a ``cap'' on the total
amount of copayments in a calendar year for a veteran enrolled in one
of VA's health care enrollment system priority categories 2 through 6.
Through December 31, 2014, the annual cap is set
[[Page 63820]]
at $960. Thereafter, the cap is to increase ``by $120 for each $1
increase in the copayment amount'' applicable to veterans enrolled in
one of VA's health care enrollment system priority categories 2 through
6.
On December 30, 2013, we published an interim final rulemaking that
``froze'' copayments for veterans in priority categories 2 through 6 at
$8 and for veterans in priority categories 7 and 8 at $9, through
December 31, 2014. 78 FR 79317, Dec. 30, 2013. This interim final rule
was made final on May 27, 2014. 79 FR 30043, May 27, 2014. In these
rulemakings, we stated that this freeze was appropriate because, as
justified in prior rulemakings, higher copayments reduced the
utilization of VA pharmacy benefits. 78 FR 79315. We continue to
believe this to be the case. The ability to ensure that medications are
taken as prescribed is essential to effective health care management.
VA can monitor whether its patients are refilling prescriptions at
regular intervals while also checking for medications that may interact
with each other when these prescriptions are filled by VA. When non-VA
providers are also issuing prescriptions, there is a greater risk of
adverse interactions and harm to the patient because it is more
difficult for each provider to assess if the patient is taking any
other medications.
Specifically, we are removing December 31, 2014, in each place it
appears in paragraphs (b)(1)(i)-(iii) and (b)(2), and inserting
December 31, 2015, to continue to keep copayment rates and caps at
their current levels.
At the end of calendar year 2015, unless additional rulemaking is
initiated, VA will once again utilize the CPI-P methodology in Sec.
17.110(b)(1)(iii) to determine whether to increase copayments and
calculate any mandated increase in the copayment amount for veterans in
priority categories 2 through 8. At that time, CPI-P as of September
30, 2015, will be divided by the index as of September 30, 2001, which
was 304.8. The ratio will then be multiplied by the original copayment
amount of $7. The copayment amount of the new calendar year will be
rounded down to the whole dollar amount. As mandated by current
17.110(b)(2), the annual cap will be calculated by increasing the cap
by $120 for each $1 increase in the copayment amount. Any change in the
copayment amount and cap, along with the associated calculations
explaining the basis for the increase, will be published in a Federal
Register notice. Thus, the intended effect of this rule is to
temporarily prevent increases in copayment amounts and the copayment
cap for veterans in priority categories 2 through 8, following which
copayments and the copayment cap will increase as prescribed in current
Sec. 17.110(b).
Although we continue to believe that the CPI-P is one relevant
indicator of the costs of prescriptions nationwide, and because VA has
maintained copayment amounts at the same level since July 1, 2010, we
are studying whether an alternative approach of determining pharmacy
copayments would be appropriate. Until we are able to complete our
study of whether the current methodology for establishing copayment
amounts is appropriate for all veterans, consistent with our
responsibility under 38 U.S.C. 1722A to require a copayment to control
health care costs, we are extending the current copayment and cap
amounts through 2015. Any change in the copayment amount and cap, along
with the associated basis for the change, would be made through a final
rule published in the Federal Register.
Administrative Procedure Act
The Secretary of Veterans Affairs finds that there is good cause
under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity
for advance notice and opportunity for public comment and good cause to
publish this rule with an immediate effective date. As stated above,
this rule freezes at current rates the prescription drug copayment that
VA charges certain veterans. The Secretary finds that it is
impracticable and contrary to the public interest to delay this rule
for the purpose of soliciting advance public comment or to have a
delayed effective date. Increasing the copayment amount on January 1,
2015, might cause a significant financial hardship for some veterans
and may decrease patient adherence to medical plans and have other
unpredictable negative health effects.
For the above reasons, the Secretary issues this rule as an interim
final rule. VA will consider and address comments that are received
within 60 days of the date this interim final rule is published in the
Federal Register.
Effect of Rulemaking
Title 38 of the Code of Federal Regulations, as revised by this
interim final rulemaking, represents VA's implementation of its legal
authority on this subject. Other than future amendments to this
regulation or governing statutes, no contrary guidance or procedures
are authorized. All existing or subsequent VA guidance must be read to
conform with this rulemaking if possible or, if not possible, such
guidance is superseded by this rulemaking.
Paperwork Reduction Act
This interim final rule contains no provisions constituting a
collection of information under the Paperwork Reduction Act of 1995 (44
U.S.C. 3501-3521).
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,'' requiring review by the Office of
Management and Budget (OMB), unless OMB waives such review, 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.''
VA has examined the economic, interagency, budgetary, legal, and
policy implications of this regulatory action and has concluded that it
is an economically significant rule under Executive Order 12866 because
it is likely to result in a regulatory action that may have an annual
effect on the economy of $100 million or more. VA's impact analysis can
be found as a supporting document at http://www.regulations.gov,
usually within 48 hours after the rulemaking document is published.
Additionally, a copy of the rulemaking and its impact analysis are
available on VA's Web site at http://www1.va.gov/orpm/, by following
the link for ``VA Regulations Published.''
[[Page 63821]]
Congressional Review Act
This regulatory action may be considered a major rule under the
Congressional Review Act, 5 U.S.C. 801-08, because it may result in an
annual effect on the economy of $100 million or more. Although this
regulatory action may constitute a major rule within the meaning of the
Congressional Review Act, 5 U.S.C. 804(2), it is not subject to the 60-
day delay in effective date applicable to major rules under 5 U.S.C.
801(a)(3) because the Secretary finds that good cause exists under 5
U.S.C. 808(2) to make this regulatory action effective on January 1,
2015, consistent with the reasons given for the publication of this
interim final rule. Increasing the copayment amount on January 1, 2015,
might cause a significant financial hardship for some veterans and may
decrease patient adherence to medical plans and have other
unpredictable negative health effects. Accordingly, the Secretary finds
that additional advance notice and public procedure thereon are
impracticable, unnecessary, and contrary to the public interest. In
accordance with 5 U.S.C. 801(a)(1), VA will submit to the Comptroller
General and to Congress a copy of this regulatory action and VA's
Regulatory Impact Analysis (RIA).
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 issuing any rule that may result in the 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 interim final rule will have no such
effect on State, local, and tribal governments, or on the private
sector.
Regulatory Flexibility Act
The Secretary hereby certifies that this interim final rule will
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. This interim final rule will temporarily freeze the
copayments that certain veterans are required to pay for prescription
drugs furnished by VA. This rule directly affects individuals and will
not directly affect small entities. Therefore, pursuant to 5 U.S.C.
605(b), this rulemaking is exempt from the initial and final regulatory
flexibility analysis requirements of 5 U.S.C. 603 and 604.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are as follows: 64.005, Grants
to States for Construction of State Home Facilities; 64.007, Blind
Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009,
Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care;
64.011, Veterans Dental Care; 64.012, Veterans Prescription Service;
64.013, Veterans Prosthetic Appliances; 64.014, Veterans State
Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.016,
Veterans State Hospital Care; 64.018, Sharing Specialized Medical
Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence;
64.022, Veterans Home Based Primary Care; and 64.024, VA Homeless
Providers Grant and Per Diem Program.
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. Jose D.
Riojas, Chief of Staff, Department of Veterans Affairs, approved this
document on September 25, 2014, 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 recordkeeping requirements, Scholarships and fellowships, Travel
and transportation expenses, Veterans.
Dated: October 22, 2014.
William F. Russo,
Acting Director, Office of Regulation Policy & Management, Office of
the General Counsel, U.S. Department of Veterans Affairs.
For the reasons set out in the preamble, VA amends 38 CFR part 17
as follows:
PART 17--MEDICAL
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1. The authority citation for part 17 continues to read as follows:
Authority: 38 U.S.C. 501(a), and as noted in specific sections.
Sec. 17.110 [Amended]
0
2. Amend Sec. 17.110 as follows:
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a. In paragraphs (b)(1)(i), (ii), and (iii), remove all references to
``December 31, 2014'' and adding in each place ``December 31, 2015''.
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b. In paragraph (b)(2) remove all references to ``December 31, 2014''
and adding in each place ``December 31, 2015''.
[FR Doc. 2014-25454 Filed 10-24-14; 8:45 am]
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