Agricultural Marketing Service
Food and Nutrition Service
Forest Service
Natural Resources Conservation Service
Rural Housing Service
Census Bureau
First Responder Network Authority
Foreign-Trade Zones Board
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Engineers Corps
Federal Energy Regulatory Commission
Western Area Power Administration
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
Federal Emergency Management Agency
Transportation Security Administration
U.S. Immigration and Customs Enforcement
Fish and Wildlife Service
Land Management Bureau
National Park Service
Alcohol, Tobacco, Firearms, and Explosives Bureau
Drug Enforcement Administration
Justice Programs Office
Labor Statistics Bureau
Federal Aviation Administration
Federal Highway Administration
National Highway Traffic Safety Administration
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.
Rural Housing Service, USDA.
Correcting amendment.
The Agency published a document in the
Effective May 6, 2016.
Requests for additional information should be directed to Nathan Chitwood, (573) 876–0965.
As published, the final rule contains an incorrect cross-reference.
In § 3570.264(d) of the final rule, there is an incorrect cross-reference to § 3570.262(c)(4). The correct cross-reference is § 3570.263(a)(4).
As published, the final rule contains a list of Ineligible project purposes on page 1868, column 3. 3570.264(k) reads “Prepare environmental assessments”. Due to the publication of 7 CFR part 1970 in the
Grant programs—Housing and community development, Reporting requirements, Rural areas, and Technical assistance.
Accordingly, 7 CFR part 3570 is corrected by making the following correcting amendments:
5 U.S.C. 301; 7 U.S.C. 1989.
Federal Deposit Insurance Corporation (FDIC).
Final rulemaking.
On December 22, 2015, the FDIC published a notice of proposed rulemaking in the
This final rule is effective July 1, 2016.
Judy Gross, Senior Policy Analyst, (202) 898–7074,
The ’34 Act provides that an entity must register as a transfer agent if it functions as a transfer agent with respect to any security registered under section 12 of the ’34 Act (Section 12) or if it would be required to be registered except for the exemption from registration provided by Section 12(g)(2)(B) or Section 12(g)(2)(G).
In 2010, the Dodd-Frank Act provided for a substantial reorganization of the regulation of State and Federal savings associations and their holding companies. On July 21, 2011, (the “transfer date” established by section 311 of the Dodd-Frank Act), the powers, duties, and functions formerly assigned to, or performed by, the OTS were transferred to (i) the FDIC, as to State savings associations; (ii) the Office of the Comptroller of the Currency (OCC), as to Federal savings associations; and (iii) the Board of Governors of the Federal Reserve System, as to savings and loan holding companies. The Dodd-Frank Act also amended the '34 Act to define the FDIC as the appropriate regulatory agency for insured State savings associations, and subsidiaries thereof, along with insured State nonmember banks, and subsidiaries thereof.
In 2012, the JOBS Act increased the thresholds at which securities must be registered under Section 12(g)(1) with the Securities and Exchange Commission (SEC).
The JOBS Act also amended Section 12(g)(1) to provide that in the case of an issuer that is a bank or a bank holding company, the issuer's securities must be registered when the issuer has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by 2,000 or more persons.
Part 341 of the FDIC's regulations (part 341) implements Section 12 of the '34 Act by requiring State nonmember banks and subsidiaries thereof that are transfer agents of qualifying securities to register with the FDIC.
The OTS did not issue a rule regarding the registration of securities transfer agents. Instead, the OTS issued a memorandum to covered financial institutions informing such institutions that because of statutory changes in the Financial Services Regulatory Relief Act of 2006,
On December 22, 2015, the proposed rule was published in the
The final rule is part of the FDIC's continuing efforts to enact rule changes required by the Dodd-Frank Act and more recent statutory changes, such as the JOBS Act, and makes it clear that part 341 applies to insured State nonmember banks, insured State savings associations, and the subsidiaries of such institutions. Expanding the scope of part 341 to include State savings associations is consistent with provisions of the Dodd-Frank Act and serves to increase regulatory consistency for all FDIC-supervised institutions. To that end, the final rule defines the term “covered institution” to include an insured State nonmember bank, an insured State savings association, and the subsidiaries of such institutions.
The final rule reconciles the regulatory definition of qualifying securities with the statutory amendments to the '34 Act required by the JOBS Act. The final rule defines qualifying securities as (1) securities registered on a national securities exchange pursuant to Section 12(b) (15 U.S.C. 78
The definition of “qualifying securities” cites to Section 12(g)(1) instead of reciting specific quantitative standards to ensure that the FDIC's regulations remain consistent with any future statutory changes to Section 12(g)(1) .
The final rule removes the delegations of authorities related to the registration
The final rule also makes certain technical corrections to part 341, such as revising outdated citations and updating the name of the FDIC division from which covered institution should request relevant forms.
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the agencies may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
The Regulatory Flexibility Act, 5 U.S.C. 601
The final rule does not affect a substantial number of small entities.
Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000. The FDIC sought to present the proposed rule in a simple and straightforward manner and specifically requested comments from the public on how it might make the proposed rule easier to understand. The FDIC did not receive any suggestions on the use of plain language. The FDIC has drafted the final rule in a similar manner to the proposed rule.
Banks, banking; Reporting and recordkeeping requirements; Savings associations; Securities.
For the reasons stated in the preamble, the Federal Deposit Insurance Corporation is amending part 341 of chapter III of Title 12, Code of Federal Regulations as follows:
Secs. 2, 3, 17, 17A and 23(a), Securities Exchange Act of 1934, as amended (15 U.S.C. 78b, 78c, 78q, 78q–1 and 78w(a)).
This part is issued by the Federal Deposit Insurance Corporation (the FDIC) under sections 2, 3(a)(34)(B), 17, 17A and 23(a) of the Securities Exchange Act of 1934 (the Act), as amended (15 U.S.C. 78b, 78c(a)(34)(B), 78q, 78q–1 and 78w(a)) and applies to all insured State nonmember banks, insured State savings associations, or subsidiaries of such institutions, that act as transfer agents for securities registered under section 12 of the Act (15 U.S.C. 78
(h) The term
(i) The term
(1) Securities registered on a national securities exchange (15 U.S.C. 78
(2) Securities required to be registered under section 12(g)(1) of the Act (15 U.S.C. 78
(a)
(c) * * * Form TA–1 may be completed electronically and is available from the FDIC at
(b) * * * A Request for Deregistration form is available electronically from
By order of the Board of Directors.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for all Airbus Model A318, A319, A320, and A321 series airplanes. This AD was prompted by reports of airspeed indication discrepancies while flying at high altitudes in inclement weather. This AD requires replacing certain pitot probes on the captain, first officer, and standby sides with certain new pitot probes. We are issuing this AD to prevent airspeed indication discrepancies during inclement weather, which, depending on the prevailing altitude, could lead to unknown accumulation of ice crystals and consequent reduced controllability of the airplane.
This AD is effective June 10, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 10, 2016.
For service information identified in this final rule, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 44 51; email:
You may examine the AD docket on the Internet at
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057–3356; telephone: 425–227–1405; fax: 425–227–1149.
We issued a supplemental notice of proposed rulemaking (SNPRM) (“the SNPRM”) to amend 14 CFR part 39 for all Airbus Model A318, A319, A320, and A321 series airplanes. The SNPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, issued EASA Airworthiness Directive 2015–0205, dated October 9, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:
Occurrences have been reported on A320 family aeroplanes of airspeed indication discrepancies while flying at high altitudes in inclement weather conditions. Investigation results indicated that A320 aeroplanes equipped with Thales Avionics Part Number (P/N) 50620–10 or P/N C16195AA pitot probes appear to have a greater susceptibility to adverse environmental conditions that aeroplanes equipped with certain other pitot probes.
Prompted by earlier occurrences, DGAC [Direction Générale de l'Aviation Civile] France issued [DGAC] AD 2001–362 [
Since that [DGAC] AD was issued, Thales pitot probe P/N C15195BA was designed, which improved airspeed indication behavior in heavy rain conditions, but did not demonstrate the same level of robustness to withstand high-altitude ice crystals. Based on these findings, EASA have decided to implement replacement of the affected Thales [pitot] probes as a precautionary measure to improve the safety level of the affected aeroplanes.
Consequently, EASA issued AD 2014–0237 (later revised) [
Since EASA issued AD 2014–0237R1 [
For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2014–0237R1, which is superseded, but reduces the compliance time.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We considered the comment received. United Airlines has no objection to the SNPRM.
We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the SNPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the SNPRM.
We reviewed the following Airbus service information:
• Airbus Service Bulletin A320–34–1170, Revision 30, dated June 18, 2015.
• Airbus Service Bulletin A320–34–1456, Revision 01, dated May 15, 2012.
• Airbus Service Bulletin A320–34–1463, Revision 01, dated May 15, 2012.
The service information describes procedures for replacing certain Thales Avionics pitot probes on the captain, first officer, and standby sides. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 953 airplanes of U.S. registry.
We also estimate that it takes about 4 work-hours per product to comply with the new basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $21,930 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $21,223,310, or $22,270 per product.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective June 10, 2016.
This AD affects AD 2004–03–33, Amendment 39–13477 (69 FR 9936, March 3, 2004) (“AD 2004–03–33”).
This AD applies to the airplanes identified in paragraphs (c)(1), (c)(2), (c)(3), and (c)(4) of this AD, certificated in any category, all manufacturer serial numbers.
(1) Airbus Model A318–111, –112, –121, and –122 airplanes.
(2) Airbus Model A319–111, –112, –113, –114, –115, –131, –132, and –133 airplanes.
(3) Airbus Model A320–211, –212, –214, –231, –232, and –233 airplanes.
(4) Airbus Model A321–111, –112, –131, –211, –212, –213, –231, and –232 airplanes.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by reports of airspeed indication discrepancies while flying at high altitudes in inclement weather. We are issuing this AD to prevent airspeed indication discrepancies during inclement weather, which, depending on the prevailing altitude, could lead to unknown accumulation of ice crystals and consequent reduced controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 24 months after the effective date of this AD: Replace any Thales pitot probe having part number (P/N) C16195AA or P/N C16195BA, with a Goodrich pitot probe having P/N 0851HL, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1170, Revision 30, dated June 18, 2015. Accomplishing the replacement in this paragraph terminates the requirements of paragraph (f) of AD 2004–03–33 for that airplane only.
(1) Replacement of the pitot probes in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1456, Revision 01, dated May 15, 2012 (pitot probes on the captain and standby sides); and Airbus Service Bulletin A320–34–1463, Revision 01, dated May 15, 2012 (pitot probes on the first officer side); is an acceptable method of compliance with the requirements of paragraph (g) of this AD.
(2) Airplanes on which Airbus Modification 25578 was embodied in production, except for post-modification 25578 airplanes on which Airbus Modification 155737 (installation of Thales pitot probes) was also embodied in production, are compliant with the requirements of paragraph (g) of this AD, provided it can be conclusively determined that no Thales pitot probe having P/N C16195AA, P/N C16195BA, or P/N 50620–10 has been installed since the date of issuance of the original certificate of airworthiness or the date of issuance of the original export certificate of airworthiness. Post-modification 25578 airplanes on which Airbus Modification 155737 (installation of Thales pitot probes) was also embodied in production must be in compliance with the requirements of paragraph (g) of this AD.
(1) This paragraph provides credit for the actions required by paragraph (g) of this AD, if those actions were performed before the
(i) Airbus Service Bulletin A320–34–1170, Revision 04, dated May 24, 2000.
(ii) Airbus Service Bulletin A320–34–1170, Revision 05, dated September 11, 2000.
(iii) Airbus Service Bulletin A320–34–1170, Revision 06, dated October 18, 2001.
(iv) Airbus Service Bulletin A320–34–1170, Revision 07, dated December 4, 2001.
(v) Airbus Service Bulletin A320–34–1170, Revision 08, dated January 15, 2003.
(vi) Airbus Service Bulletin A320–34–1170, Revision 09, dated February 17, 2003.
(vii) Airbus Service Bulletin A320–34–1170, Revision 10, dated November 21, 2003.
(viii) Airbus Service Bulletin A320–34–1170, Revision 11, dated August 18, 2004.
(ix) Airbus Service Bulletin A320–34–1170, Revision 12, dated December 2, 2004.
(x) Airbus Service Bulletin A320–34–1170, Revision 13, dated January 18, 2005.
(xi) Airbus Service Bulletin A320–34–1170, Revision 14, dated April 21, 2005.
(xii) Airbus Service Bulletin A320–34–1170, Revision 15, dated July 19, 2005.
(xiii) Airbus Service Bulletin A320–34–1170, Revision 16, dated November 23, 2006.
(xiv) Airbus Service Bulletin A320–34–1170, Revision 17, dated February 14, 2007.
(xv) Airbus Service Bulletin A320–34–1170, Revision 18, dated October 9, 2009.
(xvi) Airbus Service Bulletin A320–34–1170, Revision 19, dated November 9, 2009.
(xvii) Airbus Service Bulletin A320–34–1170, Revision 20, dated December 1, 2010.
(xviii) Airbus Service Bulletin A320–34–1170, Revision 21, dated March 24, 2011.
(xix) Airbus Service Bulletin A320–34–1170, Revision 22, dated July 19, 2011.
(xx) Airbus Service Bulletin A320–34–1170, Revision 23, dated February 3, 2012.
(xxi) Airbus Service Bulletin A320–34–1170, Revision 24, dated April 12, 2012.
(xxii) Airbus Service Bulletin A320–34–1170, Revision 25, dated September 4, 2012.
(xxiii) Airbus Service Bulletin A320–34–1170, Revision 26, dated September 16, 2013.
(xxiv) Airbus Service Bulletin A320–34–1170, Revision 27, dated March 18, 2014.
(xxv) Airbus Service Bulletin A320–34–1170, Revision 28, dated September 1, 2014.
(xxvi) Airbus Service Bulletin A320–34–1170, Revision 29, dated February 16, 2015.
(2) This paragraph provides credit for the replacement of pitot probes on the captain and standby sides specified in paragraph (h)(1) of this AD, if the replacement was performed before the effective date of this AD using Airbus Service Bulletin A320–34–1456, dated December 2, 2009, which is not incorporated by reference in this AD.
(3) This paragraph provides credit for the replacement of pitot probes on the first officer side as specified in paragraph (h)(1) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320–34–1463, dated March 9, 2010, which is not incorporated by reference in this AD.
(1) At the applicable time specified in paragraph (j)(1)(i) or (j)(1)(ii) of this AD: No person may install on any airplane a Thales pitot probe having P/N C16195AA or P/N C16195BA.
(i) For airplanes with a Thales pitot probe having P/N C16195AA or P/N C16195BA installed: After accomplishing the replacement required by paragraph (g) of this AD.
(ii) For airplanes without a Thales pitot probe having P/N C16195AA or P/N C16195BA installed: As of the effective date of this AD.
(2) As of the effective date of this AD, no person may install on any airplane a Thales pitot probe having part number P/N 50620–10.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015–0205, dated October 9, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (m)(3) and (m)(4) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) Airbus Service Bulletin A320–34–1170, Revision 30, dated June 18, 2015.
(ii) Airbus Service Bulletin A320–34–1456, Revision 01, dated May 15, 2012.
(iii) Airbus Service Bulletin A320–34–1463, Revision 01, dated May 15, 2012.
(3) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 44 51; email:
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 787–8 and 787–9 airplanes. This AD requires repetitive inspections of the bilge barriers located in the forward and aft cargo compartments for disengaged decompression panels, and reinstalling any disengaged panels. This AD was prompted by several reports of disengaged decompression panels found on in-service airplanes. We are issuing this AD to detect and correct disengaged decompression panels from the bilge barriers located in the forward and aft cargo compartments. In the event of a cargo compartment fire, this condition would provide a path for smoke and Halon to enter the flight compartment and passenger cabin, which could result in the inability to contain and extinguish a fire.
This AD is effective May 23, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of May 23, 2016.
We must receive comments on this AD by June 20, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206–544–5000, extension 1; fax 206–766–5680; Internet
You may examine the AD docket on the Internet at
Caspar Wang, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM–150S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6414; fax: 425–917–6590; email:
We have received several reports of disengaged decompression panels found on in-service airplanes. It appears these decompression panels disengaged prior to delivery, during test flights. Tests done by the airplane manufacturer revealed some decompression panels disengage at a pressure differential below the design/intended value. This condition, if not corrected, would provide a path for smoke and Halon to enter the flight compartment and passenger cabin in the event of a cargo compartment fire, which could result in the inability to contain and extinguish a fire.
We reviewed Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015. The service information describes procedures for repetitive inspections of the bilge barriers located in the forward and aft cargo compartments for disengaged decompression panels, and reinstalling any disengaged panels. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This AD requires accomplishing the actions specified in the service information described previously.
For information on the procedures and compliance times, see this service information at
We consider this AD interim action. The airplane manufacturer is currently developing a modification that will address the unsafe condition identified in this AD. Once this modification is developed, approved, and available, we might consider additional rulemaking.
An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because if any decompression panel is disengaged from the bilge barriers located in the forward and aft cargo compartments and a cargo compartment fire were to occur, the fire could not be contained or extinguished. Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.
This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD affects 42 airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary reinstallation that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need this action:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective May 23, 2016.
None.
This AD applies to The Boeing Company Model 787–8 and 787–9 airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015.
Air Transport Association (ATA) of America Code 25, Equipment/Furnishings.
This AD was prompted by several reports of disengaged decompression panels found on in-service airplanes. We are issuing this AD to detect and correct disengaged decompression panels from the bilge barriers located in the forward and aft cargo compartments. In the event of a cargo compartment fire, this condition would provide a path for smoke and Halon to enter the flight compartment and passenger cabin, which could result in the inability to contain and extinguish a fire.
Comply with this AD within the compliance times specified, unless already done.
At the applicable time specified in paragraph (g)(1) or (g)(2) of this AD: Do a general visual inspection of the bilge barriers located in the forward and aft cargo compartments for disengaged decompression panels, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015. Repeat the inspection thereafter at the applicable times specified in paragraph 5., “Compliance,” of Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015.
(1) For Group 1 airplanes identified in Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015: Inspect within 30 days after the effective date of this AD.
(2) For Group 2 airplanes identified in Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015: Inspect within 180 flight cycles or within 90 days after the effective date of this AD, whichever occurs later.
If any disengaged decompression panel is found during any inspection required by paragraph (g) of this AD: Before further flight, reinstall the panel, in accordance with the
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (j) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (i)(4)(i) and (i)(4)(ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
For more information about this AD, contact Caspar Wang, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM–150S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6414; fax: 425–917–6590; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Service Bulletin B787–81205–SB500009–00, Issue 001, dated November 16, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206–544–5000, extension 1; fax 206–766–5680; Internet
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are superseding airworthiness directive (AD) 2013–08–17 for Airbus Helicopters Model SA–365N, SA–365N1, AS–365N2, AS 365 N3, and SA–366G1 helicopters. AD 2013–08–17 required initial and recurring inspections of the 9-degree fuselage frame for a crack and repairing the frame if a crack exists. This new AD modifies the compliance times and expands the inspection area of the 9-inch frame. The actions of this AD are intended to detect a crack in the 9-degree frame to prevent loss of structural integrity and subsequent loss of control of the helicopter.
This AD is effective June 10, 2016.
The Director of the Federal Register approved the incorporation by reference of certain documents listed in this AD as of June 10, 2016.
For service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641–0000 or (800) 232–0323; fax (972) 641–3775; or at
You may examine the AD docket on the Internet at
Robert Grant, Aviation Safety Engineer, Safety Management Group, FAA, 10101 Hillwood Pkwy., Fort Worth, Texas 76177; telephone (817) 222–5110; email
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to remove AD 2013–08–17, Amendment 39–17434 (78 FR 25380, May 1, 2013) and add a new AD. AD 2013–08–17 applied to Airbus Helicopters Model SA–365N, SA–365N1, AS–365N2, AS 365 N3, and SA–366G1 helicopters and required initial and recurring inspections of the inner angles and flanges of the 9-degree fuselage frame on the right-hand (RH) and left-hand (LH) sides for a crack. If a crack was found, AD 2013–08–17 required repairing the frame. AD 2013–08–17 was prompted by EASA Emergency AD No. 2010–0064–E, dated April 1, 2010, to correct an unsafe condition for the specified model
The NPRM published in the
We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (80 FR 79274, December 21, 2015).
These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.
We do not require contacting the manufacturer for approved repair instructions. We also do not allow flight with a known crack.
Airbus Helicopters has issued an Emergency Alert Service Bulletin (EASB), Revision 2, dated April 7, 2014, containing the following three numbers: No. 05.00.57 for the Model SA–365N and N1, and AS–365N2 and N3 and for military Model AS365F, Fs, Fi, and K helicopters; No. 05.39 for Model SA–366G1 and military Model SA 366–GA helicopters; and No. 05.00.25 for military Model AS565MA, MB, SA, SB, and UB helicopters.
The EASB specifies checking at regular intervals for a crack in the areas of the inner angles and flanges of the 9-degree frame on the RH and LH sides, near the splice. Revision 2 of the EASB modifies the compliance times, adds a compliance time based on take-off/landing cycles, and expands the inspection areas up to the junction with the upper part of the frame. EASA classified this service information as mandatory and issued EASA AD No. 2014–0159 to ensure the continued airworthiness of these helicopters.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 40 helicopters of U.S. Registry and that labor costs average $85 a work hour. Based on these estimates, we expect the following costs:
• Inspecting the 9-degree frame requires 3 work-hours per inspection for a cost of $255 per helicopter and $10,200 for the fleet per inspection cycle.
• Repairing the 9-degree frame requires 24 work-hours for a labor cost of $2,040. Parts cost $3,350 for a total cost of $5,390 per helicopter.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866;
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Airbus Helicopters Model SA–365N, SA–365N1, AS–365N2, AS 365 N3, and SA–366G1 helicopters, certificated in any category.
This AD defines the unsafe condition as a crack in the 9-degree frame, which could result in the loss of structural integrity and subsequent loss of control of the helicopter.
This AD supersedes AD 2013–08–17, Amendment 39–17434 (78 FR 25380, May 1, 2013).
This AD becomes effective June 10, 2016.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
(1) Within 110 hours time-in-service (TIS) after reaching the hours or landings threshold, whichever occurs first, listed in Table 1 to Paragraph (f)(1) of this AD or within 110 hours TIS from the effective date of this AD, whichever occurs later, and thereafter at intervals not to exceed 110 hours TIS, using a 10X or higher magnifying glass and a light, inspect the 9-degree fuselage frame on the right-hand and left-hand sides for a crack in the areas depicted in Figures 1 and 2 of Airbus Helicopters Emergency Alert Service Bulletin (EASB) No. AS365 05.00.57, Revision 2, dated April 7, 2014, or EASB No. SA366 05.39, Revision 2, dated April 7, 2014, as applicable to your model helicopter. For purposes of this AD, a landing would be counted anytime the helicopter lifts off into the air and then lands again regardless of the duration of the landing and regardless of whether the engine is shut down.
(2) If there is a crack, before further flight, repair the frame. Repairing a frame does not constitute terminating actions for the repetitive inspection requirements of this AD.
(1) The Manager, Safety Management Group, FAA, may approve AMOCs for this AD. Send your proposal to: Robert Grant, Aviation Safety Engineer, Safety Management Group, FAA, 10101 Hillwood Pkwy., Fort Worth, Texas 76177; telephone (817) 222–5110; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office, before operating any aircraft complying with this AD through an AMOC.
The subject of this AD is addressed in European Aviation Safety Agency (EASA) AD No. 2014–0159, dated July 7, 2014. You may view the EASA AD on the Internet at
Joint Aircraft Service Component (JASC) Code: 5311, Fuselage Main, Frame.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Airbus Helicopters Emergency Alert Service Bulletin No. 05.00.57, Revision 2, dated April 7, 2014.
(ii) Airbus Helicopters Emergency Alert Service Bulletin No. 05.39, Revision 2, dated April 7, 2014.
Airbus Helicopters Emergency Alert Service Bulletin No. 05.00.57 and Airbus Helicopters Emergency Alert Service Bulletin No. 05.39, both Revision 2, and both dated April 7, 2014, are co-published as one document along with Airbus Helicopters Emergency Alert Service Bulletin No. 05.00.25, Revision 2, dated April 7, 2014, which is not incorporated by reference in this AD.
(3) For Airbus Helicopters service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641–0000 or (800) 232–0323; fax (972) 641–3775; or at
(4) You may view this service information at FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N–321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call (817) 222–5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741–6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are superseding Airworthiness Directive (AD) 2007–10–10 R1 for all Airbus Model A300 B4–600, B4–600R, and F4–600R series airplanes, and Model A300 C4–605R Variant F airplanes (collectively called Model A300–600 series airplanes). AD 2007–10–10 R1 required revising the Airworthiness Limitations Section (ALS) of the Instructions for Continued Airworthiness to incorporate new limitations for fuel tank systems. This new AD requires revising the maintenance program or inspection program to incorporate revised fuel maintenance and inspection tasks. This AD was prompted by issuance of more restrictive maintenance requirements and/or airworthiness limitations by the manufacturer. We are issuing this AD to prevent the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors caused by latent failures, alterations, repairs, or maintenance actions, could result in fuel tank explosions and consequent loss of the airplane.
This AD becomes effective June 10, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of June 10, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain other publication listed in this AD as of December 28, 2009 (74 FR 65398, December 10, 2009).
The Director of the Federal Register approved the incorporation by reference of certain other publications listed in this AD as of June 27, 2007 (72 FR 28827, May 23, 2007).
For service information identified in this final rule, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the Internet at
Dan Rodina, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057–3356; telephone 425–227–2125; fax 425–227–1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2007–10–10 R1, Amendment 39–16134 (74 FR 65398, December 10, 2009) (“AD 2007–10–10 R1”). AD 2007–10–10 R1 applied to all Airbus Model A300 B4–600, B4–600R, and F4–600R series airplanes, and Model A300 C4–605R Variant F airplanes (collectively called Model A300–600 series airplanes). The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014–0194, dated October 15, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A300 B4–600, B4–600R, and F4–600R series airplanes, and Model A300 C4–605R Variant F airplanes (collectively called Model A300–600 series airplanes). The MCAI states:
Prompted by an accident * * *, the Federal Aviation Administration (FAA) published Special Federal Aviation Regulation (SFAR) 88, [
The FAL were specified in Airbus A300–600 FAL document ref. 95A.1929/05 at issue 02 and in the A300–600 [Airworthiness Limitation Section] ALS variation to FAL document issue 02 ref. 0CVLG110007/C0S issue 01, for A300–600 and A300–600ST aeroplanes.
EASA issued [EASA] AD 2006–0201 to require compliance with the FAL documents (comprising maintenance/inspection tasks and Critical Design Configuration Control Limitations (CDCCL)).
EASA AD 2006–0201 was superseded by EASA AD 2007–0095 (later revised) [which corresponds to FAA AD 2007–10–10 R1, Amendment 39–16134 (74 FR 65398, December 10, 2009)], which retained the original requirements and corrected and updated the compliance paragraphs concerning task ref. 28–18–00–03–1 and CDCCLs.
Since EASA AD 2007–0095R1 was published, Airbus issued A300–600 ALS Part 5, prompted by EASA policy statement (EASA D2005/CPRO) which requests design approval holders to integrate Fuel Tank Safety items into an ALS document. The A300–600 ALS Part 5 is approved by EASA.
Failure to comply with the items as identified in Airbus A300–600 ALS Part 5 could result in a fuel tank explosion and consequent loss of the aeroplane.
For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2007–0095R1, which is superseded, and requires implementation of the new and more restrictive maintenance instructions and/or airworthiness limitations as specified in Airbus A300–600 ALS Part 5.
The unsafe condition is the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors caused by latent failures, alterations, repairs, or maintenance actions, could result in fuel tank explosions and consequent loss of the airplane. You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.
We have corrected certain paragraph references in paragraph (g) and Note 1 to paragraph (g) of this AD.
We have revised certain document citations in paragraph (h) of this AD. This change is necessary to meet the Office of the Federal Register's requirements for documents that are incorporated by reference in this AD.
We have also determined that the compliance time for revising the ALS to incorporate certain CDCCLs specified in paragraph (i) of this AD should be within 12 months after June 27, 2007 (the effective date of AD 2007–10–10, Amendment 39–15051 (72 FR 28827, May 23, 2007) (“AD 2007–10–10”)). The compliance time stated in the proposed AD was “Within 12 months after the effective date of this AD.” We have revised paragraph (i) of this AD accordingly. The proposed AD clearly indicated that we intended to restate the requirements of that paragraph from the previous AD, with no changes.
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD with the changes described previously, except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Airbus has issued A300–600 Airworthiness Limitations Section Part 5—Fuel Airworthiness Limitations, Revision 00, dated May 27, 2014. The airworthiness limitations introduce mandatory instructions and more restrictive maintenance requirements. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 122 airplanes of U.S. registry.
The actions required by AD 2007–10–10 R1, and retained in this AD take about 2 work-hours per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that were required by AD 2007–10–10 R1 is $170 per product.
We also estimate that it takes about 1 work-hour per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost $0 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $10,370, or $85 per product.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD becomes effective June 10, 2016.
This AD replaces AD 2007–10–10 R1, Amendment 39–16134 (74 FR 65398, December 10, 2009) (“AD 2007–10–10 R1”).
This AD applies to Airbus Model A300 B4–600, B4–600R, and F4–600R series airplanes, and Model A300 C4–605R Variant F airplanes (collectively called Model A300–600 series airplanes), certificated in any category, all manufacturer serial numbers.
Air Transport Association (ATA) of America Code 05, Time Limits/Maintenance Checks.
This AD was prompted by Airbus issuing more restrictive instructions and/or fuel airworthiness limitations. We are issuing this AD to prevent the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors caused by latent failures, alterations, repairs, or maintenance actions, could result in fuel tank explosions and consequent loss of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (f) of AD 2007–10–10 R1, with corrected paragraph references. Within 3 months after June 27, 2007 (the effective date of AD 2007–10–10, Amendment 39–15051 (72 FR 28827, May 23, 2007) (“AD 2007–10–10”)), revise the ALS of the Instructions for Continued Airworthiness to incorporate Airbus A300–600 ALS Part 5—Fuel Airworthiness Limitations, dated May 31, 2006, as defined in Section 1, “Maintenance/Inspection Tasks,” of Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 1, dated December 19, 2005; or Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 2, dated May 16, 2007. For all tasks identified in Section 1 of these documents, the initial compliance times start from the later of the times specified in paragraphs (g)(1) and (g)(2) of this AD, and the repetitive inspections must be accomplished thereafter at the intervals specified in Section 1 of these documents, except as provided by paragraph (h) of this AD.
(1) June 27, 2007 (the effective date of AD 2007–10–10).
(2) The date of issuance of the original French standard airworthiness certificate or the date of issuance of the original French export certificate of airworthiness.
Airbus Operator Information Telex (OIT) SE 999.0076/06, dated June 20, 2006, identifies the applicable sections of the Airbus A300–600 Airplane Maintenance Manual for accomplishing the tasks specified in Section 1 of Document 95A.1929/05.
This paragraph restates the requirements of paragraph (g) of AD 2007–10–10 R1, with revised document citations. For Task 28–18–00–03–1, “Operational check of low-level/underfull/calibration sensors,” identified in Section 1, “Maintenance/Inspection Tasks” of Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 1, dated December 19, 2005; or Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 2, dated May 16, 2007: The initial compliance time is the later of the times specified in paragraphs (h)(1) and (h)(2) of this AD. Thereafter, Task 28–18–00–03–1 must be accomplished at the repetitive interval specified in Section 1 of these documents.
(1) Prior to the accumulation of 40,000 total flight hours.
(2) Within 72 months or 20,000 flight hours after June 27, 2007 (the effective date of AD 2007–10–10), whichever occurs first.
This paragraph restates the requirements of paragraph (h) of AD 2007–10–10 R1, with a revised compliance time. Within 12 months after June 27, 2007 (the effective date of AD 2007–10–10), revise the ALS of the Instructions for Continued Airworthiness to incorporate Airbus A300–600 ALS Part 5—Fuel Airworthiness Limitations, dated May 31, 2006, as defined in Section 2, “Critical Design Configuration Control Limitations,” of Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 1, dated December 19, 2005; or Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 2, dated May 16, 2007.
Within 3 months after the effective date of this AD, revise the maintenance or inspection program, as applicable, by incorporating the airworthiness limitations as specified in
After the maintenance or inspection program has been revised as required by paragraph (j) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2014–0194, dated October 15, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (n)(6) and (n)(7) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(3) The following service information was approved for IBR on June 10, 2016.
(i) Airbus A300–600 Airworthiness Limitations Section (ALS), Part 5—Fuel Airworthiness Limitations, Revision 00, dated May 27, 2014. The issue date of this document is not identified on the title page.
(ii) Reserved.
(4) The following service information was approved for IBR on December 28, 2009 (74 FR 65398, December 10, 2009).
(i) Airbus A300–600 Fuel Airworthiness Limitations, Document 95A.1929/05, Issue 2, dated May 16, 2007.
(ii) Reserved.
(5) The following service information was approved for IBR on June 27, 2007 (72 FR 28827, May 23, 2007).
(i) Airbus A300–600 ALS Part 5—Fuel Airworthiness Limitations, dated May 31, 2006.
(ii) Airbus A300–600 Fuel Airworthiness Limitations, Issue 1, dated December 19, 2005.
(6) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(7) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221.
(8) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the airspace designation and airport name in Class E airspace by changing the designation from Cherokee Village Airport, AR, to Ash Flat, AR; and changing the airport name from Cherokee Village Airport to Sharp County Village Airport, Ash Flat, AR. These changes reflect the current information in the FAAs aeronautical database.
Effective 0901 UTC, July 21, 2016. The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments.
FAA Order 7400.9Z, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX, 76177; telephone (817) 222–5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code.
In a review of the airspace, the FAA found that the airport designation and airport name for Cherokee Village Airport, AR, as published in FAA Order 7400.9Z, Airspace Designations and Reporting Points, has changed. This is an administrative change removing Cherokee Village, AR, from the Class E designation, and establishing Ash Flat, AR, in its place, and changing the airport name from Cherokee Village Airport to Sharp County Regional Airport, Ash Flat, AR. The geographic coordinates of the airport also are adjusted.
Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9Z dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the
This action amends Title 14, Code of Federal Regulations (14 CFR) part 71 by removing the airport designation Cherokee Village, AR, and airport name of Cherokee Village Airport from Class E airspace extending upward from 700 feet above the surface, and establishing the new designation, Ash Flat, AR; and airport name, Sharp County Regional Airport, Ash Flat, AR, in its place. The geographic coordinates of the airport also are adjusted.
This is an administrative change amending the airspace designation for Sharp County Regional Airport, Ash Flat, AR, to be in concert with the FAA's aeronautical database, and does not affect the boundaries or operating requirements of the airspace; therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5–6.5.a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.5-mile radius of Sharp County Regional Airport.
Commodity Futures Trading Commission.
Final rule.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is amending its regulations in connection with the terms for which counterparties must exchange and resolve discrepancies when engaging in portfolio reconciliation.
The final rule is effective May 6, 2016.
Frank N. Fisanich, Chief Counsel, 202–418–5949,
Under § 23.502 of the Commission's regulations,
On September 22, 2015, the Commission proposed to amend the definition of “material terms” in § 23.500(g) to exclude nine specific data fields (the “Proposal”).
1. An indication that the swap will be allocated;
2. If the swap will be allocated, or is a post-allocation swap, the legal entity identifier
3. An indication that the swap is a post-allocation swap;
4. If the swap is a post-allocation swap, the unique swap identifier;
5. Block trade indicator;
6. With respect to a cleared swap, the execution timestamp;
7. With respect to a cleared swap, the timestamp for submission to swap data repository (“SDR”);
8. Clearing indicator; and
9. Clearing venue.
In the Proposal, the Commission asked for comments on a number of issues related to the appropriate scope of portfolio reconciliation. For example, the Commission asked for comment on whether counterparties should only have to exchange the “material terms” of swaps or whether counterparties should be required to exchange all terms of swaps (material or not).
In response to the Proposal, the Commission received four comments.
In particular, Chris Barnard of Germany stated that he supported “amending the definition of `material terms' to not include terms that are not relevant to the valuation of swaps portfolios” and amending “§ 23.500(i)(1) so that counterparties only have to exchange the `material terms' (which would not include the Proposed Excluded Data Fields) of swaps.”
Likewise, the Japanese Bankers Association recommended that the Commission amend § 23.500(i)(1) so that swap counterparties only have to exchange the “material terms” of swaps, consistent with the Proposed Excluded Data Fields.
Additionally, consistent with the Proposal, Freddie Mac stated that it “believes that the Commission should continue to exclude the execution timestamp and [SDR] submission timestamp data fields with respect to non-cleared swap transactions from the definition of `material terms' under 23.500(g) for purposes of compliance with the portfolio reconciliation requirements of 23.502.”
In addition, ISDA commented that it believes that “[t]he data fields that need to be exchanged and those which need to be reconciled should be the same” in
ISDA's 25 recommended excluded terms are the following:
1. An indication of whether the reporting counterparty is a SD with respect to the swap;
2. An indication of whether the reporting party is an MSP with respect to the swap;
3. If the reporting counterparty is not an SD or a MSP with respect to the swap, an indication of whether the reporting counterparty is a financial entity as defined in section 2(h)(7)(c) of the Commodity Exchange Act (“Act”);
4. An indication of whether the reporting counterparty is a U.S. person;
5. An indication that the swap will be allocated;
6. If the swap will be allocated, or is a post-allocation swap, the legal entity identifier of the agent;
7. An indication of whether the swap is a post-allocation swap;
8. If the swap is a post-allocation swap, the unique swap identifier of the original transaction between the reporting counterparty and the agent;
9. An indication of whether the non-reporting counterparty is an SD with respect to the swap;
10. An indication of whether the non-reporting counterparty is an MSP with respect to the swap;
11. If the non-reporting counterparty is not an SD or an MSP with respect to the swap, an indication of whether the reporting counterparty is a financial entity as defined in section 2(h)(7)(c) of the Act;
12. An indication of whether the non-reporting counterparty is a U.S. person;
13. An indication that the swap is a multi-asset swap;
14. For a multi-asset swap, an indication of the primary asset class;
15. For a multi-asset swap, an indication of the secondary asset class(es);
16. An indication that the swap is a mixed swap;
17. For a mixed swap reported to two non-dually-registered swap data repositories, the identity of the other SDR (if any) to which the swap is or will be reported;
18. Block trade indicator;
19. Execution timestamp;
20. Timestamp for submission to SDR;
21. Clearing indicator;
22. Clearing venue;
23. If the swap will not be cleared, an indication of whether the clearing requirement exception in section 2(h)(7) of the Act was elected;
24. The identity of the counterparty electing the clearing requirement exception in section 2(h)(7) of the Act; and
25. Any other term(s) of the swap matched or affirmed by the counterparties in verifying the swap.
With respect to the twenty-fifth term, ISDA stated that such term was “[n]ot suitable for material terms reconciliation” because “[u]ndefined data fields cannot be reconciled between parties or supported by portfolio reconciliation.”
After careful consideration, the Commission has decided to finalize the rule by: (1) Modifying § 23.500(i)(1) to define “portfolio reconciliation” as,
After analyzing and considering the materiality of such terms, the Commission believes that the terms are not material for purposes of portfolio reconciliation exercises. Specifically, the Commission has determined that these 24 data fields: (i) Pertain to static items about entering into the swap; (ii) pertain to static data fields about a party's status; (iii) are only relevant to cleared transactions; (iv) are data which is not agreed, exchanged, or confirmed between the parties; or (v) are not relevant to the swap's daily valuation. The Commission also believes that the removal of these terms from reconciliations would alleviate the burden of resolving discrepancies in terms of a swap that are not relevant to the ongoing rights and obligations of the parties and the valuation of the swap without impairing the Commission's regulatory mission. The Commission's view of these “Excluded Data Fields” only applies to the “portfolio reconciliation” process and has no bearing on other obligations that counterparties must adhere to, such as, but not limited to, recordkeeping and reporting obligations. Thus the final rule would make the portfolio reconciliation process more efficient without harming the Commission's ability to regulate the market. Accordingly, the Commission has decided to adopt the 24 terms as the “Excluded Data Fields” to be listed in § 23.500(g)'s definition of material terms.
The twenty-fifth data field listed above—“[a]ny other term(s) of the swap matched or affirmed by the counterparties in verifying the swap”—is a provision that could include terms, unlike the 24 excluded terms above, that would be relevant to or affect the valuation of the swap or the ongoing rights and obligations of the counterparties.
The Commission will, however, provide an additional measure of certainty to swap counterparties in the final rule by modifying the definition of “material terms” in § 23.500(g) to mean the
With these modifications to the existing regulations, the final rule will make it such that the terms that must be exchanged during portfolio reconciliation exercises will be identical to the terms that have to be resolved for discrepancies, both of which will be reduced from what was required under the regulations as originally promulgated. The Commission is finalizing the rule as such because the Commission believes that modifying the rule in this manner will provide for a streamlined and efficient portfolio reconciliation process that will continue to provide counterparties (and the Commission) with sufficient information about swap transactions. Accordingly, the Commission believes that the Final Rule will result in fewer “false positives” and provide for an overall more effective portfolio reconciliation process.
The Regulatory Flexibility Act
Thus, for the reasons stated above, the Commission believes that the amendments to the definitions of “material terms” and “portfolio reconciliation” will not have a significant economic impact on a substantial number of small entities. Accordingly, the Chairman, on behalf of the Commission, hereby certifies, pursuant to 5 U.S.C. 605(b), that the regulations in this
The Paperwork Reduction Act of 1995 (“PRA”)
In connection with the proposal, the Commission anticipated that, if adopted the Final Rule would require an amendment to existing collection of information OMB Control Number 3038–0068 with respect to the collection of information entitled “Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements for Swap Dealers and Major Swap Participants.”
The final rule amends the definition in § 23.500(g) of the Commission regulations so that the term “material terms” means the minimum primary economic terms of a swap other than the 24 Excluded Data Fields.
As discussed above, the final rule reduces the number of “material terms” that counterparties are required to exchange and resolve for discrepancies during portfolio reconciliations, but will not eliminate the overall portfolio reconciliation requirement itself. The Commission stated that it believed that the Proposal would reduce the time burden for portfolio reconciliation by one burden hour for each SD and MSP, which would reduce the annual burden to 1,281.5 hours per SD and MSP. The Commission stated that it believed that the Proposal would result in one hour of less work for computer programmers for SDs and MSPs because the programmers who have to match the needed data fields from two different databases would have fewer data fields to obtain and resolve for discrepancies. In the Proposal, the Commission estimated that, given that there are 106 provisionally registered SDs and MSPs, the proposed amendment would result in an aggregate burden of 135,839
Section 15(a) of the Act requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the Act or issuing an order. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the section 15(a) factors.
The Commission believes that, while portfolio reconciliation generally helps counterparties to manage risk, commentators were persuasive in their arguments that portfolio reconciliation should only involve exchanging and resolving discrepancies in material terms, and that material terms should not include the 24 Excluded Data Fields mentioned above. The Commission has been convinced that exchanging the 24 Excluded Data Fields does not improve the management of risks in swaps portfolios. By eliminating the requirement to exchange data fields that do not impact the valuation of the swap or the payment obligations of the counterparties and thereby reducing the number of data fields that parties must resolve for differences in portfolio reconciliation exercises, the Commission believes the final rule will decrease the costs that its current regulations impose on SDs and MSPs (and their counterparties) without a concomitant reduction in the benefits obtained from portfolio reconciliation exercises under the existing regulatory framework, as described below.
For purposes of considering the costs and benefits of the final rule, the Commission has used its current rules as the baseline. Currently, counterparties to swap transactions must exchange certain data elements for each swap, and then compare these and validate each element, even where the element is not relevant to the valuation of the swap or the payment obligations of the counterparties. The final rule circumscribes this process to include only those data elements that are relevant on an ongoing basis to the valuation of the swap or the payment obligations of the counterparties. Accordingly, the Commission does not believe the final rule will impose any new costs on SDs, MSPs, or their counterparties.
Rather, as described below, the Commission believes that, in the aggregate, the final rule will decrease the costs that its regulations impose on SDs and MSPs (and their counterparties) because it would eliminate the requirement to exchange and resolve discrepancies in swap terms that remain constant (or that do not impact the valuation of swaps or the payment obligations of the counterparties) and thereby reduce the number of data fields requiring particular attention in portfolio reconciliation exercises.
The Commission does not believe the final rule will impair the Commission's ability to oversee and regulate the swaps markets. Portfolio reconciliation is designed to enable counterparties to understand the current status or value of swap terms. Because the Commission's proposal only is removing terms from the general portfolio reconciliation process that are not critical to the valuation of the swap or to the ongoing obligations of the counterparties, it will not negatively impact the amount of information available to the Commission about swaps. The Commission believes that this final rule will reduce SDs,' MSPs,' or their counterparties' costs of complying with Commission regulations because it will reduce the number of terms that counterparties must exchange during portfolio reconciliations.
The Commission believes that the final rule will reduce the annual burden hours for each SD and MSP by four hours, resulting in a total of 1,278.5 hours, which leads to an aggregate number, based on 105 registrants, of 134,242.5 burden hours. The Commission previously estimated that, assuming 1,282.5 annual burden hours per SD and MSP, the financial cost of its regulations on each SD and MSP would be $128,250.
In addition, the Commission believes that the final rule benefits SDs, MSPs, and their counterparties because it will enable them to focus on reconciling data fields that actually impact the valuations of swaps and the obligations of the counterparties. Potentially, this change will enable the portfolio reconciliation process to be more efficient without reducing its usefulness as a risk management tool.
Section 15(a) of the Act requires the Commission to consider the effects of its actions in light of the following five factors:
For the reasons discussed above, the Commission believes that, notwithstanding its decision to remove the 24 Excluded Data Fields from the list of material terms that counterparties must exchange during portfolio reconciliations, its regulations will continue to protect market participants and the public.
For the reasons discussed above, the Commission believes that the final rule will increase resource allocation efficiency of market participants engaging in reconciliation exercises without increasing the risk of harm to the financial integrity of markets.
For the reasons discussed above, the Commission did not identify any impact on price discovery as a result of the proposed regulation, and did not believe there would be one, but sought
For the reasons discussed above, the Commission believes that the final rule is consistent with sound risk management practices because the regulatory change will not impair an entity's ability to conduct portfolio reconciliations.
The Commission did not identify any other public interest considerations, but welcomed comment on whether the proposal would promote public confidence in the integrity of derivatives markets by ensuring meaningful regulation and oversight of all SDs and MSPs. The Commission did not receive any comments about this issue.
Authority delegations (Government agencies), Commodity futures, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Commodity Futures Trading Commission amends 17 CFR part 23 as set forth below:
7 U.S.C. 1a, 2, 6, 6a, 6b, 6b–1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21.
(g)
(1) An indication of whether the reporting counterparty is a swap dealer with respect to the swap;
(2) An indication of whether the reporting party is a major swap participant with respect to the swap;
(3) If the reporting counterparty is not a swap dealer or a major swap participant with respect to the swap, an indication of whether the reporting counterparty is a financial entity as defined in section 2(h)(7)(c) of the Act;
(4) An indication of whether the reporting counterparty is a U.S. person;
(5) An indication that the swap will be allocated;
(6) If the swap will be allocated, or is a post-allocation swap, the legal entity identifier of the agent;
(7) An indication of whether the swap is a post-allocation swap;
(8) If the swap is a post-allocation swap, the unique swap identifier of the original transaction between the reporting counterparty and the agent;
(9) An indication of whether the non-reporting counterparty is a swap dealer with respect to the swap;
(10) An indication of whether the non-reporting counterparty is a major swap participant with respect to the swap;
(11) If the non-reporting counterparty is not a swap dealer or a major swap participant with respect to the swap, an indication of whether the reporting counterparty is a financial entity as defined in section 2(h)(7)(c) of the Act;
(12) An indication of whether the non-reporting counterparty is a U.S. person;
(13) An indication that the swap is a multi-asset swap;
(14) For a multi-asset swap, an indication of the primary asset class;
(15) For a multi-asset swap, an indication of the secondary asset class(es);
(16) An indication that the swap is a mixed swap;
(17) For a mixed swap reported to two non-dually-registered swap data repositories, the identity of the other swap data repository (if any to which the swap is or will be reported;
(18) Block trade indicator;
(19) Execution timestamp;
(20) Timestamp for submission to swap data repository;
(21) Clearing indicator;
(22) Clearing venue;
(23) If the swap will not be cleared, an indication of whether the clearing requirement exception in section 2(h)(7) of the Act was elected; and
(24) The identity of the counterparty electing the clearing requirement exception in section 2(h)(7) of the Act.
(i) * * *
(1) Exchange the material terms of all swaps in the swap portfolio between the counterparties;
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Massad and Commissioners Bowen and Giancarlo voted in the affirmative. No Commissioner voted in the negative.
I support the final rule amending the definitions of portfolio reconciliation and material terms for purposes of swap portfolio reconciliation. I commend the Commission and Division of Swap Dealer & Intermediary Oversight staff for replacing no-action relief with a rulemaking subject to a cost-benefit analysis and the notice and comment requirements of the Administrative Procedure Act.
In the proposal I raised two concerns. First, I questioned the logic of the proposed rule to require the exchange of all terms throughout the life of a swap as part of a portfolio reconciliation exercise, but then require reconciliation of only the material terms. I am pleased that the Commission has amended the definition of portfolio reconciliation to require the exchange of material terms so that the terms that must be exchanged are the same as those that must be reconciled.
Second, I questioned the logic of the proposed rule to treat as material terms, and thus require the reconciliation of, data fields that will not change over time, such as execution timestamp and timestamp for submission to a swap data repository. I am also pleased that the Commission has revised the definition of material terms to mean the minimum primary economic terms as defined in appendix 1 of part 45 of the Commission's regulations and to exclude several additional data fields that are not relevant to the ongoing rights and obligations of the parties and the valuation of the swap.
The final rule streamlines the portfolio reconciliation process and reduces costs for market participants without undermining the Commission's objectives for portfolio reconciliation. The final rule is much improved from the proposal so I am pleased to support it.
Internal Revenue Service (IRS), Treasury.
Final and temporary regulations.
This document contains final and temporary regulations relating to certified professional employer organizations (CPEOs). The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 requires the IRS to establish a voluntary certification program for professional employer organizations. These final and temporary regulations contain the requirements a person must satisfy in order to become and remain a CPEO. The final and temporary regulations will affect persons that apply to be CPEOs and are certified by the IRS as meeting the applicable requirements. The text of these final and temporary regulations also serves, in part, as the text of the proposed regulations (REG–127561–15) set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the
Melissa L. Duce at (202) 317–6798 (not a toll-free number).
The collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545–2266.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.
For further information concerning this collection of information, where to submit comments on the collection of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referenced notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014, enacted on December 19, 2014, as part of The Tax Increase Prevention Act of 2014 (Pub. L. 113–295), added new sections 3511 and 7705 to the Internal Revenue Code (Code) relating to the federal employment tax
The temporary regulations in this document apply on and after July 1, 2016, the date the IRS will begin accepting applications for CPEO certification. These temporary regulations, along with the forthcoming revenue procedure and the application forms and instructions that the IRS plans to release before July 1, 2016, provide guidance to enable persons that wish to apply to become CPEOs to prepare and submit applications on and after July 1, 2016, and to enable the IRS to begin processing these applications and make determinations as to whether to approve or deny certification.
Proposed regulations published elsewhere in this issue of the
The regulations have been divided, as described, into temporary regulations and proposed regulations in order to balance the interest in considering public comments on rules before they apply with the desire to provide guidance on application procedures that is effective early enough to open the application process and implement the statutory provisions.
The forthcoming revenue procedure will prescribe the specifics of the application process for a person to become a CPEO. In the future, the IRS intends to release another revenue procedure that prescribes the ongoing requirements that CPEOs must meet to maintain certification and describes the consequences of the failure to meet the ongoing requirements.
A professional employer organization (PEO), sometimes referred to as an employee leasing company, enters into an agreement with a client to perform some or all of the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client. The terms of a PEO arrangement typically provide that the PEO is the employer (or “co-employer”) of the client's employees and is responsible for paying the employees and for the related federal employment tax compliance. A PEO also may manage human resources, employee benefits, workers compensation claims, and unemployment insurance claims for the client. The client typically pays the PEO a fee based on payroll costs plus an additional amount. In most cases, however, the employees working in the client's business are the common law employees of the client for federal tax purposes, and the client is therefore legally responsible for federal employment tax compliance.
The ABLE Act requires the IRS to establish a voluntary certification program for persons to become CPEOs. Section 7705 provides a framework for the IRS to establish such a program. Section 7705(a) defines a CPEO as a person who applies to be treated as a CPEO for purposes of section 3511 and has been certified by the Secretary as meeting the requirements of section 7705(b). Being certified as a CPEO has certain federal employment tax consequences under section 3511 that are described in the proposed regulations under that section published
Section 7705(b) sets forth the certification requirements that a person must satisfy in order to become a CPEO. Under the statute, a person meets the requirements of section 7705(b) if: (1) The person (and any owner, officer, and other person as may be specified in regulations) demonstrates that it meets such requirements as the Secretary shall establish, including requirements relating to tax status, background, experience, business location, and annual financial audits; (2) agrees to satisfy certain bond and financial review requirements; (3) agrees to satisfy reporting requirements imposed by the Secretary; (4) computes its taxable income using an accrual method of accounting unless the Secretary approves another method; (5) agrees to verify on such periodic basis as the Secretary may prescribe that it continues to meet the certification requirements; and (6) agrees to notify the Secretary in writing (within such time as the Secretary may prescribe) of any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided to the IRS in order to meet the certification requirements.
Section 7705(c) prescribes bond and independent financial review requirements that a person must satisfy in order to become and remain a CPEO. To meet these requirements, section 7705(c)(2) provides that a CPEO must post a bond for the payment of federal employment taxes (in a form acceptable to the Secretary) that is in an amount at least equal to a specified amount. This specified amount is, for the period beginning on April 1 of any calendar year through March 31 of the following calendar year, the greater of five percent of the CPEO's liability under section 3511 in the preceding calendar year (but not more than $1,000,000) or $50,000.
Under section 7705(c)(3)(A), a CPEO must, as of the most recent audit date, cause to be prepared and provided to the Secretary (in such manner as the Secretary may prescribe) an opinion of an independent certified public accountant (CPA) as to whether the CPEO's financial statements are presented fairly in accordance with generally accepted accounting principles (GAAP). Section 7705(c)(6) states that the audit date for these purposes is six months after the completion of the CPEO's fiscal year.
Section 7705(c)(3)(B) requires a CPEO to provide to the Secretary, by the last day of the second month beginning after the end of each calendar quarter, an assertion that the CPEO has withheld and made deposits of all federal employment taxes (other than Federal Unemployment Tax Act (FUTA) taxes under chapter 23 of the Code) and an examination level attestation from an independent CPA that states this assertion is fairly stated in all material respects.
Section 7705(d) gives the Secretary the authority to suspend or revoke the certification of any person for purposes of section 3511 if the Secretary determines that such person is not satisfying the agreements or requirements of sections 7705(b) or (c), or fails to satisfy applicable accounting, reporting, payment, or deposit requirements. Section 7705(f) provides that the Secretary shall make available to the public the name and address of each person certified as a CPEO and each person whose certification is suspended or revoked.
In an effort to streamline the implementation of a new federal CPEO program and better understand the potential impact of such a program on the PEO industry, on November 17, 2015, the IRS requested information from the public regarding certain PEO industry practices.
The temporary regulations define a CPEO as a person that applies to be certified as a CPEO in accordance with the temporary regulations and has been certified by the IRS as meeting the requirements under those regulations. Consistent with section 7705(b), most of the requirements in these temporary regulations apply both to persons that have been certified as CPEOs and to any person that has applied to be certified and whose application for certification is pending with the IRS (referred to in the temporary regulations as “CPEO applicants”).
Section 7705(b)(1) provides that the Secretary may establish requirements for certification that apply not only to the CPEO applicant or CPEO, but also to “any owner, officer, and other persons as may be specified in regulations.” Accordingly, the temporary regulations contain a number of requirements that apply to certain owners, officers, and other individuals (referred to in the regulations as “responsible individuals”), as well as certain persons that are related to the CPEO (referred to as “related entities” and “precursor entities”). The remainder of this section 1 of the preamble explains the definitions of these categories of persons.
The temporary regulations generally define a responsible individual as an individual in any of the following categories with respect to the CPEO applicant or CPEO: (1) Certain owners; (2) directors and officers; (3) individuals with ultimate responsibility for implementing the decisions of the organization's governing body; (4) individuals with ultimate responsibility for the organization's management and operations; (5) individuals with ultimate responsibility for managing the organization's finances; (6) managing members or general partners; (7) the sole proprietor of a sole proprietorship; and (8) any other individuals with primary responsibility for federal employment tax compliance of the organization.
With respect to determining whether an individual is a responsible individual by reason of ownership, the temporary regulations specify that, in the case of a CPEO applicant or CPEO that is a corporation, a responsible individual includes any individual who owns 33 percent or more of the total combined voting power of all classes of stock of the corporation entitled to vote or the total value of shares of all classes of stock of the corporation. In the case of a CPEO applicant or CPEO that is a partnership (defined in the temporary regulations as a business entity that is classified as a partnership for federal tax purposes under §§ 301.7701–1, 301.7701–2, and 301.7701–3), a responsible individual includes any individual who owns 33 percent or more of the profits interest or capital interest in the partnership. In both cases, ownership may be direct or indirect and is determined by applying the constructive ownership rules of section 1563(e) with respect to stock ownership and by substituting the term “interest” for the term “stock” and the term “partnership” for the term “corporation” used in that section, as appropriate for purposes of determining whether an interest in a partnership is indirectly owned by any person. The Department of the Treasury (Treasury Department) and the IRS request
With respect to directors and officers of the CPEO applicant or CPEO, the temporary regulations provide that a director is any voting member of the governing body (such as the board of directors). An officer is determined by reference to the organization's organizing document, bylaws, or resolutions, or is otherwise designated consistent with state law (and often includes an organization's president, vice-president, treasurer, and secretary).
The temporary regulations also provide that a responsible individual includes any individual who, regardless of title, has ultimate responsibility for: (1) implementing the decisions of the organization's governing body (typically, the chief executive officer (CEO), executive director, or president); (2) supervising the management, administration, or operation of the organization (typically, the chief operating officer (COO)); or (3) managing the organization's finances (typically, the chief financial officer (CFO) or treasurer). Any individual who serves with the titles of executive director, president, CEO, COO, CFO, or treasurer will be considered to have the ultimate responsibilities that are consistent with that title. The temporary regulations also provide that an individual with this ultimate responsibility may include an individual who is not treated as an employee of the CPEO applicant or CPEO.
The temporary regulations define a related entity of a CPEO applicant or CPEO as including any person that is a member of a controlled group (within the meaning of sections 414(b) and (c) and the regulations thereunder, with two adjustments) of which the CPEO is also a member. Section 414(b) incorporates by reference the controlled group definitions in section 1563. Likewise, the regulations prescribed under section 414(c)—§§ 1.414(c)-2 and 1.414(c)-3—rely on principles that are substantially similar to the controlled group definitions in section 1563. However, with respect to persons that are not providers of employment-related services, the temporary regulations substitute “more than 50 percent” for “at least 80 percent” in each place the term appears in section 1563(a) and § 1.414(c)-2. For persons that are providers of employment-related services, the temporary regulations substitute “more than 5 percent” for “at least 80 percent” in each place the term appears in section 1563(a) and § 1.414(c)-2. The temporary regulations define a provider of employment-related services as a person that provides payroll or other employment tax administration and compliance services to clients, including, but not limited to, collecting, reporting, and paying employment taxes with respect to wages or compensation paid by the provider of employment-related services to individuals performing services for the clients. A provider of employment-related services includes, but is not limited to, a PEO and a CPEO.
A related entity of a CPEO applicant or CPEO also includes any provider of employment-related services if a majority of the directors or a majority of the officers of the CPEO applicant or CPEO are also directors or officers, respectively, of the provider of employment-related services. Finally, a related entity includes any provider of employment-related services with an owner who is a responsible individual of both the provider of employment-related services and the CPEO applicant or CPEO by virtue of the individual's ownership percentage.
The temporary regulations generally define a precursor entity as including any related entity of a CPEO applicant that is or was a provider of employment-related services and has ceased operations, dissolved, or made a substantial asset transfer to the CPEO applicant during the calendar year that the CPEO applicant applies for certification or any of the three preceding calendar years. A precursor entity also includes a related provider of employment-related services that plans to make a substantial asset transfer to the CPEO applicant while the application for certification is pending or in the 12-month period following the date of the CPEO applicant's application.
For this purpose, the temporary regulations define a substantial asset transfer as any transfer of 35 percent or more of the value of the transferor's operating assets, whether through one or a series of transactions and whether accomplished through sale, lease, gift, assignment, succession, merger, consolidation, corporate separation, or any other means. The temporary regulations further provide that operating assets include both tangible and intangible resources related to the conduct of the transferor's trade or business, including but not limited to such intangible assets as contracts, agreements, receivables, employees, and goodwill (which includes the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factors). In the case of a contract described in section 7705(e)(2) or service agreement described in § 31.3504–2(b)(2)
Finally, the temporary regulations contain a rule for purposes of determining whether a provider of employment-related services that has ceased operations, dissolved, or made a substantial asset transfer to a CPEO applicant is a related entity of the CPEO applicant. Specifically, the provider of employment-related services is a related entity of a CPEO applicant if it would be or would have been a related entity of the CPEO applicant as described in section 1.b of the preamble at the time of the provider's ceasing of operations, dissolution, or substantial asset transfer, as applicable. This determination is based on the provider's ownership and responsible individuals at the time of its ceasing of operations, dissolution, or substantial asset transfer, as applicable, and the ownership and responsible individuals of the CPEO applicant at the time of its application.
The temporary regulations provide that in order to be certified, a CPEO applicant must submit a properly completed and executed application to the IRS. In addition, the CPEO applicant's responsible individuals must also submit the information required by the regulations and in further guidance.
The IRS will notify the CPEO applicant as to whether its application for certification has been approved or denied and the effective date of its certification. If the IRS denies the application, the IRS will inform the CPEO applicant of the reason(s) for denial. The temporary regulations also state that if the IRS approves a CPEO applicant's application for certification, the IRS will make available to the public the name and address of the CPEO, as well as the effective date of its certification.
Section 7705(b)(1) provides that, to become and remain certified as a CPEO,
The temporary regulations provide that the IRS may deny a CPEO applicant's application for certification or revoke or suspend a CPEO's certification if a CPEO applicant or CPEO, or any of the precursor entities, related entities, or responsible individuals of the CPEO applicant or CPEO, fails to meet any applicable requirement described in the regulations or other applicable guidance. The temporary regulations also provide that the IRS will deny a CPEO applicant's application for certification or revoke or suspend a CPEO's certification if the IRS determines, in its sole discretion, that such failure presents a material risk to the IRS's collection of federal employment taxes. In determining whether one or more failures to meet the requirements described in the regulations presents a material risk to the IRS's collection of federal employment taxes, the IRS will generally consider all relevant facts and circumstances, including the size, scope, nature, significance, recurrence, and timing of and reason for the failure(s), and, in the case of a CPEO, any prior failures of the CPEO to meet the requirements of this section.
The Treasury Department and the IRS view tax compliance of the CPEO applicant or CPEO, and of its responsible individuals, related entities, and precursor entities, as an important factor in determining whether the CPEO applicant's or the CPEO's certification presents a material risk to the IRS's collection of federal employment taxes. Therefore, the temporary regulations provide that the IRS may deny an application for certification, or suspend or revoke a CPEO's certification, if the CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has failed to pay any applicable federal, state, or local taxes or file any required federal, state, or local tax or information returns in a timely and accurate manner, unless the failure to file or failure to pay is determined to be due to reasonable cause and not to willful neglect. In addition, the temporary regulations provide that a CPEO must be a business entity described in § 301.7701–2(a) except that it may not be a disregarded entity for federal tax purposes under §§ 301.7701–2 and 301.7701–3 (without regard to the special rule in § 301.7701–2(c)(2)(iv) that provides that such entities are corporations for federal employment tax purposes). Under § 301.7701–2(a), a business entity is any entity recognized for federal tax purposes that is not properly classified as a trust under § 301.7701–4 or otherwise subject to special treatment under the Code.
The Treasury Department and the IRS consider the criminal background of a CPEO applicant or CPEO and its responsible individuals to present a material risk to tax compliance and, therefore, the absence of such criminal background is another important requirement for certification. Consistent with section 7705(b)(1), which includes background as a category with respect to which the IRS may establish requirements for certification, the temporary regulations state that the IRS may deny an application for certification, or suspend or revoke a CPEO's certification, if the CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has been charged or convicted of any criminal offense under the laws of the United States or of a state or political subdivision thereof, or is the subject of an active IRS criminal investigation. This is also consistent with suggestions made by the Joint Committee on Taxation, which noted that the regulations under section 7705(b)(1) could include requirements for favorable criminal background checks.
The temporary regulations further state, consistent with section 7705(b)(1), that the IRS may deny a CPEO applicant's application for certification, or suspend or revoke a CPEO's certification, if the CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has been sanctioned or had a license, registration, or accreditation (including a license, registration, or accreditation relating to its status or ability to operate as a PEO) denied, suspended, or revoked by a court of competent jurisdiction, licensing board, assurance or other professional organization, or federal or state agency, court, body, board, or other authority for any misconduct that bears upon the suitability of the CPEO applicant or CPEO to perform its professional functions. Such misconduct may relate to dishonesty, fraud, or breach of trust and would include any criminal or civil penalties for violating any state laws prohibiting the transfer or acquisition of a business solely or primarily for the purpose of obtaining a lower unemployment tax rate or avoiding a higher unemployment tax rate.
In addition, the temporary regulations provide that the IRS may deny a CPEO applicant's application for certification, or revoke or suspend a CPEO's certification, if the CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, fails to demonstrate a history of financial responsibility, which the IRS may assess through
With respect to the requirements relating to experience referred to in section 7705(b)(1), the Treasury Department and the IRS consider it important that a CPEO applicant or CPEO be managed by individuals with knowledge or experience regarding federal and state employment tax compliance and business practices relating to those compliance requirements. This is consistent with the suggestions made by the Joint Committee on Taxation.
The temporary regulations provide that the IRS may deny a CPEO applicant's application for certification, or revoke or suspend a CPEO's certification, if the CPEO applicant or CPEO, or any of its responsible individuals, gives false or misleading information (including by intentionally omitting relevant information) or participates in any way in the giving of false or misleading information, to the IRS, knowing, or having reason to know, the information to be false or misleading. For these purposes, the term “information” includes: facts or other matters contained in testimony, federal tax returns, and financial statements and opinions regarding such statements; applications for certification (and all accompanying documentation); affidavits, declarations, assertions, attestations, statements, and agreements; periodic verifications that the requirements of this section continue to be met; and any other information that is required to be provided by these temporary regulations, section 3511 and the regulations thereunder, or further guidance.
In order to confirm the accuracy of information provided to the IRS with respect to these requirements, the temporary regulations require the CPEO applicant or CPEO, and each of its responsible individuals, to take such actions as are necessary to authorize the IRS to investigate the accuracy of statements and submissions made by the CPEO applicant or CPEO, including waiving confidentiality and privilege when necessary, and to conduct comprehensive background checks, including, but not limited to, checks on tax compliance, criminal background, professional experience (including through the contact of third-party references), credit history, and professional sanctions. In addition, each responsible individual of a CPEO applicant or CPEO must submit fingerprints in the time and manner and under the circumstances prescribed by the Commissioner in further guidance. The IRS is considering whether to expand the category of individuals who must authorize the IRS to conduct comprehensive background checks and submit fingerprint cards to include certain directors, officers, and owners of a CPEO applicant's or CPEO's related entities. Treasury and the IRS request comments regarding such possible expansion, including how any such expansion could be as administrable as possible. To submit comments, please follow the instructions in the “Comments and Requests for Public Hearing” section in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the
Section 7705(b)(1) specifically lists business location as one of the categories of certification requirements that the Secretary may establish. The temporary regulations require a CPEO applicant or CPEO to have one or more established physical business locations in the United States at which regular operations that constitute a trade or business within the United States (within the meaning of section 864(b)) take place and at which a significant portion of its CPEO-related functions are carried on and the administrative records relating to those functions are kept.
In addition to the specific requirements with respect to financial statements in section 7705(c), section 7705(b)(1) provides that the Secretary may establish requirements with respect to annual financial audits. Pursuant to these provisions, the temporary regulations require a CPEO applicant to provide to the IRS, with its application, a copy of its annual audited financial statements for the most recently completed fiscal year as of the date it applies for certification. If a CPEO applicant applies for certification before the last day of the sixth month following its most recently completed fiscal year, and the audit of the financial statements for this fiscal year has not yet been completed at the time of application, a CPEO applicant must also provide to the IRS a copy of its audited financial statements for the immediately preceding fiscal year, if any. The temporary regulations provide that the CPEO applicant must subsequently provide to the IRS the financial statements for the most recently completed fiscal year by the last day of the sixth month after such fiscal year ends. In addition, for any fiscal year that ends after the CPEO applicant applies for certification and on or before the effective date of certification, if applicable, the CPEO applicant must provide the audited financial statements by the last day of the sixth month after such fiscal year ends. The obligation to provide the audited financial statements described in the preceding sentence continues to apply after the CPEO applicant is certified as a CPEO. Once certified, pursuant to section 7705(b)(1), a CPEO is required by the temporary regulations to provide a copy of its annual audited financial statements to the IRS within six months of the end of each fiscal year (beginning with the first fiscal year that ends after the CPEO's effective date of certification). For these purposes, a CPEO applicant's or CPEO's fiscal year will be considered completed once the last day of that fiscal year has ended, even if the CPEO was not operating or certified for the full fiscal
Additionally, the Treasury Department and the IRS believe a CPEO with annual audited financial statements that reflect positive working capital (as determined in accordance with GAAP) presents a materially lower risk to the IRS's collection of federal employment taxes than a CPEO without such financial statements. Accordingly, pursuant to section 7705(b)(1) and consistent with several state PEO certification and registration laws, the temporary regulations require a CPEO applicant or CPEO to cause to be prepared and provided to the IRS, by the same date it must provide a copy of its annual audited financial statements, an opinion of an independent CPA that such financial statements reflect positive working capital for the fiscal year, unless the exception described in the next paragraph applies. In addition, the temporary regulations require this opinion to set forth in detail a calculation of the CPEO applicant's or CPEO's working capital. Consistent with section 7705(c)(3)(A), this CPA opinion must also generally state that the financial statements are presented fairly in accordance with GAAP.
The Treasury Department and the IRS recognize that working capital may fluctuate over the course of a CPEO's fiscal year due to normal business operations. To allow for some fluctuation in working capital, the temporary regulations contain an exception to the positive working capital requirement. Under this exception, a CPEO applicant or CPEO will not fail to meet the positive working capital requirement if three requirements are satisfied. First, the CPEO applicant or CPEO must have negative working capital for no more than two consecutive fiscal quarters of that fiscal year (as demonstrated by the financial statements for the final fiscal quarter of the fiscal year or the quarterly statements described in this section 3.c of the preamble for any other fiscal quarter). Second, the CPEO applicant or CPEO or its CPA must provide an explanation to the IRS describing the reason for the failure in such time and manner as the Commissioner may prescribe in further guidance. Third, the IRS must determine, in its sole discretion, that the failure does not present a material risk to the IRS's collection of federal employment taxes.
The temporary regulations provide special rules for newly established CPEO applicants. A CPEO applicant that was not operating as a provider of employment-related services for all or part of the most recently completed fiscal year as of the date it applies for certification must also provide a copy of the audited financial statements of any precursor entity for the precursor entity's most recently completed fiscal year as of the date of the application for certification, as well as a CPA opinion that these financial statements demonstrate positive working capital and are presented fairly in accordance with GAAP. The financial statements and CPA opinion for a precursor entity must be provided in such time and manner as the Commissioner may prescribe in further guidance.
In accordance with section 7705(c)(3)(A), the temporary regulations require the opinion regarding a CPEO's financial statements to be provided by a CPA who is independent of the CPEO. For this purpose, the temporary regulations require a CPA to be independent as prescribed by the American Institute of Certified Public Accountants' Professional Standards, Code of Professional Conduct, and its interpretations and rulings. The Treasury Department and the IRS request comments regarding whether the CPA independence guidelines or requirements of other governmental agencies or departments or industry self-regulatory bodies, as adapted for a CPA of a CPEO, would better ensure the impartiality of CPAs providing opinions on CPEO's financial statements, such as: (1) The Department of Labor's guidelines on the independence of CPAs retained by employee benefit plans under 29 CFR 2509.75–9; (2) the Securities and Exchange Commission's (SEC) independence guidelines for auditors reporting on financial statements included in SEC filings; and (3) the Government Accountability Office's auditor independence requirements under Government Auditing Standards that cover federal entities and organizations receiving federal funds.
As previously noted, section 7705(b)(5) requires a CPEO to verify on a periodic basis that it meets certification requirements. In accordance with this requirement and pursuant to the Secretary's general authority under section 7705(b)(1) to establish requirements for CPEOs to become and remain certified, the temporary regulations further require a responsible individual of the CPEO applicant or the CPEO to provide, by the last day of the second month after the end of each calendar quarter and beginning with the most recently completed quarter as of the date of the application for certification, a statement verifying under penalties of perjury that the CPEO applicant or the CPEO has positive working capital with respect to the most recently completed fiscal quarter. However, as with the requirement that annual financial statements reflect positive working capital, the temporary regulations also contain an exception to this requirement. The exception applies only if the CPEO does not have negative working capital at the end of the two fiscal quarters immediately preceding the fiscal quarter to which the statement relates. As with the exception provided with respect to annual financial statements that reflect negative working capital, the CPEO must also provide an explanation to the IRS describing the reason for the failure in such time and manner as the Commissioner may prescribe in further guidance, and the IRS must determine, in its sole discretion, that the failure does not present a material risk to the IRS's collection of federal employment taxes.
Section 7705(c)(3)(B) requires a CPEO to provide to the Secretary an assertion and examination level attestation regarding its compliance with federal employment tax withholding and depositing requirements. In accordance with this provision, the temporary regulations state that a CPEO must provide, on a quarterly basis and beginning with the first calendar quarter that ends after the CPEO's effective date of certification, an assertion signed by a responsible individual under penalties of perjury stating that the CPEO has withheld and made deposits of all federal employment taxes (other than taxes imposed by chapter 23 of the Code) as required for the quarter.
The temporary regulations provide that a CPEO applicant or CPEO will not fail to meet the quarterly assertion and attestation requirements if the CPA examination level attestation indicates that the CPEO applicant or CPEO has failed to withhold or make deposits in certain immaterial respects, provided that the attestation includes a summary of the immaterial failures that were found and states that the failures were immaterial and isolated and do not reflect a meaningful lapse in compliance with federal employment tax withholding and deposit requirements. Furthermore, in order for this exception for immaterial failures to apply, the IRS must determine, in its sole discretion, that the isolated and immaterial failures identified by the CPA do not present a material risk to the IRS's collection of federal employment taxes.
Section 7705(c)(2) sets forth the bond requirements that a person must satisfy in order to become and remain a CPEO. The provisions of section 7101 and its accompanying regulations apply to bonds required by section 7705(c)(2), except to the extent modified in the temporary regulations. The temporary regulations provide that a CPEO must post a bond for the payment of federal employment taxes in a specified amount. This specified amount is, for each period beginning on April 1 of any calendar year (or, in the case of a newly certified CPEO, on the effective date of certification) and ending on March 31 of the following calendar year (the bond period), an amount that is at least equal to the greater of: (1) Five percent of the CPEO's liability under section 3511 (or, if applicable, the liability as determined for newly certified CPEOs, discussed in section 3.e.i of this preamble) during the calendar year preceding the bond period, but not more than $1,000,000; or (2) $50,000. The proposed regulations require the bond to be issued by a surety company that holds a certificate of authority from the Secretary as an acceptable surety on federal bonds and meets such other requirements as the Commissioner may prescribe in further guidance.
One benefit of the bond requirement in section 7705(c) is that the CPEO must submit to the bonding surety's financial underwriting process to obtain the bond, which provides the IRS with a certain level of assurance concerning the financial condition of the CPEO. The Treasury Department and the IRS believe that this benefit is substantially diminished if the CPEO obtains the bond by posting collateral in the amount of the bond. For this reason, the temporary regulations provide that the CPEO must meet the bond requirements without posting collateral.
In calculating five percent of its liability under section 3511 (or, if applicable, the liability described in the subsequent paragraph) during the preceding calendar year, the temporary regulations require that a CPEO base its calculation on the amount of applicable federal employment taxes
A newly certified CPEO will not have any liability under section 3511 for the calendar year preceding its certification on which to base its calculation of the required bond amount. In such cases, the temporary regulations provide that, in calculating the bond amount, the liability used for the preceding calendar year (or portion thereof)
The temporary regulations provide that the bond posted by a CPEO must provide that it may be cancelled by the surety only after the surety gives written notice to the IRS and the CPEO. (See Form 14751, “Certified Professional Employer Organization Surety Bond,” for details on the time and manner in which such written notice must be provided.) The bond must also provide that, if the surety cancels the bond without issuing a superseding bond to the CPEO, the surety will remain liable for all federal employment tax liability accrued by the CPEO during the period beginning with the effective date of the first bond issued by the surety to the CPEO in any consecutive series of bonds issued by that surety prior to cancellation and ending with the cancellation (the total bond period), up to the penal amount of the bond at the time of cancellation. The temporary regulations provide that a cancelling surety will remain liable for federal employment tax liability accrued during the total bond period up to the penal amount of the bond for as long as the Commissioner may assess and collect taxes for such period under sections 6501 and 6502.
The temporary regulations provide that CPEO applicants and CPEOs that are members of a controlled group, within the meaning of sections 414(b) and (c), will be treated as a single CPEO applicant or CPEO for purposes of the financial statement, quarterly assertion and attestation, and bond requirements described in this preamble, except that the annual and quarterly requirements imposed under the scope of sections 7705(b)(1) and 7705(b)(5) with respect to positive working capital apply to each CPEO applicant or CPEO on a separate basis.
In order to receive and maintain certification, the temporary regulations state that a CPEO applicant or CPEO must provide such consents for the IRS to disclose confidential tax information to its customers, and to other persons as necessary to carry out the purposes of these regulations, that relates to its certification and obligations to report, deposit, and pay federal employment taxes as the Commissioner may require in further guidance.
Consistent with section 7705(b)(5), the temporary regulations require a CPEO to verify periodically that it continues to meet the certification requirements in such time and manner as the Commissioner may prescribe in further guidance. Consistent with section 7705(b)(6), the temporary regulations provide that a CPEO applicant or CPEO must notify the IRS, in the time and manner prescribed by the Commissioner in further guidance, of any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided to the IRS. The Treasury Department and the IRS expect to provide further details regarding these requirements in a future revenue procedure that will prescribe the ongoing requirements that CPEOs must meet to maintain certification.
Consistent with section 7705(b)(4), the temporary regulations require a CPEO to compute its taxable income using an accrual method of accounting or, if applicable, another method that the Commissioner prescribes in further guidance.
The temporary regulations provide that a CPEO must make reports to the IRS and to its clients as provided in section 3511(g) and regulations issued thereunder. This includes the filing of all federal employment tax and information returns. The temporary regulations also require a CPEO to file all returns, schedules, reports, and other forms and documents on magnetic media when required to do so by section 3511(g) and regulations issued thereunder, or by other Treasury regulations. With respect specifically to the requirement that CPEOs file Form 940, “Employer's Annual Federal Unemployment (FUTA) Tax Return,” and Form 941, “Employer's QUARTERLY Federal Tax Return,” on magnetic media, compliance with this requirement is a condition of certification. The CPEO program is a voluntary certification regime; a person that does not wish to file Forms 940 and 941 on magnetic media is not obligated to apply for or obtain certification as a CPEO.
The temporary regulations provide that the IRS may suspend or revoke the certification of any CPEO as a result of a failure to meet any of the requirements for CPEOs, and the IRS will suspend or revoke certification if the IRS determines, in its sole discretion, that such failure presents a material risk to the IRS's collection of federal employment taxes. If a CPEO's certification is suspended, section 3511 will not apply to any contract described in section 7705(e)(2) into which the CPEO enters during the suspension period. If a CPEO's certification is revoked, the organization will not be considered a CPEO for purposes of section 3511 after the effective date of such revocation unless and until it again applies and is again certified as a CPEO. However, an organization whose certification as a CPEO has been revoked may not re-apply to be certified as a CPEO until one year has passed since the effective date of its revocation. Neither the suspension nor the revocation of an organization's status as a CPEO will affect its potential liability under § 31.3504–2.
The temporary regulations provide that an organization whose certification as a CPEO has been suspended or revoked must notify its customers of the suspension or revocation (in the time and manner provided in further guidance). In addition, the IRS will make public a CPEO's suspension or revocation and may also individually notify the CPEO's customers of such suspension or revocation.
The IRS has announced that it plans to begin accepting applications for CPEO certification on July 1, 2016. Accordingly, the temporary regulations apply on and after July 1, 2016. Pursuant to section 7805(e)(2), the temporary regulations expire on or before May 3, 2019.
IRS revenue procedures, revenue rulings, notices, and other guidance cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS Web site at
Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) please refer to the Special Analyses section of the preamble to the cross-referenced notice of proposed rulemaking published in the Proposed Rules section in this issue of the
The principal authors of these regulations are Melissa Duce, Andrew Holubeck, and Neil Shepherd of the Office of Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and the Treasury Department participated in the development of these regulations.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Reporting and recordkeeping requirements.
Accordingly, 26 CFR parts 301 and 602 are amended as follows:
26 U.S.C. 7805 * * *
Section 301.7705–1T also issued under 26 U.S.C. 7705(h).
Section 301.7705–2T also issued under 26 U.S.C. 7705(h).
(a)
(b)
(2)
(3)
(4)
(i) With respect to a CPEO applicant or CPEO, is independent of the CPEO applicant or CPEO (as prescribed by the American Institute of Certified Public Accountants' Professional Standards, Code of Professional Conduct, and its interpretations and rulings);
(ii) Is not currently under suspension or disbarment from practice before the IRS;
(iii) Is duly qualified to practice in any state;
(iv) Files with the IRS a written declaration that he or she is currently qualified as a CPA and authorized to represent the CPEO applicant or CPEO before the IRS; and
(v) Meets such other requirements as the Commissioner may prescribe in further guidance.
(5)
(6)
(7)
(8)
(9)
(10)
(A) Has made a substantial asset transfer to the CPEO applicant during the calendar year that the CPEO applicant applies for certification or any of the three preceding calendar years or plans to make such a substantial asset transfer while the application for certification is pending or in the 12-month period following the date of the CPEO applicant's application for certification; or
(B) Has ceased operations or dissolved during the calendar year that the CPEO applicant applied for certification or any of the three preceding calendar years.
(ii)
(11)
(12)
(i) The person is a member of a controlled group of which the CPEO applicant or CPEO is also a member. For purposes of this paragraph (b)(12)(i), controlled group has the meaning given to such term by sections 414(b) and (c) and the regulations thereunder, except that—
(A) With respect to a person that is not a provider of employment-related services “more than 50 percent” will be substituted for “at least 80 percent” each place it appears in section 1563(a) (which is cross-referenced in section 414(b)) and § 1.414(c)–2 of this chapter); and
(B) With respect to a person that is a provider of employment-related services, “more than 5 percent” will be substituted for “at least 80 percent” each place it appears in section 1563(a) and § 1.414(c)–2 of this chapter; or
(ii) The person is a provider of employment-related services and—
(A) A majority of the directors or a majority of the officers (as described in paragraph (b)(13)(ii) of this section) of the CPEO applicant or CPEO are directors or officers (as described in paragraph (b)(13)(ii) of this section), respectively, of the provider of employment-related services; or
(B) An individual is a responsible individual of both the provider of employment-related services and the CPEO applicant or CPEO by reason of paragraph (b)(13)(i) of this section.
(13)
(i) Any individual who owns, directly or indirectly and applying the constructive ownership rules of section 1563(e) with respect to stock ownership and by substituting the term “interest” for the term “stock” and the term “partnership” for the term “corporation” used in that section, as appropriate for purposes of determining whether an interest in a partnership is indirectly owned by any person, 33 percent or more of—
(A) In the case of a corporation, the total combined voting power of all classes of stock entitled to vote of such corporation or of the total value of shares of all classes of stock of such corporation; or
(B) In the case of a partnership, the capital interest or profits interest of such partnership.
(ii) Any individual who is a director or an officer. For purposes of this paragraph (b)(13)(ii), a director is a voting member of the governing body (that is, the board of directors or equivalent controlling body authorized under state law to make governance decisions on behalf of the organization),
(iii) Any individual who, regardless of title, has ultimate responsibility for implementing the decisions of the organization's governing body. An individual who serves with the title of chief executive officer, executive director, and/or president has this ultimate responsibility. An individual with this ultimate responsibility may include an individual who is not treated as an employee of the organization. If this ultimate responsibility resides with two or more individuals (for example, co-presidents), who may exercise such responsibility in concert or individually, then each individual is a responsible individual.
(iv) Any individual who, regardless of title, has ultimate responsibility for supervising the management, administration, or operation of the organization. An individual who serves with the title of chief operating officer has this ultimate responsibility. An individual with this ultimate responsibility may include an individual who is not treated as an employee of the organization. If this ultimate responsibility resides with two or more individuals, who may exercise such responsibility in concert or individually, then each individual is a responsible individual.
(v) Any individual who, regardless of title, has ultimate responsibility for managing the organization's finances. An individual who serves with the title of chief financial officer or treasurer has this ultimate responsibility. An individual with this ultimate responsibility may include an individual who is not treated as an employee of the organization. If this ultimate responsibility resides with two or more individuals who may exercise the responsibility in concert or individually, then each individual is a responsible individual.
(vi) In the case of a partnership, any individual who is a managing member or general partner.
(vii) In the case of a sole proprietorship, the sole proprietor.
(viii) Any other individual with primary responsibility for the organization's federal employment tax compliance.
(14)
(15)
(c)
(2)
(3)
(a)
(2)
(3)
(4)
(b)
(c)
(i) The CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has failed to pay any applicable federal, state, or local taxes or file any required federal, state, or local tax or information returns in a timely and accurate manner, unless the failure is determined to be due to reasonable cause and not due to willful neglect.
(ii) The CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has been charged or convicted of any criminal offense under the laws of the United States or of a state or political subdivision thereof, or is the subject of an active IRS criminal investigation.
(iii) The CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, has been sanctioned, or had a license, registration, or accreditation (including a license, registration, or accreditation relating to its status or ability to operate as a professional employer organization) denied, suspended, or revoked, by a court of competent jurisdiction, licensing board, assurance or other professional organization, or federal or state agency, court, body, board, or other authority for any misconduct that involves dishonesty, fraud, or breach of trust or that otherwise bears upon the suitability of the CPEO applicant or CPEO to perform its professional functions (including, but not limited to, any civil or criminal penalty described in 42 U.S.C. 503(k)(1)(D) imposed by state law).
(iv) The CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, is listed on any sanctions list compiled by the Office of Foreign Assets Control (OFAC) within the Department of Treasury, including, but not limited to the OFAC Consolidated Sanctions List and the OFAC Specially Designated Nationals (SDN) List.
(v) The CPEO applicant or CPEO, or any of its precursor entities, related entities, or responsible individuals, fails to demonstrate a history of financial responsibility, which the IRS may assess by checks on credit history and other similar indicators.
(vi) The CPEO applicant or CPEO and the responsible individuals of the CPEO applicant or CPEO fail to demonstrate adequate collective knowledge or experience with respect to:
(A) Federal or state employment tax reporting, depositing, and withholding requirements;
(B) Handling and accounting of payroll, tax payments, and other funds on behalf of others;
(C) Effective recordkeeping systems;
(D) Retention of qualified personnel and legal advisors as needed; and
(E) General business and risk management.
(vii) The CPEO applicant or CPEO, or any of its responsible individuals, gives false or misleading information (including by intentionally omitting relevant information), or participates in any way in the giving of false or misleading information, to the IRS, knowing, or having reason to know, that the information is false or misleading. For the purpose of this subsection, “information” includes (but is not limited to) facts or other matters contained in testimony, federal tax returns, and financial statements and opinions regarding such statements; applications for certification (and all accompanying documentation); affidavits, declarations, assertions, attestations, statements, and agreements; and periodic verifications that the requirements of this section continue to be met; and any other information that is required to be provided by this section, section 3511(g) and regulations thereunder, or further guidance.
(2)
(3)
(d)
(2)
(3)
(4)
(e)
(i) Are presented fairly in accordance with GAAP; and
(ii) Reflect positive working capital or, only if the CPEO satisfies the requirements of paragraph (e)(3) of this section, reflect negative working capital, with such opinion in either case setting forth in detail a calculation of the CPEO's working capital as reflected in the financial statements.
(2)
(ii)
(3)
(i) The CPEO applicant or CPEO has negative working capital for no more than two consecutive fiscal quarters of that fiscal year, as demonstrated by the financial statements (for the final fiscal quarter in the fiscal year) and the statements described in paragraph (f)(1)(ii) of this section (for any other fiscal quarter);
(ii) The CPEO applicant or CPEO, or its CPA, provides, in such time and manner as the Commissioner may prescribe in further guidance, an explanation to the IRS describing the reason for the failure; and
(iii) The IRS determines, in its sole discretion, that the failure does not present a material risk to the IRS's collection of federal employment taxes.
(4)
(f)
(i) An assertion, signed by a responsible individual under penalties of perjury, stating that the CPEO has withheld and made deposits of all federal employment taxes (other than taxes imposed by chapter 23 of the Code) as required by subtitle C for such calendar quarter and an examination level attestation from a CPA stating that such assertion is fairly stated in all material respects.
(ii) A statement signed by a responsible individual under penalties of perjury verifying that the CPEO has positive working capital (as determined in accordance with GAAP) at the end of the most recently completed fiscal quarter, as well as such additional financial information that the Commissioner may specify in further guidance.
(2)
(A) The attestation provides a summary of the immaterial failures that were found;
(B) The attestation states that the failures were immaterial and isolated and do not reflect a meaningful lapse in compliance with federal employment tax withholding and deposit requirements; and
(C) The IRS determines, in its sole discretion, that the isolated and immaterial failures identified by the CPA do not present a material risk to the IRS's collection of federal employment taxes.
(ii)
(A) The CPEO does not have negative working capital at the end of the two fiscal quarters immediately preceding such fiscal quarter, as demonstrated by the financial statements described in paragraph (e)(1) of this section, if available, or the statements described in paragraph (f)(1)(ii) of this section;
(B) The CPEO provides an explanation to the IRS describing the reason for such negative working capital in such time and manner as the Commissioner may prescribe in further guidance; and
(C) The IRS determines, in its sole discretion, that the negative working capital does not present a material risk to the IRS's collection of federal employment taxes.
(3)
(ii)
(g)
(2)
(A) Five percent of the CPEO's liability under section 3511 (or, if applicable, the liability described in paragraph (g)(2)(ii) of this section) during the calendar year preceding the beginning of the bond period, but not more than $1,000,000; or
(B) $50,000.
(ii)
(3)
(ii)
(4)
(5)
(6)
(h)
(i)
(j)
(k)
(l)
(m)
(2)
(n)
(2)
(3)
(4)
(ii)
(o)
(2)
26 U.S.C. 7805 * * *
(b) * * *
Office of the Secretary, Department of Defense (DoD).
Correcting amendments.
The DoD published a final rule on December 31, 2014 (79 FR 78707–78714). This rule makes correcting amendments to the previously published final rule to clarify that only the replacement of lost or stolen rental durable equipment is excluded from coverage. Additionally, in the final rule, DoD mistakenly used asterisks in a paragraph it was revising in its entirety. To correct this mistake and ensure that all revisions are appropriately codified, these correcting amendments set out the full text of the impacted paragraph.
This rule is effective May 6, 2016. These correcting amendments are applicable January 30, 2015.
Gail L. Jones, (303) 676–3401.
It has been determined that these correcting amendments are not significant regulatory actions. These correcting amendments do not meet the criteria in these Executive Orders.
It has been determined that these correcting amendments do not contain a Federal mandate that may result in the expenditure by State, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year.
It has been certified that these correcting amendments are subject to the Regulatory Flexibility Act (5 U.S.C. 601) because they would not, if promulgated, have a significant economic impact on a substantial number of small entities. These are correcting amendments to the existing regulation.
It has been determined that these correcting amendments do not impose reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.
It has been determined that these correcting amendments do not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on:
(1) The States;
(2) The relationship between the National Government and the States; or
(3) The distribution of power and responsibilities among the various levels of Government.
Claims, Dental health, Health care, Health insurance, Individuals with disabilities, and Military personnel.
Accordingly, 32 CFR part 199 is corrected by making the following correcting amendments:
5 U.S.C. 301; 10 U.S.C. chapter 55.
(d) * * *
(3) * * *
(ii)
(
(
(
(
(
(
(
(
(
(
(
(
(B)
(
(
(
(
(
(
(
(
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(C)
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(D)
(
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is finalizing approval of revisions to the Indiana State Implementation Plan (SIP) submitted by the Indiana Department of Environmental Management (IDEM) to EPA in parallel process form on January 27, 2016, and February 5, 2016, and final form on March 21, 2016, and March 31, 2016. The submittals consist of orders issued by the Commissioner of IDEM that require more stringent sulfur dioxide (SO
This final rule is effective on June 6, 2016.
EPA has established a docket for this action under Docket ID No. EPA–R05–OAR–2016–0075 and EPA–R05–OAR–2016–0090. All documents in the docket are listed on the
Jenny Liljegren, Physical Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR–18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886–6832,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:
IDEM submitted parallel process revision requests to its SIP on January 27, 2016, and February 5, 2016, for A.B. Brown and Clifty Creek, respectively, and final revision requests on March 21, 2016, and March 31, 2016, for Clifty Creek and A.B. Brown, respectively. The submittals consist of orders issued by IDEM's Commissioner that establish more stringent SO
The purpose of this rulemaking is to take action on IDEM's request to approve these Commissioner's orders into the Indiana SIP and thereby make them federally enforceable. It is not, however, to take action on whether the SO
Indiana requested that EPA “parallel process” these SIP revisions to expedite action on the Commissioner's orders. Under this procedure, the state submitted copies of the draft revision requests to EPA on January 27, 2016, and February 5, 2016, for A.B. Brown and Clifty Creek, respectively, before completing its public comment process. EPA published a proposed rulemaking in the
Indiana submitted its final SIP revision requests to EPA on March 21, 2016, and March 31, 2016, for Clifty Creek and A.B. Brown, respectively. There were no changes to the original Commissioner's Orders (2016–01 and 2016–02). As a result, EPA is proceeding with this final rulemaking.
For A.B. Brown, Indiana issued Commissioner's Order 2016–01 on January 11, 2016, with a compliance date of April 19, 2016. This order established two new limits for A.B. Brown: One limit for Unit 1 when running alone and one limit for Units 1
For Clifty Creek, Indiana issued Commissioner's Order 2016–02 on February 1, 2016, with a compliance date of April 19, 2016. This order established a combined emission limit for the six coal-fired boilers (Units No. 1 through No. 6) located at Clifty Creek of 2,624.5 lbs of SO
EPA is evaluating these revisions on the basis of whether they strengthen Indiana's SIP. Prior to Commissioner's Order 2016–01, A.B. Brown had an SO
The adequacy of these limits for providing for attainment of the 2010 primary SO
EPA is finalizing approval of Commissioner's Order 2016–01 and Commissioner's Order 2016–02 into the Indiana SIP. EPA confirms that the SO
In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Indiana Administrative Code described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available electronically through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Clean Air Act (CAA) and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 5, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(d) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes time-limited tolerances for residues of methoxyfenozide in or on rice, grain and rice, bran resulting from use of methoxyfenozide in accordance with the terms of an emergency exemption issued under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). This action is in response to the California Department of Pesticide Regulation's issuance of a crisis emergency exemption under FIFRA section 18 authorizing use of the pesticide on rice, bran and rice, grain. This time-limited tolerance regulation establishes a maximum permissible level for residues of methoxyfenozide in or on these commodities. These time-limited tolerances expire on December 31, 2019.
This regulation is effective May 6, 2016. Objections and requests for hearings must be received on or before July 5, 2016, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA–HQ–OPP–2014–0591, is available at
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; main telephone number: (703) 305–7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under section 408(g) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA–HQ–OPP–2014–0591, by one of the following methods:
•
•
•
EPA, on its own initiative, in accordance with FFDCA sections 408(e) and 408(l
Section 408(l)(6) of FFDCA requires EPA to establish a time-limited tolerance or exemption from the requirement for a tolerance for pesticide chemical residues in food that will result from the use of a pesticide under an emergency exemption granted by EPA under FIFRA section 18. Such tolerances can be established without providing notice or period for public comment. EPA does not intend for its actions on FIFRA section 18 related time-limited tolerances to set binding precedents for the application of FFDCA section 408 and the safety standard to other tolerances and exemptions. Section 408(e) of FFDCA allows EPA to establish a tolerance or an exemption from the requirement of a tolerance on its own initiative,
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Section 18 of FIFRA authorizes EPA to exempt any Federal or State agency from any provision of FIFRA, if EPA determines that “emergency conditions exist which require such exemption.” EPA has established regulations governing such emergency exemptions in 40 CFR part 166.
The California Department of Pesticide Regulation asserted that an emergency condition existed in accordance with the criteria for approval of an emergency exemption, and utilized a crisis exemption under FIFRA section 18 to allow the use of methoxyfenozide on rice to control armyworm and Western yellow striped armyworm in Butte, Glenn, Sacramento, Sutter, Yolo, and Yuba counties. The California Department of Pesticide Regulation invoked the crisis exemption provision on August 27, 2015. After having reviewed the submission and determining that the risks associated with the emergency use were reasonable in comparison to the expected benefits to the California rice growers who faced the largest outbreak of armyworms in 25 years and significant economic loss, EPA concurred on the crisis exemption. The crisis exemption expired on September 10, 2015.
As part of its evaluation of the emergency exemption application, EPA assessed the potential risks presented by residues of methoxyfenozide in or on rice, bran and rice, grain. In doing so, EPA considered the safety standard in FFDCA section 408(b)(2), and EPA decided that the necessary tolerances under FFDCA section 408(l)(6) would be consistent with the safety standard and with FIFRA section 18. Consistent with the need to move quickly on the emergency exemption in order to address an urgent non-routine situation and to ensure that the resulting food is safe and lawful, EPA is issuing these tolerances without notice and opportunity for public comment as provided in FFDCA section 408(l)(6). Although these time-limited tolerances expire on December 31, 2019, under FFDCA section 408(l)(5), residues of the pesticide not in excess of the amounts specified in the tolerances remaining in or on rice, bran and rice, grain after that date will not be unlawful, provided the pesticide was applied in a manner that was lawful under FIFRA, and the residues do not exceed a level that was authorized by these time-limited tolerances at the time of that application. EPA will take action to revoke these time-limited tolerances earlier if any experience with, scientific data on, or other relevant information on this pesticide indicate that the residues are not safe.
Because these time-limited tolerances are being approved under emergency conditions, EPA has not made any decisions about whether methoxyfenozide meets FIFRA's registration requirements for use on rice, grain and rice, bran or whether permanent tolerances for this use would be appropriate. Under these circumstances, EPA does not believe that these time-limited tolerance decisions serve as a basis for registration of methoxyfenozide by a State for special local needs under FIFRA section 24(c). Nor do these tolerances by themselves serve as the authority for persons in any State other than California to use this pesticide on the applicable crops under FIFRA section 18 absent the issuance of an emergency exemption applicable within that State. For additional information regarding the crisis emergency exemption for methoxyfenozide, contact the Agency's Registration Division at the address
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure expected as a result of this emergency exemption request and the time-limited tolerances for residues of methoxyfenozide on rice, bran and rice, grain at 4.0 and 0.50 ppm, respectively, measured as 3-methoxy-2-methylbenzoic acid 2-(3,5-dimethylbenzoyl)-2-(1,1-dimethylethyl)-hydrazide. EPA's assessment of exposures and risks associated with establishing time-limited tolerances follows.
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for methoxyfenozide used for human risk assessment is discussed in Table 1 of Unit III B. of the final rule published in the
1.
i.
ii.
iii.
2.
Based on the FPQA Index Reservoir Screening Tool (FIRST), Screening Concentration in Ground Water (SCI–GROW), and the Pesticide Root Zone Model Ground Water (PRZM GW) models, the estimated drinking water concentrations (EDWCs) of methoxyfenozide and its degradates for chronic exposures for non-cancer assessments are estimated to be 7.57 parts per billion (ppb) for surface water and 214 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 214 ppb was used to assess the contribution to drinking water.
3.
Post-application oral exposure to children is not expected since the extent to which young children engage in activities associated with areas where treated ornamentals are grown (or utilize these areas for prolonged periods of play) is low. Therefore, an incidental oral post-application exposure assessment was not conducted. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
EPA has not found methoxyfenozide to share a common mechanism of toxicity with any other substances, and methoxyfenozide does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that methoxyfenozide does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at
1.
2.
3.
i. The toxicity database for methoxyfenozide is complete, including studies addressing potential pre- and post-natal susceptibility, neurotoxicity, and immunotoxicity.
ii. There is no evidence that methoxyfenozide is neurotoxic, and a developmental neurotoxicity study or additional uncertainty factors (UFs) to account for neurotoxicity are not required.
iii. There is no residual uncertainty, and no evidence increased susceptibility in the developing or young animal.
iv. The dietary exposure assessments do not underestimate potential exposure from food and drinking water, and the use pattern indicates a low potential for residential exposure.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in an aggregate MOE of 540. Because EPA's level of concern for methoxyfenozide is a MOE of 100 or below, these MOEs are not of concern.
4.
5.
6.
EPA concludes that there is reasonable certainty that no harm will result to the general population, or to infants and children, from aggregate exposure to methoxyfenozide residues because the Section 18 emergency use of methoxyfenozide on rice will result in negligible increases in dietary exposure to all subgroups relative to the safety findings reached in the August 27, 2014
An adequate enforcement methodology is available to enforce the tolerance expression, using high performance liquid chromatography (HPLC), with either tandem mass spectrometric detection (LC–MS/MS), or ultraviolet detection (UV).
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755–5350; telephone number: (410) 305–2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
There are currently no established Codex or Canadian MRLs for methoxyfenozide residues in rice commodities.
Therefore, time-limited tolerances are established for residues of methoxyfenozide, (3-methoxy-2-methylbenzoic acid 2-(3,5-dimethylbenzoyl)-2-(1,1-dimethylethyl)-hydrazide), in or on rice, grain at 0.50 ppm; and rice, bran at 4.0 ppm. These tolerances will expire on December 31, 2019.
This action establishes tolerances under FFDCA sections 408(e) and 408(l)(6). The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
Since tolerances and exemptions that are established in accordance with FFDCA sections 408(e) and 408(l)(6), such as the tolerances in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
(b)
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of clethodim in or on multiple commodities which are identified and discussed later in this document. Interregional Research Project Number 4 (IR–4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective May 6, 2016. Objections and requests for hearings must be received on or before July 5, 2016, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA–HQ–OPP–2015–0035, is available at
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; main telephone number: (703) 305–7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA–HQ–OPP–2015–0035 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before July 5, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA–HQ–OPP–2015–0035, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Based upon review of the data supporting the petition, EPA has made some modifications to petitioned-for crop tolerances. The reasons for these changes are explained in Unit IV.C.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for clethodim including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with clethodim follows.
EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
The liver is the target organ based on repeated dosing by either oral or dermal routes in rats, mice, and dogs. The observed liver effects are characterized by increased liver weights, clinical chemistry changes, and centrilobular hepatic hypertrophy. Most of the liver effects that occurred at or below 100 milligrams/kilogram body weight (mg/kg bw) were considered as adaptive effects and not adverse. Decreased body weight was also a common finding across studies and species. In the 1-year dog oral toxicity study, hematological changes such as increased platelet and leukocyte counts were also noted.
Developmental effects were not present in rabbits; the rat developmental toxicity study showed reduced fetal body weights and an increase in the incidence of delayed ossification of the lower vertebrae at the same dose where maternal toxicity was found. Neither reproductive nor offspring effects were seen in the 2-generation rat reproduction study. Therefore, the data did not show an increased susceptibility in the young. The clethodim database also showed no potential for neurotoxicity or immunotoxicity.
The rat and mouse carcinogenicity studies did not show treatment-related increases in tumor incidence. Clethodim is not genotoxic and is classified as “not likely to be carcinogenic to humans.”
Specific information on the studies received and the nature of the adverse effects caused by Clethodim as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for clethodim used for human risk assessment is shown in Table 1 of this unit.
1.
i.
Such effects were identified for clethodim. In estimating acute dietary exposure, EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM–FCID), Version 3.16, which incorporates 2003–2008 food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA conducted unrefined acute dietary analyses assuming tolerance-level residues for all commodities and 100 percent crop treated (PCT). Unless tolerances were established for processed commodities, DEEM version 7.81 default processing factors were assumed.
ii.
iii.
iv.
2.
Based on the First Index Reservoir Screening Tool (FIRST) and Pesticide Root Zone Model Ground Water (PRZM GW) models, the estimated drinking water concentrations (EDWCs) of clethodim for acute exposures are 330 parts per billion (ppb) for surface water and 1,430 ppb for ground water.
For chronic exposures for non-cancer assessments are estimated to be 137 ppb for surface water and 1,150 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model.
For acute dietary risk assessment, the water concentration value of 1,430 ppb was used to assess the contribution to drinking water.
For chronic dietary risk assessment, the water concentration of value 1,150 ppb was used to assess the contribution to drinking water.
3.
Clethodim is currently registered for the following uses that could result in residential exposures: In and around ornamental plant beds, landscaped area, trees, and ground covers (mulch). There are no residential uses associated with proposed new uses. EPA has previously assessed clethodim residential exposure using the following assumptions: Short-term residential handler inhalation exposures represent the “worst case” high-end exposure. Because a dermal hazard was not identified, residential handler and post-application dermal risk assessments were not conducted. No other post-application exposures were assessed either because the potential for exposure via non-dietary ingestion for young children is unlikely due to the limited residential uses for clethodim products. The extent to which young children engage in the types of activities associated with these areas (
Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at:
4.
EPA has not found clethodim to share a common mechanism of toxicity with any other substances, and clethodim does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that clethodim does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at:
1.
2.
3.
i. The toxicity database for clethodim is complete.
ii. There is no indication that clethodim is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.
iii. There is no evidence of increased susceptibility of fetuses as compared to maternal animals following
iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to clethodim in drinking water. Post application exposure of children and incidental oral exposures to toddlers are expected to be negligible. All exposure estimates are based on conservative assumptions that will not underestimate the exposure and risks posed by clethodim.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to clethodim will occupy 29% of the aPAD for all infants <1 year old, the population group receiving the greatest exposure.
2.
3.
4.
5.
6.
Adequate enforcement methodologies are available: FDA Multiresidue Methods, gas chromatography/flame photometric detection in the sulfur mode (GC/FPD–S) and gas chromatography method with mass selective detection (GC/MSD).
These methods have been adequately validated for the analyses of residues of clethodim in/on crop matrices.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755–5350; telephone number: (410) 305–2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has established MRLs for clethodim in or on onion bulb and garlic at 0.5 ppm, tomato at 1 ppm, rapeseed at 0.5 ppm, sunflower seed at 0.5 ppm, and cotton seed at 0.5 ppm. The U.S. tolerances for rapeseed subgroup 20A, fruiting vegetables crop group 8–10, and onion, bulb, subgroup 3–07A are harmonized with the Codex MRLs for rapeseed, tomato, and bulb onion and garlic, respectively.
However, the U.S. tolerances for sunflower subgroup 20B and cottonseed subgroup 20C are not harmonized with the corresponding Codex MRLs for sunflower seed and cotton seed since the MRL values are lower than the U.S tolerances. The U.S. tolerances cannot be lowered to harmonize because doing so could result in residues above the tolerances when following the U.S. approved label directions.
The Agency made changes to the naming of certain petitioned-for commodities to reflect the current commodity definitions and significant figures used by the Agency. Although the petitioner requested a tolerance on stevia only, EPA established a tolerance on stevia, dried leaves because the dried commodity represents stevia that will be found in the U.S. trade market. Moreover, the Agency is removing certain commodities from the table at § 180.458(a) in order to eliminate redundancies upon the establishment of new crop group tolerances that were not identified in the petition: mustard, seed at 0.5 ppm, safflower, seed at 5.0 ppm, sesame, seed at 0.35 ppm, vegetable, fruiting group 8 at 1.0 ppm.
Therefore, tolerances are established for residues of clethodim, 2-[(1E)-1-[[[(2E)-3-chloro-2-propenyl]oxy]imino]propyl]-5-[2-(ethylthio)propyl]-3-hydroxy-2-cyclohexen-1-one, and its metabolites containing the 5-(2-ethylthiopropyl)cyclohexene-3-one and 5-(2-ethylthiopropyl)-5-hydroxycyclohexene-3-one moieties and their sulphoxides and sulphones, calculated as the stoichiometric equivalent of clethodim, in or on berry, low growing, subgroup 13–07G, except cranberry at 3.0 ppm; cottonseed subgroup 20C at 1.0 ppm; fruit, pome, group 11–10 at 0.20 ppm; fruit, stone, group 12–12 at 0.20 ppm; onion, bulb, subgroup 3–07A at 0.50 ppm; rapeseed subgroup 20A, except flax seed at 0.50 ppm; stevia, dried leaves at 12 ppm; sunflower subgroup 20B at 5.0 ppm; and vegetable, fruiting, group 8–10 at 1.0 ppm. EPA is also removing the following established tolerances that are superseded by this action: Canola seed, at 0.50 ppm; cotton, undelinted seed at 1.0 ppm; mustard, seed at 0.50 ppm; peach at 0.20 ppm; onion, bulb at 0.20 ppm; strawberry at 3.0 ppm; safflower, seed at 5.0 ppm; sesame, seed at 0.35 ppm; sunflower, seed at 5.0 ppm; vegetable, fruiting group 8 at 1.0 ppm. Finally, as a housekeeping measure, the Agency is removing two individual tolerances that are subsumed within other crop group tolerances contained in § 180.458: Bean, dry, seed at 2.5 ppm is covered by the entry for vegetable, legume, group 6, except soybean at 3.5 ppm and potato at 0.5 ppm is covered by the entry for vegetable, tuberous and corm, subgroup 1C at 1.0 ppm.
This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
The additions read as follows:
(a) * * *
Federal Communications Commission.
Final rule.
In this document, the Federal Communications Commission (FCC or Commission) revises its rules governing the Emergency Alert System (EAS) to incorporate new multilingual alerting reporting requirements into its State EAS Plan reporting requirements. The Commission takes this action in response to a Petition for Immediate Interim Relief (Petition) jointly filed by the Independent Spanish Broadcasters Association (ISBA), the Office of Communication of the United Church of Christ, Inc., and the Minority Media and Telecommunications Council (now called The Multicultural, Media, Telecom and Internet Council) (MMTC) (collectively, “Petitioners”).
Effective June 6, 2016, except for the amendments to § 11.21(d) through (f), which contain modifications to information collection requirements that were previously approved by the Office of Management and Budget (OMB). Once OMB has approved the modifications to these collections, the Commission will publish a document in the
Lisa Fowlkes, Deputy Bureau Chief, Public Safety and Homeland Security Bureau, at (202) 418–7452, or by email at
This is a summary of the Commission's Order (
1. The
2. The Commission adopts these requirements in response to the Petition. As a general matter, the Commission supports the Petitioners' goals and has, accordingly, provided repeated opportunities for comment. As described below, the Petition proposes various changes to the Part 11 rules governing the EAS to facilitate the dissemination of multilingual EAS alerts and non-EAS emergency information. Although the Commission does not find that the facts and record support the Petitioners' proposed Part 11 rule revisions, it finds that the reporting requirements adopted in the
3. The EAS is a national public warning system through which broadcasters, cable systems, and other EAS Participants deliver alerts to the public to warn them of impending emergencies and dangers to life and property. The primary purpose of the EAS is to provide the President with “the capability to provide immediate communications and information to the general public at the National, State and Local Area levels during periods of national emergency.” The EAS also is used to distribute alerts issued by state and local governments, as well as by the National Weather Service (NWS). Although EAS Participants are required to broadcast Presidential alerts, they participate in broadcasting state and local EAS alerts on a voluntary basis. As the Commission noted previously in this docket, its authority to require participation in the EAS emanates from sections 1, 4(i) and (o), 303(r), and 706 of the Communications Act. The Commission, the Federal Emergency Management Agency (FEMA), and the NWS implement the EAS at the federal level.
4. The EAS is a broadcast-based, hierarchical alert message distribution system in which an alert message originator at the local, state or national level encodes (or arranges to have encoded) a message in the EAS Protocol. The alert is then broadcast from one or more EAS Participants, and subsequently relayed from one station to another until all affected EAS Participants have received the alert and delivered it to the public. This process of EAS alert distribution among EAS Participants is often referred as the “daisy chain” distribution architecture. Because this EAS architecture has been in place since the inception of the EAS, it is often referred to as the “legacy EAS.” Since June 30, 2012, however, authorized emergency alert authorities also have been able to distribute EAS alerts over the Internet to EAS Participants (who in turn deliver the alert to the public) by formatting those alerts in the Common Alerting Protocol (CAP) and delivering those alerts through the FEMA administered Integrated Public Alert and Warning System (IPAWS). This CAP-based process for distributing alerts to EAS Participants represents the “IP-based EAS.”
5. Both the legacy and IP-based EAS architectures are designed so that EAS Participants deliver to the public the alert content they receive from the EAS sources they monitor. Further, the EAS architecture and equipment is designed to operate automatically, both to minimize the risk of operator error and to facilitate EAS operation at unattended stations. Because the EAS is a top-down, closed, automated message distribution system in which alert messages are passed along from one entity to another—under tight technical tolerances required to ensure that the system functions properly—EAS Participants currently have a limited capacity to alter the content of the alert messages they receive, including translations of messages to alternate languages.
6. In particular, the EAS header codes, End-of-Message (EOM) code, and audio message (if included) that comprise any given EAS alert are determined by the entity that originates the alert (typically, the NWS or state and local emergency management authorities). The EAS equipment of EAS Participants that receive the EAS alert convert the header codes into visual crawls and broadcast the audio—if the EAS Participant's broadcasts are monitored by downstream stations, it will re-encode (regenerate) the alert so as to trigger EAS equipment in such monitoring stations, thus perpetuating the daisy chain alert distribution cycle. All of these functions are typically done automatically. In terms of timing, state and local EAS alerts are required to be broadcast within 15 minutes of receipt, and the alert messages themselves are typically limited to a duration of two minutes. An EAS Participant seeking to broadcast a non-English language translation of the audio message contained in the EAS alert message it receives within the parameters of the EAS rules, would have to manually (1) ensure the entire length of the alert, including the translated audio portion, did not exceed two minutes, and (2) complete the translation and insertion processes within 15 minutes. Further, any such audio generated by that EAS Participant would be captured by downstream stations monitoring its broadcasts, thus raising the potential for the translated audio being rebroadcast (by the monitoring stations) to unintended audiences. The same timing elements would hold true for the visual portion of the alert, which under the legacy system is a textual rendition of the location, event, time period and other relevant header code elements.
7. Although EAS Participants currently have limited capacity to alter the alert message content they receive, the Part 11 rules allow EAS Participants that provide non-English language programming to broadcast state and local EAS announcements in the primary language of the EAS Participant. Accordingly, non-English language EAS Participants may, for example, broadcast required visual crawls in their primary language and include in such crawls translations of
8. In adopting rules to facilitate CAP alerting in the Fifth Report and Order (
9. As indicated, state and local emergency management authorities use the EAS to originate state and localized emergency alert messages. Section 11.21 of the EAS rules, 47 CFR 11.21, requires that state and local EAS operations must be described in State (and Local) EAS Plans, which must be submitted to the Commission for approval so that the Commission can ensure that these operations are consistent with national plans, FCC regulations, and national EAS operations. State EAS Plans are compiled and maintained by SECCs, and include information related to state and federal activations of the EAS.
10. The Petition proposes various modifications to the Commission's Part 11 rules to “provide for the dissemination of multilingual local, state and national emergency information via the EAS.” MMTC has submitted various comments and
11. The Commission formally sought comment on the Petition in the First Report and Order and Further Notice of Proposed Rulemaking (
12. The Commission subsequently took up the Petition in the Second Report and Order and Further Notice of Proposed Rulemaking (
13. On March 25, 2010, the Public Safety and Homeland Security Bureau (Bureau) released a Public Notice (
14. On March 11, 2014, the Bureau released a Public Notice in EB Docket No. 04–296, DA 14–336, released on March 11, 2014, which sought to refresh the record on the Petition initiated by the
15. MMTC responded to objections that the Petition was inconsistent with the EAS architecture by contending that while its proposals “include EAS alerts,
16. Consistent with the record in this proceeding, the Commission supports the general goal of making emergency alert content distributed over the EAS more accessible to persons whose primary language is not English. While providing multilingual translations of an EAS alert audio message as part of a state or local EAS alert that is processed in automated mode can only be effected by the alert originator, some capabilities do exist within the EAS structure for distributing non-English language translations of the alert content, such as through the EAS visual crawl. States and localities that have the capabilities to originate CAP-formatted alert messages have more flexibility to distribute EAS alerts—enhanced textual information and audio—in multiple languages. Moreover, states have always had the flexibility to implement state and local EAS alerting however they see fit, provided such implementations are consistent with the existing EAS technical and operational architecture and the Part 11 rules.
17. The Commission agrees with the majority of commenters that alert originators are best positioned to effect multilingual alerting, since station operators simply pass down the EAS message as received within the allotted two minute timeframe and, by and large, do not have the necessary capabilities and/or time to translate or originate that alert in another language. The Commission observes that comments submitted in response to the
18. The Commission also observes, however, that State EAS Plans currently on file do not describe what actions the state or its localities, in conjunction with the EAS Participants therein, or the EAS Participants themselves, whether acting individually or collectively, are taking with respect to distributing EAS alert content to non-English speaking audiences. Accordingly, to ensure that the Commission has sufficient and accurate information on any existing state and local mechanisms to distribute multilingual state and local EAS alert content, and more generally, to ensure that the issue of disseminating EAS alert content to non-English speaking audiences has been examined by EAS Participants and state and local emergency authorities, as coordinated by the SECCs, the
19. In order that we may assess these efforts, we require EAS Participants to provide the following information to their respective SECCs, who in turn will include such information in the State EAS Plan submitted to the Commission for approval:
• A description of any actions taken by the EAS Participant (acting individually, in conjunction with other EAS Participants in the geographic area, and/or in consultation with state and local emergency authorities), to make EAS alert content available in languages other than English to its non-English speaking audience(s);
• A description of any future actions planned by the EAS Participant, in consultation with state and local emergency authorities, to provide EAS alert content in languages other than English to its non-English speaking audience(s), along with an explanation for the EAS Participant's decision to plan or not plan such actions; and
• Any other relevant information that the EAS Participant may wish to provide, including state-specific demographics on languages other than English spoken within the state, and identification of resources used or necessary to originate current or proposed multilingual EAS alert content. In particular we urge EAS Participants and SECCs to include any pilot projects or other initiatives that involve translation technologies or other innovative approaches to providing non-English alerts and emergency information to the public.
20. This information will enable the Commission to ensure that any existing multilingual EAS alerting activities are consistent with the Part 11 rules, and may provide insight into what mechanisms may work best. Similarly, information identifying why multilingual EAS activities are not being planned may provide insight into structural impediments that might be ameliorated by future Commission or federal action, if appropriate. The collection and availability of this information also will aid states, EAS Participants, non-governmental organizations and other interested parties in their efforts, if any, to establish mechanisms for disseminating multilingual EAS content and other emergency information. In terms of mechanics, the
21. Beyond this reporting requirement, the
22. The Commission believes that the compliance costs to EAS Participants of the rules adopted in the
23. For the presumably small percentage of EAS Participants that actually are engaged in multilingual EAS activities, the filing will merely require that they supply a summary of actions they already have taken in this regard. Because the Commission anticipates that the aggregate costs associated with requiring EAS Participants to file summary statements or activities reports will be minimal, the potential benefits of promoting the delivery of alerts to those who communicate in a language other than English or may have a limited understanding of the English language will far exceed those costs imposed.
24. With regard to these benefits, the Commission finds that accurately understanding how the EAS is accessible to the entire public, including those who do not have a proficiency in English, will strengthen this already resilient public alert and warning tool in a manner that may help save lives and protect property during times of national, state, regional, and local emergencies.
25. Finally, the Commission's decision is limited to EAS content—
26. The Commission has observed that the record in this proceeding provides scant support for the methods proposed by the Petition to achieve their outcomes. Instead, as indicated, the vast majority of commenters have consistently argued that state and local authorities responsible for originating alerts are best positioned to distribute multilingual alerts, and therefore should be responsible for the language content of alerts. The record also supports reliance upon voluntary arrangements among and between EAS Participants and other parties to achieve multilingual solutions that reflect the resources, localized needs and environmental characteristics of the communities they serve. These facts and record do not support the Petition's proposed revisions to the Part 11 rules.
27. The Commission also observes, as commenters have pointed out, that the Petition's proposed methods for implementing the Designated Hitter plan within the EAS architecture lack specificity, and it is therefore difficult to determine whether or how such implementation could be effected from the federal level. Commenters also have observed that the Petition's proposals implicate technical problems that could compromise the operation of the EAS. In sum, the concludes that the Petition does not provide sufficient detail as to the precise functionalities it seeks to achieve through its proposed Part 11 rule revisions and how those could be implemented within the technical architecture, including the EAS Protocol and distribution mechanisms, of the EAS.
28. Against this backdrop, and given that options for effectuating multilingual EAS alerts at the local level necessitates voluntary solutions tailored to the relevant multilingual needs of the community served, the Commission does not support moving forward with the Petition's specific proposals. Accordingly, while the Commission grants the Petition to the extent the actions taken in the
29. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
30. As required by the Regulatory Flexibility Act of 1980, see 5 U.S.C. 603, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this document.
31. This document contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104–13. These modified requirements will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107–198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.
32. In this present document, we have assessed the effects of the information collection associated with the reporting requirements set forth in this
33. The Commission will send a copy of this
34. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the First Report and Order and Further Notice of Proposed Rulemaking (First Report and Order and Further Notice of Proposed Rulemaking) in EB Docket No. 04–296, 70 FR 71023, 71072, November 25, 2005. The Commission sought written comment on the proposals in the Further Notice portion of the First Report and Order and Further Notice of Proposed Rulemaking, including comment on the IRFA. Because the Order amends the Commission's rules, this Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
35. This
36. The Small Business Administration (SBA) filed no comments in this proceeding, and there were no other comments specifically addressed to the IRFA.
37. The RFA directs agencies to provide a description of and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
38.
39.
40. According to Commission staff review of the BIA Financial Network, Inc. Media Access Pro Television Database as of March 31, 2013, about 90 percent of an estimated 1,385 commercial television stations in the United States have revenues of $38.5 million or less. Based on this data and the associated size standard, we conclude that the majority of such establishments are small. The Commission has estimated the number of licensed noncommercial educational (“NCE”) stations to be 396. We do not have revenue estimates for NCE stations. These stations rely primarily on grants and contributions for their operations, so we will assume that all of these entities qualify as small businesses. In addition, there are approximately 567 licensed Class A stations, 2,227 licensed low power television (“LPTV”) stations, and 4,518 licensed TV translators. Given the nature of these services, we will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.
41. We note that in assessing whether a business entity qualifies as small under the above definition, business control affiliations must be included. Our estimate, therefore, likely overstates the number of small entities affected by the proposed rules because the revenue figures on which this estimate is based do not include or aggregate revenues from affiliated companies.
42. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. The Commission is unable at this time and in this context to define or quantify the criteria that would establish whether a specific television station is dominant in its market of operation. Accordingly, the foregoing estimate of small businesses to which the rules may apply does not exclude any television stations from the definition of a small business on this basis and is therefore over-inclusive to that extent. An additional element of the definition of “small business” is that the entity must be independently owned and operated. It is difficult at times to
43.
44. The same SBA definition that applies to radio broadcast licensees would apply to low power FM (“LPFM”) stations. The SBA defines a radio broadcast station as a small business if such station has no more than $38.5 million in annual receipts. Currently, there are approximately 864 licensed LPFM stations. Given the nature of these services, we will presume that all of these licensees qualify as small under the SBA definition.
45.
46.
47.
48.
49.
50. In addition, the SBA's placement of Cable Television Distribution Services in the category of Wired Telecommunications Carriers is applicable to cable-based Educational Broadcasting Services. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers, which was developed for small wireline businesses. This category is defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet services.” The SBA has developed a small business size standard for this category, which is: All such businesses having 1,500 or fewer employees. Census data for 2007 shows 3,188 firms in this category. Of these, 3,144 had fewer than 1,000 employees. Therefore, under this size standard, we estimate that the majority of these businesses can be considered small. Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. In addition to Census data, the Commission's internal records indicate that as of September 2014, there are 2,207 active EBS licenses. The Commission estimates that of these 2,207 licenses, the majority are held by non-profit educational institutions and school districts, which are by statute defined as small businesses.
51.
52.
53. We have included small incumbent LECs in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (
54.
55.
56.
57.
58. There are revisions to current Part 11 reporting, recordkeeping, or compliance requirements set forth in the
59. The RFA requires an agency to describe any significant, specifically small business alternatives that it has considered in reaching its conclusions, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.”
60. Based on the Commission's review of the record, the Commission finds that it is practicable for all SECCs and EAS Participants, including small and rural EAS Participants, to comply with the minimal reporting requirements set forth in the
61. Further, this
62. Finally, in the event that small entities face unique circumstances with respect to these requirements, such entities may request waiver relief from the Commission. Accordingly, the Commission finds that it has discharged its duty to consider the burdens imposed on small entities.
63.
64. Accordingly,
65.
66.
Radio, Television.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 11 as follows:
47 U.S.C. 151, 154 (i) and (o), 303(r), 544(g) and 606.
EAS plans contain guidelines which must be followed by EAS Participants' personnel, emergency officials, and National Weather Service (NWS) personnel to activate the EAS. The plans include the EAS header codes and messages that will be transmitted by key EAS sources (NP, LP, SP and SR). State and local plans contain unique methods of EAS message distribution such as the use of the Radio Broadcast Data System (RBDS). The plans also include information on actions taken by EAS Participants, in coordination with state and local governments, to ensure timely access to EAS alert content by non-English speaking populations. The plans must be reviewed and approved by the Chief, Public Safety and Homeland Security Bureau, prior to implementation to ensure that they are consistent with national plans, FCC regulations, and EAS operation.
(d) EAS Participants are required to provide the following information to their respective State Emergency Communications Committees (SECC) within one year from the publication in the
(1) A description of any actions taken by the EAS Participant (acting individually, in conjunction with other EAS Participants in the geographic area, and/or in consultation with state and local emergency authorities), to make EAS alert content available in languages other than English to its non-English speaking audience(s),
(2) A description of any future actions planned by the EAS Participant, in consultation with state and local emergency authorities, to provide EAS alert content available in languages other than English to its non-English speaking audience(s), along with an explanation for the Participant's decision to plan or not plan such actions, and
(3) Any other relevant information that the EAS Participant may wish to provide, including state-specific demographics on languages other than English spoken within the state, and identification of resources used or necessary to originate current or proposed multilingual EAS alert content.
(e) Within six months of the expiration of the one-year period referred to in subsection (d) of this section, SECCs shall, as determined by the Commission's Public Safety and Homeland Security Bureau, provide a summary of such information as an amendment to or as otherwise included as part of the State EAS Plan filed by the SECC pursuant to this section 11.21.
(f) EAS Participants shall, within 60 days of any material change to the information they have reported pursuant to paragraphs (d)(1) and (2) of this section, submit letters describing such change to both their respective SECCs and the Chief, Public Safety and Homeland Security Bureau. SECCs shall incorporate the information in such letters as amendments to the State EAS Plans on file with the Bureau under this section 11.21.
Office of Personnel Management.
Proposed rule.
The Office of Personnel Management (OPM) proposes to amend part 297 of title 5, Code of Federal Regulations, to implement a 60-day timeframe for individuals to appeal or submit requests for administrative review of initial decisions regarding access and amendment requests involving records maintained in OPM systems of records. This proposed change will allow greater efficiency in processing appeals and requests for administrative review and will also improve the office's records maintenance and disposal policies. OPM's retention of the Privacy Act Case Records are to be maintained in accordance with the NARA General Records Schedule 14 which relies on whether or not the request is appealed to institute a disposal timeframe. The addition of this appeal or administrative review timeframe will allow offices to dispose of records in accordance with the NARA General Records Schedule 14. OPM is also proposing to update the points of contact for Privacy Act matters, including where to address appeals or requests for administrative review of access and amendment denials involving records maintained in OPM systems of records.
OPM also proposes to amend part 297 of title 5, Code of Federal Regulations to implement exemptions for the OPM Central-9/Personnel Investigations Records, the OPM Internal 16/Adjudications Officer Control Files, the newly established OPM Internal 20/Integrity Assurance Officer Control Files, and the newly established OPM Internal 19/Investigative Training Records. In this proposed rulemaking, OPM proposes to exempt portions of these system of records from one or more provisions of the Privacy Act to safeguard national security information, and law enforcement information, to protect the identities of sources who furnished information under an express promise of confidentiality, and to safeguard qualifications testing and examination materials that would, if released, compromise the objectivity or fairness of the testing or examination process.
We must receive your comments by July 5, 2016.
You may submit comments, identified by docket number and/or RIN number 3206–AN27 by any of the following methods:
•
•
•
Program Manager, Freedom of Information and Privacy Act office, U.S. Office of Personnel Management, Federal Investigative Services, (724) 794–5612.
OPM is amending 5 CFR 297.207(c)(1), (c)(2), and 297.306(a) to add a timeframe for individuals to appeal or ask for an administrative review of initial denials of access and requests to amend a record made by a Federal official, when a record is maintained in an OPM system of records. Individuals will have 60 days from the date of an initial decision to appeal or ask for an administrative review of the initial decision. This change will allow for efficiency in processing appeals and requests for administrative review and also improve the office's record maintenance and disposal policies. The office's Privacy Act Case Records are to be maintained in accordance with the NARA General Records Schedule 14 which relies on whether or not the request is appealed to institute a disposal timeframe. The addition of this timeframe will allow the offices to dispose of records in accordance with the NARA General Records Schedule 14.
In addition, OPM proposes amendments to points of contact for Privacy Act matters in 5 CFR 297.106; where to address of access denials in 5 CFR 297.207(c)(1) and (c)(2); and where to address requests for administrative review of initial amendment denials in 5 CFR 297.301(e) and (f).
The Privacy Act of 1974 allows Government agencies to exempt certain records from the access and amendment provisions. If an agency claims an exemption, however, it must issue a Notice of Proposed Rulemaking to make clear to the public the reasons why a particular exemption is claimed.
OPM is amending 5 CFR 297.501(b)(5) to exempt certain records in the Personnel Investigations Records (OPM/CENTRAL–9) from the Privacy Act's requirement to maintain only information specifically relevant and necessary to accomplish a purpose of the agency,
OPM is proposing to add 5 CFR 297.501(b)(9) to claim specific exemptions from certain requirements of the Privacy Act for the Adjudications Officer Control Files (OPM/Internal-16) to safeguard national security information and law enforcement information, to protect the identities of sources who furnished information under an express promise of confidentiality, and protect the testing and examining material used solely to determine individual qualifications for appointment or promotion in the Federal service when release of this information would compromise the objectivity and fairness of the testing or examining process.
OPM is proposing to add 5 CFR 297.501(b)(10) to claim specific exemptions from certain requirements of the Privacy Act for the Integrity Assurance Officer Control Files (OPM/Internal-20). OPM proposes to exempt portions of the system of records from one or more provisions of the Privacy Act to safeguard national security information, law enforcement information, protect the identities of sources who furnished information
OPM is also proposing to add 5 CFR 297.501(b)(11) to claim specific exemptions from certain requirements of the Privacy Act for the Investigative Training Records (OPM/Internal-19). OPM proposes to exempt portions of the system of records from one or more provisions of the Privacy Act to protect testing and examining material used solely to determine individual qualifications for appointment or promotion in the Federal service when release of this information would compromise the objectivity and fairness of the testing or examining process.
It has been determined that Privacy Act rules for OPM are not significant rules. The rules do not (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 these Executive orders.
It has been determined that this Privacy Act rule for OPM does not have significant economic impact on a substantial number of small entities because it is concerned only with the administration of Privacy Act systems of records within OPM.
It has been determined that Privacy Act rules for OPM impose no additional information collection requirements on the public under the Paperwork Reduction Act of 1995.
It has been determined that this Privacy Act rulemaking for OPM does not involve a Federal mandate 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 and that such rulemaking will not significantly or uniquely affect small governments.
It has been determined that the Privacy Act rules for OPM do not have federalism implications. The rule does not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.
Privacy.
For the reasons discussed in the preamble, the Office of Personnel Management is proposing to amend 5 CFR part 297 as follows:
Sec. 3, Pub. L. 93–579, 88 Stat. 1896 (5 U.S.C. 552a).
To determine what records the Office maintains in its system of records, requesters must write to the Program Director, Information Management, Office of the Chief Information Officer, U.S. Office of Personnel Management, 1900 E Street NW., Washington, DC 20415. Using the Office's response, requesters can contact the particular system manager indicated in the Office's notices of its systems published in the
(c) * * *
(1) For initial denials made by an agency, when the record is maintained in an Office Governmentwide system of records, a request for administrative review should be made within 60 days to the Program Director, Information Management, Office of the Chief Information Officer, U.S. Office of Personnel Management, 1900 E Street NW., Washington, DC 20415.
(2) For denials initially made by an Office official, when a record is maintained in an internal or central system of records, a request for administrative review must be made within 60 days from the date of the initial decision to the General Counsel, Office of the General Counsel, U.S. Office of Personnel Management, 1900 E Street NW., Washington, DC 20415.
(e) A request for administrative review of an agency denial to amend a record in the Office's systems of record should be addressed to the Program Director, Information Management, Office of the Chief Information Officer, U.S. Office of Personnel Management, 1900 E Street NW., Washington, DC 20415.
(f) A request for administrative review of a denial to amend a record by an Office official should be addressed to the General Counsel, Office of the General Counsel, U.S. Office of Personnel Management, 1900 E Street NW., Washington, DC 20415.
(a) An individual who disagrees with an initial denial to amend a record may file a written appeal of that denial to the appropriate official. The appeal must be made within 60 days from the date of the initial decision. In submitting an appeal, the individual should provide a copy of the original request for amendment, a copy of the initial denial decision, and a statement of the specific reasons why the initial denial is believed to be in error. Any appeal should be submitted to the official designated in the initial decision letter.
(b) * * *
(5)
(i) All information in these records that meets the criteria stated in 5 U.S.C. 552a(k)(1), (2), (3), (4), (5), (6), and (7) is exempt from the requirements of 5 U.S.C. 552a(c)(3), (d), and (e)(1). These provisions of the Privacy Act relate to making accountings of disclosures available to the data subject, access to and amendment of records, and maintaining in its records only such information that is relevant and necessary.
(ii) Exemptions from these particular subsections are justified, on a case-by-case basis to be determined at the time a request is made for the reasons that follow:
(A) From subsection (c)(3) and (d), because access to the record, amendment of the record, or release of the accounting of disclosures of the record could disclose sensitive information that could be detrimental to national security; inform the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of that investigation and reveal investigative interest on the part of another agency or law enforcement entity; compromise the safety of the individuals protected pursuant to 18 U.S.C 3056; affect compliance with a statutory mandate concerning statistical records; identify confidential sources who might not otherwise come forward and who furnished information under an express promise that the sources' identity would be held in confidence (or prior to the effective date of the Act, under an implied promise); compromise the objectivity and fairness of the testing or examining process; or compromise evaluation material used to determine potential for promotion in the armed services.
(B) From subsection (e)(1), because in the course of personnel background investigations the accuracy of information obtained or introduced occasionally may be unclear, or the information may not be strictly relevant or necessary to favorably or unfavorably adjudicate a specific investigation at a specific point in time. However, in the interests of protecting the public trust and national security, it is appropriate to retain all information that may aid in establishing patterns in such areas as criminal conduct, alcohol and drug abuse, financial dishonesty, allegiance, foreign preference or influence, and psychological conditions, that are relevant to future personnel security or suitability determinations.
(9)
(i) All information in the Adjudications Officer Control Files that meets the criteria stated in 5 U.S.C. 552a(k)(1), (2), (5) and (6) is exempt from the requirements of 5 U.S.C. 552a(c)(3) and (d), or 5 U.S.C. 552a(d) standing alone. These provisions of the Privacy Act relate to making accountings of disclosures available to the data subject and access to and amendment of records.
(ii) Exemptions from these particular subsections are justified, on a case-by-case basis to be determined at the time a request is made, because access to the record, amendment of the record, or release of the accounting of disclosures of the record could disclose sensitive information that could be detrimental to national security; inform the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of that investigation and reveal investigative interest on the part of another agency or law enforcement entity; identify confidential sources who might not otherwise come forward and who furnished information under an express promise that the sources' identity would be held in confidence (or prior to the effective date of the Act, under an implied promise); or compromise the objectivity and fairness of the testing or examining process.
(10)
(i) All information in the Integrity Assurance Officer Control Files that meets the criteria stated in 5 U.S.C. 552(k)(1), (2), (5), and (6) is exempt from the requirements of 5 U.S.C. 552a(c)(3), (d) and (e)(1). These provisions of the Privacy Act relate to making accountings of disclosures available to the data subject, access to and amendment of records, and maintaining in its records only such information that is relevant and necessary.
(ii) Exemptions from these particular subsections are justified, on a case-by-case basis to be determined at the time a request is made and the reasons for the exemptions are as follows:
(A) From subsection (c)(3) and (d), because access to the record, amendment of the record, or release of the accounting of disclosures of the record could disclose sensitive information that could be detrimental to national security; inform the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of that investigation and reveal investigative interest on the part of another agency or law enforcement entity; identify confidential sources who might not otherwise come forward and who furnished information under an express promise that the sources' identity would be held in confidence (or prior to the effective date of the Act, under an implied promise); or compromise the objectivity and fairness of the testing or examining process.
(B) From subsection (e)(1), because in the course of investigations into specific allegations of misconduct, negligence or error, the accuracy of information obtained or introduced occasionally may be unclear, or the information may not be strictly relevant or necessary to the specific investigation. However, in the interests of ensuring the quality and accuracy of investigations, and protecting the public's trust in the integrity of personnel investigation program, it is appropriate to retain all information that may aid in establishing patterns of misconduct, negligence, or error.
(11)
(i) All information in the Investigative Training Records that meets the criteria stated in 5 U.S.C. 552a(k)(6) is exempt from the requirements of 5 U.S.C. 552a(c)(3) and (d). These provisions of the Privacy Act relate to making accountings of disclosures available to the data subject and access to and amendment of records.
(ii) Exemption from subsection (c)(3) and (d) is justified, on a case-by-case basis to be determined at the time a request is made because access to the record, amendment of the record, or release of the accounting of disclosures of the record could compromise the objectivity and fairness of the testing and examining process used solely to determine individual qualifications for appointment or promotion in the Federal service.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E en route domestic airspace in the Platte Municipal Airport, Platte, SD area, to facilitate vectoring of Instrument Flight Rules (IFR) aircraft under control of Minneapolis Air Route Traffic Control Center (ARTCC). The FAA is proposing this action to enhance the safety and efficiency of aircraft operations within the National Airspace System (NAS).
Comments must be received on or before June 20, 2016.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12–140, Washington, DC 20591. You must identify the docket number FAA–2016–5386/Airspace Docket No. 16–AGL–12, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Y, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Raul Garza, Jr., Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone: 817–222–5874.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E en route airspace in the Platte, SD, area.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2016–5386/Airspace Docket No. 16–AGL–12.” The postcard will be date/time stamped and returned to the commenter.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking (202) 267–9677, to request a copy of Advisory Circular No. 11–2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document would amend FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the
This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E en route domestic airspace extending upward from 1,200 feet above the surface within a 75-mile radius of Platte Municipal Airport, Platte, SD. This action would contain aircraft while in IFR conditions under control of Minneapolis ARTCC by safely vectoring aircraft from en route airspace to terminal areas.
Class E airspace areas are published in Paragraph 6006 of FAA Order 7400.9Z, 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 1,200 feet above the surface within a 75-mile radius of Platte Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E en route domestic airspace in the Linton Municipal Airport, Linton, ND area, to facilitate vectoring of Instrument Flight Rules (IFR) aircraft under control of Minneapolis Air Route Traffic Control Center (ARTCC). The FAA is proposing this action to enhance the safety and efficiency of aircraft operations within the National Airspace System (NAS).
Comments must be received on or before June 20, 2016.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12–140, Washington, DC 20591. You must identify the docket number FAA–2016–5456/Airspace Docket No. 16–AGL–11, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Y, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Raul Garza, Jr., Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone: 817–222–5874.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace in the Linton, ND, area.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2016–5456/Airspace Docket No. 16–AGL–11.” The postcard will be date/time stamped and returned to the commenter.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking (202) 267–9677, to request a copy of Advisory Circular No. 11–2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document would amend FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the
This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E en route domestic airspace extending upward from 1,200 feet above the surface within a 125-mile radius of Linton Municipal Airport, Linton, ND. This action would contain aircraft while in IFR conditions under control of Minneapolis ARTCC by safely vectoring aircraft from en route airspace to terminal areas.
Class E airspace areas are published in Paragraph 6006 of FAA Order 7400.9Z, 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 1,200 feet above the surface within a 125-mile radius of Linton Municipal Airport.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E en route domestic airspace in the Harvey Municipal Airport, Harvey, ND area, to facilitate vectoring of Instrument Flight Rules (IFR) aircraft under control of Minneapolis Air Route Traffic Control Center (ARTCC). The FAA is proposing this action to enhance the safety and efficiency of aircraft operations within the National Airspace System.
Comments must be received on or before June 20, 2016.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12–140, Washington, DC 20591. You must identify the docket number FAA–2016–5387/Airspace Docket No. 16–AGL–13, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Z, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is
Raul Garza, Jr., Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone: 817–222–5874.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace in the Harvey, ND, area.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2016–5387/Airspace Docket No. 16–AGL–13.” The postcard will be date/time stamped and returned to the commenter.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking (202) 267–9677, to request a copy of Advisory Circular No. 11–2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document would amend FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the
This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E en route domestic airspace extending upward from 1,200 feet above the surface within a 100-mile radius of Harvey Municipal Airport, Harvey, ND, excluding Canadian airspace. This action would contain aircraft while in IFR conditions under control of Minneapolis ARTCC by safely vectoring aircraft from en route airspace to terminal areas.
Class E airspace areas are published in Paragraph 6006 of FAA Order 7400.9Z, 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 1,200 feet above the surface within a 100-mile radius of Harvey Municipal Airport, excluding that airspace within Canada.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E airspace at Slaton, TX. Controlled airspace is necessary to accommodate new Standard Instrument Approach Procedures developed at Slaton Municipal Airport, for the safety and management of Instrument Flight Rules (IFR) operations at the airport.
Comments must be received on or before June 20, 2016.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590; telephone (202) 366–9826. You must identify FAA Docket No. FAA–2016–3785; Docket No. 16–ASW–9, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Z, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Raul Garza Jr., Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone: 817–222–5874.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace at Slaton Municipal Airport, Slaton, TX.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2016–3785/Airspace Docket No. 16–ASW–9.” The postcard will be date/time stamped and returned to the commenter.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking (202) 267–9677, to request a copy of Advisory Circular No. 11–2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document would amend FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the
The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) Part 71 by establishing Class E airspace extending upward from 700 feet above the surface within a 7-mile radius of Slaton Municipal Airport, Slaton, TX, to accommodate new standard instrument approach procedures. Controlled airspace is needed for the safety and management of IFR operations at the airport.
Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9Z, dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 7-mile radius of Slaton Municipal Airport.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking and notice of proposed rulemaking by cross-reference to temporary regulations.
This document contains proposed regulations that set forth the Federal employment tax liabilities and other obligations of persons certified by the IRS as certified professional employer organizations (CPEOs) in accordance with provisions enacted as part of The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014. The proposed regulations also propose to adopt, by cross-reference, the text of temporary regulations in the Rules and Regulations section of this issue of the
Comments and requests for a public hearing must be received by August 4, 2016.
Send submissions to: CC:PA:LPD:PR (REG–127561–15), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–127561–15), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224 or sent electronically, via the Federal eRulemaking Portal at
Concerning these proposed regulations, Melissa L. Duce at (202) 317–6798; concerning submissions of comments or to request a public hearing, Oluwafunmilayo Taylor at (202) 317–6901 (not toll-free numbers).
The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget for review and approval in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by July 5, 2016.
Comments are specifically requested concerning:
Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility;
The accuracy of the estimated burden associated with the proposed collection of information;
How the quality, utility, and clarity of the information to be collected may be enhanced;
How the burden of complying with the proposed collection of information may be minimized, including through forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
The collection of information in the proposed regulations is in § 31.3511–1(g) and flows from section 3511(g) of the Internal Revenue Code (Code), which provides that the Secretary shall develop such reporting and recordkeeping rules, regulations, and procedures as the Secretary determines necessary or appropriate to ensure compliance by CPEOs with subtitle C of the Code. Section 31.3511–1(g)(1) clarifies that the reporting and recordkeeping requirements described in subtitle F of the Code that are currently applicable to employers apply to CPEOs that are treated as employers under § 31.3511–1(a), and § 31.3511–1(g)(3)(ii) specifically requires a CPEO to file on magnetic media Form 940, “Employer's Annual Federal Unemployment (FUTA) Tax Return,” and Form 941, “Employer's QUARTERLY Federal Tax Return,”
The collection of information in § 31.3511–1(g)(4) of the proposed regulations, regarding information a CPEO must provide to its customers, relates to: (1) An annual requirement to provide customers with the information necessary to claim specified credits for which the amount of the credit is determined by reference to the amount of employment tax wages or federal employment taxes; (2) a requirement to notify a customer of any transfers by the CPEO of the customer's contract meeting the requirements of section 7705(e)(2) (CPEO contract) or of any suspension or revocation of the CPEO's certification; and (3) if any covered employees are not or cease to be work site employees because they perform services at a location where the 85 percent threshold described in the definition of “work site employee” in § 301.7705–1(b)(17) is not met, a requirement to notify the customer that it may also be liable for federal employment taxes imposed on remuneration remitted by the CPEO to such covered employees. Similarly, § 31.3511–1(g)(5)(i) requires that any CPEO contract between a CPEO and a customer must: (1) Contain the name and Employer Identification Number (EIN) of the CPEO fulfilling the federal employment tax obligations covered by the contract; (2) require the CPEO to provide the notices outlined in § 31.3511–1(g)(4); (3) describe the information that the CPEO will provide that is necessary for the customer to claim specified credits; and (4) specify that the CPEO must notify the customer that it may also be liable for federal employment taxes on remuneration remitted by the CPEO to any employees who are not work site employees. Further, any service agreement described in § 31.3504–2(b)(2) that is not a CPEO contract, must notify (or be accompanied by notification to) the client that the agreement does not alter the client's liability for federal employment taxes on remuneration remitted by the CPEO to the employees covered by the agreement. While a CPEO must provide customers with the information necessary to claim the specified credits annually and agree to provide customers and clients with the described notifications in each new CPEO contract or service agreement entered into during a particular taxable year, the remaining notification obligations outlined in §§ 31.3511–1(g)(4) and (5) relate to other events that are less predictable and may be infrequent—such as transfers of existing CPEO contracts, suspension or revocation of the CPEO's certification, or the reclassification of employees at a particular work site as non-work site employees. Moreover, the Department of the Treasury (Treasury Department) and the IRS expect that CPEOs participating in this voluntary program will be able to build upon pre-existing systems and processes through which they communicate with their clients. With regard to the collections of information required in §§ 31.3511–1(g)(4) and (5), the Treasury Department and the IRS have reached the following reporting burden estimates for the expected recordkeepers (which are CPEOs):
The collection of information in the temporary regulations is in § 301.7705–2T and flows from sections 7705(b) and (c), which relate to the requirements that a person must satisfy to become and remain certified as a CPEO. The collection of information required to apply for and receive certification and to meet the requirements under § 301.7705–2T related to posting a security bond will be reflected in the burden estimates for Form 14737, “Request for Voluntary IRS Certification of a Professional Employer Organization”; Form 14737–A, “Responsible Individual Personal Attestation”; and Form 14751, “Certified Professional Employer Organization Surety Bond.” The collection of information required by §§ 301.7705–2T(j) and (k), relating to periodic verification that the CPEO continues to meet the requirements of § 301.7705–2T and a CPEO's obligation to report any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided to the IRS, will be published in a future revenue procedure that will prescribe the procedures related to these requirements.
Section 301.7705–2T(e) of the temporary regulations requires a CPEO to provide annually a copy of its annual audited financial statements and an opinion of a certified public accountant (CPA) regarding such financial statements. The collection of information required by § 301.7705–2T(f)(1)(i) relates to quarterly assertions that the CPEO has withheld and made deposits of all required federal employment taxes for the calendar quarter and examination level attestations from a CPA stating that such assertion is fairly stated in all material respects. In addition, § 301.7705–2T(f)(1)(ii) requires a quarterly statement signed by a responsible individual verifying that the CPEO has positive working capital with respect to the most recently completed fiscal quarter. While it is expected that CPEOs will generally maintain annual audited financial statements during the normal course of their business, rather than solely as a result of § 301.7705–2T(e), the Treasury Department and the IRS recognize that § 301.7705–2T(e) may impose new reporting requirements relating to underlying elements of those financial statements that will require additional time on the part of the CPEO and additional review by a CPA. In addition, § 301.7705–2T(f) requires CPEOs to submit statements regarding their working capital and assertions and exam level attestations related to their tax compliance on a quarterly basis. With respect to the collections of information required in §§ 301.7705–2T(e) and (f), the Treasury Department and the IRS have reached the following reporting burden estimates for CPEOs:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by 26 U.S.C. 6103.
The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (the ABLE Act), enacted on December 19, 2014, as part of the Tax Increase Prevention Act of 2014 (Pub. L. 113–295), added new sections 3511 and 7705 to the Code relating to the federal employment tax obligations and certification requirements of a “certified professional employer organization” (CPEO). Additionally, the ABLE Act made conforming amendments to sections 3302, 3303(a), 6053(c), 6652, and 7528 relating to obligations, requirements, and penalties applicable to a CPEO. This notice of proposed rulemaking contains proposed regulations under sections 3511 and 7705 regarding federal employment tax obligations of a CPEO and related definitions. This document also proposes to adopt, by cross-reference, temporary regulations under section 7705 published in the Rules and Regulations portion of this issue of the
When an individual performs services for another person, an employer-employee relationship may exist. Generally, the Code provides that the existence of an employer-employee relationship is determined by applying the usual common law rules to the particular facts and circumstances of each case.
Employers generally are required to deduct and withhold federal income tax and Federal Insurance Contributions Act (FICA) taxes from wages paid to their employees under sections 3402(a) and 3102(a) and are separately liable for the employer's share of FICA taxes under section 3111. FICA taxes consist of the Old-Age, Survivors, and Disability Insurance (OASDI) tax and the Hospital Insurance (HI) tax (which includes the additional tax under section 3101(b)(2), known commonly as the Additional Medicare Tax (AdMT)). The amount of wages for OASDI purposes is limited to wages paid by an employer to an employee during a calendar year not exceeding the contribution and benefit base (as determined under section 230 of the Social Security Act), which is an annually adjusted amount. Thus, there is a ceiling on the wages subject to OASDI. Accordingly, once an employee's wages from an employer reach this annually adjusted amount, the OASDI portion of the FICA tax does not apply for the remainder of the calendar year.
In contrast, there is no ceiling on wages subject to the HI tax.
Instead of FICA taxes, railroad employers are required to deduct and withhold Railroad Retirement Tax Act (RRTA) taxes from their employees' compensation and are separately liable for the employer's share of RRTA taxes. RRTA taxes consist of tier 1 taxes and tier 2 taxes. Tier 1 taxes parallel the OASDI and HI taxes applicable to other employers and employees. Tier 2 taxes consist of employer and employee taxes on railroad compensation up to the tier 2 contribution base for the calendar year.
Under the Federal Unemployment Tax Act (FUTA), taxes are imposed on the first $7,000 of wages paid to a covered employee by an employer during the calendar year.
All taxes imposed under subtitle C of the Code, including income tax withholding, FICA, RRTA, and FUTA taxes, are collectively referred to in this preamble as “federal employment taxes.” The applicable contribution bases for FICA, RRTA, and FUTA taxes, collectively, are referred to in this preamble as the “annual wage base.” Sections 31.3102–1(d), 31.3202–1(e), and 31.3403–1 establish that the employer is the person liable for the withholding and payment of federal employment taxes, whether or not amounts are actually withheld.
An employer must file an employment tax return reporting federal employment taxes for each employment tax return period. Generally, an employer files Form 941, “Employer's QUARTERLY Federal Tax Return,” to report wages the employer paid during a quarter of a calendar year that are subject to federal income tax withholding and FICA taxes. Wages an employer pays that are subject to FUTA tax are reported annually on Form 940, “Employer's Annual Federal Unemployment Tax (FUTA) Return.” Employers that pay compensation subject to the RRTA tax file Form CT–1, “Employer's Annual Railroad Retirement Tax Return,” as well as Form 941, to report federal income tax withholding. All employers that pay wages or compensation subject to federal income tax withholding, FICA tax, or RRTA tax must file Forms W–2, “Wage and Tax Statement,” and Form W–3, “Transmittal of Wage and Tax Statements,” with the Social Security Administration (SSA) and furnish a Form W–2 to each employee.
Federal employment taxes generally apply to all remuneration for services performed by an employee for an employer. However, specific exceptions apply to particular types of remuneration and particular types of services, which may depend on the type of employer for whom services are performed or the nature of those services. For example, remuneration paid by an organization exempt from federal income tax under section 501(a) to an employee who is paid less than $100 in a calendar year is excluded from the definition of “wages” for FICA purposes, and services performed in the employ of certain tax-exempt organizations are excluded from the definition of “employment” for FUTA purposes. In addition, various definitions and special rules, relevant for purposes of computing the applicable annual wage base, apply to
Furthermore, as noted earlier in this preamble, remuneration paid by an employer to an employee within any calendar year is excepted from the OASDI portion of FICA, the equivalent portion of tier 1 RRTA, and FUTA taxes to the extent it exceeds the applicable annual wage base. However, the annual wage base applies on an employer-by-employer basis, and, thus, only remuneration received during any calendar year by an employee from the same employer is considered in applying the annual wage bases for purposes of the remuneration paid by that employer.
Accordingly, if during a calendar year the employee receives remuneration from more than one employer, generally, both the annual wage base and withholding threshold apply separately to the remuneration that the employee received during that calendar year from each employer.
If a person (payor) pays wages or compensation to employees who are employed by one or more employers, the Secretary is authorized, in accordance with regulations prescribed by the Secretary under section 3504, to designate such payor to perform acts required of employers under the Code. Section 3504 further provides that, except as otherwise prescribed by the Secretary, all provisions of law (including penalties) applicable with respect to an employer are applicable to the payor so designated, but each employer for whom the payor acts remains subject to the provisions of the law (including penalties) applicable to the employer. Consequently, both an employer and the payor designated in accordance with regulations under section 3504 are liable for the federal employment taxes on wages or compensation paid by the payor. Section 31.3504–2 of the regulations provides circumstances under which a payor is designated to perform the acts required of an employer and is liable for federal employment taxes with respect to wages or compensation paid by the payor to individuals performing services for the payor's client pursuant to a service agreement between the payor and the client, as defined therein. Consistent with section 3504, § 31.3504–2 provides that the client remains liable for the federal employment taxes on wages paid by the payor to employees of the client.
In addition to an employer's federal employment tax obligations, various tax credits are available to employers based on the amount of wages and federal employment taxes paid by the employer. For example, the amount of an employer's work opportunity credit is based on a portion of FUTA wages paid by the employer to employees who are members of certain specified groups.
Certain reporting requirements relating to tips apply to large food or beverage establishments. In the case of such an establishment, an employer is generally required to report certain information relating to receipts and tips to the IRS each calendar year. Additionally, the employer must also provide employees with written statements showing certain information for each calendar year, including the amount of tips allocated to the employee for the year.
A professional employer organization (PEO), sometimes referred to as an employee leasing company, is an entity that enters into an agreement with a client to perform some or all of the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client. A PEO also may manage human resources, employee benefits, workers compensation claims, and unemployment insurance claims for the client. The terms of a PEO arrangement typically provide that the PEO is the employer or “co-employer” of the workers and is responsible for paying the workers and for the related federal employment tax compliance. Under this arrangement, the PEO remits the wages to the workers and typically files, under its name and EIN, Forms 940 and 941 and, where applicable, Form CT–1 to report the wages or compensation and employment taxes it paid. Additionally, the PEO files Forms W–2 and Form W–3 with the SSA and furnishes a Form W–2 to each worker.
The client typically pays the PEO a fee based on payroll costs plus an additional amount. In most cases, however, the workers working in the client's business are the employees of the client under the common law rules, and the client is legally responsible for federal employment tax compliance, even though the PEO may also be legally responsible for federal employment tax compliance under § 31.3504–2.
The ABLE Act requires the IRS to establish a voluntary certification program for PEOs. Section 7705(a) defines a CPEO as a person that applies to the Secretary of the Treasury (Secretary) to be treated as a CPEO for purposes of section 3511 and has been certified by the Secretary as meeting certain requirements. Those requirements are described in the temporary regulations under section 7705 published in the Rules and Regulations portion of this issue of the
Under sections 3511(a)(1) and (c)(1), for purposes of federal employment taxes and other obligations under the federal employment tax rules, a CPEO is generally treated as the employer of any individual performing services for a customer of the CPEO and covered by a contract described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but only with respect to remuneration remitted to the individual by the CPEO. A contract meets the requirements of section 7705(e)(2) with respect to an individual performing services for the customer and, therefore, is a CPEO contract if the contract is in writing and provides that the CPEO will assume responsibility, without regard to the receipt or adequacy of payment from the customer, for: (1) Payment of wages to
With respect to an individual covered by a CPEO contract who performs services for a customer at a work site meeting the requirements of section 7705(e)(3) (a work site employee), section 3511(a)(1) specifies that no person other than the CPEO is treated as the employer for federal employment tax purposes with respect to remuneration remitted by the CPEO to such individual. A work site meets the requirements of section 7705(e)(3) with respect to an individual if at least 85 percent of the individuals performing services for the customer at the work site where the individual performs services are subject to one or more CPEO contracts with the CPEO. For this purpose, individuals who are excluded employees within the meaning of section 414(q)(5) (such as newly hired or part-time employees) are not taken into account.
Sections 3511(a)(2) and (c)(2) provide that the exceptions, exclusions, definitions, and other rules that are based on type of employer and that would apply if the CPEO were not treated as the employer under sections 3511(a)(1) or (c)(1) of the provision continue to apply. Thus, for example, if services performed in the employ of a customer that is a tax-exempt organization would be excluded from employment for FUTA purposes, the fact that a CPEO is treated as the employer for federal employment tax purposes does not affect the application of the exclusion.
On entering into a CPEO contract with a customer with respect to a work site employee, section 3511(b) provides that a CPEO is treated as a successor employer and the customer is treated as a predecessor employer during the term of the CPEO contract. On termination of a CPEO contract with respect to a work site employee, the customer is treated as a successor employer and the CPEO is treated as a predecessor employer.
For purposes of various tax credits enumerated in section 3511(d) under which the amount of the credit is determined by reference to the amount of federal employment taxes or the amount of wages subject to federal employment taxes, the credit with respect to a work site employee performing services for a customer applies to the customer, not to the CPEO. Consequently, in determining the amount of the credit, the customer, and not the CPEO, is to take into account federal employment taxes and wages paid by the CPEO with respect to the work site employee and for which the CPEO receives payment from the customer. The CPEO is required to furnish the customer and the Secretary with any information necessary for the customer to claim the credit.
The CPEO provisions do not apply in the case of a customer which bears a relationship to a CPEO described in section 267(b) (relating to transactions between related taxpayers) or section 707(b) (relating to transactions between a partner and partnership). In the application of such sections, rules based on more than 50 percent ownership are applied by substituting 10 percent for 50 percent.
A CPEO has no federal employment tax liability under section 3511(a) or (c) with respect to remuneration paid by the CPEO to an individual that constitutes net earnings from self-employment to the individual. Specifically, section 3511(f) provides that an individual with net earnings from self-employment derived from a CPEO customer's trade or business, including a partner of a customer that is a partnership, is not a work site employee for federal employment tax purposes with respect to remuneration paid by a CPEO. In addition, section 3511(c) provides that, for purposes of its federal employment tax liability, a CPEO is not treated as the employer of any individual covered by a CPEO contract and described in section 3511(f) with respect to remuneration paid by the CPEO to the individual. Together, these two provisions relieve the CPEO of any federal employment tax liability under section 3511(a) or (c) with respect to such self-employed individuals.
Under section 3511(g), the Secretary is directed to develop such reporting and recordkeeping rules, regulations, and procedures as the Secretary determines necessary or appropriate to ensure compliance with the applicable federal employment tax provisions by CPEOs. Such rules are to address: (1) Notification of the Secretary in the case of the commencement or termination of a service contract with a customer and the EIN of the customer; (2) information the Secretary determines is necessary for the customer to claim specified credits and the manner in which the information is to be provided; and (3) other information the Secretary determines is essential to promote compliance with respect to specified credits and FUTA credits under section 3302. Such rules are to be designed in a manner that streamlines, to the extent possible, the application of the requirements of sections 3511 and 7705, the exchange of information between a CPEO and its customers, and the reporting and recordkeeping obligations of the CPEO. Similarly, under section 3511(h), the Secretary is directed to prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 3511.
In addition to adding new sections 3511 and 7705 to the Code, the ABLE Act made conforming amendments to sections 3302, 3303(a), 6053(c), 6652, and 7528 relating to obligations, requirements, and penalties applicable to a CPEO. If a CPEO, or a customer of a CPEO, makes a contribution to a state's unemployment fund with respect to wages paid to a work site employee, the CPEO is eligible for the credits available under section 3302 with respect to such contribution. See section 3302(h). Similarly, under section 3303(a)(4), a CPEO is allowed an additional credit under section 3302(b) with respect to any reduced rate of contributions permitted by a state law if the Secretary of Labor finds that under such law the CPEO is permitted to collect and remit contributions during the taxable year to the state unemployment fund with respect to a work site employee. The Treasury Department and the IRS recognize that section 3302(h) and section 3303(a)(4) apply exclusively with respect to wages paid to work site employees and request comments on the application of the respective credits with respect to wages paid to individuals covered by a CPEO contract who are not work site employees.
For purposes of reporting requirements relating to large food or beverage establishments, section 6053(c)(8) provides that, if a CPEO is treated as the employer of a work site employee under section 3511, the customer for whom the work site employee performs services is the employer for purposes of the applicable reporting requirements. However, the CPEO is required to furnish the customer and the Secretary with any information the Secretary prescribes as necessary to complete the required reporting.
Section 6652 provides for certain penalties for failure to file certain information returns, registration statements, and similar reports. The ABLE Act provided a new penalty in section 6652(n) specifically for failures to timely make a complete report required under sections 3511, 6053(c)(8), or 7705. In the case of such a failure, section 6652(n) imposes a penalty to be paid (on notice and demand by the Secretary and in the same manner as tax) by the CPEO in an amount equal to $50 for each report with respect to which there was such a failure. In the case of any failure due to negligence or intentional disregard, an amount equal to $100 for each report shall be paid.
Finally, section 7528(b)(4) provides that the fee charged in connection with the CPEO program shall be an annual fee not to exceed $1,000 per year per applicant.
Section 7705 provides numerous statutory definitions related to the operation of section 3511. The proposed regulations incorporate these statutory definitions and clarify the following terms: Customer, covered employee, work site employee, work site, and self-employed individual.
The proposed regulations define a “customer” as any person who enters into a CPEO contract (that is, a contract that meets the requirements of section 7705(e)(2), as described in the Background section of this preamble) with a CPEO. A provider of employment-related services that uses its own EIN for filing federal employment tax returns on behalf of its clients (or who used its own EIN immediately prior to entering into a CPEO contract with the CPEO) is specifically excluded from being a customer of a CPEO for purposes of section 3511, even if such provider has entered into a CPEO contract with the CPEO and would, but for this exclusion, be a customer of the CPEO.
With respect to a customer, a “covered employee” is any individual (other than a self-employed individual, as described subsequently in this section of the preamble) who is covered by a CPEO contract with that customer. Consistent with section 7705(e), the proposed regulations define the term “work site employee” as a covered employee who performs services for a customer of a CPEO at a “work site” where at least 85 percent of the individuals performing services are subject to one or more CPEO contracts between the CPEO and the customer.
The proposed regulations generally define “work site” as a physical location at which an individual regularly performs services for a customer of a CPEO. If there is no such location, the work site is the location from which the customer assigns work to the individual. Thus, for example, the “work site” for a technician who performs assignments at various or changing locations is the location from which the technician is dispatched on each particular assignment. The work site may not be the individual's residence or a telework site unless the customer requires the individual to work at that site. In applying the term “work site,” contiguous locations are treated as a single physical location and thus a single work site, and noncontiguous locations that are not reasonably proximate are treated as separate physical locations and thus separate work sites. However, the CPEO may treat noncontiguous locations that are reasonably proximate as a single physical location and thus a single work site. Any two work sites that are separated by 35 or more miles or that operate in a different industry or industries will not be treated as reasonably proximate. The Treasury Department and the IRS recognize that, under certain circumstances, the physical location at which an individual regularly performs services for a customer may be difficult to ascertain. Accordingly, comments are requested on the definition of work site as set forth in § 301.7705–1(b)(16) and any additional clarifications that would facilitate a determination of an individual's work site.
The proposed regulations also provide that a covered employee will be considered a work site employee for the entirety of a calendar quarter if he or she qualifies as a work site employee at any time during that quarter. Consequently, for any calendar quarter, a covered employee is either a work site employee or not a work site employee for the entire quarter and cannot be a work site employee for part of the quarter and a non-work site employee for the other part. On the other hand, a covered employee can be a work site employee for one or more calendar quarters of the year and a non-work site employee for other calendar quarters during the same year.
The proposed regulations provide that the determination of whether a covered employee is a work site employee is made separately with regard to each work site at which the covered employee regularly provides services and for each customer for which the covered employee is providing services. If, during the same calendar quarter, a covered employee regularly provides services at more than one work site for a single customer or more than one customer of a particular CPEO, that employee may be counted among the covered employees at each of those sites. In accordance with section 7705(e)(3), the proposed regulations provide that, in determining whether the 85 percent threshold is met, individuals who are excluded employees within the meaning of section 414(q)(5) (such as newly hired or part-time employees) are not taken into account as either covered employees or individuals performing services, although such individuals may otherwise be covered employees and work site employees under the proposed regulations.
Finally, the proposed regulations also clarify that, in determining whether at least 85 percent of the individuals performing services are subject to one or more CPEO contracts between the CPEO and the customer, a self-employed individual who would be a covered employee but for the exclusion of self-employed individuals from the definition of covered employee (as described in this section of the preamble) is taken into account. For this and other purposes, the proposed regulations define a “self-employed individual” as an individual with net earnings from self-employment (as defined in section 1402(a) and without regard to the exceptions thereunder) derived from providing services covered by a CPEO contract, whether such net earnings are derived from providing services as a non-employee to a customer of a CPEO, from the individual's own trade or business as a sole proprietor customer of the CPEO, or as a partner in a partnership that is a customer of the CPEO, but only with regard to such net earnings. Accordingly, a self-employed individual, whether an independent contractor to the customer, a sole proprietor customer of the CPEO, or a partner in a partnership customer of the CPEO, is not considered to be a work site employee under section 3511(f) with regard to such earnings. However, in the limited case in which such an individual also is paid wages by a CPEO
Consistent with sections 3511(a)(1) and (c)(1), the proposed regulations provide that, for purposes of federal employment taxes and other obligations under the federal employment tax rules, a CPEO is treated as the employer of any covered employee (whether or not a work site employee), but only with respect to remuneration remitted to the individual by the CPEO. Consistent with section 3511(a)(1), the proposed regulations also provide that, with respect to a covered employee who is a work site employee, no person other than the CPEO will be treated as the employer of the work site employee for federal employment tax purposes with respect to remuneration remitted by the CPEO to such work site employee. In contrast, in the case of a covered employee who is not a work site employee, the proposed regulations provide that a person other than the CPEO is also treated as an employer of the employee for purposes of federal employment taxes imposed on remuneration remitted by the CPEO to the employee if such person is determined to be an employer of the employee without regard to the application of section 3511.
Under sections 3511(a)(2) and (c)(2), the exceptions, exclusions, definitions, and other rules that are based on the type of employer and that would apply if the CPEO were not treated as the employer under section 3511 continue to apply with respect to remuneration remitted by the CPEO. Thus, sections 3511(a)(2) and (c)(2) necessitate a determination of whether the CPEO, the customer, or a third party is the employer of a covered employee without regard to section 3511 for purposes of applying federal employment tax exemptions, exclusions, definitions, and other rules. Under the Code, the existence of an employer-employee relationship is generally determined by applying the common law rules to the particular facts and circumstances of each case. While the terms of a PEO arrangement typically provide that the PEO is the employer (or “co-employer”) of the employees and is responsible for paying the employees and for the related federal employment tax compliance, in most instances the customer is actually the common law employer of such employees.
To avoid the need to make a common law employment determination for purposes of sections 3511(a)(2) and (c)(2), the proposed regulations provide that, for purposes of federal employment taxes, the exemptions, exclusions, definitions, and other rules that are based on type of employer and that apply to remuneration remitted by a CPEO to a covered employee are presumed to be based on the customer for whom the covered employee provides services. Additionally, if a covered employee provides services for more than one customer of the CPEO during the calendar year, the presumption applies separately to remuneration remitted by the CPEO to the covered employee with respect to each such customer. This presumption in the proposed regulations generally eliminates the need to make a determination as to which person is the employer (in the absence of section 3511) for purposes of the exceptions, exclusions, definitions, and other rules that are based on type of employer.
The proposed regulations also provide, however, that the presumption may be rebutted if the Commissioner determines, or the CPEO demonstrates by clear and convincing evidence, that the relationship between the customer and the covered employee is not the legal relationship of employer and employee. If the presumption is rebutted, the exemptions, exclusions, definitions, and other rules that are based on type of employer and which apply to remuneration remitted by a CPEO to a covered employee will be based on the person determined to be the employer of the covered employee without regard to the application of section 3511. The presumption can be rebutted by a demonstration that either the CPEO or a third party other than the customer is actually the employer for federal employment tax purposes and, therefore, the proper party on which to base the exceptions, exclusions, definitions, and other rules. In any event, the presumption does not create any inference with respect to who is an employer or employee or whether an employment relationship exists for other federal tax purposes or any other provision of law.
Under sections 3511(a) and (c), a CPEO is treated as the employer of any covered employee with respect to remuneration remitted to the individual by the CPEO. Thus, pursuant to section 3511, a CPEO has an employment relationship with the covered employee of a customer during the term of the CPEO contract with the customer that is separate from and independent of any employment relationship the customer may have with the employee. Consequently, during the calendar year in which a CPEO enters into a CPEO contract with a customer with respect to a covered employee, the covered employee may receive remuneration from more than one employer.
The proposed regulations provide that, except as provided with respect to successor and predecessor employers described in section 5 of this preamble, remuneration received by a covered employee from a CPEO for performing services for a customer of the CPEO within any calendar year is subject to a separate annual wage base and withholding threshold that are each computed with respect to such remuneration, without regard to any remuneration received by the covered employee during the calendar year from any other employer (including, if applicable, remuneration received directly from the customer receiving services from the employee). Thus, upon entering into a CPEO contract with a customer with respect to a covered employee, the CPEO starts a new annual wage base and withholding threshold with respect to the covered employee (unless the CPEO is treated as a successor or predecessor employer, as described in section 5 of this preamble). Additionally, any remuneration paid by the customer directly to a covered employee during the term of a CPEO contract is not paid by the CPEO and, consequently, is not included in the CPEO's annual wage base and withholding threshold with respect to the covered employee.
The proposed regulations also provide that if, during a calendar year, a covered employee receives remuneration from a CPEO for services performed by the covered employee for more than one customer of the CPEO, the annual wage base and withholding threshold do not apply to the aggregate remuneration received by the covered employee from the CPEO for services performed for all such customers. Rather, the annual wage base and withholding threshold apply separately to the remuneration received by the covered employee from
Consistent with section 3511(b), the proposed regulations also provide that, for purposes of computing the annual wage base, a CPEO and its customer are treated as: (1) A successor and predecessor employer, respectively, upon entering into a CPEO contract with respect to a work site employee who is performing services for the customer; and (2) a predecessor and successor employer, respectively, upon termination of the CPEO contract between the CPEO and the customer with respect to the work site employee. Consistent with the quarterly work site employee determination discussed in section 1 of this preamble, the determination of whether an employee is a work site employee for this purpose is made during the quarter in which the CPEO enters into (or terminates) the CPEO contract with respect to the employee. That is, an employee will be considered a work site employee for the entirety of a calendar quarter if he or she qualifies as a work site employee at any time during that quarter. Accordingly, a CPEO is a successor employer (or predecessor employer) with regard to any covered employee who is a work site employee at any point during the quarter in which the CPEO entered into (or terminated) the CPEO contract with respect to the employee. On the other hand, as also noted in section 1 of this preamble, a covered employee can be a work site employee for one or more calendar quarters of the year and a non-work site employee for other calendar quarters during the same year. Accordingly, the proposed regulations provide that a CPEO entering into a CPEO contract with a customer with respect to a covered employee who is not a work site employee at any time during that calendar quarter will not be treated as a successor employer regardless of whether, during the term of the CPEO contract, the covered employee subsequently becomes a work site employee. Similarly, a CPEO terminating a CPEO contract with a customer with respect to a covered employee who is not a work site employee at any time during that calendar quarter will not be treated as a predecessor employer regardless of whether, during the term of the CPEO contract, the covered employee had previously been a work site employee. The quarterly determination of work site employee status is utilized for purposes of the successor employer and predecessor employer determinations (as well as for other purposes under the proposed regulations) in order to have a consistent quarterly work site employee determination for all purposes and therefore assist with administrability.
Section 3511(d) governs the treatment of various tax credits under which the amount of the credit is determined by reference to the amount of wages or federal employment taxes. Section 3511(d)(2) specifies these credits as the credits under section 41 (credit for increasing research activity), section 45A (Indian employment credit), section 45B (credit for portion of employer social security taxes paid with respect to employee cash tips), section 45C (clinical testing expenses for certain drugs for rare diseases or conditions), section 45R (employee health insurance expenses of small employers), section 51 (work opportunity credit), section 1396 (empowerment zone employment credit), and any other section as provided by the Secretary. Consistent with section 3511(d), the proposed regulations provide that any specified credit with respect to a work site employee performing services for a customer applies to the customer, not to the CPEO. Consequently, in determining the amount of the credit, the customer, and not the CPEO, takes into account wages and federal employment taxes paid by the CPEO with respect to the work site employee and for which the CPEO receives payment from the customer. As noted in the discussion of the annual wage base and withholding threshold in section 4 of this preamble, a CPEO must maintain a separate annual wage base and withholding threshold with respect to each customer for which a covered employee performs services during a calendar year. Consequently, with respect to a work site employee performing services for more than one customer of a CPEO during a calendar year, each customer for which the employee performs services takes into account wages and federal employment taxes paid by the CPEO only with respect to services performed by the work site employee for that customer in determining the treatment of credits by that customer. The proposed regulations also provide that, consistent with section 3511(d)(2)(H), the Commissioner may specify other credits subject to the treatment provided for under section 3511(d).
The proposed regulations do not specify any other credits, but the Treasury Department and the IRS request comments on whether other credits should be specified in these regulations or in other guidance. Additionally, the Treasury Department and the IRS recognize that the application of the specified tax credits to the customer under section 3511(d) applies exclusively with respect to work site employees. Accordingly, comments are also requested on the treatment of tax credits with respect to covered employees who are not work site employees.
Consistent with section 3511(e), the proposed regulations do not apply in the case of a customer that is related to the CPEO. For these purposes, the proposed regulations provide that a customer is related to a CPEO if that customer bears a relationship to a CPEO described in section 267(b) or section 707(b), except that “10 percent” will be substituted for “50 percent” wherever the latter term appears in those sections. For administrative purposes such as verifying correct CPEO employment tax reporting and determining whether successor employer rules apply, the IRS must know when a CPEO has entered into a CPEO contract with a customer. For this reason, the proposed regulations also exclude from section 3511 any customer that has commenced a service contract with a CPEO if the commencement of such service contract has not been reported to the IRS in accordance with the requirements described in § 31.3511–1(g)(3)(i) of the proposed regulations (discussed in section 8 of this preamble).
Consistent with section 3511(f), which provides that a self-employed
Finally, the proposed regulations provide that section 3511 does not apply to any CPEO contract in which a CPEO enters while its certification has been suspended by the IRS or to a CPEO whose certification has been revoked or voluntarily terminated.
Consistent with section 3511(g), the proposed regulations describe various recordkeeping and reporting requirements applicable to CPEOs that are designed to ensure compliance with the applicable federal employment tax provisions. Significantly, the proposed regulations provide that a CPEO that is treated as an employer of a covered employee pursuant to section 3511 must meet all reporting and recordkeeping requirements described in subtitle F of the Code that are applicable to employers in a manner consistent with such treatment. Additionally, a CPEO must file the returns required of all employers by subtitle F.
Moreover, a CPEO must file Forms 940 and 941, and all required accompanying schedules, on magnetic media unless the CPEO is provided a waiver by the Commissioner. The proposed regulations define magnetic media as electronic filing, as well as other media specifically permitted under the applicable regulations, revenue procedures, publications, forms, instructions, or other guidance.
Consistent with section 3511(g)(1), the proposed regulations provide that a CPEO must report information relating to the commencement or termination of any CPEO contract with a customer and the name and EIN of such customer.
The proposed regulations also provide that, with any Form 940 or Form 941 that a CPEO files, the CPEO must attach the applicable Schedule R (or any successor form) containing such information as the Commissioner may require about each of its customers under a CPEO contract and any clients under a service agreement described in § 31.3504–2(b)(2). As noted previously, a CPEO is also required to file Forms 940 and 941, including all required schedules, on magnetic media as a condition of certification.
So that the IRS can better reconcile the total amounts of wages and taxes reported on Forms 940 and 941 with the amounts of wages and taxes reported on the attached Schedule R, the proposed regulations provide that, in addition to providing information about each customer under a CPEO contract, a CPEO must also include such information as the Commissioner may require about each of its clients under a service agreement described in § 31.3504–2(b)(2) that is not a CPEO contract. To assist the IRS in verifying which entities reported on the Schedule R are customers under a CPEO contract, and which are clients under a service agreement described in § 31.3504–2(b)(2) that is not a CPEO contract, the proposed regulations require that a CPEO must also report information relating to the commencement or termination of a service agreement described in § 31.3504–2(b)(2) with a client, and the name and EIN of each such client.
In addition, the proposed regulations specify that a CPEO must provide periodic verification to the IRS that it continues to meet the CPEO certification requirements of the temporary regulations, as described in § 301.7705–2T(j), and report any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided by the CPEO to the IRS, as described in § 301.7705–2T(k). The time and manner of this ongoing periodic verification will be specified in further guidance. Finally, the proposed regulations require that a CPEO provide: (1) A copy of its audited financial statements and an opinion of a certified public accountant regarding such financial statements, as described in § 301.7705–2T(e)(1); (2) the quarterly statements, assertions, and attestations regarding those assertions described in § 301.7705–2T(f); (3) any information that the IRS specifies in further guidance is necessary to promote compliance with respect to the credits described in § 31.3511–1(e)(2) of the proposed regulations and section 3302; and (4) any other information the Commissioner may prescribe in further guidance.
The proposed regulations require a CPEO to report certain information to its customers. Consistent with sections 3511(g)(2) and (3), a CPEO must provide each of its customers with the information necessary for the customer to claim the specified credits for which the amount of the credit is determined by reference to the amount of wages or federal employment taxes. The proposed regulations provide that a CPEO must also notify the customer if its CPEO contract has been transferred to another person (or if another person will report, withhold, or pay, under such other person's EIN, any applicable federal employment taxes with respect to the wages of any individuals covered by its CPEO contract), and provide the customer with the name and EIN of such other person. In addition, a CPEO must also notify each of its current customers of any suspension or revocation of the CPEO's certification. Finally, if any covered employees are not or cease to be work site employees with respect to a calendar quarter because they perform services at a location at which the 85 percent threshold described in section 1 of this preamble is no longer met, the proposed regulations provide that the CPEO must notify the customer that it may be liable for federal employment taxes imposed on remuneration remitted by the CPEO to such covered employees.
The proposed regulations provide that any CPEO contract with a customer must: (1) Contain the name and EIN of the CPEO reporting, withholding, and paying any applicable federal employment taxes with respect to any remuneration paid to individuals covered by the CPEO contract or service agreement; (2) require the CPEO to provide the customer with all of the notices and information described in section 8.b of this preamble; (3) describe the information that the CPEO will provide which is necessary for the customer to claim credits; and (4) specify that the CPEO must notify the customer that the customer may also be liable for federal employment taxes on remuneration remitted by the CPEO to covered employees if the sites at which they perform services do not (or ever cease to) meet the 85 percent threshold described in § 301.7705–1(b)(18). The proposed regulations also provide that if a service agreement described in § 31.3504–2(b)(2) is not a CPEO contract (and thus the employees covered by that
Although the ABLE Act provided the new penalty under section 6652(n) for failures to timely make required reports under sections 3511, 6053(c)(8), and 7705, the Treasury Department and the IRS note that many of the reports required under sections 3511 and 7705 are also subject to existing penalties and additions to tax. For example, because CPEOs are treated as employers of covered employees, CPEOs must meet the reporting requirements applicable to employers, including the filing of quarterly Forms 941. A CPEO that fails to file a Form 941 is subject to the addition to tax under section 6651(a)(1). Accordingly, the proposed regulations provide that a CPEO that is treated as an employer of a covered employee under section 3511 and that is required to meet the reporting requirements of an employer is subject to the same penalties and additions to tax as an employer with respect to such reporting requirements, including but not limited to penalties and additions to tax under sections 6651, 6656, 6672, 6721, 6722, and 6723.
The proposed regulations further clarify that the section 6652(n) penalty will apply to reports required under section 3511. The proposed regulations provide that a CPEO is subject to penalty under section 6652(n) for any failure to attach the applicable Schedule R (or any successor form) to Forms 940 or 941. The proposed regulations also provide that the CPEO is subject to penalty under section 6723 for any failure (including multiple failures within a single document) to include the EIN of each customer on Schedule R.
Finally, the proposed regulations clarify that, because the requirement to file Forms 940 and 941 on magnetic media is a condition of certification, any failure to file those forms, along with all required schedules, on magnetic media does not constitute a failure to file for the purposes of the section 6651(a)(1) addition to tax or failure to make a report for the purposes of the penalty under section 6652(n). The consequence of any failure to file these forms and associated schedules on magnetic media is the potential suspension or revocation of certification as a CPEO.
These regulations are proposed to be effective on and after the date these rules are published in the
IRS revenue procedures, revenue rulings, notices, and other guidance cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by visiting the IRS Web site at
Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the regulations will not have a significant economic impact on a substantial number of small entities. The collection of information is in §§ 31.3511–1(g) and 301.7705–2T. The certification is based on the following:
The Treasury Department and the IRS anticipate that the organizations that choose to apply for this voluntary certification program are likely to be entities that already have many of the systems and processes in place that are needed to comply with these regulations. For example, it is expected that CPEOs will generally maintain annual audited financial statements during the normal course of their business, rather than solely as a result of § 301.7705–2T(e). Moreover, the requirements in §§ 301.7705–2T(e) and (f) for demonstrating positive working capital on an annual basis and for the quarterly assertions regarding employment tax compliance build upon requirements already reflected in many state PEO certification and registration laws, thereby minimizing the economic impact on those CPEO applicants already subject to the similar state law requirements.
In addition, many of the requirements in §§ 31.3511–1(g) and 301.7705–2T that impose a collection of information on CPEOs constitute one-time notifications to the IRS, customers, or clients or notifications that relate to events in the life cycle of a CPEO that are less predictable and may be infrequent—such as transfers of existing CPEO contracts, making material changes to agreements previously provided to the IRS, suspension or revocation of the CPEO's certification, or the reclassification of employees at a particular work site as non-work site employees—and thus will have a minimal economic impact on the CPEO. Moreover, the Treasury Department and the IRS expect that CPEOs participating in this voluntary program will be able to build upon pre-existing systems and processes through which they already communicate with their clients.
For these reasons, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the
The principal authors of these regulations are Melissa Duce, Andrew Holubeck, and Neil Shepherd of the Office of Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the Treasury Department and the IRS participated in the development of these regulations.
Employment taxes, Income taxes, Penalties, Pensions, Railroad retirement,
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR parts 31 and 301 are proposed to be amended as follows:
26 U.S.C. 7805 * * *
Section 31.3511–1 is also issued under 26 U.S.C. 3511(h).
(a)
(2)
(3)
(b)
(2)
(3)
(c)
(2)
(d)
(i) A successor and predecessor employer, respectively, upon entering into a CPEO contract with respect to a work site employee who is performing services for the customer; and
(ii) A predecessor and successor employer, respectively, upon termination of the CPEO contract between the CPEO and the customer with respect to the work site employee who is performing services for the customer.
(2)
(e)
(i) The credit with respect to a work site employee performing services for a customer applies to the customer, not to the CPEO; and
(ii) In computing the credit, the customer, and not the CPEO, is to take into account wages and federal employment taxes paid by the CPEO with respect to the work site employee and for which the CPEO receives payment from the customer.
(2)
(i) Section 41 (credit for increasing research activity);
(ii) Section 45A (Indian employment credit);
(iii) Section 45B (credit for portion of employer social security taxes paid with respect to employee cash tips);
(iv) Section 45C (clinical testing expenses for certain drugs for rare diseases or conditions);
(v) Section 45R (employee health insurance expenses for small employers);
(vi) Section 51 (work opportunity credit);
(vii) Section 1396 (empowerment zone employment credit); and
(viii) Any other section specified by the Commissioner in further guidance (as defined in § 301.7705–1T(b)(8) of this chapter).
(f)
(1) In the case of any customer that—
(i) Has a relationship to a CPEO described in section 267(b) (including, by cross-reference, section 267(f)) or section 707(b), except that “10 percent” shall be substituted for “50 percent” wherever it appears in such sections; or
(ii) Has commenced a CPEO contract with the CPEO but such commencement has not been reported to the IRS as described in paragraph (g)(3)(i) of this section; or
(2) To remuneration paid by a CPEO to any self-employed individual (as defined in § 301.7705–1(b)(14) of this chapter);
(3) To any CPEO contract that a CPEO enters into while its certification has been suspended by the IRS; or
(4) To any CPEO whose certification has been revoked or voluntarily terminated.
(g)
(2)
(ii)
(iii)
(3)
(i) The commencement or termination of any CPEO contract (as defined in § 301.7705–1(b)(3) of this chapter) with a customer, or any service agreement described in § 31.3504–2(b)(2) with a client, and the name and employer identification number (EIN) of such customer or client.
(ii) With any Form 940 and Form 941 that it files, all required schedules, including but not limited to the applicable Schedule R (or any successor form), containing such information as the Commissioner may require about each of its customers under a CPEO contract (as defined in § 301.7705–1(b)(3) of this chapter) and each of its clients under a service agreement described in § 31.3504–2(b)(2). A CPEO must file Form 940 and Form 941, along with all required schedules, on magnetic media, unless the CPEO is granted a waiver by the Commissioner in accordance with paragraph (g)(2)(ii) of this section.
(iii) A periodic verification that it continues to meet the requirements of § 301.7705–2T of this chapter, as described in § 301.7705–2T(j).
(iv) Any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided by the CPEO to the IRS, as described in § 301.7705–2T(k) of this chapter.
(v) A copy of its audited financial statements and an opinion of a certified public accountant regarding such financial statements, as described in § 301.7705–2T(e)(1) of this chapter.
(vi) The quarterly statements, assertions, and attestations regarding those assertions described in § 301.7705–2T(f)(1) of this chapter.
(vii) Any information the IRS determines is necessary to promote compliance with respect to the credits described in paragraph (e)(2) of this section and section 3302.
(viii) Any other information the Commissioner may prescribe in further guidance.
(4)
(i) Provide each of its customers with the information necessary for the customer to claim the credits described in paragraph (e)(2) of this section.
(ii) Notify any customer if its CPEO contract has been transferred to another person (or if another person will report, withhold, or pay, under such other person's EIN, any applicable federal employment taxes with respect to the wages of any individuals covered by its CPEO contract) and provide the customer with the name and EIN of such other person.
(iii) If the CPEO's certification is suspended or revoked as described in § 301.7705–2T(n) of this chapter, notify each of its current customers of such suspension or revocation.
(iv) If any covered employees are not or cease to be work site employees because they perform services at a location at which the 85 percent threshold described in § 301.7705–1(b)(17) of this chapter is not met, notify the customer that it may also be liable for federal employment taxes imposed on remuneration remitted by the CPEO to such covered employees, as described in paragraph (a)(3) of this section.
(5)
(i) In the case of a contract that is a CPEO contract,—
(A) Contain the name and EIN of the CPEO reporting, withholding, and paying any applicable federal employment taxes with respect to any remuneration paid to individuals covered by the contract or agreement;
(B) Require the CPEO to provide to the customer the notices and information required by paragraph (g)(4) of this section;
(C) Describe the information that the CPEO will provide that is necessary for the customer to claim the credits specified in paragraph (e)(2) of this section; and
(D) Require the CPEO to notify the customer that the customer may also be liable for federal employment taxes on remuneration remitted by the CPEO to covered employees if the work sites at which they perform services do not (or ever cease to) meet the 85 percent threshold described in § 301.7705–1(b)(17) of this chapter; and
(ii) In the case of a service agreement described in § 31.3504–2(b)(2) that is not a CPEO contract (and thus the individuals covered by that contract are not covered employees), or if this section does not apply to the contract under paragraph (f) of this section, notify, or be accompanied by a notification to, the client that the service agreement or contract is not covered by section 3511 and does not alter the client's liability for federal employment taxes on remuneration remitted by the CPEO to the employees covered by the service agreement or contract.
(h)
(2)
(3)
(4)
(i)
26 U.S.C. 7805 * * *
Section 301.7705–1 also issued under 26 U.S.C. 7705(h).
Section 301.7705–2 also issued under 26 U.S.C. 7705(h).
(a) The definitions set forth in this section apply for purposes of this section, §§ 31.3511–1 and 301.7705–2, and sections 3302(h), 3303(a)(4), 6053(c)(8), and 7528(b)(4).
(b) [The text of proposed § 301.7705–1(b)(1) through (2) is the same as the text of § 301.7705–1T(b)(1) through (2) published elsewhere in this issue of the
(3)
(i) Assume responsibility for payment of wages to the individual, without regard to the receipt or adequacy of payment from the customer for the services;
(ii) Assume responsibility for reporting, withholding, and paying any applicable federal employment taxes with respect to the individual's wages, without regard to the receipt or adequacy of payment from the customer for the services;
(iii) Assume responsibility for any employee benefits that the service contract may require the CPEO to provide to the individual, without regard to the receipt or adequacy of payment from the customer for such benefits;
(iv) Assume responsibility for recruiting, hiring, and firing the individual in addition to the customer's responsibility for recruiting, hiring, and firing the individual;
(v) Maintain employee records relating to the individual; and
(vi) Agree to be treated as a CPEO for purposes of section 3511 with respect to the individual.
(4) [The text of proposed § 301.7705–1(b)(4) is the same as the text of § 301.7705–1T(b)(4) published elsewhere in this issue of the
(5)
(6)
(ii)
(7) [The text of proposed § 301.7705–1(b)(7) through (13) is the same as the text of § 301.7705–1T(b)(7) through (13) published elsewhere in this issue of the
(14)
(15) [The text of proposed § 301.7705–1(b)(15) is the same as the text of § 301.7705–1T(b)(15) published elsewhere in this issue of the
(16)
(17)
(ii)
(iii)
(iv)
(v)
(c) [The text of proposed § 301.7705–1(c)(1) is the same as the text of § 301.7705–1T(c)(1) published elsewhere in this issue of the
(2)
[The text of proposed § 301.7705–2 is the same as the text of § 301.7705–2T published elsewhere in this issue of the
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to modify the operating schedule for all drawbridges over the Fox River between DePere, WI and Oshkosh, WI. A review of the current regulation was requested by the Wisconsin Department of Transportation and the Fox River Navigational System Authority.
Comments and related material must reach the Coast Guard on or before: June 20, 2016.
You may submit comments identified by docket number USCG–2016–0256 using Federal eRulemaking Portal at
See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or email Mr. Lee D. Soule, Bridge Management Specialist, Ninth Coast Guard District; telephone 216–902–6085, email
This proposed rule was requested by WIS–DOT and FRNSA to align drawbridge operating schedules with lock schedules, and make the yearly
The Coast Guard proposes to amend the Fox River regulation at 33 CFR 117.1087. This proposed rule removes George Street Bridge from the regulation, establishes consistent annual dates for drawbridge schedules between river miles 7.13 and 58.3, eliminates currently exempted bridge opening times during certain days and times in Oshkosh, makes permanent the requirement for vessels to provide 2-hours advance notice between midnight and 8 a.m., and establishes the winter bridge operating schedules throughout the entire river system.
Currently, the regulation for Fox River drawbridges includes the opening schedule for drawbridges in Green Bay, WI, where large commercial vessel traffic continues to transit. This proposed rule does not include any changes to the schedules for drawbridges over the commercial ship channel in Green Bay.
The sections of the current regulation that includes all other drawbridges between river mile 7.13 in DePere, WI at the DePere Pedestrian Bridge, to river mile 58.3 in Oshkosh, WI, describe inconsistent dates and times for required drawbridge openings, particularly for the four highway drawbridges in Oshkosh. They also include a reference to George Street Bridge at mile 7.27. George Street Bridge has been removed since the last update of these regulations. The Oshkosh drawbridges in the current regulation contain exemptions during certain dates and times where the drawbridges are not required to open for vessels or vessels must provide advance notice prior to passing during nighttime hours.
This proposed rule establishes the requirement for all drawbridges, except the Canadian National Railroad (CN–RR) Bridge at mile 55.72 in Oshkosh, to open on signal between the hours of 8 a.m. and midnight each day from April 27 to October 7 every year. This schedule would match the lock schedule established by FRNSA and drawbridge schedules used by WIS–DOT. Between the hours of midnight and 8 a.m., except for the CN–RR Bridge in Oshkosh, all drawbridges would open for vessels if at least 2-hours advance notice of arrival is provided.
The CN–RR Bridge at mile 55.72 in Oshkosh is located where Fox River feeds into the southwest section of Lake Winnebago. The portion of Fox River in the Oshkosh area, and Lake Winnebago, are among the busiest portions of the Fox River System for recreational vessel traffic. The CN–RR Bridge provides 6 feet of vertical clearance in the closed position and prevents most vessels from passing under the bridge, thereby requiring the drawbridge to open regularly for vessels. This is also the location of first responders and public safety vessels that may require the bridge to open at any time to perform rescue or emergency operations on Lake Winnebago. Vessels in distress or seeking shelter from weather on Lake Winnebago may also need the CN–RR Bridge to open at any time. A delay in bridge openings at this location may endanger life or property and is therefore exempted from the proposed 2-hour advance notice requirement from vessels for all other drawbridges between midnight and 8 a.m.
All drawbridges would be required to open if at least 12-hours advance notice is provided prior to passing between October 8 and April 26 each year.
The proposed dates, times, and conditions have been employed by local authorities for approximately 10 years and are generally accepted by vessel operators in the area as established conditions. The proposed dates, times, and conditions have also been reviewed and accepted by WIS–DOT and FRNSA during the development of this NPRM.
We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on these statutes and Executive Orders and discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice during times when vessel traffic is at its lowest. The proposed drawbridge schedule is virtually the same as has been used by vessel operators in the area for approximately 10 years.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601–612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. This proposed rule standardizes drawbridge schedules that have been in place and would not have a significant economic impact on any vessel owner or operator because the bridges will open with advance notice during low traffic times on the waterway or when ice conditions hinder normal navigation.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520.).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule will not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This proposed rule simply promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under figure 2–1, paragraph (32)(e), of the Instruction.
Under figure 2–1, paragraph (32)(e), of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this notice, and all public comments, are in our online docket at
Bridges.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05–1; Department of Homeland Security Delegation No. 0170.1.
(b) All drawbridges between mile 7.13 in DePere and mile 58.3 in Oshkosh, except the Canadian National Railroad Bridge at mile 55.72, shall open as follows:
(1) From April 27 through October 7, the draws shall open on signal, except between the hours of midnight and 8 a.m. when the draws shall open if at least 2-hours advance notice is given.
(2) From October 8 through April 26, the draws shall open if at least 12-hours advance notice is given.
(c) The draw of the Canadian National Railroad Bridge at mile 55.72 shall open on signal, except from October 8 through April 26 when the draw shall open if at least 12-hours advance notice is given.
Office of Special Education and Rehabilitative Services, Department of Education.
Proposed priority.
The Assistant Secretary for Special Education and Rehabilitative
We must receive your comments on or before June 6, 2016.
Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments.
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The Department's policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at
Kristen Rhinehart-Fernandez. Telephone: (202) 245–6103 or by email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1–800–877–8339.
We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from this proposed priority. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.
During and after the comment period, you may inspect all public comments about these proposed regulations by accessing Regulations.gov. You may also inspect the comments in person in Room 5040, 550 12th Street SW., PCP, Washington, DC 20202–5076, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, Monday through Friday of each week except Federal holidays. Please contact the person listed under
Over the past 20 years, the fields of interpreting and interpreter training have changed significantly in order to effectively respond to the evolving needs of children and adults in the United States who are deaf,
In 2016, the National Interpreter Education Center (NIEC) released a report based on information and input collected over current and previous grant cycles through needs assessments, national surveys, and survey software platforms. A practitioner survey was conducted in 2014 to gather data from interpreters on their experiences in interpreting for consumers who are deaf and hard of hearing. One question on the survey asked interpreters whether they have served an increased number of deaf individuals with idiosyncratic language. Overall, 24 percent of respondents reported an increase in the number of individuals with idiosyncratic language served, and 38 percent of respondents reported the numbers of individuals with idiosyncratic sign language have “remained the same.” This trend dates back more than five years (Schafer and Cokely, 2016). The 2014 Practitioner survey also illustrates a growing demand for trilingual interpreting services. In that survey, 68 percent of respondents reported a need for third language fluency (Schafer and Cokely, 2016).
The data from the 2014 Practitioner Survey was substantiated by data from the 2015 National Interpreter Education Center Trends Survey. In the Trends survey, 66 percent of service provider
The 2015 Trends Survey also indicates that Federal legislation mandating communication access may have begun to pay off, creating more opportunities for deaf individuals to pursue postsecondary and graduate level education and specialized training. As a result, individuals who are deaf and hard of hearing are obtaining jobs in law, medicine, engineering, higher education, and high tech industries in greater numbers. The Trends Survey documented 47 percent of service providers reporting the number of deaf individuals pursuing education or employment in specialized fields increasing (Schafer and Cokely, 2016).
The data from the 2014 Practitioner Survey and 2015 Trends Survey give support to the conclusion that interpreters must be able to understand and communicate proficiently using technical vocabulary and highly specialized discourse in a variety of complex subject matters in both ASL and English. Interpreters must also be prepared to meet the communication needs of individuals who are “Deaf Plus”
Training, even for qualified interpreters, is needed in all of these specialized areas to build a workforce that is reflective of the population it serves and equipped to meet a variety of extremely diverse communication needs. To address this problem, the Assistant Secretary proposes a priority to establish projects to train interpreters in specialized areas.
Apart from this, generally, the pool of qualified interpreters is insufficient to meet the needs of deaf consumers in the United States. For this reason, we are publishing a proposed priority elsewhere in the
Schafer, Trudy, MPA. MIP, Center Director, and Cokely, Dennis, Ph.D., Principle Investigator, “Report on the National Needs Assessment Initiative New Challenges-Needed Challenges” (National Interpreter Education Center at Northeastern University) (March 2016).
The purpose of this priority is to fund projects that provide training for English-American Sign Language (ASL) interpreter training in specialized areas. The training must be provided to working interpreters (
During the project, applicants must develop and deliver training of sufficient scope, intensity, and duration for working interpreters to achieve increased skill, knowledge, and competence in a specialty area. Applicants may develop a new training program or stand-alone modules that could also be incorporated into an existing baccalaureate degree ASL-English program. The training program or modules must be developed by the end of the first year of the project period and delivered in years two, three, four, and five of the project period.
The projects must be designed to achieve, at a minimum, the following outcomes:
(a) An increase in the number of interpreters who are trained to work with deaf consumers who require specialized interpreting; and
(b) An increase in the number of interpreters trained in specialty areas who obtain or advance in employment in the areas for which they were prepared.
To be considered for funding, applicants must meet the requirements contained in this proposed priority, which are as follows:
(a) Demonstrate, in the narrative section of the application under “Significance of the Project,” how the proposed project will address the need for sign language interpreters in a specialized area. To address this requirement, applicants must:
(1) Present applicable data demonstrating the need for interpreters in the specialty area for which training will be developed by the project in at least three distinct, noncontiguous geographic areas, which may include the U.S. Territories;
(2) Explain how the project will increase the number of working interpreters in a specialty area who demonstrate the necessary competencies to meet the communication needs of individuals who are deaf, hard of hearing, or deaf-blind. To meet this requirement, the applicant must—
(i) Identify competencies working interpreters must demonstrate in order to provide high-quality services in the identified specialty area using practices that are promising or based on instruction supported by evidence and intervention, when available; and
(ii) Demonstrate that the identified competencies are based on practices that are promising or supported by evidence that will result in effectively meeting the communication needs of individuals who are deaf, hard of hearing, or deaf-blind.
(b) Demonstrate, in the narrative section of the application under “Quality of Project Design,” how the proposed project will—
(1) Provide training in person or remotely to at least three distinct, noncontiguous geographic areas identified in paragraph (a)(1);
(2) Identify and partner with trainers who are certified and recognized in the specialty area through formal or informal certification to develop and deliver the training. If certification is not available in the specialty area, provide evidence of relevant training and experience (
(3) Be based on current research and make use of practices that are promising or supported by evidence. To meet this requirement, the applicant must describe—
(i) How the proposed project will incorporate current research and practices that are promising or supported by evidence in the development and delivery of its products and services;
(ii) How the proposed project will engage working interpreters with different learning styles; and
(iii) How the proposed project will ensure working interpreters interact
(c) In the narrative section of the application under “Quality of Project Services,” the applicant must—
(1) Demonstrate how the project will ensure equal access and treatment for eligible project participants who are members of groups who have traditionally been underrepresented based on race, color, national origin, gender, age, or disability;
(2) Describe the criteria that will be used to identify high-quality applicants for participation in the program, including any pre-assessments that may be used to determine the skill, knowledge base, and competence of the working interpreter;
(3) Describe the recruitment strategies the project will use to attract high-quality working interpreters, including specific strategies targeting high-quality participants from traditionally underrepresented groups (
(4) Describe how the project will ensure that all training activities and materials are fully accessible;
(5) Describe the approach that will be used to enable more working interpreters to participate in and successfully complete the training program, specifically participants who need to work while in the program, have child care or elder care considerations, or live in geographically isolated areas. The approach must emphasize innovative instructional delivery methods, such as distance learning or block scheduling (a type of academic scheduling that offers students fewer classes per day for longer periods of time), which would allow working interpreters to more easily participate in the program;
(6) Describe the approach that will be used to enable working interpreters to successfully complete the program or stand-alone modules, to include mentoring, monitoring, and accommodation support services;
(7) Describe how the project will incorporate practices that are promising and supported by evidence for adult learners;
(8) Demonstrate how the project is of sufficient scope, intensity, and duration to adequately prepare working interpreters in the identified specialty area of training. To address this requirement, the applicant must describe how—
(i) The components of the proposed project will support working interpreters' acquisition and enhancement of the competencies identified in paragraph (a)(2)(i);
(ii) The components of the project will allow working interpreters to apply their content knowledge in a practical setting;
(iii) The proposed project will provide working interpreters with ongoing guidance and feedback; and
(iv) The proposed project will provide ongoing induction opportunities and support working interpreters after completion of the specialty area program.
(9) Demonstrate how the proposed project will actively engage representation from consumers, consumer organizations, and service providers, especially vocational rehabilitation (VR) agencies, interpreters, interpreter training programs, and individuals who are deaf and deaf-blind in the project, including project development, design, implementation, delivery of training, dissemination, sustainability planning, program evaluation, and other relevant areas as determined by the applicant;
(10) Describe how the project will conduct dissemination and coordination activities. To meet this requirement, the applicant must—
(i) Describe its plan for disseminating information to and coordinating with VR agencies, American Job Centers and other workforce partners regarding finding interpreters with the specialized interpreting skills needed; disseminating information to working interpreters about training available in the specialized area, and broadly disseminating successful strategies for preparing working interpreters in a specialized area;
(ii) Describe its strategy for disseminating products developed during the project period. To meet this requirement the applicant must—
(A) Develop and maintain a state-of-the-art archiving and dissemination system that is open and available to the public and provides a central location for later use of training materials, including curricula, audiovisual materials, Webinars, examples of emerging and promising practices, and any other relevant material;
(B) Provide a minimum of three Webinars or video conferences over the course of the project. Applicants may determine the audience, content, and goals of this activity. For instance, applicants may consider disseminating information to working interpreters not enrolled in the program about training in a specialty area, as well as interacting with interpreter educators about the curriculum or training module design, challenges, solutions, and results achieved.
All products produced by the grantees must meet government- and industry-recognized standards for accessibility, including section 508 of the Rehabilitation Act.
(iii) Describe its approach for incorporating the use of information technology (IT) into all aspects of the project. The approach must include establishing and maintaining a state-of-the-art IT platform that is sufficient to support Webinars, teleconferences, video conferences, and other virtual methods of dissemination of information.
In meeting the requirements mentioned in paragraphs (c)(10)(ii)(A) and (B) and (c)(10)(iii) above, projects may either develop new platforms or systems or may modify existing platforms or systems, so long as the requirements of this priority are met.
(iv) Describe its approach for conducting coordination and collaboration activities. To meet this requirement, the applicant must—
(A) Establish a community of practice
(B) Communicate, collaborate, and coordinate with other relevant Department-funded projects, as applicable;
(C) Maintain ongoing communication with the RSA project officer and other RSA staff as required; and
(D) Communicate, collaborate, and coordinate, as appropriate, with key staff in State VR agencies, such as the State Coordinators for the Deaf; State and local partner programs; consumer organizations and associations, including those that represent individuals who are deaf, hard of hearing, deaf-blind, and late deafened; and relevant RSA partner organizations and associations.
(d) In the narrative section of the application under “Quality of the Evaluation Plan,” include an evaluation plan for the project. To address this requirement, the evaluation plan must describe—
(1) An approach, using pre- and post-assessments, for assessing the level of knowledge, skills, and competencies gained among participants;
(2) An approach for assessing the application of knowledge, skills, and competencies after completion; and
(3) An approach for incorporating oral and written feedback from trainers, from deaf consumers, and any feedback from mentoring sessions conducted with the participants;
(4) Evaluation methodologies, including instruments, data collection methods, and analyses that will be used to evaluate the project;
(5) Measures of progress in implementation, including the extent to which the project's activities and products have reached their target populations; intended outcomes or results of the project's activities in order to evaluate those activities; and how well the goals and objectives of the proposed project, as described in its logic model,
(6) How the evaluation plan will be implemented and revised, as needed, during the project. The applicant must designate at least one individual with sufficient dedicated time, experience in evaluation, and knowledge of the project to coordinate the design and implementation of the evaluation. For example, coordination with any identified partners in the application and RSA to make revisions post award to the logic model in order to reflect any changes or clarifications to the model and to the evaluation design and instrumentation with the logic model (
(7) The standards and targets for determining effectiveness of the project;
(8) How evaluation results will be used to examine the effectiveness of implementation and the progress toward achieving the intended outcomes; and
(9) How the methods of evaluation will produce quantitative and qualitative data that demonstrate whether the project activities achieved their intended outcomes.
(e) Demonstrate, in the narrative section of the application under “Adequacy of Project Resources,” how—
(1) The proposed project will encourage applications for employment with the project from persons who are members of groups that have historically been underrepresented based on race, color, national origin, gender, age, or disability;
(2) The proposed project personnel, consultants, and subcontractors have the qualifications and experience to provide training to working interpreters and to achieve the project's intended outcomes;
(3) The applicant and any identified partners have adequate resources to carry out the proposed activities; and
(4) The proposed costs are reasonable in relation to the anticipated results and benefits;
(f) Demonstrate, in the narrative section of the application under “Quality of the Management Plan,” how—
(1) The proposed management plan will ensure that the project's intended outcomes will be achieved on time and within budget. To address this requirement, the applicant must describe—
(i) Clearly defined responsibilities for key project personnel, consultants, and subcontractors, as applicable; and
(ii) Timelines and milestones for accomplishing the project tasks.
(2) Key project personnel and any consultants and subcontractors will be allocated to the project and how these allocations are appropriate and adequate to achieve the project's intended outcomes, including an assurance that such personnel will have adequate availability to ensure timely communications with stakeholders and RSA;
(3) The proposed management plan will ensure that the products and services provided are of high quality; and
(4) The proposed project will benefit from a diversity of perspectives, especially relevant partners, groups, and organizations described throughout this notice, in its development and operation.
(g) Address the following application requirements. The applicant must—
(1) Include, in Appendix A, a logic model that depicts, at a minimum, the goals, activities, outputs, and intended outcomes of the proposed project;
(2) Include, in Appendix A, person-loading charts and timelines, as applicable, to illustrate the management plan described in the narrative; and
(3) Include, in the budget, attendance at a one-day intensive review meeting in Washington, DC, during the third quarter of the third year of the project period.
With this proposed priority, the Secretary intends to fund four national projects in the following specialty areas: (1) Interpreting for consumers with dysfluent language competencies (
Interpreting for consumers with dysfluent language competencies include: (1) Those with limited, idiosyncratic, or differing levels of first and second language fluency in English and ASL); (2) those who have families using non-English spoken languages at home and have limited or no fluency in English and ASL; (3) those with cognitive and physical disabilities that impact linguistic competencies; and (4) those who are deaf-blind with varying levels of vision and hearing functions.
Trilingual interpreting is interpreting between three different languages; that is, two spoken languages such as English and Spanish, and ASL. This requires a working interpreter to be competent in three different languages and seamlessly facilitate communication between those languages in real time. RSA is seeking to fund similar projects in trilingual interpreting that includes languages that may be spoken in the United States.
During the 2010–2016 grant cycle, RSA funded the development of trilingual interpreting specialized training between English and Spanish, and ASL. Therefore, proposals focusing on English and Spanish, and ASL are
Field-initiated topics that address the needs of working interpreters to acquire specialized knowledge and competencies. These topics may address new specialty areas that require development of training modules of sufficient intensity, duration, and scope of sequence to warrant funding of an entire grant. Proposed topics may also
Field-initiated topics
The Secretary intends to fund a total of four projects in FY 2016 that have been awarded at least eighty-percent of the maximum possible points, including at least one project from each of the three specialty areas. As a result, the Secretary may fund applications out of rank order.
When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the
Final Priority: We will announce the final priority in a notice in the
This notice does
Under Executive Order 12866, the Secretary must determine whether this proposed regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);
(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement 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 stated in the Executive order.
This proposed regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.
We have also reviewed this proposed regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that would maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing this proposed priority only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action would not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.
In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for
Through this priority, working interpreters will receive training in a specialty area in order to better meet the communication needs of individuals who are deaf, including consumers of VR. The training ultimately will improve the quality of VR services and the competitive integrated employment outcomes achieved by individuals with disabilities. This priority would promote the efficient and effective use of Federal funds.
As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public understands the Department's collection instructions, respondents can provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.
This proposed priority contains information collection requirements that are approved by OMB under the National Interpreter Education program 1820–0018; this proposed regulation does not affect the currently approved data collection.
This document provides early notification of our specific plans and actions for this program.
United States Patent and Trademark Office, Commerce.
Request for comments.
The United States Patent and Trademark Office (USPTO) issued the July 2015 Update: Subject Matter Eligibility (July 2015 Update) to provide further guidance to examiners in determining subject matter eligibility under 35 U.S.C. 101. The USPTO announced the July 2015 Update in the
The comment period is open-ended, and comments will be accepted on an ongoing basis.
Comments must be sent by electronic mail message over the Internet addressed to:
Regarding the examiner memorandum, contact Matthew Sked, by telephone at 571–272–7627, or Carolyn Kosowski, by telephone at 571–272–7688, both at the Office of Patent Legal Administration. Regarding the life science examples, contact June Cohan, by telephone at 571–272–7744, Ali Salimi, by telephone at 571–272–0909, or Raul Tamayo, by telephone at 571–272–7728, all at the Office of Patent Legal Administration.
On July 30, 2015, the USPTO issued the July 2015 Update to provide further guidance on subject matter eligibility in view of public comments received in response to the 2014 Interim Guidance on Patent Subject Matter Eligibility. An announcement was published in the
In response, the USPTO received a total of thirty-seven submissions from the public, which have been carefully considered by the USPTO. The USPTO has issued a memorandum to the Patent Examining Corps titled “Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection” to improve examiner correspondence regarding subject matter eligibility rejections. A copy of the memorandum is available on the USPTO's Internet Web site, on the patent examination guidance and training materials Web page (
The USPTO's guidance materials concerning the subject matter eligibility requirements of 35 U.S.C. 101, including the above-mentioned memorandum, do not constitute substantive rulemaking and do not have the force and effect of law. These guidance materials set out examination policy on rejections with respect to the Office's interpretation of the subject matter eligibility requirements of 35 U.S.C. 101 in view of decisions by the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit (Federal Circuit). The guidance materials were developed as a matter of internal Office management and are not intended to create any right or benefit, substantive or procedural, enforceable by any party against the Office. Rejections will continue to be based upon the substantive law, and it is these rejections that are appealable. Failure of Office personnel to follow the USPTO's guidance materials is not, in itself, a proper basis for either an appeal or a petition.
Additionally, the USPTO has produced new life science examples. A copy of the examples is available on the USPTO's Internet Web site, again on the patent examination guidance and training materials Web page (
The USPTO further solicited topics for study under the Topic Submission for Case Studies Pilot Program.
The July 2015 Update included an Appendix 3 containing select eligibility decisions from the Supreme Court and the Federal Circuit. This chart of decisions assists examiners in identifying the types of subject matter courts have previously found to be ineligible. Appendix 3 will continue to be updated with Federal Circuit decisions having opinions (precedential or non-precedential). While non-precedential decisions are not binding precedent, the opinions provide guidance and persuasive reasoning as outlined in Fed. Cir. R. 32.1(d). Appendix 3 will also continue to be updated with Federal Circuit decisions without opinion (Fed. Cir. R. 36) on appeals originating from the Patent Trial and Appeal Board. Federal Circuit decisions affirming a district court decision without opinion (Fed. Cir. R. 36) will no longer be added to Appendix 3 because they provide little benefit to examiners or the public.
As discussed previously, the memorandum and life science examples are available to the public on the USPTO's Internet Web site. The USPTO is now seeking public comment. The comment period is open-ended, and comments will be accepted on an ongoing basis. When it is determined that the period will close, advance notification will be made on the public comment Web page. The USPTO is particularly interested in public comments addressing the progress the USPTO is making in the quality of correspondence regarding subject matter eligibility rejections.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to partially approve and partially disapprove a revision to the Louisiana State Implementation Plan (SIP) submitted by the State of Louisiana on December 21, 2011. This revision outlines the State's program to regulate and permit emissions of greenhouse gases (GHGs) in the Louisiana Prevention of Significant Deterioration (PSD) program. We are proposing to approve those provisions to the extent that they address the GHG permitting requirements for sources already subject to PSD for pollutants other than GHGs. We are proposing to disapprove those provisions to the extent they require PSD permitting for sources that emit only GHGs above the thresholds triggering the requirement to obtain a PSD permit since that is no longer consistent with federal law. The EPA is proposing this action under section 110 and part C of the Clean Air Act (CAA or Act).
Written comments must be received on or before June 6, 2016.
Submit your comments, identified by Docket No. EPA–R06–OAR–2012–0022, at
Throughout this document wherever
On January 2, 2011, GHGs became subject to regulation under the Clean Air Act and thus regulated under the PSD permitting program.
In Step 1 of the Tailoring Rule, which began on January 2, 2011, the EPA limited application of PSD and title V requirements to sources only if they were subject to PSD or title V “anyway” due to their emissions of pollutants other than GHGs. These sources are referred to as “anyway sources.” Under its understanding of the CAA at the time, the EPA believed the Tailoring Rule was necessary to avoid a sudden and unmanageable increase in the number of sources that would be required to obtain PSD and title V permits under the CAA because the sources emitted GHGs over applicable major source and major modification thresholds.
In Step 2 of the Tailoring Rule, which began on July 1, 2011, the PSD and title V permitting requirements under the CAA applied to some sources that were classified as major, and, thus, required to obtain a permit, based solely on their GHG emissions or potential to emit GHGs, and to modifications of otherwise major sources that required a PSD permit because they increased only GHG emissions above the level in the EPA regulations. We generally describe the sources covered by PSD during Step 2 of the Tailoring Rule as “Step 2 sources.”
On June 23, 2014, the U.S. Supreme Court issued a decision in
The EPA promulgated a final rule on August 19, 2015, removing the portions of the PSD permitting provisions for Step 2 sources from the federal regulations that the D.C. Circuit specifically identified as vacated (40 CFR 51.166(b)(48)(v) and 52.21(b)(49)(v)).
Louisiana's December 21, 2011 SIP submission submittal adds automatic rescission provisions to the State's PSD regulations at LAC 33:III.501(C)(14). The automatic rescission provisions provide that in the event that there is a change in federal law, or the D.C. Circuit or the U.S. Supreme Court issues an order which limits or renders ineffective the regulation of GHGs under title I of the CAA, then the corresponding provisions of the Louisiana PSD program shall be limited or rendered ineffective to the same extent.
The EPA is proposing to approve the Louisiana automatic rescission provisions. In assessing the approvability of automatic rescission provisions, the EPA considers two key factors: (1) Whether the public will be given reasonable notice of any change to the SIP that occurs as a result of the automatic rescission provisions, and (2) whether any future change to the SIP that occurs as a result of the automatic rescission provisions would be consistent with the EPA's interpretation of the effect of the triggering action on federal GHG permitting requirements.
Regarding public notice, CAA section 110(l) provides that any revision to a SIP submitted by a State to EPA for approval “shall be adopted by such State after reasonable notice and public hearing.” In accordance with CAA section 110(l), LDEQ followed applicable notice-and-comment procedures prior to adopting the automatic rescission provisions. Thus, the public is on notice that the automatic rescission provisions in the Louisiana PSD program will enable the Louisiana PSD program and the Louisiana SIP to update automatically to reflect any order by a federal court or any change in federal law that limits or renders ineffective the regulation of GHGs under the CAA's PSD permitting program. Additionally, the EPA interprets this provision to require the
The EPA's consideration of whether any SIP change resulting from Louisiana's automatic rescission provisions would be consistent with the EPA's interpretation of the effect of the triggering action on federal GHG permitting requirements is based on 40 CFR 51.105, which states that “[r]evisions of a plan, or any portion thereof, will not be considered part of an applicable plan until such revisions have been approved by the Administrator in accordance with this part.” To be consistent with 40 CFR 51.105, any automatic SIP change resulting from a court order or federal law change must be consistent with the EPA's interpretation of the effect of such order or federal law change on GHG permitting requirements. We interpret this provision to mean that Louisiana will wait for and follow the EPA's interpretation as to the impact of any federal law change or the D.C. Circuit or the U.S. Supreme Court issues an order before Louisiana's SIP would be changed. In the event of a court decision or federal law change that triggers (or likely triggers) application of Louisiana's automatic rescission provisions, the EPA intends to promptly describe the impact of the court decision or federal law change on the enforceability of its GHG permitting regulation. The EPA invites comment, particularly from the State, regarding this interpretation.
Prior to the court decisions, the State submitted amended PSD provisions to enable permitting Step 1 and Step 2 sources and the GHG emissions from such sources on December 21, 2011. The EPA has an obligation under section 110 of the CAA to act upon a submitted revision to a state's SIP within 18 months of receipt. The December 21, 2011 SIP revisions have not been withdrawn; therefore, the EPA has an obligation to act on the submitted provisions. We have the authority under section 110(k)(3) of the Act to partially approve and partially disapprove portions of a SIP submittal that are not wholly approvable. Accordingly, we find it appropriate to propose partial approval under section 110(k)(3) of the Act of the submitted provisions that enable the State to permit GHG emissions from Step 1 sources consistent with federal requirements. Simultaneously, we are proposing disapproval of the provisions that enable the permitting of Step 2 sources under the PSD program.
Our evaluation finds that the revised rules in Louisiana's December 21, 2011 SIP submission achieve the same result as the Step 1 permitting provisions in 40 CFR 51.166 that remain applicable at this time. However, the state rules achieve this result in a manner that differs from the way the EPA's regulations are presently written. The state has not enacted limitations on the meaning of the term “subject to regulation” as reflected in 40 CFR 51.166(b)(48)(iv). Instead, the State has adopted a significance level for GHGs whereby the net emissions increase of GHGs calculated on a mass basis equals or exceeds 0 tpy and the net emission increase of GHGs calculated on a CO
It is important to note, however, that the EPA's proposed approval is not based on determination by either EPA or the state that 75,000 tons per year CO
In establishing the significance level, the State rulemaking does not establish that 75,000 is a
Given the deficiencies in the justification for the GHG BACT applicability level in the existing EPA regulations, the EPA is planning to move forward in a separate, national rulemaking to propose a GHG Significant Emission Rate (SER) that would be justified as a
Section 110(k)(3) of the Act states that the EPA may partially approve and partially disapprove a SIP submittal if we find that only a portion of the submittal meets the requirements of the Act. We are proposing to approve the revisions to the Louisiana PSD permitting program submitted on December 21, 2011, that provide the State the authority to regulate and permit emissions of GHGs from Step 1 sources in the Louisiana PSD program. The EPA has made the preliminary determination that the revisions are approvable because the submitted rules are adopted and submitted in accordance with the CAA and are consistent with the laws and regulations for PSD permitting of GHGs. Therefore, under section 110 and part C of the Act, the EPA proposes to approve the following specific revisions to the Louisiana SIP for PSD permitting:
• New provisions at LAC 33:III.501(C)(14) adopted on April 20, 2011 and submitted December 20, 2011;
• New definitions of “carbon dioxide equivalent” and “greenhouse gases” at LAC 33:III.509(B) adopted on April 20, 2011 and submitted December 20, 2011; and
• Revisions to the definitions of “major stationary source” paragraphs (a) and (b) and “significant” at LAC 33:III.509(B) adopted on April 20, 2011 and submitted December 20, 2011.
Upon promulgation of a final approval of these proposed revisions, the EPA would also remove the provisions at 40 CFR 52.986(c) under which the EPA narrowed the applicability of the Louisiana PSD program to regulate sources consistent with federal requirements. The provisions at 40 CFR 52.986(c) will no longer be necessary when we finalize approval of the state regulations into the Louisiana SIP.
We are also proposing to disapprove the provisions submitted on December 21, 2011, that would enable the State of
The EPA is also taking the opportunity to correct an omission in our proposed approval of revisions to the Louisiana Major New Source Review program on August 19, 2015. In that action we neglected to specifically identify the revisions submitted on December 20, 2005 to the PSD definition of “major stationary source” at LAC 33:III.509(B) as part of our proposed action. In both the TSD associated with docket EPA–R06–OAR–2006–0131 and in the TSD accompanying today's action, we have evaluated this submission and found the revised regulations to be consistent with federal requirements at 40 CFR 51.166(b)(1)(iii). As such, we are also proposing approval of the revisions to the definition of “major stationary source” at LAC 33:III.509(B) submitted on December 20, 2005 as subparagraph (e), but was moved to subparagraph (f) in the December 20, 2011 submittal.
In this action, we are proposing to include in a final rule regulatory text that includes incorporation by reference. In accordance with the requirements of 1 CFR 51.5, we are proposing to incorporate by reference revisions to the Louisiana regulations as described in the Proposed Action section above. We have made, and will continue to make, these documents generally available electronically through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action proposes approval of the portions of the submitted revisions to State law for the regulation and permitting of GHG emissions consistent with federal requirements and proposes disapproval of the portions of the state laws that do not meet Federal requirements for the regulation and permitting of GHG emissions.
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA. There is no burden imposed under the PRA because this action proposes to disapprove submitted revisions that are no longer consistent with federal laws for the regulation and permitting of GHG emissions.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This action proposes to disapprove submitted revisions that are no longer consistent with federal laws for the regulation and permitting of GHG emissions, and therefore will have no impact on small entities.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector. This action proposes to disapprove submitted revisions that are no longer consistent with federal laws for the regulation and permitting of GHG emissions, and therefore will have no impact on small governments.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications as specified in Executive Order 13175. This action proposes to disapprove provisions of state law that are no longer consistent with federal laws for the regulation and permitting of GHG emissions; there are no requirements or responsibilities added or removed from Indian Tribal Governments. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2–202 of the Executive Order. This action is not subject to Executive Order 13045 because it disapproves state permitting provisions that are inconsistent with federal laws for the regulation and permitting of GHG emissions.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations. This action is not subject to Executive Order 12898 because it disapproves state permitting provisions that are inconsistent with federal laws for the regulation and permitting of GHG emissions.
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
42 U.S.C. 7401
Agricultural Marketing Service, USDA.
Notice.
The Agricultural Marketing Service (AMS) is announcing the 2016 rates it will charge for voluntary grading, inspection, certification, auditing and laboratory services for a variety of agricultural commodities including meat and poultry, fruits and vegetables, eggs, dairy products, and cotton and tobacco. The 2016 regular, overtime, holiday, and laboratory services rates will be applied at the beginning of the crop year, fiscal year or as required by law (June 1 for cotton programs) depending on the commodity. This action established the rates for user-funded programs based on costs incurred by AMS.
May 9, 2016.
Sonia Jimenez, AMS, U.S. Department of Agriculture, Room 2095–S, 1400 Independence Ave SW., Washington, DC 20250; telephone (202) 720–6766, fax (202) 205–5772; email
The Agricultural Marketing Act of 1946, as amended, (AMA) (7 U.S.C. 1621–1627), provides for the collection of fees to cover costs of various inspection, grading, certification or auditing services covering many agricultural commodities and products. The AMA also provides for the recovery of costs incurred in providing laboratory services. The Cotton Statistics and Estimates Act (7 U.S.C. 471–476) and the U.S. Cotton Standards Act (7 U.S.C. 51–65) provide for classification of cotton and development of cotton standards materials necessary for cotton classification. The Cotton Futures Act (7 U.S.C. 15b) provides for futures certification services and the Tobacco Inspection Act (7 U.S.C. 511–511s) provides for tobacco inspection and grading. These Acts also provide for the recovery of costs associated with these services.
On November 13, 2014, the Department of Agriculture (Department) published in the
This notice announces the 2016 fee rates for voluntary grading, inspection, certification, auditing and laboratory services for a variety of agricultural commodities including meat and poultry, fruits and vegetables, eggs, dairy products, and cotton and tobacco on a per-hour rate and, in some instances, the equivalent per-unit cost. The per-unit cost is provided to facilitate understanding of the costs associated with the service to the industries that historically used unit-cost basis for payment. The fee rates will be effective at the beginning of the fiscal year, crop year, or as required by specific laws (June 1 for cotton programs).
The rates reflect direct and indirect costs of providing services. Direct costs include the cost of salaries, employee benefits, and if applicable, travel and some operating costs. Indirect or overhead costs include the cost of Program and Agency activities supporting the services provided to the industry. The formula used to calculate these rates also includes operating reserve, which may add to or draw upon the existing operating reserves.
These services include the grading, inspection or certification of quality factors in accordance with established U.S. Grade Standards; audits or accreditation according to International Organization for Standardization (ISO) standards and/or Hazard Analysis and Critical Control Point (HACCP) principles; and other marketing claims. The quality grades serve as a basis for market prices and reflect the value of agricultural commodities to both producers and consumers. AMS' grading and quality verification and certification, audit and accreditation, plant process and equipment verification, and laboratory approval services are voluntary tools paid for by the users on a fee-for-service basis. The agriculture industry can use these tools to promote and communicate the quality of agricultural commodities to consumers. Laboratory services are provided for analytic testing, including but not limited to chemical, microbiological, biomolecular, and physical analyses. AMS is required by statute to recover the costs associated with these services.
As required by the Cotton Statistics and Estimates Act (7 U.S.C. 471–476), consultations regarding the establishment of the fee for cotton classification with U.S. cotton industry representatives were held between January and the present when most industry stakeholder meetings take place. Representatives of all segments of the cotton industry, including producers, ginners, bale storage facility operators, merchants, cooperatives, and textile manufacturers were informed of the fees during various industry-sponsored forums.
AMS calculated the rate for services, per hour per program employee using the following formulas (a per-unit base is included for programs that charge services based on a per-unit base):
(1)
(2)
(3)
When possible, AMS is adjusting the rates to cover all of its expenses and to provide for reasonable operating reserves. Many of these rates have not been adjusted for a number of years. In some cases fees are decreased due to efficiencies and cost cutting measures. Applying the formulas described above without consideration of the operating reserves, in some cases, would have resulted in a substantial increase in fees. To avoid an undue burden on industry operations in these cases, AMS plans to phase in some of the increases over a multi-year period. Each year, AMS will reassess whether the fee rate and phase-in period are appropriate based on the formula and established operating reserve. Drawing upon the existing operating reserves will not affect AMS' ability to maintain the minimally required operating reserves.
All rates are per-hour except when a per-unit cost is noted. The specific amounts in each rate calculation are available upon request from the specific AMS program.
7 U.S.C. 15b; 7 U.S.C. 473a–b; 7 U.S.C. 55 and 61; 7 U.S.C. 51–65; 7 U.S.C. 471–476; 7 U.S.C. 511, 511s; and 7 U.S.C. 1621–1627.
Office of the Secretary, USDA.
Notice.
The Office of the Secretary of the Department of Agriculture (the Secretary) is providing notice of an increase in the fiscal year (FY) 2016 specialty sugar tariff-rate quota (TRQ) of 20,000 metric tons raw value (MTRV). The Secretary also announces the establishment of the Fiscal Year (FY) 2017 (October 1, 2016–September 30, 2017) in-quota aggregate quantity of raw cane sugar at 1,117,195 metric tons raw value (MTRV), and the establishment of the FY 2017 in-quota aggregate quantity of certain sugars, syrups, and molasses (also referred to as refined sugar) at 162,000 MTRV.
Souleymane Diaby, Import Policies and Export Reporting Division, Foreign Agricultural Service, Department of Agriculture, 1400 Independence Avenue SW., AgStop 1021, Washington, DC 20250–1021; by telephone (202) 720–
On June 15, 2015, USDA announced the establishment of the in-quota quantity of the FY 2016 refined sugar TRQ at 132,000 MTRV for which the sucrose content, by weight in the dry state, must have a polarimeter reading of 99.5 degrees or more (FR 80, No. 114, June 15, 2015, page 34129). This amount includes the minimum level to which the United States is committed under the WTO Uruguay Round Agreements (22,000 MTRV of which 1,656 MTRV is reserved for specialty sugar) and an additional 110,000 MTRV reserved for specialty sugars.
Pursuant to Additional U.S. Note 5 to Chapter 17 of the U.S. Harmonized Tariff Schedule (HTS) and Section 359k of the Agricultural Adjustment Act of 1938, as amended, the Secretary today increases the overall FY 2016 refined sugar TRQ by 20,000 MTRV to 152,000 MTRV. The increased amount is reserved for specialty sugar. Entry of this sugar will be permitted beginning May 9, 2016. The sugar entered under this tariff-rate quota is reserved for organic sugar and other specialty sugars not currently produced commercially in the United States or reasonably available from domestic sources.
The provisions of paragraph (a)(i) of the Additional U.S. Note 5, Chapter 17 in the U.S. Harmonized Tariff Schedule (HTS) authorize the Secretary to establish the in-quota tariff-rate quota (TRQ) amounts (expressed in terms of raw value) for imports of raw cane sugar and certain sugars, syrups, and molasses that may be entered under the subheadings of the HTS subject to the lower tier of duties during each fiscal year. The Office of the U.S. Trade Representative (USTR) is responsible for the allocation of these quantities among supplying countries and areas.
Section 359(k) of the Agricultural Adjustment Act of 1938, as amended, requires that at the beginning of the quota year the Secretary of Agriculture establish the TRQs for raw cane sugar and refined sugars at the minimum levels necessary to comply with obligations under international trade agreements, with the exception of specialty sugar.
Notice is hereby given that the Secretary has determined, in accordance with paragraph (a)(i) of the Additional U.S. Note 5, Chapter 17 in the HTS and section 359(k) of the 1938 Act, that an aggregate quantity of up to 1,117,195 MTRV of raw cane sugar may be entered or withdrawn from warehouse for consumption during FY 2017. This is the minimum amount to which the United States is committed under the WTO Uruguay Round Agreements. The Secretary has further determined that an aggregate quantity of 162,000 MTRV of sugars, syrups, and molasses may be entered or withdrawn from warehouse for consumption during FY 2017. This quantity includes the minimum amount to which the United States is committed under the WTO Uruguay Round Agreements, 22,000 MTRV, of which 20,344 MTRV is established for any sugars, syrups and molasses, and 1,656 MTRV is reserved for specialty sugar. An additional amount of 140,000 MTRV is added to the specialty sugar TRQ for a total of 141,656 MTRV.
Because the specialty sugar TRQ is first-come, first-served, tranches are needed to allow for orderly marketing throughout the year. The FY 2017 specialty sugar TRQ will be opened in five tranches. The first tranche, totaling 1,656 MTRV, will open October 3, 2016. All specialty sugars are eligible for entry under this tranche. The second tranche will open on October 26, 2016, and be equal to 40,000 MTRV. The third tranche of 38,344 MTRV will open on January 6, 2017. The fourth and fifth tranches of 30,000 MTRV each will open on April 7, 2017, and July 7, 2017, respectively. The second, third, fourth, and fifth tranches will be reserved for organic sugar and other specialty sugars not currently produced commercially in the United States or reasonably available from domestic sources.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by June 6, 2016 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Forest Service, USDA.
Notice of meeting.
The Ravalli Resource Advisory Committee (RAC) will meet in Hamilton, Montana. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with title II of the Act. RAC information can be found at the following Web site:
The meeting will be held May 24, 2016, at 6:30 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meeting will be held at the Bitteroot National Forest (NF) Supervisor's Office, 1801 North 1st Street, Hamilton, Montana.
Written comments may be submitted as described under
Ryan Domsalla, Designated Federal Officer, by phone at 406–821–3269 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is for voting and approving new proposed projects
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by May 20, 2016, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time to make oral comments must be sent to Joni Lubke, RAC Coordinator, 1801 N. 1st Street, Hamilton, Montana 59840; by email to
Forest Service, USDA.
Notice of meeting.
The Ravalli Resource Advisory Committee (RAC) will meet in Hamilton, Montana. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with title II of the Act. RAC information can be found at the following Web site:
The meeting will be held June 14, 2016, at 6:30 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meeting will be held at the Bitteroot National Forest (NF) Supervisor's Office, 1801 North 1st Street, Hamilton, Montana.
Written comments may be submitted as described under
Ryan Domsalla, Designated Federal Officer, by phone at 406–821–3269 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is for voting and approving new projects.
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by June 10, 2016, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time to make oral comments must be sent to Joni Lubke, RAC Coordinator, 1801 N. 1st Street, Hamilton, Montana 59840; by email to
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques and other forms of information technology.
Comments regarding this information collection received by June 6, 2016 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW., Washington, DC 20503. Commentors are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Natural Resources Conservation Service (NRCS), United States Department of Agriculture (USDA).
Notice and request for comments.
NRCS is proposing to revise Section I of the Indiana Field Office Technical Guide to include “Guidance for Indiana Wetland Determinations, Including the use of Offsite Methods, to Identify Wetlands, Wetland Types, and Their Size for the 1985 Food Security Act, as amended,” which will replace the existing “Wetland Mapping Conventions for Agricultural Land and Narrow Band and Small Pocket Inclusions of Non-Agricultural Land” (commonly referred as State Wetland Mapping Conventions).
Effective Date: This notice is effective May 6, 2016. “Guidance for Indiana Wetland Determinations, Including the use of Offsite Methods, to Identify Wetlands, Wetland Types, and Their Size for the 1985 Food Security Act, as amended” is in final draft, subject to revision and will be utilized immediately in order to better service requests for wetland determinations for compliance with the Food Security Act of 1985 (as amended) in a timely manner.
Comments should be submitted, identified by Docket Number NRCS–2016–0003, using any of the following methods:
•
•
NRCS will post all comments on
Jane E. Hardisty, State Conservationist, Telephone: (317) 295–5801
“Guidance for Indiana Wetland Determinations, Including the use of Offsite Methods, To Identify Wetlands, Wetland Types, and Their Size for the 1985 Food Security Act, as amended” will be used as part of the technical documents and procedures to conduct wetland determinations on agricultural land as required by 16 U.S.C. 3822. NRCS is required by 16 U.S.C. 3862 to make available for public review and comment all proposed revisions to standards and procedures used to carry out highly erodible land and wetland provisions of the law. All comments will be considered. If no comments are received, “Guidance for Indiana Wetland Determinations, Including the use of Offsite Methods, to Identify Wetlands, Wetland Types, and Their Size for the 1985 Food Security Act, as amended” will be considered final.
Electronic copies of the proposed “Guidance for Indiana Wetland Determinations, Including the use of Offsite Methods, to Identify Wetlands, Wetland Types, and Their Size for the 1985 Food Security Act, as amended” are available through
The National Food Security Act Manual (NFSAM) provides internal agency policy related to the Highly Erodible Land Conservation and Wetland Conservation provisions of the 1985 Food Security Act, as amended (FSA *).
* To properly differentiate between the Food Security Act and the Farm Service Agency, “FSA” will refer to the 1985 Food Security Act and “Farm Services Agency” will be spelled out.
To accomplish the first step (wetland identification), the Secretary of Agriculture directed the Natural Resources Conservation Service (NRCS) to develop and use offsite and onsite wetland identification procedures (7 CFR 12.30(a)(4)). The NRCS responded by providing such procedures in the NFSAM.
The NFSAM Part 527 FSA Wetland Identification Procedures, as distributed through Circular 6 in December 2010, directs that NRCS will utilize Part IV: Methods, contained in the Corps of Engineers Wetland Delineation Manual (Corps Manual) for onsite and offsite determinations. The NFSAM explains that the on-site procedures contained in the Corps Manual are supplemented by the Corps Regional Supplements and the FSA variances to the Corps Methods, as provided in Part 527 FSA Wetland Identification Procedures.
The second step (Assignment of Wetland Conservation Labels) assigns labels identified in NFSAM Part 514 to each sampling unit. The methodology for this step involves taking the Step 1: Wetland Identification, which is either “Yes, the site meets the FSA definition of a wetland” or “No, the site does not meet the FSA definition of a wetland”, reviewing the data for activities that have affected the wetland nature of the site and assigning a FSA label to the sampling unit in response to the disturbances, if any, done to the area within the sampling unit. This assigning of FSA labels is a straight forward determination that the data reviewed indicates that the site meets the definition of the FSA label.
The third step is to review the ecological conditions of the site for a change in the overall size from the Step 1: Wetland Identification, to the present day with an analysis of the correctness of a specific Wetland Type Label for a specific size.
This step is designed to take notice of sample units meet a FSA label of a type of wetland that then may have decreased in size after December 23, 1985, and may require a change in label to document that the sampling unit was manipulated or converted.
On the other hand, an increase in the size of a sampling unit may also indicate the change in a FSA label from a type of non-wetland to wetland where an exemption still applies to the increased size and can be converted into land suitable for crop production.
The FSA Wetland Identification Procedures provide that the US Army Corps of Engineers (USACE) offsite procedures found in Part IV, Section D, Subsection 1—“Onsite Inspection Unnecessary” can be augmented with the development of State Offsite Methods (SOSM). The purpose of this document is to provide procedures that the NRCS in Indiana will use for rendering decisions when onsite inspection (field indicators) is unnecessary. Additionally, this document provides guidance related to the assignment of FSA labels and sizing.
The SOSM incorporates by reference the current versions and pertinent sections of the following Documents (and their location):
1. National Food Security Act Manual (NFSAM)
2. 20101 Food Security Act Wetland Identification Procedures (NFSAM Part 527 Appendix)
3. 1987 United States Army Corps of Engineers Wetland Delineation Manual, Technical Report Y–87–1 (on-line edition)
4. USACE Regional Supplements
5. Hydrology Tools for Wetland Determination (Title 210 Engineering, National Engineering Handbook (NEH), Part 650, Engineering Field Handbook (EFH),
The Assignment of Wetland Types and The Sizing of Wetlands Procedures (WTSP) can be used either offsite or on-site, and both incorporate by reference the current versions and pertinent sections of NFSAM Parts 514 (Labels) and 515 (Minimal Effect and Mitigation Exemption). These labels were developed to account for all of the various kinds of wetlands defined in 7CFR12.2–
Paragraph (2–14) of the FSA Wetland Identification Procedures defines SOSM as “
Indiana NRCS presented the SOSM to the Indiana State Technical Committee on February 24, 2015 and April 9, 2015 to solicit feedback and recommendations as required in paragraph (2–14) of the FSA Wetland Identification Procedures. NRCS also presented the WTSP to the committee to demonstrate how the FSA label assignment and sizing procedure carries on the information collected to make the Wetland Identification. All of the methodologies and procedures developed for Indiana take into account unique regional, state, and local wetland characteristics. This document adheres to regulations and policies in effect as of the date of this document but may be subject to change. Specific changes required by CFR will be implemented without concurrence from other agencies while changes in methodology and procedures will be vetted with the committee.
For FSA purposes, the term “wetland” is defined in 16 U.S.C. 3801(a)(18) as land that—
A) Has a predominance of hydric soils.
B) Is inundated or saturated by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions.
C)
According to paragraph (3–2) of the FSA Wetland Identification Procedures, “
The FSA Wetland Identification Procedures paragraph (2–11) defines Normal Environmental Conditions (NEC) as “
Normal Circumstances as used in the FSA wetland definition requires that decisions be based not on anomalies, but rather what would normally occur on the sampling unit during NEC (FSA Procedures paragraph 3–3). In the Corps methods, the concept of “normal” is separated into the disturbance-based
(1) In the absence of post-December 23, 1985 drainage actions that alter the normal soil or hydrologic conditions.
(2) In the absence of an alteration (removal or change) in the plant community such that a decision cannot be made if the site would support a prevalence of hydrophytic vegetation if undisturbed.
(3) During the wet portion of the growing season during a year experiencing normal weather patterns.
In the absence of direct evidence, the decision if a sampling unit meets a particular diagnostic factor (wetland hydrology, prevalence of hydrophytic vegetation, and a predominance of hydric soils) is assisted by confirmation of the presence of indicators. The use of indicators to predict the conditions that would occur under NC is referred to as the “indicator-based approach to wetland identification.” The presence or lack of indicators can be determined using remotely sensed data sources or onsite observations. USACE, United States Environmental Protection Agency (EPA), and NRCS use the indicator-based approach to assist in decision-making. The ultimate decision if a site meets the FSA criteria for any of the three diagnostic factors is made from a preponderance of evidence, best professional judgment, and the FSA definitions and criteria of hydrophytic vegetation, hydric soils, and wetland hydrology (FSA Wetland Identification Procedures paragraph 4–3).
According to Paragraph 4–4 of the FSA Wetland Identification Procedures, “
7CFR12(a)(6) is cited in NFSAM Part 514.1.A(3)(v) as requiring an on-site investigation of FSA–569 “NRCS Report of HELC and WC Compliance” requests or whistleblower complaints. Other situations that require an on-site investigation include a specific request for an onsite determination; as a condition of withholding program benefits; servicing an appeal; or a request for a pre-conversion minimal effect determination.
In addition, an on-site visit is
1) Cannot accumulate enough offsite data to complete the decision-making process, or
2) Finds that the accumulated data do not give a clear and definitive determination.
At each significant decision-making point in the offsite procedure, the agency expert will consider whether an on-site inspection procedure is needed. It is not the intent of the SOSM to always provide a determination answer. The intent of the SOSM is to provide a body of data to the agency expert that can be used to make an offsite determination if the data is of sufficient quantity and quality. If not, then the offsite data will be used to assist in making an on-site determination.
The FSA wetland determination process makes use of two parts of the 1987 USACE Wetland Delineation Manual; Paragraph 23 of the Introduction and Part IV minus the comprehensive method (NFSAM, Part 527(5–3). Paragraph 23, entitled “Flexibility”, addresses the possibility of the need to modify the procedures.
NRCS has developed modifications to the process as required by the FSA and its amendments. These modifications are incorporated into the “2010 Food Security Act Wetland Identification Procedure” (FSA Wetland Identification Procedure) as variances and are used in the SOSM and other procedures in this document. Paragraph 23 requires all modifications to be explained so that all variances will be cited when used. No further modifications to the SOSM or other procedures are authorized. Any need to modify the SOSM or other offsite procedures themselves is an indication that a Level 2 or Level 3 on-site determination is necessary.
7 CFR 12.5(b)(7) “Responsibility to provide evidence” states it is the person who is seeking an exemption listed in 7 CFR 12.5(b)(1–5) to a converted wetland (any time before or after December 23, 1985) to provide evidence in seeking that exemption. It is not the NRCS' responsibility to search for such evidence outside of this procedure; rather, it is the NRCS' responsibility to see if the participant-provided evidence can be confirmed and to ensure that the person has had such an opportunity.
Locally produced evidence will be considered as a source of data alongside all other data used to make the offsite determination. NOTE: In this instance the use of the word “converted” is in reference to 7CFR12.2(3), meaning a manipulation creating ground suitable for crop production at any time before or after December 23, 1985. This is not referring to the use of the FSA Labels “Converted Wetland” or “Converted Wetland + Year”.
As stated in the NFSAM in Part 514.1, “Certified wetland determinations must be completed by a qualified NRCS employee, as determined by the State Conservationist. Qualified employees (
1. Have completed all the required training, including updated courses.
2. Have the appropriate job-approval authority.
3. Have demonstrated proficiency in making certified wetland determinations.
Persons using these SOSM must have the appropriate “Wetland Job Approval Authority(s)” delegated and documented in accordance with current NRCS policy.
The first step in the wetland identification process is to subdivide the project into different areas called
• Level 1 is rendering a decision using offsite resources for each of the three factors. The assessment of each factor must be independent of the other factors and a different remote data
• Level 2 is rendering a decision using on-site data, along with any useful offsite data. The exception is if Section F (Atypical Situation) or G (Problem Area) of the USACE Manual is needed. Those sections are only applied after a decision is made to use onsite methods (even if remote data sources are eventually used to render a decision).
• Level 3 is rendering a decision using offsite resources (
Wetland determinations are a technical decision resulting from the determination of whether an area is a wetland or non-wetland (wetland ID), including the determination of appropriate
NOTES:
• All agency decisions during Step 1 are made at the sampling unit level.
• The term “imagery” refers to all forms of remotely captured imagery or photography, digital or analog, at all resolutions.
• Unless otherwise stated, the use of “1985” in this document refers to December 23, 1985.
Gather all available sources of data and create a base map using available geospatial data to determine if wetlands exist within each sampling unit.
Users will graphically subdivide the area of interest into sampling units on a base map image using resources A through F (as available) listed below. The base map needs to be large enough to read and record multiple sampling units in one location. Sampling unit boundaries do not need to correspond exactly to a boundary indicated by any of the resources listed below. The agency expert determines sampling unit validity. Sampling units will be located using the following remote resources:
A. Based on knowledge of local conditions, review the FSA slides from prior to 1987 (regardless of annual precipitation). Each signature listed below may indicate a unique sampling unit:
• Trees, saplings, shrubs and other non-agricultural vegetation.
• Surface water.
• Saturated conditions.
• Flooded or drowned-out crops.
• Stressed crops due to wetness.
• Differences in vegetation due to different planting dates.
• Inclusion of wet areas as set-aside or idled.
• Circular or irregular areas of unharvested crops within a harvested field.
• Isolated areas that are not farmed with the rest of the field.
• Areas of greener vegetation (especially during dry years).
B. Review the US Fish & Wildlife Service (US FWS) National Wetland Inventory (NWI) maps. While each NWI polygon not matching the other indicators may be a sampling unit, care should be taken to notice when the NWI is simply displaced from the location where other indicators are showing a unique sampling unit. This “off-center” displacement has been observed when matching up the Indiana NWI sites with certified wetland boundaries.
C. Review DEMs derived from LIDAR data for differences in elevation indicating significant differences in land forms that may collect and hold water.
D. Review the soil survey and the county hydric soils list from the NRCS Web Soil Survey. Identify listed hydric soil map units, map units with hydric soils as part of their name, soils with hydric inclusions, and map units with conventional wetland symbols. Each soil survey feature not matching the other resources above may be a sampling unit.
E. Locally-produced information from individuals involved with the property related to manipulations and conversions prior to December 23, 1985.
F. Review other inventory tools, if available.
NOTE: The more indicators that can be assigned to a specific area, the greater the probability that the area qualifies as a unique sampling unit.
NOTE: All land within the requested area will be assigned a sampling unit designation of “Y” (yes, a wetland) or “N” (no, not a wetland); therefore all land within the requested area will be part of a sampling unit.
➢ Proceed to the Section 1.2.
The term hydric soil means soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an anaerobic condition that supports the growth and regeneration of hydrophytic vegetation (16 U.S.C. 3801(a)(12)). Refer to Part V, subpart C, paragraphs 5–49 through 5–53, of the FSA Wetland Identification Procedures for further information and allowable variances from the Corps methods.
Title 7 CFR § 12.31(a)(1) states, “NRCS shall identify hydric soils through the use of published soil maps which reflect soil surveys completed by or through the use of onsite reviews.”
Title 7 CFR § 12.31(a)(2) states, “NRCS shall determine whether an area of a field or other parcel of land has a predominance of hydric soils that are inundated or saturated as follows:”
i. “If a soil map unit has hydric soil as all or part of its name, that soil map unit or portion of the map unit related to the hydric soil will be determined to have a predominance of hydric soils.”
ii. “If a soil map unit is named for a miscellaneous area that meets the criteria for hydric soils (
iii. “If a soil map unit contains inclusions of hydric soils, that portion of the soil map unit identified as hydric soil will be determined to have a predominance of hydric soils.”
The following remote indicators are suggestive (indicates) that the hydric soils definition is met:
1. Soils Maps (data) and County Hydric Soils Lists.
1. The sampling unit meets 7 CFR § 12.31(a)(2) as described above. If a soil map unit has hydric soil as part of its name or contains a hydric inclusion, that portion of the hydric component (major or minor) in the soil survey can be verified by either:
a. Identifying that the landform (such as a depressional area viewed on remote data) of the sampling unit is consistent with the landform (such as closed
b. Using the soil series.
➢ Proceed to Section 1.3.
Wetland Hydrology means inundation or saturation of the site by surface or groundwater during a growing season at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation. Refer to Part V, subpart C, paragraphs (5–56) through (5–60), of the FSA Wetland Identification Procedures for further information and allowable variances from the Corps methods.
The NFSAM defines inundation as meaning “the ground is covered by water due to ponding, flowing, or flooded water.” Depth of the inundation is not part of the identification of the presence of hydrology. Rather, the focus of data collection and interpretation is on the time of year the inundation occurs, the length of time the inundation lasts, and how frequently it occurs over time on an annual basis.
The NFSAM and the CFR do not define saturation other than being the presence of water within the soil profile that affects the presence of hydrophytic vegetation, and by inference, the absence of non-hydrophytic vegetation as a dominant plant community. Similar to the definition of inundation, the focus on data collection and interpretation is on the season, duration, and frequency of the saturation. However, saturation as a factor in affecting the prevalence of hydrophytic vegetation is dependent on proximity to the rooting depth of the plant.
The 1987 USACE Wetland delineation Manual defines “saturated soil conditions” in the glossary as “A condition in which all easily drained voids (pore) between soil particles in the root zone are temporarily or permanently filled with water to the soil surface at pressures greater than atmospheric.”
Wetland hydrology is defined as inundation or saturation by surface or groundwater at a frequency and duration sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated soil conditions NFSAM 514.6(1).
For the purposes of this method, procedure, and process, saturation is defined as the presence of groundwater or perched water at or near the surface of the soil profile within a depth of 12 inches from the soil surface during any time in the growing season.
In Indiana, a site under direct observation during the growing season that is dominated by hydrophytic vegetation on a hydric soil that is saturated to a depth within 12 inches of the surface is indicative of the site being either a wetland (W) or a manipulated wetland (WX), indicating partially removed hydrology after 1985, rather than a non-wetland (NW), notwithstanding contradictory indicators.
The following remote indicators are suggestive (indicates) that the wetland hydrology definition is met:
1. Imagery showing surface water inundation by ponding or flooding under NC.
2. Imagery showing a Color Tone difference due to wetness that is reflective of NC that: (a) Was occurring on the date of the imagery, or (b) that occurred previous to the imagery but the evidence of this wetting event remains evident.
• Hydrophytic vegetation such as trees, saplings, shrubs, and other non-agricultural plants.
• Saturated condition.
• Stressed crops due to wetness.
• Differences in vegetation due to different planting dates.
• Inclusion of wet areas as set-aside or idled.
• Circular or irregular areas of unharvested crops within a harvested field.
• Isolated areas that are not farmed with the rest of the field.
• Areas of greener vegetation (especially during dry years).
○ Users are advised that sampling units and wetness signatures in areas with perennial vegetation may not be readily visible. In such cases,
3. The presence of mineral soil flats that have not been manipulated such that the microtopography of the soil surface has been leveled, or that the area has been altered by surface drain patterns or subsurface drainage. Clermont, Cobbsfork, and Peoga soils are currently the soil types that are included in the mineral soil flats reference site in Indiana.
1. The presence of water as indicated by signatures on imagery or a soil survey with the area labeled as “Water” or “Miscellaneous Water”,
2. The presence of mineral soil flats that have not been tilled or leveled, or altered by surface drain patterns or subsurface drainage. Clermont, Cobbsfork, and Peoga soils are currently the soil types that are included in the mineral soil flats reference site in Indiana,
3. Wetness signatures found on greater than 50 percent of imagery reviewed with consideration given to the actual environmental conditions at the time of data collection (wet, dry, normal).
• The imagery review will consist of all available imageries prior to 1988. The 1987 imagery is to be used only to verify subsequent effects of drainage installed prior to 1985. Imagery from 1979 to 1986 will be interpreted with consideration of whether it is reflective of normal, wet, or dry amounts of precipitation.
NOTE: Imagery from years that are considered wet or dry years are an indicator only if they have contrarian indicators (
• Publically available high-resolution leaf-off imagery taken in the early spring can be used to determine presence of wetland signatures, taking care not to factor in any post-December 23, 1985 manipulations and conversions.
• NRCS is invoking Paragraph 23 of the 1987 USACE Wetland Delineation Manual for agricultural land determinations. For a sample unit that has been identified by the Farm Service Agency as having an agricultural commodity produced at least once prior to 1985 and does not support woody vegetation on 1985, the only FSA labels that are applicable are Prior Converted Cropland (PC), Non-Wetland (NW), and Farmed Wetland (FW). The absence of hydrology indicators on a majority of imagery taken prior to 1987 indicates either a PC or NW determination. Hydrophytic vegetation criteria can be by-passed by documenting that an agricultural commodity was produced prior to 1985. The soils map will indicate either a PC label for hydric soils or a NW label for non-hydric soils. The FW label will be used if a majority of the aforementioned imagery has the hydrology indicators of surface water or long-term inundation (10% consecutive days of inundation during the wet part of the growing season (
NOTE: Care will be taken to identify False Positive and Negative situations.
○ An FW label will be changed to W if the site is abandoned for five consecutive years at any time after 1985.
○ A NW label due to the conversion of a wetland prior to 1985 will be changed to W if the three criteria return.
○ An herbaceous Wetland (W) or a Farmed Wetland Pasture (FWP) can present subtle signatures on the imagery such as simple vegetative color variation but with a consistent footprint.
○ FWP's can also be abandoned to the W label,
ANY TWO OF THE FOLLOWING INDICATORS:
1. High-accuracy Digital Elevation Models (DEMs) derived from LIDAR.
2. Depth Grid modeled from high accuracy digital elevation models.
3. Short term-inundation modelled from stream gauge data.
4. National Wetland Inventory (NWI) maps produced by the US FWS.
5. Soil Survey map with wetness spot symbols.
6. Soil Survey map with linear spot symbols associated with imagery wetness signatures.
7. USGS Topographical map with wetness spot symbol.
Producer-provided records indicate that drainage has been installed or constructed prior to 1985,
a. And has been maintained and is functioning such that the lack of hydrology indicators can be explained, or that such indicators are potential false positive hydrology indicators.
b. If no producer-provided records are available, then the agency expert is to presume maintenance has been conducted on any drainage features installed prior to 1985 and any wetness signatures observed are valid (indicating any potential system has not adequately removed hydrology) and are not false positive indicators.
➢ Proceed to Section 1.4.
Hydrophytic vegetation means a plant growing in (A) water; or (B) a substrate that is at least periodically deficient in oxygen during a growing season as a result of excessive water content (16 U.S.C. 3801(a)(11)). Refer to Part V, subpart C, paragraphs (5–41) through (5–46), of the FSA Wetland Identification Procedures for further information and allowable variances from the Corps methods in identification of hydrophytic vegetation.
The following remote indicators are suggestive (indicates) that the hydrophytic vegetation definition is met. See Attachment A for a detailed description of each resource:
1. Ecological Site Descriptions (ESD).
2. Approved Indiana NRCS wetland reference site data as it is developed.
3. Indiana Hydric Soil and Vegetative Correlation List
4. Locally developed soil map units and plant association lists.
5. National Wetland Inventory (NWI) mapping.
6. Indiana Approved Official Soil Series Descriptions (OSD) plant data.
7. Prior land-based (on the ground) photography.
One or more of the listed resources will indicate the presence of hydrophytic vegetation.
NOTE: Attention should be given to the definition being “Plants growing in water or in a substrate that is as least periodically deficient in oxygen during the growing season as a result of saturation or inundation by water”. Variance 5–42 of the FSA Wetland Identification Procedure states “For FSA purposes, the question is not as much the species, but rather how individual plants are behaving within any one sampling unit.” Any individual plant meeting the definition is considered to be hydrophytic vegetation.
➢ Proceed to Step 1.5
The agency expert will analyze each sampling unit as defined in Steps 1.2, 1.3, and 1.4 and use a worksheet to complete the following steps:
• If all three factor answers are “yes” (the factors are met) for a sampling unit then record a “Y” (yes) on the base map for the sampling unit.
• If any factor answer is “no” (a factor is not met) for a sampling unit then record an “N” (no) on the base map for the sampling unit.
• Provide a copy of the final base map to the case file.
• This final base map will be used to complete Section 2 and Section 3.
NOTE: Part IV of the 1987 USCAE Wetland Delineation Manual instructs the user to label the wetland “W” and the nonwetland “N”. NRCS is using the label “Y” in place of the “W” so as not to cause confusion with the use of “W” as an FSA Wetland Type Label in section 2.
➢ Proceed to Section 2
Sampling units identified as a “Y” (wetland) or “N” (non-wetland) in Section 1 will be assigned the appropriate WC compliance label as determined by any applicable exemptions found in the current version of the NFSAM. The offsite process for this step is identified as the
NOTE: Unless otherwise stated, the use of “1985” in this document refers to December 23, 1985.
The following data will be used to indicate that pre-1985 cropping history (“agricultural commodity produced at least once before 1985” (7 CFR 12.2)) is met. This step may have already been carried out in step 1.3. If so then this section need not be used unless there is a possibility of a false positive or negative determination
1. Any imagery taken prior to 1986.
2. Farm Service Agency records of any kind.
3. Any record from a person who was involved in the farming operation before December 23, 1985 that demonstrates that the site was cropped and appears to be valid.
4. Areas that are in pasture or hay land that have a uniform topography that indicates suitability as a crop field in past years. This condition does not preclude the use of wetland labels.
The threshold to use crop production as an eligible wetland exemptions has three parts:
1.
a. There may be situations with the Base Map being marked “Y” when the site may be determined to have cropping history with the use of steps #2 and #3 (resulting in a FW label).
2.
a. Evidence of Pre-1985 cropping appears on at least one piece of remote imagery.
b. Pre-1985 imagery indicates that the site was cleared of woody vegetation and the mapped soil type is commonly suited for crop production (as indicated on “Use and Vegetation” section of the Official Soil Description).
c. Farm Service Agency informs NRCS of cropping history.
d. An individual provides a written statement of when the site was cropped or imagery demonstrating so.
3.
a. 1985 or 1986 imagery indicates the site—
i. Is being cropped, or
ii. Is being used for pasture or hayland production absent of wetland indicators, or
iii. Is not inundated with surface water, or
iv. Does not contain woody vegetation such that:
1. Only isolated individual specimens that would not hinder conventional row planting are observed, and
2. There are not so many trees that a non-ag determination should be completed.
b. The Farm Services Agency informs NRCS of 1985 cropping history, “set-aside” history, or other status indicating that the site was suitable for crop production.
➢ Proceed to Section 2.2.
Manipulations are defined by regulation as an activity that drains, dredges, fills, levels, or otherwise manipulates, including the removal of woody vegetation, or any activity that results in impairing or reducing the flow and circulation of water, for the purpose of or to have the effect of making possible the production of an agricultural commodity.
The analysis related to pre-1985 manipulations has been completed in Step 1–1.1 DEVELOP A BASE MAP AND DETERMINATION OF NORMAL CIRCUMSTANCES (NC).
Evidence of pre-1985 manipulations presented during the following steps in the FSA label determination step should be applied to the steps in Section 1 (Developing the Base Map) to determine if the analysis completed in Section 2 needs reconsidered.
The following remote indicators are suggestive (indicates) that a post-1985 potential conversion occurred.
• Post-1986 imagery/aerial photography showing a manipulation(s).
• Post-1985 NRCS or Farm Service Agency records showing a manipulation(s).
• Post-1985 producer-provided records showing a manipulation(s).
• Post-1985 land-based photographs showing a manipulation(s).
• DEMs derived from LIDAR data showing a manipulation.
1. The manipulation appears on at least one indicator from post-1985 data.
NOTE: A site visit is required for potential wetland violations and a FSA–569 will be issued. Refer to 7CFR12 and NFSAM 514.1 to determine the circumstances that require a site visit.
The following remote indicators will be used to indicate whether a potential manipulation or conversion occurred before or after November 28, 1990.
• Imagery/aerial photography showing a manipulation(s) after December 23, 1985 but before November 28, 1990 (NFSAM Part 514).
• NRCS or Farm Service Agency records showing a manipulation(s) after December 23, 1985 but before November 28, 1990.
• Producer-provided records showing a manipulation(s) after December 23, 1985 but before November 28, 1990.
• Land-based photographs showing a manipulation(s) after December 23, 1985 but before November 28, 1990.
• DEMs derived from LIDAR data indicating a manipulation after December 23, 1985 but before November 28, 1990.
1. The manipulation appears on at least one indicator from data representing conditions between December 23, 1985 and November 28, 1990.
NOTE: A site visit is required for potential wetland violations and a FSA–569 will be issued. Refer to 7CFR12 and NFSAM 514.1 to determine the circumstances that require a site visit.
The following remote indicators will be used to indicate whether a potential manipulation or conversion occurred after November 28, 1990.
• Imagery/aerial photography showing a manipulation(s) after November 28, 1990 (NFSAM Part 514).
• NRCS or Farm Service Agency records showing a manipulation(s) after November 28, 1990.
• Producer provided records showing a manipulation(s) after November 28, 1990.
• Land-based photographs showing a manipulation (
• DEMs derived from LIDAR data indicating a manipulation after November 28, 1990.
1. The manipulation appears on at least one indicator representing conditions after November 28, 1990.
NOTE: A site visit is required for potential wetland violations and a FSA–569 will be issued. Refer to 7CFR12 and NFSAM 514.1 to determine the circumstances that require a site visit.
➢ Proceed to Section 2.4, 2.5, or 2.6 as appropriate. These sections identify land forms that meet the definition of depressional Farmed Wetlands, closed depressional Farmed Wetlands known as potholes, and Farmed Wetland Pastures. Proceed to section 2.7 if none of these are appropriate.
The following remote indicators are suggestive (indicates) that the site is a glaciated depression or land form that does not have topography that allows accumulated surface water to flow off-site such that it meets the definition of a Farmed Wetland pothole (FW).
1. Imagery, land-based photography, or other data show evidence that 7 consecutive days of inundation or 14 consecutive days saturation occurs in a closed topographic depression in a glaciated upland (non-floodplain, non-drainage way) landscape during the growing season. The term upland follows the concept from the national Soil Survey Handbook (NSSH). Imagery evidence includes—
a. Surface water.
b. Flooded or drowned out crops.
c. Vegetative color variation.
d. Stressed crops.
e. Un-harvested crops.
f. Isolated areas not farmed with the rest of the field.
g. Non-agricultural vegetation.
2. DEMS derived from LIDAR show a closed topographic depression in a glaciated upland landscape position.
3. USGS Topographic map or other land survey shows a closed topographic depression in a glaciated upland landscape position.
4. Soil Survey data show a depression, pothole, or closed topographic depression in a glaciated upland landscape position. Refer to Attachment B for further information.
5. A combination of US FWS NWI map and one other indicator from step 1.3.
A. The landform appears on at least one of the five remote indicators. The more indicators that can be assigned to a specific area, the greater the probability that it qualifies as a glaciated closed depressional area that meets the definition of a Farmed Wetland (FW).
B. NRCS records show field-verified manipulations with an assessment of duration, such as drainage equations found in the National Engineering Handbook, Chapter 19.
➢ Document and proceed to the section 2.5.
The following remote indicators are suggestive (indicates) that sites that have been manipulated but still warrant a “Y” on the Base Map exhibit the duration of inundation or saturation required to meet the criteria for pasture and hay land that contains depressions or other topography sufficient to allow water to accumulate such that it meets the definition of a Farmed Wetland Pasture (FWP).
1. 1980 through 1986 Farm Service Agency aerial imagery (taken during the growing season as defined in Part 514.2 of the NFSAM) showing wetness signatures. Imagery evidence includes the following signatures —
a. Surface water.
b. Flooded or drowned out crops.
c. Vegetative color variation.
d. Stressed crops.
e. Un-harvested crops.
f. Isolated areas not farmed with the rest of the field.
g. Non-agricultural vegetation.
2. DEMS derived from LIDAR show a closed topographic depression in a glaciated upland landscape position.
3. USGS Topographic map or other land survey shows a closed topographic depression in a glaciated upland landscape position.
4. Soil Survey data show a depression, pothole, or closed topographic depression in a glaciated upland landscape position. Refer to Attachment B for further information.
5. A combination of FWS NWI map and one other indicator from 1–3.
A. The landform appears on at least one of the four remote indicators. The more indicators that can be assigned to a specific area, the greater the probability that the area qualifies as a glaciated open-ended depression that meets the definition of a Farmed Wetland Pasture (FWP).
B. NRCS records show field-verified manipulations with an assessment of duration, such as drainage equations found in the National Engineering Handbook, Chapter 19.
The following remote indicators are suggestive (indicates) that sites that have been manipulated but still warrant a “Y” on the Base Map exhibit the duration of inundation or saturation required to meet the criteria for cropland that contains depressions or other topography sufficient to allow water to accumulate in order to meet the definition of a Farmed Wetland (FW).
1. 1980 through 1986 Farm Service Agency aerial imagery (taken during the growing season as defined in Part 514.2 of the NFSAM) showing wetness signatures. Any other 1986 or earlier aerial photography may also be used. Imagery evidence is limited to—
• Surface water.
• Drowned out crops leaving bare soil indicating long-term inundation (“bulls-eye” pattern).
• Non-ag vegetation on hydric soils.
2. NRCS records show field-verified manipulations with an assessment of duration, such as drainage equations found in the National Engineering Handbook, Chapter 19.
3. A combination of FWS NWI map and one other indicator from 1–3.
A. The landform appears on at least one of the three remote indicators. The more indicators that can be assigned to a specific area, the greater the probability that the area qualifies as a glaciated open-ended depression that meets the definition of a Farmed Wetland Pasture (FWP).
B. Results of analytical techniques (such as drainage equation(s)) show that inundation would not be removed within 15 days or consecutive days of 10% of the growing season.
➢ Document and proceed to section 2.7.
Refer to Part 514 of the NFSAM, 7 CFR 12.2 and 7 CFR 12.5 for a full discussion of the requirements for various exemptions. The SOSM has determined whether the sampling unit is considered a Wetland (Y) or a Non-Wetland (N). 7CFR12 lists the possible Wetland Types—
• Artificial Wetland (AW)—7CFR12.2(a) Wetland(1)
• Commenced Conversion Wetland (CC)—7CFR12.2(a) Wetland(2) & 12.5(b)(2)
• Converted Wetland (CW or CW+Year)—7CFR12.2(a) Wetland(3) & 12.4(a)(2)&(3)
• Converted Wetland not for the production of commodity crops (No label)—7CFR12.5(b)(1)(iv)
• Farmed Wetland—depressional or pothole (FW)—7CFR12.2(a) Wetland(4)
• Farmed-Wetland Pasture (FWP)—7CFR12.2(a) Wetland(5)
• Minimal Effect Wetland (MW)—7CFR12.5(b)(1)(v)
• Not-Inventoried Wetland (No label)—7CFR12.2(a) Wetland(6)
• Non-Wetland (NW)—7CFR12.2(a) Wetland(7)
• Prior-Converted Cropland (PC)—7CFR12.2(a) Wetland(8)
• Wetland (W)—7CFR12.2(a) Wetland(9)
All other WC compliance label assignments require the use of the NFSAM and on-site investigations. These include—
• Converted Wetland by Entity (CW)—7CFR12.5(D)
• Converted Wetland Planting Violation (CW)—7CFR12.2(a) Wetland(3) & 12.4(a)(2)
• Converted Wetland + Year (CW+Yr)—7CFR12.2(a) Wetland(3) & 12.4(a)(3)
• Manipulated Wetland (WX)—7CFR12.5(b)(1)(iv)
• Third Party Conversion (TP)—7CFR12.5(D)
The agency expert will analyze the final product to ensure that the size of the labeled area is accurate, particularly in response to post 1985 developments. Sample units and WC labeled areas will be adjusted to ensure that the labeled area accurately reflects the 1985 status and any changes created after that year.
The agency expert will, as appropriate, further divide or combine the sampling units identified in Section 2.0 into labeled polygons for the certified wetland determination map. This decision is based on the answers to the steps in Section 2 (
The Certified Determination Map will be depicted on the latest imagery that appears to be of normal precipitation. The map will contain labels for all areas that have certified determinations and preliminary determinations.
The map will be of sufficient scale so that the determined areas can be easily seen. Additional maps can be made to better show site location, location of farm, and past activities on the farm to show manipulation and conversion.
The following resources are listed in Part IV of the USACE 1987 Wetland Delineation Manual or are resources developed after the issuance of the Manual.
As of the date of issuance of these SOSM, ESDs are currently being developed in Indiana. Once completed, a matrix correlating soil map unit components to ecological sites will be available in Section 1, State Offsite Methods, of the Indiana Field Office Technical Guide (FOTG).
Ecological Site Descriptions and Range Site Descriptions are based on relative weight of component species, rather than the percent cover measure cited in the Corps Methods. Both measures are viable for determining the ecological significance of the species comprising the plant community. This use of these data is authorized in Paragraph 55-Step 4(c) and (d) of the 1987 USACE Wetland Delineation Manual.
Indiana NRCS will develop wetland reference site data through formal long-term water table monitoring and data demonstrating that a specific soil type has both positive hydrology and a plant community dominated by hydrophytic vegetation. These reference site data are currently being developed for Cobbsfork and similar soils in Southern Indiana. The use of these data is authorized in Paragraph 55-Step 4(d) and (h) of the 1987 USACE Wetland Delineation Manual.
Indiana NRCS will maintain and continually build a list of vegetative species observed, correlated with specific soil series, from past and future on-site determinations. In addition to this “master” correlated list, the certified agency experts may make use of their own accumulation of past determinations to indicate the presence of hydrophytic vegetation, particularly if a reference site is near the site to be determined. The use of these data is authorized in Paragraph 55-Step 4(d) and (h) of the 1987 USACE Wetland Delineation Manual.
Certified agency experts can make use of previous determination data that demonstrates a correlation between specific soil types and observed plant communities dominated by hydrophytic vegetation. The use of these data is authorized in Paragraph 55-Step 4(d), (f), and (h) of the 1987 USACE Wetland Delineation Manual.
The U.S. Fish and Wildlife Service Web site “Wetland Mapper” contains a list of vegetative species correlated to their specific wetland classifications. The use of these data is authorized in Paragraph 55-Step 4(b) of the 1987 USACE Wetland Delineation Manual
The official soil series descriptions provide a description of the vegetation adapted to the soil in a section entitled “Use and Vegetation”. The description of the vegetation can range from listing specific species to only providing a general description such as “Native vegetation is water tolerant sedges, reeds, grasses, and shrubs.”
Indiana NRCS is in the process of developing a state-wide list of all of the listed soil series, indicating which descriptions can be used to indicate hydrophytic vegetation and which soil series descriptions are being updated to provide specific species information. The use of these data is authorized in Paragraph 55-Step 4(d) and (g) of the 1987 USACE Wetland Delineation Manual
The NRCS will use the definition of pothole, playa, and pocosin as noted below. This definition is subject to change via the rule-making process. However, any change in definition will not change the soils the state considers pothole, playa, or pocosin soils.
• Pothole—Pothole means a closed or partially closed depressional wetlands, generally circular or elliptical in shape, that were formed during the Wisconsin Glaciation. Potholes can occur in an outwash plain, a recessional moraine, lacustrine plain, or a till plain and commonly contain an intermittent or seasonal pond or marsh. Many pothole wetlands are seasonally dry, retaining water and saturated soil conditions due to snow-melt and precipitation runoff early in the growing season. Later in the growing season, evapotranspiration generally exceeds normal precipitation resulting in some potholes being dry for a significant portion of the year. The fluctuating hydrology, along with alterations implemented to improve farming, lead to a variety of vegetation characteristics including submergent and floating plants in deeper water, bulrushes and cattails in shallow water and sedges located near adjacent uplands. During dry periods, upland plant species can invade these sites and persist into wet seasons.
NOTE: This definition is a mutually agreed-to definition by both Indiana and Illinois NRCS to describe the glaciated pothole region present in both states.
• Specific Indiana identification parameters are:
○ Occurs within the Wisconsin glaciated region.
○ Symmetrically closed depression.
○ Ponds water greater than 1 foot in depth if not drained.
○ Side slopes dominantly greater than 2%.
○ Has a ≥50% chance of being ponded for at least 7 consecutive days or is saturated for at least 14 consecutive days during the growing season.
• In Indiana, Potholes are located primarily in the upper half of the Wisconsin Glaciated Region and include, but are not limited to, the following soil series with the modifier “pothole”:
○ Harpster sil, pothole
○ Milford msic, pothole
○ Milford sl, pothole
○ Milford sicl, pothole
○ Pella sicl, pothole
○ Peotone sicl, pothole
○ Walkill l, pothole
○ Warners sil, pothole
1. Hydrology information will be developed using Chapter 19 of the NRCS National Engineering Field Handbook—
I. Part 650.1901—“Use of stream and lake gauges (pages 19–2 to 19–5)
i. This part may be used whenever there are data developed for such use.
II. Part 650.1911—“Remote Sensing Applications” (pages 19–85 to 19–96)
i. This part is to be used to determine the presence of hydrology.
III. The use of the other parts of Chapter 19 will only be with the assistance of NRCS engineering specialists.
IV. NRCS will use Purdue Extension Publication AY–300, June 2001, “Drainage and Wet Soil Management—Drainage Recommendations for Indiana Soils”.
i. The guide provides a tile spacing distance range for each group of soils with a similar drainage capability.
ii. The guide will be used to determine how far back to set a tile line from an herbaceous wetland, a farmed wetland, or a farmed wetland pasture.
1. Each person receiving such a guide will be advised to use the maximum spacing range as a setback distance.
2. Each person receiving such a guide will be advised that wetland labels such as W–Wetland, FW–Farmed Wetland, or FWP-–armed Wetland Pasture will be changed to CW+Year if they are affected by the installation of new tiles, even if laid according to the guide.
3. A Technical Assistance Note or a copy of the guide will be placed in the casefile of every person receiving the guide.
2. The use of Farm Service Agency aerial imagery will serve two purposes—
I. The identification of wetlands and non-wetlands as of December 23, 1985. Consequently, the slides to be used are limited to those taken before 1987 as the intent of the interpretation is for the Wetland Identification prior to 1985. Slides and imagery post-1986, such as the 2005 infrared and other high resolution imagery, may be used to help identify ground and topographical conditions but not in the identification of wetlands under typical conditions.
II. The occurrence of atypical activities in wetlands after December 23, 1985. Slides taken after 1986 are used for three purposes—
i. To indicate if a wetland was manipulated.
ii. To determine if a wetland was converted between December 23, 1985 and November 28, 1990, and if it was converted—what year, if any, was it used for the production of an annual commodity crop after the conversion.
iii. To determine what year, if any, was a wetland converted after November 28, 1990, to make it suitable for the production of a commodity crop.
3. Normal Precipitation—
The terms “normal precipitation imagery”, “normal precipitation”, or “normal years” is referring to a period of time where normal amounts of precipitation were received by the site. The time frame is normally 3 months. The amount of precipitation received by a specific area is arrived by using the procedure outlined in Part 650.1903—“Supplemental data for remote sensing” (pages 19–24 to 19–31). This same procedure is used to determine if a site, during a specific date or time frame, received precipitation amounts within the range of normal rainfall or outside of the normal range with excessive amounts of precipitation, considered “wet”, or low amounts of precipitation, considered “dry”.
Ten (10) potential sources of information are described within Part IV, Section B of the 1987 Manual. This section describes some of the sources listed in the manual, defines additional sources that NRCS may use to complete the CWD process. A source not being mentioned in this section should not be interpreted as that source being invalidated. The delineator should attempt to utilize all available sources of information when completing the SOSM.
NRCS employees are provided with the official USGS topographic maps within agency Geographic Information Systems (GIS). USGS topographic maps and other spatial data may also be accessed at:
1. Check the date on the map or in the metadata for the date of revision. This may help determine a time range when changes occurred.
2. USGS protocol was generally to delineate the wet areas mapped based on the driest season of the year, which may have missed several wetlands.
The National Wetland Inventory (NWI) is an offsite delineation of potential wetlands. The NWI is an available tool that mapped potential wetlands when wetland losses were accelerating in the 1970's and 80's due to agricultural conversions and other wetland stressors. The NWI is accepted by USFWS, USACOE, EPA and NRCS as a first cut indicator tool for the presence of wetlands. NRCS employees are provided with the most up to date version of NWI data that is compatible with agency Geographic Information Systems and tools. NWI data can also be obtained directly from USFWS at
Plant community and hydrologic condition are key components of the NWI interpretation and these interpretations were made at a time critical for making decisions relative to the FSA. Because the first iterations of NWI were commenced in the 1970's, the historical data provides an indication of the status of wetlands around the critical December 23, 1985 date. Hydrologic condition was interpreted using several water regime modifiers. The 1987 Corps Wetland Delineation Manual states in Part IV, Section B chapter 54 that areas mapped as “wetter” than temporarily flooded and intermittently flooded have extremely high probabilities of meeting the wetland criteria (in excess of 90 percent). The historical NWI also indicates possible manipulations to
1. The NWI mapping protocol was developed prior to the accepted federal definition of wetlands contingent on the three parameters of soils, hydrology, and plants. Consequently, some of the early delineations may have only been based on the two parameters of hydrology and plant species. This was somewhat corrected with soils between the draft remote sensing interpretations and the final interpretations.
2. The inventory was remotely sensed with generally no more than 5% ground-truthing in any given state.
3. The inventory often fails to capture open land wetlands, such as farmed wetlands, as defined under the Food Security Act of 1985, as amended, because of cropping activities and/or disturbance of plant communities.
Soils information is a primary tool for making offsite wetland determinations. NRCS employees and the general public have access to the most up to date soils data via agency GIS systems as well as Web Soil Survey (WSS) at
Field office business software or the WSS have reports available that will produce both spatial and tabular reports/lists for hydric soils. Currently this report for individual parcels should be a subset of the “County Hydric Soils List” which is referenced in many documents. Field office business software rates each map unit. Map units are designated as “all hydric,” “partially hydric,” “not hydric,” or “unknown hydric,” depending on the rating of its respective components. “All hydric” means that all components listed for a given map unit are rated as being hydric, while “not hydric” means that all components are rated as not hydric. “Partially hydric” refers to a soil that has at least one component of the map unit that is rated as hydric and at least one component that is rated as not hydric. “Unknown hydric” indicates that at least one component is not rated so a definitive rating for the map unit cannot be made.
In Web Soil Survey, there are multiple reports that provide hydric soil information. “Hydric Rating by Map Unit” indicates the cumulative percentage of soil components within each map unit that meet the criteria for hydric soils. A related report, “Hydric Rating by Map Unit (5 categories)” further designates a hydric category for each map unit based on the cumulative percentage of its hydric components. The “Hydric Soils List” provides the hydric/non-hydric status of all map unit components in the survey area. The “Hydric Soils” report lists only those map units that have at least one component that is hydric. The percentages of hydric or non-hydric soil components found in each report for any map unit are only an estimate. These estimates were derived from field observations taken by soil scientists during the soil survey but will vary for any map unit from one location to the next.
The decision to use SOSM (remote sensing) versus an onsite visit for possible hydric soil inclusions is a primary objective of this methodology.
The published soils data is a tool that provides evidence to the possible presence of a wetland. Some of the limitations to the published soil survey relative to offsite hydric soil determinations are as follows:
1. All soil surveys rely on data that were gathered during a specific period of time. Land use changes or manipulations from natural or human events may now result in inaccurate soils data. Additionally, some wetlands, such as floodplain wetlands, naturally evolve over time into non-wetlands.
2. A “hydric soil” component listed in the report may have properties that do meet hydric soil criteria. However, the entire range of characteristics of soil components classified to the series level may not be entirely within the range of properties for a “hydric soil.” Hydric soil criteria were developed separately from Soil Taxonomy. Therefore, any given component (series) may have a range of characteristics that is not entirely within the range for hydric soils even though the series is poorly or very poorly drained.
3. Almost all of the soil maps in the state were originally drawn at a relatively small scale so some minor displacement of soil lines may be observed. Additionally, much of the digital spatial data available were created by recompiling and digitizing these hard copy maps. Errors such as mislabeled map units and spatial displacement are accidentally introduced as a result of the analog to digital conversion process. If an error is suspected for any reason, an original hard copy of the information should be consulted when available.
Stream gauge data may be a useful tool in some parts of the state for determining the hydrologic criteria of potential riverine wetlands subject to long duration flooding. Sites subject to long duration flooding (or ponding) that occurs during the growing season for 14 or more consecutive days > 50% of years under normal circumstances will meet the criteria of a wetland if the site also supports a prevalence of hydrophytic plants. Long duration periods of surface inundation meet both the hydrologic criteria of a wetland (14 or more days) and the hydric soil criteria of a wetland (7 or more days). Typically this method requires that the flood elevation be extrapolated across the landscape between gauges in order to analyze the potential of individual sites.
1. Current stream gauge data coverage and subsequent analyses are limited in Indiana.
There are three basic film bands for the imagery available through the NHAP, NAPP, and NAIP: Color infrared (CIR), Natural Color (NC), and Black/White (BW).
The currently acquired imagery by Farm Service Agency, NAIP, is digital ortho-imagery acquired during the agricultural growing season (leaf on) and the Farm Service Agency uses this imagery as a tool primarily to verify agricultural conditions for USDA programs. The NAIP provides one meter ground sample distance (GSD) ortho-imagery rectified within +/−6 meters to true ground at a 95% confidence level.
From the 1980s through the 1990s, the Farm Service Agency purchased county-wide high altitude flights for resource assessments and verification of fields planted and types of crops grown. The spring flights make these sources of imagery very valuable for wetland determinations because they occur during the normal hydrologic period of recharge for the majority of the wetlands in the state. The Farm Service Agency Aerial Photography Field Office (
The NAIP imagery is accessible as a digital data layer in Geographic Information Systems (GIS) and is available in all field offices, and certain flight years have the capability of being displayed either in natural color and CIR.
Because Farm Services Agency imagery may be available on or around the key years of 1985 and 1990, this imagery is one of the
In addition to Farm Service Agency, NRCS personnel have access to imagery from a number of sources. Imagery from the “Indiana Historical Aerial Photo Index” can be acquired from the Indiana Geological Web site. Imagery can also be viewed on many County GIS Web sites that are operated in conjunction with the Assessor's office. These sources tend to offer variability in timing and season of photography which provides greater perspective when making a determination. Many of these sources are not geo-referenced and therefore cannot be added to a base map within a GIS. However, the information that they provide is often extremely valuable to the delineator.
Some of the limitations relative to use are:
1. Low crop producing counties may have fewer available years of imagery.
2. Many counties in the state have discarded early years of crop compliance slides.
3. Early year crop compliance slides not digitized may have no mapping index and consequently are hard to organize and use unless an index is developed.
4. Based on the actual flight date and the type of film, the imagery may be limiting relative to some interpretations. For example, flights in the growing season (
5. Normal climatic conditions (
6. Early year crop compliance slides may experience some fading of colors, although this rarely results in the masking of gross landscape features.
Determining the date of the imagery is critical when making photo-interpretations of imagery for wetland determinations. The actual date of the flight allows the reviewer to evaluate the climatic condition both for growing season decisions and for rainfall amounts and time of storm events. Actual days of the flight may be printed on the hard copy imagery or can be found in the metadata of digital imagery. Records of actual flight days may be available in the Farm Service Agency Aerial Photography Field Office as previously mentioned.
The pre-flight climatic assessment (antecedent moisture condition) supports the quality of each flight year of imagery as a tool. By documenting that the normal condition relative to rainfall existed just prior to the flight, good wetland hydrology decisions can be made. Flight dates that occur within the growing season support the wetland definition. However, imagery flown outside of growing seasons should still be considered tangible evidence for the hydrologic condition during the growing season if similar rainfall amounts are expected during growing season months. Such leaf off imagery may better display drainage patterns.
The methodology to complete this climatic assessment can be found in Chapter 19 of the NRCS National Engineering Field Handbook (Hydrology Tools for Making Wetland Determinations). Each month's rainfall amount is determined to be within the range of normal when it is within 30% to 70% of the monthly average. The three-month rainfall period is then assessed as a weighted average for the imagery, with more emphasis placed on the period just preceding the flight date. This assessment is used to determine the climatic condition prior to the flight.
There are a number of good sources of rainfall data by month. The NRCS CLIMSYS WETS table, available for most counties in the state, will post monthly rainfall amounts for the 30 years of records used to provide county averages (
• National Oceanographic and Atmospheric Administration (NOAA) cooperative site: May provide data to within two months of real time, and this data is recorded daily. The Web site does not have a static url and appears to have limited coverage of the state.
• Indiana State Climate Office: Offers hourly, daily and monthly reports. The site also offers access to additional data such as drought reports and long term moisture trends.
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• National Weather Service, Advanced Hydrologic Prediction Service: Provides a variety of search and report options for gathering climatic data up to a year to date in duration.
• Weather Underground: May provide real time rainfall amounts. This source may be limited by the lack of available stations providing data. The closest station may be some distance from the site.
The weather station closest to the potential wetland site should be the first source of rainfall data. If rainfall data is unavailable for the needed period of assessment, analyze rainfall records from more than one station on each side of the site in order to bracket the site and support that the site received rainfall amounts similar to station data results.
Wetness signature is a change in appearance of a site from the surrounding land readily visible on aerial photography due to excessive moisture or wetness. Indicators of wetness signature include:
a. Surface water
b. Flooded or drowned out crops
c. Long-term inundation that leaves a distinctive “bulls-eye” or “bathtub ring” signature indicating very gradual percolation and/or evaporation.
d. Stressed vegetation (
e. Differences in vegetation color due to management, such as delayed planting or harvesting;
f. Isolated, squared, and/or irregularly shaped areas not managed similar to rest of the agricultural field (
g. Patches of lush or greener vegetation, which may be especially pronounced in a drier than normal image or during a drought.
h. Unharvested crops in an otherwise harvest field
i. Non-agricultural vegetation in place of crops on hydric soils or inclusions.
j. A consistent land change or vegetative boundary outline, or footprint, can be indicative of a wetland of some type when the other characteristics, such as color or texture, may be too subtle to call for a different sampling unit or label on their own.
It is important to confirm the landscape position and relief of the site when making wetness signature interpretations. Recognize that similar irregular patterns on upland sloping agricultural areas may be such things as
Ground-truthing, or on-site analysis, is not required to make an offsite wetland determination. However, it is an important consideration for making sound remote sensing interpretations and should be a part of the training protocol for any wetland specialist using this method. While the policy is to do as many determinations as possible using offsite methods for both the identification of wetlands (SOSM) and the identification of wetland type (SOWTP), this process encourages the use of ground-truthing when needed for increased accuracy in the determination. Newly trained agency experts especially are encouraged to make an on-site analysis in order to better develop their ability to interpret offsite data.
Wetness signature is always easier to detect from imagery in open agricultural areas because of the physical responses of plant communities to wetness or dryness after periodic agricultural disturbances. In cropped areas, bare ground will periodically be the condition of the site in some flights. Forested areas are harder to remote sense for wetness signature due to leaf cover, shadows, lack of disturbance and lack of visible response by the forest community to minor changes in wetness. For that reason, the user may be able to interpret wetness signature within forested areas from the open agricultural areas adjacent to those areas when characteristics such as relief and drainage pattern are considered. Wetness signatures at the interface of woods and crops are a signature of wetness in the woods, indicating that the woods should be visited to determine how much of the woods is wet if it cannot be determined with the imagery.
A Digital Elevation Model (DEM) is a raster dataset that can be used as an elevation surface layer in a Geographic Information System (GIS) to display and analyze topographic and geomorphic characteristics within the extent of data coverage. For the Indiana SOSM process, DEMs refers to Digital Elevation Models that represent the bare earth surface of landscape, without buildings, vegetation, or other above ground features. The most up to date DEMs in Indiana consist of a new generation of high accuracy data derived from LIDAR datasets. This set of Digital Elevation Models is capable of accurately mapping a 2-foot contour interval on the land. The DEM and other landscape based data derivatives are available to NRCS employees for use in offsite assessments for the SOSM process and prior to site visits. Derivative datasets generated from the DEM can include contours, slope, shaded relief or hillshade, fill, flow accumulation, landform curvature, and aspect. These datasets are able to be used as remote sensing tools to aid in determining potential wetland geomorphology and detailed local drainage patterns. They serve as a valuable tool for this methodology. All NRCS employees in Indiana that have approval to perform wetland determinations are provided with access to the data and software tools to utilize and interpret the data within agency based Geographic Information Systems
1. The current set of Indiana DEMs was developed from LIDAR data collected between 2008 and 2013 across the state. As a result, the DEMs will sometimes, but not always, be useful in interpreting the presence or absence of manmade drainage features such as ditches prior to 1985.
2. DEMs from any source are similar to aerial imagery in that they store information about the state of the landscape at the time of the source data acquisition, in this case LIDAR collected between 2008 and 2013. This means that subsequent changes to the landscape are not depicted which could include ditch cleaning, diversions, terraces, etc.
There are a number of other valuable resources available to NRCS delineators. All credible data sources should be considered when making a CWD to ensure accuracy.
Additional years of orthorectified aerial imagery are available, including 1998 NAPP (1 meter, leaf-off), numerous years of NAIP (1 meter, leaf-on) from 2003 to the present, and multiple high-resolution local data sets (typically 1 foot, leaf-off, 4-band) collected by units of state and county government. More recent versions of the NAIP and high resolution local imagery include a 4th band of color infrared (CIR) data which can be displayed in a manner to further assist photo interpretation of wetness signatures.
The USGS topographic maps were created prior to the 1980's and provide a good historical indicator of land use. The contour interval on the historical USGS topographic maps is typically 5 or 10 feet which can be insufficient for landform geomorphology interpretations in relatively flat landscapes. The use of high-resolution Digital Elevation Models (DEMs) derived from new LIDAR products now enables all of Indiana to be covered by 2-foot contour interval data to provide much more detailed views of local topography and landforms.
Rural Housing Service, USDA.
Proposed collection; comments request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Rural Housing Service's (RHS) intention to request an extension for the currently approved information collection in support of our program for Complaints and Compensation for Construction Defects.
Comments on this notice must be received by July 5, 2016 to be assured of consideration.
Myron Wooden, Finance and Loan Analyst, Single Family Housing Direct Loan Division, RHS, U.S. Department of Agriculture, STOP 0783, 1400 Independence Avenue SW., Washington, DC 20250–0783. Telephone (804) 287–1559.
Copies of this information collection can be obtained from Jeanne Jacobs, Regulations and Paperwork Management Branch, at (202) 692–0040.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of RHS, including whether the information will have practical utility; (b) the accuracy of RHS's estimate of the burden of the proposed collection of information, including a variety of methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to Brigitte Sumter, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, Rural Development, STOP 0742, 1400 Independence Avenue SW., Washington, DC 20250–0743. All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Indiana Advisory Committee (Committee) will hold a meeting on Wednesday, June 15, 2016, from 3:00 p.m.–4:00 p.m. EDT. The Committee will discuss findings and recommendations regarding school discipline policies and practices which may facilitate disparities in juvenile justice involvement and youth incarceration rates on the basis of race, color, disability, or sex, in what has become known as the “School to Prison Pipeline,” in preparation to issue a report to the Commission on the topic. This meeting is open to the public vial the following toll free call in number 888–430–8694 conference ID 4308606. Any interested member of the public may call this number and listen to the meeting. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1–800–977–8339 and providing the Service with the conference call number and conference ID number.
Members of the public are invited to make statements during the designated open comment period. In addition, members of the public may submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60615. They may also be faxed to the Commission at (312) 353–8324, or emailed to Carolyn Allen at
Records and documents discussed during the meeting will be available for public viewing prior to and following the meeting at
The meeting will be held on Wednesday June 15, 2016, from 3:00pm–4:00 p.m. EDT.
Public Call Information:
Melissa Wojnaroski, DFO, at 312–353–8311 or
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules
Members of the public may listen to the discussion. This meeting is available to the public through the following toll-free call-in number: 888–504–7963, conference ID: 5407176. Any interested member of the public may call this number and listen to the meeting. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines according to their wireless plan, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1–800–977–8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also invited to make statements at the end of the conference call. In addition, members of the public may submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60615. They may also be faxed to the Commission at (312) 353–8324, or emailed to Administrative Assistant, Corrine Sanders at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at:
The meeting will be held on Monday, May 16, 2016, from 10:00–11:00 a.m. CDT.
Public Call Information:
Melissa Wojnaroski, DFO, at 312–353–8311 or
Commission on Civil Rights.
Notice of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the North Carolina Advisory Committee will hold a meeting on Tuesday, May 17, 2016, for the purpose of discussing town hall meeting transcript conducted on April 7, 2016 in Walnut Cove, NC.
Members of the public can listen to the discussion. This meeting is available to the public through the following toll-free call-in number: 888–427–9419, conference ID: 4170236. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1–800–977–8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments; the comments must be received in the regional office by May 13, 2016. Written comments may be mailed to the Southern Regional Office, U.S. Commission on Civil Rights, 61 Forsyth Street, Suite 16T126, Atlanta, GA 30303. They may also be faxed to the Commission at (404) 562–7005, or emailed to Regional Director, Jeffrey Hinton at
Records generated from this meeting may be inspected and reproduced at the Southern Regional Office, as they become available, both before and after the meeting. Records of the meeting will be available via
The meeting will be held on Tuesday, May 17, 2016, 12:00 p.m. EST.
The meeting will be by teleconference. Toll-free call-in number: 888–437–9419, conference ID: 4170236.
Jeff Hinton, DFO, at
Bureau of the Census, Department of Commerce.
Notice of public meeting.
The Bureau of the Census (U.S. Census Bureau) is giving notice of a meeting of the Federal Economic Statistics Advisory Committee (FESAC). The Committee will advise the Directors of the Economics and Statistics Administration's (ESA) two statistical agencies, the Bureau of Economic Analysis (BEA) and the Census Bureau, and the Commissioner of the U.S. Department of Labor's Bureau of Labor Statistics (BLS) on statistical methodology and other technical matters related to the collection, tabulation, and analysis of federal economic statistics. Last minute changes to the agenda are possible, which could prevent giving advance public notice of schedule adjustments.
June 10, 2016. The meeting will begin at approximately 9:00 a.m. and adjourn at approximately 4:30 p.m.
The meeting will be held at the U.S. Census Bureau Conference Center, 4600 Silver Hill Road, Suitland, MD 20746.
James R. Spletzer, Designated Federal Official, Department of Commerce, U.S. Census Bureau, Research and Methodology Directorate, Room 5K175, 4600 Silver Hill Road, Washington, DC 20233, telephone 301–763–4069, email:
Members of the FESAC are appointed by the Secretary of Commerce. The Committee advises the Directors of the BEA, the Census Bureau, and the Commissioner of the Department of Labor's BLS, on statistical methodology and other technical matters related to the collection, tabulation, and analysis of federal economic statistics. The Committee is established in accordance with the Federal Advisory Committee Act (title 5, United States Code, Appendix 2).
The meeting is open to the public, and a brief period is set aside for public comments and questions. Persons with extensive questions or statements must submit them in writing at least three days before the meeting to the Designated Federal Official named above. If you plan to attend the meeting, please register by Wednesday, June 1, 2016. You may access the online registration form with the following link:
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should also be directed to the Designated Federal Official as soon as known, and preferably two weeks prior to the meeting.
Due to increased security and for access to the meeting, please call 301–763–9906 upon arrival at the Census Bureau on the day of the meeting. A photo ID must be presented in order to receive your visitor's badge. Visitors are not allowed beyond the first floor.
First Responder Network Authority, National Telecommunications and Information Administration, U.S. Department of Commerce.
Announcement of availability of a draft programmatic environmental impact statement and of public meetings.
The First Responder Network Authority (“FirstNet”) announces the availability of the Draft Programmatic Environmental Impact Statement for the East Region (“Draft PEIS”). FirstNet also announces a series of public meetings to be held throughout the East Region to receive comments on the Draft PEIS. The Draft PEIS evaluates the potential environmental impacts of the proposed nationwide public safety broadband network in the East Region, composed of Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia.
Submit comments on the Draft PEIS for the East Region on or before July 6, 2016. FirstNet will also hold public meetings in each of the 13 states and the District of Columbia. See
At any time during the public comment period, members of the public, public agencies, and other interested parties are encouraged to submit written comments, questions, and concerns about the project for FirstNet's consideration or to attend any of the public meetings. Written comments may be submitted electronically via
For more information on the Draft PEIS, contact Amanda Goebel Pereira, NEPA Coordinator, First Responder Network Authority, National Telecommunications and Information Administration, U.S. Department of Commerce, 12201 Sunrise Valley Drive, M/S 243, Reston, VA 20192.
Attendees can obtain information regarding the project and/or submit a comment in person during public meetings. The meeting details are as follows:
The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112–96, Title VI, 126 Stat. 156 (codified at 47 U.S.C. 1401
The National Environmental Policy Act of 1969 (42 U.S.C. 4321–4347) (“NEPA”) requires federal agencies to undertake an assessment of environmental effects of their proposed actions prior to making a final decision and implementing the action. NEPA requirements apply to any federal project, decision, or action that may have a significant impact on the quality of the human environment. NEPA also establishes the Council on Environmental Quality (“CEQ”), which issued regulations implementing the procedural provisions of NEPA (see 40 CFR parts 1500–1508). Among other considerations, CEQ regulations at 40 CFR 1508.28 recommend the use of
Due to the geographic scope of FirstNet (all 50 states, the District of Columbia, and five territories) and the diversity of ecosystems potentially traversed by the project, FirstNet has elected to prepare five regional PEISs. The five PEISs will be divided into the East, Central, West, South, and Non-Contiguous Regions. The East Region consists of Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia. The Draft PEIS analyzes potential impacts of the deployment and operation of the NPSBN on the natural and human environment in the East Region, in accordance with FirstNet's responsibilities under NEPA.
All comments received by the public and any interested stakeholders will be evaluated and considered by FirstNet during the preparation of the Final PEIS. Once a PEIS is completed and a Record of Decision (ROD) is signed, FirstNet will evaluate site-specific documentation, as network design is developed, to determine if the proposed project has been adequately evaluated in the PEIS or warrants a Categorical Exclusion, an Environmental Assessment, or an Environmental Impact Statement.
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the Grand Forks Regional Airport Authority, grantee of FTZ 103, requesting authority to reorganize the zone under the alternative site framework (ASF) adopted by the FTZ Board (15 CFR 400.2(c)). The ASF is an option for grantees for the establishment or reorganization of zones and can permit significantly greater flexibility in the designation of new subzones or “usage-driven” FTZ sites for operators/users located within a grantee's “service area” in the context of the FTZ Board's standard 2,000-acre activation limit for a zone. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a–81u), and the regulations of the Board (15 CFR
FTZ 103 was approved by the FTZ Board on April 27, 1984 (Board Order 253, 49 FR 19541, May 8, 1984). The grant of authority was reissued to the Grand Forks Regional Airport Authority on July 5, 1995 (Board Order 752, 60 FR 36104–36105, July 13, 1995).
The current zone includes the following sites in Grand Forks:
The grantee's proposed service area under the ASF would include all of Grand Forks County, North Dakota, as described in the application. If approved, the grantee would be able to serve sites throughout the service area based on companies' needs for FTZ designation. The application indicates that the proposed service area is within and adjacent to the Grand Forks, North Dakota U.S. Customs and Border Protection port of entry.
The applicant is requesting authority to reorganize its existing zone under the ASF without including any of the existing sites in the reorganized zone. No new magnet sites or subzones/usage-driven sites are being requested at this time. The application would have no impact on FTZ 103's previously authorized subzone.
In accordance with the FTZ Board's regulations, Christopher Kemp of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the FTZ Board.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is July 5, 2016. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to July 20, 2016.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230–0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
Notice of issuance of an amended Export Trade Certificate of Review to The Great Lakes Fruit Exporters Association, LLC, Application No. 03–2A007.
The Secretary of Commerce, through the Office of Trade and Economic Analysis (“OTEA”), issued an amended Export Trade Certificate of Review to The Great Lakes Fruit Exporters Association, LLC (“GLFEA”) of Michigan on April 27, 2016.
Joseph E. Flynn, Director, Office of Trade and Economic Analysis, International Trade Administration, by telephone at (202) 482–5131 (this is not a toll-free number) or email at
Title III of the Export Trading Company Act of 1982 (15 U.S.C. Sections 4001–21) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. An Export Trade Certificate of Review protects the holder and the members identified in the Certificate from State and Federal government antitrust actions and from private treble damage antitrust actions for the export conduct specified in the Certificate and carried out in compliance with its terms and conditions. The regulations implementing Title III are found at 15 CFR part 325 (2016).
OTEA is issuing this notice pursuant to 15 CFR 325.6(b), which requires the Secretary of Commerce to publish a summary of the certification in the
No change has been made regarding the Export Trade, Export Trade Activities or Methods of Operation covered by the Certificate.
The amended Certificate of Review is effective from January 28, 2016, the date on which the application for an amendment was deemed submitted.
Notice of issuance of an amended Export Trade Certificate of Review to the Association for the Administration of Rice Quotas, Inc. (“AARQ”), Application No. (97–13A03).
The Secretary of Commerce, through the Office of Trade and Economic Analysis (“OTEA”), issued an amended Export Trade Certificate of Review to AARQ of Delaware on April 11, 2016.
Joseph E. Flynn, Director, Office of Trade and Economic Analysis, International Trade Administration, by telephone at (202) 482–5131 (this is not a toll-free number) or email at
Title III of the Export Trading Company Act of 1982 (15 U.S.C. Sections 4001–21) authorizes the Secretary of Commerce to issue Export Trade Certificates of
OTEA is issuing this notice pursuant to 15 CFR 325.6(b), which requires the Secretary of Commerce to publish a summary of the certification in the
1. Deleting the following Members from its Certificate:
2. Changing Nishimoto Trading Co., Ltd., Santa Fe Springs, California (a subsidiary of Nishimoto Trading Company, Ltd. (Japan) to Nishimoto Trading Co., Ltd. dba Wismettac Asian Foods, Santa Fe Springs, California (a subsidiary of Nishimoto Trading Company, Ltd. (Japan).
3. Changing PS International, LLC dba PS International Ltd., Chapel Hill, North Carolina (jointly owned by Seaboard Corporation, Kansas City, Missouri and PS Trading Inc., Chapel Hill, North Carolina) to Interra International, LLC, Chapel Hill, North Carolina.
4. Changing TRC Trading Corporation, Roseville, California (a subsidiary of TRC Group Inc., Roseville, California) and its subsidiary Gulf Rice Arkansas II, LLC, Houston, Texas to TRC Trading Corporation, Roseville, California (a subsidiary of TRC Group Inc., Roseville, California) and its subsidiary Gulf Rice Arkansas II, LLC, Crawfordsville, Arkansas.
5. Changing Veetee Rice, Inc., Great Neck, New York (a subsidiary of Veetee Investments Corporation (Bahamas)) to Veetee Foods Inc., Islandia, New York (a subsidiary of Veetee Investments Corporation (Bahamas)).
AARQ's amendment of its Export Trade Certificate of Review results in the following entities as Members under the Certificate:
1. ADM Latin, Inc., Decatur, Illinois, ADM Grain Company, Decatur, Illinois, and ADM Rice, Inc., Tarrytown, New York (subsidiaries of Archer Daniels Midland Company).
2. American Commodity Company, LLC, Williams, California.
3. Associated Rice Marketing Cooperative (ARMCO), Richvale, California.
4. Bunge Milling, Saint Louis, Missouri (a subsidiary of Bunge North America, White Plains, New York), dba PIRMI (Pacific International Rice Mills), Woodland, California.
5. Cargill Americas, Inc., and its subsidiary CAI Trading, LLC, Coral Gables, Florida.
6. Farmers' Rice Cooperative, Sacramento, California.
7. Farmers Rice Milling Company, Inc., Lake Charles, Louisiana.
8. Far West Rice, Inc., Durham, California.
9. Gulf Pacific Rice Co., Inc., Houston, Texas; Gulf Rice Milling, Inc., Houston, Texas; and Harvest Rice, Inc., McGehee, Arkansas (each a subsidiary of Gulf Pacific, Inc., Houston, Texas).
10. Gulf Pacific Disc, Inc., Houston, Texas.
11. Itochu International Inc., Portland, Oregon (a subsidiary of Itochu Corporation (Japan)).
12. Interra International, LLC, Chapel Hill, North Carolina.
13. JFC International Inc., Los Angeles, California (a subsidiary of Kikkoman Corp.).
14. JIT Products, Inc., Davis, California.
15. Kennedy Rice Dryers, L.L.C., Mer Rouge, Louisiana.
16. Kitoku America, Inc., Burlingame, California (a subsidiary of Kitoku Shinryo Co., Ltd. (Japan)).
17. LD Commodities Rice Merchandising LLC, Wilton, Connecticut, and LD Commodities Interior Rice Merchandising LLC, Kansas City, Missouri (subsidiaries of Louis Dreyfus Commodities LLC, Wilton, Connecticut).
18. Louisiana Rice Mill, LLC, Mermentau, Louisiana.
19. Nidera US LLC, Wilton, Connecticut (a subsidiary of Nidera BV (Netherlands)).
20. Nishimoto Trading Co., Ltd. dba Wismettac Asian Foods, Santa Fe Springs, California (a subsidiary of Nishimoto Trading Company, Ltd. (Japan).
21. Producers Rice Mill, Inc., Stuttgart, Arkansas.
22. Riceland Foods, Inc., Stuttgart, Arkansas.
23. Riviana Foods Inc., Houston, Texas (a subsidiary of Ebro Foods, S.A. (Spain)), for the activities of itself and its subsidiary, American Rice, Inc., Houston, Texas.
24. Sinamco Trading Inc., Minneapolis, Minnesota.
25. SunFoods LLC, Woodland, California.
26. SunWest Foods, Inc., Davis, California.
27. The Sun Valley Rice Co., LLC, Arbuckle, California.
28. TRC Trading Corporation, Roseville, California (a subsidiary of TRC Group Inc., Roseville, California) and its subsidiary Gulf Rice Arkansas II, LLC, Crawfordsville, Arkansas.
29. Trujillo & Sons, Inc., Miami, Florida.
30. Veetee Foods Inc., Islandia, New York (a subsidiary of Veetee Investments Corporation (Bahamas)).
31. Wehah Farm, Inc., dba Lundberg Family Farms, Richvale, California.
No change is has been made regarding the Export Trade, Export Trade Activities or Methods of Operation covered by the Certificate.
The amended Certificate of Review is effective from January 11, 2016, the date on which the application for an amendment was deemed submitted.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On April 18, 2016, the U.S. Trade Representative (USTR) instructed the Department of Commerce (the Department) to implement its determinations under section 129 of the Uruguay Round Agreements Act (URAA), regarding several countervailing duty (CVD) administrative reviews, which render them not inconsistent with the World Trade Organization (WTO) dispute settlement findings in
Effective April 18, 2016.
Eric B. Greynolds, Patricia Tran, or Samuel Brummitt, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–6071, (202) 482–1503, or (202) 482–7851, respectively.
On September 23, 2015, the Department informed interested parties that it was initiating proceedings under section 129 of the URAA to implement the findings of the WTO dispute settlement panel in DS436.
The Department invited interested parties to comment on the section 129 preliminary determinations.
On April 18, 2016, USTR notified the Department that, consistent with section 129(b)(3) of the URAA, consultations with the Department and the appropriate congressional committees with respect to the April 14, 2016, determination have been completed. Also on April 18, 2016, in accordance with section 129(b)(4) of the URAA, USTR directed the Department to implement these determinations.
Section 129 of the URAA governs the nature and effect of determinations issued by the Department to implement findings by WTO dispute settlement panels and the Appellate Body. Specifically, section 129(b)(2) of the URAA provides that “notwithstanding any provision of the Tariff Act of 1930,” upon a written request from USTR, the Department shall issue a determination that would render its actions not inconsistent with an adverse finding of a WTO panel or the Appellate Body.
The issues raised in the comments and rebuttal comments submitted by interested parties to these proceedings are addressed in the final determination. The issues included in the respective final determinations are as follows: (1) Ocean Freight; (2) Whether the CVD Rate Determined for JSW in the Department's 129 Proceeding Supersedes the Amended Final Results for JSW for the 2006 Administrative Review; (3) JSW's Cash Deposit Rate for Future Entries of Hot-rolled Carbon Steel Flat Products From India; (4A) Iron Ore Benchmarks: Tier I Benchmarks; (4B) Iron Ore Benchmarks: NMDC's export price to Japan; (5) NMDC as a Public Body; (6) Mining Rights of Iron Ore; (7) Mining of Coal; (8) Administration of Section 129 Proceeding; and (9) Specificity of Sale of High-Grade Iron Ore by NMDC. The final determination is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
The recalculated CVD rates are listed below. As indicated, we made changes to the net subsidy rates in certain segments.
On April 18, 2016, in accordance with sections 129(b)(4) and 129(c)(1)(B) of the URAA and after consulting with the Department and Congress, USTR directed the Department to implement these final determinations. With respect to each of these segments, the Department will instruct U.S. Customs and Border Protection to require a cash deposit for estimated countervailing duties at the appropriate rate for each exporter/producer specified above, for entries of subject merchandise, entered or withdrawn from warehouse, for consumption, on or after April 18, 2016. This notice of implementation of these section 129 final determination is published in accordance with section 129(c)(2)(A) of the URAA.
National Institute of Standards and Technology, Commerce.
Notice.
The Commission on Enhancing National Cybersecurity (the “Commission”) will meet Monday, May 16, 2016, from 9:00 a.m. until 4:00 p.m. Eastern Time in Vanderbilt Hall at the New York University (NYU) School of Law, Center on Law and Security located at 40 Washington Square South, New York, New York. The primary purpose of the meeting is to discuss the challenges and opportunities facing the finance and insurance sectors as the Commission develops detailed recommendations to strengthen cybersecurity in both the public and private sectors while protecting privacy, ensuring public safety and economic and national security, fostering discovery and development of new technical solutions, and bolstering partnerships between Federal, state, local, tribal and territorial governments and the private sector in the development, promotion, and use of cybersecurity technologies, policies, and best practices. All sessions will be open to the public.
The meeting will be held on Monday, May 16, 2016, from 9:00 a.m. until 4:00 p.m. Eastern Time.
The meeting will be held at the NYU School of Law, Center on Law and Security, in Vanderbilt Hall, located at 40 Washington Square South, New York, New York. The meeting is open to the public and interested parties are requested to contact Melanie Cook in advance of the meeting for building entrance requirements.
Melanie Cook, Information Technology Laboratory, National Institute of Standards and Technology, 100 Bureau Drive, Stop 8930, Gaithersburg, MD 20899–8930, telephone: (301) 975–5259, or by email at:
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. App., notice is hereby given that the Commission on Enhancing National Cybersecurity will meet Monday, May 16, 2016, from 9:00 a.m. until 4:00 p.m. Eastern Time. All sessions will be open to the public. The Commission is authorized by Executive Order 13718, Commission on Enhancing
The agenda is expected to include the following items:
Note that agenda items may change without notice. The final agenda will be posted on
Speakers who wish to expand upon their oral statements, those who had wished to speak but could not be accommodated on the agenda, and those who were unable to attend in person are invited to submit written statements. In addition, written statements are invited and may be submitted to the Commission at any time. All written statements should be directed to the Commission Executive Director, Information Technology Laboratory, 100 Bureau Drive, Stop 8930, National Institute of Standards and Technology, Gaithersburg, MD 20899–8930.
Pursuant to 41 CFR 102–3.150(b), this
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public hearings and webinar.
The Gulf of Mexico Fishery Management Council (Council) will hold seven public hearings and one webinar to solicit public comments on Amendment 45—Sector Separation Sunset.
The public hearings will be held May 23–31, 2016. The meetings will begin at 6 p.m. and will conclude no later than 9 p.m. For specific dates and times, see
The public documents can be obtained by contacting the Gulf of Mexico Fishery Management Council, 2203 N. Lois Avenue, Suite 1100, Tampa, FL 33607; (813) 348–1630 or on their Web site at
Douglas Gregory, Executive Director, Gulf of Mexico Fishery Management Council; telephone: (813) 348–1630.
The agenda for the following seven hearings and webinar are as follows: Council staff will brief the public on Draft Amendment 45 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico. Amendment 45 considers management alternatives to extend or eliminate the red snapper sector separation sunset provision. Following the presentation, Council staff will open the meeting for questions and public comments. The schedule is as follows:
After registering, you will receive a confirmation email containing information about joining the webinar.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kathy Pereira (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Scientific and Statistical Committee (SSC) of the Mid-Atlantic Fishery Management Council (Council) will hold a meeting.
The meeting will be held on Wednesday and Thursday, May 25–26, 2016, beginning at 1 p.m. on May 25 and conclude by 1 p.m. on May 26. For agenda details, see
The meeting will at the Royal Sonesta Harbor Court, 550 Light Street, Baltimore, MD 21202; telephone: (410) 234–0550.
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526–5255.
Agenda items to be discussed at the SSC meeting include: Review fishery performance report and multi-year ABC specifications for long-finned and short finned squid, Atlantic mackerel and butterfish; discuss MAFMC risk policy and assignment of CVs for Mid-Atlantic assessments; review fishery performance report and recommend surfclam and ocean quahog ABC specifications for 2017–18.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of Regional Fishery Management Councils Coordination Committee Meeting.
The Caribbean Fishery Management Council (CFMC) will host a meeting of the Council Coordination Committee (CCC) consisting of eight Regional Fishery Management Councils (RFMC) chairs, vice chairs, and executive directors and its subcommittees in May 2016. The intent of this meeting is to discuss issues of relevance to the Councils, contained in the following proposed agenda. All sessions are open to the public:
The meeting dates are May 25–26, 2016. Registration for the meeting will be from 9 a.m. to 4 p.m. on May 24, 2016, and from 9 a.m. to 12 noon on May 25, 2016. The meetings will begin at 9 a.m., on May 25, 2016, and recess at 5 p.m., or when business is completed, and will reconvene for its final day on May 26, 2016 at 8:30 a.m. until 4:45 p.m. or when business is completed.
The meeting will take place at the Frenchman's Reef and Morning Star Marriott Beach Resort, 5 Estate Bakkeroe, St. Thomas, U.S Virgin Islands.
Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918–1903, telephone (787) 766–5926.
The order in which the agenda items are addressed may change. The CCC will meet as late as necessary to complete scheduled business.
Copy of the tentative agenda can be found at the CFMC Web page:
These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918–1903, telephone (787) 766–5926, at least 5 days prior to the meeting date.
United States Patent and Trademark Office, Commerce.
Notice.
The United States Patent and Trademark Office (Office or USPTO), in its capacity as a PCT Receiving Office (RO/US), will begin to accept international applications under the Patent Cooperation Treaty (PCT) that are filed electronically with a PCT Request prepared in the World Intellectual Property Organization's (WIPO) ePCT system. ePCT allows users to generate a zip file containing a validated PCT Request; the zip file can then be submitted electronically to the RO/US as part of an international application filed using the USPTO's electronic filing system (EFS-Web). Because WIPO's ePCT system is web-based and the servers that support the system are located outside the United States, users of ePCT are reminded that the export of subject matter abroad pursuant to a foreign filing license from the USPTO is limited to purposes related to the filing of foreign applications, which include international applications filed in a Receiving Office other than the RO/US. A foreign filing license does not authorize the export of subject matter into ePCT for generating a PCT Request for filing with the RO/US. Persons who are considering the use of WIPO's ePCT system for preparation of the PCT Request for filing as part of an international application with the RO/US should consider contacting the Bureau of Industry and Security (BIS) at the Department of Commerce, the Directorate of Defense Trade Controls (DDTC) at the Department of State, or the National Nuclear Security Administration (NNSA) at the Department of Energy for the appropriate clearances where the international application may include technology subject to export controls.
The change in this notice takes effect on June 1, 2016.
Michael Neas, Deputy Director (telephone (571) 272–3289; electronic mail message (
The USPTO's electronic filing system (EFS-Web) enables users to electronically file international applications under the PCT with the RO/US. EFS-Web currently permits users to submit the PCT Request by uploading a zip file created using PCT Secure Applications Filed Electronically (PCT–SAFE) software which is made available and maintained by WIPO. The zip file from PCT–SAFE contains a validated PCT Request and fee calculation sheet in PDF format, which are subsequently loaded in the USPTO's Image File Wrapper (IFW). The zip file contains additional files that, among other things, allow the USPTO and WIPO to auto-load application bibliographic data. All other documents and application parts must be prepared and loaded separately in EFS-Web for filing of the international application. Submission of the zip file from PCT–SAFE at the time of filing the international application entitles the applicant to a reduction of the international filing fee. Starting on June 1, 2016, in addition to accepting the zip files generated by PCT–SAFE, the RO/US will also begin to accept international applications filed electronically with zip files created by WIPO's ePCT system. ePCT is a web-based service that provides for electronic filing of international applications with certain PCT Receiving Offices. ePCT also provides for secure electronic access, file management, and document submissions for international applications held by the International Bureau (IB). The use of ePCT in this manner requires the use of a WIPO user account authenticated with a WIPO digital certificate. ePCT is accessed via an internet browser on the user's system, and all information input into ePCT is stored securely on WIPO's servers. Detailed information on ePCT-Filing can be found at
Both PCT–SAFE and ePCT include validation features to help users properly complete the PCT Request. Since the PCT–SAFE validation can only be made against the version of the software installed on the user's system, the most up-to-date version of PCT–SAFE is required in order to ensure accurate validation. In contrast to PCT–SAFE, validation in the ePCT system is made in real time and does not require software updates. Furthermore, like PCT–SAFE, the zip file generated by ePCT, which contains a PCT Request in
By using ePCT, an international application will be associated with the user's ePCT account, even before the application is filed, thereby allowing users to share access rights with others prior to filing, if needed. In addition, after the record copy is received by the IB, the application file may be viewed online via ePCT without the need to separately request access rights.
Applicants who are residents and/or nationals of the United States and its territories can file international applications directly with the Receiving Office of the IB via ePCT or other means, provided that any national security provisions have been met prior to filing, including obtaining any required foreign filing license.
As set forth above, a foreign filing license does not authorize the export of technical data into ePCT for generating a PCT Request and resulting zip file for filing as part of an international application with the RO/US. More specifically, to complete the PCT Request and generate the zip file, ePCT requires a title of the invention, which may contain technical data. Moreover, although an abstract is not required for creation of the zip file, ePCT allows users to optionally provide the contents of the application abstract, which may also contain technical data relating to the invention. Since this technical data is stored on servers located outside of the United States, users of ePCT are reminded that the export of this subject matter abroad for the purpose of filing an international application with the RO/US may require the appropriate clearances from the Bureau of Industry and Security (BIS) at the Department of Commerce (
An ePCT demo system has been set up to enable filers to familiarize themselves with the system. For further information and to get started, go to the ePCT Portal at:
The next meeting of the U.S. Commission of Fine Arts is scheduled for 19 May 2016, at 9:00 a.m. in the Commission offices at the National Building Museum, Suite 312, Judiciary Square, 401 F Street NW., Washington, DC 20001–2728. Items of discussion may include buildings, parks and memorials.
Draft agendas and additional information regarding the Commission are available on our Web site:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and Deletions from the Procurement List.
This action adds products to the Procurement List that will be furnished by the nonprofit agency employing persons who are blind or have other severe disabilities, and deletes services from the Procurement List previously provided by such agencies.
Effective on June 5, 2016.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia, 22202–4149.
Barry S. Lineback, Telephone: (703) 603–7740, Fax: (703) 603–0655, or email
On 12/11/2015 (80 FR 76948), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed additions to the Procurement List.
I certify that the following action will not have a significant impact on a substantial number of small entities.
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the products to the Government.
2. The action will result in authorizing small entities to furnish the products to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501–8506) in connection with the products proposed for addition to the Procurement List.
Accordingly, the following products are added to the Procurement List:
The Committee for Purchase From People Who Are Blind or Severely Disabled (Committee) received comments from one firm objecting to the addition. The firm stated it is the incumbent contractor for the General Services Administration, and loss of the ability to compete for the future contract will negatively impact the firm's business. In the normal competitive procurement process, there are no guarantees of continuous contracts. Further, the Committee reviewed and applied its standard impact analysis methodology to the information submitted by the firm. The Committee determined, in accordance with its longstanding business practices, that addition of Gloves, Blue Nitrile (Industrial) to the Procurement List would not result in a severe adverse impact.
The Committee operates pursuant to statutory and regulatory requirements. The Committee's mission is to create employment opportunities for people who are blind or severely disabled. Committee regulation 41 CFR 51–2.4 states that for a commodity or service to be suitable for addition to the Procurement List, each of the following criteria must be satisfied: (1) the addition to the Procurement List must demonstrate a potential to generate employment of people who are blind or have other severe disabilities; (2) the nonprofit agency proposing to provide the product or service to the Federal Government must be qualified to participate in the AbilityOne program as defined in separate Committee regulations; (3) the nonprofit agency must prove itself capable to deliver the product or service at the quality standard and delivery schedule required by the Government; and (4) the Committee reviews the level of impact on the current contractor for the commodity or service.
After consideration of the material presented to it concerning employment potential, the qualifications of the nonprofit agency, the capability of the recommended nonprofit agency to provide the products, and the impact of the addition on the current or most recent contractor, the Committee has determined that the products listed above are suitable for procurement by the Federal Government under 41 U.S.C. 8501–8506 and 41 CFR 51–2.4 at a Fair Market Price and has approved the products for addition to the Procurement List.
On 4/1/2016 (81 FR 18839–18840), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from the Procurement List.
After consideration of the relevant matter presented, the Committee has determined that the services listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501–8506 and 41 CFR 51–2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to provide the services to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501–8506) in connection with the services deleted from the Procurement List.
Accordingly, the following services are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed additions to and deletions from the Procurement List.
The Committee is proposing to add products to the Procurement List that will be furnished by nonprofit agency employing persons who are blind or have other severe disabilities, and deletes products previously furnished by such agencies.
Comments must be received on or before June 5, 2016.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202–4149.
Barry S. Lineback, Telephone: (703) 603–7740, Fax: (703) 603–0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51–2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
If the Committee approves the proposed additions, the entities of the Federal Government identified in this notice will be required to procure the products listed below from nonprofit agency employing persons who are blind or have other severe disabilities.
The following products are proposed for addition to the Procurement List for production by the nonprofit agency listed:
The following products are proposed for deletion from the Procurement List:
Department of Defense.
Renewal of Federal Advisory Committee.
The Department of Defense (DoD) is publishing this notice to announce that it is renewing the charter for the National Intelligence University Board of Visitors (“the Board”).
Jim Freeman, Advisory Committee Management Officer for the Department of Defense, 703–692–5952.
The Board's charter is being renewed in accordance with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended) and 41 CFR 102–3.50(d). The Board's charter and contact information for the Board's Designated Federal Officer (DFO) can be found at
The Board provides the Secretary of Defense and the Deputy Secretary of Defense, through the Under Secretary of Defense for Intelligence (USD(I)), the Director, Defense Intelligence Agency, and the President of the National Intelligence University, independent advice and recommendations on matters related to mission, policy, accreditation, faculty, students, facilities, curricula, educational methods, research, and administration of the National Intelligence University.
The Board shall be composed of no more than 12 individuals, who have extensive professional experience in the fields of national intelligence, national defense, and academia. All members of the Board are appointed to provide advice on behalf of the Government on the basis of their best judgment without representing any particular point of view and in a manner that is free from conflict of interest. Except for reimbursement of official Board-related travel and per diem, Board members serve without compensation.
The DoD, as necessary and consistent with the Board's mission and DoD policies and procedures, may establish subcommittees, task forces, or working groups to support the Board, and all subcommittees must operate under the provisions of FACA and the Government in the Sunshine Act. Subcommittees will not work independently of the Board and must report all recommendations and advice solely to the Board for full deliberation and discussion.
Subcommittees, task forces, or working groups have no authority to make decisions and recommendations, verbally or in writing, on behalf of the Board. No subcommittee or any of its members can update or report, verbally or in writing, directly to the DoD or any Federal officers or employees. The Board's DFO, pursuant to DoD policy, must be a full-time or permanent part-time DoD employee, and must be in attendance for the duration of each and every Board/subcommittee meeting. The public or interested organizations may submit written statements to the Board membership about the Board's mission and functions. Such statements may be submitted at any time or in response to the stated agenda of planned Board. All written statements must be submitted to the Board's DFO who will ensure the
Department of the Army, U.S. Army Corps of Engineers, DOD.
Notice of intent.
On March 17, 2014, Brookfield Sunset LLC (applicant) submitted a Department of the Army (DA) permit application for the discharge of dredged and/or fill material into waters of the United States (WOUS) associated with the construction of the proposed Amoruso Ranch project. On December 22, 2014, the U.S Army Corps of Engineers, Sacramento District (Corps) determined that the proposed discharge of fill material into WOUS may result in significant impacts to the environment, and that the preparation of an Environmental Impact Statement (EIS) is necessary. A revised DA permit application was submitted by the applicant on October 30, 2014.
The applicant proposes to implement a large-scale, mixed-use, mixed density, master planned community. The proposed project consists of approximately 347 acres designated for residential use that would contain 2,827 dwelling units (in a mix of low, medium and high density), 51 acres for a village center and community commercial uses, 12 acres for public/quasi-public space containing a fire station and school, 161 acres of parks and natural avoided areas of open space reserve and/or preserve, and 82 acres of associated infrastructure containing roads and other public transportation corridors. Approximately 17 acres of the adjacent Al Johnson Wildlife Area property would be used to construct a 325-foot long drainage ditch. No other off-site improvements are included in the proposed project. A segment of the future Placer Parkway would be constructed by others on 49 acres of the site and is not part of this permit application.
The proposed project site is approximately 674 acres and contains approximately 38.86 acres of WOUS, including: Vernal pools; seasonal wetlands; University Creek; and, grasslands. The proposed project would involve the discharge of fill material into approximately 18.64 acres of WOUS, including vernal pools, seasonal wetlands, and open water pond. The proposed project may also result in indirect impacts to WOUS, including wetlands.
The Corps will conduct a public scoping meeting on Thursday, May 26, 2016, from 5:00–6:00 p.m.
The public scoping meeting will be held in Rooms 1 & 2 of the Martha Riley Community Library, 1501 Pleasant Grove Boulevard, Roseville, CA, 95747.
Ms. Leah M. Fisher, (916) 557–6639, email:
Interested parties are invited to submit written comments on or before
The Amoruso Ranch project site is located in unincorporated western Placer County, south of West Sunset Boulevard, approximately 1.5 miles west of Fiddyment Road, east of Pettigrew Road, and north of Pleasant Grove Creek in Sections 10, 11, and 14, Township 11 North and Range 5 east of the Pleasant Grove California 7.5-minute USGS quadrangle. The approximate center of the 674-acre site is Latitude 38.816667°, Longitude −121.384722°.
A wetland delineation of the project site, which has been verified by the Corps, indicates there are approximately 38.86 acres of WOUS present within the proposed project area, including: 9.81 acres of vernal pools; 19.74 acres of seasonal wetland swales; 4.83 acres of seasonal wetlands; 1.82 acre of freshwater marsh; 1.92 acre of intermittent stream; 0.01 acre of ephemeral stream; and, 0.36 acre of open water pond. A wetland delineation of the off-site improvement area was conducted in June 2015. There are approximately 0.364 acre of WOUS present within the off-site improvement area, including: 0.34 acre of farmed wetland; 0.001 acre of vernal pool; and, 0.023 acre of seasonal stream.
The EIS will include alternatives to the Proposed Action that will meet National Environmental Policy Act (NEPA) requirements for a reasonable range of alternatives, and will also meet the requirements of CWA section 404(b)(1) Guidelines. The alternatives to be evaluated within the EIS have not yet been developed, but will, at a minimum, include the No Action Alternative, the Proposed Action Alternative, and additional on-site and off-site alternatives.
The Corps' public involvement program includes several opportunities to provide verbal and written comments on the proposed Amoruso Ranch Project through the EIS process. Affected federal, state, and local agencies, Native American tribes, and other interested private organizations and parties are invited to participate. Potentially significant issues to be analyzed in depth in the EIS include the loss of WOUS (including wetlands) and impacts related to: Cultural resources; biological resources; air quality; hydrology and water quality; noise; traffic; aesthetics; utilities and service systems; and, socioeconomic effects.
The Corps will initiate formal consultation with the U.S. Fish and Wildlife Service (USFWS) under section 7 of the Endangered Species Act for proposed impacts to listed species. The Corps will also consult with the State Historic Preservation Office under section 106 of the National Historic Preservation Act for proposed impacts to properties listed or potentially eligible for listing on the National Register of Historic Places, as appropriate.
The Draft EIS is expected to be made available to the public by September 2017.
Office of Postsecondary Education (OPE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before June 6, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Christopher McCormick, 202–502–7580.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Department of Energy.
Notice of Open Meeting.
This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Savannah River Site. The Federal Advisory Committee Act (Pub. L. 92–463, 86 Stat. 770) requires that public notice of this meeting be announced in the
Holiday Inn Express—Historic, 199 East Bay Street, Savannah, Georgia 31401.
James Giusti, Office of External Affairs, Department of Energy, Savannah River Operations Office, P.O. Box A, Aiken, SC, 29802; Phone: (803) 952–7684.
On January 22, 2016, the Whitewater Green Energy, LLC filed an application for a preliminary permit under section 4(f) of the Federal Power Act proposing to study the feasibility of the proposed Whitewater Hydroelectric Project No. 14383–006, to be located on Russel and Whitewater Creeks, near the town of Idanha, in Marion and Linn Counties, Oregon. The project would be located entirely on U.S. Forest Service lands.
The proposed project would consist of the following: (1) A 9.5-foot-high, 40-foot-wide weir on Russell Creek; (2) a 19,500-foot-long, 60-inch-diameter steel penstock; (3) a 50-foot-long by 40-foot-wide concrete powerhouse containing one pelton turbine rated at 11 megawatts; (4) a 160-foot-long, 72-inch-diameter tailrace discharging into Whitewater Creek; (5) an underground 2.25-mile-long, 12,000 kilovolt-amperes transmission line extending from the project to an outside transmission line (the point of interconnection); (6) an access road along side of the penstock; and (7) appurtenant facilities. The estimated annual generation of the Whitewater Creek Project would be 95.04 gigawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36. The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
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j. Holyoke Gas and Electric filed its request to use the Traditional Licensing Process on February 29, 2016. Holyoke Gas and Electric provided public notice of its request on February 26, 2016. In a letter dated April 29, 2016, the Director of the Division of Hydropower Licensing approved Holyoke Gas and Electric's request to use the Traditional Licensing Process.
k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, part 402; and NOAA Fisheries under section 305(b) of the Magnuson-Stevens Fishery Conservation and Management Act and implementing regulations at 50 CFR 600.920. We are also initiating consultation with the
l. With this notice, we are designating Holyoke Gas and Electric as the Commission's non-federal representative for carrying out informal consultation pursuant to section 7 of the Endangered Species Act and section 106 of the National Historic Preservation Act.
m. Holyoke Gas & Electric filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
n. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site (
o. The licensee states its unequivocal intent to submit an application for a new license for Project No. 2766. Pursuant to 18 CFR 16.8, 16.9, and 16.10, each application for a new license and any competing license applications must be filed with the Commission at least 24 months prior to the expiration of the existing license. All applications for license for this project must be filed by February 28, 2019.
p. Register online at
On April 26, 2016, the St. Charles Mesa Water District (SCMWD) filed a notice of intent to construct a qualifying conduit hydropower facility, pursuant to section 30 of the Federal Power Act (FPA), as amended by section 4 of the Hydropower Regulatory Efficiency Act of 2013 (HREA). The proposed Hydro-Electric Station at the SCMWD Treatment Plant Project would have an installed capacity of 40 kilowatts (kW), and would be located adjacent to the outlet of an existing raw water supply pipeline at the SCMWD's existing raw water storage reservoir. The project would be located near Pueblo, in Pueblo County, Colorado.
The proposed project would have a total installed capacity of 40 kW.
A qualifying conduit hydropower facility is one that is determined or deemed to meet all of the criteria shown in the table below.
Deadline for filing motions to intervene is 30 days from the issuance date of this notice.
Anyone may submit comments or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210 and 385.214. Any motions to intervene must be received on or before the specified
The Commission strongly encourages electronic filing. Please file motions to intervene and comments using the Commission's eFiling system at
In its
Upon receipt of the agency submissions, the Commission posted the information in eLibrary, and issued, on March 17, 2016, a notice announcing the date for a technical conference to review the submitted costs. On April 7, 2016, the Commission held the technical conference. Technical conference transcripts, submitted cost forms, and detailed supporting documents are all available for review under Docket No. AD16–2. These documents are accessible on-line at
Interested parties may file specific questions and comments on the FY 2015 OFA cost submissions with the Commission under Docket No. AD16–2, no later than May 13, 2016. Once filed, the Commission will forward the questions and comments to the OFAs for response.
Anyone with questions pertaining to the technical conference or this notice should contact Norman Richardson at (202) 502–6219 (via email at
On April 28, 2016, the Commission issued an order in Docket No. EL16–54–000, pursuant to section 206 of the Federal Power Act (FPA), 16 U.S.C. 824e (2012), instituting an investigation into the justness and reasonableness of the individual reactive power rates of Lakewood Cogeneration, L.P., Essential Power Rock Springs, LLC, and Essential Power OPP, LLC.
The refund effective date in Docket No. EL16–54–000, established pursuant to section 206(b) of the FPA, will be the date of publication of this notice in the
This notice identifies the Federal Energy Regulatory Commission (Commission or FERC) staff's revised schedule for the completion of the environmental assessment (EA) for Transcontinental Gas Pipe Line Company, LLC's Virginia Southside Expansion Project II. The first notice of schedule, issued on March 7, 2016, identified April 29, 2016 as the EA issuance date. Staff has revised the schedule for issuance of the EA.
If a schedule change becomes necessary, an additional notice will be provided so that the relevant agencies are kept informed of the project's progress.
In order to receive notification of the issuance of the EA and to keep track of all formal issuances and submittals in specific dockets, the Commission offers a free service called eSubscription (
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Line T2KNY Install, Line TNY Replacement, and Line KNY Abandonment Project involving construction and operation of facilities by National Fuel Gas Supply Corporation (National Fuel) in Erie County, New York. The Commission will use this EA in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the project. You can make a difference by providing us with your specific comments or concerns about the project. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EA. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before June 2, 2016.
If you sent comments on this project to the Commission before the opening of this docket on April 4, 2016, you will need to file those comments in Docket No. CP16–125–000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this proposed project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the project, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
National Fuel provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is also available for viewing on the FERC Web site (
For your convenience, there are three methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502–8258 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (CP16–125–000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
National Fuel proposes to install approximately 1.2 miles of new 20-inch-diameter natural gas pipeline (Line T2KNY), replace approximately 6.7 miles of 20-inch-diameter bare steel pipeline with 7.0 miles of 24-inch-diameter coated natural gas pipeline (Line TNY), abandon approximately 14.9 miles of 20-inch-diameter bare steel natural gas pipeline (Line KNY), make modifications at two existing National Fuel meter and regulator stations (North Boston and East Eden), and make modifications at National Fuel's existing Zoar Compressor Station in Erie County, New York. The Line T2KNY Install, Line TNY Replacement, and Line KNY Abandonment Project would allow National Fuel to cure operating deficiencies on Line TNY and would provide an additional 2,600 dekatherms per day of new firm capacity which would be offered in an open season. This project would eliminate vintage bare steel pipeline, replacing it with modern, high strength, coated steel pipeline, therefore increasing the overall integrity and reliability of National Fuel's pipeline system.
The general location of the project facilities is shown in appendix 1.
Construction of the proposed facilities would disturb about 112 acres of land for the aboveground facilities and the pipeline. Following construction, National Fuel would maintain about 52 acres for permanent operation of the project's facilities; the remaining
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
In the EA we will discuss impacts that could occur as a result of the construction and operation of the proposed project under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• air quality and noise;
• endangered and threatened species;
• public safety; and
• cumulative impacts.
We will also evaluate reasonable alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
The EA will present our independent analysis of the issues. The EA will be available in the public record through eLibrary. Depending on the comments received during the scoping process, we may also publish and distribute the EA to the public for an allotted comment period. We will consider all comments on the EA before making our recommendations to the Commission. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section, beginning on page 2.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues of this project to formally cooperate with us in the preparation of the EA.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the applicable State Historic Preservation Office (SHPO), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the proposed project.
If we publish and distribute the EA, copies will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the CD version or would like to remove your name from the mailing list, please return the attached Information Request (appendix 2).
In addition to involvement in the EA scoping process, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Instructions for becoming an intervenor are in the “Document-less Intervention Guide” under the “e-filing” link on the Commission's Web site. Motions to intervene are more fully described at
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208–FERC, or on the FERC Web site at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared an environmental assessment (EA) for the Atlantic Bridge Project proposed by Algonquin Gas Transmission, LLC (Algonquin) and Maritimes & Northeast Pipeline, LLC (Maritimes), collectively referred to as the Applicants, in the above-referenced docket. The Applicants request authorization to expand existing pipeline systems to deliver up to 132,705 dekatherms per day of natural gas transportation service to the New England and Maritimes provinces of Canada markets.
The EA assesses the potential environmental effects of the construction and operation of the Atlantic Bridge Project in accordance with the requirements of the National Environmental Policy Act. The FERC staff concludes that approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment.
The U.S. Environmental Protection Agency is a cooperating agency assisting us in the preparation of this EA because they have special expertise with respect to environmental impacts associated with the Applicants' proposals.
The proposed Atlantic Bridge Project includes the following facilities:
• 4.0 miles of 42-inch-diameter pipeline to replace existing 26-inch diameter pipeline in Westchester County, New York;
• 2.3 miles of 42-inch-diameter pipeline to replace existing 26-inch diameter pipeline in Fairfield County, Connecticut;
• a new 7,700 horsepower compressor station (Weymouth Compressor Station) in Norfolk County, Massachusetts;
• a new meter and regulating station in New London County, Connecticut;
• modifications to three existing compressor stations in Rockland County, New York and Windham and New Haven Counties, Connecticut;
• modifications to five existing meter and regulating stations and one regulator station in New York, Connecticut, Massachusetts, and Maine; and
• ancillary facilities associated with the new pipeline including mainline valves and pig launcher/receiver facilities.
The FERC staff mailed copies of the EA to federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American tribes; potentially affected landowners and other interested individuals and groups; and newspapers and libraries in the project area. In addition, the EA is available for public viewing on the FERC's Web site (
Any person wishing to comment on the EA may do so. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. The more specific your comments, the more useful they will be. To ensure that the Commission has the opportunity to consider your comments prior to making its decision on this project, it is important that we receive your comments in Washington, DC on or before June 1, 2016.
For your convenience, there are three methods you can use to file your comments with the Commission. In all instances please reference the project docket number (CP16–9–000) with your submission. The Commission encourages electronic filing of comments and has expert staff available to assist you at 202–502–8258 or
(1) You can file your comments electronically using the eComment feature located on the Commission's Web site (
(2) You can also file your comments electronically using the eFiling feature on the Commission's Web site (
(3) You can file a paper copy of your comments by mailing them to the following address: Nathaniel J. Davis, Sr., Deputy Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (Title 18 Code of Federal Regulations Part 385.214).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208–FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription, which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental impact statement (EIS) for the planned Access Northeast Project (ANE Project). This EIS will discuss the potential impacts on the environment resulting from Algonquin Gas Transmission, LLC's (Algonquin) construction and operation of interstate natural gas transmission and storage facilities in New Jersey, New York, Connecticut, Rhode Island, and Massachusetts. The Commission will use this EIS in its decision-making process to determine whether the Project is in the public convenience and necessity.
This notice, which is being sent to the Commission's current environmental mailing list describes the process the Commission will use to gather input from the public and interested agencies on the ANE Project. The Review Process flow chart in Appendix 1 also illustrates public input opportunities.
Comments on the ANE Project may be submitted in written form or verbally. The Public Participation section of this notice describes how to submit written comments. To ensure that written comments are properly recorded and that staff has sufficient time to consider them, please send these comments so that the Commission receives them in Washington, DC on or before May 30, 2016. The Commission's staff will also consider comments received after this date, but we encourage you to file your comments within the identified comment period. Verbal comments can be given at the public scoping meetings described in the Public Participation section below.
If you sent comments on the ANE Project to the Commission before November 17, 2015, you will need to resend those comments, attention Docket No. PF16–1–000, to ensure they are considered as part of this proceeding.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the planned facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the Project, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement and the Project is approved, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
To help potentially affected landowners and other interested parties better understand the Commission and its environmental review process, the “For Citizens” section of the FERC Web site (
Submitting comments can make a difference. Your comments should focus on potential environmental impacts, measures to avoid or lessen these impacts, and reasonable alternatives. These comments will help the Commission's staff determine what issues need to be evaluated in the EIS and focus the analysis in the EIS on the important environmental issues.
For your convenience, there are four methods you can use to submit your comments to the Commission. The commission will provide equal consideration to all comments received, whether filed in written form or provided verbally. In all instances, please reference the Project docket number (PF16–1–000) with your submission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502–8258 or
(1) You can file your comments electronically using the eComment feature on the Commission's Web site (
(2) You can file your comments electronically using the eFiling feature on the Commission's Web site (
(3) You can file a paper copy of your comments by mailing them to the following address: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
(4) In lieu of sending written or electronic comments, the Commission invites you to attend one of the public scoping meetings its staff will conduct in the project area, scheduled as follows.
The purpose of these meetings is to provide the public an opportunity to learn more about the Commission's environmental review process and to verbally comment on the ANE Project. Affected landowners and other interested parties concerned about the ANE Project are encouraged to attend these meetings and to give their comments on the issues they believe should be addressed in the EIS. Individuals wishing to provide comments on Algonquin's Incremental Market and Atlantic Bridge Projects should file their comments in the respective FERC administrative records (CP14–96–000 and CP16–9–000).
Individuals wishing to comment at a meeting may begin registering to speak one hour prior to each meeting.
Over the past several years Algonquin has expanded its existing natural gas transmission system in the Northeastern United States to meet demand as it arises in the region. In response to growing demand and interest from shippers, Algonquin plans to modify its existing system in New Jersey, New York, Connecticut, Rhode Island, and Massachusetts. If constructed, the ANE Project would be capable of providing up to 925 million cubic feet per day of natural gas at various delivery points on the existing Algonquin pipeline system. The planned ANE Project facilities are described below. The general locations of the Project facilities are shown in Appendix 2.
• Replacement of approximately 45.0 miles of existing 26-inch-diameter pipeline with 42-inch-diameter pipeline as follows:
○ 1.2 miles in Rockland County, New York (Hanover Take-up and Relay
○ 12.7 miles in Westchester and Putnam Counties, New York (Stony Point Take-up and Relay);
○ 17.6 miles in Fairfield and New Haven Counties, Connecticut (Southeast Take-up and Relay; and
○ 13.5 miles in New Haven and Hartford Counties, Connecticut (Oxford Take-up and Relay.
• Extensions of existing pipeline loops;
○ 13.3 miles of 36-inch-diameter pipeline in Hartford, Middlesex, and Tolland Counties, Connecticut (Cromwell Loop);
○ 9.4 miles of 36-inch-diameter pipeline in Windham County, Connecticut (Chaplin Loop);
○ 21.7 miles of 30-inch-diameter pipeline in Norfolk County, Massachusetts (Q–1 Loop); and
○ 4.2 miles of 30-inch-pipeline in Norfolk County, Massachusetts (I–8 Loop).
• Installation of approximately 26.8 miles of new 16-inch-diameter lateral pipeline in Norfolk and Worcester Counties, Massachusetts.
• Installation of approximately 2.9 miles of new 24-inch-diameter lateral pipeline in Bristol County, Massachusetts.
Algonquin would also need to construct pig
Algonquin plans to modify six existing compressor stations, expand one currently proposed compressor station, construct one new compressor station, modify seven existing metering and regulating (M&R) stations, and construct two new M&R stations. The modifications to the six existing compressor stations would be located in Rockland and Putnam Counties, New York, New Haven, Middlesex, and Windham Counties Connecticut, and Providence County, Rhode Island. The expansion of the currently proposed compressor station would be located in Norfolk County, Massachusetts and the new compressor station would be located in Bristol County, Massachusetts. These eight compressor stations would add a total of 165,560 horsepower to Algonquin's pipeline system.
The modifications to the seven existing Algonquin M&R stations would occur in New Jersey, New York, Connecticut, and Massachusetts to accept the new gas flows associated with the Project. The new M&R stations would be constructed in Bristol and Worcester Counties Massachusetts.
The planned LNG Storage Facility would be located on a 210-acre site in Acushnet, Massachusetts adjacent to an existing LNG peak-shaving facility (the existing facility would not be affected). The facility would include; two full containment LNG storage tanks with a total combined capacity of 6.8 billion standard cubic feet (84.6 million gallons), feed gas pretreatment systems, liquefaction and regasification capabilities, a new permanent access road, a flare or other venting system yet to be determined, electrical service facilities, and a refrigerant compressor driver with appropriate noise suppression and emission controls. This facility would be connected to Algonquin's existing natural gas transmission system by a new approximately 2.86 mile pipeline.
Construction of the planned facilities would disturb about 1,866 acres of land including forested, open, agricultural, industrial/commercial, and residential lands. Of the lands affected, about 1,590 acres for the pipeline facilities, 118 acres for the compressor stations, 150 acres for the LNG Facility, and 8 acres for the M&R stations. About 1,100 acres of land that would be affected by pipeline construction activities has already been disturbed by existing pipelines or other utilities. Similarly, about 95 acres of land that would be affected by the compressor stations has already been disturbed. Following construction, Algonquin would retain about 494 acres of new, permanent easement outside of its current operating footprint. This amount includes approximately 327 acres of permanent easement for the new pipeline right-of-way, 20 acres for the new compressor station, 150 acres for the LNG Facility, and a total of 2 acres for the M&R stations.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity under Section 7 of the Natural Gas Act. NEPA also requires us
In the EIS we will discuss impacts that could occur as a result of the construction, operation, and maintenance of the planned Project under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• air quality and noise;
• threatened and endangered species;
• public safety and reliability; and
• cumulative impacts.
Staff, in cooperation with other federal agencies, has already begun an evaluation of alternatives to the ANE Project, including pipeline route alternatives, compressor station equipment and locations, and LNG Storage Facility sites. This alternatives analysis will be included in the EIS along with any recommendations we may have on how to avoid, minimize, and/or mitigate impacts on the various resource areas.
Although no formal application has been filed, we have already initiated our NEPA review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the FERC receives an application. As part of our pre-filing review, we have contacted federal and state agencies to discuss their involvement in the scoping process and the preparation of the EIS.
The EIS will present our independent analysis of the issues. We will publish and distribute the draft EIS for public comment. After the comment period, we will consider all timely comments and revise the document, as necessary, before issuing a final EIS. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section of this notice.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this Project to formally cooperate with us in the preparation of the EIS.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with applicable State Historic Preservation Offices (SHPO), and to solicit their views and those of other government agencies, interested federally recognized Indian tribes, and the public on the Project's potential effects on historic properties.
Based on our preliminary review of the project; information provided by Algonquin; and public comments filed in the Commission's administrative record and submitted to staff at the applicant-sponsored open houses, we have identified several issues that we think deserve attention. This preliminary list of issues may change based on your comments and our ongoing environmental analysis. These issues are:
• Project reliability, pipeline and LNG storage tank integrity;
• public safety;
• impacts on property values;
• environmental justice;
• compressor station emissions and noise;
• impacts on land use; and
• impacts on groundwater.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities and construction workspaces, and anyone who submits comments on the Project. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the planned Project.
When we publish and distribute the EIS, copies will be sent to the environmental mailing list for public
In addition to involvement in the EIS scoping process, once Algonquin files its application with the Commission, you may want to become an “intervenor,” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Motions to intervene are more fully described at
Additional information about the Project is available from the Commission's Office of External Affairs, at (866) 208–FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
On April 19, 2016, Aquenergy Systems, Inc. and Coneross Power Corporation (co-licensees) filed an application for the partial transfer of license of the Coneross Hydroelectric Project No. 6731. The project is located on Coneross Creek in Oconee County, South Carolina. The project does not occupy Federal lands.
The applicants seek Commission approval to partially transfer the license for the Coneross Hydroelectric Project from the co-licenses to Coneross Power Corporation as sole licensee.
Applicants Contact: For co-licensees: Ms. Megan Beauregard, Senior Associate General Counsel, Enel Green Power North America, Inc., One Tech Drive, Suite 220, Andover, MA 01810, Telephone: 978–681–1900, Email:
Deadline for filing comments, motions to intervene, and protests: 30 days from the date that the Commission issues this notice. The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
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j. Holyoke Gas and Electric filed its request to use the Traditional Licensing Process on February 29, 2016. Holyoke Gas and Electric provided public notice of its request on February 26, 2016. In a letter dated April 29, 2016, the Director of the Division of Hydropower Licensing approved Holyoke Gas and Electric's request to use the Traditional Licensing Process.
k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and/or NOAA Fisheries under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, part 402; and NOAA Fisheries under section 305(b) of the Magnuson-
l. With this notice, we are designating Holyoke Gas and Electric as the Commission's non-federal representative for carrying out informal consultation pursuant to section 7 of the Endangered Species Act and section 106 of the National Historic Preservation Act.
m. Holyoke Gas & Electric filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
n. A copy of the PAD is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site (
o. The licensee states its unequivocal intent to submit an application for a new license for Project No. 2771. Pursuant to 18 CFR 16.8, 16.9, and 16.10, each application for a new license and any competing license applications must be filed with the Commission at least 24 months prior to the expiration of the existing license. All applications for license for this project must be filed by February 28, 2019.
p. Register online at
Western Area Power Administration, DOE.
Notice of proposed plan.
The Department of Energy (DOE), Western Area Power Administration (Western), Sierra Nevada Region (SNR) has developed a Proposed 2025 Power Marketing Plan (Proposed Plan). The Proposed Plan provides for marketing power from the Central Valley Project (CVP) and the Washoe Project from January 1, 2025, through December 31, 2054. Western currently markets about 1,580 megawatts (MW) of power from the CVP and 3.65 MW from the Washoe Project under long-term contracts to approximately 80 preference customers in northern and central California and Nevada. On December 31, 2024, all of Western's long-term power sales contracts will expire. Western developed the Proposed Plan to define the products and services to be offered, and the Eligibility and Allocation Criteria that will lead to allocations of SNR's power starting on January 1, 2025, and going through December 31, 2054. This
On June 1, 2016, beginning at 1 p.m., PT, Western will hold a public information forum to present the Proposed Plan and respond to questions from the public. On July 12, 2016, beginning at 1 p.m., PT, Western will hold a public comment forum to receive oral and written comments on the Proposed Plan. To assure consideration, written comments on the Proposed Plan must be received or postmarked by 5 p.m. August 4, 2016.
Each forum will be held at the Lake Natoma Inn, 702 Gold Lake Drive, Folsom, CA, 95630. Oral and written comments may be presented at the public comment forum. A transcript of oral comments made at this forum will be available from the court reporter or on Western's Web site
Ms. Sonja Anderson, Vice President of Power Marketing, Sierra Nevada Customer Service Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630, by email at
The CVP is a large water and power system, initially authorized by Congress in 1935, which spans approximately one-third of the State of California. Congress defined the purposes of the CVP as: (1) River regulation; (2) improvement of navigation; (3) flood control; (4) irrigation; (5) domestic uses; and (6) power. The CVP Improvement Act of 1992 added fish and wildlife habitat to the list of CVP purposes.
CVP power facilities include 11 powerplants with a maximum operating capability of about 2,113 MW and an estimated average annual generation of 4.6 million megawatthours (MWh). The U.S. Department of the Interior, Bureau of Reclamation (Reclamation) operates the water control and delivery system and all of the powerplants with the exception of the San Luis Unit, the operation of which Reclamation contracted to the State of California Department of Water Resources. Western markets and transmits the power available from the CVP. Western owns the 94 circuit-mile Malin-Round Mountain 500-kilovolt (kV) transmission line (an integral part of the Pacific AC Intertie (PACI)), the 84 circuit-mile Los Banos-Gates No. 3 500-kV transmission line, 803 circuit miles of 230-kV transmission line, 7 circuit miles of 115-kV transmission line, and approximately 63 circuit miles of 69-kV and below transmission line. Western also has part ownership in the 342-mile California-Oregon Transmission Project (COTP) 500-kV transmission line. Many of Western's existing customers have no direct access to Western's transmission lines and receive service over
Congress authorized the Washoe Project in 1956. The Washoe Project is located in west-central Nevada and east-central California and was designed to regulate runoff from the Truckee and Carson Rivers and to enhance irrigation; water drainage; municipal, industrial, and fisheries uses; provide flood protection; fish and wildlife habitat; and recreation. The Washoe Project includes Prosser Creek Dam and reservoir; Stampede Dam, reservoir, and powerplant; Marble Creek Dam; and Pyramid Lake Fishway. The Stampede Powerplant, located in Sierra County, California, was completed in 1987 and has a maximum operating capability of 3.65 MW with an estimated annual generation of 10,000 MWh. Sierra Pacific Power Company (SPPC) owns and operates the only transmission system available for access to Stampede Powerplant.
The United States began generating power in the CVP from the Shasta Powerplant in 1944. Formal allocations of 450 MW of CVP power were first made in 1952. In 1964, with the addition of the Trinity River Division facilities, Reclamation increased allocations to preference customers to 925 MW. In 1967, under terms of Contract 14–06–200–2948A (Contract 2948A) with the Pacific Gas and Electric Company, power imports over the PACI (Northwest imports) were incorporated along with provisions for load level increases up to 985 MW in 1975 and up to 1,050 MW in 1980.
Later in 1980, the load level under Contract 2948A was increased by 102 MW to 1,152 MW and Western increased allocations under the 1981 Power Marketing Plan (47 FR 4139). New customers received 26 MW of nonwithdrawable power and 42 MW of withdrawable power
Under the 1994 Power Marketing Plan (57 FR 45782 and 58 FR 34579), existing customers with contracts expiring in 1994 were allocated 501 MW, and approximately 8 MW was allocated to new customers. With these allocations, a total of approximately 1,580 MW were under contract through 2004.
On November 30, 1993, the National Defense Authorization Act for Fiscal Year 1993 (Pub. L. 102–484; 1993 NDAA) was signed into law. Section 2929 of the 1993 NDAA provides that, for a 10-year period, the CVP electric power allocations to military installations in the State of California which have been closed or approved for closure shall be reserved for sale through long-term contracts to preference entities which agree to use such power to promote economic development at the military installations closed or approved for closure. On December 1, 1994, Western published the final procedures developed to fulfill the requirements of section 2929 of the 1993 NDAA (59 FR 61604). About 41 MW of long-term firm power and about 8 MW of withdrawable power under contract to closing military installations were converted to NDAA power allocations.
Under the 2004 Power Marketing Plan, Western changed the way in which it marketed its power resources. Rather than allocating a firm contract rate of delivery to each customer, Western allocated a percentage of the available power to each customer. Western converted existing customers' MW allocations to percentages and then reduced those percentages by 4 percent to create a 2005 resource pool. All customers' (including 2005 allottees) percentages were reduced again to create a 2 percent resource pool in 2015.
Pursuant to the Final Allocation of Stampede Powerplant Power (50 FR 43456), Western allocated all the energy generated at Stampede Powerplant in excess of that needed to serve project use (Lahontan Fish Hatchery and Marble Bluff Fish Facility) to Truckee Donner Public Utility District (Truckee Donner). Because Truckee Donner was unable to obtain transmission service, it was unable to enter into a contract with Western to receive Stampede energy. In 1988, Western rescinded the allocation of Stampede energy to Truckee Donner and marketed Stampede energy to SPPC under short-term agreements.
In 1990, Western began conducting a marketing process for the sale of Stampede energy, giving priority to preference entities. Since no preference entity met the marketing criteria, SPPC continued to purchase Stampede energy under short-term agreements.
In April 1994, Western executed agreements with SPPC and the U.S. Department of the Interior, Fish and Wildlife Service (FWS) that established a mechanism to provide project use service to the FWS facilities. These agreements also provided Western the option to market and transmit all energy, in excess of that which is required to provide project use service, outside of SPPC's control area.
Under the 2004 Power Marketing Plan, the Washoe Project was financially integrated with the CVP to ensure cost recovery of the Washoe Project.
After electric industry restructuring and open transmission access, Truckee Donner was finally able to obtain transmission service from SPPC and, in May 2007, Western terminated its agreement with SPPC and executed an agreement with Truckee Donner and the City of Fallon (Fallon) for the Stampede generation. Under this agreement, Truckee Donner and Fallon provide power to the FWS facilities. Revenues from this agreement flow back to the SNR's power revenue requirement. This agreement terminates December 31, 2024.
Western is developing the Proposed Plan: (1) To define the products and services Western will offer, and (2) to determine the criteria for marketing and allocating power starting on January1, 2025, and going through December 31, 2054.
In the Proposed Plan, Western is proposing to offer a resource extension to existing customers and to offer a portion of the resource to new customers. The Proposed Plan provides a balance between existing and new customers.
As explained in the
Western developed the schedule for the Proposed Plan recognizing the importance of: (1) Necessary planning time (approximately 5 years after final contract commitments) for customers to acquire new power resources should their allocation of power change; (2) sufficient time for SNR or its customers to negotiate contracts for balancing area services, third-party transmission, and supplemental power supplies; and (3) time to meet with each customer to design a product/service package prior to the customer making a final commitment.
The Proposed Plan also incorporates the intent of Energy Planning and Management Program (EPAMP) (10 CFR part 905), published by Western on October 20, 1995 (60 FR 54151). EPAMP implements Section 114 of the Energy Policy Act of 1992, and requires Western's customers to prepare Integrated Resource Plans. The Power Marketing Initiative (PMI) of EPAMP provides a framework for extending a major portion of the power available at the time current contracts expire to existing customers, and for establishing project-specific resource pools.
The Proposed Plan addresses: (1) The power to be marketed after December 31, 2024, which is the termination date for all SNR electric service contracts; (2) the general terms and conditions under which the power will be marketed starting on January 1, 2025, and going through December 31, 2054; and (3) the criteria to determine who will be eligible to receive allocations from the resource pools.
Within broad statutory guidelines and operational constraints of the CVP and the Washoe Project, Western has wide discretion as to whom and under what terms it will contract for the sale of Federal power, as long as preference is accorded to statutorily defined public bodies. Western markets power in a manner that will encourage the most widespread use at the lowest possible rates consistent with sound business principles.
As used herein, the following acronyms and terms, whether singular or plural, capitalized or not capitalized, shall have the following meanings:
The primary purpose of the CVP and Washoe Project is water control and
Expected CVP generation (energy and capacity) for 2025 and beyond will vary annually, monthly, and daily based on hydrology and other constraints that govern CVP operations. CVP generation is available at the generator bus and must be adjusted for project use, maintenance, reserves, system losses, and certain ancillary services before the Base Resource is available for marketing. The power resources will be further adjusted for transmission losses to the point of delivery. The power resources also will be adjusted for first preference customers as described in this Proposed Plan.
The following table lists estimates of CVP power resources and adjustments. This table is for informational purposes only and does not imply the power resources and adjustments shown will be the actual amounts available or adjustments applied.
All of the power resource adjustments and variables mentioned above will influence the amount of Base Resource available to customers. During some critically dry months, purchases may be required to meet project use and only a minimal amount of Base Resource will be available during such months. The usability of the Base Resource for meeting customers' loads will be directly related to a customer's ability to integrate this power resource into their power resource mix.
Energy from the Washoe Project is estimated to be about 10,000 MWh annually. Currently, approximately half of the energy is being provided to F&WS Lahontan National Fish Hatchery and Marble Bluff Fish Facility. These F&WS facilities are project use loads of the Washoe Project and have first call on the power resources from the Washoe Project. All costs associated with providing F&WS project use service are, by law, non-reimbursable, and are not included in the Washoe Project energy rates.
Western will continue to make every effort to provide the Washoe Project power resource to F&WS. F&WS is currently using approximately 50 percent of Washoe Project generation, and the same percentage of costs is considered non-reimbursable. Western expects that F&WS loads will increase, reducing the cost to be repaid from power revenues.
Western proposes to market its Base Resource alone or in combination with a Custom Product, which could include purchasing some level of firming power on behalf of all customers, a group of customers, or individual customers. All costs incurred by Western in providing additional services to customers will be paid by those customers using the services. The degree to which Western continues to purchase power will depend on customer requests and Federal authorities. After the effective date of the Marketing Plan, Western will determine, in a collaborative process with the customers, the best use of Western's power and transmission resources to provide the Base Resource and Custom Products.
Each allottee will be allocated a percentage of the Base Resource. Following the offer of a contract pursuant to the Final Plan, Western will work with each individual allottee to determine the best use of the Base Resource for that allottee. All allottees will be required to commit to the Base Resource within 6 months of a contract offer. Upon request, Western may develop a Custom Product for any customer. A Custom Product may include any products or services mutually negotiated between Western and a customer. This may include firming and/or renewable power purchases, ancillary services, reserves, portfolio management services, scheduling coordinator services, etc. Commitments to purchase a Custom Product must be made by January 1, 2023, for a period of no less than 5 years of service, beginning January 1, 2025. Thereafter, the Custom Product will be offered for periods as agreed to by Western. Western may, at its discretion, extend the commitment dates for the Base Resource and Custom Product.
Western proposes to manage an exchange program to allow all customers to fully and efficiently use their power allocations. Any power allocated by Western to a customer that cannot be used on a real-time basis due to that customer's load profile will be offered under this program to other customers.
Any unused resources may be marketed for periods of time as determined by Western, and may be marketed outside the primary marketing area. Such sales may be to any entity (preference or non-preference), under any terms, conditions, rates or charges, determined solely by Western.
On December 31, 2024, all of the Sierra Nevada Region's long-term power sales contracts will expire. This Proposed Plan addresses how Western will market CVP and Washoe Project power after these contracts expire. Western proposes to apply the principles of the PMI of EPAMP to allocate power starting on January 1, 2025. Using the PMI as a framework, Western proposes to set aside a portion of its available power resource for new allocations. Based on Western's evaluation of potential new loads, Western proposes to initially provide 98 percent of its available power resource
1. Starting January 1, 2025, Western proposes that existing customers will have a right to purchase 98 percent of their current Base Resource percentage amount; except as provided below:
2. In the event that an existing customer(s) forfeits some or all of its allocation prior to 2025, that percentage, up to 2 percent of the total Base Resource, will be returned to the existing customers on a
3. In January 2024, Western will compare all existing customers' allocations to their loads. Western will use the average Base Resource MWh annual generation and the customers' previous 5 years energy consumption to compare allocations to loads. No customer should have an allocation greater than its load. If, after the comparison, Western believes a customer(s) has an allocation greater than its load, Western will consult with the customer(s) to determine if the allocation is, in fact, larger than its load. If SNR determines the allocation is too large, SNR will reduce that customer(s) allocation to 98 percent of its load.
4. Starting on January 1, 2040, Western is proposing to reduce all customers, including 2025 Resource Pool customers, by an additional 1 percent to create the 2040 Resource Pool.
1. Western proposes to establish a resource pool by reserving a portion of the power available after 2024 for allocation to eligible preference entities and existing customers. A second resource pool is proposed starting on January 1, 2040. The second resource pool will consist of 1 percent of the power resource available after 2039. Allocations for the resource pools will be determined through a separate public process at a later date.
The 2025 Resource Pool will initially consist of 2 percent of the power resources available after 2024. Should any Base Resource become available because of Sections IV.A.2 and IV.A.3 above, Western will, using its discretion, allocate the additional Base Resource at that time. Western will, at its discretion, allocate a percentage of the 2025 Resource Pool to applicants that meet the Eligibility and Allocation Criteria. Allocations from the 2040 Resource Pool will be determined through a separate public process conducted prior to 2040.
Western proposes to apply the following Eligibility Criteria to all applicants seeking a resource pool allocation under the Marketing Plan.
a. Applicants must meet the preference requirements under Section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485(c)), as amended and supplemented.
b. Applicants should be located within SNR's primary marketing area (map of marketing area available upon request). If SNR's power resources are not fully subscribed, Western may market its resource outside the primary marketing area.
c. Applicants that require power for their own use must be ready, willing, and able to receive and use Federal power.
d. Applicants that provide retail electric service must be ready, willing, and able to receive and use the Federal power to provide electric service to their customers, not for resale to others.
e. Applicants must submit an application in response to the Call for Resource Pool Applications issued by Western in a separate
f. Native American applicants must be a Native American tribe as defined in the Indian Self Determination Act of 1975 (25 U.S.C. 450b, as amended).
g. Western generally will not allocate power to applicants with loads of less than 1 MW; however, allocations to applicants with loads which are at least 500 kilowatts may be considered, provided the loads can be aggregated with other allottees' loads to schedule and deliver to a minimum load of 1 MW.
Western proposes to apply the following Allocation Criteria to all applicants receiving a resource pool allocation under the Marketing Plan.
a. Allocations will be made in amounts as determined solely by Western in exercise of its discretion under Reclamation Law and considered to be in the best interest of the U.S. Government.
b. Allocations will be based on the applicant's load during the calendar year prior to the Call for Applications or the amount requested, whichever is less.
c. An allottee will have the right to purchase power from Western only upon the execution of an electric service contract between Western and the allottee, and satisfaction of all conditions in that contract.
d. All customers, including those receiving an allocation from the 2025 Resource Pool, will be subject to the 2040 Resource Pool adjustment.
e. Eligible Native American entities will receive greater consideration for an allocation of up to 65 percent of their total energy load in the calendar year prior to the Call for Applications.
Western proposes to apply the following criteria and contract principles to all contracts executed under the Marketing Plan, except that certain criteria may not apply to contracts for first preference customers (see section VI for a definition of those customers):
A. Electric service contracts shall be executed within 6 months of a contract offer, unless otherwise agreed to in writing by Western.
B. Allocation percentages shall be subject to adjustment.
C. All power supplied by Western will be delivered pursuant to a scheduling arrangement.
D. Customers will be required to pay for their percentage of the Base Resource, regardless of whether they can actually use the power.
E. Customers must pay for all charges associated with the products and services provided, including charges associated with ancillary services, Custom Products, and transmission. Those charges will be passed on to the customer(s) contracting for the product or service.
F. Western may develop rate schedules for services provided under the Proposed Plan. Such rates will be developed through a separate process.
G. Customers must pay all applicable rates and charges in the manner and within the time prescribed in the contract.
H. A written commitment to the Custom Product will be required on or before January 1, 2023. Western may extend the final commitment dates for the Custom Product.
I. Contracts will include clauses specifying criteria that customers must meet on a continuous basis to be eligible to receive electric service from Western.
J. Upon request, Western shall provide, or assist each new and existing customer in obtaining transmission arrangements for delivery of power marketed under the Marketing Plan; nonetheless, each entity is ultimately responsible for obtaining its own
K. Contracts shall provide for Western to furnish electric service effective January 1, 2025, through December 31, 2054.
L. Specific products and services may be provided for periods of time as agreed to in the electric service contract.
M. Contracts shall incorporate Western's standard provisions for electric service contracts, integrated resource plans, and General Power Contract Provisions, as determined by Western.
N. Contracts will include a clause that allows Western to reduce or rescind a customer's allocation percentage, upon 90 days' notice, if Western determines that (1) the customer is not using this power to serve its own loads, except as otherwise specified in Section III; or (2) the allocation amounts are consistently greater than the customer's maximum load.
O. Any power not under contract may be allocated at any time, at Western's sole discretion, or sold as deemed appropriate by Western.
P. Contracts will include a clause providing for Western to adjust the customers' allocation percentage for the 2040 Resource Pool.
Q. Contracts may include a clause providing for alternative funding arrangements, including Net Billing, Bill Crediting, Reimbursable Financing, and advance payment.
The Trinity River Division Act and the New Melones Project provisions of the Flood Control Act of 1962 (Acts) specify that contracts for the sale and delivery of the additional electric energy, available from the CVP power system as a result of the construction of the plants authorized by these Acts and their integration into the CVP system, shall be made in accordance with preferences expressed in Federal Reclamation Laws. These Acts also provide that a first preference of up to 25 percent of the additional energy shall be given, under Federal Reclamation Law, to preference customers in the counties of origin (Trinity, Tuolumne, and Calaveras), for use in those counties, who are ready, willing, and able to enter into contracts for the energy.
Western proposes to calculate and allocate the maximum entitlements of first preference customers (MEFPC), which is the maximum amount of energy available to first preference customers/entities, in accordance with the following:
A. The MEFPC will be calculated separately for the New Melones Project, Calaveras and Tuolumne Counties, and the Trinity River Division (TRD), Trinity County (first preference projects). To determine the 25 percent of additional energy made available to the CVP as a result of the construction of each of these projects, Western proposes to use the average of the previous 20 years of historical annual generation. The TRD MEFPC includes generation from Trinity, Carr, and Spring Creek Powerplants and a portion of the Keswick Powerplant generation. Based on the most current information available, this calculation results in an estimated MEFPC of 122,800 MWh available from the New Melones Project, and an estimated MEFPC of 361,500 MWh available from the TRD. Western proposes to recalculate the MEFPC every 5 years, with the initial recalculation pertaining to this Proposed Plan completed by June 1, 2024.
B. Upon recalculation, if the MEFPC from a first preference project is 10 percent above or below the currently effective MEFPC from that first preference project, the MEFPC will be adjusted to reflect that increase or decrease. Western will notify affected first preference customers at least 6 months before making an adjustment to the MEFPC. If recalculation reduces the MEFPC to an amount less than the load previously served, Western may, upon request and at its discretion, make purchases necessary to replace that amount of power no longer available. The costs for all such purchases made on behalf of a first preference customer will be passed on to that first preference customer.
C. An allocation made to a first preference customer/entity under the Final Plan will be based on the power requirements of that first preference customer/entity. The sum of allocations of first preference power, including losses, shall not exceed the MEFPC from each first preference project, or a county of origin's share of the MEFPC, except as allowed under Section VI.7 below.
D. Western proposes to provide full requirements service as described below to first preference customers. The first preference customer will be responsible for transformation and transmission losses to the first preference customer delivery point. Transmission losses shall include losses for CVP transmission and third-party transmission.
Western will provide the first preference customer with its full power requirements (capacity and energy) up to its right to the MEFPC at the Base Resource rate. If there is more than one first preference customer in a county of origin, or a first preference entity in that county makes a request for power, Western reserves the right to establish a maximum amount of power available to each first preference customer from the MEFPC. Payment for full requirements service will be based on usage.
E. A first preference entity may exercise its right to use a portion of the MEFPC by providing written notice to Western at least 18 months prior to the anniversary date of the first preference project located in its county. The anniversary date is the successive fifth year anniversary of the date the Secretary of the Interior declared the availability of power from the powerplants in the counties of origin. New applications for service to begin on January 1, 2025, must be received 18 months prior to January 1, 2022 (
F. If the request of a first preference customer/entity for power, including adjustment for losses, is greater than the remaining MEFPC from that county's first preference project, then Western will allocate the remaining MEFPC to the first preference customer/entity first making a request for a power allocation or a justified increase in its allocation percentage.
G. Power allocated to first preference customers/entities in Tuolumne and Calaveras Counties will be subject to the following additional conditions:
1. Tuolumne and Calaveras Counties shall each be entitled to one-half of the New Melones Project MEFPC.
2. If first preference customers in either Tuolumne County or Calaveras County are not using their county's full one-half share, and a first preference customer/entity in the other county requests power in an amount exceeding that county's one-half share, then Western will allocate the unused power, on a withdrawable basis, to the requesting first preference customer/entity. Such power may be withdrawn for use by a first preference customer/entity in the county not using its full one-half share upon 6 months' written notice from Western.
H. Trinity Public Utilities District is currently the sole recipient of the TRD's first preference rights.
I. Transmission service will be provided in accordance with applicable
J. For planning purposes, first preference customers may be required to provide forecasts and other information required by Western as set forth in the electric service contract.
K. The general criteria and contract principles set forth in Sections V.A, C through I, K, M, and O of this Proposed Plan will apply to first preference customers.
Allottees and customers must secure all necessary transmission service to deliver Federal power. Western will provide transmission service to deliver the Base Resource over the CVP transmission system. Western will work with allottees and customers to secure bundled or unbundled transmission services as appropriate beyond its CVP transmission system in conjunction with its power sales in a manner consistent with Federal Energy Regulatory Commission orders, legislated mandates, or California Independent System Operator agreements. While Western will work with allottees and customers, it is the allottees and customers obligations to secure all necessary transmission service.
Generally, Western will market surplus transmission capacity on the CVP and COTP available under Western's Open Access Transmission Tariff. The legislation authorizing the PACI provides for the Secretary to market surplus available transmission capacity on the PACI at equitable rates to aid and benefit the CVP. Western will determine the use of its transmission resources concurrently with further development of the products and services under this Proposed Plan. Specific terms and conditions for transmission will be provided for in future service agreements. Western will develop transmission rates under a separate proceeding.
Western recognizes that there have been, and continue to be, significant changes in the electric utility industry. In order to address this concern, Western is proposing, in collaboration with its customers, to include the ability to make changes in how the Federal resource is marketed if there is deemed a benefit to Western and its customers. Any changes implemented would be done through negotiation and revision to individual customer contracts.
Western developed this Proposed Plan in accordance with its power marketing authorities pursuant to the Department of Energy Organization Act (42 U.S.C. 7101,
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 3501,
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601,
In compliance with the National Environmental Policy Act (NEPA) (42 U.S.C. 4321–4370), Council on Environmental Quality NEPA implementing regulations (40 CFR parts 1500–1508), and DOE NEPA implementing regulations (10 CFR part 1021), Western completed a Categorical Exclusion (CX). Since Western is reallocating its existing resources and is not planning to increase its generation or transmission under this Proposed Plan, a CX is the appropriate level of environmental review.
Western has an exemption from centralized regulatory review under Executive Order 12866; accordingly, no clearance of this
Environmental Protection Agency (EPA).
Notice.
In accordance with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is issuing a notice of receipt of requests by registrants to voluntarily cancel certain pesticide registrations and amend one pesticide registration. The amendment request would delete the following uses of MGK 264: Outdoor ground applications (tall grass, shrubbery, around lawns, corrals, feed lots, swine lots, zoos); and direct applications to beef cattle, dairy cattle, and horses. The product cancellation requests listed herein would not terminate the last products registered for these pesticides for use in the United States. EPA intends to grant these cancellation and amendment requests at the close of the comment period for this announcement unless the Agency receives substantive comments within the comment period that would merit its further review of the requests, or unless the registrants withdraw their requests. If these requests are granted, any sale, distribution, or use of products listed in this notice will be permitted after the registration has been cancelled or amended only if such sale, distribution, or use is consistent with the terms as described in the final order.
Comments must be received on or before June 6, 2016.
Submit your comments, identified by docket identification (ID) number EPA–HQ–OPP–2009–1017, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Miguel Zavala, Pesticide Re-Evaluation Division (7508P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 347–0504; email address:
This action is directed to the public in general, and may be of interest to a wide range of stakeholders including environmental, human health, and agricultural advocates; the chemical industry; pesticide users; and members of the public interested in the sale, distribution, or use of pesticides. Since others also may be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.
1.
2.
This notice announces receipt by EPA of requests from registrants to cancel certain pesticide products and amend one product registration for MGK 264 by deleting specific uses listed in Table 2 of this unit. The affected products and the registrants making the requests are identified in Tables 1–3 of this unit.
Unless a request is withdrawn by the registrant or if the Agency determines that there are substantive comments that warrant further review of the request, EPA intends to issue an order in the
Table 3 of this unit includes the names and addresses of record for the registrants of the products listed in Table 1 and Table 2 of this unit, in sequence by EPA company number. This number corresponds to the first part of the EPA registration numbers of the products listed in Table 1 and Table 2 of this unit.
Section 6(f)(1) of FIFRA (7 U.S.C. 136d(f)(1)) provides that a registrant of a pesticide product may at any time request that any of its pesticide registrations be cancelled or amended to terminate one or more uses. FIFRA further provides that, before acting on the request, EPA must publish a notice of receipt of any such request in the
Section 6(f)(1)(B) of FIFRA (7 U.S.C. 136d(f)(1)(B)) requires that before acting on a request for voluntary cancellation, EPA must provide a 30-day public comment period on the request for voluntary cancellation or use termination. In addition, FIFRA section 6(f)(1)(C) (7 U.S.C. 136d(f)(1)(C)) requires that EPA provide a 180-day comment period on a request for voluntary cancellation or termination of any minor agricultural use before granting the request, unless:
1. The registrants request a waiver of the comment period, or
2. The EPA Administrator determines that continued use of the pesticide would pose an unreasonable adverse effect on the environment.
The registrants listed in Table 3 of Unit II requested that EPA waive the 180–day comment period. Accordingly, EPA will provide a 30–day comment period on the proposed requests.
Registrants who choose to withdraw a request for product cancellation or use deletion should submit the withdrawal in writing to the person listed under
Existing stocks are those stocks of registered pesticide products that are currently in the United States and that were packaged, labeled, and released for shipment prior to the effective date of the action. If the requests for voluntary cancellation and amendments to delete uses are granted, the Agency intends to publish the cancellation order in the
In any order issued in response to these requests for cancellation of product registrations and for an amendment to delete a use, EPA proposes to include the following provisions for the treatment of any existing stocks of the products listed in Tables 1 and 2 of Unit II.
1. For product 100–1455, the registrant has indicated to the Agency via written response that the product was never produced or sold. Therefore, EPA anticipates that no existing stocks provision is needed for the registrant or persons other than the registrant.
2. For the products 6836–25, 6836–201, 6836–284, 74075–2, 81002–2, and 81002–3, the registrants have indicated to the Agency that there are no stocks of the products in the channels of trade. Therefore, EPA anticipates that the registrants do not need an existing stocks provision. Persons other than the registrant will generally be allowed to sell, distribute, or use existing stocks until such stocks are exhausted, provided that such sale, distribution, or use is consistent with the terms of the previously approved labeling on, or that accompanied, the cancelled product.
3. For product registration 47000–101, ChemTech requested 12 months to manufacture and distribute existing stocks. However, since their stated goal
4. For product 67690–40, the registrant requested an existing stocks provision to sell and distribute product until December 31, 2016, and as of that date will no longer have any current stock. Therefore, EPA anticipates allowing the registrant to sell and distribute existing stocks of the product through December 31, 2016. Thereafter, the registrant will be prohibited from selling and distributing the product, except for export consistent with FIFRA section 17 (7 U.S.C. 136o) or for proper disposal. Persons other than the registrant will generally be allowed to sell, distribute, or use existing stocks until such stocks are exhausted, provided that such sale, distribution, or use is consistent with the terms of the previously approved labeling on, or that accompanied, the cancelled product.
5. For the product 89459–27, once EPA has approved the product label reflecting the requested amendments to delete specific uses, the registrant will be permitted to sell or distribute the product under the previously approved labeling for a period of 18 months after the date of
6. For all other products identified in Table 1 of Unit II, EPA anticipates allowing the registrants to sell and distribute existing stocks of voluntarily cancelled products for 1 year after the effective date of the cancellation, which will be the date of publication of the cancellation order in the
7 U.S.C. 136
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
Environmental Protection Agency (EPA).
Notice of final action denying petitions for reconsideration.
The U.S. Environmental Protection Agency (EPA) received six petitions for reconsideration of the final Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units, published in the
Effective May 6, 2016.
Dr. Nick Hutson, Energy Strategies Group, Sector Policies and Programs Division (D243–01), U.S. EPA, Research Triangle
A copy of this
Section 307(b)(1) of the Clean Air Act (CAA) specifies which Federal Courts of Appeal have venue over petitions for review of final EPA actions. This section provides, in part, that “a petition for review of action of the Administrator in promulgating . . . any standard of performance or requirement under section [111] of [the CAA],” or any other “nationally applicable” final action, “may be filed only in the United States Court of Appeals for the District of Columbia.”
The EPA has determined that its action denying the petitions for reconsideration is nationally applicable for purposes of CAA section 307(b)(1) because the action directly affects the Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units, which are nationally applicable section 111 standards. Thus, any petitions for review of the EPA's decision to deny petitioners' requests for reconsideration must be filed in the United States Court of Appeals for the District of Columbia by July 5, 2016.
On October 23, 2015, pursuant to section 111(b) of the CAA, the EPA published the final rule titled “Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units.” (“section 111(b) greenhouse gas (GHG) new source performance standards (NSPS)”) 80 FR 64510.
CAA section 307(d)(7)(B) requires the EPA to convene a proceeding for reconsideration of a rule if a party raising an objection to the rule “can demonstrate to the Administrator that it was impracticable to raise such objection within [the public comment period] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” The requirement to convene a proceeding to reconsider a rule is, thus, based on the petitioner demonstrating to the EPA both: (1) That it was impracticable to raise the objection during the comment period, or that the grounds for such objection arose after the comment period but within the time specified for judicial review (
The EPA received six petitions for reconsideration of the CAA section 111(b) greenhouse gas (GHG) new source performance standard (NSPS) from the following entities: the Utility Air Regulatory Group (UARG); American Electric Power (AEP); Ameren Corp. (Ameren); the Energy and Environmental Legal Institute (EELI); State of Wisconsin; and the Biogenic CO
We discuss each of the five petitions we are denying and the basis for those denials in a separate, docketed memorandum titled “Basis for Denial of Petitions to Reconsider the CAA section 111(b) Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Fossil Fuel-Fired Electric Utility Generating Units.” For reasons set out in the memorandum, the petitions for review of UARG, AEP, Ameren, EELI, and the State of Wisconsin (with the exception of the issue regarding treatment of biomass) are denied.
Environmental Protection Agency (EPA).
Notice.
In accordance with Section 743 of Division C of the Consolidated Appropriations Act of 2010 (Public Law 111–117), the Environmental Protection Agency (EPA) is publishing this notice to advise the public of the availability of the FY 2015 Service Contract Inventory. This inventory provides information on service contract actions over $25,000 that were made in FY 2015. The information is organized by function to show how contracted resources are distributed throughout the Agency. The inventory has been developed in accordance with guidance issued by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP), Service Contract Inventories (December 19, 2011). The Environmental Protection Agency has posted its inventory and a summary of the inventory on the EPA's homepage at the following link:
Questions regarding the service contract inventory should be directed to Linear Cherry in the Office of Acquisition Management, Policy, Training, and Oversight Division (3802R), Financial Analysis and Oversight Service Center, Environmental Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC 20460; telephone number: (202)
1. The EPA has established a docket for this action under Docket ID No. EPA–HQ–OARM–2016–0214. Publicly available docket materials are available either electronically through
2.
Farm Credit Administration.
Notice is hereby given, pursuant to the Government in the Sunshine Act, of the regular meeting of the Farm Credit Administration Board (Board).
The regular meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on May 12, 2016, from 9:00 a.m. until such time as the Board concludes its business.
Dale L. Aultman, Secretary to the Farm Credit Administration Board, (703) 883–4009, TTY (703) 883–4056.
Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102–5090. Submit attendance requests via email to
Parts of this meeting of the Board will be open to the public (limited space available), and parts will be closed to the public. Please send an email to
* Session Closed—Exempt pursuant to 5 U.S.C. Section 552b(c)(8) and (9).
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501–3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before July 5, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele at (202) 418–2991.
This collection is utilized for the rural health care (RHC) support mechanism of the Commission's universal service fund (USF). The collection of the information is necessary so that the Commission and USAC will have sufficient information to determine if entities are eligible for funding pursuant to the RHC universal service support mechanism, to determine if entities are complying with the Commission's rules, and to prevent waste, fraud, and abuse. In addition, the information is necessary in order to allow the Commission to evaluate the extent to which the RHC Programs are meeting the statutory objectives specified in section 254(h) of the 1996 Act, and the Commission's own performance goals for the Healthcare Connect Fund. This information collection is being revised to: (1) Eliminate the information requirement for the Internet Access Program; (2) extend some of the existing collection requirements for the Healthcare Connect Fund, the Skilled Nursing Facilities Pilot Program, the 2006 Pilot Program, and the Telecommunications Program; and (3) revise some of the existing information collection requirements for the Healthcare Connect Fund and the Telecommunications Programs. This information collection is organized by program indicating which information collection requirements are being eliminated, extended, and/or revised for each RHC Program. The Healthcare Connect Fund includes FCC Forms 460, 461, 462, and 463, and the Telecommunications Program includes FCC Forms 465, 466, 467. At the time of the Commission's last information collection submission, 2006 Pilot Program participants were using the FCC Forms for the Telecommunications and Internet Access Programs. 2006 Pilot Program participants and former 2006 Pilot Program participants, however, can now seek funding from the Healthcare Connect Fund and the Telecommunications Programs using the forms for those programs. The revisions to these FCC Forms, where applicable, are intended to make the RHC Program information requests consistent between the programs, to the extent possible. Since the last revision to this information collection, USAC has upgraded its information technology environment to create an integrated online application and administrative process for the Healthcare Connect Fund and all Healthcare Connect Fund forms are being submitted and processed via the online portal. Similarly, the information collection requirements associated with the Telecommunications Program have also been placed online. Taken as a whole, the implementation of these automated systems should reduce administrative burdens and costs for applicants, service providers, and USAC. Since the application processes have now been automated, the Commission will, in this information collection request, submit templates describing the type of information that will be requested from RHC Program participants, rather than submitting paper forms. As part of this information collection, we propose to make the revisions to this information collection and all RHC forms processed via the online portal effective January 1, 2017. The current FCC Forms will remain in effect until that date.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501–3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before July 5, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email
For additional information about the information collection, contact Cathy Williams at (202) 418–2918.
Federal Communications Commission.
Based upon the foregoing, the Receiver has determined that the continued existence of the receivership will serve no useful purpose. Consequently, notice is given that the receivership shall be terminated, to be effective no sooner than thirty days after the date of this Notice. If any person wishes to comment concerning the termination of the receivership, such comment must be made in writing and sent within thirty days of the date of this Notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.1, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of this receivership will be considered which are not sent within this time frame.
The Federal Deposit Insurance Corporation (FDIC), as Receiver for 10289, First Commerce Community Bank, Douglasville, Georgia (Receiver) has been authorized to take all actions necessary to terminate the receivership estate of First Commerce Community Bank (Receivership Estate); the Receiver has made all dividend distributions required by law.
The Receiver has further irrevocably authorized and appointed FDIC-Corporate as its attorney-in-fact to execute and file any and all documents that may be required to be executed by the Receiver which FDIC-Corporate, in its sole discretion, deems necessary; including but not limited to releases, discharges, satisfactions, endorsements, assignments and deeds.
Effective May 1, 2016, the Receivership Estate has been terminated, the Receiver discharged, and the Receivership Estate has ceased to exist as a legal entity.
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage
Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act.
Unless otherwise noted, comments regarding the notices must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than May 23, 2016.
A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690–1414:
1.
Board of Governors of the Federal Reserve System, May 3, 2016.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than June 2, 2016.
A. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President), 90 Hennepin Avenue, Minneapolis, Minnesota 55480–0291:
1.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than May 23, 2016.
A. Federal Reserve Bank of Atlanta (Chapelle Davis, Assistant Vice President), 1000 Peachtree Street NE., Atlanta, Georgia 30309. Comments can also be sent electronically to
1.
2.
B. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480–0291:
1.
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Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by June 6, 2016.
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395–5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of the following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
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The IPP will provide an opportunity for 100 selected individuals from around the country who are already leading and participating in delivery reform initiatives with local and regional networks to engage in a deeper way with CMS to enhance these efforts. During the course of one year, the IPP will immerse individuals in the strategy and innovation work of CMS through intensive webinars and small group discussions. Program participants will engage with CMS staff in the Innovation Center and Regional Offices to inform and support regional activities supporting innovation models. In collaboration with CMS and fellow program participants, they will create partnerships regionally and across the United States.
An application process is necessary to select the individuals who will participate in IPP and is the first component of this data collection. Applicants shall likely include physicians, nurses and other clinical staff in leadership roles from various health care delivery, public health and community health organizations. The second data collection component is a set of surveys and the respondents shall be only those who are participating in the program. Data from these surveys will be used to design program activities and to identify opportunities for improvement to both activities and the program overall. This data collection is necessary in order to launch and implement the IPP—a key initiative in
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice of meeting.
This notice announces that a public meeting of the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) (“Committee”) will be held on Wednesday, July 20, 2016. This meeting will specifically focus on obtaining the MEDCAC's recommendations regarding treatment strategies for patients with lower extremity chronic venous disease. This meeting is open to the public in accordance with the Federal Advisory Committee Act (5 U.S.C. App. 2, section 10(a)).
We will be broadcasting the meeting live via Webcast at
Maria Ellis, Executive Secretary for MEDCAC, Centers for Medicare & Medicaid Services, Center for Clinical Standards and Quality, Coverage and Analysis Group, S3–02–01, 7500 Security Boulevard, Baltimore, MD 21244 or contact Ms. Ellis by phone (410–786–0309) or via email at
MEDCAC, formerly known as the Medicare Coverage Advisory Committee (MCAC), is advisory in nature, with all final coverage decisions resting with CMS. MEDCAC is used to supplement CMS' internal expertise. Accordingly, the advice rendered by the MEDCAC is most useful when it results from a process of full scientific inquiry and thoughtful discussion, in an open forum, with careful framing of recommendations and clear identification of the basis of those recommendations. MEDCAC members are valued for their background, education, and expertise in a wide variety of scientific, clinical, and other related fields. (For more information on MCAC, see the MEDCAC Charter (
This notice announces the Wednesday, July 20, 2016, public meeting of the Committee. During this meeting, the Committee will discuss recommendations regarding treatment strategies for patients with lower extremity chronic venous disease. Background information about this topic, including panel materials, is available at
The Committee will deliberate openly on the topics under consideration. Interested persons may observe the deliberations, but the Committee will not hear further comments during this time except at the request of the chairperson. The Committee will also allow a 15-minute unscheduled open public session for any attendee to address issues specific to the topics under consideration. At the conclusion of the day, the members will vote and the Committee will make its recommendation(s) to CMS.
CMS' Coverage and Analysis Group is coordinating meeting registration. While there is no registration fee, individuals must register to attend. You may register online at
This meeting will be held in a federal government building; therefore, federal security measures are applicable. The Real ID Act, enacted in 2005, establishes minimum standards for the issuance of state-issued driver's licenses and identification (ID) cards. It prohibits Federal agencies from accepting an official driver's license or ID card from a state unless the Department of Homeland Security determines that the state meets these standards. Beginning October 2015, photo IDs (such as a valid driver's license) issued by a state or territory not in compliance with the Real ID Act will not be accepted as identification to enter Federal buildings. Visitors from these states/territories will need to provide alternative proof of identification (such as a valid passport) to gain entrance into CMS buildings. The current list of states from which a Federal agency may accept driver's licenses for an official purpose is found at
• Presentation of government-issued photographic identification to the Federal Protective Service or Guard Service personnel.
• Inspection of vehicle's interior and exterior (this includes engine and trunk inspection) at the entrance to the grounds. Parking permits and instructions will be issued after the vehicle inspection.
• Inspection, via metal detector or other applicable means, of all persons entering the building. We note that all items brought into CMS, whether personal or for the purpose of presentation or to support a presentation, are subject to inspection. We cannot assume responsibility for coordinating the receipt, transfer, transport, storage, set-up, safety, or timely arrival of any personal belongings or items used for presentation or to support a presentation.
All visitors must be escorted in areas other than the lower and first floor levels in the Central Building.
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
5 U.S.C. App. 2, section 10(a).
Centers for Medicare & Medicaid Services, HHS.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are require; to publish notice in the
Comments must be received by July 5, 2016.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
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To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
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In accordance with the ACA, CMS established the SRDP on September 23, 2010, and information concerning how to disclose an actual or potential violation of section 1877 of the Act was posted on the CMS Web site. The most recent approval of this information collection request (“ICR”) was issued by the Office of Management and Budget on August 26, 2014.
We are now seeking approval to revise the currently approved ICR. Under the currently approved collection, a party must provide a financial analysis of overpayments arising from actual or potential violations of section 1877 of the Act based on a 4-year lookback period. On February 12, 2016, CMS published a final rule on the reporting and returning of overpayments. See CMS–6037–F, Medicare Program; Reporting and Returning of Overpayments, 81 FR 7654 (Feb. 12, 2016) (the “final overpayment rule”). The final overpayment rule establishes a 6-year lookback period for reporting and returning overpayments. We are revising the information collection for the SRDP to reflect the 6-year lookback period established by the final overpayment rule. The re vision is necessary to ensure that parties submitting self-disclosures to the SRDP report overpayments for the entire 6-year lookback period. The 6-year lookback period applies
We are also taking the opportunity to streamline and simplify the SRDP by issuing a required form for SRDP submissions. The SRDP Form will reduce the burden on disclosing parties by reducing the amount of information
Food and Drug Administration, HHS.
Notice; renewal of advisory committee.
The Food and Drug Administration (FDA) is announcing the renewal of the Pharmacy Compounding Advisory Committee by the Commissioner of Food and Drugs (the Commissioner). The Commissioner has determined that it is in the public interest to renew the Pharmacy Compounding Advisory Committee for an additional 2 years beyond the charter expiration date. The new charter will be in effect until April 25, 2018.
Authority for the Pharmacy Compounding Advisory Committee will expire on April 25, 2016, unless the Commissioner formally determines that renewal is in the public interest.
Cindy Hong, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993–0002, 301–796–9001,
Pursuant to 41 CFR 102–3.65 and approval by the Department of Health and Human Services pursuant to 45 CFR part 11 and by the General Services Administration, FDA is announcing the renewal of the Pharmacy Compounding Advisory Committee. The committee is a discretionary Federal advisory committee established to provide advice to the Commissioner. The Pharmacy Compounding Advisory Committee advises the Commissioner or designee in discharging responsibilities as they relate to compounded drugs for human use and, as required, any other product for which the Food and Drug Administration has regulatory responsibility.
The Committee shall provide advice on scientific, technical, and medical issues concerning drug compounding under sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353a) and (21 U.S.C. 353b), and, as required, any other product for which the Food and Drug Administration has regulatory responsibility, and make appropriate recommendations to the Commissioner of Food and Drugs.
The Committee shall consist of a core of 12 voting members including the Chair. Members and the Chair are selected by the Commissioner or designee from among authorities knowledgeable in the fields of pharmaceutical compounding, pharmaceutical manufacturing, pharmacy, medicine, and related specialties. These members will include representatives from the National Association of Boards of Pharmacy, the United States Pharmacopeia, pharmacists with current experience and expertise in compounding, physicians with background and knowledge in compounding, and patient and public health advocacy organizations. Members will be invited to serve for overlapping terms of up to 4 years. Almost all non-Federal members of this committee serve as Special Government Employees. The core of voting members may include one or more technically qualified members, selected by the Commissioner or designee, who are identified with consumer interests and are recommended by either a consortium of consumer-oriented organizations or other interested persons. In addition to the voting members, the Committee may include one or more non-voting members who are identified with industry interests.
Further information regarding the most recent charter and other information can be found at
This document is issued under the Federal Advisory Committee Act (5 U.S.C. app.). For general information related to FDA advisory committees, please visit us at
Health Resources and Services Administration, HHS.
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects (section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995), the Health Resources and Services Administration (HRSA) announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this Information Collection Request must be received no later than July 5, 2016.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the information request collection title for reference.
Prior to releasing information from the survey, BPHC will request prospective users to complete the “Data Use Agreement” (DUA). BPHC uses DUAs as legal binding agreements when an external entity (
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
June 8–9, 2016.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of a change in the meeting of the Subcommittee I—Transition to Independence, June 14, 2016, 08:00 a.m. to June 15, 2016, 05:00 p.m., Hyatt Regency Bethesda, One Bethesda Metro Center, 7400 Wisconsin Avenue, Bethesda, MD 20814 which was published in the
The meeting notice is amended to change the location of the meeting to DoubleTree Hotel Bethesda, 8120 Wisconsin Avenue, Bethesda, MD 20814. The meeting is closed to the public.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, Department of Health and Human Services.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for
Licensing information may be obtained by emailing the indicated licensing contact at the National Heart, Lung, and Blood, Office of Technology Transfer and Development Office of Technology Transfer, 31 Center Drive Room 4A29, MSC2479, Bethesda, MD 20892–2479; telephone: 301–402–5579. A signed Confidential Disclosure Agreement may be required to receive any unpublished information.
Technology description follows.
Alloreactive T Cell Depletion Method For Preventing Graft-Versus-Host Disease. The invention relates to the use of adenosine to deplete alloreactive T cells from donor grafts to prevent graft-versus-host disease (GVHD). The method includes culturing donor cells that include T cells with recipient antigen presenting cells (APCs) to form a mixture of cells. The recipient's APCs activate donor T cells. The activated T cells are treated with high doses of adenosine or an adenosine-like molecule to decrease or inhibit viability of the activated donor T-cells. The adenosine or adenosine-like molecule is filtered away from the mixture resulting in cells that can be transplanted into the recipient.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
In compliance with Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 concerning opportunity for public comment on proposed collections of information, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the information collection plans, call the SAMHSA Reports Clearance Officer at (240) 276–1243.
Section 1955 of the Public Health Service Act (42 U.S.C. 300x–65), as amended by the Children's Health Act of 2000 (Pub. L. 106–310) and Sections 581–584 of the Public Health Service Act (42 U.S.C. 290kk
No changes are being made to the regulations or the burden hours.
Information on how states comply with the requirements of 42 CFR part 54 was approved by the Office of Management and Budget (OMB) as part of the Substance Abuse Prevention and Treatment Block Grant FY 2016–2017 annual application and reporting requirements approved under OMB control number 0930–0168.
Send comments to Summer King, SAMHSA Reports Clearance Officer, 5600 Fishers Lane, Room 15E57–B, Rockville, Maryland 20857,
Federal Emergency Management Agency, DHS.
Notice.
The Federal Emergency Management Agency (FEMA) will submit the information collection abstracted below to the Office of Management and Budget for review and clearance in accordance with the requirements of the Paperwork Reduction Act of 1995. The submission will describe the nature of the information collection, the categories of respondents, the estimated burden (
Comments must be submitted on or before June 6, 2016.
Submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the Desk Officer for the Department of Homeland Security, Federal Emergency Management Agency, and sent via electronic mail to
Requests for additional information or copies of the information collection should be made to Director, Records Management Division, 500 C Street SW., Washington, DC 20472–3100, or email address
This information collection previously published in the
U.S. Immigration and Customs Enforcement, DHS.
30-Day notice.
The Department of Homeland Security, U.S. Immigration and Customs Enforcement (USICE), is submitting the following information collection request for review and clearance in accordance with the Paperwork Reduction Act of 1995. The information collection is published in the
The purpose of this notice is to allow an additional 30 days for public comments. Comments are encouraged and will be accepted until June 6, 2016.
Written comments and suggestions regarding items contained in this notice and especially with regard to the estimated public burden and associated response time should be directed to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for U.S. Immigration and Customs Enforcement, Department of Homeland Security, and sent via electronic mail to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Transportation Security Administration, DHS.
30-Day notice.
This notice announces that the Transportation Security Administration (TSA) has forwarded the Information Collection Request (ICR), Office of Management and Budget (OMB) control number 1652–0055, abstracted below to OMB for review and approval of a revision of the currently approved collection under the Paperwork Reduction Act (PRA). The ICR describes the nature of the information collection and its expected burden. TSA published a
Send your comments by June 6, 2016. A comment to OMB is most effective if OMB receives it within 30 days of publication.
Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, OMB. Comments should be addressed to Desk Officer, Department of Homeland Security/TSA, and sent via electronic mail to
Christina A. Walsh, TSA PRA Officer, Office of Information Technology (OIT), TSA–11, Transportation Security Administration, 601 South 12th Street, Arlington, VA 20598–6011; telephone (571) 227–2062; email
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
(1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
In addition to security incident reporting, the Pipeline Security Guidelines previously included collecting pipeline operator security manager contact information to TSA.
Office of the Chief Information Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202–395–5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in section A.
The baseline survey will provide HUD with baseline measures of in-home high-speed internet access, barriers to access among those without access, and types of devices used to access the internet. Upon establishing baseline measures, HUD's ConnectHome team will use this information to support local efforts in closing the digital divide.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This Notice identifies unutilized, underutilized, excess, and surplus Federal property reviewed by HUD for suitability for use to assist the homeless.
Juanita Perry, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7266, Washington, DC 20410; telephone (202) 402–3970; TTY number for the hearing- and speech-impaired (202) 708–2565 (these telephone numbers are not toll-free), or call the toll-free Title V information line at 800–927–7588.
In accordance with 24 CFR part 581 and section 501 of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11411), as amended, HUD is publishing this Notice to identify Federal buildings and other real property that HUD has reviewed for suitability for use to assist the homeless. The properties were reviewed using information provided to HUD by Federal landholding agencies regarding unutilized and underutilized buildings and real property controlled by such agencies or by GSA regarding its inventory of excess or surplus Federal property. This Notice is also published in order to comply with the December 12, 1988 Court Order in
Properties reviewed are listed in this Notice according to the following categories: Suitable/available, suitable/unavailable, and suitable/to be excess, and unsuitable. The properties listed in the three suitable categories have been reviewed by the landholding agencies, and each agency has transmitted to HUD: (1) Its intention to make the property available for use to assist the homeless, (2) its intention to declare the property excess to the agency's needs, or (3) a statement of the reasons that the property cannot be declared excess or made available for use as facilities to assist the homeless.
Properties listed as suitable/available will be available exclusively for homeless use for a period of 60 days from the date of this Notice. Where property is described as for “off-site use only” recipients of the property will be required to relocate the building to their own site at their own expense. Homeless assistance providers interested in any such property should send a written expression of interest to HHS, addressed to: Ms. Theresa M. Ritta, Chief Real Property Branch, the Department of Health and Human Services, Room 5B–17, Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857, (301) 443–2265 (This is not a toll-free number.) HHS will mail to the interested provider an application packet, which will include instructions for completing the application. In order to maximize the opportunity to utilize a suitable property, providers should submit their written expressions of interest as soon as possible. For complete details concerning the processing of applications, the reader is encouraged to refer to the interim rule governing this program, 24 CFR part 581.
For properties listed as suitable/to be excess, that property may, if subsequently accepted as excess by GSA, be made available for use by the homeless in accordance with applicable law, subject to screening for other Federal use. At the appropriate time, HUD will publish the property in a Notice showing it as either suitable/available or suitable/unavailable.
For properties listed as suitable/unavailable, the landholding agency has decided that the property cannot be declared excess or made available for use to assist the homeless, and the property will not be available.
Properties listed as unsuitable will not be made available for any other purpose for 20 days from the date of this Notice. Homeless assistance providers interested in a review by HUD of the determination of unsuitability should call the toll free information line at 1–800–927–7588 for detailed instructions or write a letter to Ann Marie Oliva at the address listed at the beginning of this Notice. Included in the request for review should be the property address (including zip code), the date of publication in the
For more information regarding particular properties identified in this Notice (
Office of Policy Development and Research, HUD.
Notice of proposed information collection.
The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202–395–5806. Email:
Colette Pollard, Reports Management Officer, QDAM, U.S. Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410. Email Colette Pollard at
The Department will submit the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35, as amended). This notice is soliciting comments from members of the public and affected agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including if the information will have practical utility; (2) Evaluate the accuracy of the agency's estimate of the burden of proposed collection of information; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology,
This notice also lists the following information:
Data collection will include the families that are part of the treatment and control groups. Data will be gathered through surveys.
Members of the affected public:
Estimation of the total number of hours needed to prepare the information collection including number of respondents, frequency of response, and hours of response:
Title 13 U.S.C. 9(a), and title 12, U.S.C., section 1701z–1
Fish and Wildlife Service, Interior.
Notice of public meeting.
The North American Wetlands Conservation Council (Council) will meet to select North American Wetlands Conservation Act (NAWCA) grant proposals for recommendation to the Migratory Bird Conservation Commission (Commission). This meeting is open to the public, and interested persons may present oral or written statements.
The Council meeting will occur on June 22, 2016, from 8:30 a.m. to 4:30 p.m. The Council will consider U.S. Standard grant proposals. If you are interested in presenting information at this public meeting, contact the Council Coordinator no later than June 10, 2016. If you require reasonable accommodations to attend the meeting, contact the person listed under
The Council meeting will take place at the Lewis and Clark Interpretive Center, 4201 Giant Springs Road, Great Falls, Montana 59405.
Sarah Mott, Council Coordinator, by phone at 703–358–1784; by email at
The Council meets two to three times per year to select NAWCA grant proposals for recommendation to the Commission. Council meetings are open to the public, and interested persons may present oral or written statements.
In accordance with the North American Wetlands Conservation Act (NAWCA; Pub. L. 101–233, 103 Stat. 1968, December 13, 1989, as amended), the State-private-Federal Council meets to consider wetland acquisition, restoration, enhancement, and management projects for recommendation to, and final funding approval by, the Commission.
NAWCA provides matching grants to organizations and individuals who have developed partnerships to carry out wetlands conservation projects in the United States, Canada, and Mexico. These projects must involve long-term protection, restoration, and/or enhancement of wetlands and associated uplands habitats for the benefit of all wetlands-associated migratory birds. Project proposal due dates, application instructions, and eligibility requirements are available on the NAWCA Web site at
Interested members of the public may submit relevant information or questions for consideration during the public meeting. If you wish to submit a written statement, you must contact the Council Coordinator by the date in Public Input. Written statements must be supplied to the Council Coordinator in both of the following formats: One hard copy with original signature, and
Individuals or groups who request to make an oral presentation at the meeting will be limited to 2 minutes per speaker, with no more than a total of 30 minutes for all speakers. Interested parties should contact the Council Coordinator by the date in Public Input, in writing (preferably via email; see
Summary minutes of the Council meeting will be maintained by the Council Coordinator at the address under
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the Fish and Wildlife Service (Service), announce the availability of a Draft Comprehensive Conservation Plan (CCP) and Environmental Impact Statement (EIS) for Lower Klamath, Clear Lake, Tule Lake, Upper Klamath, and Bear Valley National Wildlife Refuges (Refuges) for review and comment. The Refuges are part of the Klamath Basin Complex. The draft CCP/EIS, prepared under the National Wildlife Refuge Improvement Act of 1997, and in accordance with the National Environmental Policy Act of 1969, describes how the Service proposes to manage the refuges for the next 15 years. Draft compatibility determinations for uses proposed under one or more of the alternatives are also available for review and public comment.
To ensure consideration, we must receive your written comments by June 20, 2016. Comments submitted electronically using the Federal eRulemaking Portal (see
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○ Klamath Refuge Basin National Wildlife Refuge Complex Headquarters, 4009 Hill Road, Tulelake, CA 96134.
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We request that you send comments by only the methods described above. We will post all information received on
For how to view comments on the draft CCP/EIS from the Environmental Protection Agency (EPA), or for information on EPA's role in the EIS process, see EPA's Role in the EIS Process under
Additional information about the CCP planning process is available on the Internet at
Klamath Refuge Planner, (916) 414–6464 (phone).
We publish this notice to announce the availability of a draft CCP/EIS for the Klamath Basin Refuges. The draft CCP/EIS, which we prepared in accordance with the National Environmental Policy Act of 1969 (NEPA), describes and analyzes a range of management alternatives for the Klamath Basin Refuges. In addition to our publication of this notice, EPA is publishing a notice announcing the draft CCP/EIS, as required under section 309 of the Clean Air Act (42 U.S.C. 7401
The EPA is charged under section 309 of the CAA (42 U.S.C. 7401
EPA also serves as the repository (EIS database) for EISs prepared by Federal agencies and provides notice of their availability in the
The notice of availability is the start of the public comment period for draft EISs, and the start of the 30-day “wait period” for final EISs, during which agencies are generally required to wait 30 days before making a decision on a proposed action. For more information, see
The National Wildlife Refuge System Improvement Act of 1997 (16 U.S.C. 668dd–668ee), which amended the National Wildlife Refuge System Administration Act of 1966, requires the Service to develop a CCP for each national wildlife refuge. The purpose in developing a CCP is to provide refuge managers with a 15-year plan for achieving refuge purposes and contributing toward the mission of the National Wildlife Refuge System, consistent with sound principles of fish and wildlife management, conservation, legal mandates, and our policies. In addition to outlining broad management direction on conserving wildlife and their habitats, CCPs also evaluate the potential for providing wildlife-dependent recreational opportunities to the public, including opportunities for hunting, fishing, wildlife observation and photography, and environmental education and interpretation. We will review and update the CCP at least every 15 years in accordance with the Improvement Act.
With this notice, we continue the CCP process for Lower Klamath, Clear Lake, Tule Lake, Upper Klamath, and Bear Valley National Wildlife Refuges (Refuges). We started this process through a notice in the
The Klamath Basin Refuges consist of a variety of habitats, including freshwater marshes, open water, grassy meadows, coniferous forests, sagebrush and juniper grasslands, agricultural lands, and rocky cliffs and slopes. These habitats support diverse and abundant populations of resident and migratory wildlife, with 433 species having been observed on or near the Refuges. In addition, each year the Refuges serve as a migratory stopover for about three-quarters of the Pacific Flyway waterfowl, with peak fall concentrations of over 1 million birds.
In addition to any methods in
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We are conducting environmental review in accordance with the requirements of NEPA, as amended (42 U.S.C. 4321
We request that you send comments only by one of the methods described in
The locations, dates, and times of public meetings will be listed in a planning update distributed to the project mailing list and posted on the refuge planning Web site at
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act of 1976 (FLPMA), and the Federal Advisory Committee Act of 1972 (FACA), the U.S. Department of the Interior, Bureau of Land Management (BLM) Northern California Resource Advisory Council will meet as indicated below.
The meeting will be held Thursday, June 23, 2016. The council subcommittee will convene at 9 a.m. via Video Teleconference (VTC). Members of the public are welcome.
Bureau of Land Management Arcata and Redding Field Offices. The Arcata Field Office is located at 1695 Heindon Road, Arcata,
Todd Forbes, Northern California District Manager, (530) 224–2160; or Leisyka Parrott, Acting Public Affairs Officer, (707) 825–2313. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at (800) 877–8339, to contact the above individual during normal business hours. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
The 15-member council advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with public land management on BLM-administered lands in northern California and far northwest Nevada. At this meeting the RAC will discuss development of the Northern California Integrated Resource Management Plan, results from public envisioning meetings and next steps in the planning process. All meetings are open to the public. Members of the public may present written comments to the council. Each formal council meeting will have time allocated for public comments. Depending on the number of persons wishing to speak, and the time available, the time for individual comments may be limited. Individuals who plan to attend and need special assistance, such as sign language interpretation and other reasonable accommodations, should contact the BLM as provided above.
National Park Service, Interior.
Request for nominations.
The National Park Service (NPS), U.S. Department of the Interior, proposes to appoint new members to the Boston Harbor Islands National Recreation Area Advisory Council (Council). The NPS is requesting nominations for qualified persons to serve as members of the Council.
Written nominations must be received by June 6, 2016.
Nominations or requests for further information should be sent to Mary Raczko, Partnership Liaison, Boston Harbor Islands National Recreation Area, 15 State Street, Suite 1100, Boston, MA 02109, telephone (617) 223–8669, or email
The Boston Harbor Islands National Recreation Area Advisory Council is a Federal advisory committee established by 16 U.S.C. 460kkk(g).
The objectives and scope of the Council's activities as defined by the Act are to represent various groups with interests in the Boston Harbor Islands National Recreation Area and make recommendations to the Boston Harbor Islands Partnership on issues related to the development and implementation of the park's integrated resource management plan.
The Council is composed of 18 members appointed by the Director to three year terms. In accordance with the statute, the Director is to appoint no fewer than three individuals to represent each of the following categories of entities: (a) Municipalities; (b) educational and cultural institutions; (c) environmental organizations; (d) business and commercial entities (including those related to transportation, tourism and the maritime industry); (e) Boston Harbor Islands-related advocacy organizations; and (f) organizations representing Native American interests. The chairman is selected by the members.
Each member shall be appointed for a term of three years and may be reappointed for not more than two successive terms. A member may serve after the expiration of that member's term until a successor has taken office.
We are currently seeking members to represent all categories.
Nominations should be typed and should include a resume providing an adequate description of the nominee's qualifications, including information that would enable the Department of the Interior to make an informed decision regarding meeting the membership requirements of the Commission and permit the Department of the Interior to contact a potential member.
Members of the Commission serve without compensation. However, while away from their homes or regular places of business in the performance of services for the Commission as approved by the Designated Federal Officer, members may be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons employed intermittently in Government service are allowed such expenses under 5 U.S.C. 5703.
Individuals who are Federally registered lobbyists are ineligible to serve on all Federal Advisory Committee Act (FACA) and non-FACA boards, committees, or councils in an individual capacity. The term “individual capacity” refers to individuals who are appointed to exercise their own individual best judgment on behalf of the government, such as when they are designated Special Government Employees, rather than being appointed to represent a particular interest.
All nominations must be compiled and submitted in one complete package. Incomplete submissions (missing one or more of the items described above) will not be considered.
United States International Trade Commission
May 13, 2016 at 10:00 a.m.
Room 101, 500 E Street SW., Washington, DC 20436, Telephone: (202) 205–2000.
Open to the public
1. Agendas for future meetings: none.
2. Minutes.
3. Ratification List.
4. Vote in Inv. Nos. 701–TA–558 and 731–TA–1316 (Preliminary) (1-Hydroyethylidene-1, 1-Disphosphonic Acid (HEDP) from China). The Commission is currently scheduled to complete and file its determinations on May 16, 2016; views of the Commission are currently scheduled to be completed and filed on May 23, 2016.
5. Outstanding action jackets: none.
In accordance with Commission policy, subject matter listed above, not disposed of at the scheduled meeting, may be carried over to the agenda of the following meeting.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined not to review the presiding administrative law judge's (“ALJ”) initial determination (“ID”) (Order No. 29), which terminated the investigation based upon settlement.
Sidney A. Rosenzweig, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 708–2532. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205–2000. General information concerning the Commission may also be obtained by accessing its Internet server at
The Commission instituted this investigation on May 26, 2015, based on a complaint filed by Synaptics Incorporated of San Jose, California (“Synaptics”). 80 FR 30093 (May 26, 2015). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain touchscreen controllers and products containing the same by reason of infringement of certain claims of U.S. Patent Nos. 7,868,874 (“the '874 patent”); 8,338,724 (“the '724 patent); 8,558,811 (“the '811 patent”); and 8,952,916 (“the '916 patent”). The notice of investigation named as respondents Shenzhen Hiuding Technology Co., Ltd. a/k/a Shenzhen Goodix Technology Co. Ltd., of Shenzhen, China; and Goodix Technology Inc. of San Diego, California (collectively, “Goodix”); as well as BLU Products, Inc. of Doral, Florida (“BLU”). The Office of Unfair Import Investigations was also named as a party.
On March 29, 2016, Synaptics, Goodix, and BLU filed a joint motion to terminate the investigation based upon a settlement agreement between Synaptics and Goodix. On April 7, 2016, the Commission investigative attorney filed a response in support of the motion, agreeing with the movants that the settlement agreement resolves the entire dispute between Synaptics and all respondents.
On April 12, 2016, the ALJ granted the motion as an ID (Order No. 29), and terminated the investigation. The ALJ found that the motion complies with Commission Rules,
No petitions for review of the ID were filed. The Commission has determined not to review the ID.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
U.S. International Trade Commission.
Correction of notice.
Correction is made to the case caption indicated in notice 81 FR 26255–56 which was published on Monday, May 2, 2016. The caption should read as follows: Certain Dental Implants.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until June 6, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Kris Howard, Program Manager, National Tracing Center Division, 244 Needy Road, Martinsburg, WV 25405, at email:
Written comments and suggestions from the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Form number: ATF F 5300.3A
Component: Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice.
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Notice of registration.
Myoderm applied to be registered as an importer of certain basic classes of controlled substances. The Drug Enforcement Administration (DEA) grants Myoderm registration as an importer of those controlled substances.
By notice dated January 4, 2016, and published in the
The DEA has considered the factors in 21 U.S.C. 823, 952(a) and 958(a) and determined that the registration of Myoderm to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated the company's maintenance of effective controls against diversion by inspecting and testing the company's physical security systems, verifying the company's compliance with state and local laws, and reviewing the company's background and history.
Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above-named company is granted registration as an importer of the following basic classes of controlled substances:
The company plans to import the listed controlled substances in finished dosage form for clinical trials, research, and analytical purposes.
The import of the above listed basic classes of controlled substances will be granted only for analytical testing, research, and clinical trials. This authorization does not extend to the import of a finished FDA approved or non-approved dosage form for commercial sale.
Notice of registration.
Sharp Clinical Services, Inc. applied to be registered as an importer of a certain basic class of controlled substance. The Drug Enforcement Administration (DEA) grants Sharp Clinical Services, Inc. registration as an importer of this controlled substance.
By notice dated January 4, 2016, and published in the
The DEA has considered the factors in 21 U.S.C. 823, 952(a) and 958(a) and determined that the registration of Sharp Clinical Services, Inc. to import the basic class of controlled substance is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated the company's
Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above-named company is granted registration as an importer of marihuana (7360), a basic class of controlled substance listed in schedule I.
The company plans to import finished pharmaceutical products containing cannabis extracts in dosage form for clinical trial studies.
This compound is listed under drug code 7360. No other activity for this drug code is authorized for this registration. Approval of permits applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of FDA approved or non-approved finished dosage forms for commercial sale.
Notice of registration.
Noramco, Inc. applied to be registered as a manufacturer of certain basic classes of controlled substances. The Drug Enforcement Administration (DEA) grants Noramco, Inc. registration as a manufacturer of those controlled substances.
By notice dated November 23, 2015, and published in the
The DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Noramco, Inc. to manufacture the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated the company's maintenance of effective controls against diversion by inspecting and testing the company's physical security systems, verifying the company's compliance with state and local laws, and reviewing the company's background and history.
Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above-named company is granted registration as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the above-listed controlled substances in bulk for distribution to its customers.
Notice of registration.
Almac Clinical Services Incorp (ACSI) applied to be registered as an importer of a certain basic class of controlled substance. The Drug Enforcement Administration (DEA) grants Almac Clinical Services Incorp (ACSI) registration as an importer of this controlled substance.
By notice dated December 15, 2015, and published in the
The DEA has considered the factors in 21 U.S.C. 823, 952(a) and 958(a) and determined that the registration of Almac Clinical Services Incorp (ACSI) to import the basic class of controlled substance is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated the company's maintenance of effective controls against diversion by inspecting and testing the company's physical security systems, verifying the company's compliance with state and local laws, and reviewing the company's background and history.
Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above-named company is granted registration as an importer of Morphine (9300), a basic class of controlled substance listed in schedule II.
The company plans to import the listed controlled substance in dosage form for clinical trial only. Approval of permit applications will occur only when the registrant's business activity is consistent with what is authorized under 21 U.S.C. 952(a)(2). Authorization will not extend to the import of FDA approved or non-approved finished dosage forms for commercial sale.
Notice of registration.
Noramco, Inc. applied to be registered as an importer of certain basic classes of controlled substances. The Drug Enforcement Administration
By notice dated January 4, 2016, and published in the
The DEA has considered the factors in 21 U.S.C. 823, 952(a) and 958(a) and determined that the registration of Noramco, Inc. to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated the company's maintenance of effective controls against diversion by inspecting and testing the company's physical security systems, verifying the company's compliance with state and local laws, and reviewing the company's background and history.
Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above-named company is granted registration as an importer of the following basic classes of controlled substances:
The company plans to import opium raw (9600) and poppy straw concentrate (9670) to bulk manufacture other controlled substances for distribution to its customers. The company plans to import an intermediate form of tapentadol (9780) to bulk manufacture tapentadol (9780) for distribution to its customers. The company plans to import phenylacetone (8501) in bulk for the manufacture of a controlled substance.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until June 6, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please Kris Howard, Program Manager, National Tracing Center Division, 244 Needy Road, Martinsburg, WV 25405, at email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Room 3E–405B, Washington, DC 20530.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until June 6, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Andrew Ashton, Specialist, National Firearms Act (NFA) Branch, 244 Needy Road, Martinsburg, WV 25405 at telephone: 304–616–4541. Written comments and/or suggestions can also be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention Department of Justice Desk Officer, Washington, DC 20503 or sent to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Room 3E–405B, Washington, DC 20530.
Bureau of Justice Statistics, Department of Justice.
60-Day notice.
The Department of Justice (DOJ), Office of Justice Programs, Bureau of Justice Statistics, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until July 5, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Shelley Hyland, Statistician, Law Enforcement Statistics, Bureau of Justice Statistics, 810 Seventh Street NW., Washington, DC 20531 (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
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If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., 3E.405B, Washington, DC 20530.
Notice.
The Department of Labor (DOL) is submitting the Occupational Safety and Health Administration (OSHA) sponsored information collection request (ICR) titled, “Hexavalent Chromium Standards for General Industry, Shipyard Employment, and Construction,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 6, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–OSHA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202–395–5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202–693–4129, TTY 202–693–8064, (these are not toll-free numbers) or by email at
This ICR seeks to extend PRA authority for the Hexavalent Chromium Standards for General Industry, Shipyard Employment, and Construction information collection requirements respectively codified in regulations 29 CFR 1910.1026, 1915.1026, and 1926.1126. These regulations require an Occupational Safety and Health Act (OSH Act) covered employer subject to one of the Standards to monitor employee exposure to hexavalent chromium, to provide medical surveillance, and to establish and maintain accurate records of employee exposure to hexavalent chromium and employee medical records. Employers, employees, physicians, and the Government use these records to ensure that exposure to chromium does not harm employees. OSH Act sections 2(b)(9), 6, and 8(c) authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3507(a)(1)(D).
The Bureau of Labor Statistics Technical Advisory Committee will meet on Friday, June 17, 2015. The meeting will be held in the Postal Square Building, 2 Massachusetts Avenue NE., Washington, DC.
The Committee provides advice and makes recommendations to the Bureau of Labor Statistics (BLS) on technical aspects of the collection and formulation of economic measures. The BLS presents issues and then draws on the expertise of Committee members representing specialized fields within the academic disciplines of economics, statistics and survey design.
The meeting will be held in rooms 1–3 of the Postal Square Building Conference Center. The schedule and agenda for the meeting are as follows:
The meeting is open to the public. Any questions concerning the meeting should be directed to Sarah Dale, Bureau of Labor Statistics Technical Advisory Committee, on 202–691–5643. Individuals who require special accommodations should contact Ms. Dale at least two days prior to the meeting date.
National Science Foundation.
Notice; Submission for OMB Review; Comment Request.
The National Science Foundation (NSF) has submitted the following information collection requirement to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. This is the second notice for public comment; the first was published in the
Submit written comments to Suzanne Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Room 1265, Arlington, VA 22230, or by email to
Call or write, Suzanne Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Room 1265, Arlington, VA 22230, or by email to
NSF may not conduct or sponsor a collection of information unless the collection of information displays a
Approval to conduct a pilot of the new Nonprofit Research Activities Survey (NPRA) is being requested under the America COMPETES Reauthorization Act of 2010 § 505, codified in the National Science Foundation Act of 1950 (NSF Act), as amended, at 42 U.S.C. 1862, which under paragraph “b” directs the Foundation through NCSES to (1) collect, acquire, analyze, report, and disseminate statistical data related to the science and engineering enterprise in the U.S. and other nations that is relevant and useful to practitioners, researchers, policymakers, and the public, including statistical data on (a) research and development trends; (b) the science and engineering workforce; (c) U.S. competitiveness in science, engineering, technology, and research and development.
The National Center for Science and Engineering Statistics (NCSES) plans to conduct a pilot of the new NPRA. This survey will collect R&D and other related data from U.S. nonprofit organizations. This survey will collect the following:
• Total amount spent on R&D activities within nonprofit organizations,
• Number of employees and R&D employees,
• Sources of funds for R&D expenditures,
• Expenditures by field of R&D,
• Total amount of R&D funding provided to others outside the nonprofit organization,
• Types of recipients receiving R&D funding, and
• Funding by field of R&D.
Nuclear Regulatory Commission.
Regulatory issue summary; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing Regulatory Issue Summary (RIS) 2016–05, “Embedded Digital Devices In Safety-Related Systems.” This RIS clarifies the NRC staff's position on existing regulatory requirements for the quality and reliability of safety-related equipment with embedded digital devices. Furthermore, the purpose of this RIS is to raise awareness that there may be potential safety issues from a postulated common cause failure (CCF) if an undetected software error should occur in embedded digital devices located in multiple trains of redundant safety equipment in nuclear facilities.
The RIS is available as of May 6, 2016.
Please refer to Docket ID NRC–2014–0129 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
•
•
•
• This RIS is also available on the NRC's public Web site at
Eugene Eagle, Office of Nuclear Reactor Regulation, telephone: 301–415–3706;
The NRC published a notice of opportunity for public comment on draft RIS 2013–XX, “Embedded Digital Devices in Safety-Related Systems, Systems Important to Safety, and Items Relied on For Safety” (ADAMS Accession No. ML12248A065), in the
Based on the public comments received, the NRC published a notice of opportunity for public comment on revised draft RIS 2014–XX, “Embedded Digital Devices in Safety-Related Systems,” (ADAMS Accession No. ML13338A769) in the
For the Nuclear Regulatory Commission.
In notice document 2016–09981 beginning on page 26583 in the issue of Tuesday, May 03, 2016, make the following corrections:
1. On page 26583, in the third column, in the
2. On the same page, in the third column, in the
3. On the same page, in the third column, in the
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of First-Class Package Service Contract 52 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add First-Class Package Service Contract 52 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–130 and CP2016–164 to consider the Request pertaining to the proposed First-Class Package Service Contract 52 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Kenneth R. Moeller to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–130 and CP2016–164 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail Contract 212 to the competitive product list. This notice informs the public of the filing,
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30-.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail Contract 212 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–127 and CP2016–161 to consider the Request pertaining to the proposed Priority Mail Contract 212 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Curtis E. Kidd to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–127 and CP2016–161 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Curtis E. Kidd is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail Contract 210 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail Contract 210 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–125 and CP2016–159 to consider the Request pertaining to the proposed Priority Mail Contract 210 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Lyudmila Y. Bzhilyanskaya to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–125 and CP2016–159 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Lyudmila Y. Bzhilyanskaya is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail & First-Class Package Service Contract 18 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail & First-Class Package Service Contract 18 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–129 and CP2016–163 to consider the Request pertaining to the proposed Priority Mail & First-Class Package Service Contract 18 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Cassie D'Souza to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–129 and CP2016–163 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Cassie D'Souza is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an amendment to First-Class Package Service Contract 39 negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
On April 29, 2016, the Postal Service filed notice that it has agreed to an Amendment to the existing First-Class Package Service Contract 39 negotiated service agreement approved in this docket.
The Postal Service also filed the unredacted Amendment and supporting financial information under seal. The Postal Service seeks to incorporate by reference the Application for Non-Public Treatment originally filed in this docket for the protection of information that it has filed under seal. Notice at 1.
The Amendment updates the information listed in section I.G., the custom First-Class Package Service Commercial Tier tables, among other changes.
The Postal Service intends for the Amendment to become effective one business day after the date that the Commission completes its review of the Notice. Notice at 1. The Postal Service asserts that the Amendment will not impair the ability of the contract to comply with 39 U.S.C. 3633. Notice, Attachment B at 1.
The Commission invites comments on whether the changes presented in the Postal Service's Notice are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR 3015.5, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Kenneth R. Moeller to represent the interests of the general public (Public Representative) in this docket.
1. The Commission reopens Docket No. CP2016–47 for consideration of matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, the Commission appoints Kenneth R. Moeller to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an amendment to Priority Mail Express Contract 25 negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
On April 29, 2016, the Postal Service filed notice that it has agreed to an amendment to the existing Priority Mail Express Contract 25 negotiated service agreement approved in this docket.
The Postal Service also filed the unredacted Amendment and supporting financial information under seal. The Postal Service seeks to incorporate by reference the Application for Non-Public Treatment originally filed in this docket for the protection of information that it has filed under seal. Notice at 1.
The Amendment changes prices under Priority Mail Express Contract 25 as contemplated by the contract's terms.
The Postal Service intends for the Amendment to become effective one business day after the date that the Commission completes its review of the Notice. Notice, Attachment A at 1. The Postal Service asserts that the Amendment will not impair the ability of the contract to comply with 39 U.S.C. 3633. Notice, Attachment B.
The Commission invites comments on whether the changes presented in the Postal Service's Notice are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR 3015.5, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Jennaca D. Upperman to represent the interests of the general public (Public Representative) in this docket.
1. The Commission reopens Docket No. CP2015–28 for consideration of matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, the Commission appoints Jennaca D. Upperman to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail Contract 209 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail Contract 209 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–124 and CP2016–158 to
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Lyudmila Y. Bzhilyanskaya to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–124 and CP2016–158 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Lyudmila Y. Bzhilyanskaya is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning notice to enter into an additional Global Expedited Package Services 3 negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
On April 29, 2016, the Postal Service filed notice that it has entered into an additional Global Expedited Package Services 3 (GEPS 3) negotiated service agreement (Agreement).
To support its Notice, the Postal Service filed a copy of the Agreement, a copy of the Governors' Decision authorizing the product, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket No. CP2016–165 for consideration of matters raised by the Notice.
The Commission invites comments on whether the Postal Service's filing is consistent with 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of the filing can be accessed via the Commission's Web site (
The Commission appoints Katalin K. Clendenin to serve as Public Representative in this docket.
1. The Commission establishes Docket No. CP2016–165 for consideration of the matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is appointed to serve as an officer of the Commission to represent the interests of the general public in this proceeding (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail Contract 211 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail Contract 211 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–126 and CP2016–160 to
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Curtis E. Kidd to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–126 and CP2016–160 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Curtis E. Kidd is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning the addition of Priority Mail Contract 213 to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30–.35, the Postal Service filed a formal request and associated supporting information to add Priority Mail Contract 213 to the competitive product list.
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request, Attachment B.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2016–128 and CP2016–162 to consider the Request pertaining to the proposed Priority Mail Contract 213 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 9, 2016. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Katalin K. Clendenin to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2016–128 and CP2016–162 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 9, 2016.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Giant Resources, Inc. (CIK No. 1327926), an Alberta corporation with its principal place of business listed as Calgary, Alberta, Canada with stock quoted on OTC Link under the ticker symbol GIREF, because it has not filed any periodic reports since the period ended December 31, 2012. On August 18, 2015, a delinquency letter was sent by the Division of Corporation Finance to Giant Resources, Inc. requesting compliance with its periodic filing obligations, and Giant Resources, Inc. received the delinquency letter on August 31, 2015, but failed to cure its delinquencies.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Rush Exploration, Inc. (CIK No. 1301574), an Alberta corporation with its principal place of business listed as Edmonton, Alberta, Canada with stock quoted on OTC Link under the ticker symbol REXEF, because it has not filed any periodic reports since the period ended December 31, 2012. On August 18, 2015, a delinquency letter was sent by the Division of Corporation Finance to Rush Exploration, Inc. requesting compliance with its periodic filing obligations, and Rush Exploration, Inc. received the delinquency letter on August 31, 2015, but failed to cure its delinquencies.
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies.
Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on May 4, 2016, through 11:59 p.m. EDT on May 17, 2016.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The ISE proposes to amend its Market Maker API fees as described in more detail below. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange charges application programming interface (“API”) fees to Market Makers
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that the proposed fee change is reasonable and equitable because the proposed changes will reduce the impact of increased quoting activity on Market Maker API charges, and will encourage Market Makers to maintain quality markets in order to qualify for the proposed incentives. As noted above, Market Makers are currently facing increased API charges due to increases in quoting activity for members that quote aggressively. The Exchange believes that a cap in API fees is appropriate for Market Makers that consistently maintain quality markets as demonstrated by achieving Market Maker Plus in a number of symbols. The Exchange also believes that it is appropriate to grant free API sessions to members that achieve Market Maker Plus in SPY, which is the most actively traded name on the Exchange. Similarly, the Exchange believes that it is appropriate to grant an additional quoting allowance as well as free API
In accordance with Section 6(b)(8) of the Act,
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
ISE Gemini proposes to change its billing cycle for FIX Session/API Session Fees to correspond to the calendar month. The text of the proposed rule change is available on the Exchange's Internet Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements.
On April 18, 2016, the Exchange's affiliate, the International Securities Exchange, LLC (“ISE”), filed a proposed rule change to reduce application programming interface (“API”) fees charged to Market Makers that meet specified performance criteria.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
In accordance with Section 6(b)(8) of the Act,
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of EQCO2, Inc. (CIK No. 1371487), a Nevada corporation with its principal place of business listed as Las Vegas, Nevada, with stock quoted on OTC Link (previously, “Pink Sheets”) operated by OTC Markets Group, Inc. (“OTC Link”) under the ticker symbol CLNO, because it has not filed any periodic reports since the period ended July 31, 2013. On September 16, 2014, a delinquency letter was sent by the Division of Corporation Finance to EQCO2, Inc. requesting compliance with its periodic filing obligations, and EQCO2, Inc. received the delinquency letter on September 19, 2014, but failed to cure its delinquencies.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Hondo Minerals Corp. (CIK No. 1471136), a defaulted Nevada corporation with its principal place of business listed as Chloride, Arizona with stock quoted on OTC Link under the ticker symbol HMNC, because it has not filed any periodic reports since the period ended April 30, 2013. On August 19, 2015, a delinquency letter was sent by the Division of Corporation Finance to Hondo Minerals Corp. requesting compliance with its periodic filing obligations, but Hondo Minerals Corp. did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual).
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Liberty Gold Corp. (CIK No. 1459697), a void Delaware corporation with its principal place of business listed as Phoenix, Arizona, with stock quoted on OTC Link under the ticker symbol LBGO, because it has not filed any periodic reports since the period ended June 30, 2013. On October 17, 2014, a delinquency letter was sent by the Division of Corporation Finance to Liberty Gold Corp. requesting compliance with its periodic filing obligations, but Liberty Gold Corp. did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual).
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies.
Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on May 4, 2016, through 11:59 p.m. EDT on May 17, 2016.
By the Commission.
Pursuant to a written trackage rights agreement (Agreement) dated April 12, 2016,
The transaction may be consummated on or after May 21, 2016, the effective date of the exemption (30 days after the verified notice of exemption was filed). The purpose of the trackage rights is to allow AVR to operate bridge train service for a 125-day period while AVR rehabilitates a trestle on its Allegheny Subdivision. The temporary trackage rights will expire 125 days from the commencement date mutually agreed upon between AVR and NS, which commencement date shall not occur until after the effective date of the exemption but, pursuant to the Agreement, no later than July 15, 2016.
As a condition to this exemption, any employees affected by the acquisition of the temporary trackage rights will be protected by the conditions imposed in
This notice is filed under 49 CFR 1180.2(d)(8). If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than May 13, 2016 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No. FD 36015, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, a copy of each pleading must be served on Richard R. Wilson, 518 N. Center Street Ste. 1, Ebensburg, PA 15931.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
CaterParrott Railnet, LLC (CPR), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to lease from Central of Georgia Railroad Company (CGR), a wholly owned subsidiary of Norfolk Southern Railway Company, and to operate 17.35 miles of rail line between milepost B–234.00 at Barnesville, and milepost B–251.35 at Thomaston, in Lamar and Upson Counties, Ga. (the Line),
CPR certifies that its projected annual revenues as a result of this transaction will not result in CPR's becoming a Class II or Class I rail carrier and that its projected annual revenue do not exceed $5 million.
CPR states that the lease between CPR and CGR does not contain any provisions that prohibit, restrict, or would otherwise limit future interchange of traffic with any third-party carrier.
The transaction may be consummated on or after May 20, 2016, the effective date of the exemption (30 days after the verified notice of exemption was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than May 13, 2016 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No. FD 36026, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, one copy of each pleading must be served on Chris Parrott, CaterParrott Railnet, LLC, 3825 Aubrey Lane, Tifton, GA 31794.
According to CPR, this action is categorically excluded from environmental review under 49 CFR 1105.6(c).
Board decisions and notices are available on our Web site at
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Federal Aviation Administration (FAA), DOT.
Notice of meetings.
This notice announces the 2016 meetings of the Equip 2020 Plenary and Working Groups. Equip 2020 is a joint FAA and Industry group tasked with moving forward significantly on ADS–B Out implementation. Formed as a result of the Call to Action held October 28, 2014, Equip 2020 was given 32 tasks, reflecting barriers to implementation, which forms the basis of our agendas and discussions.
Meeting 1 will be held on Wednesday, June 22, 2016, at 8:30 a.m.; meeting 2 will be held on Wednesday, September 14, 2016, at 8:30 a.m.; and meeting 3 will be held on Tuesday, December 13, 2016, at 8:30 a.m.
Meeting 1 will be held at RTCA, 1150 18th Street NW., Suite 910, Washington, DC 20036. Meetings 2 and 3 will be held at Helicopter Association International, 1920 Ballenger Ave., Alexandria, VA 22314.
Elisabeth Auld, Program Support—FAA AVS Safety Technical Support Services Flight Technologies and Procedures Division; Email:
More information on ADS–B Out can be found at
(a) Meeting attendance is by invitation only, and is generally limited to those that have participated in previous meetings or are a proxy from their organization.
(b) All meetings start at 8:30 a.m. and conclude at approximately 3:30 p.m. Doors open 30 minutes prior to the beginning of each meeting.
(c) Equip 2020 meetings generally start with 2 hours of Plenary briefings/discussion, 2–3 hours of working group meetings and 1–2 hours of Plenary for working group out briefs. Working groups are currently: Air Carrier Equipage, General Aviation Equipage and Engagement, Benefits and ADS–B In and Installation and Approvals.
(d) Contact Elisabeth Auld (
(e) The meetings will not be formally recorded. However, minutes are posted approximately 2–3 weeks after the meeting on the Equip 2020 SharePoint site
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9665, 3 CFR, 1959–1963 Comp., p. 389.
Federal Aviation Administration (FAA), DOT.
Notice.
The Federal Aviation Administration (FAA) announces the availability of draft Advisory Circular, (AC) 150/5360–14A, Access to Airports by Individuals with Disabilities, for public review. This AC will provide guidance and recommendations for ensuring access to airports by
Comments must be received on or before June 6, 2016. The FAA will also consider comments received after that date to the extent practicable.
You may also submit comments identified by Docket Number FAA–2016–4796 using any of following methods:
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•
•
•
• The FAA invites interested persons, airport operators, guide dog trainers and handlers, consultants, industry representatives, and all other interested parties to review and comment on the draft, at:
Lillian Miller, Program Analyst, Federal Aviation Administration, Office of Airports, Airport Engineering Division (AAS–100) 800 Independence Ave. SW., Washington, DC 20591; Telephone (202) 267–3367.
Under 49 U.S.C. 47108(a) the Secretary may impose terms on the grant offer that the Secretary considers necessary to carry out the Airport Improvement Program (AIP). This provision includes uniform design standards for airports, which are included in the FAA Advisory Circulars.
FAA updated the Advisory Circular,
Draft AC 150/5360–14A presents and reconciles the federal accessibility regulations of the Americans with Disabilities Act of 1990 (ADA); the Air Carrier Access Act of 1986 (ACAA); the Rehabilitation Act of 1973, as amended (RA); and the Architectural Barriers Act of 1968, as amended (ABA). Additionally, the draft provides guidance regarding service animal relief areas in airport terminals.
On August 5, 2015, U.S. Department of Transportation (DOT) published a final rule addressing service animal relief areas amending 49 CFR 27.71(h). (See 80 FR 46508) Under that final rule, primary airports must provide at least one service animal relief area in each airport terminal. This service animal relief area, with limited exceptions, must be located in the sterile area of each airport terminal to ensure that individuals with service animals are able to access service animal relief areas when traveling, particularly during layovers.
DOT decided that it will not adopt specific requirements with respect to dimensions, design, materials, and maintenance of SARAs. However, the final rule requires airports to consult with service animal training organizations regarding design and dimensions. DOT uses airport terminals as the standard upon which airports must determine the number of required SARA, rather than using the amount of time required for an individual with a disability to reach a service animal relief area from a particular gate. DOT recognizes that the Transportation Security Administration (TSA) may prohibit an airport from locating the SARA in the sterile area of a terminal for security reasons. Therefore, the rule provides airports with an exception to the final rule requirement to locate the SARA within the sterile area of each airport terminal.
DOT also realizes that, based on an airport's configuration, a relief area in the non-sterile area of an airport may be more desirable to relief area users. As such, DOT gives airports the option of placing a relief area in a location other than the sterile area of a terminal if a service animal training organization, the airport, and carriers in the terminal in which the relief area will be located agree that a relief area would be better placed outside the terminal's sterile area instead of inside the sterile area. For all these exceptions, the airport must, however, document and retain a record of this agreement, including when TSA prohibits location of the SARA in a sterile area.
To better understand the needs of SARA users, the FAA held a public meeting on April 10, 2014, to receive input from airport operators, service animal trainers, and service animal handlers on service animal relief areas at airports. As a result of that meeting, the FAA included service animal relief area standards and technical recommendations in the AC addressing size and surface materials of the relief area, maintenance methods, and time/distance between gates and relief areas. Since the FAA is aware that service dog training schools do not offer standardized training, the AC recommends that airport operators consider installing two types of surfaces when designing relief areas.
The draft AC's recommendations for SARAs will generally apply to primary airports with 10,000 or more enplanements and operated by public entities, but will be helpful for all airport operators. The draft AC will serve as a guide for airport operators in complying with requirements regarding individuals with disabilities by identifying relevant statutes and regulations affecting airports, and by listing sources of assistance and additional information. Accordingly, the FAA is seeking public input regarding SARAs. The FAA also recognizes that relief areas must be accessible for people who use wheelchairs, that some service animals will only relieve themselves when off leash and others on leash, and that some service animals are trained to relieve themselves only outdoors. For the SARA located outdoors, the AC recommends fencing an area large enough to address safety, sanitation, and maintenance considerations. For accessibility, the AC recommends accessible doors/gates with accessible door opening/closing mechanisms, or the removal of gates that may present obstacles for people who use wheelchairs.
The SARA located outside the terminal may also present difficulties for service animal handlers during
The FAA is also aware that it may be difficult for people with visual impairments to navigate within the SARA. To allow these people to familiarize themselves with the SARA's layout before entering, the AC recommends placing special signs, maps, and other orienting cues at the entrance to the SARA. In addition, this AC defines the airport terminal for the purpose of helping airports decide on the number and locations of required SARA. To enhance SARAs, the FAA is seeking input on new concept cleaning technology; like nano technology as a potential for self-cleaning SARA.
The FAA understands that way-finding is necessary for safe and efficient mobility in a complex airport terminal. The FAA recognizes that wayfinding in a complex airport terminal might be a challenge for people who are blind or have vision impairments. Additionally, the FAA recognizes escorting is time consuming and diminishes independence for individuals with disabilities.
Accordingly, the FAA specifically seeks comments about:
• RFID (Radio Frequency Identification) systems for possible use in wayfinding and mobility in the airport terminal for people with visual impairments;
• Audio-haptic systems designed for enhancing orientation and mobility skills in people with visual impairments; and
• Other technology innovations to enhance wayfinding is interested in public input regarding the use of wayfinding technologies and other technology innovations at airports.
Federal Highway Administration (FHWA), DOT.
Notice and request for comments.
FHWA invites public comments about our intention to request the Office of Management and Budget's (OMB) approval for a new information collection, which is summarized below under
Please submit comments by June 6, 2016.
You may send comments within 30 days to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention DOT Desk Officer. You are asked to comment on any aspect of this information collection, including: (1) Whether the proposed collection is necessary for the FHWA's performance; (2) the accuracy of the estimated burden; (3) ways for the FHWA to enhance the quality, usefulness, and clarity of the collected information; and (4) ways that the burden could be minimized, including the use of electronic technology, without reducing the quality of the collected information. All comments should include the Docket number FHWA–2016–0013.
Pamela Woodruff, 202–366–1607, Office of Civil Rights, Federal Highway Administration, Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.48.
Department of Transportation.
Notice of Public Availability of FY 2015 Service Contract Inventories.
In accordance with section 743 of Division C of the Consolidated Appropriations Act of 2010, Public Law 111–117, Department of Transportation is publishing this notice to advise the public of the availability of the FY 2015 Service Contact Inventory data, the summary spreadsheet, the supplement, the analysis of the FY 2014 data and the plan for analyzing the FY 2015 data. This inventory provides information on service contract actions over $25,000 awarded in FY 2015. The information is organized by function to show how contracted resources are distributed throughout the agency.
The inventory has been developed in accordance with guidance issued on November 5, 2010 by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP). OFPP's guidance is available at
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of eight individuals and 11 entities whose property and interests in property have been blocked pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) (21 U.S.C. 1901–1908, 8 U.S.C. 1182).
The designations by the Acting Director of OFAC of the eight individuals and 11 entities identified in this notice pursuant to section 805(b) of the Kingpin Act are effective on May 3, 2016.
Assistant Director, Sanctions Compliance & Evaluation, Office of Foreign Assets Control, U.S. Department of the Treasury, Washington, DC 20220, Tel: (202) 622–2490.
This document and additional information concerning OFAC are available on OFAC's Web site at
The Kingpin Act became law on December 3, 1999. The Kingpin Act provides a statutory framework for the imposition of sanctions against significant foreign narcotics traffickers and their organizations on a worldwide basis, with the objective of denying their businesses and agents access to the U.S. financial system and the benefits of trade and transactions involving U.S. companies and individuals.
The Kingpin Act blocks all property and interests in property, subject to U.S. jurisdiction, owned or controlled by significant foreign narcotics traffickers as identified by the President. In addition, the Kingpin Act provides that the Secretary of the Treasury, in consultation with the Attorney General, the Director of the Central Intelligence Agency, the Director of the Federal Bureau of Investigation, the Administrator of the Drug Enforcement Administration, the Secretary of Defense, the Secretary of State, and the Secretary of Homeland Security, may designate and block the property and interests in property, subject to U.S. jurisdiction, of persons who are found to be: (1) Materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of, the international narcotics trafficking activities of a person designated pursuant to the Kingpin Act; (2) owned, controlled, or directed by, or acting for or on behalf of, a person designated pursuant to the Kingpin Act; or (3) playing a significant role in international narcotics trafficking.
On May 3, 2016, the Acting Director of OFAC designated the following eight individuals and 11 entities whose property and interests in property are blocked pursuant to section 805(b) of the Kingpin Act.
1. CASTILLO LONDONO, Claudia Jannet (Latin: CASTILLO LONDOÑO, Claudia Jannet); DOB 14 Apr 1963; POB Medellin, Antioquia, Colombia; Cedula No. 43056130 (Colombia); C.U.I.T. 27–60357111–3 (Argentina) (individual) [SDNTK] (Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: RECREO S.A.; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To: FRIGORIFICO DEL CAUCA S.A.S.; Linked To: DYSTRY PANAMA S.A.; Linked To: LA ALIANZA GANADERA LTDA.; Linked To: CONSTRUCTORA PIEDRA DEL CASTILLO S.A.S.). Acting for or on behalf of COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA, RECREO S.A., FRIGORIFICO DEL CAUCA S.A.S., and/or Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. 1904(b)(3).
2. GARCES GIRALDO, Duber Astrid; DOB 18 Jan 1971; POB Envigado, Antioquia, Colombia; Cedula No. 43732323 (Colombia) (individual) [SDNTK] (Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: RECREO S.A.). Acting for or on behalf of COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA and RECREO S.A., and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
3. JARAMILLO ESTRADA, Nelson Fernando; DOB 23 Jan 1962; POB Medellin, Antioquia, Colombia; Cedula No. 70554907 (Colombia) (individual) [SDNTK] (Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To:
4. PALACIO MONTOYA, Nelson Albeiro; DOB 28 Nov 1968; POB Medellin, Antioquia, Colombia; Cedula No. 71702964 (Colombia) (individual) [SDNTK] (Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To: FRIGORIFICO DEL CAUCA S.A.S.). Acting for or on behalf of SUBASTA GANADERA DE CAUCASIA S.A., FRIGORIFICO DEL CAUCA S.A.S, and/or Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
5. PIEDRAHITA CASTILLO, Jose; DOB 23 May 1989; POB Cali, Valle, Colombia; Cedula No. 1136881315 (Colombia) (individual) [SDNTK] (Linked To: RECREO S.A.; Linked To: FRIGORIFICO DEL CAUCA S.A.S.; Linked To: GOODY PET S.A.S.; Linked To: GUMOBARO S.A.S.; Linked To: CONSTRUCTORA PIEDRA DEL CASTILLO S.A.S.; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.). Acting for or on behalf of RECREO S.A. and FRIGORIFICO DEL CAUCA S.A.S., and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
6. PIEDRAHITA CASTILLO, Andres; DOB 01 Aug 1991; POB Cali, Valle, Colombia; Cedula No. 1017194157 (Colombia) (individual) [SDNTK] (Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To: FRIGORIFICO DEL CAUCA S.A.S.; Linked To: RECREO S.A.; Linked To: DYSTRY PANAMA S.A.). Acting for or on behalf of FRIGORIFICO DEL CAUCA S.A.S. and/or Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
7. PIEDRAHITA CEBALLOS, Jose Bayron; DOB 27 Dec 1958; POB Bello, Antioquia, Colombia; Cedula No. 8399245 (Colombia); C.U.I.T. 20–60357110–0 (Argentina) (individual) [SDNTK] (Linked To: ARROCERA CONTADORA; Linked To: JOSE PIELES; Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To: FRIGORIFICO DEL CAUCA S.A.S.; Linked To: RECREO S.A.; Linked To: DYSTRY PANAMA S.A.; Linked To: LA ALIANZA GANADERA LTDA.; Linked To: LA OFICINA DE ENVIGADO). Materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of, the international narcotics trafficking activities of LA OFICINA DE ENVIGADO, and/or is acting for or on behalf of LA OFICINA DE ENVIGADO, and therefore meets the criteria for designation as an SDNT pursuant to sections 805(b)(2) and/or (3) of the Kingpin Act, 21 U.S.C. § 1904(b)(2) and/or (3).
8. RUIZ PEREZ, Leonardo; DOB 24 Jun 1973; POB Medellin, Antioquia, Colombia; Cedula No. 98563640 (Colombia) (individual) [SDNTK] (Linked To: COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA; Linked To: SUBASTA GANADERA DE CAUCASIA S.A.; Linked To: LA ALIANZA GANADERA LTDA.; Linked To: DYSTRY PANAMA S.A.). Acting for or on behalf of COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA, DYSTRY PANAMA S.A., and LA ALIANZA GANADERA LTDA., and therefore meets the criteria for designation as an SDNT pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
1. ARROCERA CONTADORA, Vereda Rioman, Caceres, Antioquia, Colombia; Carrera 4A No. 7A–47, Barrio Centro, Ayapel, Cordoba, Colombia; Matricula Mercantil No 57192402 (Medellin) [SDNTK]. Owned by Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
2. COMERCIALIZADORA TROPPO SOCIEDAD ANONIMA (a.k.a. TROPPO S.A.), Calle 7 Sur 42 70 603, Medellin, Antioquia, Colombia; NIT # 800142500–2 (Colombia) [SDNTK]. Owned, controlled, or directed by Jose Bayron PIEDRAHITA CEBALLOS and/or FRIGORIFICO DEL CAUCA LTDA., and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
3. CONSTRUCTORA PIEDRA DEL CASTILLO S.A.S., Cr. 27 Nro. 35 Sur 162, Of. 336, Envigado, Antioquia, Colombia; NIT # 900848164–4 (Colombia) [SDNTK]. Controlled or directed by Jose PIEDRAHITA CASTILLO and/or Claudia Jannet CASTILLO LONDOÑO, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
4. DYSTRY PANAMA S.A., Av. Ramon Arias Malina, Primer Piso, Ciudad de Panama, Panama; Calle Calderon de La Barca 1315, Buenos Aires, Argentina; RUC # 245800–1–402386 (Panama) [SDNTK]. Controlled or directed by, or acting for or on behalf of, Nelson Fernando JARAMILLO ESTRADA and/or Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
5. FRIGORIFICO DEL CAUCA S.A.S., Calle 30 28 A 14, Kilometro 1 Via Monteria, Caucasia, Antioquia, Colombia; NIT # 811017934–0 (Colombia) [SDNTK]. Controlled or directed by, or acting for or on behalf of, Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
6. GOODY PET S.A.S. (f.k.a. PET TREATS FACTORY COLOMBIA S.A.S.), Av. 36 C DG No. 42 CC 20, Bello, Antioquia, Colombia; Ciudad de Guatemala, Guatemala; NIT # 900713562–2 (Colombia) [SDNTK]. Owned, controlled, or directed by Jose PIEDRAHITA CASTILLO, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
7. GUMOBARO S.A.S., Cr. 27 Nro. 35 Sur 162, Of. 336, Envigado, Antioquia, Colombia; NIT # 811002414–7 (Colombia) [SDNTK]. Owned, controlled, or directed by Nelson Fernando JARAMILLO ESTRADA, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
8. JOSE PIELES, Km. 4 via Caucasia Caceres, Hda. Contadora, Caucasia, Antioquia, Colombia; Matricula Mercantil No 54369602 (Medellin) [SDNTK]. Owned by Jose Bayron PIEDRAHITA CEBALLOS, and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
9. LA ALIANZA GANADERA LTDA. (a.k.a. LA ALIANZA GANADERA S.A.S.), Calle 7 Sur 42 70, Of. 603, Medellin, Antioquia, Colombia; NIT # 900185737–8 (Colombia) [SDNTK]. Owned, controlled, or directed by Jose Bayron PIEDRAHITA CEBALLOS and/or TROPPO S.A., and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
10. RECREO S.A., Calle 36D Sur Nro. 27–160 CA 54, Envigado, Antioquia, Colombia; NIT # 830500371–4 (Colombia) [SDNTK]. Owned by Jose Bayron PIEDRAHITA CEBALLOS and/or TROPPO S.A., and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
11. SUBASTA GANADERA DE CAUCASIA S.A. (a.k.a. SUBAGAUCA S.A.), Coliseo de Ferias, Km. 1 via a Planeta Rica, Caucasia, Antioquia, Colombia; NIT # 811016451–0 (Colombia) [SDNTK]. Owned, controlled, or directed by, or acting for or on behalf of Jose Bayron PIEDRAHITA CEBALLOS, Leonardo RUIZ PEREZ, Claudia Jannet CASTILLO LONDOÑO, Nelson Fernando JARAMILLO ESTRADA, Andres PIEDRAHITA CASTILLO, FRIGORIFICO DEL CAUCA S.A.S., GUMOBARO S.A.S., and/or TROPPO S.A., and therefore meets the statutory criteria for designation pursuant to section 805(b)(3) of the Kingpin Act, 21 U.S.C. § 1904(b)(3).
Office of Foreign Assets Control, Treasury.
Notice.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of the individuals and entities whose property and interests in property have been unblocked pursuant to Executive Order 12978 of October 21, 1995, “Blocking Assets and Prohibiting Transactions With Significant Narcotics Traffickers”.
The unblocking and removal from the list of Specially Designated Nationals and Blocked Persons (SDN List) of the three individuals and 15 entities identified in this notice whose property and interests in property were blocked pursuant to Executive Order 12978 of October 21, 1995, is effective on May 3, 2016.
Assistant Director, Sanctions Compliance & Evaluation, Department of the Treasury, Office of Foreign Assets Control, Washington, DC 20220, Tel: (202) 622–2490.
This document and additional information concerning OFAC are available from OFAC's Web site at (
On October 21, 1995, the President, invoking the authority,
Section 1 of the Order blocks, with certain exceptions, all property and interests in property that are in the United States, or that hereafter come within the United States or that are or hereafter come within the possession or control of United States persons, of: (1) The foreign persons listed in an Annex to the Order; (2) any foreign person determined by the Secretary of Treasury, in consultation with the Attorney General and the Secretary of State: (a) to play a significant role in international narcotics trafficking centered in Colombia; or (b) to materially assist in, or provide financial or technological support for or goods or services in support of, the narcotics trafficking activities of persons designated in or pursuant to the Order; and (3) persons determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to be owned or controlled by, or to act for or on behalf of, persons designated pursuant to the Order.
On May 3, 2016, the Associate Director of the Office of Global Targeting removed from the SDN List the individuals and entities listed below, whose property and interests in property were blocked pursuant to the Order:
1. OSORIO AVILA, Orlando, Calle 14 No. 16–54, La Union, Valle, Colombia; c/o CASA GRAJALES S.A., La Union, Valle, Colombia; c/o FREXCO S.A., La Union, Valle, Colombia; c/o GAD S.A., La Union, Valle, Colombia; c/o GRAJALES S.A., La Union, Valle, Colombia; c/o HOTEL LOS VINEDOS, La Union, Valle, Colombia; c/o INDUSTRIAS DEL ESPIRITU SANTO S.A., Malambo, Atlantico, Colombia; c/o INVERSIONES SANTA CECILIA S.C.S., La Union, Valle, Colombia; c/o TRANSPORTES DEL ESPIRITU SANTO S.A., La Union, Valle, Colombia; c/o EAGLE COMMUNICATION BROKERS INC., Panama City, Panama; c/o FUNDACION CENTRO FRUTICOLA ANDINO, La Union, Valle, Colombia; c/o FUNDACION CENTRO DE INVESTIGACION HORTIFRUTICOLA DE COLOMBIA, La Union, Valle, Colombia; Cedula No. 6355939 (Colombia) (individual) [SDNT].
2. RENGIFO AMAYA, Harvy Ramiro, c/o RED DE SERVICIOS INMOBILIARIO PROFESIONALES S.A., Bogota, Colombia; c/o CENTRO COMERCIAL GUSS S.A., Cali, Colombia; c/o CONSTRUCTORA UMBRIA S.A., Cali, Colombia; c/o FRONTERA VIRTUAL S.A., Bogota, Colombia; c/o INMOBILIARIA QUILICHAO S.A., Cali, Colombia; c/o MIRACANA INMOBILIARIA QUILCHAO S.A. & CIA S.C.A., Cali, Colombia; c/o VENECIA INMOBILIARIA QUILICHAO S.A. & CIA S.C.A., Cali, Colombia; DOB 02 Jan 1982; POB Colombia; nationality Colombia; citizen Colombia; Cedula No. 80201385 (Colombia); Passport AH406973 (Colombia); alt. Passport AE948092 (Colombia) (individual) [SDNT].
3. RENGIFO PUENTES, Ramiro (a.k.a. TORRIJOS, William; a.k.a. “LA LLAVERIA”), c/o RENGIFO MANCERA & CIA S.C.A., Bogota, Colombia; c/o RED DE SERVICIOS INMOBILIARIO PROFESIONALES S.A., Bogota, Colombia; c/o RUIZ DE ALARCON 12 S.L., Madrid, Spain; Calle 98 No. 9–41, Apt. 1102, Torre C, Bogota, Colombia; Calle 99 No. 10–72, Bogota, Colombia; Carrera 12 No. 90–19, Piso2, Bogota, Colombia; Madrid, Spain; DOB 18 Nov 1950; POB Cali; nationality Colombia; citizen Colombia; Cedula No. 19187359 (Colombia); Passport AI912220 (Colombia) issued 30 Jul 2003 expires 30 Jul 2013; alt. Passport AI206319 (Colombia); alt. Passport AG589478 (Colombia); National Foreign ID Number X3093421J (Spain) (individual) [SDNT].
1. AGROGANADERA LA ISABELA S.A., Avenida 4 No. 6N–61, Ofc. 510, Cali, Colombia; NIT # 900100335–6 (Colombia) [SDNT].
2. CENTRO COMERCIAL GUSS S.A., Carrera 105 No. 14–01, Cali, Colombia; NIT # 900105460–1 (Colombia) [SDNT].
3. CONSTRUCCIONES LA RESERVA S.A., Carrera 105 No. 14–01, Cali, Colombia; NIT # 900100336–3 (Colombia) [SDNT].
4. CONSTRUCTORA JUANAMBU S.A., Carrera 105 No. 14–01, Cali, Colombia; NIT # 900100334–9 (Colombia) [SDNT].
5. CONSTRUCTORA LOMA LINDA S.A., Carrera 105 No. 14–01, Cali, Colombia; NIT # 900100191–2 (Colombia) [SDNT].
6. CONSTRUCTORA UMBRIA S.A., Carrera 105 No. 14–01, Cali, Colombia; NIT # 900100194–4 (Colombia) [SDNT].
7. FRONTERA VIRTUAL S.A., Carrera 12 No. 90–19, Piso 2, Bogota, Colombia; NIT # 830118496–9 (Colombia) [SDNT].
8. INMOBILIARIA QUILICHAO S.A. (f.k.a. AGROPECUARIA B GRAND LTDA.), Avenida 4N No. 6N–61, Apt. 510, Cali, Colombia; NIT # 817002547–1 (Colombia) [SDNT].
9. INVERSIONES INMOBILIARIA QUILICHAO S.A. Y CIA S.C.A. (f.k.a. RENGIFO OSPINA Y CIA S.C.S.), Avenida 4N No. 6N–61, Ofc. 510, Cali, Colombia; NIT # 8001329098 (Colombia) [SDNT].
10. MIRACANA INMOBILIARIA QUILICHAO S.A. & CIA S.C.A. (a.k.a. MIRACANA INMOBILIARIA QUILICHAO S.A. AND CIA S.C.A.), Avenida 4N No. 6N–61, Ofc. 510, Cali, Colombia; NIT # 805017200–1 (Colombia) [SDNT].
11. RED DE SERVICIOS INMOBILIARIO PROFESIONALES S.A. (f.k.a. RED DE INMOBILIARIOS PROFESIONALES S.A.; a.k.a. “RIPSA”), Carrera 12 No. 79–32, Ofc. 703, Bogota, Colombia; NIT # 830065743–4 (Colombia) [SDNT].
12. RENGIFO MANCERA & CIA S.C.A. (a.k.a. RENGIFO MANCERA AND CIA S.C.A.), Carrera 12 No. 79–32, Ofc. 703, Bogota, Colombia; NIT # 800138803–3 (Colombia) [SDNT].
13. RENGIFO O.A.M. Y CIA S.C.A., Carrera 12 No. 79–32, Bogota, Colombia; NIT # 900110717–9 (Colombia) [SDNT].
14. RUIZ DE ALARCON 12 S.L., Calle Ruiz de Alarcon, 12, Madrid 28014, Spain; V.A.T. Number ES B83031682 (Spain) [SDNT].
15. VENECIA INMOBILIARIA QUILICHAO S.A. & CIA S.C.A. (f.k.a. INVERSIONES RENGIFO E HIJOS LTDA.; a.k.a. VENECIA INMOBILIARIA QUILICHAO S.A. AND CIA S.C.A.), Avenida 4N No, 6N–61, Ofc. 510, Cali, Colombia; NIT # 800026554–3 (Colombia) [SDNT].
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. App. 2, that the Advisory Committee on Disability Compensation (Committee) will meet on June 20–21, 2016. The Committee will meet at 810 Vermont Avenue Northwest, Washington, DC 20571, on the Sixth Floor in Conference Room 630. The sessions will begin at 8:30 a.m. and end at 4:30 p.m. each day. The meeting is open to the public.
The purpose of the Committee is to advise the Secretary of Veterans Affairs on the maintenance and periodic readjustment of the VA Schedule for Rating Disabilities. The Committee is to assemble and review relevant information relating to the nature and character of disabilities arising during service in the Armed Forces, provide an ongoing assessment of the effectiveness of the rating schedule, and give advice on the most appropriate means of responding to the needs of Veterans relating to disability compensation.
The Committee will receive briefings on issues related to compensation for Veterans with service-connected disabilities and other VA benefits programs. Time will be allocated for receiving public comments. Public comments will be limited to three minutes each. Individuals wishing to make oral statements before the Committee will be accommodated on a first-come, first-served basis. Individuals who speak are invited to submit 1–2 page summaries of their comments at the time of the meeting for inclusion in the official meeting record.
The public may submit written statements for the Committee's review to Dr. Ioulia Vvedenskaya, Department of Veterans Affairs, Veterans Benefits Administration, Compensation Service, Policy Staff (211C), 810 Vermont Avenue NW., Washington, DC 20420 or email at
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
This final rule modernizes the Medicaid managed care regulations to reflect changes in the usage of managed care delivery systems. The final rule aligns, where feasible, many of the rules governing Medicaid managed care with those of other major sources of coverage, including coverage through Qualified Health Plans and Medicare Advantage plans; implements statutory provisions; strengthens actuarial soundness payment provisions to promote the accountability of Medicaid managed care program rates; and promotes the quality of care and strengthens efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries. It also ensures appropriate beneficiary protections and enhances policies related to program integrity. This final rule also implements provisions of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) and addresses third party liability for trauma codes.
Except for 42 CFR 433.15(b)(10) and § 438.370, these regulations are effective on July 5, 2016. The amendments to §§ 433.15(b)(10) and 438.370, are effective May 6, 2016.
Nicole Kaufman, (410) 786–6604, Medicaid Managed Care Operations.
Heather Hostetler, (410) 786–4515, Medicaid Managed Care Quality.
Melissa Williams, (410) 786–4435, CHIP.
Nancy Dieter, (410) 786–7219, Third Party Liability.
V. Collection of Information Requirements
VI. Regulatory Impact Analysis
Because of the many organizations and terms to which we refer by acronym in this final rule, we are listing these acronyms and their corresponding terms in alphabetical order below:
States must be in compliance with the requirements at § 438.370 and § 431.15(b)(10) of this rule immediately. States must be in compliance with the requirements at §§ 431.200, 431.220, 431.244, 433.138, 438.1, 438.2, 438.3(a) through (g), 438.3(i) through (l), 438.3(n) through (p), 438.4(a), 438.4(b)(1), 438.4(b)(2), 438.4(b)(5), 438.4(b)(6), 438.5(a), 438.5(g), 438.6(a), 438.6(b)(1), 438.6(b)(2), 438.6(e), 438.7(a), 438.7(d), 438.12, 438.50, 438.52, 438.54, 438.56 (except 438.56(d)(2)(iv)), 438.58, 438.60, 438.100, 438.102, 438.104, 438.106, 438.108, 438.114, 438.116, 438.214, 438.224, 438.228, 438.236, 438.310, 438.320, 438.352, 438.600, 438.602(i), 438.610, 438.700, 438.702, 438.704, 438.706, 438.708, 438.710, 438.722, 438.724, 438.726, 438.730, 438.802, 438.806, 438.808, 438.810, 438.812, 438.816, 440.262, 495.332, 495.366 and 457.204 no later than the effective date of this rule.
For rating periods for Medicaid managed care contracts beginning before July 1, 2017, States will not be held out of compliance with the changes adopted in the following sections so long as they comply with the corresponding standard(s) codified in 42 CFR part 438 contained in 42 CFR parts 430 to 481, edition revised as of October 1, 2015: §§ 438.3(h), 438.3(m), 438.3(q) through (u), 438.4(b)(7), 438.4(b)(8), 438.5(b) through (f), 438.6(b)(3), 438.6(c) and (d), 438.7(b), 438.7(c)(1) and (2), 438.8, 438.9, 438.10, 438.14, 438.56(d)(2)(iv), 438.66(a) through (d), 438.70, 438.74, 438.110, 438.208, 438.210, 438.230, 438.242, 438.330, 438.332, 438.400, 438.402, 438.404, 438.406, 438.408, 438.410, 438.414, 438.416, 438.420, 438.424, 438.602(a), 438.602(c) through (h), 438.604, 438.606, 438.608(a), and 438.608(c) and (d), no later than the rating period for Medicaid managed care contracts starting on or after July 1, 2017. States must comply with these requirements no later than the rating period for Medicaid managed care contracts starting on or after July 1, 2017.
For rating periods for Medicaid managed care contracts beginning before July 1, 2018, states will not be held out of compliance with the changes adopted in the following sections so long as they comply with the corresponding standard(s) codified in 42 CFR part 438 contained in the 42 CFR parts 430 to 481, edition revised as of October 1, 2015: §§ 438.4(b)(3), 438.4(b)(4), 438.7(c)(3), 438.62, 438.68, 438.71, 438.206, 438.207, 438.602(b), 438.608(b), and 438.818. States must comply with these requirements no later than the rating period for Medicaid managed care contracts starting on or after July 1, 2018.
States must be in compliance with the requirements at § 438.4(b)(9) no later than the rating period for Medicaid managed care contracts starting on or after July 1, 2019.
States must be in compliance with the requirements at § 438.66(e) no later than the rating period for Medicaid managed care contracts starting on or after the date of the publication of CMS guidance.
States must be in compliance with § 438.334 no later than 3 years from the date of a final notice published in the
Except as otherwise noted, states will not be held out of compliance with new requirements in part 457 of this final rule until CHIP managed care contracts as of the state fiscal year beginning on or after July 1, 2018, so long as they comply with the corresponding standard(s) in 42 CFR part 457 contained in the 42 CFR, parts 430 to 481, edition revised as of October 1, 2015. States must come into compliance
In 1965, amendments to the Social Security Act (the Act) established the Medicaid program as a joint federal and state program to provide medical assistance to individuals with low incomes. Under the Medicaid program, each state that chooses to participate in the program and receive federal financial participation (FFP) for program expenditures, establishes eligibility standards, benefits packages, and payment rates, and undertakes program administration in accordance with federal statutory and regulatory standards. The provisions of each state's Medicaid program are described in the state's Medicaid “state plan.” Among other responsibilities, the Centers for Medicare and Medicaid Services (CMS) approves state plans and monitors activities and expenditures for compliance with federal Medicaid laws to ensure that beneficiaries receive timely access to quality health care. (Throughout this preamble, we use the term “beneficiaries” to mean “individuals eligible for Medicaid benefits.”)
Until the early 1990s, most Medicaid beneficiaries received Medicaid coverage through fee-for-service (FFS) arrangements. However, over time that practice has shifted and states are increasingly utilizing managed care arrangements to provide Medicaid coverage to beneficiaries. Under managed care, beneficiaries receive part or all of their Medicaid services from health care providers that are paid by an organization that is under contract with the state; the organization receives a monthly capitated payment for a specified benefit package and is responsible for the provision and coverage of services. In 1992, 2.4 million Medicaid beneficiaries (or 8 percent of all Medicaid beneficiaries) accessed part or all of their Medicaid benefits through capitated health plans; by 1998, that number had increased fivefold to 12.6 million (or 41 percent of all Medicaid beneficiaries). As of July 1, 2013, more than 45.9 million (or 73.5 percent of all Medicaid beneficiaries) accessed part or all of their Medicaid benefits through Medicaid managed care.
In a Medicaid managed care delivery system, through contracts with managed care plans, states require that the plan provide or arrange for a specified package of Medicaid services for enrolled beneficiaries. States may contract with managed care entities that offer comprehensive benefits, referred to as managed care organizations (MCOs). Under these contracts, the organization offering the managed care plan is paid a fixed, prospective, monthly payment for each enrolled beneficiary. This payment approach is referred to as “capitation.” Beneficiaries enrolled in capitated MCOs must access the Medicaid services covered under the state plan through the managed care plan. Alternatively, managed care plans can receive a capitated payment for a limited array of services, such as behavioral health or dental services. Such entities that receive a capitated payment for a limited array of services are referred to as “prepaid inpatient health plans” (PIHPs) or “prepaid ambulatory health plans” (PAHPs) depending on the scope of services the managed care plan provides. Finally, applicable federal statute recognizes primary care case managers (PCCM) as a type of managed care entity subject to some of the same standards as MCOs; states that do not pursue capitated arrangements but want to promote coordination and care management may contract with primary care providers or care management entities for primary care case management services to support better health outcomes and improve the quality of care delivered to beneficiaries, but continue to pay for covered benefits on a FFS basis directly to the health care provider.
Comprehensive regulations to cover managed care delivery mechanisms for Medicaid were adopted in 2002 after a series of proposed and interim rules. Since the publication of those Medicaid managed care regulations in 2002, the landscape for health care delivery has continued to change, both within the Medicaid program and outside (in Medicare and the private sector market). States have continued to expand the use of managed care over the past decade, serving both new geographic areas and broader groups of Medicaid beneficiaries. In particular, states have expanded managed care delivery systems to include older adults and persons with disabilities, as well as those who need long-term services and supports (LTSS). In 2004, eight states (AZ, FL, MA, MI, MN, NY, TX, and WI) had implemented Medicaid managed long-term services and supports (MLTSS) programs. By January 2014, 12 additional states had implemented MLTSS programs (CA, DE, IL, KS, NC, NM, OH, PA, RI, TN, VA, WA).
States may implement a Medicaid managed care delivery system under four types of federal authorities:
(1) Section 1915(a) of the Act permits states with a waiver to implement a voluntary managed care program by executing a contract with organizations that the state has procured using a competitive procurement process.
(2) Through a state plan amendment that meets standards set forth in section 1932 of the Act, states can implement a mandatory managed care delivery system. This authority does not allow states to require beneficiaries who are dually eligible for Medicare and Medicaid (dually eligible), American Indians/Alaska Natives, or children with special health care needs to enroll in a managed care program. State plans, once approved, remain in effect until modified by the state.
(3) CMS may grant a waiver under section 1915(b) of the Act, permitting a state to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, or children with special health care needs. After approval, a state may operate a section 1915(b) waiver for up to a 2-year period (certain waivers can be operated for up to 5 years if they include dually eligible beneficiaries) before requesting a renewal for an additional 2 (or 5) year period.
(4) CMS may also authorize managed care programs as part of demonstration projects under section 1115(a) of the Act using waivers permitting the state to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, and children with special health care needs. Under this authority, states may seek additional flexibility to demonstrate and evaluate innovative policy approaches for delivering Medicaid benefits, as well as the option to provide services not typically covered by Medicaid. Such flexibility is approvable only if the objectives of the Medicaid statute are likely to be met, the demonstration satisfies budget
All of these authorities may permit states to operate their programs without complying with the following standards of Medicaid law outlined in section of 1902 of the Act:
• Statewideness [section 1902(a)(1) of the Act]: States may implement a managed care delivery system in specific areas of the State (generally counties/parishes) rather than the whole state;
• Comparability of Services [section 1902(a)(10) of the Act]: States may provide different benefits to beneficiaries enrolled in a managed care delivery system; and
• Freedom of Choice [section 1902(a)(23)(A) of the Act]: States may require beneficiaries to receive their Medicaid services only from a managed care plan or primary care provider.
The health care delivery landscape has changed substantially, both within the Medicaid program and outside of it. Reflecting the significant role that managed care plays in the Medicaid program and these substantial changes, this rule modernizes the Medicaid managed care regulatory structure to facilitate and support delivery system reform initiatives to improve health care outcomes and the beneficiary experience while effectively managing costs. The rule also includes provisions that strengthen the quality of care provided to Medicaid beneficiaries and promote more effective use of data in overseeing managed care programs. In addition, this final rule revises the Medicaid managed care regulations to align, where appropriate, with requirements for other sources of coverage, strengthens actuarial soundness and other payment regulations to improve accountability of capitation rates paid in the Medicaid managed care program, and incorporates statutory provisions affecting Medicaid managed care passed since 2002. This final rule also recognizes that through managed care plans, state and federal taxpayer dollars are used to purchase covered services from providers on behalf of Medicaid enrollees, and adopts procedures and standards to ensure accountability and strengthen program integrity safeguards to ensure the appropriate stewardship of those funds.
In the June 1, 2015
In the proposed rule and in this final rule, we restated the entirety of part 438 and incorporated our changes into the regulation text due to the extensive nature of our proposals. However, for many sections within part 438, we did not propose, and do not finalize, substantive changes.
Throughout this document, the use of the term “managed care plan” incorporates MCOs, PIHPs, and PAHPs and is used only when the provision under discussion applies to all three arrangements. An explicit reference is used in the preamble if the provision applies to PCCMs, PCCM entities, or only to MCOs. In addition, many of our proposals incorporated “PCCM entities” into existing regulatory provisions and the proposed amendments.
Throughout this document, the term “PAHP” is used to mean a prepaid ambulatory health plan that does not exclusively provide non-emergency medical transportation (NEMT) services. Whenever this document is referencing a PAHP that exclusively provides NEMT services, it will be specifically addressed as a “Non-Emergency Medical Transportation (NEMT) PAHP.”
We received a total of 879 timely comments from State Medicaid agencies, advocacy groups, health care providers and associations, health insurers, managed care plans, health care associations, and the general public. The comments ranged from general support or opposition to the proposed provisions to very specific questions or comments regarding the proposed changes. In response to the proposed rule, many commenters chose to raise issues that are beyond the scope of our proposals. In this final rule, we are not summarizing or responding to those comments in this document. However, we may consider whether to take other actions, such as revising or clarifying CMS program operating instructions or procedures, based on the information or recommendations in the comments.
Brief summaries of each proposed provision, a summary of the public comments we received (with the exception of specific comments on the paperwork burden or the economic impact analysis), and our responses to the comments are provided in this final rule. Comments related to the paperwork burden and the impact analyses included in the proposed rule are addressed in the “Collection of Information Requirements” and “Regulatory Impact Analysis” sections in this final rule. The final regulation text follows these analyses.
The following summarizes comments about the proposed rule, in general, or regarding issues not contained in specific provisions:
As we noted in the proposed rule in section I.B.1.a., the current regulation at § 438.104 imposes certain limits on MCOs, PIHPs, PAHPs, and PCCMs in connection with marketing activities; our 2002 final rule based these limits on section 1932(d)(2) of the Act for MCOs and PCCMs and extended them to PIHPs and PAHPs using our authority at section 1902(a)(4) of the Act. The creation of qualified health plans (QHPs) by the Affordable Care Act and changes in managed care delivery systems since the adoption of the 2002 rule are the principal reasons behind our proposal to revise the marketing standards applicable to Medicaid managed care programs. QHPs are defined in 45 CFR 155.20.
We proposed to revise § 438.104(a) as follows: (1) To amend the definition of
Prior to the proposed rule, we had received several questions from Medicaid managed care plans about the implications of current Medicaid marketing rules in § 438.104 for their operation of QHPs. Specifically, stakeholders asked whether the provisions of § 438.104(b)(1)(iv) would prohibit an issuer that offers both a QHP and a MCO from marketing both products. The regulatory provision implements section 1932(d)(2)(C) of the Act, titled “Prohibition of Tie-Ins.” In issuing regulations implementing this provision in 2002, we clarified that we interpreted it as intended to preclude tying enrollment in the Medicaid plan to purchasing other types of private insurance (67 FR 41027). Therefore, it would not apply to the issue of a possible alternative to the Medicaid plan, which a QHP could be if the consumer was determined as not Medicaid eligible or loses Medicaid eligibility. Section 438.104(b)(1)(iv) only prohibits the marketing of insurance policies that would be sold “in conjunction with” enrollment in the Medicaid plan.
We recognized that a single legal entity could be operating separate lines of business, that is, a Medicaid MCO (or PIHP or PAHP) and a QHP. Issuers of QHPs may also contract with states to provide Medicaid managed care plans; in some cases the issuer might be the MCO, PIHP, or PAHP itself, or the entity offering the Medicaid managed care plan, thus providing coverage to Medicaid beneficiaries. Many Medicaid managed care plan contracts with states executed prior to 2014 did not anticipate this situation and may contain broad language that could unintentionally result in the application of Medicaid standards to the non-Medicaid lines of business offered by the single legal entity. For example, if a state defines the entity subject to the contract through reference to something shared across lines of business, such as licensure as an insurer, both the Medicaid MCO and QHP could be subject to the terms of the contract with the state. To prevent ambiguity and overly broad restrictions, contracts should contain specific language to clearly define the state's intent that the contract is specific to the Medicaid plan being offered by the entity. This becomes critically important in the case of a single legal entity operating Medicaid and non-Medicaid lines of business. We recommended that states and Medicaid managed care plans review their contracts to ensure that it clearly defined each party's rights and responsibilities.
Consumers who experience periodic transitions between Medicaid and QHP eligibility, and families who have members who are divided between Medicaid and QHP coverage may prefer an issuer that offers both types of products. Improving coordination of care and minimizing disruption to care is best achieved when the consumer has sufficient information about coverage options when making a plan selection. We noted that our proposed revisions would enable more complete and effective information sharing and consumer education while still upholding the intent of the Medicaid beneficiary protections detailed in the Act. Section 438.104 alone does not prohibit a managed care plan from providing information on a QHP to enrollees who could potentially enroll in a QHP as an alternative to the Medicaid plan due to a loss of eligibility or to potential enrollees who may consider the benefits of selecting an MCO, PIHP, PAHP, or PCCM that has a related QHP in the event of future eligibility changes. We proposed minimum marketing standards that a state would be able to build on as part of its contracts with entities providing Medicaid managed care.
Finally, we had received inquiries about the use of social media outlets for dissemination of marketing information about Medicaid managed care. The definition of “marketing” in § 438.104 includes “any communication from” an entity that provides Medicaid managed care (including MCOs, PIHPs, PAHPs, etc.) and “marketing materials” include materials that are produced in any medium. These definitions are sufficiently broad to include social media and we noted in the proposed rule that we intended to interpret and apply § 438.104 as applicable to communication via social media and electronic means.
In paragraph (b)(1)(v), we proposed to clarify the regulation text by adding unsolicited contact by email and texting as prohibited cold-call marketing activities. We believed this revision necessary given the prevalence of electronic forms of communication.
We intended the proposed revisions to clarify, for states and issuers, the scope of the marketing provisions in § 438.104, which generally are more detailed and restrictive than those imposed on QHPs under 45 CFR 156.225. We indicated that while we believed that the Medicaid managed care regulation correctly provided significant protections for Medicaid beneficiaries, we recognized that the increased prevalence in some markets of issuers offering both QHP and Medicaid products and sought to provide more clear and targeted Medicaid managed care standards with our proposed changes.
We received the following comments in response to our proposal to revise § 438.104.
Communication from the Medicaid managed care plan to its current enrollees is not within the definition of marketing in § 438.104(a); the definition is clear that marketing is communication to a Medicaid beneficiary who is not enrolled in that plan. Communications to the managed care plan's current enrollees, however, are subject to § 438.10.
After consideration of the public comments, we are adopting these provisions as proposed with the revision to the definition of marketing materials to include PCCM entities, as discussed above.
We proposed several modifications to the current regulations governing the grievance and appeals system for Medicaid managed care to further align and increase uniformity between rules for Medicaid managed care and rules for MA managed care, private health insurance, and group health plans. As we noted in the preamble to the proposed rule, the existing differences between the rules applicable to Medicaid managed care and the various rules applicable to MA, private insurance, and group health plans concerning grievance and appeals processes inhibit the efficiencies that could be gained with a streamlined grievance and appeals process that applies across markets. A streamlined process would make navigating the appeals system more manageable for consumers who may move between coverage sources as their circumstances change. Our proposed changes in subpart F of part 438 would adopt new definitions, update appeal timeframes, and align certain processes for appeals and grievances. We also proposed modifying §§ 431.200, 431.220 and 431.244 to complement the changes proposed to subpart F of part 438.
We are concerned that the different appeal and grievance processes for the respective programs and health coverage causes: (1) Confusion for beneficiaries who are transitioning between private health care coverage or MA coverage and Medicaid managed care; and (2) inefficiencies for health insurance issuers that participate in both the public and private sectors. We proposed to better align appeal and grievance procedures across these areas to provide consumers with a more manageable and consumer friendly appeals process and allow health insurers to adopt more consistent protocols across product lines.
The grievance, organization determination, and appeal regulations in 42 CFR part 422, subpart M, govern grievance, organization determinations, and appeals procedures for MA members. The internal claims and appeals, and external review processes for private insurance and group health plans are found in 45 CFR 147.136. We referred to both sets of standards in reviewing current Medicaid managed care regulations regarding appeals and grievances. (1) §§ 431.200, 431.220, 431.244, subpart F, part 438, and § 438.228.
Two of our proposals concerning the grievance and appeals system for Medicaid managed care were for the entire subpart. First, we proposed to add PAHPs to the types of entities subject to the standards of subpart F and proposed to revise text throughout this subpart accordingly. Currently, subpart F only applies to MCOs and PIHPs. Unlike MCOs which provide comprehensive benefits, PIHPs and PAHPs provide a narrower benefit package. While PIHPs were included in the standards for a grievance system in the 2002 rule, PAHPs were excluded. At that time, most PAHPs were, in actuality, capitated PCCM programs managed by individual physicians or small group practices and, therefore, were not expected to have the administrative structure to support a grievance process. However, since then, PAHPs have evolved into arrangements under which entities—private companies or government subdivisions—manage a subset of Medicaid covered services such as dental, behavioral health, and home and community-based services. Because some PAHPs provide those medical services which typically are subject to medical management techniques such as prior authorization, we believe PAHPs should be expected to manage a grievance process, and therefore, proposed that they be subject to the grievance and appeals standards of this subpart. In adding PAHPs to subpart F, our proposal would also change the current process under which enrollees in a PAHP may seek a state fair hearing immediately following an action to deny, terminate, suspend, or reduce Medicaid covered services, or the denial of an enrollee's request to dispute a financial liability, in favor of having the PAHP conduct the first level of review of such actions. We relied on our authority at sections 1902(a)(3) and 1902(a)(4) of the Act to propose extending these appeal and grievance provisions to PAHPs.
We note that some PAHPs receive a capitated payment to provide only NEMT services to Medicaid beneficiaries; for these NEMT PAHPs, an internal grievance and appeal system does not seem appropriate. The reasons for requiring PAHPs that cover medical services to adhere to the grievance and appeals processes in this subpart are not present for a PAHP solely responsible for NEMT. We proposed to distinguish NEMT PAHPs from PAHPs providing medical services covered under the state plan. Consequently, we proposed that NEMT PAHPs would not be subject to these internal grievance and appeal standards. Rather, beneficiaries receiving services from NEMT PAHPs will continue to have direct access to the state fair hearing process to appeal adverse benefit determinations, as outlined in § 431.220. We requested comment on this approach.
As a result of our proposal to have PAHPs generally follow the provisions of subpart F of part 438, we also proposed corresponding amendments to §§ 431.220 and 431.244 regarding state fair hearing requirements, and changes
Second, throughout subpart F, we proposed to insert “calendar” before any reference to “day” to remove any ambiguity as to the duration of timeframes. This approach is consistent with the timeframes specified in regulations for the MA program at 42 CFR part 422, subpart M.
We did not propose any changes to § 438.228 but received comments that require discussion of that provision in this final rule. We received the following comments in response to our proposals.
After consideration of the public comments, we are finalizing our proposal to add PAHPs (other than NEMT PAHPs) to the types of entities subject to the standards of subpart F of this part and our proposal to insert “calendar” before any reference to the “day” regarding duration of timeframes throughout subpart F of this part.
After consideration of the public comments, we are modifying the regulatory text at § 438.228(a) to include the term “appeal” when referencing the grievance system and to be inclusive of both grievances and appeals. Since commenters recommended this change throughout subpart F of this part, we have made this change accordingly as recommended. We are also replacing the terms “dispose” and “disposition” with “resolve” and “resolution” in connection with an appeal and grievance throughout our finalization of subpart F of this part when referring to the final resolution of an adverse benefit determination; this ensures that the phrasing for appeals and grievances is consistent. Finally, we are modifying § 431.200 to update the terminology from “takes action” to “adverse benefit determination” when referring to subpart F of part 438 of this chapter.
In general, the proposed changes for § 438.400 are to revise the definitions to provide greater clarity and to achieve alignment and uniformity for health
In § 438.400(b), we proposed a few changes to the defined terms. First, we proposed to replace the term “action” with “adverse benefit determination.” The proposed definition for “adverse benefit determination” included the existing definition of “action” and revisions to include determinations based on medical necessity, appropriateness, health care setting, or effectiveness of a covered benefit in revised paragraph (b)(1). We believed this would conform to the term used for private insurance and group health plans and would lay the foundation for MCOs, PIHPs, or PAHPs to consolidate processes across Medicaid and private health care coverage sectors. By adopting a uniform term for MCO, PIHP, or PAHP enrollees and enrollees in private insurance and group health plans, we hoped to enable consumers to identify similar processes between lines of business, and be better able to navigate different health care coverage options more easily. Our proposal was also to update cross-references to other affected regulations, delete the term “Medicaid” before the word “enrollee,” and consistently replace the term “action” in the current regulations in subpart F with the term “adverse benefit determination” throughout this subpart.
In addition to using the new term “adverse benefit determination,” we proposed to revise the definition of “appeal” to be more accurate in describing an appeal as a review by the MCO, PIHP, or PAHP, as opposed to the current definition which defines it as a request for a review. In the definition of “grievance,” we proposed a conforming change to delete the reference to “action,” to delete the part of the existing definition that references the term being used to mean an overall system, and to add text to clarify the scope of grievances.
For clarity, we proposed to separately define “grievance system” as the processes the MCO, PIHP, or PAHP implements to handle appeals and grievances and collect and track information about them. By proposing a definition for “grievance system,” we intended to clarify that a MCO, PIHP, or PAHP must have a formal structure of policies and procedures to appropriately address both appeals and grievances. We also proposed to remove the reference to the state's fair hearing process from this definition as it is addressed in part 431, subpart E. This continued to be a significant source of confusion, even after the changes were made in the 2002 final rule, and these proposed changes were intended to add clarity.
We received the following comments in response to our proposal to revise § 438.400.
We agree with commenters that the definition should be broadened to include potential enrollee financial liability, as we recognize that state Medicaid programs have some discretion regarding cost sharing and there can be variations in financial requirements on enrollees. We are modifying the regulatory text to adopt this recommendation.
For broadening the definition to include disputes regarding an enrollee's request to receive services outside of the managed care plan's network or an enrollee's choice of provider, we do not believe it is necessary to include this specifically in the definition of “adverse benefit determination.” Section 438.206(b)(4), as proposed and as we would finalize, requires that managed care plans adequately and timely cover services outside of the network when the managed care plan's network is unable to provide such services; the definition already includes the denial or limited authorization for a service and the denial of payment for a service, which we believe adequately includes a denial of a request to receive covered services from an out-of-network provider. The proposed definition also contains a provision for enrollees of rural areas with only one MCO to exercise their right to obtain services
After consideration of the public comments, we are finalizing § 438.400 as proposed with several modifications. In the final definition of “adverse benefit determination” in § 438.400(b), we are adding to the proposed text a new category that addresses potential enrollee financial liability; we are also modifying the definition to replace the term “health care setting” with “setting” to be inclusive of MLTSS programs and populations.
We are also modifying the regulatory text to retitle subpart F of this part as “Grievance and Appeal System” to be inclusive of both grievances and appeals and revising the term “grievance system,” defined in § 438.400(b) and throughout subpart F of part 438, to “grievance and appeal system” to be inclusive of both grievances and appeals. We are also modifying the regulation text to add the term “request” throughout subpart F of part 438 when referring to “filing” an appeal to improve clarity and accuracy. We are finalizing all other provisions in § 438.400 as proposed.
We proposed in paragraph (a) to add “grievance” in front of “system” and to delete existing language that defines a system in deference to the proposed new definition added in § 438.400. We also proposed to add text to clarify that subpart F does not apply to NEMT PAHPs.
In paragraph (b), we proposed to revise the paragraph heading to “Level of appeals” and limit MCOs, PIHP, and PAHPs to only one level of appeal for enrollees to exhaust the managed care plan's internal appeal process. Once this single level appeal process is exhausted, the enrollee would be able to request a state fair hearing under subpart E of part 431. In conjunction with this proposal, we proposed amending § 438.402(c)(1)(i) and § 438.408(f) with corresponding text that would have enrollees exhaust their MCO, PIHP, or PAHP appeal rights before seeking a state fair hearing. Our proposal was designed to ensure that the MCO, PIHP, or PAHP process will not be unnecessarily extended by having more than one level of internal review. This proposal was consistent with the limit on internal appeal levels imposed on issuers of individual market insurance under 45 CFR 147.136(b)(3)(ii)(G) and MA organizations at § 422.578, although we acknowledge that issuers of group market insurance and group health plans are not similarly limited under 45 CFR 147.136(b)(2) and 29 CFR 2560.503–1(c)(3). We believed this proposal would not impair the administrative alignment we seek in this context and ensure that enrollees can reach the state fair hearing process within an appropriate time. We requested comment on this proposal.
In paragraph (c)(1)(i), we proposed to revise this section to permit an enrollee to request a state fair hearing after receiving notice from the MCO, PIHP, or PAHP upholding the adverse benefit determination. We proposed in paragraph (c)(1)(ii) to remove the standard for the enrollee's written consent for the provider to file an appeal on an enrollee's behalf. The current standard is not specified in section 1932(b)(4) of the Act and is inconsistent with similar MA standards for who may request an organization determination or a reconsideration at §§ 422.566(c)(1)(ii) and 422.578, so we believe it is not necessary.
We proposed in paragraph (c)(2) to delete the state's option to select a timeframe between 20 and 90 days for enrollees to file a request for an appeal and proposed to revise paragraphs (c)(2)(i) and (ii) to set the timing
In paragraph (c)(3), we proposed to add headings to paragraphs (c)(3)(i) and (c)(3)(ii) and to make non-substantive changes to the text setting forth the procedures by which grievances are filed or appeals are requested. Under our proposal, as under current law, a standard grievance may be filed or an appeal may be requested orally or in writing (which includes online), and standard appeal requests made orally must be followed up in writing by either the enrollee or the enrollee's authorized representative. Expedited appeal requests may be requested either way, and if done orally, the enrollee does not need to follow up in writing.
We requested comment on the extent to which states and managed care plans are currently using or plan to implement an online system that can be accessed by enrollees for filing and/or status updates of grievances and appeals. If such systems are not in use or in development, we requested comment on the issues influencing the decision not to implement such a system and whether an online system for tracking the status of grievances and appeals should be required at the managed care plan level.
We received the following comments in response to our proposal to revise § 438.402.
Several commenters also recommended that CMS allow for an optional and independent external medical review, which is independent of both the state and the managed care plan. Commenters stated that such an optional external review can better protect beneficiaries and reduce burden on state fair hearings, as these external processes have proven to be an effective tool in resolving appeals before reaching a state fair hearing. Several commenters also recommended that CMS adopt the deemed exhaustion requirement from the private market rules at 45 CFR 147.136(b)(2)(ii)(F) to ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408, including specific timeframes for resolving standard and expedited appeals. Finally, a few commenters supported the provision as proposed without change and stated that it builds a better relationship between enrollees and their managed care plans.
We also agree with commenters that adopting the deemed exhaustion requirement from the private market rules at 45 CFR 147.136(b)(2)(ii)(F) will ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408, including specific timeframes for resolving standard and expedited appeals. In addition, this will further align the rules for the grievance and appeal system for Medicaid managed care plans with the system for private health insurance; we note as well that Medicare Advantage plans are subject to a somewhat similar standard under § 422.590(c) and (g) in that failure of a Medicare Advantage plan to resolve timely a reconsideration of an appeal decision results in the appeal being forwarded automatically to the next level of review. We also note that states would be permitted to add rules that deem exhaustion on a broader basis than this final rule. We are modifying the final text of § 438.402(c) and 438.408(f) to adopt the recommendation to add a deemed exhaustion requirement.
While we disagree with commenters that recommended that states be allowed to establish their own processes and timeframes for grievances and appeals that differ from the requirements of the proposed rule, we are persuaded by commenters' recommendations regarding an optional and independent external medical review. We agree with commenters that an optional, external medical review could better protect enrollees and be an effective tool in resolving appeals before reaching a state fair hearing. Under the rule we are finalizing here, if states want to offer enrollees the option of an external medical review, the review must be at the enrollee's option and must not be a requirement before or used as a deterrent to proceeding to the state fair hearing. Further, if states want to offer enrollees the option of an external medical review, the review must be independent of both the state and managed care plan, and the review must be offered without any cost to the enrollee. Finally, this final rule requires that any optional external medical review must not extend any of the timeframes specified in § 438.408 and must not disrupt the continuation of benefits in § 438.420. Accordingly, the regulation text in this final rule at §§ 438.402(c)(1)(i)(B) and 438.408(f)(ii) adopts this recommendation.
However, we disagree with commenters regarding the recommendation to remove the state's discretion to recognize the provider as an authorized representative of the enrollee; we believe the state should be permitted to make this decision when designing and implementing their grievance and appeal system. We note as well that the ability of a provider to act as an authorized representative of an enrollee could vary based on state law. We also did not accept commenters' recommendation to explicitly expand our list of authorized representatives. Although, in principle, we agree that legal representatives, beneficiary advocates, and similar parties may effectively serve as authorized representatives, we defer to state determinations regarding the design of their grievance and appeal system; state laws could vary regarding who the state recognizes as an authorized representative. Nothing in § 438.402(c)(1)(ii) would prohibit a legally authorized representative from acting on the enrollee's behalf in requesting an appeal, as long as the state recognizes and permits such legally authorized representative to do so. However, in response to these comments, we will clarify that when the term “enrollee” is used throughout subpart F of this part, it includes providers and authorized representatives consistent with this paragraph, with the exception that providers cannot request continuation of benefits as specified in § 438.420(b)(5). This exception applies because an enrollee may be held liable for payment for those continued services, as specified in § 438.420(d), and we believe it is critical that the enrollee—or an authorized representative who is not a provider—initiate the request.
After consideration of the public comments, we are finalizing the regulatory text at § 438.402 with some modifications from the proposal as discussed above. Specifically, we are finalizing § 438.402(c)(1)(i) with a deemed exhaustion requirement, similar to the requirement in 45 CFR 147.136(b)(2)(ii)(F), to ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408. We are also finalizing the regulatory text at § 438.402(c)(1)(i) with modifications to permit states to offer an optional and independent external medical review within certain parameters; the external review must be at the enrollee's option, it must not be a requirement before or used as a deterrent to proceeding to the state fair hearing, it must be offered without any cost to the enrollee, it must not extend any of the timeframes specified in § 438.408, and must not disrupt the continuation of benefits in § 438.420. We are finalizing a modification to the regulatory text at § 438.402(c)(1)(ii) to require that providers obtain the enrollee's written consent before filing an appeal and to clarify that when the term “enrollee” is used throughout subpart F of this part, it includes providers and authorized representatives, with the exception that providers cannot request continuation of benefits as specified in § 438.420(b)(5). As explained above, this exception applies because an enrollee may be held liable for payment for those continued services, as specified in § 438.420(d), and we believe it is critical that the enrollee—or an authorized representative of the enrollee who is not a provider—initiate the request. Finally, we are finalizing the regulatory text at § 438.402(c)(2)(ii) with a modification to clarify that the 60 calendar day appeal filing limit begins from the date on the adverse benefit determination notice. We are finalizing all other provisions in § 438.402 as proposed.
In § 438.404, we proposed to revise the section heading to a more accurate and descriptive title, “Timely and adequate notice of adverse benefit determination.” In paragraph (a), we proposed a non-substantive wording revision to more accurately reflect the intent that notices must be timely and meet the information requirements detailed in proposed § 438.10.
In paragraph (b), describing the minimum content of the notice, we proposed to delete paragraph (b)(4) (about the state option to require exhaustion of plan level appeal processes) to correspond to our proposal in § 438.408(f) and redesignate the remaining paragraphs accordingly. In paragraph (b)(2), we proposed to clarify that the reason for the adverse benefit determination includes the right of the enrollee to be provided upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the enrollee's adverse benefit determination. This additional documentation would include information regarding medical necessity criteria, consistent with § 438.210(a)(5)(i) as appropriate, and any processes, strategies, or evidentiary standards used in setting coverage limits. In new paragraph (b)(5), we proposed to replace expedited “resolution” with expedited “appeal process” to add consistency with wording throughout this subpart. We further proposed to add the phrase “consistent with State policy” in paragraph (b)(6) to be consistent with a proposed change in § 438.420(d) regarding the MCO's, PIHP's, or PAHP's ability to recoup from the enrollee under a final adverse decision be addressed in the contract and that such practices be consistent across both FFS and managed care delivery systems within the state. While notice of the possibility of recoupment under a final adverse decision is an important beneficiary protection, we noted that such notice may deter an enrollee from exercising the right to appeal. We indicated that we would issue guidance following publication of the rule regarding the model language and content of such notice to avoid dissuading enrollees from pursuing appeals.
In paragraph (c), we proposed to revise paragraph (c)(4) to replace “extends the timeframe in accordance with . . .” with “meets the criteria set forth . . .” to more clearly state that MCOs, PIHPs, and PAHPs cannot extend the timeframes without meeting the specific standards of § 438.210(d)(1)(ii). Lastly, in paragraph (c)(6), we proposed to update the cross reference from § 438.210(d) to § 438.210(d)(2).
We received the following comments in response to our proposal to revise § 438.404.
We also decline commenters' recommendations to add (“documents and records are relevant to the specific enrollee appeal” and “policies and procedures”) or define (“reasonable access” and “relevant”) terms. We find this language duplicative and unnecessary. In addition, we believe the standard at (b)(2) is clear that managed care plans must disclose all documents, records, and other information relevant to the enrollee's adverse benefit determination. We are not familiar with any existing federal standard for “reasonable access” or “relevant” that we can draw upon in this context. We believe that these terms are adequately defined and understood in common discourse. We encourage commenters to work with states and managed care plans when specific issues arise regarding an enrollee's “reasonable access” to documentation, or the “relevance” of such documentation. Finally, we restate that state laws could vary regarding who the state recognizes as an authorized representative. Nothing in § 438.404(b)(2) would prohibit an authorized representative (including a provider who is acting on behalf of an enrollee) from requesting the same information and documentation specified at (b)(2), as long as the state recognizes and permits such legally authorized representative to do so.
After consideration of the public comments, we are finalizing the regulation text at § 438.404 as proposed with two modifications. We are finalizing additional regulatory text at § 438.404(b)(3) to specify that the notice must include the enrollee's and provider's right to request an appeal of the managed care plan's adverse benefit determination and include information on exhausting the one level of managed care plan appeal and enrollees' rights to request a state fair hearing at § 438.402(b) and (c). We are also modifying the regulatory text at § 438.404(b)(2) to make a technical correction and § 438.404(b)(6) to correct a typographical error. We are finalizing all other sections as proposed.
In addition to language consistent with our overall proposal to make PAHPs subject to the grievance and appeals standards for MCOs and PIHPs, we proposed to reorganize § 438.406 to be simpler and easier to follow and to revise certain procedural standards for appeals. Existing paragraph (a) was proposed to be revised by adding the existing provision in paragraph (a)(1) to paragraph (a), which specifies that each MCO, PIHP, and PAHP must give enrollees any reasonable assistance, including auxiliary aids and services upon request, in completing forms and taking other procedural steps. In paragraph (b), we proposed to revise the paragraph heading and redesignate existing provisions in paragraphs (a)(2) and (a)(3) as (b)(1) and (b)(2), respectively; we also proposed to add grievances to the provisions of both. MCOs, PIHPs, or PAHPs would have to send an acknowledgment receipt for each appeal and grievance and follow the limitations on individuals making decisions on grievances and appeals in paragraphs (b)(2)(i) and (ii). In new paragraph (b)(2)(i), we proposed to add that individuals who are subordinates of individuals involved in any previous level of review are, like the individuals who were involved in any previous level of review, excluded from making decisions on the grievance or appeal. This final proposed revision added assurance of independence that we believe is appropriate and is consistent with standards under the private market rules in 45 CFR 147.136 that incorporate 29 CFR 2560.503–1(h)(3)(ii). Redesignated paragraph (b)(2)(ii) was proposed to remain unchanged from its current form. Consistent with the standards under the private market rules in 45 CFR 147.136 that incorporate 29 CFR 2560.503–1(h)(2)(iv), we proposed to add a new paragraph (b)(2)(iii) to specify that individuals that make decisions on appeals and grievances take all comments, documents, records, and other information submitted by the
We noted that current paragraph (b)(3) required the enrollee to have the opportunity before and during the appeal process to examine the case file, medical record and any documents or records considered during the appeal process. We proposed to redesignate this paragraph as paragraph (b)(5) and to replace “before and during” with “sufficiently in advance of the resolution”, to add specificity. We also proposed to add “new or additional evidence” to the list of information and documents that must be available to the enrollee. The proposed language in paragraph (b)(5) would more closely align with the disclosure standards applicable to private insurance and group health plans in 45 CFR 147.136(b)(2)(ii)(C)(1). Existing paragraph (b)(4) was proposed to be redesignated as paragraph (b)(6) without change.
We received the following comments in response to our proposal to revise § 438.406.
We decline to define explicitly the term “subordinate,” in the regulation as we believe it is clear that in this context, subordinates are individuals who report to or are supervised by the individuals who made the original adverse benefit determination. We also decline to allow states to enforce a different standard, as we believe this standard is clear and should serve as a national benchmark for handling grievances and appeals and that states have discretion within their standard to develop particular approaches with their plans. Finally, while we understand the commenter's concern regarding managed care plan burden, we believe this is a normal part of doing business in the health care market. We further clarify that § 438.406(b)(2)(i) does not require multiple levels of review from separate departments. The standard requires that individuals reviewing and making decisions about grievances and appeals are not the same individuals, nor subordinates of individuals, who made the original adverse benefit determination. Reviewers hearing an appeal of an adverse benefit determination may be from the same department (or a different department) so long as the necessary clinical expertise and independence standards are met and the reviewer takes into account the information described in § 438.406(b)(2)(iii).
We disagree with the commenter's recommendation to remove the language “new or additional evidence . . . generated by the MCO, PIHP, or PAHP” as we believe it is necessary and appropriate for managed care plans to make this information available to enrollees and their representatives to ensure a fair and impartial appeal. We clarify that the documents and information referenced at § 438.404(b)(2) and § 438.406(b)(5) are similar; however, it is possible that the enrollee's case file used for the appeal at § 438.406(b)(5) could contain additional documents and information that were not available at the time of the adverse benefit determination under § 438.404(b)(2). We agree with the commenter's recommendation to restructure the sentence to remove the parentheses. We are modifying the regulatory text to adopt this recommendation accordingly.
After consideration of the public comments, we are finalizing § 438.406 with a modification at § 438.406(b)(5) to restructure the sentence and remove the parentheses. We are also finalizing § 438.406(b)(2)(i), as discussed more fully in section I.B.9.a. of this final rule, to replace the term “health care professional” with “individual.” Finally, we are modifying § 438.406(a) to add the language “related to a grievance or appeal” to improve the accuracy of the sentence. We are finalizing all other sections as proposed.
We proposed to make significant modifications to § 438.408 to further align Medicaid managed care standards with MA and private insurance and group health plan standards. We proposed several significant modifications as explained in more detail below: (1) Changes in the timeframes to decide appeals and expedited appeals; (2) strengthen notice standards for extensions; and (3) change the processes for receiving a state fair hearing for enrollees of MCOs, PIHPs, and PAHPs. In addition, we proposed to reorganize the regulation for greater clarity and to add the phrase “consistent with state policy” to paragraph (e)(2)(iii) to be consistent with our proposal in § 438.420(d).
In § 438.408(b)(2), we proposed to adjust the timeframes in which MCOs, PIHPs, and PAHPs would have to make a decision about an enrollee appeal to align with the standards applicable to a MA organization. Currently, MCOs and PIHPs may have up to 45 days to make a decision about a standard (non-expedited) appeal. In § 422.564(e), MA plans must make a decision about first level appeals in 30 days, while Part D plans must provide a decision in 7 days under § 423.590(a)(1). Federal regulations on the private market permit up to 60 days for a standard decision on an internal appeal (
In paragraph (b)(3), we proposed to adjust the Medicaid managed care timeframes for expedited appeals to align with standards applicable to MA and the private market. Currently under subpart F, MCOs and PIHPs have 3 working days from receipt of a request to make a decision in an expedited review. The MA (§ 422.572(a)) and private market regulations (29 CFR 2590.715–2719(c)(2)(xiii)) stipulate that a plan must make a decision within 72 hours of receiving a request for expedited review. We proposed to modify our expedited appeal decision timeframes from 3 working days to 72 hours. The change would improve the speed with which enrollees would receive a MCO, PIHP, or PAHP decision on critical issues, and align Medicaid managed care with Medicare and private insurance and group health plans.
For extensions of the timeframe to resolve an appeal or grievance when the enrollee has not requested the extension (§ 438.408(c)(2)), we proposed to strengthen the notification responsibilities on the MCO, PIHP, or PAHP by setting new specific standards and to add existing text in § 438.408(c) to paragraph (c)(2). We proposed to add the current standards in § 438.404(c)(4)(i) and (ii) to § 438.408(c)(ii) and (iii), which describe the standards on the MCO, PIHP, or PAHP for an extension of the timeframe for standard or expedited appeals for clarity and consistency.
In § 438.408(d)(1) and (2), we proposed to add a provision requiring that grievance notices (as established by the state) and appeal notices (as directed in the regulation) from a MCO, PIHP, or PAHP ensure meaningful access for people with disabilities and people with limited English proficiency by, at a minimum, meeting the standards described at § 438.10.
In § 438.408(e), we proposed to add “consistent with state policy” in paragraph (e)(2)(iii) to be clear that such practices must be consistent across both FFS and managed care delivery systems within the state. This is added here to be consistent with a proposed change in § 438.420(d) that stipulates that the MCO's, PIHP's, or PAHP's ability to recoup from the enrollee under a final adverse decision must be addressed in the contract and that such practices be consistent across both FFS and managed care delivery systems within the state. For example, if the state does not exercise the authority for recoupment under § 431.230(b) for FFS, the same practice must be followed by the state's contracted MCOs, PIHPs, and PAHPs.
In § 438.408(f), we proposed to modify the Medicaid managed care appeals process such that an enrollee must exhaust the MCO, PIHP, or PAHP appeal process prior to requesting a state fair hearing. This would eliminate a bifurcated appeals process while aligning with MA and the private market regulations. Under current Medicaid rules, states have the discretion to decide if enrollees must complete the MCO, PIHP, or PAHP appeal process before requesting a state fair hearing or whether they can request a state fair hearing while the MCO, PIHP, or PAHP appeal process is still underway. Depending on the state's decision in this regard, this discretion has led to duplicate efforts by the MCO, PIHP, or PAHP and the state to address an enrollee's appeal. Both MA rules and regulations governing private market and group health plans have a member complete the plan's internal appeal process before seeking a second review. Our proposed change would be consistent with both those processes.
Specifically, under the proposed change in paragraph (f)(1), a MCO, PIHP, or PAHP enrollee would have to complete the MCO, PIHP, or PAHP appeal process before requesting a state fair hearing. The proposed change would enable consumers to take advantage of the state fair hearing process in a consecutive manner which would lead to less confusion and effort on the enrollee's part and less administrative burden on the part of the managed care plan and the state; the use of a federal standard for this would eliminate variations across the country and lead to administrative efficiencies for the MCOs, PIHPs, and PAHPs that operate in multiple states. Moreover, our proposed reduction in the timeframes that a MCO, PIHP, or PAHP would have to take action on an appeal (from 45 to 30 calendar days) in § 438.408(b)(2) would permit enrollees to reach the state fair hearing process more quickly. We believed that our proposal would achieve the appropriate balance between alignment, beneficiary protections, and administrative simplicity.
We proposed in new paragraph (f)(2) to revise the timeframe for enrollees to request a state fair hearing to 120 calendar days. This proposal would extend the maximum period under the current rules and would give enrollees more time to gather the necessary information, seek assistance for the state fair hearing process and make the request for a state fair hearing.
We also proposed a number of changes to § 431.244, Hearing Decisions, that correspond to these proposed amendments to § 438.408. In § 431.244, we proposed to remove paragraph (f)(1)(ii) which references direct access to a state fair hearing when permitted by the state. As that option is proposed to be deleted in § 438.408(f)(1), it should also be deleted in § 431.244(f)(1). In § 431.244(f)(2), we considered whether to modify the 3 working day timeframe on the state to conduct an expedited state fair hearing. In the interest of alignment, we examined the independent and external review timeframes in both MA and QHPs and found no analogous standard or consistency for final administrative action regarding expedited hearings. We therefore proposed to keep the state fair hearing expedited timeframe at 3 working days. We proposed to delete current paragraph (f)(3) as it is no longer relevant given the deletion of direct access to state fair hearing proposed revision to § 438.408(f)(1). We proposed no additional changes to § 431.244.
We received the following comments in response to our proposal to revise § 438.408 and § 431.244.
We decline to define “reasonable efforts” at § 438.408(c)(2)(i) as we do not believe it is necessary. We encourage managed care plans to make every effort to reach enrollees and give prompt oral notice of the delay. However, we have also required at § 438.408(c)(2)(ii) that managed care plans provide enrollees written notice of the delay within 2 calendar days. We believe that this is
Finally, consistent with our preamble discussion about § 438.402(c)(1)(i), we agree with commenters that adopting the deemed exhaustion requirement from the private market rules at 45 CFR 147.136(b)(2)(ii)(F) will ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408, including specific timeframes for resolving standard and expedited appeals and the 14 calendar day extension. We are finalizing the regulatory text to adopt this recommendation.
We agree with commenters that adopting the deemed exhaustion requirement from the private market rules at 45 CFR 147.136(b)(2)(ii)(F) will ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408, including specific timeframes for resolving standard and expedited appeals. As noted in our discussion of § 438.402, we are including a deemed exhaustion provision in this final rule; we are finalizing text in several regulation sections, including § 438.408(c)(3) and (f)(1)(i) to implement the deemed exhaustion requirement.
In addition, we disagree with commenters that recommended that states be allowed to establish their own processes and timeframes for grievances and appeals that differ from our proposed rule, we are persuaded by commenters' recommendations regarding an optional and independent external medical review. We agree that an optional external medical review could better protect enrollees and be an effective tool in resolving appeals before reaching a state fair hearing. Therefore, we are finalizing this rule with provisions in several sections, including § 438.408(f)(1)(ii), that permit a state to implement an external appeal process on several conditions: the review must be at the enrollee's option and cannot be a requirement before or used as a deterrent to proceeding to the state fair hearing; the review must be independent of both the state and managed care plan; the review must be offered without any cost to the enrollee; and any optional external medical review must not extend any of the timeframes specified in § 438.408 and must not disrupt the continuation of benefits in § 438.420.
After consideration of the public comments, we are finalizing § 438.408 of the rule with some changes from the proposed rule. As compared to the proposed rule, the final text at §§ 438.408(c)(3) and 438.408(f)(1) is modified to adopt the deemed exhaustion requirement from the private market rules at 45 CFR 147.136(b)(2)(ii)(F) to ensure that enrollees maintain access to a state fair hearing if the managed care plan does not adhere to the notice and timing requirements in § 438.408. The regulatory text at § 438.408(f)(1) now contains an optional and independent external medical review that must be at the enrollee's option, must not be a requirement before or used as a deterrent to proceeding to the state fair hearing, must be offered without any cost to the enrollee, must not extend any of the timeframes specified in § 438.408, and must not disrupt the continuation of benefits in § 438.420. Consistent with the discussion throughout subpart F, we are replacing the term “dispose” with “resolve” in § 438.408 references to resolution of the appeal. We are finalizing all other sections as proposed.
In addition to the revisions to add PAHPs to the scope of this regulation, we proposed to revise § 438.410(c)(2) to replace the current general language on oral and written notification with a cross reference to § 438.408(c)(2), to more specifically identify the responsibilities of the MCO, PIHP, or PAHP when extending timeframes for resolution. We also proposed a grammatical correction to paragraph (b) to replace the word “neither” with “not.” We proposed no other changes to this section.
We received the following comments in response to our proposal to revise § 438.410.
After consideration of the public comments, we are finalizing § 438.410 as proposed with a modification to § 438.410(a) to include both physical and mental health as discussed above.
In addition to the change proposed throughout this subpart in connection with PAHPs, we proposed to update the cross reference from § 438.10(g)(1) to § 438.10(g)(2)(xi) to be consistent with our proposed revisions to § 438.10, discussed in more detail below in section I.B.6.d. of this final rule.
We received the following comments in response to our proposal to revise § 438.414.
After consideration of the public comments, we are finalizing § 438.414 as proposed with a modification to include the term “appeal” when referencing the grievance system.
In § 438.416, we proposed to modify the recordkeeping standards under subpart F to impose a consistent, national minimum recordkeeping standard. The current recordkeeping provisions do not set standards for the type of appeals and grievance information to be collected, and only stipulate that states must review that information as part of an overall quality strategy.
Specifically, we proposed to redesignate the existing provisions of § 438.416 as a new paragraph (a), adding that the state must review the information as part of its monitoring of managed care programs and to update and revise its comprehensive quality strategy. We proposed to add a new paragraph (b) to specifically list the information that must be contained in the record of each grievance and appeal: A description of the reason for the appeal or grievance, the date received, the date of each review or review meeting if applicable, the resolution at each level, the date of resolution, and the name of the enrollee involved. Finally, we proposed to add a new paragraph (c) to stipulate that the record be accurately maintained and made accessible to the state and available to CMS upon request.
We received the following comments in response to our proposal to revise § 438.416.
After consideration of the public comments, we are finalizing § 438.416 as proposed without modification.
In addition to adding PAHPs to § 438.424, we proposed to revise the current rule in paragraph (a) so that the MCO, PIHP, or PAHP must effectuate a reversal of an adverse benefit determination and authorize or provide such services no later than 72 hours from the date it receives notice of the adverse benefit determination being overturned. This is consistent with the timeframes for reversals by MA organizations and independent review entities in the MA program, as specified in § 422.619 for expedited reconsidered determinations, when the reversal is by the MA organization or the independent review entity. In addition to providing consistency across these different managed care programs, and the increases in efficiency that we predict as a result of this alignment, we believe that 72 hours is sufficient time for an MCO, PIHP, or PAHP to authorize or provide services that an enrollee has successfully demonstrated are covered services. We solicited comment on this proposal and on our assumptions as to the amount of time that is necessary for an MCO, PIHP, or PAHP to authorize or provide services.
We received the following comments in response to our proposal to revise § 438.424.
After consideration of the public comments, we are finalizing § 438.424 as proposed without modification.
In keeping with our goals of alignment with the health insurance market whenever appropriate and to ensure that capitation rates are actuarially sound, we proposed that the MLR for MCOs, PIHPs, and PAHPs be calculated, reported, and used in the development of actuarially sound capitation rates. Under section 1903(m)(2) of the Act and regulations based on our authority under section 1902(a)(4) of the Act, actuarially sound capitation rates must be utilized for MCOs, PIHPs, and PAHPs. Actuarial soundness requires that capitation payments cover reasonable, appropriate and attainable costs in providing covered services to enrollees in Medicaid managed care programs. A medical loss ratio (MLRs) is one tool that can be used to assess whether capitation rates are appropriately set by generally illustrating how those funds are spent on claims and quality improvement activities as compared to administrative expenses, demonstrating that adequate amounts under the capitation payments are spent on services for enrollees. In addition, MLR calculation and reporting results in responsible fiscal stewardship of total Medicaid expenditures by ensuring that states have sufficient information to understand how the capitation payments made for enrollees in managed care programs are expended. We proposed to incorporate various MLR standards in the actuarial soundness standards proposed in §§ 438.4 and 438.5, and to add new §§ 438.8 and 438.74. The new regulation text would impose the requirement that MLR be calculated, reported and used in the Medicaid managed care rate setting context by establishing, respectively, the substantive standards for how MLR is calculated and reported by MCOs, PIHPs, and PAHPs, and state responsibilities in oversight of the MLR standards.
In § 438.4(b)(8), we proposed that capitation rates for MCOs, PIHPs, and PAHPs must be set such that, using the projected revenues and costs for the rate year, the MCO, PIHP, or PAHP would achieve an MLR of at least 85 percent, but not exceed a reasonable maximum threshold that would account for reasonable administrative costs. We proposed 85 percent as it is the industry standard for MA and large employers in the private health insurance market. Considering the MLR as part of the rate setting process would be an effective mechanism to ensure that program dollars are being spent on health care services, covered benefits, and quality improvement efforts rather than on potentially unnecessary administrative activities.
We explained that it is also appropriate to consider the MLR in rate setting to protect against the potential for an extremely high MLR (for example, an MLR greater than 100 percent). When an MLR is too high, it means there is a possibility that the capitation rates were set too low, which raises concerns about enrollees' access to services, the quality of care, provider participation, and the continued viability of the Medicaid managed care plans in that market. We did not propose a specific upper bound for the MLR because states are better positioned to establish and justify a maximum MLR threshold, which takes into account the type of services being delivered, the state's administrative requirements, and the maturity of the managed care program.
In § 438.5(b)(5), we proposed that states must use the annual MLR calculation and reporting from MCOs, PIHPs, or PAHPs as part of developing rates for future years.
Comments received in response to §§ 438.4(b)(8) and 438.5(b)(5) are addressed at section I.B.3.b and c. of this final rule.
We proposed minimum standards for how the MLR must be calculated and the associated reports submitted to the state so that the MLR information used in the rate setting process is available and consistent.
In paragraph (a), we proposed that states ensure through their contracts with any risk based MCO, PIHP, or PAHP that starts on or after January 1, 2017, the MCO, PIHP, or PAHP meet the standards proposed in § 438.8. Non-risk PIHP or PAHP contracts by their nature
Paragraph (b) proposed to define terms used in this section, including the terms MLR reporting year and non-claims cost; several terms that are relevant for purposes of credibility adjustments were also proposed but are discussed in connection with § 438.8(h). Regarding the MLR reporting year, we acknowledged that states vary their contract years and we proposed to give states the option of aligning their MLR reporting year with the contract year so long as the MLR reporting year is the same as the rating period, although states would not be permitted to have a MLR reporting year that is more than 12 months. The 12 month period is consistent with how the private market and MA MLR is calculated. In the event the state changes the time period (for example, transitions from paying capitation rates on a state fiscal year to a calendar year), the state could choose if the MLR calculation would be done for two 12 month periods with some period of overlap. Whichever methodology the state elects, the state would need to clarify the decision in the actuarial certification submitted under § 438.7 and take this overlap into account when determining the penalties or remittances (if any) on the MCO, PIHP, or PAHP for not meeting the standards developed by the state.
Paragraph (c) addressed certain minimum standards for the use of an MLR if a state elects to mandate a minimum MLR for an MCO, PIHP, or PAHP. We acknowledged that some states have imposed MLR percentages on certain managed care plans that equal or exceed 85 percent and we did not want to prohibit that practice. Therefore, as proposed, paragraph (c) would permit each state, through its law, regulation, or contract with the MCO, PIHP, or PAHP to establish a minimum MLR that may be higher than 85 percent, although the method of calculating the MLR would have to be consistent with at least the standards in § 438.8.
Paragraphs (d), (e) and (f) proposed the basic methodology and components that make up the calculation of the MLR. We proposed the calculation of the MLR as the sum of the MCO's, PIHP's, or PAHP's incurred claims, expenditures on activities that improve health care quality, and activities specified under § 438.608(a)(1) through (5), (7), (8) and (b) (subject to the cap in § 438.8(e)(4)), divided by the adjusted premium revenue collected, taking into consideration any adjustments for the MCO's, PIHP's, or PAHP's enrollment (known as a credibility adjustment). Our proposal used the same general calculation as the one established in 45 CFR 158.221 (private market MLR) with proposed differences as to what is included in the numerator and the denominator to account for differences in the Medicaid program and population. The proposal for MCOs, PIHPs, and PAHPs required calculation of the MLR over a 12-month period rather than the 3-year period required by 45 CFR 158.120.
The total amount of the numerator was proposed in paragraph (e) which, as noted above, is equal to the sum of the incurred claims, expenditures on activities that improve health care quality, and, subject to the cap in paragraph (e)(4), activities related to proposed standards in § 438.608(a)(1) through (5), (7), (8) and (b). Generally, the proposed definition of incurred claims comported with the private market and MA standards, with the proposed rule differing in several ways, such as:
• We proposed that amounts the MCO, PIHP, or PAHP receives from the state for purposes of stop-loss payments, risk-corridor payments, or retrospective risk adjustment would be deducted from incurred claims (proposed § 438.8(e)(2)(ii)(C) and (e)(2)(iv)(A)).
• Likewise, if a MCO, PIHP, or PAHP must make payments to the state because of a risk-corridor or risk adjustment calculation, we proposed to include those amounts in incurred claims (proposed § 438.8(e)(2)(iv)(A)).
• We proposed that expenditures related to fraud prevention activities, as set forth in § 438.608(a)(1) through (5), (7), (8) and (b), may be attributed to the numerator but would be limited to 0.5 percent of MCO's, PIHP's, or PAHP's premium revenues. We also proposed that the expenses for fraud prevention activities described in § 438.8(e)(4) would not duplicate expenses for fraud reduction efforts for purposes of accounting for recoveries in the numerator under § 438.8(e)(2)(iii)(C), and the same would be true in the converse. We specifically requested comment on the approach to incorporating fraud prevention activities and the proportion of such expenditures in the numerator for the MLR calculation, as this proposal was unique to Medicaid managed care.
We proposed that non-claims costs would be considered the same as they are in the private market and MA rules. We proposed in § 438.8(e)(2)(v)(A)(3) that certain amounts paid to a provider are not included as incurred claims; we noted an intent to use the illustrative list in the similar provisions at § 422.2420(b)(4)(i)(C) and 45 CFR 158.140(b)(3)(iii) to interpret and administer this aspect of our proposal. Incurred claims would also not include non-claims costs and remittances paid to the state from a previous year's MLR experience.
In paragraph (e)(2)(iii)(A), we proposed that payments made by an MCO, PIHP, or PAHP to mandated solvency funds must be included as incurred claims, which is consistent with the private market regulations on market stabilization funds at 45 CFR 158.140(b)(2)(i).
Paragraph (e)(2)(iv) would take a consistent approach with the private market rules at 45 CFR 158.140(b)(4)(ii) that amounts that must either be included in or deducted from incurred claims are net payments related to risk adjustment and risk corridor programs. We proposed in paragraph (e)(2)(v) that the following non-claims costs are excluded from incurred claims: Amounts paid to third party vendors for secondary network savings, network development, administrative fees, claims processing, and utilization management; and amounts paid for professional or administrative services. This approach is consistent with the expenditures that must be excluded from incurred claims under the private market rules at 45 CFR 158.140(b)(3).
Proposed paragraph (e)(2)(vi) would incorporate the provision in MA regulations (§ 422.2420(b)(5)) for the reporting of incurred claims for a MCO, PIHP, or PAHP that is later assumed by another entity to avoid duplicative reporting in instances where one MCO, PIHP, or PAHP is assumed by another.
We also proposed at § 438.8(e)(3) that an activity that improves health care quality can be included in the numerator as long as it meets one of three standards: (1) It meets the requirements in 45 CFR 158.150(b) (the private market MLR rule) for an activity that improves health care quality and is not excluded under 45 CFR 158.150(c); (2) it is an activity specific to Medicaid managed care External Quality Review (EQR) activities (described in § 438.358(b) and (c)); or (3) it is an activity related to Health Information Technology and meaningful use, as defined in 45 CFR 158.151 and excluding any costs that are deducted or excluded from incurred claims under paragraph (e)(2). Regarding activities related to Health Information
Because of our understanding that some managed care plans cover more complex populations in their Medicaid line of business than in their private market line(s) of business, we believed that the case management/care coordination standards are more intensive and costly for Medicaid managed care plans than in a typical private market group health plan. We proposed to use the definition of activities that improve health care quality in 45 CFR 158.150 to encompass MCO, PIHP, and PAHP activities related to service coordination, case management, and activities supporting state goals for community integration of individuals with more complex needs such as individuals using LTSS but specifically requested comment on this approach and our proposal not to specifically identify Medicaid-specific activities separately in the proposed rule. We indicated our expectation that MCOs, PIHPs, and PAHPs would include the cost of appropriate outreach, engagement, and service coordination in this category.
Paragraph (f) proposed what would be included in the denominator for calculation of the MLR. Generally, the denominator is the MCO's, PIHP's, or PAHP's premium revenue less any expenditure for federal or state taxes and licensing or regulatory fees. In proposed § 438.8(f)(2), we specified what must be included in premium revenue. We noted our expectation that a state will have adjusted capitation payments appropriately for every population enrolled in the MCO, PIHP, or PAHP so that the capitated payment reasonably reflects the costs of providing the services covered under the contract for those populations and meets the actuarial soundness standards in § 438.4 through § 438.7. We proposed that any payments by states to managed care plans for one-time, specific life events of enrollees—events that do not receive separate payments in the private market or MA—would be included as premium revenue in the denominator. Typical examples of these are maternity “kick-payments” where a payment to the MCO is made at the time of delivery to offset the costs of prenatal, postnatal and labor and delivery costs for an enrollee.
Paragraph (f)(3) proposed that taxes, licensing and regulatory fees be treated in the same way as they are treated in the private market and MA, as deductions from premium revenue. Similar to the private market MLR rule in 45 CFR 158.161(b), fines or penalties imposed on the MCO, PIHP, or PAHP would not be deducted from premium revenue and must be considered non-claims costs (proposed § 438.8(e)(2)(v)(A)(
Paragraph (g) proposed standards for allocation of expenses. MCOs, PIHPs, and PAHPs would use a generally accepted accounting method to allocate expenses to only one category, or if they are associated with multiple categories, pro-rate the amounts so the expenses are only counted once.
We also proposed regulation text to address credibility adjustments after summarizing how section 2718(c) of the Public Health Service Act (PHS Act) addresses them and the work on credibility adjustments by the National Association of Insurance Commissioners (NAIC). In paragraph (h), we proposed to adopt the method of credibility adjustment described in the NAIC's model regulation on MLR and, to the extent possible, to follow the approach used in both the private market (45 CFR 158.230) and MA and Medicare Part D MLR rules (§§ 422.2440, 423.2440). For our detailed explanation of credibility adjustments,
In paragraph (i)(1), we proposed that the MLR be calculated and reported for the entire population enrolled in the MCO, PIHP, or PAHP under the contract with the state unless the state directed otherwise. Our proposal permitted flexibility for states to separate the MLR calculation by Medicaid eligibility group based on differences driven by the federal medical assistance percentage (FMAP) (to simplify accounting with the federal government), by capitation rates, or for legislative tracking purposes. However, while states could divide eligibility groups for MLR calculation and reporting purposes, we explained that our proposal would not allow different calculation standards or use of different MLR percentages for different eligibility groups. The state may choose any aggregation method described, but proposed paragraph (k)(1)(xii) stipulated that the MCO, PIHP, and PAHP must clearly show in their report to the state which method it used.
We proposed in paragraph (j) minimum standards for when a state imposed a remittance requirement for failure to meet a minimum MLR established by the state. Under our proposal, an MCO, PIHP, or PAHP would pay a remittance to the state consistent with the state requirement. We encouraged states to incent MCO, PIHP, and PAHP performance consistent with their authority under state law. While states would not have to collect remittances from the MCOs, PIHPs, or PAHPs through this final rule, we encourage states to implement these types of financial contract provisions that would drive MCO, PIHP, and PAHP performance in accordance with the MLR standard. In section 1.B.1.c.(3) of this final rule, we address the treatment of any federal share of potential remittances.
In paragraph (k), we proposed that MCOs, PIHPs, and PAHPs would submit a report meeting specific content standards and in the time and manner established by the state; we proposed that such deadline must be within 12 months of the end of the MLR reporting year based on our belief that 12 months afforded enough time after the end of the MLR reporting year for the state to reconcile any incentive or withhold arrangements they have with the MCOs, PIHPs, and PAHPs and for the managed care plans to calculate the MLR accurately. We requested comment on whether this is an appropriate timeframe. Our proposal would have permitted the state to add content requirements to the mandatory reports.
In paragraph (l), we proposed that MCOs, PIHPs, and PAHPs need not calculate or report their MLR in the first year they contract with the state to provide Medicaid services if the state
We proposed in paragraph (m) that in any case where a state makes a retroactive adjustment to the rates that affect a MLR calculation for a reporting year, the MCO, PIHP, or PAHP would need to recalculate the MLR and provide a new report with the updated figures.
In paragraph (n), we proposed that the MCO, PIHP, or PAHP provide an attestation when submitting the report specified under proposed paragraph (k) that gives an assurance that the MLR was calculated in accordance with the standards in this final section.
We received the following comments in response to our proposals in § 438.8.
Some commenters expressed concern about allowing states to set an MLR standard that is higher than 85 percent. These commenters provided that states currently have discretion to include expenses in either the numerator or the denominator and have set MLRs with those principles in mind; however, this final rule would remove that flexibility from states to develop and establish rules governing the calculation of the MLR. In addition, these commenters were concerned that if a state requires an MLR to be met that is too high, managed care plans will be incentivized to leave the market. These commenters recommended that CMS set an upper limit to a state-established MLR requirement to protect managed care plans from a MLR standard that is too high by requiring an additional payment to managed care plans if the managed care plans have an MLR that exceeds a state-imposed MLR standard that is greater than 85 percent. Commenters provided that such an additional payment to the managed care plans would be necessary to ensure that there is adequate funding in every year, as managed care plans are currently able to keep excess funds from one year to offset future losses.
We appreciate the concern that states may have a desire to set an excessively ambitious MLR requirement, but we believe that states, with their understanding of managed care plan's historical experience and the unique characteristics of the state's population, are best equipped to determine an appropriate MLR when setting minimum MLR requirements, which could be above 85 percent. We encourage managed care plans to address concerns about state-established MLR requirement with the state. Note that the actuarial soundness requirements in § 438.4(a) provide that capitation rates project the reasonable, appropriate, and attainable costs under the contract and are developed in accordance with § 438.4(b).
The regulation text noted by the commenters (“If a state elects to mandate a minimum MLR for its . . .”) identifies how the state may impose a requirement to meet a minimum MLR—not just calculate and report the managed care plan's MLR experience—and that such a minimum MLR must be at least 85 percent. We will review the MLR reports during the review of the annual rate certification and will inquire about current assumptions if it is found that the historical MLR is found to be below 85 percent.
No comments were received on § 438.8(d); however, we will finalize that section with a technical edit to remove the designation of paragraphs (1) and (2). The substantive regulatory text proposed at § 438.8(d)(1) will be finalized as § 438.8(d).
While the definition of quality improvement activities is broad, the requirements for accounting for general operating expenses, also known as non-claims costs, are not. Section 438.8(b) explicitly provides that non-claims costs are administrative services that are not expenditures on quality improving activities as defined at § 438.8(e)(3). We decline to institute an approval process for activities that could qualify as quality improvement activities as that would be inconsistent with the MA and private market MLR requirements; however, states are able to do so if they choose.
Some commenters requested that additional costs related to calculating and administering enrollee incentives for the purposes of improving quality be included either as an activity that improves health care quality or as a separate category under the numerator. Commenters stated that such a change should address social determinants of care, promoting patient engagement, and improving self-sufficiency.
We believe that only those enrollee incentive program expenses that meet the requirements of 45 CFR 158.150 should be counted towards the numerator, and would already qualify without specifying that in these rules. Administrative costs for incentive programs that do not meet the requirements under 45 CFR 158.150 cannot be included in the numerator; therefore, we will finalize the rule as proposed.
Several commenters supported the proposal at § 438.8(e)(4) to include the cost of fraud prevention activities in the numerator of the MLR calculation but requested that CMS further define these activities and recommended that such activities not be subject to a cap. Commenters that supported the proposal requested that CMS include a similar provision in the private market and Medicare rules.
While expenses related to program integrity activities compliant with § 438.608 will not be explicitly included in the MLR calculation at this time, we underscore the importance of those activities. Consistent with § 438.608, contracts must require that managed care plans adopt and implement measures to protect the integrity of the Medicaid program.
After consideration of public comments, we are finalizing § 438.8(e)(4) to incorporate standards for fraud prevention activities in the MLR calculation as adopted for the private market at 45 CFR part 158.
After consideration of public comments, we will finalize § 438.8(i) with technical edits to delete designations for paragraphs (1) and (2), as such designations are unnecessary.
While we understand that the utilization of some covered populations may not be completely stabilized in the second year of operation, the over-inflation of startup costs will be mitigated at that point. Therefore, we do not believe a change is necessary to exempt a managed care plan from calculating and reporting the MLR in the second year so that such experience may be taken into account when developing actuarially sound capitation rates in accordance with § 438.4(b)(8) (redesignated in the final at § 438.4(b)(9)).
After consideration of the public comments and for the reasons discussed above, we are finalizing § 438.8 with the following changes from the proposed rule:
• Changed the definition of MLR reporting year in § 438.8(a) to reference the new definition of rating period.
• Modified definitions in § 438.8(b) to insert “MLR” for “medical loss ratio” for consistency within § 438.8.
• Modified the definition of “non-claims costs” in § 438.8(b) to refer to “activities that improve health care quality” for consistency with § 438.8(e)(3).
• Deleted designations for paragraphs (1) and (2) from § 438.8(d).
• Removed the term “medical” from § 438.8(e)(2)(i)(A) when referencing “services meeting the requirements of § 438.3(e).”
• Revised § 438.8(e)(2)(i)(B) to reference claims “liabilities” instead of claims “reserves ” and to include amounts incurred but not reported.
• Revised § 438.8(e)(2)(ii)(A) to refer to “network providers” instead of “health care professionals” as we are not finalizing a definition for “health care professional” and are adding a definition for “network provider.”
• Revised § 438.8(e)(2)(ii)(B) to reference pharmacy rebates received and accrued as part of incurred claims and deleted “MCO, PIHP, or PAHP” as all aspects of the MLR calculation are based on the expenses of the MCO, PIHP, or PAHP and a specific reference is not needed in this paragraph.
• Deleted § 438.8(e)(2)(ii)(C) related to state subsidies for stop-loss payment methodologies.
• Deleted § 438.8(e)(2)(iii)(A) related to payments made by the MCO, PIHP, or PAHP to mandated solvency funds.
• Changed § 438.8(e)(2)(iii)(B), redesignated as § 438.8(e)(2)(iii)(A), to include amounts expected to be paid to network providers.
• To accommodate other modifications to proposed § 438.8(e)(2)(iii), the cross reference to paragraph (C) has been updated to paragraph (B).
• Redesignated § 438.8(e)(2)(iii)(C) as § 438.8(e)(2)(iii)(B), in light of the deletion of the proposed § 438.8(e)(2)(iii)(A) related to payment by the MCO, PIHP, or PAHP to mandated solvency funds.
• Revised § 438.8(e)(2)(iv) to include or deduct, respectively, net payments or receipts related to state mandated solvency funds. To accommodate other modifications to proposed § 438.8(e)(2)(iv), paragraphs (A) and (B) were deleted.
• Excluded amounts from the numerator for pass-through payments under to § 438.6(d) in § 438.8(e)(2)(v)(C).
• Revised § 438.8(e)(4) to allow the Medicaid MLR numerator to include fraud prevention activities according to the standard that is adopted for the private market at 45 CFR part 158.
• Excluded amounts for pass-through payments made under to § 438.6(d) from the denominator in § 438.8(f)(2)(i).
• Revised § 438.8(f)(2)(iii) to exclude payments authorized by § 438.6(b)(2) from the denominator.
• Added local taxes as an item that can be deducted from premium revenue in § 438.8(f)(3)(iv).
• Changed the treatment of risk sharing mechanisms as proposed at § 438.8(e)(2)(iv)(A), which was revised to reference risk-sharing mechanisms broadly, to the denominator at § 438.8(f)(2)(vi).
• Removed designations for paragraphs (1) and (2) from § 438.8(i).
• Changed the term “reconcile” to “compare” in § 438.8(k)(1)(xi).
• Revised § 438.8(k)(3) to refer to third party vendors that provide claims adjudication services.
We proposed minimum standards for state oversight of the MLR standards in § 438.74. Specifically, we proposed two key standards related to oversight for states when implementing the MLR for contracted MCOs, PIHPs, and PAHPs: (1) Reporting to CMS; and (2) re-payment and reporting of the federal share of any remittances the state chooses to collect from the MCOs, PIHPs, or PAHPs. Proposed paragraph (a) required each state to provide a summary description of the MLR calculations for each of the MCOs, PIHPs, and PAHPs with the rate certification submitted under § 438.7. Proposed paragraph (b) applied if the state collects any remittances from the MCOs, PIHPs, or PAHPs for not meeting the state-specified minimum MLR standard. In such situations, we proposed that the state would return the federal share and submit a report describing the methodology for how the state determined the federal share. We explained that if a state decided not to segregate MLR reporting by population, the state would need to submit to CMS the methodology of how the federal share of the remittance was calculated that would be reviewed and approved via the normal CMS–64 claiming protocol.
We received the following comments in response to our proposal to revise § 438.74.
We do not intend to publish the MLR experience of each managed care plan of each state publically at this time, but we do expect the states to do so as part of its public annual report as required in § 438.66(e).
After consideration of the public comments, we are finalizing § 438.74 as proposed with the following modifications:
• Inserted “rate” in place of “actuarial” in § 438.74(a) to describe the certification in § 438.7 and rephrased the last half of the sentence to improve the accuracy of cross-references.
• Inserted “the amount of the” preceding “denominator” and replace “MLR experienced” with “the MLR percentage achieved” in § 438.74(a)(2) to improve readability.
• Inserted “separate” before “report” in § 438.74(b)(2) to clarify that, if a remittance is owed according to paragraph (b)(1), the state must submit a separate report from the one required under paragraph (a) to describe to methodology for determining the state and federal share of the remittance.
We proposed to add a new § 438.3 to contain the standard provisions for MCO, PIHP, and PAHP contracts, including non-risk PIHPs and PAHPs, that are distinguishable from the rate setting process and the standard provisions that apply to PCCM and PCCM entity contracts. These provisions generally set forth specific elements that states must include in their managed care contracts, identify the contracts that require CMS approval, and specify which entities may hold comprehensive risk contracts. To improve the clarity and readability of part 438, we proposed that § 438.3 would include the standard contract provisions from current § 438.6 that are unrelated to standards for actuarial soundness and the development of actuarially sound capitation rates.
We proposed that the provisions currently codified in § 438.6 as paragraphs (a) through (m) be redesignated respectively as § 438.3(a) through (l), (p) and (q), with some revisions as described below. These proposed paragraphs addressed standards for our review and approval of contracts, entities eligible for comprehensive risk contracts, payment, prohibition of enrollment discrimination, services covered under the contract, compliance with applicable laws and conflict of interest safeguards, provider-preventable conditions, inspection and audit of financial records, physician incentive plans, advance directives, subcontracts, choice of health professional, additional rules for contracts with PCCMs, and special rules for certain HIOs.
a. CMS Review (§ 438.3(a))
First, in § 438.3(a) related to our review and approval of contracts, we proposed to add the regulatory flexibility for us to set forth procedural rules—namely timeframes and detailed processes for the submission of contracts for review and approval—in sub-regulatory materials, and added a new standard for states seeking contract approval prior to a specific effective date that proposed final contracts must be submitted to us for review no later than 90 days before the planned effective date of the contract. Under our proposal, the same timeframe would also apply to rate certifications, as proposed § 438.7(a) incorporated the review and approval process of § 438.3(a). To the extent that the final contract submission is complete and satisfactory responses to questions are exchanged in a timely manner, we explained that we expected 90 days would be a reasonable and appropriate timeframe for us to conduct the necessary level of review of these documents to verify compliance with federal standards. Upon approval, we would authorize FFP concurrent with the contract effective date. In addition, for purposes of consistency throughout part 438, we proposed to remove specific references to the CMS Regional Offices and replace it with a general reference to CMS; we also noted our expectation that the role of the CMS Regional Offices would not change under the proposed revisions to part 438.
We received the following comments in response to proposed § 438.3(a).
In regard to commenters' concerns as to how this provision relates to partial deferrals or disallowances in proposed § 438.807, that proposal (discussed below in section I.B.4.e) was to authorize us to take a partial deferral or disallowance when we find non-compliance on specific contractual or rate setting provisions. We did not propose to extend § 438.807 to contractual or rate setting provisions for which we have not completed our review; further this comment is moot in light of our decision with regard to § 438.807, as discussed in detail in section I.B.4.e. We decline to establish regulatory timeframes for CMS to finalize or notify the state of compliance issues; we also decline to adopt a deemed approval approach if the 90 days elapse without approval because this provision is not directly tied to the prior approval requirements in § 438.806.
We disagree with commenters that requested a 45 day timeframe for the submission of rate certifications to mitigate concerns about the actuary relying on older data for rate setting purposes to meet the 90 day timeframe. Section 438.5(c)(2) would require states and their actuaries to use appropriate base data with the data being no older than the 3 most recent and complete years prior to the rating period. The additional claims data that would be used in a rate development process that would accommodate a 45 day timeframe for submission to CMS, rather than a 90 day timeframe, is not actuarially significant.
After consideration of the public comments, we are finalizing 438.3(a) as proposed.
We proposed to redesignate the existing provisions at § 438.6(b) to § 438.3(b), without substantive change. We did not receive comments on § 438.3(b) pertaining to entities that are eligible for comprehensive risk contracts and will finalize as proposed.
In proposed § 438.3(c), we restated our longstanding standard currently codified at § 438.6(c)(2)(ii) that the final capitation rates for each MCO, PIHP, or PAHP must be specifically identified in the applicable contract submitted for our review and approval. We also proposed to reiterate in this paragraph that the final capitation rates must be based only upon services covered under the state plan and that the capitation rates represent a payment amount that is adequate to allow the MCO, PIHP, or PAHP to efficiently deliver covered services in a manner compliant with contractual standards.
We received the following comments in response to § 438.3(c).
Since publication of the proposed rule, we have become aware of instances in a couple of states where capitation payments were made for enrollees that were deceased and the capitation payments were not recouped by the state from the managed care plans. It is unclear to us why such capitation payments would be retained by the managed care plans as these once Medicaid-eligible enrollees are no longer Medicaid-eligible after their death. It is implicit in the current rule, and we did not propose to change, that capitation payments are developed based on the services and populations that are authorized for Medicaid coverage under the state plan which are covered under the contract between the state and the managed care plan and that capitation payments are made for Medicaid-eligible enrollees. This would not include deceased individuals or individuals who are no longer Medicaid-eligible. Therefore, we are including language in § 438.3(c) to specify that capitation payments may only be made by the state and retained by the MCO, PIHP or PAHP for Medicaid-eligible enrollees. As a corollary of this requirement and while we assume that states and managed care plans already operate in such a manner, we advise states to have standard contract language that requires individuals that are no longer Medicaid-eligible to be disenrolled from the managed care plan.
To effectuate the change to § 438.3(c), introductory text is added following the “Payment” heading for paragraph (c) that the requirements apply to the final capitation rate and the receipt of capitation payments under the contract. A new designation for paragraph (1) specifies that the final capitation rate for each MCO, PIHP or PAHP must be (i) specifically identified in the applicable contract submitted for CMS review and approval and (ii) the final capitation rates must be based only upon services covered under the State plan and additional services deemed by the state to be necessary to comply with the parity standards of the Mental Health Parity and Addiction Equity Act, and represent a payment amount that is adequate to allow the MCO, PIHP or PAHP to efficiently deliver covered services to Medicaid-eligible individuals in a manner compliant with contractual requirements. The requirements in finalized paragraphs (c)(1)(i) and (ii) mirror those that were proposed at § 438.3(c). A new paragraph (2) specifies that capitation payments may only be made by the state and retained by the MCO, PIHP or PAHP for Medicaid-eligible enrollees to address the issue of retention of capitation payments for Medicaid enrollees that have died, or who are otherwise no longer eligible.
After consideration of the comments, we are finalizing § 438.3(c) with a new paragraph (c)(2) to make clear that capitation payments may not be made by the state and retained by the managed care plan for Medicaid enrollees that have died, or who are
We proposed to redesignate the provisions prohibiting enrollment discrimination currently at § 438.6(d) as new § 438.3(d) and proposed to replace the reference to the Regional Administrator with “CMS”; this replacement was for consistency with other proposals to refer uniformly to CMS as one entity in the regulation text. We also proposed to add sex, sexual orientation, gender identity and disability as protected categories under our authority in section 1902(a)(4) of the Act; this proposal related to sex discrimination is discussed in the proposed changes in § 438.3(f) below.
We received the following comments on proposed § 438.3(d).
After consideration of public comment, we are finalizing § 438.3(d) as proposed.
The current regulation at § 438.6(e) addresses the services that may be covered by the MCO, PIHP, or PAHP contract. We proposed to move that provision to § 438.3(e). The existing provision also prohibits services that are in addition to those in the Medicaid state plan from being included in the capitation rate and we proposed to incorporate that standard in new § 438.3(c).
We received the following comments on proposed § 438.3(e).
After consideration of public comments, we are finalizing § 438.3(e) with additional text to address requirements for the use of in lieu of services in managed care. First, the introductory text from proposed paragraph (e) is redesignated at paragraph (e)(1), without substantive change, and the paragraphs proposed as (e)(1) and (e)(2) (Reserved) are redesignated as (e)(1)(i) and (e)(1)(ii) in this final rule. Second, we are codifying
We also proposed to redesignate the existing standard for compliance with applicable laws and conflict of interest standards from existing § 438.6(f) to § 438.3(f)(1) with the addition of a reference to section 1557 of the Affordable Care Act, which prohibits discrimination in health programs that receive federal financial assistance. We also proposed to add sex as a protected category for purposes of MCO, PIHP, PAHP, PCCM, or PCCM entity enrollment practices in the enrollment provisions proposed to be moved to § 438.3(d)(4), because adding this category is consistent with the scope of section 1557 of the Affordable Care Act. We also proposed to add sexual orientation and gender identity because managed care plans are obligated to promote access and delivery of services without discrimination and must ensure that care and services are provided in a manner consistent with the best interest of beneficiaries under section 1902(a)(19) of the Act. We noted that the best interest of beneficiaries is appropriately met when access is provided in a non-discriminatory manner; adopting these additional methods of administration is also necessary for the proper operation of the state plan under section 1902(a)(4) of the Act.
In addition, we proposed a new standard, at § 438.3(f)(2), to state more clearly the existing requirement that all contracts comply with conflict of interest safeguards (described in § 438.58 and section 1902(a)(4)(C) of the Act).
We received the following comments in response to proposed § 438.3(f).
We proposed to redesignate the standards related to provider reporting of provider-preventable conditions currently codified in § 438.6(f)(2)(i) to the new § 438.3(g). With this redesignation, we proposed to limit these standards to MCOs, PIHPs, and PAHPs, because those are the entities for which these standards are applicable. We did not receive comments on the proposals related to reporting of provider-preventable conditions at § 438.3(g) and will finalized as proposed.
We proposed to move the inspection and audit rights for the state and federal government from § 438.6(g) to new § 438.3(h) and to expand the existing standard to include access to the premises, physical facilities and equipment of contractors and subcontractors where Medicaid-related activities or work is conducted. In addition, we proposed to clarify that the state, CMS, and the Office of the Inspector General may conduct such inspections or audits at any time.
We received the following comments in response to proposed § 438.3(h).
After consideration of the public comments, we are modifying the regulatory text at § 438.230(c)(3)(i) to indicate that audits and inspections may occur at any time to be consistent with § 438.3(h). We are modifying the regulatory text at § 438.3(h) to include the list at § 438.230(c)(3)(i), including the Comptroller General and designees. We are also adding the right to audit for 10 years to § 438.3(h) so that the timeframe is clear and consistent for managed care plans, PCCMs, and PCCM entities in § 438.3(h), as well as for subcontractors of MCOs, PIHPs, PAHPs, and PCCM entities in § 438.230. We are otherwise finalizing § 438.3(h) as proposed.
As part of our proposal to redesignate the provisions related to physician incentive plans from § 438.6(h) to new § 438.3(i), we proposed to correct the outdated references to Medicare+Choice organizations to MA organizations.
We received the following comments on the regulation text concerning physician incentive plans at § 438.3(i).
After consideration of the public comments, we are finalizing § 438.3(i) as proposed.
We proposed to redesignate the provisions for advance directives currently in § 438.6(i) as § 438.3(j). We received the following comments on § 438.3(j) relating to advance directives.
After consideration of the public comments, we are finalizing § 438.3(j) with “as if such regulation applied directly to . . .” in paragraphs (1) and (2) and “subject to the requirements of this paragraph (j) . . .” in paragraph (3) for clarification.
We proposed to redesignate the provisions for subcontracts currently at § 438.6(l) as § 438.3(k) and also proposed to add a cross-reference to § 438.230 that specifies standards for subcontractors and delegation. We did not receive comments on § 438.3(k) and will finalize as proposed.
We proposed to redesignate the standards for choice of health care professional currently at § 438.6(m) at § 438.3(l).
We received the following comments on the standards for choice of health professional at § 438.3(l). We did not propose any substantive change to the current rule other than this redesignation.
In addition, this section uses the term “health professional” which is not currently defined in part 438. We address our proposal related to adding a definition for health care professional in section I.B.9.a. of this final rule. We have changed the term “health professional” to “network provider” in this final rule to clarify that the choice for enrollees is within the network.
After consideration of the public comments, we are finalizing § 438.3(l) with a modification to replace “health professional” with “network provider” in the heading and text.
In § 438.3(m), we proposed to add a new standard that MCOs, PIHPs, and PAHPs submit audited financial reports on an annual basis as this information is a source of base data that must be used for rate setting purposes in proposed § 438.5(c). We proposed that the audits of the financial data be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.
We received the following comments on proposed § 438.3(m).
After consideration of the public comments, we are finalizing all § 438.3(m) largely as proposed, with a modification to add the phrase “specific to the Medicaid contract” to clarify the scope of the audited financial report.
Paragraph (n) was reserved in the proposed rule and is finalized as a redesignation of § 438.6(n) in the March 30, 2016 final rule (81 FR 18390).
In § 438.3(o), we proposed that contracts covering LTSS provide that services that could be authorized through a waiver under section 1915(c) of the Act or a state plan amendment
We received the following comments on the proposal to add § 438.3(o).
After consideration of the public comments, we are finalizing § 438.3(o) as proposed.
We proposed to redesignate existing § 438.6(j) (special rules for certain HIOs) as § 438.3(p). As part of our proposed redesignation of the HIO-specific provisions from existing § 438.6(j) to new § 438.3(p), we also proposed to correct a cross-reference in that paragraph.
We received the following comments on the HIO-specific provisions at § 438.3(p).
After consideration of the public comments, we are finalizing 438.3(p) as proposed with a modification to correct the cross-reference to paragraph (b) of § 438.3.
We proposed to redesignate the additional contract standards specific to PCCM contracts from existing § 438.6(k) to new § 438.3(q) to separately identify them. In § 438.3(r), we proposed to set standards for contracts with PCCM entities, in addition to those standards specified for PCCM contracts in proposed § 438.3(q), including the submission of such contracts for our review and approval to ensure compliance with § 438.10 (information requirements). If the PCCM entity contract provides for shared savings, incentive payments or other financial reward for improved quality outcomes, § 438.330 (performance measurement), § 438.340 (managed care elements of comprehensive quality strategy), and § 438.350 (external quality review) would also be applicable to the PCCM entity contract. We address comments on § 438.3(q) and (r) at section I.B.6.e of this final rule.
In § 438.3(s), we proposed that state Medicaid contracts with MCOs, PIHPs, or PAHPs meet the requirements of section 1927 of the Act when providing coverage of covered outpatient drugs. The proposed managed care standards are based primarily on section 1903(m)(2)(A)(xiii) of the Act and we relied on our authority under section 1902(a)(4) of the Act to extend the section 1927 requirements to PIHPs and PAHPs that are contractually obligated to provide covered outpatient drugs. In addition, we relied on section 1902(a)(4) of the Act to address, for all managed care plans within the scope of this proposal, requirements that are outside the scope of section 1903(m)(2)(A)(xiii) of the Act, namely the proposed requirements at § 438.3(s)(1), (4) and (6).
Section 2501(c)(1)(C) of the Affordable Care Act amended section 1903(m)(2)(A) of the Act to add clause (xiii) to add certain standards applicable to contracts with MCOs. In the February 1, 2016
We received the following comments about proposed § 438.3(s) generally.
In paragraph (s)(1), we proposed that the MCO, PIHP, or PAHP must provide coverage of covered outpatient drugs (as defined in section 1927(k)(2) of the Act) as specified in the contract and in a manner that meets the standards for coverage of such drugs imposed by section 1927 of the Act as if such standards applied directly to the MCO, PIHP, or PAHP. Under the proposal, when the MCO, PIHP, or PAHP provides prescription drug coverage, the coverage of such drugs must meet the standards set forth in the definition of covered outpatient drugs at section 1927(k)(2) of the Act. The MCO, PIHP, or PAHP may be permitted to maintain its own formularies for covered outpatient drugs, but when there is a medical need for a covered outpatient drug that is not included in their formulary but that is within the scope of the contract, the MCO, PIHP, or PAHP must cover the covered outpatient drug under a prior authorization process. This proposal was based on our authority under section 1902(a)(4) of the Act to mandate methods of administration that are necessary for the efficient operation of the state plan. Furthermore, if an MCO, PIHP, or PAHP is not contractually obligated to provide coverage of a particular covered outpatient drug, or class of drugs, the state is required to provide the covered outpatient drug through FFS in a manner that is consistent with the standards set forth in its state plan and the requirements in section 1927 of the Act.
We received the following comments on proposed § 438.3(s)(1).
We understand that each state may cover outpatient drugs differently for its managed care enrollees. For example, a state may contract with a managed care plan to include coverage of a limited set of drugs related to a specific disease state (for example, medications for substance abuse disorders). In these instances, the managed care plan should meet the coverage requirements of section 1927 of the Act to the extent they apply to the drugs covered by the plan within the scope of its contract. In other words, a managed care plan that agrees to provide coverage of a subset of covered outpatient drugs under the contract with the state would need to provide coverage of every covered outpatient drug included in the subset when the manufacturer of those drugs has entered into a rebate agreement with the Secretary. For example, if the managed care plan is only required in its contract to provide coverage of substance use disorder drugs, the managed care plan may choose to subject certain substance use disorder covered outpatient drugs to prior authorization as long as the prior authorization program it adopts meets the requirements in section 1927(d)(5) of the Act. Further, the state would be required, under section 1927 of the Act, to provide coverage of outpatient covered drugs that are not included in the managed care plan's contract and the state may meet this obligation through FFS or another delivery system.
States that contract with managed care plans to cover outpatient drugs for the entire covered outpatient drug benefit under the state plan must ensure that the contract meets the standards set forth at § 438.3(s) for all of those drugs. That is, when applicable, the managed care plan's contract must ensure that:
• The managed care plan's drugs are covered outpatient drugs in accordance with section 1927(k)(2) of the Act and meet the standards for coverage under section 1927 of the Act;
• The managed care plan reports drug utilization data to the states to enable billing for Medicaid drug rebates;
• The managed care plan has procedures in place to exclude utilization data for covered outpatient drugs that are subject to 340B discounts covered by the managed care plan;
• The managed care plan operates a drug utilization program that complies with the requirements of section 1927(g) of the Act, provides a description of the DUR activities to the state on an annual basis, and conducts a prior authorization program, when applicable, consistent with the minimum requirements set forth at section 1927(d)(5) of the Act.
States may allow managed care plans to use their own formulary; however, if the managed care plan's formulary does not include a covered outpatient drug that is otherwise covered by the state plan pursuant to section 1927 of the Act, the managed care plan must ensure access to the off-formulary covered outpatient drug consistent with the prior authorization requirements at section 1927(d)(5) of the Act. States may also choose to cover covered outpatient drugs not on the managed care plan's formulary for enrollees by providing coverage of such drugs under the state plan using a prior authorization program that meets the requirements at section 1927(d)(5) of the Act. States and managed care plans should address these requirements in their contract documents so the responsibilities of each party are clearly identified when administering the Medicaid covered outpatient drug benefit.
In paragraph (s)(2), we proposed to implement section 1903(m)(2)(A)(xiii)(III) of the Act. Specifically, we proposed that MCOs, PIHPs, and PAHPs report drug utilization data necessary for the state to submit utilization data under section 1927(b)(2) of the Act and within 45 calendar days after the end of each quarterly rebate period to ensure that MCO, PIHP, or PAHP data is included in utilization data submitted by states to manufacturers. We further proposed that such utilization information must include, at a minimum, information on the total number of units of each dosage form and strength and package size by National Drug Code of each covered outpatient drug dispensed or covered by the MCO, PIHP, or PAHP.
We received the following comments on proposed § 438.3(s)(2).
In paragraph (s)(3), we proposed that the MCO, PIHP, or PAHP must have procedures in place to exclude utilization data for drugs subject to discounts under the 340B Drug Pricing Program from the utilization reports submitted under proposed paragraph (s)(2). Section 2501(c) of the Affordable Care Act modified section 1927(j)(1) of the Act to specify that covered outpatient drugs are not subject to the rebate requirements if such drugs are both subject to discounts under section 340B of the PHS Act and dispensed by health maintenance organizations, including Medicaid MCOs. In accordance with section 1927(a)(5) of the Act, states may not seek rebates with respect to drugs provided by covered entities when covered outpatient drugs are purchased at discounted 340B prices that are provided to Medicaid beneficiaries. Section 1903(m)(2)(A)(xiii)(III) of the Act specifies that MCOs report drug utilization data necessary for the state to bill for rebates under section 1927(b)(2)(A) of the Act; we extend those obligations to PIHPs and PAHPs using our authority under section 1902(a)(4) of the Act. In accordance with this provision, MCOs, PIHPs and PAHPs are not responsible for reporting information about covered outpatient drugs if such drugs are subject to discounts under section 340B of the PHS Act and dispensed by MCOs in accordance with section 1927(j)(1) of the Act. Therefore, covered outpatient drugs dispensed to Medicaid enrollees from covered entities purchased at 340B prices, which are not subject to Medicaid rebates, should be excluded from managed care utilization reports to the state. To ensure that drug manufacturers will not be billed for rebates for drugs purchased and dispensed under the 340B Drug Pricing Program, MCOs, PIHPs, or PAHPs must have mechanisms in place to identify these drugs and exclude the reporting of this utilization data to the state to prevent duplicate discounts on these products. Our proposal at § 438.3(s)(3) was designed to address this issue.
We received the following comments on proposed § 438.3(s)(3).
Other commenters suggested that assigning unique Bank Identification Number (BIN)/Processor Control Number (PCN)/Group numbers for Medicaid managed care plans will allow pharmacies to clearly identify and handle Medicaid managed care claims and enable pharmacies dispensing 340B drugs to distinguish these claims from the managed care commercial claims for covered drugs. In addition, commenters believe that the use of unique BIN/PCN/Group numbers will give pharmacies the capability to properly coordinate benefits in cases when beneficiaries have third party coverage.
Several commenters indicated that collaboration among CMS, HRSA and state Medicaid Agencies will be necessary to ensure that guidance for plans and 340B covered entities clearly address the many potential challenges of operationalizing the prohibition on duplicate discounts. They also recommended that CMS clarify that states may require managed care plans to report drug claims that are subject to 340B discounts, outside of the utilization reports submitted under paragraph (s)(2) of the proposed rule.
Several commenters expressed support for CMS' proposal requiring managed care plans to establish procedures to exclude 340B drugs from the drug utilization reports provided to the states. Commenters indicated that this clarification is important because of confusion among 340B stakeholders regarding how the 340B program operates in Medicaid managed care relative to Medicaid FFS. One commenter asked that CMS ensure that managed care plans not only take responsibility for identifying 340B drugs but also absorb the costs associated with that process. The commenter encouraged CMS to ensure that the methodologies managed care plans use are not overly administratively burdensome for providers (particularly when contracting with multiple plans) and that participation in, or the benefit of, the 340B program is not limited in the managed care environment. One commenter recommended that because of the complexity of 340B claims identification and payment—including a lack of using industry claim transactions to amend claims transactions—separate guidance be provided to help resolve the technically complex nature of 340B claim identification issues.
And finally, several commenters appreciated that CMS explicitly stated that 340B providers are not legally responsible for protecting manufacturers from having to pay both a 340B discount and a Medicaid rebate on a managed care claim. The commenters believed that this interpretation is consistent with the statute, and is logical from an operational standpoint. Commenters requested that CMS address it explicitly in the regulation.
When states contract with managed care plans, the contracts should include specific language addressing which tools managed care plans can use to exclude 340B purchased drugs from utilization, the responsibility the MCO has with resolving manufacturer disputes or rebate invoices derived from MCOs, state's ability to access data and records related to the MCO's exclusion of 340B purchased drugs from utilization reports, and any liability the MCO may face in cases of unresolved manufacturer disputes of rebate invoices derived from the MCO's utilization. For managed care plans, in accordance with section 1903(m)(2)(A)(xiii)(III) of the Act, MCOs should not report information about covered outpatient drugs to the states that are not subject to this rebate standard if such drugs are both subject to discounts under section 340B of the PHS Act and dispensed by MCOs in accordance with section 1927(j)(1) of the Act. We extend those reporting standards to PIHPs and PAHPs in this rule using our authority under section 1902(a)(4) of the Act. Managed care plans can use several methods to ensure they report consistent with section 1903(m)(2)(A)(xiii)(III) of the Act. For example, plans could include in their contracts with their pharmacy providers a reference to billing instructions or processes that must be followed when identifying a 340 patient and dispensing a 340B drug to a Medicaid patient. States may place certain requirements on plans to require that covered entities or contract pharmacies use specific identifiers on prescriptions so that a managed care plan recognizes that the claim should be billed as 340B. Managed care plans may issue billing instructions and can assign unique BIN/PCN/Group numbers for a particular Medicaid line of business and require pharmacies of managed care plan network providers to bill for the 340B drug to that specific BIN/PCN/Group. We believe that all parties (states, managed care plans, covered entities and pharmacies) should ensure that Medicaid rebates are not paid on 340B drugs and should work together to establish a standard process to identify 340B claims that is collectively effective.
Commenters also suggested which entities should be responsible for ensuring that duplicate discounts are not paid on 340B drugs. Several commenters indicated that each state, not the covered entity, should be legally responsible under federal law for protecting manufacturers from having to pay both a 340B discount and a Medicaid rebate on a managed care claim. Commenters further indicated that it is the responsibility of the state and the managed care plans to have
One commenter believed that the Affordable Care Act exempted 340B drugs provided to Medicaid managed care enrollees from the manufacturer Medicaid rebate requirement to avoid the possibility of duplicate discounts. Given that 340B managed care drugs are not subject to rebates, the provisions of the 340B statute imposing liability on covered entities for creation of duplicate discounts do not apply when the underlying drug is provided through managed care plans. Rather, it is the responsibility of the states and managed care plans to avoid duplicate discounts in the managed care environment. The commenter stated they support CMS' proposal to confirm that it is the managed care plan's responsibility to avoid duplicate discounts in managed care.
Finally, commenters requested that CMS and the states clearly identify what is considered the responsibility of the managed care plan and what is considered the responsibility of the state and believe it is important for CMS to understand that it is difficult, if not impossible, for managed care plans to identify such drugs unless the dispensing pharmacy itself identifies a drug as one for which it has obtained a 340B discount. Since all Medicaid managed care plans will be required to certify the completeness and accuracy of their reports, this will put these plans in the untenable position of having to certify to the accuracy of information which is not within the plan's knowledge.
We recognize that HRSA established a Medicaid Exclusion File to assist in identifying 340B covered entities to avoid duplicate discounts paid by manufacturers for FFS claims. As previously stated for MCO claims, states may place certain requirements on plans to require that covered entities use specific identifiers on prescriptions so a pharmacy knows that it is a 340B claim and subsequently uses predetermined transaction standards to bill for the 340B purchased drug claim. Managed care plans can assign unique BIN/PCN/Group numbers for a particular Medicaid line of business.
We continue to encourage covered entities, states, and Medicaid managed care plans develop strategies to ensure accurate identification of 340B claims.
In paragraph (s)(4), we proposed that MCOs, PIHPs, or PAHPs that provide coverage of covered outpatient drugs also operate a DUR program that is consistent with the standards in section 1927(g) of the Act; this standard means that the DUR program operated by the MCO, PIHP, or PAHP would be compliant with section 1927(g) of the Act if it were operated by the state in fulfilling its obligations under section 1927 of the Act. We clarified that this would not mean that the DUR program operated by the MCO, PIHP, or PAHP must be the same as that operated by the state, but that the MCO's, PIHP's, or PAHP's DUR program meets the requirements in section 1927(g) of the Act. This proposal was based on our authority under section 1902(a)(4) of the Act. We recognized that MCOs, PIHPs, and PAHPs that are contractually responsible for covered outpatient drugs generally conduct utilization review activities as these activities promote the delivery of quality care in a cost effective and programmatically responsible manner. We stated that because the MCO, PIHP, or PAHP is providing coverage for covered outpatient drugs as part of the state plan instead of the state providing that coverage through FFS, it was appropriate to extend the DUR responsibilities associated with such coverage to the MCO, PIHP, or PAHP. Section 1927(g)(1)(A) of the Act provides, in part, that states must provide a DUR program for covered outpatient drugs to assure that prescriptions: (1) Are appropriate; (2) are medically necessary; and (3) are not likely to result in adverse medical results. The provisions proposed in paragraph (s)(4) would be satisfied if the managed care plan's DUR program met those standards.
We received the following comments on proposed § 438.3(s)(4).
In paragraph (s)(5), we proposed that the MCO, PIHP, or PAHP would have to provide a detailed description of its DUR program activities to the state on an annual basis. The purpose of the report was to ensure that the parameters of section 1927(g) of the Act are being met by the MCO's, PIHP's, or PAHP's DUR program, as proposed under paragraph (s)(4).
We received the following comments on proposed § 438.3(s)(5).
Finally, in paragraph (s)(6), we proposed that the state stipulate that the MCO, PIHP, or PAHP conduct the prior authorization process for covered outpatient drugs in accordance with section 1927(d)(5) of the Act; we relied again on our authority under section 1902(a)(4) of the Act for this proposal. Since the MCO, PIHP, or PAHP is providing coverage for covered outpatient drugs as part of the state plan instead of the state providing that coverage through FFS, it is appropriate to extend the prior authorization standards associated with such coverage to the MCO, PIHP, or PAHP. Therefore, we proposed that the MCO, PIHP, or PAHP would provide a response to a request for prior authorization for a covered outpatient drug by telephone or other telecommunication device within 24 hours of the request and dispense a 72 hour supply of a covered outpatient drug in an emergency situation.
We received the following comments on proposed § 438.3(s)(6).
After consideration of the public comments, we will finalize § 438.3(s) as proposed except for the following modifications:
• Revision to the introduction language of section 438.3(s) to make a minor correction to address a grammatical issue; and
• In response to comments about states that may currently have processes in place to receive drug claims data directly from covered entities so that states can exclude the 340B utilization data from their state files before invoicing manufacturers for rebates, we have revised § 438.3(s)(3) to indicate that MCOs, PIHPs, or PAHPs must have procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports required under paragraph (s)(2) of this section when states do not require submission of Medicaid managed care drug claims data from covered entities directly.
In § 438.3(t), we proposed a new contract provision for MCO, PIHP, or PAHP contracts that cover Medicare-Medicaid dually eligible enrollees and delegate the state's responsibility for coordination of benefits to the managed care plan. Under our proposal, in states that use the automated crossover process for FFS claims, the contract would need to provide that the MCO, PIHP, or PAHP sign a Coordination of Benefits Agreement and participate in the automated crossover process administered by Medicare.
We received the following comments in response to our proposal to add § 438.3(t).
After consideration of the public comments, we are finalizing § 438.3(t) as proposed.
In the proposed rule, we discussed our longstanding policy that managed care plans generally have had flexibility under risk contracts to offer alternative services or services in alternative settings in lieu of covered services or settings if such alternative services or settings are medically appropriate, cost-effective, and are on an optional basis for both the managed care plan and the enrollee. We noted, however, that legal issues are presented if the services offered in lieu of state plan services are furnished in an Institution for Mental Disease (IMD) setting, given the fact that, under subparagraph (B) following section 1905(a)(29) of the Act, Medicaid beneficiaries between ages 21 and 64 are not eligible for medical assistance (and thus FFP) while they are patients in an IMD. Under this broad exclusion, no FFP is available for the cost of services provided either inside or outside the IMD while the individual is a patient in the facility.
Since the capitation payments are made to the MCO or PIHP for assuming the risk of covering Medicaid-covered services during the month for which the capitation payment is made, there would be no such risk assumed in the case of an enrollee who is a patient in an IMD for the entire month, as the enrollee could not, by definition, be entitled to any Medicaid covered benefits during that month. Thus, it would not be appropriate for an MCO or PIHP to receive FFP for a capitation payment for a month for which an enrollee is a patient in an IMD the entire month.
To ensure that the use of IMD settings in lieu of covered settings for this care is sufficiently limited so as to not contravene subparagraph (B) following section 1905(a)(29) of the Act, we
In the proposed rule (80 FR 31116), we discussed that managed care programs may achieve efficiency and savings compared to Medicaid FFS programs by managing care through numerous means, including networks of providers, care coordination and case management. We also acknowledged that inherent in transferring the risk for Medicaid coverage during a period means that capitation payments may be made for months during which no Medicaid services are used by a particular beneficiary who is enrolled with the managed care plan, even though the managed care plan is at risk for covering such costs if they are incurred. Thus, we believed it would be appropriate to permit states to make a monthly capitation payment that covers the risk of services that are eligible for FFP rendered during that month when the enrollee is not a patient in an IMD, even though the enrollee may also be a patient in an IMD during a portion of that same period. A corollary of our proposal was that capitation payments eligible for FFP may not be made if the specified conditions outlined in this section are not met and that, if a beneficiary were disenrolled for the month from the MCO or PIHP, a state would have to ensure that covered Medicaid services (that is, services under the Medicaid state plan that are medically necessary during any period when the beneficiary is not a patient of an IMD and that are incurred during the month when the beneficiary is not enrolled in the MCO or PIHP) are provided on a FFS basis or make other arrangements to assure compliance. In addition, a state could refrain from seeking FFP for payments made for services provided to beneficiaries who are patients in an IMD for a longer period during the month as the Medicaid exclusion does not apply where the state pays the full amount for services with state-only funds.
We proposed that services rendered to a patient in an IMD may be considered “in lieu of services” covered under the state plan. As noted in section I.B.2.e, “in lieu of services” are alternative services or services in a setting that are not covered under the state plan but are medically appropriate, cost effective substitutes for state plan services included within the contract (for example, a service provided in an ambulatory surgical center or sub-acute care facilities, rather than an inpatient hospital). However, an MCO, PIHP or PAHP may not require an enrollee to use an “in lieu of” arrangement as a substitute for a state plan covered service or setting, but may offer and cover such services or settings as a means of ensuring that appropriate care is provided in a cost efficient manner. Accordingly, the contract may not explicitly require the MCO or PIHP to use IMD facilities, and must make clear that the managed care plan may not make the enrollee receive services at an IMD facility versus the setting covered under state plan. However, the contract could include, in its list of available Medicaid-covered services to be provided under the contract, services such as inpatient psychiatric hospital services. The MCO or PIHP could then purchase these services from an IMD rather than an inpatient hospital if it so chooses to make the covered services available.
We proposed to limit payment of capitation rates for enrollees that are provided services while in an IMD (to stays of no more than 15 days per month and so long as the IMD is a certain type of facility) for two reasons. First, our proposal sought to address the specific concerns about ensuring access to and availability of inpatient psychiatric and SUD services that are covered by Medicaid; these concerns have focused on short-term stays. The expansion of the Medicaid program coupled with the overall increase in health care coverage in managed care plans in the Marketplace led us to expect greater demand on the limited inpatient resources available to provide mental health and SUD services. Specifically, we provided a number of statistics in the proposed rule, at 80 FR 31117, regarding the anticipated need for mental health and SUD services. We noted that states and other stakeholders have raised concerns that access to and availability of short-term inpatient psychiatric and SUD services have been compromised and that delays in the provision of care may occur. Managed care plans have an obligation to ensure access to and availability of services under Medicaid regulations for services not prohibited by statute and covered under the contract. To meet that obligation, managed care plans have used alternate settings, including short term crisis residential services, to provide appropriate medical services in lieu of Medicaid-covered settings.
The second reason we proposed to limit the payment of capitation rates for enrollees that are provided services while in an IMD is that we believe that subparagraph (B) following section 1905(a)(29) of the Act is applicable to the managed care context. Managed care plans should not be used to pay—under the Medicaid program—for services for which coverage and payment are prohibited by the Medicaid statute. If an enrollee were a patient in an IMD for an extended period of time, the likelihood that the enrollee would otherwise be incurring authorized Medicaid-covered expense or receiving Medicaid-covered services—and with it, the risk on the managed care plan of having to furnish covered services that is compensated by the capitation payment—would not exist during that extended period when the enrollee is a patient in the IMD. We noted that permitting capitation payments when an enrollee has a short-term stay in an IMD is a means of securing compliance with the statute by delineating parameters for these capitation payments, which we would otherwise exclude or prohibit to achieve compliance with the statutory IMD exclusion.
Therefore, we proposed that for a month in which an enrollee is an IMD patient, FFP in capitation payments will only be provided if the enrollee receives inpatient services in an IMD for a period of no more than 15 days. This 15-day parameter is supported by evidence of lengths of stay in an IMD based on data from the Medicaid Emergency Psychiatric Demonstration. This preliminary evidence suggests that the average length of stay is 8.2 days.
For purposes of rate setting, we explained the state and its actuary may use the utilization of services provided to an enrollee while they have a short term stay as a patient in an IMD to determine an estimate of the utilization of state plan services, that is, inpatient psychiatric services or SUD services, covered for the enrolled population in future rate setting periods. However, we provided that the costs associated with the services to patients in an IMD may not be used when pricing covered inpatient psychiatric services; rather, the IMD utilization must be priced consistent with the cost of the same services through providers included under the state plan. We noted that this guidance for accounting for service utilization to patients in an IMD differs from rate setting guidance issued in December 2009 for in lieu of services in the context of home and community based services,
We received the following comments on proposed § 438.3(u).
Other commenters highlighted that CMS has in the past permitted managed care plans to provide medically appropriate, cost‐effective substitutes in lieu of state plan services included under the managed care plan contract. Commenters stated that this in lieu of policy originates from section 1915(a) of the Act which specifies that a state shall not be deemed to be out of compliance solely by reason of the fact that the State has entered into a contract with an organization which has agreed to provide care and services in addition to those offered under the State plan to individuals eligible for medical assistance. Commenters also stated that CMS has ample statutory authority beyond section 1915 of the Act to both permit managed care plans to offer coverage for services in addition to what is covered in a state plan and to allow for payment by the managed care plan for services rendered in an IMD in lieu of state plan services. Several commenters were supportive of the discussion of the legal authority for Medicaid managed care plans to provide additional services not covered under the state plan (80 FR 31116–31117). In addition, a commenter explained that the inclusion of mental health coverage in the benchmark benefit standard under the Affordable Care Act and the parity requirements under EHB/MHPAEA also lend support to for this proposed provision.
To clarify, the state may pay for services provided to individuals eligible under the state plan that are enrolled in a managed care program who are patients in an IMD for a longer term than 15 days within the period covered by the capitation payment, either directly or through a separate arrangement
First, we will finalize the substance of proposed § 438.3(u), relating to capitation payments for enrollees with a short term stay in an IMD, at § 438.6(e) in this final rule. The proposed rule's designation of this section under § 438.3 “Standard Contract Provisions” could suggest that all states must provide access to psychiatric or SUD services through IMDs and that was not our intent. By moving this provision to § 438.6 “Special Contract Provisions Related to Payment”, it is clearer that it is at the state's option to authorize use by managed care plans of IMDs as an in lieu of setting and the requirements therein must be followed to make a capitation payment for such enrollees. We are finalizing this rule largely as proposed, with little substantive change. Provision of the capitation payment for enrollees who are short-term patients in an IMD under this rule must also comply with the requirements we are finalizing for managed care plan coverage of in lieu of services with one difference related to rate setting that is addressed below. We clarify here that the capitation payment that is made for enrollees that fall under this provision represents the full capitation for that enrollee's rate cell and in response to these comments have added regulation text addressing the in lieu of services policy generally in this final rule.
Second, we have modified § 438.3(e), which explains additional services (not covered under the state plan) that may be covered by an MCO, PIHP, or PAHP on a voluntary basis, to include a new paragraph (e)(2) that sets forth the criteria for a separate category of additional services or settings provided in lieu of state plan services as follows: the state determines that the alternative service or setting is a medically appropriate and cost effective substitute for the covered service or setting under the state plan; the enrollee is not be required by the MCO, PIHP, or PAHP to use the alternative service or setting; the approved in lieu of services are identified in the MCO, PIHP, or PAHP contract, and will be provided at the option of the MCO, PIHP, or PAHP; and the utilization and cost of in lieu of services would be taken into account in developing the component of the capitation rates that represents the covered state plan services. We also note that the regulatory standard for rate setting is different when using an IMD as an in lieu of setting and that distinction is provided in revised § 438.6(e).
As provided in response to commenters that were concerned that the IMD provision would counter efforts for community integration, we highlight that the in lieu of service or setting must be medically appropriate. While we agree that most beneficiaries would be well served in the community, others may need more intensive services such as acute inpatient psychiatric care offered by general hospitals and inpatient psychiatric hospitals. As part of the continuum of care for behavioral health conditions, some short-term psychiatric services delivered in inpatient settings, including those delivered in facilities that meet the definition of an IMD, may be medically necessary depending on the needs of the individual. These requirements for in lieu of services at § 438.3(e)(2) must be satisfied in addition to the specific standards contained in the IMD provision at § 438.6(e). Specifically, the IMD must be a facility that is a hospital providing psychiatric or substance use disorder inpatient care or a sub-acute facility providing psychiatric or SUD crisis residential services and the stay in the IMD is for no more than 15 days during the period covered by the monthly capitation payment. Further, the enrollee cannot be required to use the alternate setting or service; the enrollee must be allowed to opt for provision (and coverage) of the service and setting authorized in the state plan. Authorizing “in lieu of” services and settings under this final rule is not intended to limit enrollee choices or to require enrollees to receive inappropriate services. We emphasize that this is a basic element for in lieu of service to meet the provisions of this rule.
Third, in § 438.6(e), we add a cross-reference to the provisions of § 438.3(e)(2) to ensure compliance with the in lieu of services requirements, and add with additional regulation text to supersede the rate development component in § 438.3(e)(2)(iv). Specifically, we finalize regulation text for how to reflect services rendered in an IMD covered under this rule in the capitation rates in the manner we proposed (80 FR 31118); the state may use the utilization of services provided to an enrollee in an IMD but must price utilization at the cost of the same services through providers included under the state plan.
We consider facilities treating substance use disorder (including addiction) to be within the definition of an “institution for mental disease,” provided the other relevant criteria are met as set forth in the applicable law and guidance (for example, subsection C of Section 4390 of the State Medicaid Manual, a body of sub-regulatory guidance designed to provide states with policies, procedures and instructions for administering their Medicaid programs). The additional criteria, which are not intended to be exhaustive, include whether the facility is licensed as a psychiatric facility; the facility is accredited as a psychiatric facility; the facility is under the jurisdiction of the state's mental health authority; the facility specializes in providing psychiatric/psychological care and treatment; and the current need for institutionalization for more than 50 percent of all the patients in the facility results from mental diseases. To the extent that the substance use disorder treatment services delivered are covered by the Medicaid program, the services are considered medical treatment of a mental disease. Facilities with more than 16 beds primarily engaged in providing this type of treatment would most likely meet the definition of an IMD. CMS is available to provide additional clarification on these points. We also note here that Medicaid-covered services provided in facilities meeting qualifications of the inpatient psychiatric benefit for individuals under the age of 21 are eligible for reimbursement under section 1905(a)(16) of the Act. These services are an exception to the IMD exclusion, regardless of the bed size of the facility.
We also note that the IMD exclusion is not a non-quantitative treatment limit. Treatment and the provision of covered services maybe furnished in a different setting consistent with applicable parity standards. Further, the IMD exclusion is not a mandatory standard for provider admission to participate in a network. In addition, the 15-day length of stay standard in this rule is not a quantitative treatment limitation on treatment. It is a rule related to the payment of FFP for capitation rates to MCOs and PIHPs using substitute service settings; medically necessary treatment of enrollees in a non-IMD setting (for example, in a psychiatric ward of a general hospital) may continue for greater than 15 days and be eligible for FFP.
After consideration of public comments, we are finalizing the regulation text for this provision at § 438.6(e) substantially as proposed, with the following modifications:
• Clarified that § 438.6(e) applies to both psychiatric and substance use disorder services;
• Specified that the provision was limited to enrollees aged 21–64;
• Incorporated requirements for in lieu of services in § 438.3(e)(2)(i) through (iii);
• Described the rate setting requirements for in lieu of services in an IMD consistent with our proposal (80 FR 31118).
In paragraph (v), we proposed minimum recordkeeping requirements for MCOs, PIHPs, PAHPs, and
We received the following comments in response to proposed § 438.3(v).
After consideration of the public comments, we are modifying the regulatory text to revise the 6 year recordkeeping requirement to 10 years and redesignating this paragraph at (u) to account for the move of proposed § 438.3(u) relating to capitation payments for enrollees with a short term stay in an IMD to § 438.6(e).
Building on a decade of experience with states, we proposed to improve the effectiveness of the regulatory structure to better assure the fiscal integrity, transparency and beneficiary access to care under the Medicaid program and to promote innovation and improvement in the delivery of services through a comprehensive review of Medicaid managed care capitation rates. The overarching goal behind our proposed revisions to the rate setting framework (proposed in §§ 438.4 through 438.7) was to reach the appropriate balance of regulation and transparency that accommodates the federal interests as payer and regulator, the state interests as payer and contracting entity, the actuary's interest in preserving professional judgment and autonomy, and the overarching programmatic goals—shared by states and the federal government—of promoting beneficiary access to quality care, efficient expenditure of funds and innovation in the delivery of care. We also noted that requiring more consistent and transparent documentation of the rate setting process would allow us to conduct more efficient reviews of the rate certification submissions.
Section 1903(m)(2)(A)(iii) of the Act permits federal matching dollars for state expenditures to a risk bearing entity for Medicaid services when such services are provided for the benefit of individuals eligible for benefits under this title in accordance with a contract between the state and the entity under which the prepaid payments to the entity are made on an actuarially sound basis and under which the Secretary must provide prior approval for contracts [meeting certain value thresholds].
We relied on the following principles of actuarial soundness to inform the modernized rate setting framework in this final rule. First, capitation rates should be sufficient and appropriate for the anticipated service utilization of the populations and services covered under the contract and provide appropriate compensation to the managed care plans for reasonable non-benefit costs. Built into that principle is the concept that an actuarially sound rate should result in appropriate payments for both payers (the state and the federal government) and that the rate should promote program goals such as quality of care, improved health, community integration of enrollees and cost containment, where feasible. Second, an actuarial rate certification underlying the capitation rates should provide sufficient detail, documentation, and transparency of the rate setting components set forth in this regulation to enable another actuary to assess the reasonableness of the methodology and the assumptions supporting the development of the final capitation rate. Third, a transparent and uniformly applied rate review and approval process based on actuarial practices should ensure that both the state and the federal government act effectively as fiscal stewards and in the interests of beneficiary access to care.
We proposed to define “actuary” to incorporate standards for an actuary who is able to provide the certification under current law at § 438.6(c); that is, that the individual meets the qualification standards set by the American Academy of Actuaries as an actuary and follows the practice standards established by the Actuarial Standards Board. We also proposed that where the regulation text refers to the development and certification of the capitation rates, and not the review or approval of those rates by CMS, the term actuary refers to the qualified individual acting on behalf of the state. We explained that an actuary who is either a member of the state's staff or a contractor of the state could fulfill this role so long as the qualification and practice standards are also met. We did not receive comments on the proposed definition for “actuary” and will finalize the definition as proposed without modification.
We proposed to modify the existing definition of “capitation payment” by removing references to “medical” services in recognition of the fact that states are contracting with MCOs, PIHPs, and PAHPs for LTSS, which are not adequately captured in the existing definition of capitation payments that refers only to medical services.
We received the following comments in response to the proposed modification to the definition of “capitation payment.”
The proposed rule made a minor modification to the definition of a capitation payment and the definition is consistent with sections 2.3 and 3.2.2 of ASOP 49. We note that section 3.2.2 of the ASOP No. 49 refers primarily to the development of rate cells and explains that capitation payments are made according to rate cell. In addition, to the extent any inconsistencies Section AA.4 of the CMS Ratesetting Checklist also addresses rate cells, we refer commenter to our response to comments on the definition of a “rate cell.” Ultimately, the definitions are consistent. As stated in other forums, the CMS Ratesetting Checklist is an internal tool for CMS' use when reviewing rate certifications. The applicability or need to update that tool based on changes in these regulations is outside the scope of this rule. States, their actuaries, and managed care plans should rely on the regulatory requirements related to rate setting in §§ 438.4–438.7 when developing capitation rates and sub-regulatory rate development guidance published by CMS (for example, 2016 Medicaid Managed Care Rate Development Guide).
After consideration of the public comments, we are finalizing the definition of “capitation payment” as proposed without modification.
We proposed to define a “material adjustment” as one that, in the objective exercise of an actuary's judgment, has a significant impact on the development of the capitation rate. We noted that material adjustments may be large in magnitude, or be developed or applied in a complex manner. The actuary developing the rates should use reasonable actuarial judgment based on generally accepted actuarial principles when assessing the materiality of an adjustment. We did not receive comments on the definition for “material adjustment” and will finalize as proposed without modification.
We also proposed to add a definition for “rate cells.” The use of rate cells is intended to group people with more similar characteristics and expected health care costs together to set capitation rates more accurately. The rate cells should be developed in a manner to ensure that an enrollee is assigned to one and only one rate cell. That is, each enrollee should be categorized in one of the rate cells and no enrollee should be categorized in more than one rate cell.
We received the following comments in response to our proposal to define “rate cells.”
After consideration of the public comments, we are finalizing the definition of “rate cell” to recognize that enrollees may be in different rate cells for each set of mutually exclusive benefits under the contract and to include eligibility category to the criteria for creating rate cells.
Consistent with the principles of actuarial soundness described herein, we proposed to add a new § 438.4 that built upon the definition of actuarially sound capitation rates currently at § 438.6(c)(i) and established standards for states and their actuaries. In § 438.4(a), we proposed to define actuarially sound capitation rates as rates that are projected to provide for all reasonable, appropriate, and attainable
We received the following comments on proposed § 438.4(a).
After consideration of the public comments, we are finalizing § 438.4(a) as proposed.
In § 438.4(b), we proposed to set forth the standards that capitation rates must meet and that we would apply in the review and approval of actuarially sound capitation rates. In § 438.4(b)(1), we proposed to redesignate the standard currently in § 438.6(c)(1)(i)(A) that capitation rates have been developed in accordance with generally accepted actuarial principles and practices. We also proposed in § 438.4(b)(1) that capitation rates must meet the standards described in proposed § 438.5 dedicated to rate development standards. We acknowledged that states may desire to establish minimum provider payment rates in the contract with the managed care plan. Because actuarially sound capitation rates must be based on the reasonable, appropriate, and attainable costs under the contract, minimum provider payment expectations included in the contract would necessarily be built into the relevant service components of the rate. However, we proposed in paragraph (b)(1) to prohibit different capitation rates based on the FFP associated with a particular population. We explained at 80 FR 31120 that different capitation rates based on the FFP associated with a particular population represented cost-shifting from the state to the federal government and were not based on generally accepted actuarial principles and practices.
We received the following comments on the introductory language in § 438.4(b) and paragraph (b)(1).
After consideration of the public comments, we are finalizing the introductory text of § 438.4(b) without the phrase “do all the following” and are finalizing § 438.4(b)(1) with additional text to provide that any proposed differences among capitation rates must be based on valid rating factors and not on network provider reimbursement requirements that apply only to covered populations eligible for higher percentages of FFP.
In § 438.4(b)(2), we proposed to redesignate the provision currently at § 438.6(c)(1)(i)(B). We restated the standard, but the substance is the same: the capitation rates must be appropriate for the population(s) to be covered and the services provided under the managed care contract.
We received the following comments on § 438.4(b)(2).
After consideration of the public comments, we are finalizing § 438.4(b)(2) as proposed.
In § 438.4(b)(3), we proposed that capitation rates be adequate to meet the requirements on MCOs, PIHPs, and PAHPs in §§ 438.206, 438.207, and 438.208, which contain the requirements for MCOs, PIHPs, and PAHPs to ensure availability and timely access to services, adequate networks, and coordination and continuity of care, respectively. We noted that the definition of actuarially sound capitation rates in proposed § 438.4(a) provides that the rates must provide for all reasonable, appropriate, and attainable costs that are required under the contract. The maintenance of an adequate network that provides timely access to services and ensures coordination and continuity of care is an obligation on the managed care plans for ensuring access to services under the contract. In the event concerns in these areas arise, the review of the rate certification would explore whether the capitation payments, and the provider rates on which the capitation payments are based, are sufficient to support the MCO's, PIHP's, or PAHP's obligations.
We received the following comments on § 438.4(b)(3).
Other commenters were opposed to proposed § 438.4(b)(3) and stated that the actuary should not be responsible for evaluating network adequacy. Commenters provided that it is the state's responsibility to assess and ensure managed care plan compliance with §§ 438.206, 438.207, and 438.208 and that the actuary should be able to rely on the state's assessment. Several commenters requested additional guidance as to how this assessment would be conducted.
In response to commenters that requested an additional evaluation of network adequacy or that suggested that review of capitation rates alone was not a sufficient evaluation of network adequacy, there are several other requirements regarding network adequacy that are in this part of note. Specifically, § 438.207(d) requires the state to provide documentation to CMS, at specified times, that managed care plans meet the requirements in that section and § 438.206, which incorporates compliance with the network adequacy standards established by the state under § 438.68. In addition, the annual program report in § 438.66 that is publicly available requires the state to report on the availability and accessibility of services in managed care plan networks. Finally, the mandatory EQR-related activity in § 438.358(b)(1)(iv) requires validation of MCO, PIHP, and PAHP network adequacy during the preceding 12 months for compliance with § 438.68.
After consideration of the public comments, we are finalizing § 438.4(b)(3) as proposed.
In § 438.4(b)(4), we proposed that capitation rates be specific to the payment attributable to each rate cell under the contract. We explained that the rates must appropriately account for the expected benefit costs for enrollees in each rate cell, and for a reasonable amount of the non-benefit costs of the plan. We further explained that payments from any rate cell must not be expected to cross-subsidize or be cross-subsidized by payments for any other rate cell. In accordance with the existing rule in § 438.6(c)(2)(i), we proposed that all payments under risk contracts be actuarially sound and that the rate for each rate cell be developed and assessed according to generally accepted actuarial principles and practices.
• Each individual rate paid to each MCO, PIHP, or PAHP be certified as actuarially sound with enough detail to understand the specific data, assumptions, and methodologies behind that rate.
• States may still use rate ranges to gauge an appropriate range of payments on which to base negotiations, but states would have to ultimately provide certification to CMS of a specific rate for each rate cell, rather than a rate range.
We received the following comments in response to proposed § 438.4(b)(4).
We believe that once a managed care plan has entered into a contract with the state, any increase in funding for the contract should correspond with something of value in exchange for the increased capitation payments. Our proposal also was based on the concern that some states have used rate ranges to increase capitation rates paid to managed care plans without changing any obligations within the contract or certifying that the increase was based on managed care plans' actual expenses during the contract period in a way that differed materially from the actuarial assumptions and methodologies initially used to develop the capitation rates. While we appreciate states' need for flexibility, we think there is an important balance to strike between administrative burden related to submitting revised rate certifications for small programmatic changes and upholding the principle that in the contracting process, managed care plans are agreeing to meet obligations under the contract for a fixed amount. Therefore, in this final rule, we will not permit states to certify to a rate range in the rate certification required in § 438.7(a). We do, however, provide some administrative relief as described below with respect to small changes in the capitation rates.
We recognize that the use of rate ranges can provide states greater flexibility to effectuate programmatic changes and adjust capitation rates accordingly without the administrative burden associated with a submission of a revised rate certification for our review and approval. In response to comments about the administrative burden associated with small programmatic changes, we will permit states flexibilities moving forward. First, states may increase or decrease the capitation rate certified per rate cell as required under § 438.4(b)(4) by 1.5 percent, which results in a 3 percent range, without submitting a revised rate certification for CMS review and approval based on our general determination that fluctuation of plus or minus 1.5 percent does not change the actuarial soundness of a capitation rate. We have selected 1.5 percent as the permissible modification because that percentage is generally not more than the risk margin incorporated into most states' rate development process. Some commenters suggested that there should be the flexibility to raise or lower capitation rates 3 to 5 percent without a rate certification. We do not believe that 3 to 5 percent (resulting in a 6 to 10 percent rate range) is a reasonable amount. At 5 percent, the top of the range is almost 11 percent more than the bottom of the range. It is difficult to imagine that both of these capitation rates are actuarially sound, especially when the risk margin is almost always less than 3 percent. Therefore, we are providing the flexibility to raise or lower the certified capitation rate without a revised rate certification, but at the smaller amount of one percent. If the state needs to make an adjustment to the capitation rate per rate cell that exceeds the 1.5 percent rate range, the state will need to submit a new rate certification supporting that change to CMS for review and approval. We believe that it is reasonable for the capitation rate to be modified a
The ability for the state to adjust the actuarially sound capitation rate during the rating period within a 1.5 percent range will be finalized at a new paragraph (c)(3) in § 438.7, which governs the requirements for the rate certification. Because the initial rate certification, and any subsequent rate certification, must certify to a capitation rate per rate cell, the proposed regulatory text at § 438.4(b)(4) will be finalized without modification. If a state modifies the capitation rate paid under the contract within that 1.5 percent range from the capitation rate certified in the rate certification, the state will need to ensure that the payment rate in the contract is updated with CMS, as required in § 438.3(c), to reflect the appropriate capitation rate for purposes of claiming FFP. We believe that it is reasonable for the capitation rate to be modified a
We believe that this approach, which requires states to certify a specific rate but allows states to increase or decrease the capitation rate certified per rate cell by 1.5 percent, provides the most clarity on the particular assumptions, data, and methodologies used to set capitation rates, and facilitates CMS' review process of rate certifications in accordance with the requirements for actuarial sound capitation rates. The approach also provides states flexibility to make small changes while easing the administrative burden of rate review for both states and CMS. There are other mechanisms in the regulation for states to modify capitation rates when there is a more significant contract change or other valid rationale for an adjustment to the assumptions, data, or methodologies used to develop the capitation rates as specified in §§ 438.5(f) and 438.7(b)(4). In addition, states have other options—such as setting minimum provider payment requirements for a class of providers at § 438.6(c)(1)(iii)—to ensure access to
After consideration of public comments, we are finalizing § 438.4(b)(4) as proposed but will finalize § 438.7(c) with an additional paragraph (3) to indicate that states may adjust the capitation rate within a 1.5 percent range without submitting a revised rate certification for CMS' review and approval. This provision also indicates that the payment term of the contract must be updated to reflect such adjustment of the capitation rate to be compliant with § 438.3(c). The requirement that payments from any rate cell must not cross-subsidize or by cross-subsidized by payments for any other rate cell will be finalized as § 438.4(b)(5).
In proposed § 438.4(b)(5), we proposed to redesignate the standard in current § 438.6(c)(1)(i)(C) that an actuary certify that the rate methodology and the final capitation rates are consistent with the standards of this part and generally applicable standards of actuarial practice. We provided that this would require that all components and adjustments of the rate be certified by the actuary. We also restated that for this standard to be met, the individual providing the certification must be within our proposed definition of “actuary” in § 438.2. Proposed § 438.4(b)(5) also incorporated the requirements at § 438.3(c) and (e) to reiterate that the development of actuarially sound capitation rates is based on services covered under the state plan and additional services for compliance with parity standards (§ 438.3(c)) and is not based on additional services that the managed care plan voluntarily provides (§ 438.3(e)(1)).
We received the following comments in response to proposed § 438.4(b)(5).
After consideration of the public comments, we are finalizing § 438.4(b)(5) as proposed with the following technical modifications: (1) to redesignate this provision as § 438.4(b)(6); and (2) to refine the reference to § 438.3(c) to § 438.3(c)(1)(ii) (pertaining to the types of services that the final capitation rates must be based upon) as the other requirements in § 438.3(c) are not subject to the actuary's certification.
As proposed, § 438.4(b)(6) incorporated the special contract provisions related to payment proposed in § 438.6 if such provisions were applied under the contract. In § 438.6, we proposed to address requirements
We received no comments on § 438.4(b)(6) itself (that is, separate from comments about § 438.6) and we will finalize § 438.4(b)(6) as proposed but will redesignate the provision as § 438.4(b)(7). We discuss § 438.6 in section I.B.3.d.
Section 438.4(b)(7) incorporated the documentation standards for the rate certification proposed in § 438.7. We explained that for us to assess the actuarial soundness of capitation rates, the data, methodologies, and assumptions applied by the actuary must be sufficiently and transparently documented. We also explained that clear documentation would support the goal of instituting a meaningful and uniformly applied rate review and approval process and would streamline the process for both states and CMS.
We received no comments on § 438.4(b)(7) itself (that is, separate from comments about § 438.7) and we will finalize § 438.4(b)(7) as proposed but will redesignate the provision as paragraph § 438.4(b)(8). We discuss § 438.7 in section I.B.3.e.
In § 438.4(b)(8), we proposed to include a new standard that actuarially sound capitation rates for MCOs, PIHPs, and PAHPs must be developed so that MCOs, PIHPs, and PAHPs can reasonably achieve a minimum MLR of at least 85 percent, and if higher, a MLR that provides for reasonable administrative costs when using the calculation defined in proposed § 438.8. We explained that states could establish standards that use or require a higher MLR target—for rate development purposes, as a minimum MLR requirement for managed care plans to meet, or both—but that the MLR must be calculated in accordance with § 438.8. We noted that this minimum 85 percent standard, which is consistent with MLR standards for both private large group plans and MA organizations, balances the goal of ensuring enrollees are provided appropriate services while also ensuring a cost effective delivery system. As a result of this standard, the MLR reports from MCOs, PIHPs, and PAHPs would be integral sources of data for rate setting. For instance, states that discover, through the MLR reporting under proposed § 438.8(k), that an MCO, PIHP, or PAHP has not met an MLR standard of at least 85 percent would need to take this into account and include adjustments in future year rate development. All such adjustments would need to comply with all standards for adjustments in § 438.5(f) and § 438.7(b)(4).
We received the following comments in response to our proposal at § 438.4(b)(8).
After consideration of the public comments, we are finalizing § 438.4(b)(8) with a modification to use the standard “appropriate and reasonable” to modify “non-benefit costs”, which was inserted in place of “administrative costs”, for consistency with § 438.5(e). We will also redesignate this provision as paragraph § 438.4(b)(9).
We proposed § 438.5 as a list of required steps and standards for the development of actuarially sound capitation rates. We discuss each paragraph of § 438.5 below in more detail; we received the following comments on proposed § 438.5 generally.
In § 438.5(a), we proposed to establish definitions for certain terms used in the standards for rate development and documentation in the rate certification in § 438.7(b). We proposed to add definitions for “budget neutral,” “prospective risk adjustment,” “retroactive risk adjustment,” and “risk adjustment.”
We proposed to define “budget neutral” in accordance with the generally accepted usage of the term as applied to risk sharing mechanisms, as meaning no aggregate gain or loss across the total payments made to all managed care plans under contract with the state.
We received the following comments on the proposed definition for “budget neutral.”
However, we do believe that additional clarification to the definition for “budget neutral” is warranted in respect to the payments for which there can be no net aggregate gain or loss. The payments are the capitation payments subject to risk adjustment made to all managed care plans under contract for the particular managed care program. This clarification to reference “managed care program” in the regulatory text is to recognize that states may have more than one Medicaid managed care program—for example physical health and behavior health—and a risk adjustment applied to behavioral health contracts would not impact the physical health program.
After consideration of public comments, we are finalizing the definition of “budget neutral” with modifications to clarify the payments considered when determining that no net gain or loss results from the application of the risk adjustment methodology.
We proposed to define “risk adjustment” as a methodology to account for health status of enrollees covered under the managed care contract. We proposed that the definitions for “prospective risk adjustment” and “retrospective risk adjustment” clarify when the risk adjustment methodology is applied to the capitation rates under the contract.
We received the following comment on the proposed definition for “risk adjustment.”
After consideration of public comments, we are finalizing the definition of “risk adjustment” with additional text that specifies that risk adjustment determines the health status of enrollees via relative risk factors. In addition, we will finalize § 438.5(a) with a technical edit to the introductory text at § 438.5(a) to specify that the defined terms apply to § 438.5 and § 438.7(b).
We did not receive comments on proposed definitions for “prospective risk adjustment” or “retrospective risk adjustment” and will finalize those definitions without modification.
In § 438.5(b), we set forth the steps a state, acting through its actuary, would have to follow when establishing Medicaid managed care capitation rates. The proposed standards were based on furthering the goals of transparency, fiscal stewardship, and beneficiary access to care. We explained that setting clear standards and expectations for rate development would support managed care systems that can operate efficiently, effectively, and with a high degree of fiscal integrity.
We based these steps on our understanding of how actuaries approach rate setting with modifications to accommodate what actuarial soundness should include in the context of Medicaid managed care. We solicited comment on whether additional or alternative steps were more appropriate to meet the stated goals for establishing standards for rate setting. While we do not require for these steps to be followed in the order listed in this final rule, we proposed that the rate setting process include each step and follow the standards for each step. States would have to explain why any one of the steps was not followed or was not applicable. The six steps included:
• Collect or develop appropriate base data from historical experience;
• Develop and apply appropriate and reasonable trends to project benefit costs in the rating period, including trends in utilization and prices of benefits;
• Develop appropriate and reasonable projected costs for non-benefit costs in the rating period as part of the capitation rate;
• Make appropriate and reasonable adjustments to the historical data, projected trends, or other rate components as necessary to establish actuarially sound rates;
• Consider historical and projected MLR of the MCO, PIHP, or PAHP; and
• For programs that use a risk adjustment process, select an appropriate risk adjustment methodology, apply it in a budget neutral manner, and calculate adjustments to plan payments as necessary.
We discuss each step within § 438.5(b) below and received the following comments on proposed § 438.5(b) generally.
After consideration of public comments, we are finalizing the introductory text in § 438.5(b) with changes to clarify that the steps in paragraph (b) have to be performed in an appropriate order.
We did not receive comments on proposed § 438.5(b)(1), pertaining to the identification and development of the base utilization and price data as specified in paragraph (c) of this section, and will finalize without modification.
We received the following comment on proposed § 438.5(b)(2) that cross-referenced the requirements for trend in paragraph (d) of this section.
After consideration of public comments, we are finalizing § 438.5(b)(2) as proposed without modification.
We received the following comments on proposed § 438.5(b)(3) that cross-referenced the requirements for the non-benefit component of the capitation rate in paragraph (e) of this section.
After consideration of public comments, we are finalizing
We received the following comment on proposed § 438.5(b)(4) that cross-referenced the requirements for adjustments in paragraph (f) of this section.
After consideration of public comments, we are finalizing § 438.5(b)(4) as proposed.
We received the following comments on proposed § 438.5(b)(5) that incorporated the requirement to take a managed care plan's past MLR into account.
After consideration of public comments, we are finalizing § 438.5(b)(5) with a modification to correct the cross-reference to § 438.4(b)(9) for consistency with redesignation of paragraphs in § 438.4(b) discussed above.
We received the following comments on proposed § 438.5(b)(6) that cross-referenced the requirements for risk adjustment in paragraph (g) of this section.
After consideration of public comments, we are finalizing § 438.5(b)(6) to limit application of the budget neutral requirement for risk adjustment to the managed care programs within a state to which risk adjustment is applied.
In § 438.5(c), we proposed standards for selection of appropriate base data. In paragraph (c)(1), we proposed that, for purposes of rate setting, states provide to the actuary Medicaid-specific data such as validated encounter data, FFS data (if applicable), and audited financial reports for the 3 most recent years completed prior to the rating period under development. In § 438.5(c)(2), we proposed that the actuary exercise professional judgment to determine which data is appropriate after examination of all data sources provided by the state, setting a minimum parameter that such data be derived from the Medicaid population or derived from a similar population and adjusted as necessary to make the utilization and cost data comparable to the Medicaid population for which the rates are being developed. We proposed that the data that the actuary uses must be from the 3 most recent years that have been completed prior to the rating period for which rates are being developed. For example, for rate setting activities in 2016 for CY 2017, the data used must at least include data from calendar year 2013 and later. We noted that while claims may not be finalized for 2015, we would expect the actuary to make appropriate and reasonable judgments as to whether 2013 or 2014 data, which would be complete, must account for a greater percentage of the base data set. We used a calendar year for ease of reference in the example, but a calendar year is interchangeable with the state's contracting cycle period (for example, state fiscal year). We also noted that there may be reasons why older data would be necessary to inform certain trends or historical experience containing data anomalies, but the primary source of utilization and price data should be no older than the most recently completed 3 years. Noting that states may not be able to meet the standard in proposed paragraph (c)(2) for reasons such as a need to transition into these new standards or for an unforeseen circumstance where data meeting the proposed standard is not available, we proposed an exception in the regulation to accommodate such circumstances. We proposed, in § 438.5(c)(3)(i) and (ii), that the state may request an exception to the
We received the following comments in response to proposed § 438.5(c).
Other commenters requested that CMS require states to consider market rates in MA, CHIP, and the private market when developing the capitation rates.
Regarding the commenters that requested that CMS require states to consider market rates in other coverage options when developing capitation rates, it would not be appropriate for us to do so. The relevant base data must be based on the Medicaid population, or if such data is not available, the base data must be derived from a similar population and adjusted to make the utilization and price data comparable to data from the Medicaid population.
After consideration of public comments, we are finalizing § 438.5(c) as proposed.
Section 438.5(d) addressed standards for trend factors in setting rates. Specifically, we proposed that trend factors be reasonable and developed in accordance with generally accepted actuarial principles and practices. We also stipulated that trend factors be developed based on actual experience from the same or similar populations. We proposed specific standards for the documentation of trend factors in proposed § 438.7(b)(2). We requested comment on whether we should establish additional parameters and standards in this area.
However, general trends unassociated with the Medicaid population or similar populations cannot be the sole or primary source of information to develop the trends. To clarify this distinction, address the comment, and to better reflect our intent that other sources of data may be used to set trend, we will finalize § 438.5(d) with additional text. Trend must be developed primarily from actual experience of the Medicaid population or from a similar population. The trend should be a projection of future costs for the covered population and services. It should be based on what the actuary expects for that population, and historical experience is an important consideration. Actual experience must be one consideration for developing trend and the actuary must compare the experience to projected trends.
After consideration of public comments, we are finalizing § 438.5(d) with modification to provide that trend must be developed primarily from actual experience of the Medicaid population or from a similar population.
Paragraph (e) established standards for developing the non-benefit component of the capitation rate, which included expenses related to administration, taxes, licensing and regulatory fees, reserve contributions, profit margin, cost of capital, and other operational costs. We explained in preamble that the only non-benefit costs that may be recognized and used for this purpose are those associated with the MCO's, PIHP's, or PAHP's provision of state plan services to Medicaid enrollees; the proposed regulation text provided for the development of non-benefit costs “consistent with § 438.3(c),” thus incorporating the authority to include costs related to administration of additional benefits necessary for compliance with mental health parity standards reflected in subpart K of part 438.
We received the following comments on the non-benefit component rate standard proposed § 438.5(e).
After consideration of public comments, we are finalizing § 438.5(e) with a revision to require that non-benefit costs must be reasonable, appropriate, and attainable for consistency with the definition of actuarially sound capitation rates § 438.4(a). As noted above, we are also finalizing § 438.5(e) with three changes: (1) Using “and other operational costs” to clarify that all listed categories of non-benefit costs must be included in the development of actuarially sound capitation rates; (2) using “risk margin” instead of “profit margin”; and (3) specifying that the non-benefit expenses must be associated with the provision of services identified in § 438.3(c)(1)(ii) to the populations covered under the contract in place of the cross-reference to § 438.3(c) for increased clarity in the regulatory text.
In paragraph (f), we proposed to address adjustments and explained that adjustments are important for rate development and may be applied at almost any point in the rate development process. We noted that most adjustments applied to Medicaid capitation rate development would reasonably support the development of accurate data sets for purposes of rate setting, address appropriate programmatic changes, the health status of the enrolled population, or reflect non-benefit costs. For additional discussion on acuity adjustments to account for the health status of the enrolled population, refer to the content on risk adjustment in section I.B.3.e of the proposed rule (80 FR 31126). We considered identifying specific adjustments we find permissible in the regulations instead of requiring additional justification, but we noted that such an approach might foreclose the use of reasonable adjustments.
We received the following comment on proposed § 438.5(f) relating to adjustments.
After consideration of public comments, we are finalizing § 438.5(f) with a modification to insert the word “reflect” before “the health status of the enrolled population” to improve clarity of the regulatory text.
In paragraph (g), we proposed to set forth standards for risk adjustment. In general, risk adjustment is a methodology to account for the health status of enrollees when predicting or explaining costs of services covered under the contract for defined populations or for evaluating retrospectively the experience of MCOs, PIHPs, or PAHPs contracted with the state.
We noted that states currently apply the concept of “risk adjustment” in multiple ways and for multiple purposes. In some cases, states may use risk adjustment as the process of
We received the following comments in response to proposed § 438.5(g).
After consideration of the public comments, we are finalizing § 438.5(g) as proposed.
We proposed, at § 438.6, contract standards related to payments to MCOs, PIHPs, and PAHPs, specifically, risk-sharing mechanisms, incentive arrangements, and withhold arrangements. This section built upon and proposed minor modifications to the special contract provisions that are currently codified at § 438.6(c)(5). We proposed, at paragraph (a), three definitions applicable to this section. The definition for an “incentive arrangement” was unchanged from the definition that is currently at § 438.6(c)(1)(iv).
We proposed a definition for “risk corridor” with a slight modification from the existing definition at § 438.6(c)(1)(v). The current definition specifies that the state and the contractor share in both profits and losses outside a predetermined threshold amount. Experience has shown that states employ risk corridors that may apply to only profits or losses. We therefore proposed to revise the definition to provide flexibility that reflects that practice.
We also proposed to add a definition for “withhold arrangements,” which would be defined as a payment mechanism under which a portion of the capitation rate is paid after the MCO, PIHP, or PAHP meets targets specified in the contract.
We received the following comments on proposals in § 438.6(a).
After consideration of public comments, we are finalizing paragraph (a) and its definitions with modifications. The definition of a risk corridor in § 438.6(a) as a risk sharing mechanism that accounts for both profits and losses between the state and the MCO, PIHP, or PAHP. Section 438.6(a) also maintained the existing definition for incentive arrangements and proposed a definition for withhold arrangements. While we did not receive comments on those proposed definitions, we believe clarification is necessary as to the scope of these contractual arrangements. These arrangements are the methods by which the state may institute financial rewards on the MCO, PIHP, or PAHP for meeting performance targets specified in the contract. These arrangements, and the
In addition, we believe it is important to distinguish in the final rule between a withhold arrangement, subject to the requirements at § 438.6(b)(3), and a penalty that a state would impose on a managed care plan through the contract. A withhold arrangement is tied to meeting performance targets specified in the contract that are designed to drive managed care plan performance in ways distinct from the general operational requirements under the contract. For example, states may use withhold arrangements (or incentive arrangements) for specified quality outcomes or for meeting a percentage of network providers that are paid in accordance with a value-based purchasing model. A penalty, on the other hand, is an amount of the capitation payment that is withheld unless the managed care plan satisfies an operational requirement under the contract and is not subject to the requirements at § 438.6(b)(3). For example, a state may withhold a percentage of the capitation payment to penalize a managed care plan that does not submit timely enrollee encounter data. To clarify this distinction in the final rule, we are finalizing the definition for a withhold arrangement with additional text to distinguish it from a penalty, which is assessed for non-compliance with general operational contract requirements. We note that this does not provide federal authority for penalties (other than sanctions authorized under section 1932(e) of the Act) and that penalties are subject to state authority under state law.
In paragraph (b), we established the basic standards for programs that apply risk corridors or similar risk sharing arrangements, incentive arrangements, and withhold arrangements. In § 438.6(b)(1), we proposed to redesignate the existing standard (in current § 438.6(c)(2)) that the contract include a description of any risk sharing mechanisms, such as reinsurance, risk corridors, or stop-loss limits, applied to the MCO, PIHP, or PAHP. The proposed regulation text included a non-exhaustive list of examples and we stated our intent to interpret and apply this regulation to any mechanism or arrangement that had the effect of sharing risk between the MCO, PIHP, or PAHP and the state. Given the new standards related to using, calculating, and reporting MLRs, we noted that states should consider the impact on the MLR when developing any risk sharing mechanisms. We did not receive comments on paragraph (b)(1) and will finalize as proposed with a modification to include the standard that was in the 2002 rule at § 438.6(c)(5)(i) that was inadvertently omitted in the proposed rule specifying that risk-sharing mechanisms must be computed on an actuarially sound basis.
In § 438.6(b)(2), we proposed to redesignate the existing standards for incentive arrangements currently stated in § 438.6(c)(5)(iii), but with a slight modification. We proposed to add a new standard in § 438.6(b)(2)(v) that incentive arrangements would have to be designed to support program initiatives tied to meaningful quality goals and performance measure outcomes. We also clarified that not conditioning the incentive payment on IGTs means that the managed care plan's receipt of the incentive is solely based on satisfactory performance and is not conditioned on the managed care plan's compliance with an IGT agreement. We requested comment as to whether the existing upper limit (5 percent) on the amount attributable to incentive arrangements is perceived as a barrier to designing performance initiatives and achieving desired outcomes and whether CMS must continue to set forth expectations for incentive arrangements between the state and managed care plans.
We received the following comments on proposed § 438.3(b)(2) relating to incentive arrangements for managed care plans.
After consideration of public comments, we are finalizing § 438.6(b)(2) with the following modifications: (1) In paragraph (b)(2), to reinsert the longstanding requirement that payments under incentive arrangements may not exceed 105 percent of the approved capitation rate “since such total payments will not be considered to be actuarially sound; (2) in paragraph (b)(2)(i), to add text to clarify that the arrangement is for a fixed period of time and performance is measured during the rating period under the contract in which the arrangement is applied; (3) in paragraph (b)(2)(iv), to add text to clarify how participation cannot be conditioned on entering into or complying with an IGT; and (4) in paragraph (b)(2)(v), to insert “or” in place of “and” to insert a reference to the state's quality strategy at § 438.340. We are finalizing identical technical modifications in paragraphs § 438.6(b)(3)(i), (iv) and (v).
In paragraph (b)(3), we proposed that the capitation rate under the contract with the MCO, PIHP, or PAHP, minus any portion of the withhold amount that is not reasonably achievable, must be certified as actuarially sound. As an example, if the contract permits the state to hold back 3 percent of the final capitation rate under the contract, or 3 percent from a particular rate cell of the capitation rate under the contract, the actuary must determine the portion of the withhold that is reasonably achievable. We requested comment on how an actuary would conduct such an assessment to inform future guidance in this area. If the actuary determines that only two thirds of the withhold is reasonably achievable (that is, 2 percent of the final contract capitation rate), the
The proposed rule was designed to ensure that any withhold arrangements meet the following goals: (1) The withhold arrangement does not provide an opportunity for MCOs, PIHPs, or PAHPs to receive more than the actuarially certified capitation rate; (2) the withhold arrangement provides MCOs, PIHPs, and PAHPs an opportunity to reasonably achieve an amount of the withhold, such that if the state had set the capitation rate at the actual amount paid after accounting for the effect of the withhold, it would be certifiable as actuarially sound; and (3) the actuarial soundness of the capitation rates after consideration of the withhold arrangement is assessed at an aggregate level, across all contracted MCOs, PIHPs, or PAHPs, rather than at the level of an individual managed care plan. A withhold arrangement is applied at the contract level rather than at the rate cell level as there is not a practical way to accomplish the latter. For example, a withhold arrangement may be described as 2 percent under the contract, which would encompass all rate cells under the contract, rather than calculating and deducting the amount to be withheld per individual rate cell to reach 2 percent under the withhold arrangement. We welcomed comment on appropriate approaches to evaluating the reasonableness of these arrangements and the extent to which the withholds are reasonably achievable and solicited comment on whether our proposed regulation text sufficiently accomplished our stated goals.
We received the following comments in response to proposals at § 438.3(b)(3) relating to withhold arrangements for managed care plans.
Many commenters suggested alternatives to the “reasonably achievable” standard for withhold arrangements. Several commenters recommended that a limitation of 5 percent similar to incentive arrangements at § 438.6(b)(2) be placed on withhold arrangement, because without such a limitation, the capitation rates actually received by managed care plans if they do not earn back the withhold amount would not be actuarially sound. Another commenter suggested that the amount of the withhold be considered exempt from the actuarial soundness requirement so long as the amount met a CMS defined limit, similar to the 5 percent cap used for incentive arrangements. Other commenters suggested that CMS limit the withhold arrangement to no more than the profit percentage assumed in the rate setting process. Some commenters suggested that the entire amount of the withhold be excluded from the actuarially sound capitation rate to ensure that the amount received by the managed care plans remained actuarially sound absent receipt of funds for meeting specified performance metrics.
Similarly, we considered counting all of the withhold amount toward the assessment of actuarially sound capitation rates. However, this approach created a risk that a managed care plan would not actually be paid an actuarially sound capitation rate because managed care plans frequently do not earn the full withhold amount. If the capitation rates were determined to be actuarially sound on the assumption that the managed care plans would earn all of the withhold, then it is possible that the capitation rates would not remain actuarially sound if a managed care plan did not meet the performance metrics. This situation would put the enrollee at risk.
This provision is intended to strike a balance between the approach of counting all of the withhold toward actuarially sound capitation rates and the approach of counting none of the withhold toward actuarially sound capitation rates. We agree that determining the amount of the withhold that is reasonably achievable requires the actuary to exercise judgment. There may be a number of methods that could be used to make the determination. Historical experience may be relied upon as many states track managed care plans' performance on various quality measures over a number of years. It may also be possible to look at the experience in other states and estimate how that experience is applicable. It is also possible that there may be managed care plan industry metrics or metrics from other health insurance coverage types that could be used as a comparison. If neither the state, nor actuary, can provide any evidence or information that managed care plans can expect to earn some or all of withhold, the appropriate course would be to take the most cautious approach and assume that none of the withhold is reasonably achievable.
States use a variety of withhold arrangements today. Setting arbitrary limits for withhold such as the expected profit margin could interfere with states' current approaches. Therefore, we decline to use these approaches to limit the amount of the withhold.
Other commenters supported the provision in § 438.7(b)(6), and at 80 FR 31259, that a description of withhold arrangements (and other special contract provisions described in § 438.6) be included in the rate certification, but requested that states should have to share the information supporting the withhold amount with managed care plans. Another commenter asked for clarification under § 438.7(b)(6) as to the scope of the data, assumptions, and methodologies used to determine the portion of the withhold that is reasonably achievable to be documented in the rate certification. The commenter questioned if the intention was for the state to include something other than the metrics, methods and assumptions for those metrics, and if so, raised concern about the administrative burden the level of documentation would create.
Given the states have many different performance metrics, there may be a variety of appropriate assumptions, data, and methodologies for assessing the amount of the withhold that is reasonably achievable. We clarify that the scope of the assumptions, data, and methodologies for determining the
After consideration of public comments,
We proposed to redesignate the standard at the existing § 438.6(c)(5)(v), related to adjustments to actuarially sound capitation rates to account for graduate medical education (GME) payments authorized under the state plan, at § 438.6(b)(4) without any changes to the substantive standard.
We received the following comments on proposed § 438.6(b)(4).
After consideration of public comments, we are not finalizing proposed § 438.6(b)(4) (which has the effect of removing the provision currently codified at § 438.6(c)(5)(v)) in this final rule but clarify here that if states require managed care plans to provide GME payments to providers, such costs must be included in the development of actuarially sound capitation rates. We will also remove the reference to § 438.6(c)(5)(v) in § 438.60 to be consistent with our decision not to finalize § 438.6(b)(4).
We proposed to add a new provision to § 438.6(c) to codify what we believe was a longstanding policy on the extent to which a state may direct the MCO's, PIHP's or PAHP's expenditures under a risk contract. Existing standards in § 438.6(c)(4) (proposed to be redesignated as § 438.3(c)) limit the capitation rate paid to MCOs, PIHPs, or PAHPs to the cost of state plan services covered under the contract and associated administrative costs to provide those services to Medicaid eligible individuals. Furthermore, under existing standards at § 438.60, the state must ensure that additional payments are not made to a provider for a service covered under the contract other than payment to the MCO, PIHP or PAHP with specific exceptions. Current CMS policy has interpreted these regulations to mean that the contract with the MCO, PIHP or PAHP defines the comprehensive cost for the delivery of services under the contract, and that the MCO, PIHP or PAHP, as risk-bearing organizations, maintain the ability to fully utilize the payment under that contract for the delivery of services. Therefore, in § 438.6(c)(1), we proposed the general rule that the state may not direct the MCO's, PIHP's, or PAHP's expenditures under the contract, subject to specific exceptions proposed in paragraphs (c)(1)(i) through (iii).
In the proposed rule, we noted the federal and state interest in strengthening delivery systems to improve access, quality, and efficiency throughout the health care system and in the Medicaid program. In support of this interest, we encouraged states that elect to use managed care plans in Medicaid to leverage them to assist the states in achieving their overall objectives for delivery system and payment reform and performance improvements. Consistent with this interest, we established a goal of empowering states to be able, at their discretion, to incentivize and retain certain types of providers to participate in the delivery of care to Medicaid beneficiaries under a managed care arrangement. We proposed in paragraphs (c)(1)(i) through (c)(1)(iii) the ways that a state may set parameters on how expenditures under the contract are made by the MCO, PIHP, or PAHP, other mechanisms would be prohibited.
Paragraph (c)(1)(i) proposed that states may specify in the contract that managed care plans adopt value-based purchasing models for provider reimbursement. In this approach, the contract between the state and the managed care plan would set forth methodologies or approaches to provider reimbursement that prioritize achieving improvements in access, quality, and/or health outcomes rather than merely financing the provision of services. Implementing this flexibility in regulation would assure that these regulations promote paying for quality or health outcomes rather than the volume of services, which is consistent with broader HHS goals, as discussed in more detail in the proposed rule at 80 FR 31124.
In paragraph (c)(1)(ii), we proposed that states have the flexibility to require managed care plan participation in broad-ranging delivery system reform or performance improvement initiatives. This approach would permit states to specify in the contract that MCOs, PIHPs, or PAHPs participate in multi-payer or Medicaid-specific initiatives, such as patient-centered medical homes, efforts to reduce the number of low birth weight babies, broad-based provider health information exchange projects, and other specific delivery system reform projects to improve access to services, among others. We acknowledge that, despite the discussion at 80 FR 31124 about the ability to engage managed care plans in Medicaid-specific initiatives, we unintentionally omitted these initiatives from the proposed regulatory text at § 438.6(c)(1)(ii). Under our proposal, states could use the managed care plan payments as a tool to incentivize providers to participate in particular initiatives that operate according to state-established and uniform conditions for participation and eligibility for additional payments. The capitation rates to the managed care plans would reflect an amount for incentive payments to providers for meeting performance targets but the managed care plans would retain control over the amount and frequency of payments. We noted that this approach balances the need to have a managed care plan participate in a multi-payer or community-wide initiative, while giving the managed care plan a measure of control to participate as an equal collaborator with other payers and participants. We also clarified that because funds associated with delivery system reform or performance initiatives are part of the capitation payment, any unspent funds remain with the MCO, PIHP, or PAHP. We also stated our belief that the overall regulatory approach to identify mechanisms that permit states to direct MCO, PHIP, or PAHP expenditures was designed to ensure that payments associated with a reform initiative are also tied to the relative value of the initiative as demonstrated through the utilization of services or quality outcomes. As an example of a delivery system reform initiative, we provided that states could make available incentive payments for the use of technology that supports interoperable health information exchange by network providers that were not eligible for EHR
We proposed in paragraph (c)(1)(iii) to permit states to require certain payment levels for MCOs, PIHPs and PAHPs to support two state practices critical to ensuring timely access to high-quality, integrated care, specifically: (1) setting minimum reimbursement standards or fee schedules for providers that deliver a particular covered service; and (2) raising provider rates in an effort to enhance the accessibility or quality of covered services. For example, some states have opted to voluntarily pay primary care providers at Medicare reimbursement rates beyond CYs 2013–2014, which was the time period required for such payment levels under section 1202 of the Affordable Care Act. Because actuarially sound capitation rates are based on all reasonable, appropriate and attainable costs (see section I.B.3.b. of the final rule), the contractual expectation that primary care providers would be paid at least according to Medicare reimbursement levels must be accounted for in pricing the primary care component of the capitation rate. These amounts would be subject to the same actuarial adjustments as the service component of the rate and would be built into the final contract rate certified by the actuary. Under the contract, the state would direct the MCO, PIHP, or PAHP to adopt a fee schedule created by the state for services rendered by that class of providers. As proposed, paragraph (c)(1)(iii)(A) would permit states to direct payment levels for all providers of a particular service as contemplated in this scenario.
In paragraph (c)(1)(iii)(B), we noted the state could specify a uniform dollar or percentage increase for all providers that provide a particular service under the contract. This option would have the state treat all providers of the services equally and would not permit the state to direct the MCO, PIHP, or PAHP to reimburse specific providers specific amounts at specified intervals. We noted that this option would help ensure that additional funding is directed toward enhancing services and ensuring access rather than benefitting particular providers. It would also support the standard that total reimbursement to a provider is based on utilization and the quality of services delivered. Finally, we also noted that this option would be consistent with and build upon the existing standard that the capitation rate reflects the costs of services under the contract. Under both approaches in (c)(1)(iii), the MCO, PIHP or PAHP could negotiate higher payment amounts to network providers under their specific network provider agreements.
Sections 438.6(c)(2)(i) and (ii) set forth proposed approval criteria for approaches under paragraphs (c)(1)(i) through (iii) to ensure that the arrangement is consistent with the specific provisions of this section. To ensure that state direction of expenditures promotes delivery system or provider payment initiatives, we expected that states would, as part of the federal approval process, demonstrate that such arrangements are based on utilization and the delivery of high-quality services, as specified in paragraph (c)(2)(i)(A). Our review would also ensure that state directed expenditures support the delivery of covered services. Consequently, we expected that states would demonstrate that all providers of the service are being treated equally, including both public and private providers, as specified in paragraph (c)(2)(i)(B). In proposed paragraph (c)(2)(i)(C) and (D), we linked approval of the arrangement to supporting at least one of the objectives in the comprehensive quality strategy in § 438.340 and that the state would implement an evaluation plan to measure how the arrangement supports that objective. This would enable us and states to demonstrate that these arrangements are effective in achieving their goals. In proposed paragraph (c)(2)(i)(E), to promote the extent to which these arrangements support proactive efforts to improve care delivery and reduce costs, we would prohibit conditioning provider participation in these arrangements on intergovernmental transfer agreements. Finally, in proposed paragraph (c)(2)(i)(F), because we sought to evaluate and measure the impact of these reforms, such agreements would not be renewed automatically.
Under proposed paragraph (c)(2)(ii), we specified that any contract arrangement that directs expenditures made by the MCO, PIHP, or PAHP under paragraphs (c)(1)(i) or (c)(1)(ii) for delivery system or provider payment initiatives would use a common set of performance measures across all payers and providers. Having a set of common performance measures would be critical to evaluate the degree to which multi-payer efforts or Medicaid-specific initiatives achieve the stated goals of the collaboration. We sought comment on the proposed general standard, and the three exceptions, providing a state the ability to direct MCO's, PIHP's, or PAHP's expenditures. Specifically, we sought comment on the extent to which the three exceptions were adequate to support efforts to improve population health and better care at lower cost, while maintaining MCO's, PIHP's or PAHP's ability to fully utilize the payment under that contract for the delivery of services to which that value was assigned.
We received the following comments in response to proposed § 438.6(c).
We received the following comments in response to the example of incentive payments to network providers for EHR adoption that are not eligible for incentives under the HITECH Act.
Several commenters supported proposed § 438.6(c)(1)(iii)(A) and (B) but recommended that CMS include additional requirements. Some commenters requested clarification as to the parameters for a minimum fee schedule. Several commenters recommended that CMS set a national floor for minimum provider fee schedules for all managed care plans at the Medicare reimbursement rate to improve access to care for all Medicaid managed care enrollees. One commenter recommended that CMS require states to include the methods and procedures related to rates that the state mandates that a managed care plan pay to a provider in the state's Medicaid state plan, and that CMS review and approve such methods and rates to ensure adequate access to care. A few commenters recommended that CMS require any minimum fee schedule to reflect an adequate living wage for health care providers sufficient to live in the communities they serve. One commenter recommended that CMS expand the requirement to allow states to establish both minimum and maximum fee schedules for all providers that provide a particular service under the managed care contract.
We cannot establish a national floor for network provider payments without explicit statutory authority. We decline to specify that any minimum fee schedule reflect a living wage for the providers subject to such a fee schedule. In addition, we decline to incorporate such minimum provider payment amounts in the State plan as the State plan only governs FFS provider payments.
Many commenters stated specific concerns regarding proposed § 438.6(c)(1) and stated that the regulatory language creates inequality in the use of supplemental payments in managed care compared to FFS programs. Commenters stated that by making it more difficult for states to use supplemental payments in managed care, it would dis-incentivize the use of the managed care delivery model. Commenters stated that the proposed regulatory language would limit the full functionality of Medicaid managed care in driving quality and value for Medicaid beneficiaries. Commenters stated that CMS' regulatory approach would inhibit state flexibility to produce the next generation of transformative innovations and that the proposed new restrictions could create the potential for a major destabilization of state health care delivery systems. Commenters recommended that rather than restricting the use of supplemental payments in broad and inappropriate ways, CMS should pursue alternative approaches to promote transparency around these payments. Commenters stated that such an approach would help the agency achieve its policy goals while ensuring the policy is not a barrier to the use of Medicaid managed care or other innovation.
Many commenters recommended that CMS modify the proposed language to provide additional flexibility for states to direct expenditures to promote access to services for safety-net providers and tailor payment models, for specific class of provider type. Commenters recommended that CMS include a fourth exception (to be codified at a new § 438.6(c)(1)(iv)) to allow states to direct managed care payments to promote access to and retain certain types of safety-net providers, including public hospitals and public health systems to ensure that Medicaid can retain essential community providers. Many commenters stated that the proposed language would destabilize their safety-net provider systems and block states from targeting additional Medicaid support to providers with the largest Medicaid patient populations and acknowledging the role and extra burden these safety-net providers bear and their inability to subsidize low reimbursement rates.
For purposes of this final rule, we define pass-through payments at § 438.6(a) as any amount required by the state to be added to the contracted payment rates between the MCO, PIHP, or PAHP and hospitals, physicians, or nursing facilities that is not for the following purposes: A specific service or benefit covered under the contract and provided to a specific enrollee; a provider payment methodology permitted under § 438.6(c)(1)(i) through (c)(1)(iii) for services and enrollees covered under the contract; a subcapitated payment arrangement for a specific set of services and enrollees covered under the contract; GME payments; or FQHC or RHC wrap around payments. This definition is consistent with the definition for pass-through payments in CMS' 2016 Medicaid Managed Care Rate Guidance.
Accordingly, our final rule phases out the ability of states to use pass-through payments by allowing states to direct MCO, PIHP and PAHP expenditures only based on the utilization, delivery of services to enrollees covered under the contract, or the quality and outcomes of services. However, because we recognize that pass-through payments are often an important revenue source for safety-net providers and some commenters requested a delayed implementation of the provision at § 438.6(c), the final rule will allow transition periods for pass-through payments to hospitals, physicians and nursing facilities to enable affected providers, states, and managed care plans to transition pass-through payments into payments tied to services covered under the contract, value-based payment structures, or delivery system reform initiatives without undermining access for the beneficiaries they serve.
To clearly address the issues raised by commenters, it is helpful to clarify the statutory and regulatory differences between provider payments under FFS and managed care programs. In the case of FFS, section 1902(a)(30)(A) of the Act requires that payment for care and services under an approved state plan be consistent with efficiency, economy, and quality of care. Regulations implementing section 1902(a)(30)(A) of the Act permit states considerable flexibility in structuring FFS rates, but impose aggregate upper payment limits (UPLs) on rates for certain types of services or provider types. For institutional providers, these UPLs are generally based on Medicare payment methodologies. Additionally, these UPLs determine the maximum amount of federal funding, or FFP, that is available for services through these institutional providers. Many states have used the flexibility under FFS to structure rates to include both base payment rates and supplemental rates, with the supplemental rates in some cases reflecting individual provider circumstances, such as the volume of uncompensated care. Since aggregate supplemental payments, when added to the aggregate base payments, cannot exceed the UPL, the supplemental payments are sometimes tied directly to the UPL calculation.
To draw down the federal share of an expenditure for a provider payment, including expenditures for supplemental payments, states must document an expenditure that includes a non-federal share. Supplemental payments are typically funded by intergovernmental transfers (IGTs) from local governments, by certified public expenditures (CPEs) from public providers, or by provider taxes, all of which are permissible sources of the nonfederal share of Medicaid spending. As states have faced budget pressures, states have sought various approaches to maintain existing Medicaid coverage and to avoid reducing benefits for beneficiaries. One approach used to address these challenges has been to increase supplemental payments funded through IGTs, CPEs and provider taxes. Over time, these supplemental payments have become an important and significant revenue stream to certain provider types.
The increase in supplemental payments is frequently associated with lower base payment rates to providers. In fact, in some situations supplemental payment revenues exceed revenues from the Medicaid base rates.
In contrast to FFS, section 1903(m)(2)(A)(iii) of the Act provides the requirements for the payment for care and services under managed care. Section 1903(m)(2)(A)(iii) of the Act requires contracts between states and MCOs to provide capitation payments for services and associated administrative costs that are actuarially sound. The underlying concept of managed care and actuarial soundness is that the state is transferring the risk of providing services to the MCO and is paying the MCO an amount that is reasonable, appropriate, and attainable compared to the costs associated with providing the services in a free market. Inherent in the transfer of risk to the MCO is the concept that the MCO has both the ability and the responsibility to utilize the funding under that contract to manage the contractual requirements for the delivery of services. Further, unlike FFS, which uses maximum aggregate caps to limit the amount of FFP available, managed care limits the amount of FFP to the actuarially sound capitation rate paid to the managed care plan, which is based on the amount of funding that is reasonable and appropriate for the managed care plan to deliver the services covered under the contract. We also note here that the actuarial soundness requirements apply statutorily to MCOs under section 1903(m)(2)(A)(ii) of the Act and were extended to PIHPs and PAHPs under our authority in section 1902(a)(4) of the Act in the 2002 final rule.
Because the capitation payment that states make to a managed care plan is expected to cover all reasonable, appropriate, and attainable costs associated with providing the services under the contract, the statutory provision for managed care payment does not anticipate a supplemental payment mechanism. Managed care plans are expected to utilize capitation payments made under a contract to cover all reasonable, appropriate and attainable costs associated with providing the services under the contract. We do not believe that section 1903(m)(2)(A)(ii) of the Act permits managed care payments that are not directly related to the delivery of services under the contract, because it requires actuarially sound payments for the provision of services and associated administrative obligations under the managed care contract.
We disagree with the assertion of commenters that limiting state direction of payments under the managed care plan contract has not been a federal policy before the proposed rule. As
Current managed care regulations at § 438.60 expressly prohibit the state from making a payment to a provider for services available under the contract between the state and the managed care plan. As a matter of policy, we have interpreted § 438.60 to mean that states are also prohibited from making a supplemental payment to a provider through a managed care plan, which is referred to as a “pass-through” payment, as discussed earlier.
The rationale for this policy interpretation is that the payment to the managed care plan is for the provision of services under the contract, in which the managed care plan is responsible for negotiating contracts with providers. If the state is making a pass-through payment by requiring a managed care plan to pay network providers in a manner that is not related to the delivery of services, this situation is no different than the state making a payment outside of the contract directly to providers. Put another way, the pass-through payment requirements do not align payment to the managed care plan or providers with the provision of services.
Despite CMS' interpretation of § 438.60, a number of states have integrated some form of pass-through payments into their managed care contracts for hospitals, nursing facilities, and physicians. In general, the size and number of the pass-through payments for hospitals has been more significant than for nursing facilities and physicians. There are multiple reasons that states have implemented pass-through payments into their managed care contracts. Commonly, states that have moved from FFS to managed care have sought to ensure a consistent payment stream for certain critical safety-net hospitals and providers and to avoid disrupting existing IGT, CPE, and provider tax mechanisms associated with the supplemental payments.
The amount of the pass-through payment often represent a significant portion of the overall capitation rate under the contract. We have seen supplemental payments that have represented 25 percent, or more, of the overall contract and 50 percent of individual rate cells. The rationale for these pass-through payments in the development of the capitation rates is often not transparent and it is not clear what the relationship of these pass-through payments is to the requirement for actuarially sound rates. Additionally, not directly connecting provider payments to the delivery of services also compromises the ability of managed care plans to manage their contractual responsibilities for the delivery of services.
We are concerned that pass-through payments may limit a managed care plan's ability to effectively use value-based purchasing strategies and implement quality initiatives. As in FFS, the existence of pass-through payments may affect the amount that a managed care plan is willing or able to pay for the delivery of services through its base rates or fee schedule. In addition, pass-through payments make it more difficult to implement quality initiatives or to direct beneficiaries' utilization of services to higher quality providers because a portion of the capitation rate under the contract is independent of the services delivered. Put another way, when the fee schedule for services is set below the normal market, or negotiated, rate to account for pass-through payments, moving utilization to higher quality providers can be difficult because there may not be adequate funding available to incentivize the provider to accept the increased utilization. In addition, when pass-through payments guarantee a portion of a provider's payment and divorces the payment from service delivery, it is more challenging for managed care plans to negotiate provider contracts with incentives focused on outcomes and managing individuals' overall care.
We understand that many states are interested in directing efforts through contracts with MCOs, PIHPs, or PAHPs to improve and integrate care, enhance quality, and reduce costs. Some states have also had an interest in using their Medicaid program, which is often one of the largest payers in a state, to promote market-wide delivery and payment changes in collaboration with other insurers in the state. We have clarified elsewhere in our response to comments that § 438.6(c) provides explicit mechanisms to support innovative efforts to transform care delivery and payment. Section 438.6(c)(1)(i) allows states to contractually require managed care plans to adopt value-based purchasing approaches for provider reimbursement. In addition, section 438.6(c)(1)(ii) allows states to require managed care plan participation in multi-payer, market-wide delivery system reform, or Medicaid-specific delivery system reform or performance improvement initiatives. Finally, § 438.6(c)(1)(iii) allows states to specify minimum and maximum provider fee schedules. The provisions of § 438.6(c) provide significant flexibility for states to use their Medicaid managed care program to implement initiatives to improve and integrate care, enhance quality, and reduce costs. However, § 438.6(c)(2)(i)(A) and (B) maintains our approach in the proposed rule to require that the payment arrangements be based on the utilization, delivery of services, and performance under the contract. As a whole, § 438.6(c) maintains the MCO's, PIHP's, or PAHP's ability to fully utilize the payment under that contract for the delivery and quality of services by limiting states' ability to require payments that are not directly associated with services delivered to enrollees covered under the contract.
While we do not believe that pass-through payments are consistent with actuarially sound rates and do not align provider payments with the provision of services, we also acknowledge pass-through payments have served as critical source of support for safety net providers who provide care to Medicaid beneficiaries. We also share commenters concerns that an abrupt end to pass-through payments could create significant disruptions for some safety-net providers who serve Medicaid managed care enrollees. As such, we are retaining our proposal to transition pass-through payments into value-based payment structures, delivery system reform initiatives, or payments tied to services under the contract as provided in § 438.6(c)(1)(i) through (iii).
We recognize the challenges associated with transitioning pass-through payments into payments for the delivery of services covered under the contract to enrollees or value-based payment structures for such services. The transition from one payment structure to another requires robust provider and stakeholder engagement, agreement on approaches to care delivery and payment, establishing systems for measuring outcomes and
In an effort to provide a smooth transition for network providers, to support access for the beneficiaries they serve, and to provide states and managed care plans with adequate time to design and implement payment systems that link provider reimbursement with services covered under the contract or associated quality outcomes, we will finalize this rule with a new § 438.6(d) that provides for transition periods related to pass-through payments for specified providers. The rule provides a 10-year transition period for hospitals, subject to limitations on the amount of pass-through payments in § 438.6(d)(2) through (3). After July 1, 2027, states will not be permitted to require pass-through payments for hospitals under a MCO, PIHP, or PAHP contract. The rule also provides a 5-year transition period for pass-through payments to physicians and nursing facilities. After July 1, 2022, states will not be permitted to require pass-through payments for physicians and nursing facilities under a MCO, PIHP, or PAHP contract. After July 1, 2022, for physicians and nursing facilities, and after July 1, 2027 for hospitals, only the approaches in § 438.6(c)(1)(i) through (iii) will be permitted mechanisms for states to direct the MCO's, PIHP's or PAHP's expenditures under the contract. This transition period provides states, network providers, and managed care plans time and flexibility to integrate pass-through payment arrangements into different payment structures, including enhanced fee schedules or the other approaches consistent with § 438.6(c)(1)(i) through (c)(1)(iii) under actuarially sound capitation rates.
Section 438.6(d) sets forth the time frames and requirements for transitioning pass-through payments to payment structures linked to delivered services for hospitals, physicians, and nursing facilities. We have created transition periods for the payment structures for the three provider types acknowledged in § 438.6(d), because these are the primary provider types to which states make UPL and other supplemental payments under state plan authority, which states have typically sought to continue making as pass-through payments under managed care programs.
It is important to note that § 438.6(d) provides different periods for hospitals versus nursing facilities and physicians. States are also required to phase down hospital pass-through payments, but do not have the same requirement for physicians and nursing facilities. This distinction in the treatment of hospitals versus physicians and nursing facilities under § 438.6(d) is based on the difference in number and dollar amount of pass-through payments to these different provider types under managed care today. Pass-through payments to hospitals are significantly larger than the pass-through payments to physicians and nursing facilities. We recognize that states and hospitals may use a variety of payment approaches to link payments to services and outcomes. Understanding that it will take significant time to design and implement alternative approaches consistent with the final rule and the amount of funding involved, we provided a longer time period to transition pass-through payments to hospitals. We also provide for a phased transition with annual milestones. Having these milestones is particularly important for hospital payments where states may use multiple approaches to achieving the goal of complying with the final rule.
We believe that states will be able to more easily transition pass-through payments to physicians and nursing facilities to payment structures linked to services covered under the contract. Consequently, we have provided a shorter time period for eliminating pass-through payments to physicians and nursing facilities, but have also not required a prescribed phase down for these payments, although states have the option to phase down these payments if they prefer. The distinction between hospitals and nursing facilities and physicians is also based on the comments from stakeholders during the public comment period to the proposed rule. We received many comments on the disruptive nature to hospitals and beneficiary access if such pass-through arrangements were abruptly eliminated. Similar concerns were not raised with respect to payments to physicians and nursing facilities.
To determine the total amount of pass-through payments to hospitals that may be included in the MCO, PIHP or PAHP contracts in any given contract year under the final rule, a state must calculate a base amount and then reduce the base amount by the schedule provided in § 438.6(d)(3). The base amount is defined at § 438.6(a) as the amount available for pass-through payments to hospitals in a given contract year subject to the schedule for the reduction of the base amount in paragraph (d)(3). For contracts beginning on or after July 1, 2017, a state would be able to make pass-through payments for hospitals under the contract up to the full “base amount” as defined in § 438.6(a).
The portion of the base amount calculated in § 438.6(d)(2)(i) is analogous to performing UPL calculations under a FFS delivery system, using payments from managed care plans for Medicaid managed care hospital services in place of the state's payments for FFS hospital services under the state plan. The portion of the base amount calculated in § 438.6(d)(2)(ii) takes into account hospital services and populations included in managed care during the rating period that includes pass-through payments which were in FFS 2 years prior. This timeframe and use of 2-year old data is in place so that the state has complete utilization data for the service type that would be subject to pass-through payments. We point out that the base amount includes both inpatient and outpatient hospital services. Therefore, the calculation of the base amount in § 438.6(d)(2) is calculated using a four-step process:
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•
•
•
As an example, for contracts starting on July 1, 2017, the base amount is derived for the hospital services and the populations that will be included in the July 1, 2017 managed care contracts. For those hospital services and populations, the difference between what Medicare FFS would have paid for the hospital services utilized in 2015 (under Medicaid managed care and/or Medicaid FFS, as appropriate) and the actual Medicaid payments for the hospital services utilized in 2015 (under managed care and/or FFS, as appropriate) represents the base amount. This method for establishing the base amount, which uses the aggregate difference between Medicaid and Medicare reimbursement for actual hospital utilization, is directly analogous to the calculations of a hospital UPL payment under Medicaid FFS and is, therefore, a familiar exercise for many states.
Building on the similarity to the FFS hospital UPL calculations, in § 438.6(d)(2)(iv), we permit states to make reasonable estimates of the aggregate differences in Steps Two and Three in accordance with the hospital upper payment limit requirements under 42 CFR part 447 and described in CMS' hospital UPL guidance, available at
Section 438.6(d)(2)(iii) establishes that the base amount is calculated by the state on an annual basis and is recalculated annually. This annual recalculation is done to account for various factors which impact hospital service utilization over time such as changes in enrollment, fee schedules, and service mix.
The schedule for the phased reduction of the base amount of pass-through payments to hospitals is specified at § 438.6(d)(3). As mentioned above, for contracts beginning on or after July 1, 2017, the state may require pass-through payments to hospitals under the contract up to the base amount. For subsequent contract years (contracts beginning on or after July 1, 2018 through contracts beginning on or after July 1, 2026), the available amount of pass-through payments decreases by 10 percentage points per year. To illustrate, for contracts beginning on or after July 1, 2018, 90 percent of the base amount is available to be included as pass-through payments under the contract. Per this schedule, contracts beginning on or after July 1, 2026, can include 10 percent of the base amount as pass-through payments. For contracts starting on or after July 1, 2027, no pass-through payments are permitted. In addition, this schedule applies regardless of when a state elects to include pass-through payments. If a state elected to include pass-through payments starting for contracts on or after July 1, 2018, rather than 2017, the amount available for pass-through payments is 90 percent of the base amount. We note that nothing in this paragraph would prohibit a state from eliminating pass-through payments to hospitals before contracts starting on or after July 1, 2027. However, we provided for a phased reduction in the percentage of the base amount that can be used for pass-through payments, anticipating that a phased transition would support the development of stronger payment approaches while mitigating any disruption to states and providers.
Section 438.6(d)(4) specifies that the calculation of the base amount must be included in the rate certification required under § 438.7. The documentation must include the following: A description of the data, methodologies, and assumptions used to calculate the base amount; each calculated component of the base amount in § 438.6(d)(2)(i) through (ii); and the calculation of the applicable percentage of the base amount available for pass-through payments under the schedule in paragraph (d)(3). These additional documentation requirements only apply when the contract with the state requires MCOs, PIHPs or PAHPs to make pass-through payments and the state is relying on § 438.6(d) rather than an exception identified in § 438.6(c) to direct the MCO's, PIHP's or PAHP's expenditures.
At § 438.6(d)(5), for contracts starting on or after July 1, 2017, pass-through payments would be permitted for physicians and nursing facilities at any amount; this means that pass-through payments for physicians and nursing facilities are not subject to the base amount calculation at paragraph (d)(2) or the schedule for pass-through payments at paragraph (d)(3) that are applicable to hospitals. However, the transition period for pass-through payments to physicians and nursing facilities is shorter than that provided for hospitals. Pass-through payments for physicians and nursing facilities are permitted for a total of 5 years ending with contracts that begin on or after July 1, 2022. This transition period for pass-through payments to physicians and nursing facilities is in place to provide states maximum flexibility over the 5 year period that such payments may be made under managed care contracts. Again, the rationale for the shorter transition timeframe is based on our understanding that these payments are generally smaller than the pass-through payments attributable to hospitals and, therefore, the process of tying the payments more directly to services will be less disruptive. States could elect to take an approach that incrementally phases down the amount of pass-through payments to these provider types or to eliminate pass-through payments immediately or a period less than 5 years.
Therefore, after consideration of the public comments, we are finalizing the proposals at § 438.6(c) with the following modifications:
• Clarified the statutory and regulatory requirements under Title XIX, as applicable to managed care programs, that would be exceptions to the general rule at § 438.6(c)(1).
• Modified §§ 438.3(c)(1)(iii)(A) and (B) to remove the proposed requirement that a minimum fee schedule or uniform dollar or percentage increase in provider payments apply to all providers that provide a particular service under the contract and made a technical modification to insert “network” before “providers” in each of these paragraphs.
• Added a new § 438.6(c)(1)(iii)(C) to specify that states can include a maximum fee schedule in managed care plan contracts, so long as the managed care plan retains the ability to reasonably manage risk and have discretion in accomplishing the goals of the contract.
• Clarified § 438.6(c)(2) that expenditures under § 438.6(c)(1)(i) through (iiii) must be developed in accordance with §§ 438.4, 438.5, and generally accepted principles and practices.
• Changed §§ 438.6(c)(2)(i)(B) and 438.6(c)(2)(ii)(A) to permit states to direct expenditures or make participation in value-based purchasing, delivery system reform, or performance improvement initiatives to a class of providers rather than to all public and private providers under the contract.
• Revised § 438.6(c)(2)(i)(E) to clarify that the network provider's participation in a contract arrangement under paragraphs (c)(1)(i) through (c)(1)(iii) is not conditioned on the network provider entering or adhering to an IGT agreement.
In addition, we are finalizing § 438.6 with a new paragraph (d) to define pass-through payments, to permit pass-through payments to hospitals subject to a specific calculation and schedule so that the availability of pass-through payments for hospitals under managed care contracts ceases for contracts starting on or after July 1, 2027. This new paragraph permits pass-through payments for physicians and nursing facilities for contracts starting on or after July 1, 2017 through contracts starting on or after July 1, 2021.
At 80 FR 31125, we stated our belief that the regulations in part 438 were not a barrier to the operation of programs that promote wellness among beneficiaries by Medicaid managed care plans. We advised states and managed care plans that undertake efforts to reward beneficiary health care decisions and behaviors through inexpensive gifts or services to consult OIG guidance for compliance with section 1128A(a)(5) of the Act.
We received the following comments on the preamble discussion on wellness initiatives.
In new § 438.7, we proposed the content of the rate certification that is submitted by the state for CMS review and approval. This section is distinguished from the rate development standards in § 438.5 in that it focuses on documentation of rate development as opposed to the actual steps taken by states and actuaries to develop capitation rates. This section includes a new proposal that states receive CMS' approval of the rate certification in addition to the contract, as provided in § 438.3(a). The rate certification is part of the procedural mechanism for CMS to ensure that the capitated rates payable to MCOs, PIHPs, and PAHPs are actuarially sound as specified in section 1903(m)(2)(A)(iii) of the Act. We proposed that rate certifications in § 438.7(a) follow the same procedures as for contract submissions through a cross-reference to § 438.3(a). Our proposal therefore included the regulatory flexibility to set forth timeframes and more detailed processes for the submission of the rate certification review and approval process in subregulatory guidance, which is in addition to the specific proposed standard that states seeking contract and rate approval prior to an anticipated effective date should submit such contracts and rate certifications to us no later than 90 days before anticipated effective date. We believe that review and approval of the rate certification separate from the approval of a contract is an integral step to work with states to ensure appropriate rates under these programs and to modernize our oversight of Medicaid managed care rate setting practices. In addition, we provided that this approach will streamline the approval process as the rate certification supports the payment terms in the contract. We explained that section 1903(m)(2)(A)(iii) authorizes us to stipulate review and approval of both the contract and the rate certification for MCOs as the contract must include the payment rates, which are developed via the rate certification. Consistent with existing standards for our review and approval for PIHP and PAHP contract in § 438.6(a) (redesignated as § 438.3(a) in this final rule), we proposed to extend the review and approval standards for the rate certification for PIHPs and PAHPs under our authority under section 1902(a)(4) of the Act. Under our proposal, the rate certification would describe and provide the necessary documentation and evidence that the rates were developed consistent with generally accepted actuarial principles and practices and applicable regulatory standards. In the event that the certification and the contract are submitted to us at different times, we noted in the proposed rule that we would approve the rate certification prior to approval of the contract but that FFP for the program would be contingent upon approval of the contract. Our statutory authority to oversee the Medicaid program and to ensure that capitation rates are actuarially sound, which in turn helps states and managed care plans to improve access to and quality of care for Medicaid beneficiaries, would be met by review of the documentation we proposed to require.
We received the following comments on proposed § 438.7 generally.
We received the following comments on proposed § 438.7(a).
After consideration of public comments, we are finalizing § 438.7(a) as proposed.
Section 438.7(b) sets forth the content that must be in the rate certification to initiate the CMS review process. In paragraph (b)(1), the certification would describe the base data. The rate certification would describe how the actuary used professional judgment to determine which data was appropriate after examination of all data sources and the data sources used, as well as reasons if the other data sources provided to the actuary were not used in the rate development process.
We did not receive comments on § 438.7(b)(1) and will finalize as proposed.
In paragraph (b)(2), we proposed specific documentation standards for trend. We proposed that the rate certification be detailed enough so that CMS or an actuary can understand and evaluate the development and reasonableness of the trend and any meaningful differences among trend factors applied across rate cells, populations, or services. Comments relating to trend were addressed in response to comments received on § 438.5(d), we did not receive comments specific to § 438.7(b)(2). We are finalizing § 438.7(b)(2) as proposed.
In paragraph (b)(3), we proposed that the basis for determining the non-benefit component of the rate must be included in the actuarial certification with enough detail so we or an actuary can understand each type of non-benefit expense and evaluate the reasonableness of each cost assumption underlying each non-benefit expense.
We received the following comments on proposed § 438.7(b)(3).
After consideration of public comments, we are finalizing § 438.7(b)(3) with the clarification that non-benefit costs may not be documented as a single rating factor but may be documented according to the types of non-benefit costs listed in the section.
In paragraphs (b)(4)(i) through (iii), we proposed standards for transparency in the rate certification on how the material adjustments were developed and the reasonableness of the adjustment for the population, the cost impacts of each material adjustment and where in the rate development process the adjustment was applied. We understand there may be multiple adjustments applied in the rate setting process, ranging from minor adjustments (which on their own do not impact the overall rate by a material amount), to material adjustments (which may be much greater in scope and magnitude). Therefore, we proposed that states only provide information on the development of and cost impact for each of the material adjustments. Adjustments that do not meet this threshold (“non-material adjustments”), may be aggregated and only the cost impact of that aggregated bundle would need to be shown in the certification as set forth in paragraph (b)(4)(ii). In § 438.7(b)(4)(iv), we proposed that the actuarial certification include a list of all the non-material adjustments used in rate development, but that specifics of each non-material adjustment would not need to be identified. We noted that as we gain experience in reviewing adjustments consistent with these standards and further consult with states, we may issue guidance on what we believe to be material and non-material adjustments, but until that time, we would expect the actuary to exercise reasonable judgment and good faith when characterizing or treating an adjustment as material or non-material.
We received the following comments in response to proposed § 438.7(b)(4).
After consideration of public comments, we are finalizing § 438.7(b)(4) as proposed.
In paragraph (b)(5), we proposed to establish documentation standards in the certification for prospective and retrospective risk adjustment. In paragraph (b)(5)(i), we proposed that the rate certification should include sufficient detail of the prospective risk adjustment methodology for our review because the methodology is an integral part of the rate development process. To evaluate the appropriateness of the prospective risk adjustment methodology, we proposed that the following specific pieces of information be included in the rate certification: The model selected and data used by the state; the method for calculating the relative risk factors and the reasonableness and appropriateness of the method in measuring the risk of the respective populations; the magnitude of the adjustment on the capitation rate for each MCO, PIHP, or PAHP; and an assessment of the predictive value of the methodology compared to prior rating periods, and any concerns the actuary may have with the risk adjustment process.
Retrospective risk adjustment methodologies are calculated and applied after the rates are certified; however, we proposed in § 438.7(b)(5)(ii) that the certification must document who is calculating the risk adjustment; the timing and frequency of the risk adjustment; the model and the data to be used and any adjustments to them; and any concerns the actuary may have with the risk adjustment process. For either approach to risk adjustment, our proposal required adjustment to be budget neutral under § 438.5(b)(6).
We proposed that use of the risk adjustment model as a method to retrospectively increase or decrease the total payments across all Medicaid managed care plans based on the overall health status or risk of the population would not be permitted. Such retrospective increases or decreases in the total payments would not meet the standard in § 438.5(g) that the risk adjustment methodology be developed in a budget neutral manner. We believe that an adjustment applied to the total payments across all managed care plans to account for significant uncertainty about the health status or risk of a population is an acuity adjustment, which is a permissible adjustment under § 438.5(f), but would need to be documented under paragraph (b)(4) of this section regarding adjustments. While retrospective acuity adjustments may be permissible, they are intended solely as a mechanism to account for differences between assumed and actual health status when there is significant uncertainty about the health status or risk of a population, such as: (1) New populations coming into the Medicaid program; or (2) a Medicaid population that is moving from FFS to managed care when enrollment is voluntary and there may be concerns about adverse selection. In the latter case, there may be significant uncertainty about the health status of which individuals would remain in FFS versus move to managed care; although this uncertainty is expected to decrease as the program matures.
We received the following comments in response to proposed § 438.7(b)(5).
After consideration of public comments, we are adding a new paragraph (iii) to § 438.7(b)(5) to clarify that a revised rate certification is not required for capitation rates that change due to application of an approved risk adjustment methodology. Consistent with other technical corrections to § 438.7 discussed above, the phrase “sufficient detail” was struck and replaced with “enough detail.”
In § 438.7(b)(6), we proposed that the rate certification include a description of any of the special contract provisions related to payment in § 438.6, such as risk sharing mechanisms and incentive or withhold arrangements. We did not receive comments on § 438.7(b)(6) and are finalizing that provision as proposed.
In paragraph (c), we proposed the rate certification standards for rates paid under risk contracts. In paragraph (c)(1), we acknowledge that states may pay different capitation rates to different managed care plans; for example, some states already account for differences in final capitation rates paid to contracted managed care plans through risk adjustment. States that choose to pay different rates to managed care plans (for factors such as differing administrative assumptions, service area adjustments or other non-risk adjustment methodologies) will need to provide documentation for the different assumptions used in the development of each of the individual rates paid to each plan. While such variations are permissible, we reminded states as reflected and strengthened in this final rule, that all payment rates must be actuarially sound under existing law.
We received the following comments on § 438.7(c)(1).
After consideration of public comment, we are finalizing the introductory text in § 438.7(c) as proposed with two technical modifications: (1) To insert “per rate cell” preceding “under each risk contract”; and (2) to insert the word “capitation” after “specific.” We are finalizing § 438.7(c)(1) as proposed by replacing “the” following the phrase “so long as” with the word “each”; and to insert the word “capitation” before “rate.”
In § 438.7(c)(2), we proposed to establish parameters for retroactive adjustments to capitation rates paid under the risk contract. Specifically, we proposed that the state submit a revised rate certification (and contract amendment) that describes the specific rationale, data, assumptions, and methodologies of the adjustment in sufficient detail to understand and evaluate the proffered retroactive adjustments to the payment rate. All such adjustments are also subject to federal timely filing standards for FFP.
After consideration of public comments, we are finalizing § 438.7(c)(2) as proposed with a technical correction to insert “claim” so that the regulatory reference is to “Federal timely claim filing requirements” and to insert “enough” in place of “sufficient.” As discussed in section I.B.3.b of this final rule, we will finalize § 438.7(c) with a new paragraph (3) to reflect the state's ability to modify the certified capitation rate per rate within a 1.5 percent range without submitting a revised rate certification. This provision also specifies that the payment term under the contract must updated as required under § 438.3(c).
In paragraph (d), we proposed to require states to include additional information in the rate certification if pertinent to our approval of the contract rates and to identify whether that additional information, which may supplement the rate certification, is proffered by the state, the actuary, or another party. This proposal was to set forth our expectations and set parameters for consistent and transparent documentation of the rate setting process so that we conduct more efficient reviews of the rate certification submissions and to expedite the approval process.
We received the following comments on proposed § 438.7(d).
After consideration of public comments, we are finalizing § 438.7(d) as proposed.
We proposed to remove the standard currently at § 438.6(c)(4)(iii) that states document the projected expenditures under the proposed contract compared to the prior year's contract, or with FFS if the managed care program is new. We do not believe that this information is integral to the review of the rate certification or contract; further, such information can be reasonably calculated by CMS if necessary. We did not receive comments on this proposal and will finalize this rule without the requirement that states document the projected expenditures under the contract compared with the prior year's contract or with FFS.
We proposed a new heading for § 438.60 and to make minor revisions to the regulatory text to clarify the intent of the prohibition of additional payments to network providers that are contracted with an MCO, PIHP or PAHP. The original heading of § 438.60 was “Limit on payments to other providers;” we believe that heading was potentially ambiguous or confusing when paired with the regulatory text as it could be read to treat an MCO, PIHP, or PAHP as a provider. We proposed to revise the section heading as “Prohibition of additional payments for services covered under MCO, PIHP, or PAHP contracts” to make clear that the capitation payments are to be inclusive of all service and associated administrative costs under such contracts. In addition, we proposed to refine overly broad references to Title XIX of the Act and this title of the CFR to clarify that such payments are permitted only when statute and regulation specifically stipulate that the state make those payments directly to a provider. We explained that the exception to this standard has always been limited to cases where other law (statutory or regulatory) explicitly directs the state to make the additional payment to the health care provider and propose to strengthen the language accordingly. Finally, we proposed to update the cross-reference for GME payments from its current location at § 438.6(c)(5)(v) to § 438.6(b)(4) to reflect the proposed restructuring of § 438.6.
We received the following comments in response to our proposal to revise § 438.60.
After consideration of the public comments, we are finalizing § 438.60 with two modifications: (1) without the cross-reference to § 438.6(b)(4) or the requirement to adjust capitation payments when the state directly makes GME payments to eligible network providers; and (2) with the addition of a requirement that the state payment of GME be consistent with the state plan.
We proposed to replace the current standards in § 438.230 with clearer standards for MCOs, PIHPs, or PAHPs that enter into subcontractual relationships and delegate responsibilities under the contract with the state. These proposed standards were modeled on the MA standards relating to MA organization relationships with first tier, downstream, and related entities at § 422.504(i).
In paragraph (a), we proposed to more clearly state when § 438.230 would apply by adding language specifying that the standards of this section would apply to all contracts and written arrangements that a MCO, PIHP, or PAHP has with any individual or entity that relates directly or indirectly to the performance of the MCO's, PIHP's, or PAHP's obligations under the contract with the state.
In new paragraph (b)(1), we proposed that regardless of any relationship that a MCO, PIHP, or PAHP may have, it alone is accountable for complying with all terms of the contract with the state. While this is not a new standard, we explained that this revision to the text more clearly stated our intent. We proposed in new paragraph (b)(2) to specify that all contracts and written arrangements comply with the provisions of paragraph (c).
Existing paragraphs (b)(2)(i) (requiring the contract to specify the delegated activities, obligations, and responsibilities) and (b)(2)(ii) (providing for revocation of any delegation) would be redesignated as (c)(1)(i) and (c)(1)(iii) but would otherwise remain substantively the same with revisions for clarity. In paragraph (c)(1)(ii), we proposed to add that the individual or entity accepting the delegation agrees to perform the activities in compliance with the MCO's, PIHP's, or PAHP's contract with the state. In paragraph (c)(2), we proposed a general standard that the entity or individual performing the delegated activities must comply with all applicable Medicaid laws, regulations, subregulatory guidance, and contract provisions. Lastly, in paragraphs (c)(3)(i) through (iv), we proposed that the entity or individual performing the delegated activities must agree to grant the state, CMS, HHS OIG, or the Comptroller General the right to audit, evaluate, and inspect any books, contracts, computer or other electronic systems that pertain to services performed or determinations of amounts payable; make available for audit, evaluation, or inspection, its premises, physical facilities, equipment and records; preserve the rights under (c)(3)(i) for 10 years from completion; and grant the state, CMS, HHS OIG, or the Comptroller General the right to audit, evaluate, and inspect at any time if the reasonable possibility of fraud is determined to exist by any of these entities.
We received the following comments in response to our proposal to revise § 438.230.
However, in light of public comments received on this provision and others, we believe it is important to distinguish network providers from subcontractors as the responsibilities on both, as well as the responsibilities on managed care plans in relation to both, are different throughout this part. Therefore, we will finalize this rule with a new definition for “subcontractor” in § 438.2 as an individual or entity that has a contract with an MCO, PIHP, PAHP, or PCCM entity that relates directly or indirectly to the performance of the MCO's, PIHP's, PAHP's, or PCCM entity's obligations under its contract with the State. A network provider is not a subcontractor by virtue of the network provider agreement. Similarly, we will finalize the definition of a “network provider” at § 438.2 to clarify that a network provider is not a subcontractor when acting as a network provider; the network provider agreement with the managed care plan does not create a subcontractor relationship for purposes of this rule. Since the definition of a subcontractor includes “an individual or entity” we will finalize § 438.230(a), (b)(1) and (2), (c)(1) introductory text, (c)(1)(ii) and (iii), (c)(2), (c)(3) introductory text, and (c)(3)(i) through (iv) with “subcontractor” in place of “individual or entity.”
After consideration of the public comments, we are modifying the regulatory text at § 438.230(b)(2) to include commas as necessary. As we will finalize this rule with a definition for “subcontractor,” that term replaces references to “individual or entity” throughout § 438.230. We are also modifying the regulatory text at § 438.230(c)(2) to clarify for commenters that the subcontractor agrees to comply
We proposed several changes to the program integrity provisions in subpart H that were intended to address two types of program integrity risks that were of particular concern: fraud committed by Medicaid managed care plans and fraud by network providers. The provisions of the proposed rule were intended to address both of these types of risk, as well as tighten standards for MCO, PIHP, PAHP, PCCM, and PCCM entity submission of certified data, information, and documentation that is critical to program integrity oversight by state and federal agencies. At 80 FR 31127–31128, we discussed a number of laws that passed since 2002 that impacted program integrity as well as relevant OIG reports that identified potential program integrity vulnerabilities in Medicaid managed care programs. We proposed to modify the title of subpart H to “Additional Program Integrity Safeguards” from the current title “Certifications and Program Integrity” to recognize that various program integrity standards, such as those relating to audited financial data, MLR, and subcontractual relationships, among others, were proposed to be added throughout this part. In addition, we proposed to add entirely new provisions and amend existing provisions to address program integrity risks that are addressed in detail below.
In § 438.600, we proposed to add to the existing list of statutory provisions related to program integrity that support our proposed changes to this subpart. Our proposal included the following statutory provisions: sections 1128, 1128J(d), 1902(a)(4), 1902(a)(19), 1902(a)(27), 1902(a)(68), 1902(a)(77), 1902(a)(80), 1902(kk)(7), 1903(i), 1903(m), and 1932(d)(1) of the Act. In the description of section 1932(d)(1) of the Act in § 438.600, we proposed to remove the term “excluded” and replace it with “debarred” to reflect the statutory standard. As a general matter, we relied on section 1902(a)(4) of the Act when standards in this subpart were proposed to extend beyond MCOs to PIHPs, PAHPs, PCCMs, and PCCM entities.
We received the following comments in response to our proposal to revise § 438.600.
After consideration of the public comments, we are finalizing § 438.600 with a statement of the basic rule and have redesignated the paragraphs accordingly. We have also made a technical correction to § 438.600(a)(6) to specify that section 1902(a)(68) of the Act applies to entities that receive or make annual payments of at least $5 million for consistency with the statutory language, as the proposed rule only specified entities that receive such amounts on an annual basis.
We proposed to replace § 438.602 in its entirety. The intent of the revisions to § 438.602 was to contain all state responsibilities associated with program integrity in one section. Proposed paragraph (a) set forth the state's monitoring standards for contractor compliance with provisions in this subpart and § 438.230 (subcontractual relationships and delegation) and § 438.808 (excluded entities). We did not receive comments on the proposed revisions to § 438.602(a) and will finalize that provision as proposed.
In § 438.602(b), we proposed that states must enroll all network providers of MCOs, PIHPs, and PAHPs that are not otherwise enrolled with the state to provide services to FFS Medicaid beneficiaries. Such enrollment would include all applicable screening and disclosure standards under part 455, subparts B and E and ensure that all providers that order, refer or furnish services under the state plan or waiver are appropriately screened and enrolled. We also proposed that this standard would apply to PCCMs and PCCM entities, to the extent that the PCCM is not otherwise enrolled with the state to provide services to FFS Medicaid beneficiaries. In addition, we provided that the proposed extension of the screening and enrollment requirement to network providers would not obligate the network provider to also render services to FFS beneficiaries.
We requested comment on this approach; in particular, we sought feedback on any barriers to rapid network development that this approach might create by limiting the ability of MCOs, PIHPs, or PAHPs to contract with providers until the results of the state's screening and enrollment process are complete. We also explained that this proposal did not alter the MCO's, PIHP's, or PAHP's responsibility under § 438.214(c) to operate a provider selection process that does not discriminate against providers that serve high-risk populations or that specialize in costly treatments or the state's responsibility to monitor the
We received the following comments in response to our proposal at § 438.602(b).
In light of these concerns, some commenters requested that CMS remove this provision altogether while others requested clarification in the final rule that states would be permitted to delegate the screening and enrollment processes to managed care plans or another third party. Other commenters suggested the imposition of timeframes for the state to complete the screening and enrollment process to mitigate delays in network development. Another suggestion to mitigate delays in network development was to permit managed care plans to enter into provisional provider agreements pending the outcome of the screening and enrollment process. If a provider failed the screen, the managed care plan would be obligated to terminate the provider agreement immediately or within 30 days and provide notice to impacted enrollees. Some commenters suggested that the screening and enrollment provisions only apply to new providers that negotiate provider agreements with managed care plans after this provision would become effective.
Other commenters were supportive of the provision as a way to reduce administrative costs by centralizing the screening, enrollment, and revalidation of network provider eligibility but encouraged CMS to provide guidance on how the state could reduce administrative and financial burden. Some commenters requested that CMS require states to share a list of screened providers with the managed care plans on at a least a monthly basis. Many commenters questioned the date that states would have to be in compliance with the screening and enrollment provision for network providers.
Second, the credentialing process involves the activities taken by the state or the managed care plan to verify the education, training, liability record, and practice history of providers. This step represents the level of scrutiny necessary to ensure that the provider is qualified to perform the services that they seek to be paid to perform. There is undoubtedly some overlap between the screening and credentialing processes. Section 438.214 requires the managed care plan to follow the state's credentialing and recredentialing policies. Under managed care programs, managed care plans primarily conduct the credentialing process as part of executing network provider agreements with providers to become part of the managed care plan's network.
Finally, the screening, disclosures, and credentialing processes described above are the precursor to a provider being “enrolled” as a Medicaid provider with the State Medicaid agency. Under FFS programs, upon enrollment, the provider is loaded into the claim adjudication system as an approved provider and able to receive payment through Electronic Funds Transfer (EFT). We recognize that the proposed rule could have been clearer in describing what “enrollment” means for network providers; however, § 438.602(b) makes clear that the “enrollment” of network providers will not obligate those providers to participate in the FFS delivery system. Section 1902(a)(27) of the Act requires the state plan to provide for agreements with every person or institution providing services under the State plan under which such person or institution agrees to keep such records as are necessary fully to disclose the extent of the services provided under the State plan, and to furnish the State agency or the Secretary with such information, regarding any payments claimed by such person or institution for providing services under the State plan. Execution of the provider agreement with the state and satisfaction of the applicable screening requirements results in the provider being enrolled as required under 42 CFR part 455. In the regulations implementing a provision in section 6402 of the Affordable Care Act, requiring inclusion of a National Provider Identifier (NPI) on all applications to enroll in Medicare or Medicaid, we noted that there is no Federally required enrollment application, although all Medicaid providers are required to enter into a provider agreement with the State as a condition of participating in the program under section 1902(a)(27) of the Act.
We recognize the changes in administrative procedures and resources that may be necessary to carry out the screening and enrollment of network providers but believe that the additional burden imposed by such changes is outweighed by the benefit of the additional safeguards these activities bring to ensure the quality of and access to care for Medicaid beneficiaries, as well as to support effective stewardship of public resources. We also note that a
We acknowledge here that states may require a third party, such as contracted managed care plans or a fiscal intermediary, to conduct the functions in § 438.602(b) but we do so with some cautionary statements. We recognize existing arrangements in many states that extended the provisions of part 455, subparts B and E to network providers before this final rule, as well as the desire of other states, that have not already extended these requirements to network providers, to rely on their contracted managed care plans or a fiscal intermediary to facilitate compliance with these provisions of the final rule. We are concerned about quality control, consistency among the managed care plans or a fiscal intermediary in conducting these activities, and duplicative efforts with respect to network providers that participate in several managed care plans. We are also concerned about the ability of managed care plans or a fiscal intermediary to conduct all of the functions required in subpart E of 42 CFR part 455, including on-site visits and fingerprint-based criminal background checks for high-risk providers. As with any state function that is contracted out for performance, the state must maintain oversight of the activity. Some state functions, such as entering into provider agreements under § 431.107, cannot be contracted out for performance. The state is not required to contract with a third party for the activities in § 438.602(b).
To mitigate concerns about delays in network development, we are adding a new paragraph (b)(2) that the MCO, PIHP, or PAHP may execute network provider agreements pending the outcome of the screening process of up to 120 days, but upon notification from the state that a provider's enrollment has been denied or terminated, or the expiration of the one 120 day period without enrollment of the provider, the managed care plan must terminate such network provider immediately and notify affected enrollees that the provider is no longer participating in the network. States must be in compliance with these provisions by the rating period for managed care contracts starting on or after July 1, 2018, for all network providers. The 120 day timeframe is intended to encourage the state's expedient completion of the screening and enrollment process.
After consideration of public comments, we are finalizing § 438.602(b) as proposed and with a new paragraph (b)(2) to explain that managed care plans may execute network provider agreements pending the outcome of the screening process but upon notification from the state that a network provider cannot be enrolled, must terminate such agreement and notify affected enrollees.
In paragraph (c), we proposed that the state must review the ownership and control disclosures submitted by the MCO, PIHP, PAHP, PCCM, or PCCM entity, and any subcontractors, in accordance with 42 CFR part 455, subpart B.
We received the following comments in response to our proposal at § 438.602(c).
After consideration of public comments, we are finalizing § 438.602(c) with a technical modification to refer to § 438.608(c) rather than subpart B of part 455 of this chapter, as § 438.608(c) incorporates the disclosure requirements in § 455.104.
In paragraph (d), we proposed that states must conduct federal database checks, consistent with the standards in § 455.436, to confirm the identity of, and determine the exclusion and debarment status of, the MCO, PIHP, PAHP, PCCM, or PCCM entity, any subcontractor, any person with an ownership or control interest, or any agent or managing employee at the time of entering into the contract and no less frequently than monthly thereafter. If a state determines that a party subject to the federal database checks has been excluded from Medicaid participation, it must promptly notify the MCO, PIHP, PAHP, PCCM, or PCCM entity and take action consistent with § 438.610(c).
We received the following comments in response to our proposal at § 438.602(d).
In paragraph (e), we proposed that the state must periodically, but no less frequently than once every 3 years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO, PIHP, and PAHP.
We received the following comments in response to our proposal at § 438.602(e).
After consideration of public comments, we are finalizing § 438.602(e) as proposed.
In paragraph (f), we proposed to incorporate the requirement for states to receive and investigate information from whistleblowers. We did not receive comments on § 438.602(f) and will finalize as proposed.
In paragraph (g), we proposed that each state must post on its Web site or otherwise make available, the MCO, PIHP, PAHP, or PCCM entity contract, the data submitted to the state under § 438.604, and the results of any audits conducted under paragraph (e) of this section. We proposed to add PCCM entity contracts to this standard as we proposed in § 438.3(r) that such contracts be submitted for our review and approval.
We received the following comments in response to our proposal at § 438.602(g).
After consideration of public comments, we are finalizing § 438.602(g) with modification of the types of information that must be provided on the state's Web site.
In paragraph (h), we proposed that states have conflict of interest safeguards in place consistent with § 438.58. We did not receive comments on § 438.602(h) and are finalizing as proposed.
In paragraph (i), we proposed that the state must ensure, consistent with section 1902(a)(80) of the Act, that the MCO, PIHP, PAHP, PCCM, or PCCM entity is not located outside of the United States and that no payments are made for services or items to any entity or financial institution outside of the U.S. We interpreted this payment prohibition to mean that no such payments made by an MCO, PIHP, or PAHP to an entity or financial institution located outside of the U.S.
We received the following comments in response to our proposal at § 438.602(i).
After consideration of public comments, we are finalizing § 438.602(i) as proposed.
We proposed to modify existing standards regarding submission and certification of data by managed care plans, PCCMs and PCCM entities to the state which currently exist in §§ 438.604 and 438.606. We proposed to revise § 438.604(a) and (b) to specify the data, information and documentation that must be submitted by each MCO, PIHP, PAHP, PCCM, or PCCM entity to the state, including encounter data and other data generated by the managed care plan for purposes of rate setting; data on which the state determined that the entity met the MLR standards; data to ensure solvency standards are met; data to ensure availability and accessibility of services; disclosure information as described at 42 CFR part 455, subpart B; the annual report on recoveries of overpayments as proposed in § 438.608(d)(3); and any other data related to the performance of the entity's obligations as specified by the state or the Secretary.
Comments received on proposed § 438.604 were primarily related to the transparency requirements in § 438.602(g). Those comments were addressed in response to comments on § 438.602(g) above. Therefore, we are finalizing § 438.604 as proposed.
Section § 438.606 stipulated that MCOs, PIHPs, PAHPs, PCCMs, and PCCM entities must certify the data, information and documentation specified in § 438.604. We proposed to expand the certification requirement to documentation and information, as well as data and proposed to cross-reference the submission standards in § 438.604 to identify the scope of the certification requirement. In § 438.606(a), we proposed to eliminate the option for a MCO's, PIHP's, PAHP's, PCCM's, or PCCM entity's executive leadership to delegate the certification.
We received the following comments in response to § 438.606(a).
After consideration of public comments, we are modifying § 438.606(a) to permit an individual who reports directly to the managed care plan's CEO or CFO with delegated authority to sign for the CEO or CFO, so that the CEO or CFO remains ultimately responsible for the certification, to be the source of the certification required in this section. We are also modifying this paragraph with grammatical changes to insert semi-colons where appropriate.
In § 438.606(b), we proposed to include documentation or information after the existing reference to data for consistency with the addition of such terms in § 438.604 and § 438.606 and to specify that the certification attests that the MCO, PIHP, PAHP, PCCM, or PCCM entity has conducted a reasonably diligent review of the data, documentation, and information in § 438.604(a) and (b), and that such data, documentation, and information is accurate, complete, and truthful. We proposed this modification to the certification to clarify that the attesting individual has an affirmative obligation to ensure that a reasonably diligent review has been conducted and that the information being certified is accurate, complete, and truthful. We requested comment on the proposed certification language.
We received the following comments on § 438.606(b).
After consideration of public comments, we are finalizing § 438.606(b) to include the best information, knowledge, and belief language for certifications by managed care plans.
In paragraph (c), we proposed to maintain the existing standard that the certification is provided concurrently with the submission of the data, documentation or information specified in § 438.604. We did not receive comments on § 438.606(c) and are finalizing as proposed.
Current § 438.608 specifies the elements that must be included in a MCO's and PIHP's program integrity/compliance program and administrative procedures to detect and prevent fraud, waste and abuse. We proposed to expand those standards to PAHPs and subcontractors to the extent that the subcontractor is delegated responsibility by the MCO, PIHP, or PAHP for coverage of services and payment of claims under the contract between the state and the MCO, PIHP, or PAHP.
We received the following general comments on § 438.608(a).
We proposed the following changes to § 438.608:
• Establishment of written policies, procedures, and standards of conduct that articulate the organization's commitment to comply with all applicable requirements and standards under the contract, and all applicable Federal and state requirements (proposed to redesignate § 438.608(b)(1) as § 438.608(a)(1)(i)). We did not receive comments on § 438.608(a)(1)(i) and will finalize the provision as proposed.
• Direct reporting by the Compliance Officer to both the CEO and board of directors of the MCO, PIHP, or PAHP, which is consistent with MA requirements at § 422.503(b)(4)(vi)(B)(2); the designation of compliance officer that is accountable to senior management is at current § 438.608(b)(2) (proposed § 438.608(a)(1)(ii)). We received the following comments on proposed § 438.608(a)(1)(ii).
After consideration of public comments, we are finalizing § 438.608(a)(1)(ii) as proposed.
• Establishment of a Regulatory Compliance Committee on the Board of Directors and at the senior management level charged with oversight of the compliance program for consistency with MA requirements at § 422.502(b)(4)(vi)(B). We received the following comments on proposed § 438.608(a)(1)(iii).
After consideration of public comments, we are finalizing § 438.608(a)(1)(iii) as proposed.
• Establishment of a system for training and education for the Compliance Officer, the organization's senior management, and the organization's employees for the federal and state standards and requirements under the contract for consistency with MA organization requirements at § 422.503(b)(4)(vi)(C). We did not receive comments on proposed § 438.608(a)(1)(iv) and are finalizing as proposed.
• Establishment of a system for effective communication between the compliance officer and the organization's employees (proposed to redesignate § 438.608(a)(4) as § 438.608(a)(1)(v)). We did not receive comments on § 438.608(a)(1)(v) and are finalizing as proposed.
• Enforcement of standards through well-publicized disciplinary guidelines (proposed to redesignate § 438.608(b)(5) as § 438.608(a)(1)(vi)). We did not receive comments on § 438.608(a)(1)(vi) and are finalizing as proposed.
• Establishment and implementation of procedures and a system with dedicated staff for routine internal monitoring and auditing of compliance risks, prompt response to compliance issues as they are raised, investigation of potential compliance problems as identified in the course of self-evaluation and audits, correction of such problems promptly and thoroughly (or coordination of suspected criminal acts with law enforcement agencies) to reduce the potential for recurrence, and ongoing compliance with the requirements under the contract; the provision for internal monitoring and auditing and prompt response to detected offenses is at current § 438.608(b)(6) and (7) (proposed § 438.608(a)(1)(vii)).
We received the comments on § 438.608(a)(1)(vii):
After consideration of public comments, we are finalizing § 438.608(a)(1)(vii) as proposed.
• Mandatory reporting to the state or law enforcement of improper payments identified or recovered, specifying the improper payments due to potential fraud. We received the following comments on proposed § 438.608(a)(2).
For clarity in this part, we will add a definition for “fraud” in § 438.2 that incorporates the definition found in § 455.2.
Upon review of this provision, as proposed, we identified two areas within the provision that require modification to clarify the regulatory standard. First, the use of the term “improper payments” in the proposed provision could have been interpreted to incorporate Payment Error Rate Measurement (PERM) requirements, and that was not our intention. Our intention for § 438.608(a)(2) is that managed care plans promptly report overpayments to the state that are identified or recovered and, in that reporting, to specify the overpayments due to potential fraud. Second, overpayments must be reported to the state and it is not necessary that the managed care plan instead, or in addition to, report this information to law enforcement as proposed. Note that § 438.608(a)(7) separately requires managed care plans to refer any potential fraud, waste, or abuse to the state Medicaid program integrity unit or any potential fraud directly to the state MFCU.
After consideration of public comments, we are finalizing § 438.608(a)(2) with the following modifications: (1) Replacing “improper payments” with “overpayments”; and (2) deletion of law enforcement. In addition, to clarify the definition of “fraud” applicable in this paragraph and elsewhere in this part, we will finalize the rule with a cross-reference in § 438.2 to the definition of “fraud” in § 455.2.
• Mandatory reporting to the state of information received by managed care plans about changes in an enrollee's circumstances that may affect the enrollee's eligibility. We received the following comments on proposed § 438.608(a)(3).
After consideration of public comments, we are finalizing § 438.608(a)(3) so that managed care plans would notify the state of changes in the enrollee's residence and death.
• Mandatory reporting to the state of information received by the managed care plan about changes in a provider's circumstances that may affect the provider's participation in the managed care program. Such changes in circumstances would include the termination of the network agreement with the managed care plan.
We received the following comment on proposed § 438.608(a)(4).
After consideration of public comments, we are finalizing § 438.608(a)(4) as proposed.
• Verification by sampling or other methods, whether services that were represented to have been delivered by network providers were actually received. We received the following comments on proposed § 438.608(a)(5).
After consideration of public comments, we are finalizing § 438.608(a)(5) as proposed.
• Establishment of written policies related to the Federal False Claims Act, including information about rights of employees to be protected as whistleblowers at proposed § 438.608(a)(6). We did not receive comments on § 438.608(a)(6) and will finalize with a minor grammatical change so that this provision reads correctly from the introductory language in paragraph (a).
• Mandatory referral of any potential fraud, waste, or abuse that the MCO, PIHP, or PAHP identifies to the State Medicaid program integrity unit or any potential fraud directly to the State Medicaid Fraud Control Unit (proposed § 438.608(a)(7)). We explained that states that have a MFCU may choose, as part of their contracts with MCOs, PIHPs, or PAHPs, to stipulate that suspected provider fraud be referred only to the MFCU, to both the MFCU and to the Medicaid program integrity unit, or only to the Medicaid program integrity unit. For those matters referred to the Medicaid program integrity unit, 42 CFR part 455 provides that the unit must conduct a preliminary investigation and cooperate with the MFCU in determining whether there is a credible allegation of fraud. For those MCOs, PIHPs, and PAHPs with their own Special Investigation Unit (SIU) to investigate suspected provider fraud, the program integrity unit should assess the adequacy of the preliminary investigation conducted by those units and seek to avoid the duplication and delay of their own preliminary investigation.
We received the following comments on § 438.608(a)(7).
After consideration of public comments, we are finalizing § 438.608(a)(7) as proposed.
• Provision for the MCO's, PIHP's, or PAHP's suspension of payments to a network provider for which the state determines there is a credible allegation of fraud in accordance with § 455.23 (proposed § 438.608(a)(8)). Under § 455.23, which implements section 1903(i)(2)(C) of the Act, the state must suspend payments to an individual or entity against which there is a pending investigation or a credible allegation of fraud against the individual or entity, unless the state determines that there is good cause not to suspend such payments. Under our authority in sections 1903(i)(2)(C) and 1902(a)(4) of the Act, we proposed to require that the state make provision for the MCO, PIHP, or PAHP to suspend payment to a network provider when the state determines there is a credible allegation of fraud against that network provider, unless the state determines there is good cause for not suspending such payments pending the investigation. Under this provision, the responsibility of MCOs, PIHPs, and PAHPs is limited to promptly suspending payments at the direction of the state until notified by the state that the investigation has concluded.
We received the following comments on proposed § 438.608(a)(8).
After consideration of public comments, we are finalizing § 438.608(a)(8) as proposed.
Section 438.608(b) incorporated the provider screening and enrollment standards in § 438.602(b). Comments on this proposal were addressed in response to comments on § 438.602(b). We are finalizing § 438.608(b) as proposed.
In paragraph (c) of § 438.608, we proposed additional expectations for performance by managed care plans that the state must include in their contracts, including:
• Requiring MCOs, PIHPs, and PAHPs to disclose in writing any prohibited affiliation outlined in § 438.610 (proposed paragraph (c)(1));
• Requiring written disclosures of information on control and ownership under § 455.104 (proposed paragraph (c)(2)); and
• Requiring MCOs, PIHPs, and PAHPs to report to the state within 60 calendar days of when they identify receipt of payments in excess of the capitation rate or other payments established in the contract (proposed paragraph (c)(3)).
We requested comment on whether we should establish timeframes for the written disclosures on control and ownership at proposed paragraph (c)(2).
We did not receive comments on § 438.608(c)(1) or (c)(2) and will finalize those provisions as proposed.
We received the following comments on proposed § 438.608(c)(3).
After consideration of comments received, we are finalizing § 438.608(c)(3) as proposed.
In § 438.608(d)(1), we proposed that MCO, PIHP, and PAHP contracts specify that recoveries of overpayments made by the MCO, PIHP, or PAHP to providers that were excluded from Medicaid participation or that were due to fraud, waste or abuse were to be retained by the MCO, PIHP, or PAHP. We explained that because these overpayments represent state and federal Medicaid funds that were paid to the excluded or fraudulent providers by the MCO, PIHP, or PAHP, states are then expected to take such recoveries into account in the development of future actuarially sound capitation rates as proposed in § 438.608(d)(4). The proposal in § 438.608(d)(1) would not prohibit the federal government or states from retaining the appropriate share of recoveries of overpayments due to their own audits and investigation. We solicited comment on this proposal to allow MCOs, PIHPs, and PAHPs to retain overpayment recoveries of payments made to providers that were excluded from Medicaid participation or that were due to fraud, waste or abuse that were made by the managed care plan, while also allowing the federal government and states retain overpayment recoveries they make. We also requested comment on alternative approaches to determining when a recovery may be retained by an MCO, PIHP, or PAHP. Specifically, whether we should instead impose a timeframe between 6 months to 1 year for which the MCO, PIHP, or PAHP may act to initiate the recovery process and retain such recovered overpayments. We further proposed that, consistent with that contractual language, the state collect reports from each MCO, PIHP, or PAHP about recoveries of overpayments in proposed § 438.608(d)(3).
To aid in the creation and submission of such reports in proposed paragraph (d)(3), in paragraph (d)(2) we proposed a standard that the MCO, PIHP, or PAHP must have a mechanism in place for providers to report the receipt of overpayments and to return such overpayments to the MCO, PIHP, or PAHP within 60 calendar days after the overpayment was identified. For clarity, in proposed (d)(5) we define the term “overpayment.”
We received the following comments in response to our proposal to add § 438.608(d).
Some commenters recommended that the window for the managed care plan to identify, recover, and retain such
Some commenters recommended that overpayments made to excluded providers, as proposed at § 438.608(d)(1)(i), should not be permitted to be retained as the managed care plan never should have made a payment to an excluded provider. A few commenters wanted it to be clarified that all overpayments identified by the MFCU or under a False Claims Act case should be fully retained by the state.
However, in light of comments received on this proposal and after further consideration, it is clear that a number of states have long-standing procedures in place for the treatment of overpayments recovered by managed care plans that differ from the approach in the proposed rule. It also became clear to us that implementing this provision as proposed may result in ambiguity as to when an overpayment was identified for purposes of entitlement to the recovery. Therefore, we will not finalize § 438.608(d) as proposed and instead finalize a requirement that permits states flexibility to set forth an approach to overpayment recoveries in the managed care plan contracts. As provided in a new paragraph § 438.608(d)(1)(i), the state will need to address in its contracts the retention policies for the treatment of recoveries of all overpayments from the MCO, PIHP, or PAHP, and in particular, the policy for recoveries of overpayments due to fraud, waste, or abuse. A new paragraph (d)(1)(ii) provides that the contract must specify the process, timeframes, and documentation required of the managed care plans for reporting the recovery of all overpayments. Finally, a new paragraph (d)(1)(iii) requires that the contract specify the process, timeframes, and documentation required for the payment of recoveries of overpayments to the state if the managed care plan is not permitted to retain some or all of the recoveries. We believe that this revised approach respects current approaches that are working well within a Medicaid managed care program, but it also requires states to have policies in place for the treatment of managed care plan recoveries of overpayments.
States must ensure that contract provisions implementing § 438.608(d)(1) are consistent with other requirements under federal law and this part. For example, § 438.608(d)(2) requires network providers to return overpayments to MCOs, PIHPs, and PAHPs within 60 days once the overpayment is identified. We may provide additional guidance regarding § 438.608(d)(1) to ensure that states incorporate appropriate requirements into their overpayment retention contract provisions. Although states have the flexibility to implement overpayment retention contract provisions, the policies in the contract would not prohibit the federal government from retaining the appropriate share of recoveries of overpayments due to their own audits and investigations.
After consideration of public comments, we are finalizing § 438.608(d)(1) to require states to have policies in place for the treatment of overpayment recoveries and to specify that policies implemented pursuant to this provision do not apply to the retention of recoveries made under the False Claims Act or through other investigations.
After consideration of public comments, we are finalizing § 438.608(d)(2) as proposed. We did not receive comments on paragraph (d)(3) and will finalize as proposed. We did not receive comments on paragraph (d)(4) but, for consistency with the final provisions in § 438.608(d)(1), we will finalize this paragraph as proposed and with an additional requirement that the information and documentation collected pursuant to paragraph (d)(1) must be used by the state for purposes of setting actuarially sound capitation rates.
We received the following comment on proposed § 438.608(d)(5).
After consideration of public comments, we will finalize the definition of an “overpayment,” as proposed and with a modification to reflect a state's payments to managed care plans to which the plans are not entitled, in the general definition section at § 438.2, rather than in § 438.608(d), as the term appears in multiple sections of this part.
We proposed to revise the title of § 438.610 from “Prohibited affiliations with individuals debarred by federal agencies” to “Prohibited affiliations.” This proposed change was in recognition of the addition of individuals or entities excluded from Medicaid participation under section 1128 of the Act. In paragraph (a), which provided the general standards under this section, we added PCCM and PCCM entities through our authority for the proper and efficient administration of the state plan in section 1902(a)(4) of the Act.
In paragraphs (a)(1) and (a)(2) that specify the types of knowing relationships in section 1932(d)(1)(C) of the Act, we proposed to clarify that these relationships may be with individuals or entities that meet those
We proposed to redesignate paragraph (b) that specified the relationships that are prohibited as paragraph (c) to accommodate the proposed inclusion of individuals or entities excluded from participation under section 1128 of the Act. In addition, we proposed to add subcontractors of the MCO, PIHP, PAHP, PCCM, or PCCM entity as described in § 438.230 to the types of prohibited relationships in paragraph (c)(3). In paragraph (c)(4), we proposed to add network providers to clarify that they fall under the employment or other consulting arrangement for items and services under the contract between the state and the managed care plan.
Due to the proposed restructuring of paragraphs within this section, we redesignated paragraph (c) as paragraph (d) without change, with the exception of the following modifications. In paragraph (d)(3), we proposed to clarify that the reasons for continuation of a managed care plan's agreement with a prohibited individual or entity must be compelling despite the prohibited affiliation. In addition, we proposed a new paragraph (d)(4) to clarify that this section does not limit or affect any remedies available to the federal government under sections 1128, 1128A or 1128B of the Act. Finally, we proposed to redesignate paragraph (d) as paragraph (e) without change.
We received the following comments in response to our proposal to revise § 438.610.
After consideration of the public comments, we are finalizing § 438.610 as proposed.
Throughout subpart I pertaining to sanctions, we proposed to extend standards applicable to PCCMs to PCCM entities, as we proposed to recognize PCCM entities as a type of PCCM as defined in section 1905(t)(2) of the Act and referenced in section 1932(a)(1)(B)(ii) of the Act. The discussion of the proposed recognition and application of standards in this part to PCCM entities is described in section I.B.6.e. of this final rule. Therefore, we proposed to add PCCM entities to § 438.700(a), (c), and (d)(2); § 438.704(a); § 438.708; and § 438.722.
In § 438.700(a), we proposed to clarify that the intermediate sanctions specified in § 438.702 “may” be used by the state, rather than providing that these “must” be the sanctions that the state establishes. The current regulation could be interpreted to mean that the specific intermediate sanctions enumerated must be used by the state, even though section 1932(e)(1) of the Act only stipulates that intermediate sanctions be in place for the specified violations, and that such intermediate sanctions may include those specified in section 1932(e)(2) of the Act and set forth in § 438.702. The standard in section 1932(e)(1) of the Act that is a condition for having or renewing a MCO contract is only that there be intermediate sanctions in place.
In § 438.700(c), we proposed to delete PIHPs and PAHPs from the state's determination that unapproved or misleading marketing materials have been distributed as provided for in the last sentence of section 1932(e)(1) of the Act. In the 2002 final rule, we included PIHPs and PAHPs in the regulation text implementing this sentence but have determined that the statutory provision, by its terms, only applies to a “managed care entity.” While a PCCM may be both a managed care entity and a PAHP, if it is paid on a risk basis, it would only be subject to this provision based on its status as a “managed care entity” under section 1932 of the Act, rather than its status as a PAHP. In this paragraph, we proposed to add PCCM entities consistent with the discussion of PCCM entities in the opening paragraph of this section of this final rule, and with the fact that the definition of managed care entity includes a PCCM.
In § 438.702(a)(4), we proposed to delete the phrase “after the effective date of the sanction,” and insert “after the date the Secretary or the State notifies the MCO or PCCM of a determination of a violation of any standard under sections 1903(m) or 1932 of the Act.” The proposed language is identical to the statutory standard in section 1932(e)(2)(D) of the Act; we believed that the current language did not fully reflect the statutory directive.
In § 438.706, we proposed a change to correct an inconsistency. Currently, § 438.706 discusses special rules for temporary management and, in paragraph (a), we reference “onsite survey, enrollee complaints, financial audits, or any other means” as acceptable ways to determine if an MCO must be subjected to temporary management. However, this language is inconsistent with language at § 438.700(a) that references “onsite surveys, enrollee or other complaints, financial status, or any other source” as a means to determine imposable sanctions. We proposed to correct this inconsistency by revising § 438.706(a) to incorporate the language of § 438.700(a).
In § 438.724(a), we proposed to delete the reference to “Regional Office,” consistent with proposed changes in § 438.3(a) and § 438.7(a).
We also proposed changes to update terms. For instance, § 438.730 currently addresses sanctions imposed by CMS on MCOs and paragraphs (e)(1) and (e)(2) use the term “HMO.” The Balanced Budget Act of 1997 (BBA) replaced the term “Health Maintenance Organization (HMO)” with “Managed Care Organization (MCO).” We proposed to correct these obsolete references to HMO in paragraphs (e)(1) and (2) by replacing the term with “MCO.” In addition, current § 438.730 uses “State agency” or “agency,” which is inconsistent with references to the state in subpart H as well as our proposal to create a uniform definition for “state” in § 438.2. We therefore proposed revisions to address this.
We also proposed to correct several inaccurate cross-references to other provisions of the regulations text. In § 438.730(f)(1), the reference to “paragraph (b)” would be revised to reference “paragraph (c).” In § 438.730(f)(2)(i) and (ii), the reference to “(d)(2)(ii)” would be revised to reference “(d)(2)” and the reference to “(c)(1)(ii)” would be revised to reference “(d)(1)(ii).” Finally, in § 438.730(g)(1), the reference to “paragraph (c)(1)(i)” would be revised to reference “paragraph (c)(1).”
We received the following comments in response to our proposal to revise §§ 438.700, 438.702, 438.704, 438.706, 438.708, 438.722, and 438.730.
Regarding comments whether the state has the option to impose intermediate sanctions upon a determination that an MCO, PCCM, or PCCM entity acted or failed to act as specified in § 438.700(b) through (d), section 1932(e)(1) and (2) of the Act clearly permits state flexibility as to the decision to impose a sanction and as to the appropriate sanction. The state, as the direct contractor with the MCO, PCCM, or PCCM entity, is in the best position to determine if the imposition of intermediate sanctions is warranted. If a state determines that the imposition of intermediate sanctions is appropriate, it may select from the options in § 438.702 or use others in place through the contract with the MCO, PCCM, or PCCM entity. We note that § 438.702(b) specifies that states retain the authority to impose additional sanctions for the areas of noncompliance in § 438.700, as well as additional areas of noncompliance. For the most part, the state has the discretion to choose which of these intermediate sanctions to use. However, the state is required to have authority to appoint temporary management under section 1932(e)(2)(B) of the Act, and to permit individuals to terminate without cause under section 1932(e)(2)(C) of the Act. This is because section 1932(e)(3) of the Act requires the state to impose at least those two sanctions if an MCO repeatedly fails to meet the requirements of section 1903(m) or 1932 of the Act. This requirement is specified at § 438.706(b).
After consideration of the public comments, we are finalizing § 438.700 with the modifications to replace “whether” with “that” in paragraphs (b), (c) and (d) as described above but otherwise as proposed. We are finalizing, as proposed, §§ 438.702, 438.704, 438.706, 438.708, 438.710, 438.722, 438.724, 438.726 and 438.730; in § 438.704(b), § 438.706(a), and § 438.730(a) we are also finalizing minor technical corrections to cross-referenced cites.
We proposed to add a new § 438.807 to specify that we may defer and/or disallow FFP for expenditures under a MCO contract identified in section 1903(m)(2)(A) of the Act when the state's contract, as submitted for our approval or as administered, is non-compliant with standards therein, with section 1932 of the Act, or with the provisions of 42 CFR part 438 implementing such standards. These standards include whether final capitation rates, as specified in the contract and detailed in the rate certification, are consistent with the standards of actuarial soundness proposed in §§ 438.4 through 438.7. The proposed process for issuance of a deferral or a disallowance is the same as the process identified in §§ 430.40 and 430.42, respectively.
Section 1903(m)(2)(A) of the Act specifies that if the requirements set forth in paragraphs (i) through (xiii) therein are not satisfied, no FFP is authorized for expenditures incurred by the state for services under a prepaid capitation or other risk-based contract under which the payment is for inpatient hospital services and any other service described in paragraphs (2), (3), (4), (5), or (7) of section 1905(a) of the Act, or for the provision of any three or more of the services described in such paragraphs. We have previously interpreted this to mean that if the state fails to comply with any of the listed conditions, there could be no FFP at all for payments under the contract, even for amounts associated with services for which there was full compliance with all requirements of section 1903(m)(2)(A) of the Act. This interpretation has resulted in a potential penalty that in some cases appears to be out of proportion to the nature of the violation, under which FFP would be withheld for payment amounts representing services which are in compliance.
We proposed to interpret section 1903(m)(2)(A) of the Act that the enumerated services are for purposes of defining the minimum scope of covered services under a comprehensive risk, or MCO, contract. We proposed that deferrals and/or disallowances of FFP can be targeted to all services under the MCO contract even if not listed explicitly in section 1903(m)(2)(A) of the Act, rather than FFP in the full payment amount made under the contract. Specifically, we proposed in § 438.807 to interpret section 1903(m)(2)(A) of the Act to condition
We received the following comments in response to our proposal to add § 438.807.
One commenter stated that none of the requirements listed in section 1903(m)(2)(A) of the Act support CMS' approach in § 438.807. The commenter stated that section 1903(m)(2)(A)(iii) of the Act contains the requirement that capitation rates be actuarially sound, and this concept does not allow CMS to isolate and remove portions of capitation rates to be paid for individual services, without affecting the certification of the rate as adequate to meet the needs of contracting plans. The commenter also stated that the remaining federal Medicaid managed care requirements in section 1903(m)(2)(A) of the Act are established as obligations imposed on states for inclusion in their contracts with Medicaid plans, not as requirements applicable to individual services. The commenter stated that it is unclear when and under what basis, CMS would be able to conclude that a violation involves only a particular category of service. Other commenters opposed to § 438.807 stated that CMS' approach to defer or disallow FFP for targeted services is incongruent with the operation of Medicaid managed care programs and inconsistent with a comprehensive full-risk managed care contract and capitated payment model.
We are not finalizing § 438.807.
Current § 438.808 implements the requirements of section 1902(p)(2) of the Act with respect to MCOs. Section 1902(p) of the Act enforces exclusions from federal health care programs by prohibiting FFP for medical assistance to MCOs and entities furnishing services under a waiver approved under section 1915(b)(1) of the Act if the MCOs or entities that have a contractual or other relationships with excluded entities or individuals. We proposed to clarify that PIHPs, PAHPs, PCCMs or PCCM entities that have contracts with the state under a section 1915(b)(1) waiver would also be subject to § 438.808, which implements the requirements in section 1902(p)(2) of the Act for the types of organizations or entities with which the state must not contract in order for the state to receive federal payments for medical assistance. Section 1902(p)(2) of the Act similarly provides that an entity furnishing services under a waiver approved under section 1915(b)(1) of the Act must meet the exclusion parameters identified in section 1902(p)(2)(A), (B) and (C) of the Act in order for the state to receive FFP. The regulation, at § 438.808(b), lists the entities that must be excluded. There is no requirement in the statute that MCO contracts be tied to a specific managed care authority so we proposed that all MCO contracts under any authority be subject to this provision.
We received the following comments in response to our proposal to revise § 438.808.
After consideration of the public comments, we are finalizing this section as proposed with a modification to include appropriate references to § 438.610(b).
In this section, we addressed a gap in the current managed care regulations regarding the enrollment process. Other than the default enrollment standards currently in § 438.50(e) and (f) for MCOs and PCCMs, there have been no federal regulations governing enrollment of beneficiaries into Medicaid managed care programs. In the absence of specific federal regulatory provisions, states have used a number of different approaches to enrolling beneficiaries into voluntary and mandatory managed care programs. The variation in proposed processes revealed a need for guidance to ensure an appropriate, minimum level of beneficiary protection and consistency across programs. In this section, we proposed basic federal standards for enrollment while continuing to permit state flexibility in designing enrollment processes for Medicaid managed care programs.
Among states currently operating voluntary Medicaid managed care programs, which allow each beneficiary to choose to receive services through either a managed care or FFS delivery system, states have generally used a passive enrollment process to assign a beneficiary to a managed care plan immediately upon being determined eligible. Typically, the beneficiary is provided a period of time to elect to opt-out of enrollment from the state-assigned managed care plan and select a different managed care plan or elect to opt-out of managed care completely and, instead, receive services through a FFS delivery system. If the beneficiary does not make an affirmative choice, the
In a mandatory Medicaid managed care program, states require beneficiaries to receive Medicaid benefits from managed care plans. Under section 1932(a)(4)(A)(ii)(I) of the Act, beneficiaries in a mandatory managed care program have the right to change plans without cause within 90 days of enrolling in the plan and every 12 months; enrollees may also change plans for cause at any time. When the beneficiary does not actively select a managed care plan in the timeframe permitted by the state, states have generally used the default assignment process to assign individuals into plans. Section 1932(a)(4)(D) of the Act and current implementing regulations at § 438.50(f) outline the process that states must follow to implement default enrollment (also commonly known as auto-assignment) in a mandatory managed care program.
In both voluntary and mandatory managed care programs, we suggested that beneficiaries are best served when they affirmatively exercise their right to make a choice of delivery system or plan enrollment. We noted that this involves both an active exercise of choice and requisite time and information to make an informed choice. Further, given the sensitive nature of this transition from FFS to managed care or from one managed care system to a new managed care system and the often complex medical, physical and/or cognitive needs of Medicaid beneficiaries, we indicated that enrollment processes should be structured to ensure that the beneficiary has an opportunity to make an informed choice of a managed care plan and that state processes support a seamless transition for an enrollee into managed care.
Our goal of alignment prompted us to consider how enrollment is conducted in the private market and in other public programs. In the proposed rule, we noted that MA is a voluntary managed care program, in which beneficiaries actively select the MA organization during the annual open enrollment period with limited exceptions for passive enrollment. To promote integration of care for dually eligible (Medicare and Medicaid) beneficiaries in a section 1115A demonstration, CMS' Medicare-Medicaid Coordination Office (MMCO) is using a form of passive enrollment. That enrollment process generally requires notifying dually eligible individuals that they can select a Medicare plan 2 months before they would be enrolled in the plan. If no active choice is made, enrollment into the plan identified through the passive process takes effect.
We also noted that enrollment into a QHP in either the FFM or SBM requires an active selection of a plan, and in some cases premium payment. The online application for the FFM at Healthcare.gov provides the option to select a QHP at the time of application. If a QHP is not selected at the time of application, the FFM single, streamlined application requires follow-up by the individual to complete enrollment into a QHP. A few states with mandatory Medicaid managed care programs require applicants to select a Medicaid managed care plan at the time of application. While this approach aligns the processes for Medicaid, CHIP and QHPs, it also eliminates the traditional approach of providing a post-eligibility determination choice period to select a managed care plan for Medicaid beneficiaries already eligible for FFS coverage.
We proposed a new § 438.54 to apply a consistent standard for all managed care enrollment processes. At the same time, we proposed to move and revise, as noted below, the existing provisions in § 438.50(e) and (f) to our new § 438.54. Under these proposed changes, states would implement enrollment processes subject to a set of enrollment standards that are consistent with section 1932(a)(4) of the Act and that promote high quality managed care programs. The goals of this approach were to promote accurate and timely information to beneficiaries about their managed care options; to enable and encourage active beneficiary choice periods for enrollment; and to ensure the state's ability to conduct intelligent default enrollments into a managed care plan when necessary.
Through the changes discussed below, we proposed to set broad parameters for a state's enrollment process rather than dictate specific elements. In paragraph § 438.54(a), we proposed to clarify that the provisions of this section apply to all authorities under which a state may enroll beneficiaries into a managed care delivery system to ensure a broad and consistent application. We noted that this includes voluntary managed care programs under section 1915(a) of the Act, as well as mandatory or voluntary programs under sections 1932(a), 1915(b) or 1115(a) of the Act.
We proposed in paragraph (b) that the state have an enrollment system for both voluntary and mandatory managed care programs, and proposed definitions for those programs in, respectively, paragraphs (b)(1) and (b)(2). These proposals supported clarity and consistency.
Proposed paragraph (c) specified the standards for programs using a voluntary managed care program. In paragraph(c)(1), we proposed that the state may use either an enrollment system that provides the beneficiary time to make an affirmative election to receive services through a managed care or FFS delivery system or a passive enrollment process. We proposed to define a passive enrollment process as one in which the State selects a MCO, PIHP, PAHP, PCCM, or PCCM entity for a potential enrollee but provides a period of time for the potential enrollee to decline the managed care plan selection before enrollment became effective. Using either option, the state would have had to comply with the standards proposed in paragraphs (c)(2) through (c)(8).
In paragraph (d), we proposed to set forth standards for enrollment systems for mandatory managed care programs. In paragraph (d)(1), we proposed that such a system must meet certain standards, listed in proposed paragraphs (d)(2) through (d)(7). We discussed the remaining proposals for paragraphs (c) and (d) together below as these proposed standards were substantially similar.
In paragraph (c)(2) and (d)(2), we proposed a specific enrollment standard applicable to both voluntary and mandatory managed care programs that all states must provide a period of time of at least 14 calendar days of FFS coverage for potential enrollees to make an active choice of their managed care plan. We explained that the minimum 14-calendar day period would have had to occur between the date that the notice specified in paragraph (c)(3) and (d)(3) is sent and the date on which the enrollee becomes covered under the applicable managed care entity.
We proposed to clarify in paragraph (c)(2)(i), that if the state does not use a passive enrollment process and the potential enrollee does not make a choice, then the potential enrollee would have been enrolled into a managed care plan selected by the state's default process when the choice period has ended. We did not propose that states must use FFS as the default enrollment when using a voluntary managed care program; rather FFS enrollment could be limited to those beneficiaries that affirmatively selected FFS. In proposed paragraph (c)(2)(ii), we clarified that if the state used a passive
We acknowledged that states may want to effectuate plan enrollment in mandatory programs as soon as possible after the eligibility determination. Our proposal would have required those states to provide a period of FFS coverage for beneficiaries between their date of eligibility and their date of managed care enrollment. To minimize any further delay in managed care enrollment, we proposed to allow states to operationalize the 14-day active choice period by advising beneficiaries of the managed care plan they would be enrolled into through the default process if they do not make an active choice of managed care plan in that 14-day period. According to this process, states would complete the default enrollment process outlined in § 438.54(d)(5) prior to beginning the notice and education process described in paragraph (d)(3) with beneficiaries, and ensure that adequate and appropriate information is provided to beneficiaries regarding the implications of not making an active managed care plan selection. This proposal would also have enabled beneficiaries to override default enrollments by exercising their ability to make an active choice of a managed care plan.
We requested comment on the impact of this new standard on managed care program costs and operations, as well as the operational flexibility we proposed to relieve beneficiaries of the burden of receiving too many mailings, which can create confusion, before making the default enrollment permitted in § 438.54. We also invited comment on whether a 14-day period is necessary, provides sufficient time for beneficiaries to make an election, or whether a longer minimum period, such as 30 days or 45 days, should be adopted.
All beneficiaries, regardless of whether enrollment is mandatory or voluntary, must be given the information, education, and opportunity to participate actively in their choice of managed care plan. Paragraphs (c)(3) and (d)(3) proposed that states develop informational notices to clearly explain to the potential enrollee the implications of not actively making the decisions available to them and allowing the passive or default enrollment to take effect. Proposed paragraphs (c)(3)(i) and (d)(3)(i) provided that the notices comply with § 438.10 and proposed paragraphs (c)(3)(ii) and (d)(3)(ii) provided that the notices have a postmark or electronic date stamp that is at least 3 calendar days prior to the first day of the 14-day choice period. We believed these proposed provisions established reasonable time for either postal delivery or the potential enrollee to read the electronic communication and still have 14 days to make an active selection.
Priority for enrollment into a managed care plan is currently in § 438.50(e); however, for better organization, we proposed to delete the text from § 438.50 and proposed it as paragraphs (c)(4) and (d)(4). No other changes were proposed to this text regarding priority for enrollment.
We proposed in paragraphs (c)(5) and (d)(5) that states assign potential enrollees to a qualified MCO, PIHP, PAHP, PCCM, or PCCM entity. This concept is currently addressed in § 438.50(f)(2) but only to the extent of excluding those MCOs and PCCMs that are subject to the intermediate sanction in § 438.702(a)(4). In proposed (c)(5)(i) and (d)(5)(i), we proposed to exclude MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities subject to sanction under § 438.702(a)(4) and to add paragraphs (c)(5)(ii) and (d)(5)(ii) to ensure that a MCO, PIHP, PAHP, PCCM, or PCCM entity has the capacity for new enrollments as a condition of being qualified to accept assigned enrollments.
In proposed paragraphs (c)(6) and (d)(6), we addressed standards that are currently reflected in § 438.50(f) which provides that states have a default enrollment process for assigning a MCO or PCCM when the potential enrollee does not make an active managed care plan selection. Section 1932(a)(4)(D) of the Act provides that a state conduct such enrollments in a manner that takes existing provider-individual relationships into consideration, and if that approach is not possible, to equitably distribute individuals among the participating managed care plans. While the 2002 final rule strictly interpreted the provisions of section 1932(a)(4)(D) of the Act regarding default enrollment to apply only to enrollment that occurred under state plan authority in section 1932(a) of the Act, we noted our belief that the enrollment processes currently specified in § 438.50(e) and (f) should not be limited only to entities subject to section 1932(a)(4)(D) of the Act. Allowing potential enrollees sufficient time to make informed decisions about their managed care plan is an important protection that should not exclude potential enrollees of PIHPs and PAHP, as well all those subject to voluntary programs that utilize a passive process. Therefore, we proposed to make these provisions applicable to all managed care authorities and to both passive and default enrollment processes. We proposed adding existing text from § 438.50(f)(2) through (f)(4) in paragraphs (c)(6) and (d)(6). While § 438.50(f) currently only applies to default enrollment in mandatory managed care programs, we stated that enrollees in voluntary programs that utilize a passive enrollment process should also benefit from being assigned to a plan based on existing provider relationships or other criteria relevant to beneficiary experience. Therefore, we proposed to add standards in paragraph (c)(6) for voluntary programs that mirrored the standards for mandatory programs using default enrollments.
In paragraphs (c)(7) and (d)(7), we proposed to include provisions from existing § 438.50(f)(2) that provide that if a state cannot preserve existing provider-beneficiary relationships and relationships with providers that traditionally serve Medicaid, then enrollees must be equitably distributed. Paragraphs (c)(7)(i) and (d)(7)(i) proposed a standard that states may not arbitrarily exclude a MCO, PIHP, PAHP, PCCM, or PCCM entity from the assignment process. We proposed interpreting “equitable distribution” in section 1932(a)(4)(D)(ii)(II) of the Act to mean not only that the criteria applied to make default enrollments are fair and reasonable for enrollees and plans, but that the pool of contractors eligible to receive default enrollments is not based on arbitrary criteria. We also proposed to allow the flexibility to use additional criteria related to the beneficiary when making default assignments, such as the geographic location of the beneficiary, enrollment preferences of family members, previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, and other reasonable criteria that support the goal of the Medicaid program, should be provided for in the regulation. We proposed that such criteria be part of an equitable distribution by ensuring fair treatment for enrollees and managed care plans.
For voluntary programs only that use passive enrollment, paragraph (c)(8)
We received the following comments in response to our proposal to add a new § 438.54 with these provisions.
We also received many comments opposed to the 14 day FFS choice period. These commenters believed that putting potential enrollees in FFS would be confusing for enrollees and providers; result in disruptions of care when FFS providers did not also participate in managed care plan networks; and delay enrollees' access to the increased benefits, provider network, case management and care coordination that come through managed care enrollment. Further, many commenters stated that the delay in enrollment under the proposal would negatively impact potential enrollees in need of care coordination, such as pregnant women, newborns, and individuals recently released from incarceration. Several commenters pointed out that due to low or no enrollment in their FFS programs over time, implementing a FFS period for all new potential enrollees would be difficult, if not impossible, for several states. Some commenters stated that these challenges would be particularly significant for states with State-based Marketplaces (SBMs) that were designed to determine eligibility for multiple products and facilitate up-front managed care plan selection. Commenters also believed that a mandated FFS choice period was unnecessary given the 90 day opportunity to change managed care plans without cause afforded all enrollees in § 438.56(c)(2)(i), the ability to disenroll for cause as specified in § 438.56(d)(2)(iv), and the accessibility of choice counseling and other information through the beneficiary support system proposed in § 438.71. Lastly, commenters recommended that CMS to leave the decision of whether to include a choice period to the states and not mandate a one-size-fits-all approach.
Given the tremendous variation among managed care programs, we believe each state, rather than CMS, is in the best position to draft these notices. We acknowledge that states and managed care plans appreciate the importance of producing easily understood materials and have traditionally utilized reading level tools and standards to facilitate the production of effective materials. We also believe that education and demographic differences across states necessitate flexibility and we encourage states to ensure that it, and its managed care plans, are producing materials in a grade level that is most appropriate for their population. We decline to revise the final rule to reflect these recommendations. Given that most enrollment and disenrollment is done electronically or by phone, we do not believe there is a need to mandate a requirement for including forms with the notice; however, states are free to do so if it supports their enrollment processes.
After consideration of the public comments, we are finalizing § 438.54 with revisions as follows:
• Paragraph (b), we are finalizing revised introductory text to clarify that an enrollment system is required for both voluntary and mandatory managed care programs;
• Paragraph (c)(1), we are finalizing text to permit a state to provide an enrollment choice period or to use a passive enrollment process without mandating a period of FFS coverage, for reasons discussed in the comments above;
• Paragraph (c)(2), we are finalizing the regulation text without reference to the proposed 14-day choice period with FFS coverage (as discussed above) and with minor editorial changes to preserve the flow and meaning of the text;
• Paragraphs (c)(3), we are finalizing additional requirements for the notice from the state to potential enrollees to provide more complete information;
• Paragraphs (c)(5)(i), we are adding “; and” to indicate that the requirements in both paragraphs must be applied;
• Paragraph (c)(8), we are finalizing revised text to more clearly explain the content of the final notice required for voluntary programs that use a passive enrollment process and to clarify the deadline for that notice;
• Paragraph (d)(2), we are finalizing the regulation text without reference to the proposed 14-day choice period with FFS coverage (as explained above) and with new text to clarify the enrollment process options available in mandatory programs, including passive enrollment;
• Paragraph (d)(3), we are finalizing additional requirements for the notice from the state to potential enrollees to provide more complete information;
• Paragraph (d)(5), we are finalizing the regulation text without reference to the proposed 14-day choice period (as explained above) and with “; and” between paragraphs (i) and (ii) to indicate that the requirements in both paragraphs must be applied;
• Paragraph (d)(6), we are finalizing text that clarifies requirements for enrollee assignment using a passive enrollment process in a mandatory program;
• Paragraph (d)(7) (redesignated from (d)(6)), we are revising “. . . the main source . . .” to “. . . a main source . . .” to clarify that multiple existing relationships should be maintained in both passive and default enrollment processes if possible and making non-substantive revisions to the text to
• Paragraph (d)(8) (redesignated from (d)(7)), we are finalizing a conforming change to recognize the redesignation of (d)(7) and in paragraph (ii), to include a reference to accessibility for disabled enrollees.
In the proposed rule, we proposed to retain the majority of the regulation text currently in § 438.56, with four substantive exceptions:
• We proposed, as discussed in more detail in section I.B.5.e. of this final rule, to add references to “PCCM entity” as applicable;
• We proposed to revise the text in paragraph (c)(2)(i) concerning the start of the statutorily mandated 90-day period during which an enrollee may disenroll without cause;
• We proposed to explicitly provide that a state may accept, at its option, either oral or written requests for disenrollment; and
• We proposed in (d)(2)(iv) to specify an additional cause for disenrollment. We also proposed grammatical and clarifying corrections to the regulation text.
In our proposal, paragraphs (a) through (c)(1) were unchanged from the current rule except for the addition of PCCM entity. In paragraph (c)(2)(i), we proposed to modify our approach to an enrollee's 90-day without cause disenrollment period. Section 1932(a)(4)(A) of the Act specifies that a state plan must permit disenrollment without cause from a managed care entity during the first 90 days of enrollment under mandatory managed care programs. As part of the 2002 final rule, we exercised authority under section 1902(a)(4) of the Act to extend this standard to state plans with voluntary managed care programs and to PIHPs and PAHPs (whether voluntary or mandatory). As finalized in 2002, we interpreted the clause “90 days following the date of the beneficiary's initial enrollment” to mean enrollment with a particular MCO, PIHP, PAHP, or PCCM and to allow an enrollee to disenroll from a MCO, PIHP, PAHP, or PCCM every 90 days until he or she had exhausted all contracted MCO, PIHP, PAHP, or PCCM options for which he or she is eligible. As noted in the preamble to the proposed rule, we believe that this provision has been applied in an inconsistent manner, and that such an approach is disruptive to the goals of establishing enrollee-provider relationships that support a coordinated delivery system and contribute to medical and administrative inefficiencies. Therefore, we proposed in paragraph (c)(2)(i) to revise the regulation to limit the 90-day without cause disenrollment period to the first 90 days of an enrollee's initial enrollment into any MCO, PIHP, PAHP, or PCCM offered through the state plan; therefore, an enrollee would have only one 90-day without cause disenrollment opportunity per enrollment period. We explained that the revised approach is consistent with our interpretation of the intent of section 1932(a)(4)(A)(ii) of the Act, represents current practice in some states, and supports efficiency under the Medicaid program. We proposed no changes to paragraphs (c)(2)(ii) through (iv).
We proposed to add the phrase “as required by the state” to § 438.56(d)(1) to clarify that this section of the regulation was intended to give states the flexibility to accept disenrollment requests either orally, or in written form, or both ways if the state so desires. We expressed our intent to interpret “written request” for purposes of this regulation to include online transactions or requests conducted with an electronic signature. A state could also accept requests orally, but require written confirmation of the oral request. Under our proposal, the state's standard for the form of disenrollment requests would have to be clearly communicated to enrollees to take advantage of this flexibility.
In paragraph (d)(2)(iv), we proposed to add a new cause for disenrollment: the exit of a residential, institutional, or employment supports provider from an enrollee's MCO, PIHP, or PAHP network. We noted that provider network changes can have a significant impact on those enrolled in MLTSS programs, since such providers are typically integral to residential and work services and supports. Therefore, if the state does not permit participants enrolled in MLTSS to switch managed care plans (or disenroll to FFS), at any time, we proposed that states must permit enrollees to disenroll and switch to another managed care plan or FFS when the termination of a provider from their MLTSS network would result in a disruption in their residence or employment. We proposed to codify this additional cause for disenrollment as § 438.56(d)(2)(iv) and to redesignate the existing text at that paragraph to (d)(2)(v). In paragraph (d)(3), we proposed to add text to clarify that disenrollment requests that the MCO, PIHP, PAHP, PCCM, or PCCM entity does not approve would have to be referred to the state for review. This would not change the meaning but we believed it would improve the readability of the sentence. The existing text was otherwise retained in paragraph (d)(5), except to add PCCM entities to its scope as discussed elsewhere. We also proposed two minor grammatical corrections to paragraph (d) of this section. In current paragraph (d)(1)(ii), the term “PIHP” is in its singular form, but must be changed to plural to conform to other terms in the paragraph. We also proposed to use the possessive form for MCO, PIHP, and PAHP where applicable.
In paragraph (e)(1), we proposed changes for clarification. Currently in paragraph (e)(1) of this section, the timeframe for a state to process a disenrollment request is intended to apply to enrollee requests for disenrollment. The timeframe applies regardless of whether the enrollee submits the request- directly to the state or to the MCO, PIHP, PAHP, PCCM, or PCCM entity (if permitted by its contract with the state.) However, § 438.56(d)(1)(ii) permits states to allow MCOs, PIHPs, PAHPs, and PCCMS to process disenrollment requests. Additionally, in these instances, the managed care plan can approve the request, but it cannot actually disapprove the request. Instead, per § 438.56(d)(3), it must forward the request to the state. In these instances, the timeframe for the state to process a disenrollment request referred by the plan is the same as if the enrollee had submitted it directly to the state. To clarify this intent, in paragraph (e)(1), we proposed to insert the term “requests” after the term “enrollee” and replaced the term “files” with “refers.” No changes were proposed in paragraphs (f) and (g).
We received the following comments in response to our proposal to revise § 438.56.
We appreciate the opportunity to clarify “12 months thereafter.” A state can use either the first day of enrollment in the managed care plan or the end of the 90 day period to begin the 12 month period so long as the enrollee is provided at least one opportunity to change their managed care plan without cause within 12 months from the selected date. We understand the commenters' issue that the result of using the end of the 90-day period is that the enrollee is in the managed care plan for a minimum of 15 months. However, during that time, the enrollee will have had at least 2 opportunities to disenroll without cause: the first opportunity being the initial 90 days and the second being within the 12 months beginning on the 91st day.
We believe that permitting the managed care plan to attempt to negotiate with a provider to either not terminate their contract or to continue seeing certain enrollees on an out-of-network/limited participation basis should be part of the managed care plan's provider termination process, rather than the enrollee's disenrollment process. If a state elects to accommodate the managed care plan's attempt to permit the provider to continue seeing individual enrollees on an out-of-network basis in their disenrollment process, we remind states and managed care plans of the timeframe for disenrollment determinations in § 438.56(e) and expect states and managed care plans to adhere to them in a manner that does not disadvantage the enrollee. Any efforts by the managed care plan to use a single case agreement with a provider to maintain an enrollee's ability to access the provider must be concluded within the timeframes for disenrollment determinations in § 438.56(e). Otherwise, the disenrollment request must be processed.
After consideration of the public comments, we are adopting § 438.56 as proposed with four substantive revisions. First, in paragraph(c)(2)(i), we are revising “. . . enrollment into a . . .” to “. . . enrollment into the . . .” to clarify that more than one 90 day disenrollment period is permitted and adding “during the 90 days following” before “the date the State sends . . . .” for added clarity. Second, in paragraph (d)(2)(iv), we are finalizing with text that was described in the preamble but erroneously omitted from the proposed regulation text that addressed MLTSS enrollees experiencing a disruption to residence or employment. Third, in paragraph (f)(1), we are finalizing an additional requirement to include information on all disenrollment opportunities in the required notice. Fourth, although not proposed, we are also removing “health” in paragraph (d)(2)(v) in the final rule to consistently reflect a less acute care approach and be more inclusive of enrollees receiving LTSS. This change is consistent with proposals (and final regulation text) throughout the rule to acknowledge the managed care programs increasingly include LTSS and that requirements for managed care plans generally apply to LTSS as well as health care services provided by the plan. Finally, we are making technical corrections throughout § 438.56 to add commas as applicable when referencing groups of managed care plan types.
Although the existing regulation at § 438.10 acknowledges the importance of information and disclosure in helping the beneficiary choose a managed care plan, we recognized in the proposed rule that some beneficiaries may need additional assistance when evaluating their choices. This additional assistance includes having access to personalized assistance—whether by phone, internet, or in person—to help beneficiaries understand the materials provided, answer questions about options available, and facilitate enrollment with a particular managed care plan or provider.
We proposed a new § 438.71, entitled Beneficiary Support System, to require this additional assistance to potential enrollees and enrollees.
Proposed paragraph (a) established the requirement that a state develop and implement a beneficiary support system to provide support before and after managed care enrollment. Paragraph (b) proposed four minimum functions for a beneficiary support system: Paragraph (b)(1)(i) would make choice counseling available to all beneficiaries; paragraph (b)(1)(ii) would require training of plans and network providers on the type and availability of community based resources and supports; paragraph (b)(1)(iii) would require assistance to all beneficiaries in understanding managed care; and paragraph (b)(1)(iv) would add assistance for enrollees who receive or desire to receive LTSS. In paragraph (b)(2), we proposed that the system be available to the beneficiaries in multiple ways including phone, internet, in-person, and via auxiliary aids and services when requested.
We proposed at § 438.71(c)(1) that states provide choice counseling services for any potential enrollee (that is, prior to first enrollment in managed care) or to managed care enrollees when they have the opportunity or requirement to change enrollment under § 438.56(b) and (c). States have the flexibility to decide who can provide choice counseling; however, in paragraph (c)(2), we proposed that any individual or entity providing choice counseling services would be an enrollment broker under our regulations, and therefore, must meet the independence and conflict of interest standards of § 438.810 to provide those services. We noted that some entities may receive federal grant funding distinct from Medicaid funding that may require those entities, such as FQHCs or Ryan White providers, to conduct activities similar to those that would fall under the definition of choice counseling; if those entities do not have a memorandum of agreement or contract with the state to provide choice counseling on the state's behalf, such entities would not be required to adhere to the conflict of interest standards in § 438.810 under our proposal at § 438.71(c)(2). While not discussed, we note here that such
Under proposed paragraph (d), the beneficiary support system would provide training to MCO, PIHP, and PAHP staff and network providers on community based resources and supports that can be linked with covered benefits. As noted in the following responses to public comments, we are not finalizing proposed paragraph (d); therefore, the paragraphs following proposed paragraph (d) have been redesignated accordingly.
In proposed paragraph (e) (finalized as paragraph (d)), we proposed four elements for a beneficiary support system specific to beneficiaries who use, or desire to use, LTSS: (1) An access point for complaints and concerns about enrollment, access to covered services, and other related matters; (2) education on enrollees' grievance and appeal rights, the state fair hearing process, enrollee rights and responsibilities, and additional resources; (3) assistance (without representation), upon request, in navigating the grievance and appeal process and appealing adverse benefit determinations made by a plan to a state fair hearing; and (4) review and oversight of LTSS program data to assist the state Medicaid Agency on identification and resolution of systemic issues. Proposed paragraph (e)(1) (finalized as (d)(1)) applies to enrollees of MCOs, PIHPs, PAHPs, PCCMS, and PCCM entities while (e)(2) through (e)(4) (finalized as (d)(2) through (d)(4)) apply only to MCOs, PIHPs, and PAHPs since they reference the grievance and appeal process which PCCMs are not required to have.
We acknowledged that states may include many of these services already within their Medicaid program and indicated our intent that our proposed regulation does not require that states develop a new system of delivering all the functions proposed in § 438.71(e) (finalized as § 438.71(d)) for MLTSS. Under our proposal, states would be permitted to draw upon and expand, if necessary, those existing resources to meet the standards proposed in this section.
We noted in the preamble of the proposed rule that the proposed scope of services for LTSS beneficiary supports may include what has been traditionally considered “ombudsman” services; however, rules concerning Medicaid-reimbursable expenditures remain in place, so we cautioned that not all ombudsman activities traditionally found in a Long-Term Care Ombudsman office may be eligible for Medicaid payment under this proposal. We issued an informational bulletin on June 18, 2013, entitled “Medicaid Administrative Funding Available for Long-Term Care Ombudsman Expenditures,” that provided guidance on this issue. The informational bulletin is available at
We also proposed to move the definition of choice counseling to § 438.2, which was previously defined in § 438.810, and to revise the definition to the provision of information and services designed to assist beneficiaries in making enrollment decisions, including answering questions and identifying factors to consider when choosing among managed care plans and primary care providers. We proposed to clarify in the revised definition that choice counseling does not include making recommendations for or against enrollment into a specific MCO, PIHP, or PAHP. Further, we proposed in § 438.810 to include PCCM entities in the regulatory text when other managed care plans were mentioned, and we proposed to add electronic methods of communication as a means through which enrollment activities could be conducted in the definition of “enrollment activities” in § 438.810(a).
Finally, we proposed a new section § 438.816 that would impose conditions that must be met for the state to claim FFP for the LTSS-specific beneficiary support system activities proposed in § 438.71(e) (and finalized as paragraph (d)). We modeled this standard, in part, on current rules for claiming FFP for administrative services and, in part, on the current rules for enrollment broker services. We proposed, consistent with our current policy, that beneficiary support services for MLTSS enrollees be eligible for administrative match subject to certain standards. Specifically, in paragraph (a), we proposed that costs must be supported by an allocation methodology that appears in the state's Public Assistance Cost Allocation Plan; in paragraph (b) that the costs do not duplicate payment for activities that are already being offered or should be provided by other entities or paid by other programs; in paragraph (c) that the person or entity providing the service must meet independence and conflict of interest provisions applicable to enrollment brokers in § 438.810(b); and in paragraph (d) that the initial contract or agreement for services in this section be reviewed and approved by CMS.
We received the following comments in response to our proposals at §§ 438.2, 438.71, 438.810, and 438.816.
We remind commenters that states need not develop a new system if current structures meet all of the standards specified at § 438.71. We maintain that the elements of the beneficiary support system specified represent the benchmark for the provision of independent information and supports for Medicaid enrollees that must be applied across all Medicaid managed care programs. States are permitted to draw upon and expand their current beneficiary support systems as necessary and applicable. We also encourage states to consider these programs and resources and to consult with a variety of stakeholders as they develop and implement their beneficiary support systems. However, the beneficiary support system should be built in a manner to ensure that the state can maintain appropriate oversight of the system and ensure ease of access for beneficiaries when accessing the system.
We do not agree that choice counseling should be distinct from the beneficiary support system because choice counseling is an important form of beneficiary support. The state may select a distinct entity to provide choice counseling, subject to requirements in § 438.71(c)(2), from other entities that provide other elements of the beneficiary support system.
Several commenters also recommended that CMS require training to be linked to the goals in the person-centered plan and require training on the independent living and recovery philosophies.
However, several other commenters also stated that the requirements of the beneficiary support system to train network providers went too far and recommended that the provision be removed, as beneficiary support system individuals and entities are not qualified to train network providers. Several commenters also stated that some managed care plans are opposed to the training requirements and recommended that training for managed care plans remain optional. A few commenters stated that the requirement to train managed care plans was overly burdensome.
Several commenters believed that entities that receive non-Medicaid funding to represent beneficiaries at hearings should also be permitted to provide choice counseling within the beneficiary support system with adequate firewalls in place as proposed at § 438.71(e)(3)(i). Other commenters believed that such firewalls should not be permitted and recommended that such entities not be permitted to serve in both capacities for it is possible, even with firewalls in place, for an advocacy group that represents beneficiaries in the appeals and State fair hearing processes to have strong formed opinions about managed care plans that could cloud their impartiality in the provision of choice counseling services and result in inadvertent steering toward or away from a particular managed care plan.
We proposed at § 438.71(e)(3)(i) a provision to permit a state to engage, for the purposes of providing choice counseling as required under this final rule at § 438.71(a), an entity that receives non-Medicaid funding to represent beneficiaries at hearings only if the state requires firewalls to ensure that the requirements for the provision of choice counseling are met and only in the context of LTSS-specific activities. We are finalizing a similar provision at paragraph (c)(3) to permit such engagement in connection with firewalls for the provision of choice counseling generally.
In response to comments received on this proposal, we believe that an entity that provides legal representation at hearings should generally not be permitted to also provide choice counseling on the state's behalf, unless the appropriate firewalls have been put in place to ensure that the entity can meet the requirements for choice counseling—namely, to provide the required information and assistance in an unbiased manner. We do not believe it is necessary to prohibit states from utilizing such entities for the provision of choice counseling under these conditions, and we will leave such decisions to the state's discretion. We are finalizing the firewall provision for entities that provide legal representation to provide choice counseling at paragraph (c)(3) to provide that this flexibility is directly related to choice counseling and not limited to LTSS-specific activities. Note that the provision of choice counseling makes the entity an enrollment broker and the memorandum of understanding or contract is subject to CMS review and approval per § 438.810(b)(3); the independence and freedom of conflict of interest protections also apply. Therefore, we will finalize § 438.71 with the substance of proposed paragraph (e)(3)(i) and finalized at paragraph (c)(3).
We decline to revise the term “enrollment broker” as the statute uses this term in section 1903(b)(4) of the Act. We also clarify for the commenter that enrollment activities and enrollment services would include all activities and services consistent with the definitions at § 438.810(a), including activities and services both before and after enrollment as applicable. The beneficiary support system offers resources and supports beyond the resources provided by an enrollment broker subject to § 438.810. Therefore, it would not be appropriate to extend the definition of “enrollment services” or “enrollment activities” to include all functions of the beneficiary support system at § 438.71.
After consideration of the public comments, we are not finalizing the regulatory text proposed at § 438.71(b)(1)(ii) and (d). We are finalizing the remainder of the proposed rule at § 438.71 with modifications. First, we are redesignating proposed paragraph (e) as § 438.71(d). We are finalizing the firewall provision for entities that provide legal representation to provide choice counseling at paragraph (c)(3) to provide that this flexibility is directly related to choice counseling and not limited to LTSS-specific activities. We are also modifying the regulatory text at § 438.816 to strike “independent consumer support services” in the section title and replace with “the beneficiary support system,” to be consistent with proposed § 438.71. We are finalizing the definition of “choice counseling” at § 438.2 as proposed. We are finalizing §§ 438.810 and 438.816 largely as proposed, with grammatical corrections to the punctuation in § 438.810(b)(1)(iii) and a revision of the heading at § 438.816.
We grouped our discussion of proposals for §§ 438.210 and 438.420 because they address related benefit issues about the receipt and provision of covered services. Section 438.210 establishes standards for authorization periods set by managed care plans and § 438.420 addresses the duration of continued benefits pending appeal resolution. Although the current regulation at § 438.210 addresses MCOs, PIHPs, and PAHPs, the current regulation at § 438.420 addresses only MCOs and PIHPs. We proposed to add PAHPs to the subpart F appeal and grievance regulations as discussed in the Appeals and Grievance section of the proposed rule (I.B.1.b.).
Under existing regulations, continuation of benefits during an appeal is tied to coverage and authorization decisions made by the MCO, PIHP, or PAHP. As more managed care programs include enrollees with ongoing and chronic care needs, including LTSS, we believe it is important that authorization periods for such services reflect the ongoing need for these services to avoid disruptions in care.
While we recognized that MCOs, PIHPs, and PAHPs have flexibility in applying utilization management controls for covered services, exercising that flexibility could result in the inappropriate curtailment of necessary services, particularly for those requiring on-going and chronic care services, including LTSS. We acknowledged that our current standards reflect an acute care model of health care delivery and do not speak to the appropriate medical management of individuals with ongoing or chronic conditions, or the authorization of home and community based services that maximize opportunities for individuals to have access to the benefits of community living and the opportunity to receive services in the most integrated setting. Therefore, we proposed to modernize the language in § 438.210 governing the coverage and authorization of services and establish standards for states to ensure through the managed care contract that MCOs, PIHPs, and PAHPs employ utilization management strategies that adequately support individuals with ongoing or chronic conditions or who require LTSS.
As background, the foundation of coverage and authorization of services is that services in Medicaid must be sufficient in amount, duration, or scope to reasonably be expected to achieve the purpose for which the services are furnished, and services must not be arbitrarily denied or reduced because of the diagnosis or condition of the enrollee. Our proposal was to permit an MCO, PIHP, or PAHP to place appropriate limits on a service on the basis of criteria applied under the state plan, such as medical necessity or for the purpose of utilization control, provided that the services furnished can reasonably achieve their purpose. This is the same standard applied to a state's coverage decisions under the state plan.
We proposed no changes to § 438.210(a)(1) and (2).
We proposed that existing paragraph (a)(3)(iii) be redesignated as (a)(4) and existing paragraphs (a)(3)(iii)(A) and (B)
We proposed that existing paragraph (a)(4) be redesignated as (a)(5) and paragraph (a)(5)(i) remained unchanged. In paragraph (a)(5)(ii), we proposed to revise the criteria for defining medically necessary services by adding that such criteria must meet the requirements for providing the early and periodic screening and diagnosis and treatment (EPSDT) benefit beneficiaries under age 21. We believed this addition was necessary to ensure that managed care plans that provide the EPSDT benefit use definitions of medical necessity that comply with federal EPSDT laws. In paragraph (a)(5)(iii)(A), we proposed to revise the criteria for defining medically necessary services by replacing “health impairments” with “an enrollee's disease, condition, or disorder that results in health impairment and/or disability” because the change more accurately reflected our intent than the existing text. In paragraph (a)(5)(iii)(A) through (C), we proposed grammatical revisions to accommodate a proposed new paragraph (a)(5)(iii)(D) that would add an LTSS focus by requiring that medically necessary services address the opportunity for an enrollee to have access to the benefits of community living.
In paragraph (b), we proposed to add specificity related to LTSS services. No changes were proposed for (b)(1) and (2)(i); however, in (b)(2)(ii) we proposed to add “for medical services” to address requests for non-LTSS, and in paragraph (b)(2)(iii), we proposed to add a standard that MCOs, PIHPs, and PAHPs authorize LTSS based on an enrollee's current needs assessment and consistent with the person-centered service plan. In paragraph (b)(3), we proposed to change the text from “treating the enrollee's condition or disease” to “addressing medical, behavioral health, or long term services and supports needs.”
We proposed the changes in paragraph (c) to add “PAHP” to the standards of this paragraph and to revise “notice of adverse action” to “notice of adverse benefit determination.” In paragraph (c), we also proposed to correct the heading to reflect the change from “action” to “adverse benefit determination.” As discussed in section I.B.1.b. of this final rule, we proposed to add PAHPs to subpart F and replace “action” with “adverse benefit determination” throughout 42 CFR part 438.
We also proposed to remove the provision that referenced notices to providers of adverse benefit determinations need not be in writing as an exception to § 438.404. Provider notices are not currently addressed in § 438.404, thus this reference is erroneous.
The only change proposed to paragraph (d)(1) was to delete “health” to use the more comprehensive term “condition”.
We proposed in § 438.210(d)(2)(i) and (ii) to change the timeframe for MCOs, PIHPs, and PAHPs to make expedited authorization determinations within 72 hours, rather than the current standard of 3 working days, after receipt of the request for the service to align expedited authorization determination timeframes with the expedited managed care plan level of appeal in proposed § 438.408(b)(3). We discuss in section I.B.1.b. of this final rule how these proposed timelines align with the MA and private market standards for expedited appeals. We did not propose any revisions to § 438.210(e).
In section § 438.420, we proposed conforming revisions, consistent with other proposals throughout subpart F: specifically, to change “action” to “adverse benefit determination,” to add PAHPs to standards currently applicable only to MCOs and PIHPs, and to specify all time limits expressed in days as calendar days. To address the limit on enrollee's access to benefits pending resolution of an appeal, we also proposed to eliminate the link between the duration of continued benefits pending appeal and the original service authorization period. Thus, we proposed to delete existing § 438.420(c)(4) that permits MCOs and PIHPs to discontinue coverage of services pending appeal when the time period or service limits of a previously authorized service has been met. The removal of this paragraph would mean that an enrollee must continue to receive benefits without interruption, if the enrollee elects to continue benefits, through the conclusion of the appeal and state fair hearing process if the enrollee appeals an MCO's, PIHP's, or PAHP's adverse benefit determination. This change would apply to all authorized services covered by the MCO, PIHP, or PAHP. We indicated that this proposal represented a critical enrollee protection given the nature and frequency of many ongoing services, particularly for enrollees receiving LTSS.
In addition, in § 438.420(d), we proposed that the MCO's, PIHP's, or PAHP's ability to recoup the cost of such continued benefits from the beneficiary under a final adverse decision be addressed in the contract and that such practices be consistent across both FFS and managed care delivery systems within the state. Under both managed care and FFS, the right to continuation of benefits is not exercised without potential financial risk to the beneficiary for payment for services provided if the final decision is adverse
We received the following comments in response to our proposal to revise § 438.210.
We received the following comments in response to our proposal to revise § 438.420.
We did not intend for § 438.420(a) or (b) to truncate the period of time for the enrollee to request an appeal of the adverse benefit determination under § 438.402(c)(2)(ii). To correct this error, we have modified § 438.420(a) to replace “timely” with “timely files” and specify that “timely files” means “files for continuation of benefits on or before. . . .” This revision will clarify that all requirements related to the availability and the duration of continuation of benefits are contained in § 438.420.
We are also finalizing a revision to the deadline in this definition. As proposed, the deadline was the later of: (1) 10 calendar days of the MCO, PIHP or PAHP mailing the notice of adverse benefit determination or (2) the intended effective date of the plan's adverse benefit determination. In the final rule, we will replace the term “mailing” with “sending” to recognize that electronic communication methods, subject to § 438.10, may be used. Taken together, the revisions to § 438.420(a) mean that if the managed care plan did not meet its obligation to send the notice of the adverse benefit determination 10 calendar days before the termination or reduction of previously authorized services, the enrollee has longer than the original authorization period to timely file a request for continuation of benefits. To illustrate, the enrollee's original authorization period expires on the 30th day of the month and the managed care plan mails the notice of the adverse benefit determination on the 29th day of the month. The enrollee would have until the 9th day of the following month, which exceeds the period of the original authorization period, to timely file a request for continuation of benefits. Lastly, to recognize the use of electronic communication methods, the word “mailing” has been replaced with “sending.”
In paragraph (b)(1), we will add text to the regulation to clarify that the enrollee must file the request for appeal timely by adding a cross-reference to § 438.402(c)(ii) to incorporate the timeframe for the enrollee's or provider's request for an appeal. We are also finalizing slightly different text in § 438.420(b)(1) regarding who files the appeal to be consistent with our finalization of § 438.404 (see section I.B.1.b). The continuation of benefits is intrinsically linked to the appeals process so we believe that any continuation of benefits pending appeal of a termination, suspension or reduction of previously authorized benefits must be conditioned on a timely request for an appeal. We acknowledge that an enrollee may request an appeal after the enrollee requests continuation of benefits due to the variation in timeframes; actual continuation of benefits is conditioned; however, on the filing of the appeal consistent with the timing requirements in § 438.402. We encourage managed care plans to specify in their notice of the adverse benefit determination that both the appeal and request for continuation of benefits may be filed concurrently. Paragraphs (b)(2) and (b)(3) are being finalized substantively the same as proposed, with the replacement of the term “course of treatment” with “services” in (b)(2); these paragraphs require that the appeal involve termination, suspension, or reduction of a previously authorized services ordered by an authorized provider.
Paragraph (b)(4) proposed that, as another condition for an enrollee to receive continuation of benefits, the original period covered by the original authorization has not expired. We believe it is important to have this requirement as the enrollee must have been entitled under the previous authorization to receive the benefit to receive continuation of benefits. However, we will finalize this paragraph with on modification to delete the word “original” preceding “period” as that word is not necessary to convey the intent of the provision. Whether the first or a latter authorization is in effect is itself immaterial so long as an authorization for the services that is subject to the adverse benefit determination has not expired or lapsed at the time of the enrollee's timely filing of a request for continuation of benefits.
Lastly, we modify paragraph (b)(5) to incorporate the “timely files” standard in paragraph (a) and replaced the word “extension” with “continuation” for consistent use of terms. We are finalizing paragraph (b)(5) with these modifications to make clear that the enrollee must request continuation of benefits in a timely manner.
After consideration of the public comments, we are finalizing § 438.210 substantially as proposed with a few modifications. In paragraph (a)(2), we are including a cross-reference to the coverage standards in part 440 for beneficiaries under age 21. In § 438.210(a)(5)(i), we are finalizing as proposed except for the addition of quantitative and non-quantitative treatment limits. In § 438.210(a)(5)(ii), we are deleting the proposed text and redesignating paragraph (iii) as (ii); in § 438.210(a)(5)(ii)(D), we are modifying to include the opportunity for enrollees receiving LTSS to achieve person-centered goals and live and work in the setting of their choice. In § 438.210(b)(3), we are revising to use individual instead of health care professional since the definition of health care professional is not being finalized. In paragraph (c), we are finalizing the text with technical corrections. In § 438.210(d)(3), we are finalizing text for the timing standard applicable to authorizations of covered outpatient drug authorizations as described in section 1927(d)(5)(A) of the Act.
After consideration of public comments, we are finalizing § 438.420 substantially as proposed with several modifications. In § 438.420(a), we are correcting “Definitions” to “Definition,” using “timely files,” and clarifying the definition; in § 438.420(a)(i), we are replacing the term “mailing” with “sending” to recognize the use of electronic communication methods. In § 438.420(b)(1), we are also finalizing slightly different text regarding who files the appeal, consistent with our finalization of § 438.404, to prohibit a provider from filing the request for continuation of benefits. In § 438.420(b)(2), we are replacing “course of treatment” with “services.” In § 438.420(b)(4), we are not finalizing “original” before “period” for clarity. In § 438.420(b)(5), we are finalizing minor text revisions for clarity. We are also finalizing grammatical changes in (b)(1) through (4) to clarify that the all of the conditions must be met. In § 438.420(c)(1), we are adding a reference to state fair hearing for consistency with rest of section. In § 438.420(d), we are finalizing more succinct wording for clarity and not finalizing specific policies about the content of the managed care plan contract.
To ensure consistent continuity of care and coordination of services for beneficiaries, we proposed revisions to §§ 438.62 and 438.208.
The existing regulatory framework for coordination of care focuses on three elements: (1) All enrollees must have an ongoing source of primary care; (2) a person or entity will coordinate the care provided by the MCO, PIHP, or PAHP; and (3) additional assessments and treatment plans are in place for individuals identified by the state as having special health care needs. In 2002, when the current regulations were finalized, the use of managed care for delivery of LTSS or providing medical services to more complex populations was not prevalent and, therefore, not substantially reflected in the regulations.
The proposed changes sought to align the Medicaid managed care framework with other public and private programs and improve coordination and continuity of care. To that end, we proposed to: set standards for transition plans when a beneficiary moves into a new MCO, PIHP, or PAHP; expand beyond the emphasis on primary care when considering care coordination; strengthen the role of the assigned care coordinator; ensure more accurate and timely data gathering and sharing; and include enrollees with LTSS needs in the identification, assessment and service planning processes. The proposals were to modify sections §§ 438.62 and 438.208.
Our only explicit transition of care standards included in current Medicaid managed care regulations (codified at § 438.52) focus on when a beneficiary is mandated into a single MCO, PIHP or PAHP in a rural area. As stated in our preamble, we believed there should be transition of care standards for all Medicaid beneficiaries transitioning from one delivery system to another within Medicaid (even MCO to MCO), and not just rural area enrollees.
We proposed no changes to paragraph (a) other than to add PCCM entity as discussed elsewhere in this rule. We proposed to add a standard to § 438.62(b) which would require that states have a transition of care policy in place for individuals moving to managed care from FFS, or from one MCO, PIHP, PAHP, PCCM, or PCCM entity to another when an enrollee without continued services would experience serious detriment to their health or put them at risk of hospitalization or institutionalization. Under this proposal, states would define the transition policy, as long as it met the standards proposed in paragraph (b)(1), and would have the flexibility to identify the enrollees for which the MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities would need to provide transition activities. Paragraph (b)(1) proposed that state transition policies include: Permitting the enrollee to continue to receive the services they are currently receiving from their current provider for a specified period of time in paragraph (b)(1)(i); referring the enrollee to an appropriate participating provider in paragraph (b)(1)(ii); assuring that the state or MCO, PIHP, or PAHP comply with requests for historical utilization data in paragraph (b)(1)(iii); and assuring that the enrollee's new provider is able to obtain appropriate medical records in paragraph (b)(1)(iv). References to “services” mean services covered under the contract, which would include prescription drugs if the managed care plan is obligated to provide such services under the contract. We also proposed, at paragraph (b)(1)(v), that additional procedures for the transition plan may be specified by the Secretary as necessary to ensure continued access to services for an enrollee to prevent serious detriment to the enrollee's health or to reduce the risk of hospitalization or institutionalization.
In paragraph (b)(2), we proposed that states include a requirement for a transition of care policy meeting the standards in the regulation (and the state transition policy) in their MCO, PIHP, and PAHP contracts. We proposed to interpret the regulation text in a way to provide flexibility for states to decide whether to apply the state developed policy consistently to their MCOs, PIHPs, and PAHPs, or whether to permit the managed care plans to have different policies, as long as the state's minimum standards are met. We believed this approach would achieve an appropriate balance between assuring ongoing care for individuals who have significant needs while permitting states flexibility to determine how best to implement these transitions. At a minimum, the proposed regulation would also require the transition policies to be included in the state's comprehensive quality strategy, be publicly available, and included in information provided to potential enrollees.
We received the following comments in response to our proposal to revise § 438.62.
When significant delivery system changes are being made, we believe that states and managed care plans are already performing transition planning. Since states are required to notify and sometimes obtain approval from CMS for significant delivery system changes, we receive information on their transition planning efforts and have the opportunity to review and provide feedback. Providers leaving a network may warrant providing transition services for enrollees; however, these situations frequently do not. Therefore, we leave the decision of determining when a network change warrants transition services to the state.
After consideration of the public comments, we are finalizing § 483.62 as proposed with two modifications. In paragraph (a), we are adding a comma between “PCCM” and “or.” In paragraph (b)(3), we are finalizing the regulation text without the word “comprehensive” modifying the term “quality strategy” to be more consistent with how this final rule generally refers to the quality strategy required under § 438.340.
The current regulation at § 438.208(a) requires the State to ensure through its contracts, that each MCO, PIHP, and PAHP meet specific coordination and continuity of care standards outlined in paragraphs (b) and (c), with two exceptions. We proposed technical changes to the exceptions for MCOs, PIHPs, and PAHPs serving dually eligible individuals. We proposed no changes to paragraph (a)(1). We proposed to delete paragraph (a)(2)(i) as it is redundant to language proposed in paragraph (b)(1); however, doing this necessitates incorporating the existing provisions in paragraph (a)(2)(ii) into (a)(2). We proposed minor technical corrections in § 438.208(a)(3)(i) to replace the outdated reference to “Medicare+Choice plan” with “MA organization.” Additionally, in § 438.208(a)(3)(ii), we proposed that the decision to grant an exception to a MCO serving dually eligible individuals would be based on the needs of the population served rather than on what services are covered under the contract.
We received the following comments in response to our proposal to revise § 438.208(a).
After consideration of the public comments, we are finalizing § 438.208(a) as proposed, with a modification to include a cross-reference to the definition of “Medicare Advantage Organization” in § 422.2.
As noted in the preamble to the proposed rule, the Agency for Healthcare Research and Quality (AHRQ) defines care coordination as “deliberately organizing patient care activities and sharing information among all of the participants concerned with a patient's care to achieve safer and more effective care. This means that the patient's needs and preferences are known ahead of time and communicated at the right time to the right people, and that this information is used to provide safe, appropriate, and effective care to the patient.”
We proposed to expand the standards in paragraph (b)(2) so that care coordination activities by MCOs, PIHPs, and PAHPs involve coordination between care settings in paragraph (b)(2)(i) and coordination with services provided outside of the MCO, PIHP or PAHP, including with another MCO, PIHP, or PAHP in paragraph (b)(2)(ii) and FFS Medicaid in paragraph (b)(2)(iii).
We also noted in the preamble that we believe that managed care plans must ensure that appropriate information is available to, shared with, and maintained by all providers and the MCO, PIHP, or PAHP that is coordinating the care. Therefore, we proposed, under our authority at section 1902(a)(4) of the Act, to add standards in new paragraphs (b)(3) and (b)(5) that each MCO, PIHP and PAHP make their best effort to complete an initial health risk assessment within 90 days of the effective date of enrollment for all new enrollees and that all providers maintain and share an enrollee health record according to MCO, PIHP, or PAHP standards. We also proposed to remove the phrase “with special health care needs” from existing paragraph (b)(3) (proposed to be redesignated at (b)(4)) and change the word “its” to “any” in that same paragraph to broaden the standard for sharing assessment results to avoid duplication of services. The standard of an initial health assessment is explicit in the MA regulations in § 422.112(b)(4)(i), so we believed these changes established consistent standards for MCOs participating in Medicare and Medicaid, thereby easing administrative burden. Finally, in the redesignated paragraph (b)(4) regarding the sharing of the results of an enrollee's need assessment with another MCO, PIHP, or PAHP that serves the enrollee, we proposed to add the state as a recipient of that information if the state (through FFS) provides coverage of some services to an enrollee, such as behavioral health or pharmacy coverage. In addition, we proposed that existing paragraph (b)(4) be moved without change to paragraph (b)(6).
We received the following comments in response to our proposal to revise § 438.208(b).
We appreciate the suggestion that the state act as a repository for all of the data collected and assume responsibility for facilitating sharing of the data but decline to include that in the final rule. States are not prohibited from taking that approach but we do not believe it should be a requirement. We are finalizing § 438.208(b)(3) to reflect “screening,” as well as rearranging some of the text for better grammatical flow.
For the commenters that suggested prioritizing enrollees and excluding those being assessed under § 438.208(c), we are unclear on what information the managed care plan would use to determine that a new enrollee is high risk or would be eligible for the assessment in § 438.208(c). Managed care plans may be able to identify some of these types of enrollees (perhaps through eligibility codes), but it does not appear that the information necessary to accurately determine high risk enrollees or those in need of LTSS or with special health care needs would be consistently or reliably available at the time of enrollment. We do not believe it is appropriate to completely exclude enrollees from the health risk screening simply based on their eligibility for an assessment in § 438.208(c). While we are not expressly prohibiting prioritization for the health risk screening, we urge plans to be careful in its application and to ensure that resources are appropriately utilized to attempt screening completion for all enrollees within the specified timeframe.
After consideration of the public comments we are finalizing paragraph (b) of § 438.208 with modifications. In
As we stated in the preamble to the proposed rule, the current Medicaid managed care regulations were written at a time when a managed care delivery system was not frequently utilized for LTSS. With states using managed care to deliver covered services to populations with more complex needs, care coordination that is appropriate for individuals using LTSS becomes an important component of managed care.
We proposed changes in paragraph (c)(1) of § 438.208 to add enrollees who need LTSS to the populations for which the state must have mechanisms to identify these enrollees to the MCO, PIHP, or PAHP. We proposed a change to paragraph (c)(1)(i) to reflect that the mechanisms required in paragraph (c)(1) must be included in the state's comprehensive quality strategy as defined in proposed § 438.340. We also proposed that states may use their staff, their enrollment brokers, and the MCOs, PIHPs, and PAHPs as part of these identification mechanisms. There were no changes proposed to paragraph (c)(1)(ii). Other changes we proposed to paragraph (c) included:
• Amending paragraph (c)(2) so that assessments for both individuals in need of LTSS as well as those with special health care needs are comprehensive and are conducted by appropriate providers or LTSS service coordinators having qualifications specified by the state or the MCO, PIHP, or PAHP. We believe this to be a critical standard to avoid insufficient service or treatment plans or a disruption in services to enrollees.
• Amending paragraph (c)(3) to clarify that treatment plans would also be considered service plans and that they are developed for individuals needing LTSS in addition to individuals with special health care needs.
• Amending paragraph (c)(3)(i) to propose that treatment or service plans are developed by an individual meeting the managed care plan or state's service coordination provider standards in consultation with other providers caring for the enrollee. This change was intended to permit a MCO, PIHP, or PAHP to use internal staff for service coordination, even though those staff would not be considered providers and, thus, not permitted to perform assessments under current regulation.
• Adding new standards under paragraphs (c)(3)(ii) to require that treatment or service plans developed for those in need of LTSS conform with the person centered planning standards found in § 441.301(c)(1) and (2). This proposal is consistent with the HCBS final rule released in 2014 (CMS–2249 and CMS–2296).
• Redesignating current paragraphs (c)(3)(ii) and (iii) without change as paragraphs (c)(3)(iii) and (iv). Proposed a new standard under paragraph (c)(3)(v) that service and treatment plans be reviewed and revised upon reassessment of the enrollee's functional needs, at least every 12 months, when the enrollee's circumstances or needs change significantly, or at the request of the enrollee.
No changes were proposed for paragraph (c)(4).
We received the following comments in response to our proposal to revise § 438.208(c).
We supports states' efforts in the development of standardized assessment instruments and processes; however, we decline to require a uniform assessment tool or establish criteria for such a tool in this regulation.
We appreciate the opportunity to clarify how the assessment referenced in the 2013 MLTSS Guidance is different than the assessment proposed in § 428.208(c)(2). The 2013 MLTSS Guidance prohibited managed care plan involvement in functional assessments conducted prior to enrollment for the purpose of determining initial eligibility for services. The assessments in § 428.208(c)(2) are conducted by managed care plans after enrollment and are assessments of their own enrollees. We do not perceive the same conflict of interest in having MCOs, PIHPs and PAHPs assess individuals already enrolled in their plans to determine the appropriate care to be provided by the plan.
We agree with the last comment that, as drafted, the reference to the enrollee's provider in proposed § 438.208(c)(3)(i) was inconsistent with the regulation governing home and community based services generally in § 441.301. To correct this, we are finalizing paragraph (c)(3)(i) without the text “the enrollee's provider;” we rely on the reference to § 441.301(c)(1) in § 438.208(c)(3)(ii) to address a provider's level of involvement. As a conforming change, we are finalizing (c)(3)(i) without “other” in the phrase “in consultation with any. . . .”
After consideration of the public comments, in § 438.208(c)(2) and (c)(3)(i), we are finalizing a change to “provider” in place of the proposed use of “health care professional” for reasons discussed in section I.B.9.a. of this final rule; in § 438.208(c)(3), we are finalizing the provision to clarify the populations for which treatment/service plans are required and added “;” and “and” as appropriate between (3)(i) through (v); in § 438.208(c)(3)(i), we are removing “enrollee's provider;” and “other; ”and in § 438.208(c)(4), we revised “health care professional” to “network provider” for accuracy of intent.
As explained in the preamble to the proposed rule, health information technology (health IT) and the electronic exchange of health information are important tools for achieving the care coordination objectives proposed in § 438.62, § 438.208, and other parts of this final rule. The Department supports the principle that all individuals, their families, their healthcare and social service providers, and payers should have consistent and timely access to health information in a standardized format that can be securely exchanged among the patient, providers, and others involved in the individual's care (HHS August 2013 Statement, “Principles and Strategies for Accelerating Health Information Exchange.”) Further, the Department is committed to accelerating health information exchange (HIE) through the use of health IT across the broader care continuum and across payers. Health IT that facilitates the secure, efficient and effective sharing and use of health-related information when and where it is needed is an important contributor to improving health outcomes, improving health care quality and lowering health care costs. Health IT can help health care providers recommend treatments that are better tailored to an individual's preferences, genetics, and concurrent treatments. In addition, it can help individuals make better treatment decisions and health-impacting decisions outside of the care delivery system.
On October 6, 2015, the Office of the National Coordinator for Health Information Technology (ONC) published the final “Connecting Health and Care for the Nation: A Shared Nationwide Interoperability Roadmap” (available at
In addition, ONC released the final version of the “2016 Interoperability Standards Advisory” (available at
In the proposed rule, we encouraged states, MCOs, PIHPs, PAHPs, PCCMs, PCCM entities, and other stakeholders to utilize HIE and certified health IT to effectively and efficiently help providers improve internal care delivery practices, support management of care across the continuum, enable the reporting of electronically specified clinical quality measures (eCQMs), and improve efficiencies and reduce unnecessary costs. We welcomed comment on how we might reinforce standards through future rulemaking or guidance to states and plans as standards become more mature and adoption of certified health IT increases.
We received the following comments in response to this discussion.
As this section of the preamble provided a discussion of ONC's Interoperability Roadmap and Interoperability Standards Advisory and did not result in regulation, there is no regulatory section to finalize in this rule.
Managed long term services and supports (MLTSS) refers to an arrangement between state Medicaid programs and MCOs, PIHPs or PAHPs through which the MCO, PIHP, or PAHP receives a capitated payment for providing long-term services and supports (LTSS). MLTSS programs have grown significantly over the past decade and are expected to increase even more in the coming years. Recognizing this significant shift in delivery system design, we developed ten key principles inherent in a strong MLTSS program. These principles were released on May 21, 2013, in guidance
We proposed to add a definition of Long-term services and supports (LTSS) to § 438.2 for purposes of applying the rules in part 438 of this chapter; however, the definition will not be applicable to any other part of title 42 of the CFR. Our proposal defined LTSS as “services and supports provided to beneficiaries of all ages who have functional limitations and/or chronic illnesses that have the primary purpose of supporting the ability of the beneficiary to live or work in the setting of their choice, which may include the individual's home, a provider-owned or controlled residential setting, a nursing facility, or other institutional setting.” We intended for community based services within the scope of this definition to be largely non-medical in nature and focused on functionally supporting people living in the community. Examples of what we would consider community based LTSS include Home- and Community-Based Services (HCBS) delivered through a section 1915(c) waiver, section 1915(i), or section 1915(k) state plan amendments, as well as personal care services otherwise authorized under the state plan. We note that individuals with chronic illness that may receive LTSS include individuals with mental health conditions and substance use disorders.
We noted that we considered defining LTSS in a way that references specific services in title 42 such as HCBS and Nursing Facility services (defined in part 440), but determined that would be too limiting and not allow for future innovation in what services are considered LTSS. We requested comment on the proposed definition and whether it is appropriate in scope.
We received the following comments in response to our proposal to add a definition of long-term services and supports to § 438.2.
Further, in the
Section 438.3(o), as proposed and finalized, also requires the HCBS regulation at § 441.301(c)(4) to be followed for all HCBS settings where the services could be in a sections 1915(c), 1915(i), or 1915(k) of the Act program. The HCBS settings requirements describe how HCBS settings must offer community integration opportunities. Additionally, § 438.3(f)(1), as proposed and finalized, requires all contracts to comply with the ADA, which describes the rights of people with disabilities including institutionalization issues. Because of these provisions, and because the LTSS definition is only intended to describe the scope to which the proposed rule managed LTSS regulations apply (rather than to create the substantive requirements that will apply to the provision of LTSS), we have decided not to adopt these requested changes to the definition.
After consideration of the public comments and for reasons outlined above, we are modifying the LTSS definition to state that long term services and supports (LTSS) means services and supports provided to beneficiaries of all ages who have functional limitations and/or chronic illnesses that have the primary purpose of supporting the ability of the beneficiary to live or work in the setting of their choice, which may include the individual's home, a worksite, a provider-owned or controlled residential setting, a nursing facility, or other institutional setting.
The principles in CMS' May 2013 guidance were developed after extensive review of numerous published findings, interviews with states as to lessons learned in the start-up and implementation of MLTSS programs, and recommendations from our HHS partners and other external stakeholders. The 10 elements identified in our 2013 guidance and used as the basis for our proposed regulation are:
(1) Adequate Planning.
(2) Stakeholder Engagement.
(3) Enhanced Provision of Home and Community Based Services.
(4) Alignment of Payment Structures and Goals.
(5) Support for Beneficiaries.
(6) Person-centered Processes.
(7) Comprehensive, Integrated Service Package.
(8) Qualified Providers.
(9) Participant Protections.
(10) Quality.
In the preamble to the proposed rule, we described how we have incorporated these elements into the proposed rule. As noted previously, the elements were incorporated in proposed changes throughout this part, and we reference those sections of this final rule where the associated proposals are further discussed. In this section, we summarize the LTSS specific proposals and finalized regulations in the context of the ten elements of our guidance and explain how, together, they strengthen MLTSS programs. We requested comment on the incorporation of these elements in the proposed rule.
• Amending § 438.66 to propose that there is appropriate state monitoring and accountability of the program that includes readiness reviews. While this standard applies broadly to all managed care programs and is discussed in section I.B.6.c. of the proposed rule, LTSS, as a covered service under the contract, would be included in this review to the same extent as all other covered services.
• Amending § 438.10 to propose additional standards for enrollee and potential enrollee materials, including information on transition of care, who to contact for support and other standards for provider directories. The specific proposed changes to § 438.10 are discussed in the Information standards section of the proposed rule in section I.B.6.d. While LTSS is not specifically referenced, states (under § 438.10(e)) and managed care plans (under § 438.10(g) and (h)) would provide information on all covered benefits and provider directory information under our proposal.
• Provide an access point for complaints and concerns pertaining to the MCO, PIHP, PAHP, PCCM, or PCCM entity on the enrollment process, access to services, and other related matters (§ 438.71(e)(1)) (finalized as paragraph (d)(1));
• Educate beneficiaries on the grievance and appeal process, the state fair hearing process, enrollee rights and responsibilities, as well as resources outside of the MCO, PIHP or PAHP (§ 438.71(e)(2)) (finalized as paragraph (d)(2));
• Assist in navigating the grievance and appeal process for MCOs, PIHPs and PAHPs or state fair hearing excluding providing representation (§ 438.71(e)(3)) (finalized as paragraph (d)(3)); and
• Review and oversight of LTSS program data to assist the state Medicaid Agency on identification, remediation, and resolution of systemic issues (§ 438.71(e)(4)) (finalized as paragraph (d)(4)).
We also incorporated this element by proposing and finalizing a new for cause reason for disenrollment for enrollees receiving LTSS in § 438.56(d)(2)(iv), which is discussed in section I.B.5.b. of this final rule. The proposal was based on recognition that provider network changes can have a significant impact on those enrolled in MLTSS programs, since some providers are integral to residential and employment services and supports. Therefore, if the state does not permit participants enrolled in MLTSS to switch managed care plans (or disenroll to FFS), at any time, states should permit MLTSS enrollees to disenroll and switch to another MCO, PIHP, PAHP, or FFS when the termination of a provider from their MLTSS network would result in a disruption in the enrollee's use of that provider. Under this proposal, an enrollee would be permitted to change their MCO, PIHP, or PAHP if their residential, institutional, or employment supports provider terminates their participation with the enrollee's current MCO, PIHP, or PAHP.
Finally, as discussed at I.B.5.c., we proposed and finalized a new § 438.816 that would describe the conditions that must be met for the state to claim FFP for the LTSS-specific beneficiary support system activities proposed in
We noted in the preamble of the proposed rule that the proposed scope of services for LTSS beneficiary supports may include what has been traditionally considered “ombudsman” services; however, rules concerning Medicaid-reimbursable expenditures remain in place, so we cautioned that not all ombudsman activities traditionally found in a Long-Term Care Ombudsman office may be eligible for Medicaid payment under this proposal. We issued an informational bulletin on June 18, 2013, entitled “Medicaid Administrative Funding Available for Long-Term Care Ombudsman Expenditures,” that provided guidance on this issue. The informational bulletin is available at
• Amending § 438.68(b)(2) to propose that states establish time and distance standards specifically for MLTSS programs. This proposal addressed time and distance standards for LTSS provider types in which the enrollee must travel to the provider and the use of standards other than time and distance for LTSS provider types that travel to the enrollee to deliver the service. We believe it is important to recognize that standards must reflect the high utilization of services outside of the traditional medical office setting by enrollees using LTSS. Other changes to § 438.68 are discussed in section I.B.6.a. of this final rule.
• Amending § 438.206(c)(3) to propose that MCOs, PIHP, and PAHPs ensure that network providers have capabilities to ensure physical access, accommodations, and accessible equipment for enrollees with physical and mental disabilities. Given the high number of enrollees with a disability receiving some LTSS, we believed this to be an important factor when evaluating qualified providers in a MLTSS program. Other changes to § 438.206 are discussed in section I.B.6.a. of this final rule.
• Amending § 438.207(b)(1) to propose that MCOs, PIHPs, or PAHPs submit documentation to the state to demonstrate that it complies with offering the full range of preventive, primary care, specialty care, and LTSS services adequate for the anticipated number of enrollees. Under this proposal, the state would review the submitted documentation and certify its adequacy in paragraph (d) of this section. These changes are discussed in section I.B.6.a. of this final rule.
• Amending § 438.214(b)(1) to propose that each state establish a credentialing and re-credentialing policy that addresses all the providers, including LTSS providers, covered in their managed care program regardless of the type of service provided by such providers. We proposed this to emphasize the importance of a credentialing and re-credentialing policy for all provider types for the services covered under the contracts. We also proposed that each MCO, PIHP, and PAHP must follow the state policy but did not propose to prohibit additional policies at the state or managed care plan level. These proposals, comments, and responses to the proposal, and the provisions of the final rule on this are discussed below in this section.
We noted in the proposed rule our belief that a quality system for MLTSS is fundamentally the same as a quality system for a state's entire managed care program, but should include MLTSS-specific quality elements. We specifically proposed § 438.330(b)(5) to address specific MLTSS quality considerations. Under proposed paragraph (b)(5), the MCO, PIHP, or PAHP would have mechanisms to assess the quality and appropriateness of care provided to LTSS enrollees including between settings of care and as compared to the enrollee's service plan.
These ten elements were the basis for many of our proposals related to LTSS provided through a managed care delivery system. We solicited comment on the extent to which our proposals—those discussed specifically above and the other LTSS-specific provisions in this final rule—successfully incorporate the elements.
We received comments in response to our proposals; comments specific to proposals and finalized provisions discussed in more detail in other sections can be located in the section noted after each citation: §§ 438.2 (definitions at I.B.5.g), 438.3 (standard contract provisions at I.B.2), 438.10 (information requirements at I.B.6.d), 438.66 (state monitoring standards at I.B.6.c), 438.68 (network adequacy standards at I.B.6.a), 438.70 (stakeholder engagement for MLTSS at I.B.5.h), 438.71 (beneficiary support system at I.B.5.c), 438.206 (availability of services at I.B.6.a), 438.207 (assurances of adequate capacity and services at I.B.6.a), and 438.816 (beneficiary support system at I.B.5.c). We discuss our proposals, comments, and responses, and finalized provisions related to § 438.214 here.
We received the following comments in response to our proposal in § 438.214.
Given the challenges of determining common criteria among certain types of LTSS providers, selecting appropriate criteria becomes even more important. As one commenter suggested, training may be a method to help address this for some LTSS providers. Lastly, we interpret the comment requesting that the state have discretion to determine which types of LTSS providers to credential to mean that states want to be able to have no credentialing or evaluation process at all for certain LTSS providers when alternative methods of assuring quality care and beneficiary protection may be sufficient. If that interpretation is correct, then we restate that LTSS providers, regardless of the type of service provided, must undergo the credentialing and recredentialing process. We note that the criteria for credentialing may differ based on the type of LTSS provider.
In a self-directed model, there may be individual credentialing based on beneficiary-defined parameters, along with certain state-wide criteria such as passing a criminal background and fraud check, and/or being of age to perform the work. When an individual specifies self-directed provider enrollment criteria, the state must have or delegate to the managed care entities a process by which the provider credentials are verified, and that safety monitoring and appropriate payment oversight occurs. This usually occurs through a financial management services entity qualified to perform payroll and other actions on behalf of the self-directing individual. We do not agree that assurances of quality of care or other beneficiary protections would be sufficient unless used in a well-structured self-direction program as a post review process where beneficiary risk and mitigation has been worked through at initiation of services in a person-centered planning process.
Although not proposed, we are making two technical corrections in § 438.214. In paragraphs (a), (b)(2), and (c), we are adding “network” before “provider” for accuracy given that these paragraphs address topics applicable only to network providers, that is, contracts, credentialing, and provider selection. In paragraph (b)(2), we are deleting “who have signed contracts with the MCO, PIHP, or PAHP” to remove the redundancy that phrase adds given the definition of “network provider” in § 438.2.
After consideration of public comments, we are finalizing § 438.214 as proposed without modification.
Since stakeholder and member engagement plays a critical role in the success of a MLTSS program, we proposed that states and managed care plans must have appropriate minimum mechanisms in place to accomplish this in a new § 438.70 regarding the state's creation and maintenance of a stakeholder group so that opinions of beneficiaries, providers, and other stakeholders are solicited and addressed during the design, implementation, and oversight of the MLTSS program. We proposed that states set the composition of the stakeholder group and the frequency of meetings to ensure meaningful stakeholder engagement. Our proposal specifically uses a “sufficiency” standard rather than setting quantitative parameters for the composition of the group or the frequency of meetings to permit states a significant degree of flexibility. We requested comments on the overall approach for these changes, as well as on the composition of the stakeholder group, stakeholder group responsibilities, and approach to meeting frequency for both states and managed care plans.
In concert with the new § 438.70, we also proposed a new § 438.110. While the stakeholder group proposed in § 438.70 is maintained by the state, we believe that each MCO, PIHP, and PAHP should also establish a regular process to solicit direct input on the enrollees' experiences. Therefore, in § 438.110(a), we proposed that for any MCO, PIHP, or PAHP contract that includes LTSS, the MCO, PIHP, or PAHP must establish and maintain a member advisory committee. Paragraph (b) proposed that the member advisory committee include a reasonably representative sample of the covered LTSS populations. We included PAHPs in this standard, because we understand there are some PAHPs in operation that cover LTSS. We have combined our discussion of the requirements in §§ 438.70 and 438.110 throughout this section; therefore we use the terms stakeholders and members interchangeably when referring to the general requirements for a state to establish and maintain a state stakeholder group in § 438.70 and for the MCO, PIHP, or PAHP to establish and maintain a member advisory committee in § 438.110.
We received the following comments in response to our proposal to add a new §§ 438.70 and 438.110.
We concur that individuals must be offered accommodations to participate in stakeholder engagement activities. This could include telephonic meetings, use of computer messaging, interpreter services, or other means identified by participants that may be necessary to participate. The ADA requires reasonable accommodations for persons with disabilities, so we do not believe the need for accommodations should be specified here as well. In regard to stakeholder engagement performance reviews or payment incentives, we are not aware of evidence-based standards upon which such an evaluation or payment could be based. We are, therefore, not adding an evaluation component to stakeholder engagement at this time.
We also decline to remove the requirement that LTSS be covered under a risk contract through an MCO, PIHP, or PAHP as a condition for the requirements in § 438.110 to apply, as we do not believe that PCCM entities are directly providing LTSS and are instead focused solely on care coordination activities and arranging for the provision of services outside of the PCCM entity. While we do not believe that it would be appropriate for such PCCM entities to be required to establish and maintain a member advisory committee, we encourage states to consider how their PCCM entities operate in determining whether to impose a stakeholder engagement or member advisory committee requirement in the state contract. Finally, we decline to remove § 438.110(a) in entirety, as we disagree with the commenter that states and managed care plans should be given discretion on whether to establish and maintain a member advisory committee. We believe that the establishment and maintenance of a member advisory committee is a critical beneficiary protection to ensure that enrollees' feedback is heard and included as appropriate when those enrollees are receiving LTSS services.
After consideration of the public comments, we are finalizing §§ 438.70 and 438.110 as proposed with a revision to include other individuals that represent beneficiaries or enrollees to the list of individuals included in the committees required by the two regulations.
As indicated in I.B.6.a of the proposed rule, assessment of the network adequacy of contracted MCOs, PIHPs, and PAHPs is a primary component of our determination of a state's readiness to implement and sustain managed care programs. We proposed a new regulation section and revisions to existing regulations to establish minimum standards in this area. The proposed changes had the goal of maintaining state flexibility while modernizing the current regulatory framework to reflect the maturity and prevalence of Medicaid managed care delivery systems, promoting processes for ensuring access to care, and aligning, where feasible, with other private and public health care coverage programs. To that end, we proposed to set standards to ensure ongoing state assessment and certification of MCO, PIHP, and PAHP networks, set threshold standards for the establishment of network adequacy measures for a specified set of providers, establish criteria for developing network adequacy standards for MLTSS programs, and ensure the transparency of network adequacy standards. These proposed changes would create a new § 438.68 specific to the development of network adequacy standards for medical services and LTSS and modify §§ 438.206 and 438.207.
(1) Requirements for the Network Adequacy Standards set by the State for a Specified Set of Providers (§ 438.68)
Our current regulatory framework provides states with significant flexibility to determine whether an MCO, PIHP, or PAHP adequately makes services accessible and available to enrollees under the managed care contract. Because our existing regulations were developed at a time when managed care for the delivery of LTSS was extremely limited and involved only a handful of programs limited in geographic scope, we proposed to amend the existing regulations to establish standards for states to follow in the development of Medicaid managed care network adequacy standards that address medical services, behavioral health services, and LTSS. In accordance with our underlying goal to align Medicaid managed care standards with other public programs where appropriate, we analyzed the network adequacy standards applicable under the Marketplace and the MA program to inform our proposed rule. In section I.B.6.a of the proposed rule, we provided a short summary of the standards utilized by these programs.
Similar to the rules finalized for Marketplaces and QHPs, the existing network adequacy standards for Medicaid managed care do not include detailed and specific time and distance standards or provider to enrollee ratios but deferred to each state to develop specific standards; the current regulations rely heavily on attestations and certifications from states, with supporting documentation, about the adequacy of the network. Consistent with the primary role of states in Medicaid, our proposal kept to this general approach. Therefore, we proposed to add a new § 438.68 that would stipulate that the state must establish, at a minimum, network adequacy standards for specified provider types.
Proposed paragraph (a) specified that a state that contracts with an MCO, PIHP, or PAHP must develop network adequacy standards that satisfy the minimum parameters in § 438.68. This proposed provision is the counterpart to our proposal at § 438.206 that the state ensures that enrollees of MCOs, PIHPs, and PAHPs have access to all services covered under the state plan in a manner that is consistent with the state-set standards for access and availability. These proposals would apply to contracts that cover medical services, behavioral health services, and LTSS; the standards for LTSS proposed in paragraphs (b)(2) and (c)(2) are described in the MLTSS-specific discussion at the end of this section.
Proposed paragraph (b)(1) would stipulate that states must establish time and distance standards for the following network provider types: Primary care (adult and pediatric); OB/GYN; behavioral health; specialist (adult and pediatric); hospital; pharmacy; pediatric dental; and additional provider types when it promotes the objectives of the Medicaid program for the provider type to be subject to such time and distance standards. We intended that this proposal be applicable only to the services covered under the MCO, PIHP, or PAHP contract(s). We proposed that states, at a minimum, establish time and distance standards as such standards are currently common in the private market and many state Medicaid managed care programs; further, we believe time and distance standards present a more accurate measure of the enrollee's ability to have timely access to covered services than provider-to-enrollee ratios. We requested comment on whether we should propose a different national type of measure for states to further define, such as provider-to-enrollee ratios, or whether we should permit states the flexibility to select and define the type of measure for the network's adequacy of the specified provider types. Additionally, we requested comment on whether we should define the actual measures to be used by states such that we would set the time and distance or provider-to-enrollee ratio standard per provider type, per county, or other appropriate geographic basis.
Given the large number of pediatric Medicaid enrollees, we noted that it is important for states and plans to specifically include pediatric primary, specialty, and dental providers in their network adequacy standards. Network adequacy is often assessed without regard to practice age limitations, which can mask critical shortages and increase the need for out-of-network authorizations and coordination. We requested comment on whether standards for behavioral health providers should distinguish between adult and pediatric providers. We considered adding family planning providers to the list of providers that would be subject to time and distance standards but declined to do so because section 1902(a)(23) of the Act guarantees freedom of choice of family planning
Appreciating that provider networks can vary between geographic areas of a state and states have different geographic areas covered under managed care contracts, as proposed in paragraph (b)(3), states would have to establish time and distance standards for specified provider types that reflect the geographic scope of the Medicaid managed care program. Our proposal would permit states to vary those standards in different geographic areas to account for the number of providers practicing in a particular area. Our proposal would not limit states to only the mandatory time and distance standards but also would have states consider additional elements when developing network adequacy standards.
Proposed paragraph (c)(1) specifies the minimum factors a state must consider in developing network adequacy standards; most of the elements proposed here are currently part of § 438.206(b)(1) as considerations for MCOs, PIHPs, and PAHPs in developing their managed care networks. These are: Anticipated Medicaid enrollment; expected utilization of services; taking into account the characteristics and health needs of the covered population; number and types of health care professionals needed to provide covered services; number of network providers that are not accepting new Medicaid patients; and the geographic location and accessibility of the providers and enrollees.
Disparities in access to care related to demographic factors such as race, ethnicity, language, or disability status are, in part, a function of the availability of the accessible providers who are willing to provide care and are competent in meeting the needs of populations in medically underserved communities. Additionally, new enrollees in Medicaid managed care, including those who are dually eligible for Medicare and Medicaid, may present with multiple chronic conditions and need the services of multiple specialists. Absent an adjustment for new populations enrolled in a state's Medicaid managed care program, existing plan networks may be inadequate to meet new enrollees' needs.
Accordingly, we proposed changes to the required factors that we proposed to move from current § 438.206(b)(1). We proposed to make existing § 438.206(b)(1)(ii) into separate factors that the state must consider: Expected utilization and the characteristics and health needs of the covered population; these are codified as § 438.68(c)(1)(ii) and (iii) and use substantially the same language as in the current regulation. Similarly, we proposed two separate factors, to be codified at § 438.68(c)(1)(vi) and (viii), in place of the current § 438.206(b)(1)(v), which are geographic location and accessibility. Although we proposed to use the same language regarding geographic considerations, we proposed in § 438.68(c)(1)(viii) that each state must also consider the ability of providers to ensure physical access, accommodations, and accessible equipment available for Medicaid enrollees with physical or mental disabilities, with proposed additional standards that the accommodations be reasonable and that the ability of providers to ensure culturally competent communication be considered as well. Also, we proposed to add a new element, at proposed paragraph (c)(1)(vii), so that states must also consider the ability of network providers to communicate with limited English proficient (LEP) enrollees in their preferred language when the state is developing time and distance access standards.
In effect, our proposal was that the states develop standards by which to review the provider networks used in Medicaid managed care, which should ensure that these elements are also taken into consideration by MCOs, PIHPs, and PAHPs that maintain and monitor the provider networks. We intended that compliance with our proposal would be best met if states looked to standards established by the insurance regulator (for example, Department of Insurance, or similar agency within the state) for private market insurance, and the standards set under the MA program, as well as historical patterns of Medicaid utilization—including utilization specific to sub-populations that may be more relevant to the Medicaid program than in private or Medicare markets—to inform the standards the state establishes for Medicaid managed care programs under § 438.68. While we did not propose to dictate the particular time and distance standards or set a quantitative minimum to be adopted by a state, we noted our intent to assess the reasonableness of the particular standard adopted by a state under our proposed § 438.68 within the context of other existing standards should the need for such evaluation of the state's performance arise.
We recognized that situations may arise where a MCO, PIHP, or PAHP may need an exception to the state established provider network standards. A number of states currently permit exceptions, and have a process for seeking exceptions, under the state standards imposed on a managed care entity under existing §§ 438.206 and 438.207. Therefore, proposed § 438.68(d) provides that, to the extent a state permits an exception to any of the provider network standards, the standard by which an exception would be evaluated must be specified in the contract and must be based, at a minimum, on the number of health care professionals in that specialty practicing in the service area. Under our proposal, the state would monitor enrollee access to providers in managed care networks that operate under an exception and report its findings to us as part of its annual managed care program monitoring report provided under proposed § 438.66. We invited comment on our proposal related to exceptions a state may grant to its network adequacy standards established by the state for Medicaid MCOs, PIHPs, or PAHPs.
Finally, in proposed paragraph (e), to promote transparency and public input for these managed care network adequacy standards, we proposed that states would have to publish the network adequacy standards developed in accordance with § 438.68 on the Medicaid managed care Web site under § 438.10. In addition, states would have to make these standards available at no cost, upon request, to individuals with disabilities through alternate formats and using auxiliary aids and services.
We received the following comments in response to our proposal to add a new § 438.68 that would stipulate that the state must establish, at a minimum, network adequacy standards for specified provider types.
In the proposed rule, we proposed minimum standards for how states adopt network adequacy standards to ensure the availability of critical services and supports for beneficiaries as more of them transition to MLTSS programs. We noted that, unlike medical and behavioral health services, there are no commonly used access standards for LTSS in the private market or in Medicare, as LTSS are primarily covered through Medicaid. Further, as states have begun to deliver LTSS through managed care, they have created standards for their individual programs, which vary widely. Likewise, the level of oversight by the state that is necessary to enforce network adequacy standards for LTSS provided through managed care contracts varies, ranging from a minimal level of effort to an in-depth review of service plan authorizations compared to actual claims experience.
We noted that LTSS can also be delivered in a person's home, a provider's office, in various community locations, such as places of employment or recreation, or in an institution. In § 438.68(b)(2), we proposed that states would set standards that encompass time and distance and other measures of access when delivering LTSS through their managed care plans, noting that the type of standard that the state would adopt under our proposal depends on whether the enrollee or the provider must travel to provide the services. While we did not specify a specific set of providers in our LTSS-specific proposal, we indicated that we expect the state to consider all LTSS delivered through managed care when developing the standards which may include, but are not limited to, institutional, community-based, residential, and employment supports providers, depending on the program. Proposed paragraph (c)(2) set forth the elements that states would have to consider when developing standards for LTSS in a managed care program. Under our proposal, when developing time and distance standards, states would consider the same elements as when setting medical services network standards and also consider strategies to ensure the health and welfare of enrollees using LTSS and to support community integration of individuals receiving LTSS. We noted that LTSS enrollees may have different needs than those enrollees only using acute, primary, and behavioral health services. For example, assessing network
We received the following comments in response to our proposal to add new § 438.68(b)(2) and (c)(2).
CMS also agrees with commenters that timely access and availability of services is critical for all enrollees and especially for enrollees needing LTSS. Section 438.207(d) requires managed care plans to document and provide assurance that they are meeting the state's requirements for the availability of services as set forth in § 438.206. States are required to review this documentation and submit an assurance to CMS that managed care plans are meeting the state's requirements for the availability of services. We decline to add requirements because states need flexibility to tailor their program to the populations served and the benefits provided.
We also decline to require additional reporting on the network adequacy requirements. Section 438.207(d) requires that documentation and analysis be submitted to CMS. Likewise, § 438.66(e)(2)(vi) requires states to report on the availability and accessibility of services in the annual report. We believe that these two requirements provide an appropriate balance between CMS oversight role, public transparency, and administrative burden on states.
After consideration of the public comments, we are modifying the regulatory text at § 438.68(b)(1)(iii) to include both “adult and pediatric” behavioral health. We are also modifying the regulatory text at § 438.68(b)(1)(iii) to clarify that the “behavioral health” provider type/category includes both mental health (MH) and substance use disorder (SUD) providers. We are finalizing the regulation text at paragraphs (c)(1)(vi) through (viii) to use “network provider” in place of the proposed use of “health care professionals” for reasons discussed in section I.B.9.a. of this final rule. We are modifying the regulatory text at § 438.68(c)(1)(ix) to include triage lines or screening systems, as well as the use of telemedicine, e-visits, and/or other evolving and innovative technological solutions, as criteria that states should consider when setting their network adequacy standards and, to account for this additional text in the final rule, are modifying paragraph (c)(2)(i) to refer to paragraphs (c)(1)(i) through (ix). We are finalizing all other paragraphs in § 438.68 as proposed.
Currently, in § 438.206, states must ensure that all services covered under the state plan are available and accessible to enrollees of MCOs, PIHPs, and PAHPs. Throughout § 438.206, we proposed to use the terms “network provider” and “provider” as applicable to be consistent with the proposed new definitions of these terms (see section I.B.9. of this final rule) and to provide greater clarity to our regulations. We consider such changes largely technical in nature.
We also proposed to revise paragraph (a), which currently sets forth the basic rule for the availability of services, to add a new sentence such that states must ensure that MCO, PIHP, and PAHP provider networks for services covered under the MCO, PIHP, or PAHP contract meet the state's network adequacy standards established under proposed § 438.68. In addition, we also proposed to clarify that services are to be made available and accessible in a timely manner. The timeliness standard is currently in paragraph (b)(4), pertaining to access to out-of-network providers, and in paragraph (c)(1); we indicated that we believe it is appropriate to incorporate timeliness into the general rule for availability of services in paragraph (a).
In paragraph (b), we proposed substantive changes only to (b)(1) and (b)(5). We proposed to move the second sentence of (b)(1) and the provisions at existing paragraphs (b)(1)(i) through (b)(1)(v) to the new § 438.68(c) so that all regulatory standards related to the measurement of adequate MCO, PIHP, and PAHP provider networks are contained in one section. We proposed to add text to (b)(1) to clarify that the sufficiency and adequacy of the provider network and access to services is for all enrollees, including those with limited English proficiency and physical or mental disabilities. We proposed to amend paragraph (b)(5) to include PAHPs in the payment standard for covered services that are provided out-of-network. We stated that this represents a technical correction as the preamble for the 2002 final rule refers to PAHPs (67 FR 41038) and we believe PAHPs were inadvertently excluded from the final regulatory text.
We did not propose any substantive changes to existing paragraph (c)(1) but proposed changes to improve the readability and clarity of the regulation text. We also clarified our intent to interpret and apply the provisions in paragraph (c)(1) as requiring states to set standards for timely access to all state plan services covered under the managed care contract. For purposes of setting timely access standards, state plan services may be reasonably classified as routine, urgent, or emergency care. We noted that for access standards to be effective, states will need to have mechanisms in place for ensuring that those standards are being met by the managed care plan networks. We considered requiring a mix of approaches, such as conducting enrollee surveys, reviewing encounter data, calculating and reporting of HEDIS measures related to access, implementing secret shopper efforts, and a systematic evaluation of consumer service calls. We requested comment on approaches to measuring enrollee's timely access to covered services and to evaluating whether managed care plan networks are compliant with such standards. We also requested comment on the value of requiring some or all of these mechanisms for ensuring that access standards are being met.
In paragraph (c)(2), we proposed to add to the standards to ensure that MCOs, PIHPs, and PAHPs participate in states' efforts to promote access in a culturally competent manner to all enrollees. This includes those with limited English proficiency, diverse cultural and ethnic background, disabilities, and regardless of an enrollee's gender, sexual orientation, or gender identity. We also proposed to add a corresponding standard in a new § 440.262 so that the state would similarly ensure cultural competence and non-discrimination in access to services under FFS. We believe that the obligation for the state plan to promote access and delivery of services without discrimination is necessary to assure that care and services are provided in a manner consistent with the best interest of beneficiaries under section 1902(a)(19) of the Act. We noted that the best interest of beneficiaries is appropriately met when access is provided in a non-discriminatory manner; adopting these additional methods of administration is also necessary for the proper operation of the state plan under section 1902(a)(4) of the Act.
We proposed to add a new paragraph (c)(3) to emphasize the importance of network providers having the capabilities to ensure physical access, accommodations, and accessible equipment for the furnishing of services to Medicaid enrollees with physical or mental disabilities. We noted that this proposal was mirrored in proposed
We received the following comments in response to our proposal to revise § 438.206 and add new § 440.262.
We also disagree with commenters that we should add language regarding out of network access to care for services not provided by a managed care plan due to religious objections. Within part 438, we have included references for religious objections at § 438.10(e)(2)(v)(C), § 438.10(g)(2)(ii)(A) and (B), and § 438.100(b)(2)(iii). Consistent with the context of the regulatory text, § 438.206(b)(2) is related to the availability of services within the managed care plan's delivery network. It is not appropriate to add regulatory text to address all circumstances that could warrant out of network care or services, including religious objections.
In § 438.206, we have added a new paragraph (b)(7) that requires states to include a contract provision in all MCO, PIHP, and PAHP contracts requiring the managed care plan to demonstrate that it has sufficient providers for family planning services in network to provide timely access. Despite the ability of enrollees to access family planning services out of network without a referral, we agree with commenters that it is important for managed care plans to be able to provide sufficient timely access to these services within the network as well. Use of network providers facilitates claims payment, helps enrollees locate providers more easily, and improves care coordination. While the ability to choose a family planning provider from outside a managed care plan's network is an important beneficiary option, we do not believe it negates the managed care plan's responsibility to ensure timely access within its network. For these reasons, we are finalizing new paragraph (b)(7).
After consideration of the public comments, we are adding new regulatory text at § 438.206(b)(7) to require a managed care plan to demonstrate that its network has family planning providers sufficient to ensure timely access to family planning services. We are modifying the regulatory text at § 438.206(c)(3) to revise “accommodations” to “reasonable accommodations” to be consistent with the language at § 438.68(c)(1)(viii). We are finalizing the regulation text at § 438.206(b)(3) to use “network provider” in place of the proposed use of “health care professional” for reasons discussed in section I.B.9.a. of this final rule. We are finalizing all other provisions in §§ 438.206 and 440.262 as proposed.
Currently in § 438.207(a), states have to ensure, through the contracts and submission of assurances and documentation from managed care entities, that the managed care plans have the capacity to serve the expected enrollment in accordance with state-set standards for access to care. In addition, under current § 438.207(b), the specified documentation must demonstrate the adequacy of the range of covered services and the provider network. We proposed to keep the existing regulation text in paragraphs (a) and (b) substantially the same, but proposed a minor amendment to specify in paragraph (b)(1) that supporting documentation must also address LTSS. This change is consistent with our broader proposal to incorporate LTSS throughout part 438, where applicable.
Under current § 438.207, states, through their contracts, must stipulate that MCOs, PIHPs, and PAHPs submit documentation that their network is sufficient in number, mix, and geographic distribution to meet, in accordance with state-set standards, the needs of anticipated enrollees. We proposed to amend § 438.207(c) so that managed care plans have to submit documentation and the state has to certify the adequacy of the provider networks on at least an annual basis. We requested comment on the appropriate timeframe for submission and review of network certification materials.
We also proposed to redesignate the regulation text currently at § 438.207(c)(2) as (c)(3), which stipulates submission of documentation of adequate networks when there has been a significant change in the managed care plan's operations that would affect capacity and services. We proposed that a significant change in the composition of a MCO, PIHP, or PAHP's network itself would also trigger a submission of documentation to be codified in § 438.207(c)(3)(i). For example, we noted a significant change in the composition of the provider network would occur when the only participating hospital terminates the network provider agreement, or similarly, when a hospital that provides tertiary or trauma care exits a managed care plan network. We also proposed minor edits to introductory text in paragraph (c)(3) to improve the readability of the paragraph.
In paragraph (d) of § 438.207, addressing the obligation of the state to review documentation from the MCO, PIHP, or PAHP and submit an assurance to us that the managed care plan meets the state's standards for access to services, we proposed to add an explicit standard that the submission include documentation of the analysis supporting the certification of the network for each contracted MCO, PIHP, or PAHP. We indicated that this is appropriate because it would demonstrate to us how the state evaluates plan compliance with state standards and that the state's assurance is supported by the data. In addition, we proposed to replace the word “certify” with “submit an assurance of compliance” to more clearly describe the responsibility of the state under paragraph (d). We did not propose any revision to § 438.207(e), which establishes our right to inspect the documentation provided under § 438.207. We requested comments on the overall approach to § 438.207.
We received the following comments in response to our proposal to revise § 438.207.
We decline to add specific documentation requirements for pediatric and specialty providers, as we believe this is appropriately specified in the network adequacy standards at § 438.68. We also decline to set specific data submission requirements or set specific requirements regarding the types of analyses that managed care plans should be submitting to states. These recommendations are too prescriptive and would not provide states the flexibility to specify the types of analyses and the format of such analyses for their respective programs. We believe it is appropriate to require supporting documentation as an overarching federal framework but decline to set prescriptive requirements on the kinds or format of such documentation. We also decline to require states to compare managed care plan documentation submissions to provider directories. While this might be a beneficial exercise, it may not be the most appropriate method for states to verify compliance. States should be allowed flexibility in the methods they utilize to verify the documentation and ensure that managed care plans are meeting all of the requirements at § 438.207(b)(1) and (2).
Finally, we thank commenters for the recommendations regarding more specificity related to LTSS programs and providers. Consistent with our approach at § 438.68, we decline to include specific requirements regarding the numbers and types of LTSS providers to ensure an adequate mix. We believe that states are in the best position to determine the exact requirements, depending on the scope of their LTSS programs and the populations served. We also note that at § 438.70, states must ensure the views of beneficiaries, providers, and other stakeholders are solicited and addressed during the design, implementation, and oversight of a state's managed LTSS program. This includes the supporting documentation requirements at § 438.207(b)(1) and (2). We encourage states and managed care plans to engage their stakeholder communities regarding specific and appropriate timely access to care standards and supporting documentation requirements.
After consideration of the public comments, we are modifying the regulatory text at § 438.207(a) to add references to §§ 438.68 and 438.206(c)(1) to be consistent with § 438.206(a) and other sections throughout part 438. We are also modifying the regulatory text at § 438.207(d) to include a specific reference to § 438.68 to be consistent with the reference to § 438.206. We are finalizing all other sections as proposed.
Section 1932(c) of the Act establishes quality assurance standards for Medicaid managed care programs, specifically, a quality assessment and improvement strategy and an external independent review of contracting MCOs. Regulations at 42 CFR part 438, subparts D (Quality Assessment and Performance Improvement) and E (External Quality Review) implement this statutory provision; subpart D became effective on August 13, 2002 (67 FR 40989) and subpart E became effective on March 25, 2003 (68 FR 3586). Based on the authority under section 1902(a)(4) of the Act, we included capitated entities in addition to MCOs, within the scope of the regulatory requirements. The existing regulations describe quality standards for all states contracting with MCOs, PIHPs, and in some cases PAHPs, for the delivery of Medicaid services to beneficiaries. This final rule modifies these standards.
Approaches to assessing quality, access, and timeliness of care have evolved significantly over the past 10 years. At the federal level, CHIPRA, the American Recovery and Reinvestment Act (ARRA), the Affordable Care Act, the National Quality Strategy, and the CMS Quality Strategy all build on one another to decrease burdens, improve alignment, and encourage innovative approaches to quality measurement and improvement, among other activities. States also have expanded the use of managed care for the delivery of primary care, acute care, behavioral health services, and LTSS to Medicaid beneficiaries, and the proposed regulation reflected that development. Throughout the proposed rule, we proposed changes to maximize the opportunity to improve health outcomes over the lifetime of individuals. Specifically, we proposed to strengthen quality measurement and improvement efforts in managed care by focusing on the following three principles:
(1)
(2)
(3)
We received the following comments in response to our proposed quality principles.
As discussed in the proposed revisions to subpart E below, we proposed that sections related to the quality strategy currently found in subpart D be moved to subpart E. We proposed to make minor conforming changes to subpart D and to change the name from “Quality Assessment and Performance Improvement” to “MCO, PIHP, and PAHP Standards.” We believe this change more accurately describes the remaining sections of subpart D, which address MCO, PIHP, and PAHP activities, some of which are measured as part of the state quality strategy. Additionally, we proposed to remove the subheadings found in subpart D to be consistent with the remaining subparts in part 438. These subheadings would no longer be necessary because the section titles discuss what types of standards are found in subpart D.
We did not receive any comments in response to our proposal to revise subpart D title and subheadings, and therefore, are finalizing as proposed.
As discussed in section I.B.6.b(1)(a) of the proposed rule, the proposed consolidation of all quality-related standards under subpart E would render § 438.200, which describes the quality-centric scope of subpart D, unnecessary. We thus proposed to remove § 438.200 in its entirety.
We proposed to remove § 438.202, due to the standards we proposed in the new part 431, subpart I.
We proposed to remove § 438.218, which incorporates enrollee information requirements in § 438.10 into the state's quality strategy. Proposed changes to both enrollee information requirements at § 438.10 and the elements of a state's comprehensive quality strategy at § 438.340 would render § 438.218 duplicative and unnecessary.
Similarly, we proposed to remove § 438.226, which incorporates the enrollment and disenrollment standards in § 438.56 into the state's comprehensive quality strategy. Because we proposed deleting these elements from inclusion in a state's comprehensive quality strategy (see § 438.340), it would render § 438.226 unnecessary.
We did not receive any comments in response to our proposal to remove §§ 438.200, 438.202, 438.218, and 438.226. While we are withdrawing our proposal for a new subpart I of part 431 requiring a new comprehensive quality strategy that would have applied across all delivery models (see discussions in section b.(2)(f) below), it is still appropriate to remove § 438.202 due to revisions to § 438.340 in the final rule. Therefore, we are finalizing these removals as proposed.
This section explains the basis, scope, and applicability of subpart E, which provides details on the EQR process for MCOs and PIHPs. Generally, subpart E covers the selection of EQR reviewers, their qualifications, types of EQR-related activities, the availability of EQR results, and the circumstances in which EQR may use the results from a Medicare or private accreditation review. Because we proposed to move and revise the existing standards related to both the managed care quality strategy and the QAPI program from subpart D to subpart E, we proposed in paragraph (a) to include section 1932(c)(1) of the Act as part of the statutory basis for the quality strategy provisions. In addition, we proposed to include section 1902(a)(19) of the Act as part of the statutory basis, which maintains that each state provide such safeguards as may be necessary to assure that eligibility for care and services under the plan will be determined, and such care and services will be provided, in a manner consistent with simplicity of administration and the best interests of the recipients. We believe this authority would be applicable to both existing provisions of the regulation and some of our proposed changes.
Under the existing quality provisions, states contracting with MCOs and PIHPs must draft and implement a quality strategy and all MCOs and PIHPs must undergo an annual EQR. As states expand their use of managed care for other services or populations, it is increasingly important to develop a comprehensive approach to measuring and improving quality. Because some PAHPs might provide dental or behavioral health services, we proposed that states address such plans in the state's comprehensive quality strategy, with performance results publicly available in the EQR technical reports. Therefore, we proposed to rely on the authority of section 1902(a)(4) of the Act to apply the quality standards of section 1932(c) of the Act to PAHPs and PIHPs. Throughout subpart E, as well as in § 438.310, we proposed the addition of “PAHPs” as necessary to reflect this proposal. Some PAHPs function as brokers of non-emergency medical transportation (NEMT), so much of subparts D and E would not apply to these NEMT PAHPs. The provisions that apply to NEMT PAHPs were identified in the proposed changes to § 438.9.
We also proposed to delete the specific reference to health insuring organizations (HIOs), throughout subpart E because with the exception of those HIOs that are expressly exempt by statutory law, HIOs under the proposed rule would be treated in the same manner as an MCO. We proposed in § 438.310(b) to identify the scope of subpart E, including specifications for a process to ensure review and approval of managed care plans, quality ratings, the quality strategy, and EQRs. In paragraph (c)(1), we proposed that these specifications apply to MCOs (including non-exempt HIOs), PIHPs, and PAHPs. Finally, we proposed in § 438.310(c)(2) to address the elements related to quality assessment and improvement for states contracting with PCCM entities. Specifically, we proposed that states assess the performance of PCCM entities consistent with § 438.3(r); such assessment would include a review of at least the mechanisms to detect under- and over-utilization of services, performance measures, and program review (by reference to specific provisions proposed at § 438.330).
We received the following comments in response to our proposal to revise § 438.310.
After consideration of the public comments, we are finalizing this section with modification to clarify the application of part 438 subpart E to select PCCM entities. Specifically, we are modifying § 438.3(r) to cross-reference § 438.310(c)(2), which we are modifying to describe the types of PCCM entities subject to subpart E (those whose contract with the state provide shared savings, incentive payments or other financial reward for improved quality outcomes) and to correctly state that § 438.330(b)(2), (b)(3), (c), (e), § 438.340, and § 438.350 apply to these PCCM entities. We are revising § 438.310(b)(5) to address PCCM entities, consistent with our revision to § 438.310(c)(2). We are making corresponding changes in §§ 438.320, 438.330, 438.340, and 438.350 to reflect their application to these PCCM entities. Note that other sections of the regulation cross-referenced in § 438.350 also apply to PCCM entities described in § 438.310(c)(2) under the revisions made in the final regulation. We are also making a technical modification to paragraph (c)(1) to remove the reference to HIOs; by default, HIOs which are not expressly exempt under statute will be subject to the standards that apply to an MCO, consistent with section 1903(m)(2)(A) of the Act.
This section of the current regulations defines terms related to the EQR process, including EQR, EQRO, financial relationship, quality, and validation. We did not propose to change the definitions for EQR, financial relationship, and validation, other than the addition of “PAHP” as necessary. Because the EQR process involves an analysis and evaluation of the quality, timeliness, and access to services that a managed care plan furnishes, we proposed adding a definition for access, as it pertains to EQR, by referring to the timely provision of services in accordance with the network adequacy standards proposed in § 438.68 and availability of services standards in § 438.206.
We proposed revising the definition of “external quality review organization” (EQRO) to clarify that an entity must also hold an active contract with a state to perform EQR or EQR-related activities to be considered an EQRO. Therefore, an entity itself would not be considered an EQRO if it has not yet entered into an EQRO arrangement with a state even if it meets all qualifications for entering into such a contract.
We also proposed to modify the definition of “quality” as it pertains to EQR to reflect that professional knowledge must be evidence-based and supported by current science. Consistent with the revised definition, states and their plans will be expected to stay up-to-date on the latest scientific findings and translate those findings into effective practices, as many states and plans already attempt to do. We also proposed to modify the definition of quality by including performance measure trends and performance improvement outcomes (which, for individuals receiving MLTSS, could include considerations around quality of life).
We received the following comments in response to our proposal to revise § 438.320.
After consideration of the public comments, we are modifying the regulatory text at § 438.320 to: (1) incorporate a definition for health care services and outcomes which are based on the definitions for these terms included in our 2012 guidance on the application of EQR to MLTSS; (2) modify the definition for quality to remove the reference to positive trends in performance measures and to clinical significant results; and (3) revert to the current definition for EQRO to ensure that the definition does not inadvertently limit the market to entities with EQR contracts in effect today. As discussed in section I.B.6.b(2)(a) of this preamble, we are modifying the definitions for EQR and quality to reflect that PCCM entities (described in § 438.310(c)(2)) must undergo an annual EQR.
We proposed to recodify the standards related to a QAPI program, previously described in § 438.240, at § 438.330. In § 438.330(a)(1) we proposed incorporating PAHPs for the reasons mentioned previously in this preamble. We proposed including the word “comprehensive” to signal that states should consider all populations and services covered by managed care when developing QAPI standards for their contracted managed care plans. In § 438.330(a)(2), we proposed to revise the existing regulatory language at § 438.240(a)(2) to permit us, in consultation with states and other stakeholders, to specify performance measures and topics for PIPs for inclusion alongside state-specified measures and topics in state contracts with their MCOs, PIHPs, and PAHPs. We proposed to add that we would also establish a methodology for quality ratings, which is discussed in more detail below in connection with proposed § 438.334. We proposed this would be accomplished after notice and public comment to ensure that states, beneficiaries, and other stakeholders had the opportunity to provide input during the measure selection process. We proposed, in § 438.330(a)(2)(ii), to adopt a mechanism to permit an exemption from the nationally identified PIP topics and metrics for states that request one. We considered which criteria might be appropriate for the exemption process and invited comment on instances in which an exemption may be appropriate.
In paragraph (b), we proposed to recodify and reorganize the substance of existing § 438.240(b) consistent with our proposal to move all quality program provisions to subpart E. In paragraph (b)(1), we proposed moving the description of what PIPs are designed to achieve to paragraph (d) to describe all PIP-specific details in one place. In paragraph (b)(2), we proposed to modify the existing language from “submit performance measurement data” to “collect and submit performance measurement data.”
We proposed in paragraph (b)(5) that MCOs, PIHPs, and PAHPs have specialized mechanisms to assess the quality and appropriateness of care furnished to enrollees receiving LTSS. This would include an assessment of the care that individuals receive when transitioning to different service settings, such as residential to community (or vice versa) or residential to hospital (or vice versa). We encouraged states to consider including language in their MCO, PIHP, and PAHP contracts that incorporates the use of surveys to assess the experience of beneficiaries receiving LTSS as a key component of the plan's LTSS assessment process. We solicited comment on the current use of such surveys and how they might best be used to improve the delivery of LTSS to beneficiaries and improve their experience of care. We also proposed that MCOs, PIHPs, and PAHPs compare the services that an individual receiving LTSS has obtained with those that were in the individual's LTSS treatment plan. Lastly, we proposed in paragraph (b)(6) that MCOs, PIHP, and PAHPs participate in efforts by the state to prevent, detect, and remediate critical incidents, based on applicable standards on the state for home and community based waiver programs.
In paragraph (c)(1), we proposed to delete the reference to § 438.204(c), as we proposed removing this from the managed care elements for inclusion in a state's comprehensive quality strategy, as described in the proposed § 438.340 (currently § 438.204); our other proposed revisions to paragraphs (c)(1) through (c)(3) were to conform it to the remainder of our proposal and to incorporate PAHPs.
We proposed the addition of paragraph (c)(4), to require that MCOs, PIHPs, and PAHPs that provide LTSS include, in addition to other performance measures under paragraphs
To streamline quality improvement standards for plans exclusively serving dual eligible beneficiaries, we proposed the option in paragraph (d)(3) for states to substitute an MA plan's quality improvement project conducted under § 422.152(d) in the place of a Medicaid PIP. Finally, under proposed § 438.330(e), states would continue annually to review the impact and effectiveness of each MCO's, PIHP's, and PAHP's quality assessment and improvement program. We also proposed that the state incorporate the results of any LTSS balancing efforts (community integration) at the managed care plan level into this program review. We requested comment on our approach to § 438.330.
We received the following comments in response to our proposal to revise § 438.330.
Other commenters suggested that CMS recommend, but not require, specific performance measures and PIP topics. Some urged CMS to allow states to select a minimum number of measures from a required menu of measures issued by CMS in consultation with states and other stakeholders. The same menu approach was also suggested for PIPs. Other commenters recommended that CMS develop a set of minimum required measures from a larger menu of measures and allow for state-identified optional measures beyond the core. Other commenters expressed concern that states will require both their own and CMS' required measures and projects, which could result in burdening plans and providers. They therefore suggested that CMS require states to implement the CMS-specified measures and projects or allow the state to propose an alternate set of measures and projects, subject to CMS approval. Some recommended that CMS identify high priority topics for PIPs, and offer technical assistance to states and plans around the implementation of these given topics.
Some commenters sought clarification related to the process. Commenters recommended that CMS describe in the regulation the process they will use for soliciting public comments, which should include an outreach and education component, a minimum comment period and minimum time periods for such comment periods, and requirements to include responses to public comments in subsequent drafts. Some commenters noted that the comment period should be a minimum of 60 days.
Several commenters noted specific stakeholders and stakeholder groups that should be engaged, including states; patients and their families; consumer, LTSS, family caregiver, and health equity groups; MCOs, PIHPs, and PAHPs, including integrated Medicare-Medicaid Plans (MMPs) and dual eligible special needs plans (D–SNPs); the Aging Network sponsored by the Older Americans Act; and groups run by people with disabilities across multiple disability categories. Several commenters also suggested establishing a quality task force with balanced and meaningful representation from various advocates, Medicaid beneficiaries, and their families to increase stakeholders' awareness and expertise for future revisions of and additions to the core measures set. This could be achieved through regular required consultations with the state MCACs and, as applicable, LTSS stakeholder advisory groups. One commenter recommended that states be required to have a component of the public notice and comment process that is specific to children's health. Commenters also recommended that future notice and comment include discussions on setting improvement targets, in addition to focusing on selecting metrics.
Finally, commenters requested additional information related to the public notice and comment process for the MMC QRS.
As discussed in section I.B.6.b(2)(e) of this preamble, we are finalizing the public engagement process for the MMC QRS in § 438.334, rather than in § 438.330(a)(2) as was proposed. Please see section I.B.6.b(2)(e) below for additional discussion of the MMC QRS public engagement process.
Several commenters requested that CMS include a consensus-building working group to support the identification of federal standards for the MMC QRS. Commenters made various recommendations for participants in the work-group or in the stakeholder engagement process including plans, state officials, advocacy groups and coalition groups, consumer advocates or other stakeholders. Some commenters additionally recommended that CMS should include a transparent, public application process for identifying working group members. One commenter requested that CMS define “meaningful input,” and clearly describe how many and which organizations will participate, how often they should meet, and what their roles should be.
One commenter recommended that the states should be the primary partners in the development of a MMC QRS(§ 438.334) because states are the only “equity stakeholder” and have critical experience that should inform the practicality and utility of such systems as they understand the fundamental differences between programs and populations. The commenter believed that this would be imperative if CMS does not provide clear guidance for states to develop and use their own system.
Several commenters recommended that all national QAPI measures be endorsed by the National Quality Forum (NQF). Several commenters recommended using the Measure Applications Partnership convened by NQF as part of the measure selection and measure gap identification process; selecting quality metrics that are developed by national standard-setters, such as the National Committee for Quality Assurance (NCQA), including HEDIS measures; and aligning with the 15 improvement areas identified in the Institute of Medicine's
To help alleviate measure collection and reporting burden, another commenter recommended harmonizing physician-related measures with existing programs such as the Physician Quality Reporting System or the NCQA Patient Centered Medical Home standards and streamlining reporting and utilization standardized reporting tools and metrics. Another commenter encouraged CMS to support HIV measure reporting alignment, consistent with the HIV Care Continuum Initiative. They recommended using the HIV Medicine Association's compilation of existing quality measures as a guide.
Another commenter suggested CMS consider a comprehensive review of both Medicare and Medicaid measures applied to integrated programs serving dually eligible beneficiaries and of issues that are of unique importance to producing quality outcomes for these populations. Lastly, one commenter also recommended that CMS strive to align not only the measures used for evaluating quality in Medicare and Medicaid, but also their timelines for reporting the data underlying those measures.
Commenters recommended several populations that require consideration, for example, pediatric populations, including children with complex conditions; Native Americans and Alaska Natives; persons with degenerative conditions, such as Alzheimer's Disease or dementia; persons with HIV/AIDS; and persons with serious mental illness or substance use disorders.
Commenters offered a range of measurement topics for CMS to consider when selecting the national QAPI performance measures, including but not limited: to measures focused on access to care, and certain subpopulations' access to medically necessary treatment for specified conditions; measures that address health care disparities; meaningful outcomes of clinical care; patient-and caregiver-reported measures of outcomes; care experience and functional status; over-and under-utilization; person-centeredness; consumer's individual preferences and goals; patient activation scores or other similar measurements; quality outcomes beyond medical ones, specifically quality of life; screening; prevention and disease management for dental caries in children (specifically the measure set developed by the Dental Quality Alliance); behavioral health care; medication adherence; preventable events, including ambulatory-sensitive admissions, readmissions, preventable ER visits and hospital complications; effective management of HIV, in addition to routine HIV screening and viral load suppression; screening for exposure to intimate partner violence among pregnant woman; health and coordination across the continuum (specifically NQF-endorsed measures); social determinants of health care (specifically IOM metrics); and care coordination for the chronically ill.
Commenters also offered PIP topics for CMS to consider, including but not limited to improving population health; reducing adverse drug events, particularly in high-risk populations and high-risk therapeutic classes; and utilization of childbirth education. Commenters noted that CMS should choose PIPs that are broadly applicable to all states, are clearly important issues for improvement, can be aligned with other payers, and can have an impact.
Some commenters urged CMS to limit the reasons for which a state could seek an exemption. While commenters recognize that flexibility would let states meet their own needs, it could lead to less alignment between states and potentially minimize transparency and stakeholder engagement efforts. Commenters suggested that CMS provide strict guidance to states regarding the removal of state-specific measures that overlap or conflict with the standard set of measures issued by CMS. Some commenters recommended enumerating a set of specific reasons that would justify a state obtaining an exception and some encouraged CMS to allow states to receive exemptions only if the measure is not applicable to the covered population or if the measure is only relevant to a service or services not covered in the MCO contract. Others recommended that states with an exemption should still be required to gather data and report on quality metrics. One commenter recommended that the exemption process include specific pediatric components. Commenters also suggested setting time limits on how long an exemption could last without review and some commenters recommended establishing a 2-year time limit for exemptions.
Several commenters agreed with exempting states if the number of enrollees is too small to calculate a measure. One commenter suggested that exemptions within states be allowed for plans that serve specialty populations (for example, recipients with HIV/AIDS, or dual eligibles) that may not have sufficient numbers of eligible members for the required PIP topic indicators. Another commenter recommended that CMS specify in regulation or sub-regulatory guidance how small a measure population must be to not be meaningful. The commenter recommended that a minimum of 30 enrollees is a sufficient size to be valuable and meaningful.
Some commenters recommended allowing a state to seek an exemption if the state already meets and exceeds a performance threshold. Other commenters disagreed with allowing a state to seek an exemption if it surpasses a performance threshold for multiple years. They stated that thresholds are not always accurate measures of quality for states, especially for subpopulations, and granting such an exemption could allow for deterioration in performance after the exemption is granted. Several commenters noted that performance in the 90th percentile for more than 3 years, as suggested in the preamble, would not be attainable for even the highest performing plans. They also noted that for many measures, such as certain vaccinations or the frequency of “never events,” a threshold of 90 percent would not be considered successful. Commenters stated that allowing for an exemption may undermine HHS' broader efforts to identify and reduce health disparities across key demographic groups. If CMS permits exemptions based on sustained achievement, the thresholds must be appropriate for each measure and states should have to prove that no significant disparities exist for key demographic groups prior to receiving a time-limited exemption.
Some commenters noted that CMS did not explicitly identify examples of exemptions that would apply to the federally-identified PIP topics in the preamble and request that a clear exemption process be established for PIPs as well. Other commenters recommend that states be permitted, on an ongoing basis, to put forward a justification for other cases where an exemption would be warranted.
Several commenters recommended that LTSS performance measurement activities be developed and implemented in alignment with other CMS quality initiatives. One commenter recommended that efforts should align with MA, private market, and Medicaid requirements and quality measurements, and that organizations who care for dual eligibles be subjected to same quality measures as MA, such that comprehensive care is coordinated and administrative burden is lessened.
Several commenters requested a delay or flexibility in the implementation of performance measurement and assessment activities until appropriate quality metrics for LTSS are developed and endorsed. One commenter stated that national quality and performance measurement for LTSS is not as well-developed as it is for medical services and noted reservations about the robustness, validity, and reliability of LTSS measures at this time. A couple of commenters requested that the agency delay the implementation of this requirement until national accrediting bodies and other stakeholders are able to establish a meaningful set of quality measures for use. One commenter stated concerns that managed care plans will not be able to meet the QAPI program regulations because of the lack of robust and comprehensive LTSS quality measures and performance assessment tools.
• Risk- and reliability-adjustment models for three composite measures for HCBS after identifying potentially avoidable hospital admissions as an important quality measurement domain for individuals receiving HCBS.
• The NQF convened a multi-stakeholder group in 2014 to conduct a measure gap analysis and develop recommendations for performance measurement to address person- and family-centered care. Specific recommendations focused on patient-centered communications; shared decision making; the concordance of care plans with individual preferences, values, and goals; and measures based on patient-reported outcomes. NQF's Measure Applications Partnership (MAP) also convened a time-limited task force in 2014, drawn from the membership of the MAP Coordinating Committee and four advisory workgroups, to identify a family of measures focused on person- and family-centered care. Families of measures are sets of related available measures and measure gaps that span programs, care settings, levels of analysis, and populations.
• NQF is currently working on a similar effort to address the gaps in HCBS measures through a multi-stakeholder process to consider the definition of home and community-based services (for the purposes of this project), develop a conceptual framework using domains for measurement, and make recommendations for HCBS measurement development.
• The Experience of Care (EoC) Survey elicits feedback on beneficiaries' experience with the services they receive in Medicaid community-based LTSS programs. In addition to the survey, the electronic Long-Term Services & Supports (eLTSS) Initiative is an Office of the National Coordinator for Health Information Technology (ONC)–CMS partnership focused on identifying and harmonizing electronic standards that can enable the creation, exchange and re-use of interoperable service plans for use by providers of both health care and home and community-based services, payers, and beneficiaries. Both of these initiatives are driven by the requirements of the CMS Testing Experience and Functional Tools (TEFT) Planning and Demonstration Grant Program funded by the Affordable Care Act.
• The Medicare-Medicaid Coordination Office is working across CMS to further efforts related to LTSS measure development and endorsement.
We agree with aligning with existing programs and measurements when possible for ease of measurement and burden reduction, and we will continue to look for opportunities for alignment and burden reduction.
We may issue additional information on LTSS performance measurement through subregulatory guidance.
After consideration of the public comments, we are finalizing this section with modification. We are removing reference to the MMC QRS methodology from § 438.330 (a)(2) and will address the public notice and comment process for the MMC QRS methodology in § 438.334 of the final rule. We have struck proposed § 438.330(a)(2)(i) as this is now addressed in paragraphs (c) and (d) of this section. In light of this, we have combined proposed § 438.330(a)(2)(ii) with § 438.330(a)(2) in the final rule. We have made non-substantive revisions throughout § 438.330 to improve clarity. This includes adding paragraph (a)(3) to more clearly reflect which components of this section apply to PCCM entities described in § 438.310(c)(2) of the final rule. Finally, we are correcting a typographical error in paragraph (d)(1) so that it correctly references paragraph (a)(2) of this section.
Under proposed § 438.332, as a condition of contracting with a state to provide Medicaid benefits, MCOs, PIHPs, and PAHPs must undergo a performance review. These options were proposed in § 438.332(a) and (b). In paragraph (a), we proposed that the state would review and approve based on standards that are at least as stringent as those used by the accreditation organizations that are recognized by CMS in MA or the Marketplace. We proposed that states would review and reissue approval of each MCO, PIHP, and PAHP at least once every 3 years. We also proposed that MCOs, PIHPs, and PAHPs maintain performance with state standards at the level necessary for approval for as long as they participate in the state's managed care program.
Under proposed paragraph (b), a state could rely on accreditation by one of the CMS-recognized private accrediting entities to deem one or more plans compliant with the review and approval standard proposed in paragraph (a). In paragraph (c), we proposed that states make the final approval status of each MCO, PIHP, and PAHP, publicly available on the state's Medicaid Web site. For additional discussion of proposed § 438.332, see section I.B.6.b.1.d of the June 1, 2015 proposed rule.
We received the following comments on proposed § 438.332.
While several commenters supported allowing private accreditation received by Marketplace and Medicare plans to satisfy the Medicaid review process, many expressed concern that current private accreditation processes do not reflect the needs of vulnerable Medicaid beneficiaries—for example, children, pregnant women, individuals with special health care needs, or those receiving LTSS. A few commenters recommended that states only be permitted to accept accreditation specifically of the Medicaid managed care business line of an MCO, PIHP or PAHP. Other commenters supported state flexibility in determining the review and approval process, including use of existing state review processes. Several commenters requested that CMS clarify or identify the accrediting bodies recognized for MA and Marketplace plans that would also apply to Medicaid plans.
Several commenters expressed concern about the administrative burden and potential cost related to accreditation and/or a state review and approval process. Several commenters were concerned, in particular, that the proposed state review process would be duplicative of current EQR processes which are already required; some requested clarification on how state review and approval would differ from EQR and whether it would replace elements of EQR. Another commenter asked if stringent EQRs would satisfy the new state review and approval requirement for new plans. Others questioned the federal capacity to oversee a robust accreditation or review process for Medicaid plans. Some of these commenters were concerned that a review process which lacked adequate resources at the state and federal level would undermine other measures aimed at improving quality and transparency for Medicaid beneficiaries.
Several commenters also were concerned that state review standards should include meaningful public stakeholder input. Several commenters noted, in particular, the importance of input from stakeholders knowledgeable about managed care long-term services and supports (MLTSS), behavioral health, child health care, and specialty plans. These commenters believed it critical that the final regulations specify measures to ensure robust stakeholder input. Several commenters also recommended full transparency of review standards, including private accreditation standards deemed by states through the review and approval process, and that these be available to the public at no cost or for a nominal fee.
Several commenters requested clarification on the timeline available for states to implement the review and approval process. One commenter recommended piloting the process first. A few commenters recommended a timeframe that allows for state procurement processes to be implemented, while several commenters requested the process be phased-in to accommodate costs and administrative burden. One commenter recommended the state review include a managed care plan readiness assessment. Another commenter recommended CMS adopt the approach for QHP accreditation (45 CFR 155.1045 and 156.275), which allows states to establish the timeline for plans to become accredited.
We are retaining the requirement proposed at § 438.332(c), with revision, that states post the accreditation status of their Medicaid plans. This is consistent with the goals of maximizing the transparency of information on a plan's quality of care, and aligning with the availability of information for consumers in the Marketplace and Medicare. Because not all Medicaid plans may have received private accreditation, we are revising § 438.332 in the final rule to provide at paragraph (a) that states must confirm the accreditation status of the contracting MCOs, PIHPs, and PAHPs at least once per year. Under § 438.332(b) of the final rule, states must require their contracted managed care plans to authorize the release of the most recent accreditation review to the state. Finally, paragraph (c) requires that states post and update the accreditation status of their managed care plans on their Web sites at least annually.
While we are not finalizing a requirement to establish a new state review process, we agree that input from all stakeholders, including those representing individuals needing LTSS, is essential to states' quality improvement efforts. The stakeholder engagement process required under § 438.70 along with the managed care plan member advisory committees (at § 438.110), beneficiary support system (§ 438.71), quality measurement and reporting (part 438 subpart E), grievance and appeal system (part 438 subpart F) and the reporting requirements for each of these requirements, all contribute to a framework which ensures that stakeholder concerns are identified and addressed. In addition, regardless of operating authority (for example, section 1915(c) or section 1115(a) of the Act), states generally must go through a robust public notice and comment period to launch a new managed LTSS program. We are revising § 438.332 to require only that states confirm and publically post the accreditation status of each contracted MCO, PIHP and PAHP. This information must be updated annually on the State's Web site.
After consideration of the public comments, we are modifying the regulatory text at § 438.332 to: (1) Remove the requirement to implement a state review and approval process involving standards at least as stringent as the standards used by a private accreditation entity recognized by CMS; (2) revise the state review process to include review of accreditation status of each MCO, PIHP, and PAHP when entering into a contract with the state and on an annual basis thereafter; and (3) revise the type of information available on the State's Medicaid Web site to include the accreditation status of each contracted MCO, PIHP and PAHP and accrediting entity when applicable. We are also revising the title of this section to “State review of the accreditation status of MCOs, PIHPs, and PAHPs” to reflect the content of this section in the final rule.
This new section proposed minimum standards that all states contracting with MCOs, PIHPs, and PAHPs would use in developing and implementing a MMC QRS in order to increase transparency regarding Medicaid managed care plan performance, increase consumer and stakeholder engagement, and enable beneficiaries to consider quality when choosing a managed care plan. For more discussion of the development of the MMC QRS proposal, see section I.B.6.b.1.e of the proposed rule at 80 FR 31098.
We proposed in § 438.334(a) that states establish a rating system that includes specific factors outlined in the proposed regulation. We also proposed that the MMC QRS would utilize the same three summary indicators that are currently used to frame the Marketplace quality rating system (clinical quality management; member experience; and plan efficiency, affordability, and management). We proposed that the state's MMC QRS would measure and report on performance data collected from each MCO, PIHP, and PAHP on a standardized set of measures to be determined by CMS, through a public notice and comment process. Further, the measures would be categorized within the components proposed in paragraph (a)(2), and states would be able to adopt additional measures.
Under proposed paragraph (b) each state would apply a methodology, established by CMS under proposed § 438.330(a)(2), to the performance measures described in proposed paragraph § 438.334(a)(3) to determine the quality rating or ratings for each MCO, PIHP, and PAHP serving Medicaid beneficiaries in the state. We proposed in paragraph (c) that, subject to CMS approval, states may elect to use an alternative or preexisting MMC QRS in place of the MMC QRS developed per paragraphs (a) and (b). To avoid duplication of effort, in paragraph (d), we proposed providing states with the option to default to the MA Five-Star Rating system for those plans that serve only beneficiaries enrolled in both Medicare and Medicaid. Finally, in paragraph (e), we proposed that states prominently display the quality rating given by the state to each MCO, PIHP or PAHP online in a manner that complies with the language and format standards of § 438.10(d).
We received the following comments on proposed § 438.334.
Some commenters recommended that states be required to demonstrate a substantial state-specific purpose to utilize an alternative MMC QRS contingent upon CMS approval. One commenter believed that CMS should consider the following for justification: (1) Holding managed care plans more accountable for areas of quality outlined as priorities for improvement within a state's comprehensive quality strategy; or (2) giving greater weight to certain measures of greater importance to the quality of care for a particular population in that state. Some commenters also requested that the general public have an opportunity to view and provide comment on the states' justifications and requests.
A few commenters recommended that states be given broad latitude on the development, implementation, and timing of the MMC QRS to assure that it recognizes local needs and successes. They also recommended that CMS partner with states to outline the criteria for approval of alternative MMC QRS following promulgation of the final rule. One commenter noted that the alternative MMC QRS would give states the ability to leverage quality improvement by adopting developmental and innovative measures that are unlikely to appear in a national core measure set.
Several also requested that CMS only approve an alternative system after states include evidence of consultation with stakeholders. Other stakeholders asked that CMS develop a rollout strategy to ensure vetting of measures and alternative MMC QRS programs are comparable across states.
We will also require that states requesting to adopt an alternative MMC QRS, or to modify an approved alternative MMC QRS, provide an opportunity for public comment of at least 30-days and obtain the input of the state's Medicaid Medical Care Advisory Committee established under § 431.12. Under § 438.334(c) of the final rule, CMS expects that requests for alternative MMC QRS will document the public comment process utilized by the State including discussion of the issues raised by the Medical Care Advisory Committee and the public. The request must also document any policy revisions or modifications made in response to the comments and rationale for comments not accepted.
We note that in states with PIHPs or PAHPs for behavioral health or other specialty services, the comprehensive managed care plans and the PIHPs and PAHPs are subject to both the MMC QRS and the requirements for the QAPI Program (§ 438.330). States, comprehensive plans and behavioral health PAHPs can draw from the behavioral quality measures in the Child and Adult Core Sets for Medicaid and CHIP for their QAPI program.
We fully support the continuation of dental-specific quality improvement projects and have developed guidance for managed care dental PIPs. Section § 438.334 does not impact the PIPs required under § 438.330(d) and therefore has no bearing on the ability of a state or managed care plan to conduct a PIP relating to oral health.
After consideration of the public comments, we are finalizing with modification our proposal that states contracting with MCOs, PIHPs, and PAHPs develop and implement a MMC QRS. Section 438.334(a) requires states contracting with MCOs, PIHPs, or PAHPs to adopt either the MMC QRS developed by CMS or an alternative MMC QRS, and implement such MMC QRS within three years of the date of a final notice published in the
Under the existing regulations at § 438.202(a), states contracting with MCOs or PIHPs have been required to maintain a written strategy for assessing and improving the quality of services offered by all MCOs and PIHPs. We proposed adding a new subpart I to part 431 that would require a comprehensive quality strategy (CQS) that applied to services provided through all delivery systems, including a FFS delivery system, not just those provided through an MCO or PIHP. We also proposed additional CQS elements which would apply to states that contract with an MCO, PIHP, PAHP, or PCCM entity (described in proposed § 438.3(r)) to deliver Medicaid services.
We proposed that each state be required to have a comprehensive quality strategy to address and support efforts to strengthen quality in a state's Medicaid managed care program (inclusive of MLTSS programs, where applicable), as well as other types of delivery systems for Medicaid services. In proposed § 431.500(a) we described the statutory basis of the proposed new subpart I, including the authority to adopt standards for a quality strategy established in section 1932(c) of the Act for MCOs, and in section 1902(a)(4) of the Act for PIHPs. We relied as well on section 1902(a)(4) of the Act because development of a comprehensive quality strategy for all service delivery systems would promote efficient and proper administration of the state plan. We also proposed to rely on section 1902(a)(6) of the Act, for purposes of the proposed reporting requirement; section 1902(a)(19) of the Act; and section 1902(a)(22) of the Act.
In paragraph (b), we proposed that the scope of this new section establish parameters for states to develop a comprehensive quality strategy to monitor the delivery of quality health care to Medicaid beneficiaries. This would include states contracting with MCOs, PIHPs, or PAHPs, those utilizing a PCCM arrangement, and those that deliver services through FFS. We solicited comments on our proposal for a comprehensive quality strategy.
We received the following comments on proposed § 431.500.
The current regulations at § 438.202(a) identify responsibilities for the managed care quality strategy for states contracting with MCOs and PIHPs. Proposed § 431.502(a) set forth a general rule requiring a comprehensive quality strategy in all states addressing all Medicaid delivery systems.
In paragraph (b)(1), we proposed that the strategy include the state's goals and objectives for continuous quality improvement, which would be required to be measurable and take into consideration the health status of all Medicaid-covered populations in the state. Under the proposal states would be required to take into account a variety of data (such as population health status, service utilization and expenditure information, quality of life issues, quality metrics, etc.) when developing such goals. In paragraph (b)(2), we proposed that states be required to identify the specific quality metrics and performance targets that they plan to use to measure performance and improvement, which would be linked to the goals identified in paragraph (b)(1). Further, we proposed that states be required annually to publish these quality metrics and performance standards on their Web site.
We received the following comments on proposed § 431.502.
A few commenters expressed support for the proposed CQS but were concerned that requiring every state to develop a strategy, including its own quality standards, and its own list of measures would add a potentially heavy burden for states, increase the number of measures and disparate activities, and diminish the likelihood that quality
Other commenters did not support the proposed comprehensive quality strategy. Some of these commenters pointed to the challenges of incorporating a small or shrinking FFS population into a comprehensive quality strategy. One commenter noted that the populations served by FFS often are small and disparate, which would make it difficult for a state to develop an effective strategy. Others noted that the populations in FFS may be eligible for a limited set of benefits (such as family planning services) or may be eligible for a limited period of time (for example, medically needy beneficiaries eligible only during part of a budget period after meeting a spenddown amount in accordance with § 435.831, or individuals prior to initial enrollment in a managed care plan). Some commenters pointed out that many performance measures and performance improvement programs may not apply to FFS beneficiaries, or may prove impractical to collect based on the limited sample size or the poor fit between the measure and the population. One commenter sought guidance on how a state should incorporate goals and objectives relating to a shrinking FFS population.
One commenter recommended allowing states with more than 80 percent of their Medicaid beneficiaries in managed care to be exempted from any requirement to develop a comprehensive quality strategy, while another recommended that states be provided an option to include FFS delivery systems in their quality strategy, but not be required to do so. This commenter noted that a voluntary approach would allow each state to direct limited resources to quality activities which the state determines will have the most impact and which are best suited to meet future program growth. Another commenter believed that the inclusion of a very small population of FFS beneficiaries would detract from a state's ability to focus on measuring the quality of care provided to enrollees in managed care.
A few commenters noted that states, which currently do not generally have in place performance measurement or improvement activities for the FFS population, would have to invest additional resources to meet the comprehensive quality strategy requirement. One of these commenters believed that this change would push states to reconsider the use of FFS. Another believed that to include the FFS population in the comprehensive quality strategy, states essentially would have to develop an organizational structure and staff similar to that of an accredited MCO. While one commenter believed that its state could include FFS in the overall quality strategy with existing staff and resources (other than implementing a consumer survey and performance improvement plan), several commenters believed that states would need time and resources to build a solid structure to achieve quality measurement and improvement in FFS. These commenters recommended that CMS provide support to states in building the requisite capacity, including an enhanced match for all quality activities and sufficient lead time to prepare for the development and implementation of a comprehensive quality strategy. Another commenter noted that a comprehensive quality strategy will require extensive review and updating by CMS, which may be difficult to maintain.
One commenter expressed general opposition to the proposed comprehensive quality strategy, noting that the variety of changes proposed, including the expansion to additional managed care programs, additional elements to be included in the CQS, and the requirement to update the plan every 3 years instead of every 5 years, would require significantly more work than what is presently required.
Two commenters requested clarification regarding the application of the comprehensive quality strategy to FFS beneficiaries and certain small populations (such as dual eligibles).
After considering the entirety of the comments regarding the proposed comprehensive quality strategy, we are convinced that the time and resources required to develop and implement a comprehensive quality strategy would be higher than we estimated in the proposed rule, and could hamper other state quality efforts. Therefore, we are withdrawing proposed subpart I of part 431 in its entirety. We will, however, retain the requirement for a managed care quality strategy, described in § 438.340 of the final rule (see discussion in section I.B.6.b(2)(f)(5) below). We are retaining the requirement in § 438.340 of the final rule that states contracting with MCOs, PIHPs, and PAHPs, as defined in § 438.2, or with a PCCM entity described in § 438.310(c)(2) of the final rule (describing PCCM entities with shared savings or other financial incentives tied to improved quality outcomes)—will be required to draft and implement a quality strategy consistent with § 438.340. Since we are retaining the requirement for a managed care quality strategy applicable to multiple managed care contractual arrangements in § 438.340, we are revising § 438.310 in the final rule to reflect the basis and scope for this broader applicability of the Medicaid managed care quality strategy.
We strongly encourage states to report on the CMS Child and Adult Core Measure Sets for Medicaid and CHIP, and to explore other ways to measure, improve, and report on the quality of care in FFS. States interested in expanding the scope of their quality improvement efforts to FFS beneficiaries may wish to consult our November 22, 2013 SHO letter, Quality Considerations for Medicaid and CHIP Programs (SHO #13–007, available at
We encourage states to report comparative quality information in a user-friendly format and in accordance with health literacy practices required by the state or identified in the state's quality strategy.
Through our work on the CMS Child and Adult Core Measure Sets for Medicaid and CHIP, we actively engage with and provide guidance to states to support the collection, analysis, and reporting of these performance measures. While we may issue additional guidance in the future, we believe that the guidance provided through such direct technical support to individual states is the most useful approach.
Finally, while we encourage states to report on all of the performance measures identified in their quality strategies on an annual basis, we understand that this may not be feasible and thus provide states with the flexibility to identify which measures and outcomes they will report on annually. We note that states will report publicly on all the measures and outcomes in the quality strategy at least once every 3 years in accordance with the evaluation of the effectiveness of the quality strategy (proposed § 431.504(b)(1), finalized at § 438.340(c)(2)(i) and (ii)).
One commenter stated that the process for states to include additional quality measures is not clear. The commenter submitted that physicians are already overburdened with multiple quality reporting systems that use different measures and methodologies. The commenter recommended that CMS ensure standardization and harmonization of quality measures and methodologies across reporting programs to reduce administrative burdens and simplify compliance.
Commenters recommended that stratifying quality data by the key factors called for in the Affordable Care Act would sharpen quality improvement interventions, identify groups that continue to be left behind, and provide critical information on whether managed care is helping to resolve the longstanding inequities in our health care system. They noted that HHS has produced reports with recommendations on how to improve data collection for health disparities in Medicaid and CHIP, and that support from the Adult Medicaid Quality Grants Program helped states build their capacity to collect and report data stratified by key demographic categories. One commenter recommended that states include the metrics developed by the Agency for Healthcare Research and Quality (AHRQ) for its Quality and Disparities Report, or another established institution, to track health disparities.
One commenter cited section 1311(g) of the Affordable Care Act, which requires insurers to have an incentive program to, among other things, reduce health and health care disparities, and noted that requiring the comprehensive quality strategy to address disparities would assure that consumers in the Medicaid program who might be victim of such disparities receive no less attention than their counterparts in the Marketplaces. Other commenters noted that the Affordable Care Act requires any federally conducted or supported health care or public health program, activity or survey to collect and report data stratified by race, ethnicity, sex, primary language, geography, and disability status to the extent practicable. Commenters noted that while HHS has moved to implement this mandate for national Medicaid population health surveys and to incorporate it into Medicaid claims data based updates, states have just begun to address the issue of health disparities in quality measurement in Medicaid managed care.
Some commenters recommended inclusion of additional language in § 438.340 to ensure that the state's
In response to these comments, we are: (1) Retaining the requirements in proposed § 431.502(a) at § 438.340(a) of the final rule, with modification to specify that it applies to all Medicaid services provided by the MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)); (2) retaining the requirements from proposed § 431.502(b) within § 438.340(b) of the final rule, with non-substantive revisions for clarity; (3) adding a new element at § 438.340(b)(3)(i) of the final rule to describe quality metrics and performance targets used to measure performance; (4) adding a reference to the description of a state's transition of care policy consistent with § 438.62(b)(3) at § 438.340(b)(5); and (5) adding an element focused on identifying, evaluating, and reducing health disparities based on age, race, ethnicity, sex, primary language, and disability status, to the extent practicable, as § 438.340(b)(6). We also are retaining at § 438.340(b)(6) a requirement formerly at § 438.204(b)(2) requiring states provide specified demographic information to MCOs, PIHPs, and PAHPs for each Medicaid enrollee at the time of enrollment. See section I.B.6.b(2)(f)(5) for additional discussion of § 438.340 of the final rule. (3) Comprehensive quality strategy development, evaluation, and revision (new § 431.504)
In § 431.504, we proposed to extend the current regulations at § 438.202(b), (d) and (e) (relating to states' responsibility to obtain public input into the state quality strategy, to evaluate the effectiveness of the strategy, and to submit the strategy to CMS for review) to the comprehensive quality strategy which would have been required under the proposed rule, as opposed to applying specifically to the quality strategy required for states contracting with managed care plans. We also proposed modest revision of the current regulation as follows.
We proposed at § 431.504(a) to add the State Medical Care Advisory Committee and tribes (through tribal consultation), as appropriate, to the existing list of persons and entities from which the state would obtain input when developing the quality strategy, and that this input be obtained prior to submitting the comprehensive quality strategy to CMS, to ensure that stakeholder concerns have been taken into consideration at an early phase in the quality strategy development process.
In paragraph (b), we proposed to revise the existing requirement in § 438.202(d) that states review and update their strategy “as needed” but with a requirement to do so at least once every 3 years. We encouraged states to view the comprehensive quality strategy as a living document, which should be updated on a regular basis to account for changes in population, delivery systems, emerging information system technology, and benefit design. We also proposed to improve clarity by using “review and update” instead of “conduct reviews . . . and update” in the regulation text.
We proposed moving the evaluation of the effectiveness of the quality strategy into a new paragraph (b)(1) and, in paragraph (b)(2), we proposed that states make the results and findings of this effectiveness evaluation publicly available on the state's Medicaid Web site. The language from the current § 438.202(e)(2) relating to the submission of regular reports on the implementation and effectiveness of the strategy also was included in proposed § 431.504(b)(1) and (b)(2). We proposed that states post these on their Medicaid Web site, rather than submitting such reports to CMS as required under the current regulation.
In paragraph (c)(1), we proposed revision of the existing language in § 438.202(e)(1) that the state submit a copy of its initial strategy to CMS to clarify that submission is for the purposes of receiving CMS comment and feedback before adopting the comprehensive quality strategy in final. In paragraph (c)(2), we proposed that states submit a copy of the revised strategy whenever significant changes are made. We also proposed that states include their definition of “significant changes” within the body of the quality strategy. Finally, in paragraph (d), we proposed that states make their final comprehensive quality strategy available on the state's Medicaid Web site.
We received the following comments in response to proposed § 431.504.
Other recommendations for additional guidance include requiring states: (1) To conduct statewide meetings of stakeholders that include representation from the breadth of affected individuals (for example, individuals with disabilities, LTSS consumers and their family caregivers, people with limited English proficiency, and representatives from the LGBT community); (2) to make their quality strategy available on the state Medicaid Web site for public comment and review; (3) to establish and publicize a Web site that facilitates public comment on and recommendations for the quality strategy; (4) to adopt the National Council on Disability's guidance to states on stakeholder involvement. One commenter recommended that CMS set a minimum comment period of 60 days for comprehensive quality strategy creation and revisions.
Finally, many commenters recommended that the comprehensive quality strategy undergo a public comment process that meets the same requirements as the public notice and comment process for the section 1115(a) demonstration projects.
We are moving the requirements in proposed § 431.504 to § 438.340(c) and (d) to reflect the retention of only the managed care quality strategy in the final rule, with revisions discussed above and for clarity.
To reduce the burden on states contracting with managed care entities and to ensure that the comprehensive quality strategy addresses all populations, we proposed to cross-reference the elements of the managed care quality strategy applicable to states that contract with MCOs, PIHPs, PAHPs, and certain PCCM entities to deliver Medicaid services. Under proposed § 431.506, states contracting with one of these managed care entities would be able to create a managed care quality strategy by incorporating the part 438 elements into the larger, comprehensive quality strategy.
We received the following comments in response to our proposed § 431.506.
After consideration of the public comments on part 431 subpart I, we are striking this proposed section, consistent with our decision to withdraw the proposed requirement for a comprehensive quality strategy. Since this paragraph only cross-referenced § 438.340 but did not include any additional requirements for a comprehensive or managed care quality strategy, none of this language will be retained in § 438.340 in the final rule.
Section 438.204 of the current regulations identifies the minimum elements of a managed care state quality strategy, including: (1) MCO and PIHP contract provisions that incorporate the standards in existing part 438 subpart D; (2) procedures for assessing the quality and appropriateness of care and services furnished to all enrollees under the contract; providing information about the race, ethnicity and language of beneficiaries to MCOs and PIHPs at the time of enrollment; and regular monitoring and evaluation of MCO and PIHP compliance with the standards in subpart D; (3) specification of any national performance measures identified by CMS; (4) arrangements for annual, external independent reviews of quality outcomes, and timeliness of, and access to, services provided by each MCO and PIHP; (5) appropriate use of intermediate sanctions for MCOs; (6) an information system sufficient to support initial and ongoing operation and review of the state's quality strategy; and (7) standards, at least as stringent as those under the applicable subpart D of the regulations.
Consistent with our proposal in part 431 subpart I, we proposed to title this section “managed care elements of the state comprehensive quality strategy”. We also proposed to extend the quality strategy requirements to states contracting with PAHPs. Consistent with the current structure of § 438.204 (that is, a list of the elements required in a quality strategy), we proposed to move the quality strategy elements specific to managed care to proposed § 438.340 (those applicable to managed care and FFS were moved to proposed
In paragraph (a), we proposed that states include in their comprehensive quality strategy the network adequacy and availability of service standards and examples of evidence-based clinical practice guidelines that its managed care plans follow. We proposed that the content of existing § 438.204(b)(1) was captured in proposed part 431 subpart I. We proposed deleting reference to the information previously found in §§ 438.204(b)(2) and (b)(3).
In § 438.340(b), we proposed that the state's goals and objectives developed under proposed § 431.502(b)(i) incorporate a description of quality metrics and performance targets that the state will use to assess Medicaid managed care quality, including any performance measures required by the state in accordance with proposed § 438.330(c) and any PIPs required by the state in accordance with proposed § 438.330(d). Proposed § 438.340(b) would replace § 438.204(c) of the current regulations. We proposed redesignating current § 438.204(d) and (e) at § 438.340(c) and (d), respectively, and to expand the external review element in proposed § 438.340(c) to PAHP contracts as well. We proposed to eliminate the text previously found in § 438.204(g) as redundant with proposed § 438.340(a). Finally, in paragraph (e), we proposed that states address how they would assess the performance and quality outcomes achieved by each PCCM entity, to conform to other changes made in this part.
We received the following comments in response to proposed § 438.340.
After consideration of the public comments, we are finalizing this section as proposed, with the following modifications: (1) The inclusion of language from proposed §§ 431.502 and 431.504 with modification as discussed in sections I.B.6.b(f)(2) and (3) of this preamble; (2) renumbering of paragraphs to address the addition of the language from proposed §§ 431.502 and 431.504; (3) modifying § 438.340(b)(6) to retain the requirement, previously at § 438.204(b)(2), that states provide plans with specific demographic information about enrollees; (4) adding a cross-reference to § 438.350 to paragraph (b)(4) (paragraph (c) in the proposed rule); and (5) adding cross-references to other sections in part 438 which identify information that must be included in a state's quality strategy. We are also revising the title of this section to “Managed care State quality strategy” to reflect the content of this section in the final rule.
In § 438.350, we proposed to modify the title of the section that identifies the state's responsibilities related to EQR to clarify that these responsibilities are specific to the EQR process. In addition to proposing the application of EQR to PAHPs, consistent with our proposal discussed in § 438.310, we proposed a minor restructuring of § 438.350 and a few substantive changes. We proposed to redesignate existing paragraphs (a) through (f) as (a)(1) through (a)(6). In paragraph (a)(3), we proposed that information from Medicare or private accreditation reviews is a permissible source of information for use in the EQR, in addition to information gathered from the EQR-related activities as described in § 438.358. We also proposed clarification in (a)(4) that the information gathered from each EQR-related activity is for use in the EQR and resulting EQR technical report. Finally, in paragraph (b), we proposed to add that if a state chooses to perform an EQR on a PCCM entity, the standards laid out in paragraphs (a)(2) through (6) would apply.
We received the following comments in response to our proposal to revise § 438.350.
Proposed § 438.3(r) required that PCCM entities whose contract with the state provides for shared savings, incentive payments or other financial reward for improved quality outcomes be subject to EQR under this section. While the language in proposed § 438.350(b), and its associated preamble, described EQR as an option for these PCCM entities, this was an error. Consistent with proposed § 438.3(r), we intend that EQR of these PCCM entities be mandatory, with no flexibility for states to opt out of this requirement. Therefore, in the final rule we are striking proposed § 438.350(b) and adding a reference to PCCM entities (described in § 438.310(c)(2)) to the introductory text for § 438.350 to require the annual EQR of select PCCM entities, which were described in § 438.3(r) of the proposed rule but are now described in § 438.310(c)(2) of the final rule.
We are also revising § 438.358(b) to clearly identify which mandatory EQR-related activities apply to PCCM entities (described in § 438.310(c)(2)). Specifically, we are redesignating proposed paragraph (b) as (b)(1) and proposed paragraphs (b)(1) through (b)(4) as paragraphs (b)(1)(i) through (b)(1)(iv). We are also adding a new paragraph (b)(2), which specifies that performance measure validation (in paragraph (b)(1)(ii) of the final rule) and the compliance review (in paragraph (b)(1)(iii) of the final rule) must be conducted on PCCM entities (described in § 438.310(c)(2)). PCCM entities (described in § 438.310(c)(2)) are not subject to the PIP validation activity (paragraph (b)(1)(i) of the final rule) as they are not required to conduct PIPs. PCCM entities (described in § 438.310(c)(2)) are not subject to the validation of network adequacy activity (paragraph (b)(1)(iv) of the final rule) as they are not subject to the network adequacy standards identified in § 438.68.
After consideration of the public comments, and to clarify the application of this section to PCCM entities described in § 438.310(c)(2) of the final rule, we are: (1) Deleting paragraph (b) and instead adding PCCM entity described in § 438.310(c)(2) to the list of impacted entities throughout this section; (2) not finalizing the proposed restructuring of section (a); and (3) revising final rule paragraph (c) of this section to clarify that the information used to carry out the annual EQR must be obtained from the EQR-related activities or, if applicable, from a Medicare or private accreditation review. This revision clarifies that the EQR of PCCM entities whose contract with the state provides for shared savings, incentive payments or other financial reward for improved quality outcomes (consistent with § 438.3(r) of the proposed rule and § 438.310(c)(2) of the final rule) is mandatory.
We did not propose any changes to § 438.352. This section sets forth the parameters for the EQR protocols. Protocols are detailed instructions from CMS for personnel to follow when performing the EQR-related activities. Protocols must specify: (1) The data to be gathered; (2) the source of the data; (3) the activities and steps to be followed in collecting the data to promote its accuracy, validity, and reliability; (4) the proposed methods for valid analysis and interpretation of the data; and (5) all instructions, guidelines, worksheets and any other documents or tools necessary for implementing the protocol. Under section 1932(c)(2)(A)(iii) of the Act, the Secretary, in coordination with the National Governors' Association, contracts with an independent quality review organization to develop such protocols.
We received the following comments on § 438.352.
After consideration of the public comments, we are making a technical correction to this section to clarify that the Secretary develops the protocols in consultation with NGA and that the protocols are issued by the Secretary.
We proposed two modifications to § 438.354, which sets forth the competence and independence standards that an entity must meet to qualify as an EQRO. First, we proposed additional text, consistent with our overall proposal, to expand EQR to PAHPs. Second, in paragraph (c)(3)(iv), we proposed that an accrediting body may not also serve as an EQRO for a managed care plan it has accredited within the previous 3 years. This is due to our proposal that an EQRO be allowed to use the results of an accreditation review to perform the final EQR analyses; the financial relationship between a managed care plan and its accrediting body should not influence the results of the EQR (or the information that is included in the resulting EQR technical report). We also proposed a corresponding redesignation of existing paragraph (c)(3)(iv) to (c)(3)(v).
We received the following comments in response to our proposal to revise § 438.354.
Regarding the concerns about an accrediting body serving as an EQRO, we share the commenter's interest in ensuring impartiality, though we are uncertain what is meant by the statement that the accrediting body sector “define[s] the metrics of MCO quality.” Section 1932(c)(2)(iii) of the Act requires CMS to contract with an independent quality review organization, such as NCQA, to develop these protocols; however, consistent with § 438.352, the EQR protocols are to be developed by the Secretary in coordination with the National Governor's Association. These protocols are ultimately issued by the Secretary, not by an accrediting body. Second, to ensure independence, proposed paragraph (c)(3)(iv) would require that the EQRO have not, within the previous 3 years, conducted an accreditation review of any MCO, PIHP, or PAHP contracted by the state. We believe that these provisions ensure that the same entity is not developing the EQR protocols and conducting EQR for plans it has accredited. We believe this sufficiently addresses the commenter's concern, and are finalizing paragraph (c)(3)(iv) as paragraph (c)(2)(iv) with nonsubstantive edits.
After consideration of the public comments, we are adding PCCM entity described in § 438.310(c)(2) to the list of managed care plans in § 438.354(c) and adding a provision that an EQRO with ties to an MCO, PIHP, PAHP or PCCM entity (described in § 438.310(c)(2)) cannot qualify to review competitors of its MCO, PIHP, PAHP, or PCCM entity operating in the same state. We are also making a technical clarification to paragraph (c), which does not alter the meaning of the rule, by redesignating proposed paragraphs (c)(1) and (c)(2) as paragraphs (c)(1)(i) and (c)(1)(ii), respectively. This redesignation necessitates the redesignation of paragraph (c)(3) as (c)(2).
Our proposed revisions to § 438.356 would provide additional clarification to the existing EQRO contracting process. We proposed changing the title of this section to clarify that it is specific to EQR contracting. In paragraph (a)(2), we proposed adding that other entities, in addition to or instead of an EQRO (such as the state or its agent that is not an MCO, PIHP, or PAHP) may conduct the EQR-related activities to comport with this same flexibility afforded to states in § 438.358. In paragraph (e), we proposed the addition of a cross-reference to paragraph (a), with the addition of “with an EQRO” to make clear that the contract subject to the open, competitive process is the state's contract with the EQRO. We also, in paragraph (e), proposed to update the cross-reference to the part of 45 CFR that governs grants to state governments from part 74 to part 75, to reflect changes that occurred after the existing regulations were finalized.
We received the following comments in response to our proposal to revise § 438.356.
After consideration of the public comments, we are finalizing this section as proposed.
This section sets forth the activities that produce information that the EQRO must use to conduct the EQR, to draw conclusions regarding access, timeliness, and quality of services provided by managed care plans, and to draft the final EQR technical report. Under the 2003 final rule, there were three mandatory and five optional EQR-related activities. The three mandatory EQR-related activities are: (1) Validation of performance improvement projects; (2) validation of performance measures; and (3) determination of compliance with the standards set forth in subpart D. The five optional activities are: (1) Validation of encounter data; (2) administration or validation of surveys; (3) calculation of additional performance measures; (4) conduct of additional PIPs; and (5) conduct focused studies of quality of care. Under paragraph (d) of this section, EQROs are permitted to provide technical assistance if the state directs. We proposed several changes to this section, including the addition of text to be consistent with our proposal to extend EQR to PAHPs.
We proposed separating the current paragraph (a) into two paragraphs, the first of which would retain the language in the current general rule. Our proposed paragraph (a)(2) would clarify that the information resulting from the performance of the EQR-related activities will be used in accordance with § 438.350(a)(3) to complete the EQR. In paragraph (b), we proposed minor technical changes to make clear that the mandatory activities will be performed for each MCO, PIHP, and PAHP. In paragraphs (b)(1) and (b)(2), we included reference to the proposed CMS-identified measures and PIPs, which may be developed by CMS, in consultation with the states and other stakeholders, through the public process as described in the proposed § 438.330(a)(2). In paragraph (b)(3), we proposed that the mandatory compliance review would consist of an evaluation of the MCO, PIHP, and PAHP standards proposed in subpart D, and because we proposed moving the QAPI program standards to subpart E (as described in the proposed § 438.330), we reference that section as well. This does not propose any significant change from what comprises the current compliance review activity.
We proposed the addition of a new mandatory EQR-related activity in paragraph (b)(4), the analysis of which would be included in the annual EQR technical report in accordance with § 438.364. This proposed EQR-related activity would validate MCO, PIHP, or PAHP network adequacy during the preceding 12 months to comply with the state standards developed in accordance with § 438.68. An assessment of compliance with § 438.206 (availability of services) would occur as part of the mandatory compliance review described in § 438.358(b)(3); however, because the methods that are frequently used to do so are limited to the review of policies and procedures and onsite interviews of personnel, we proposed that this EQR-related activity would go beyond the compliance activity by directly evaluating and validating network adequacy on an annual basis. While the specifics of this activity would be identified in a new EQR protocol, we envision the inclusion of steps such as measurement of how effectively a plan is meeting a state's specific access standards (for example, time and distance standards), direct testing to determine the accuracy of network information maintained by managed care plans, and telephone calls to providers that either assess compliance with a specific standard, such as wait times for appointments, or assess the accuracy of provider information, such as whether a provider is participating in a plan.
Finally, in paragraph (d), we proposed a minor technical change by clarifying that technical assistance may be provided by the EQRO to assist managed care plans in conducting activities that would produce information for the resulting EQR technical report.
We received the following comments in response to our proposal to revise § 438.358.
After consideration of the public comments, we are finalizing this section as proposed, with several technical revisions: (1) We are modifying § 438.358 to reflect that states require an annual EQR for PCCM entities described in § 438.310(c)(2), consistent with § 438.350 in the final rule; (2) we are clarifying in (a)(2) that the information produced by the EQR-related activities must be used in the annual EQR under § 438.350, and that the information produced by the activities must at a minimum include the elements described in § 438.364(a)(1)(i) through (iv); and (3) we are modifying (b)(4) of this section to reflect that the network adequacy validation should examine compliance with the requirements set forth in § 438.14(b), which addresses network requirements for managed care plan contracts involving Indians, Indian health care providers (IHCPs), and Indian managed care entities (IMCEs).
This section is based on section 1932(c)(2)(B) of the Act, which provides the option for states to exempt MCOs from EQR-related activities that would duplicate activities conducted as a part of a Medicare review conducted of an MA plan or a private accreditation survey. In 68 FR 3586 (published January 24, 2003), to avoid duplication of work, states were given the option of using information about contracted MCOs or PIHPs obtained from a Medicare or private accreditation review to provide information which would otherwise be gathered from performing the mandatory EQR-related compliance review, but not for the validation of performance measures or PIPs. In addition, for MCOs or PIHPs that exclusively serve dual eligible beneficiaries, states may use information obtained from the Medicare program in place of information otherwise gathered from performing the mandatory EQR-related activities of validating performance measures and validating PIPs.
We proposed giving states the option to rely on information obtained from a review performed by Medicare or a private accrediting entity to support performing the three existing mandatory EQR-related activities: (1) The validation of PIPs; (2) the validation of performance measures; and (3) the compliance review. For further discussion of this proposed change, see section I.b.6.b.2.m of the June 1, 2015 proposed rule (80 FR 31098).
We proposed in paragraph (a) that the state may use information about an MCO, PIHP, or PAHP obtained from a Medicare or private accreditation review within the past 3 years to support collection of information that would be obtained by completing one or more of the three existing EQR-related mandatory activities. We did not propose extending this option for non-duplication to the fourth, newly proposed EQR-related mandatory activity for validation of network adequacy, as neither we nor private industry have enough experience to know how well it would line up with current accreditation standards.
Because of our proposal to extend the non-duplication option to three mandatory activities, we proposed to combine and streamline the content in the current § 438.360(b) and (c), as it would no longer be necessary to separately address plans serving only dual eligibles. In paragraph (b)(1), we proposed clarifying that the Medicare or private accreditation review standards must be substantially comparable to the standards for the three EQR-related activities to be eligible for non-duplication. Finally, we retain that states identify whether they opt to deem portions of any of the EQR-related activities under this option, and include the reasons for doing so, in the comprehensive quality strategy. This redesignated the previous § 438.360(b)(4) and (c)(4) to paragraph (c).
We received the following comments in response to our proposal to revise § 438.360.
A number of other commenters expressed opposition to the expansion of nonduplication to either the mandatory EQR-related activities of validation of PIPs (proposed § 438.358(b)(1)), performance measures (proposed § 438.358(b)(2)), or both. Concerns that were submitted include: (1) Use of proprietary private standards in EQR that can't be publicly compared to the CMS EQR Protocols; (2) questions about the independence of validation tests from private accreditors when accreditation survey or a HEDIS audit paid for by the plan could represent a potential conflict of interest; and (3) a potential for increased time lag in use of information from private accreditation within the previous 3 years, in lieu of mandatory EQR activities under EQR to validate performance measures and PIPs annually.
Several commenters recommended that CMS revert to the current nonduplication provision, with the added requirement that information from an authorized private accreditor used in lieu of an EQR-related activity must come from entities that meet the independence and competency standards in § 438.354, except § 438.354(c)(3)(iv)(which relates to accreditation).
Paragraph (b)(1) of the proposed rule, finalized as paragraph (a)(2) of this section, requires that for the state to rely on information from a Medicare review or private accreditation, the standards for that review must be comparable to the standards for the EQR-related activities, consistent with the EQR protocols issued per § 438.352. We intend to provide guidance on comparability for the mandatory EQR-related activities in § 438.358 (b)(1) to (b)(3) through future EQR protocols required under § 438.352. This will address concerns raised relating to the transparency, timeliness and independence of accreditation results, and how the information from an
Finally, § 438.358(a)(1) of the final rule allows a state, its agent that is not an MCO, PIHP, or PAHP, or an EQRO to conduct the mandatory and optional EQR-related activities. This allows an entity that does not meet the independence and competency standards in § 438.354 to conduct these activities. Given this flexibility, we do not believe the standards in § 438.354 should apply to accreditation entities whose information is used under this section. Furthermore, section 1932(c)(2)(B) of the Act refers to accreditation by a private independent entity such as those described in section 1852(e)(4) of the Act; we do not believe we have the authority to impose additional restrictions based on the standards in § 438.354.
We are finalizing this section with revision to clarify that nonduplication is to be used at the state's discretion and consistent with guidance issued by the Secretary under § 438.352.
After consideration of the public comments we are finalizing this section with modification to clarify that nonduplication must operate consistent with guidance issued by the Secretary under § 438.352. We are also reorganizing this section so that the general rule, including qualifying conditions, is finalized as paragraph (a) and paragraph (b) contains the requirement that if a state uses information from a Medicare or accreditation review to support an EQR-related activity, this information must be provided to the EQRO. Paragraph (c) is revised to reflect that the state's use of and rationale for nonduplication must be included in the managed care quality strategy, in light of the withdrawal of the proposed comprehensive quality strategy.
This section is based on section 1932(c)(2)(C) of the Act, which provides that a state may exempt a MCO from undergoing an EQR if the MCO has a current Medicare contract under part C of Title XVIII or under section 1876 of the Act, and, for at least 2 years, has had in effect a Medicaid contract under section 1903(m) of the Act. We proposed the removal of PIHPs, as they are not entities that fall under section 1903(m) of the Act. We also proposed to update the phrase “Medicare+Choice” to “Medicare Advantage” (MA).
We received the following comments in response to our proposal to revise § 438.362.
After consideration of the public comments, we are finalizing this section with minor wording revisions.
This section sets forth the information, or final deliverables, that annually result from the EQR. We proposed several changes to this regulation to assist CMS and the states in meaningfully assessing the performance of each managed care plan. For more discussion, see section I.B.6.b.2.o of the June 1, 2015 proposed rule. Previously, the EQR activities in § 438.358(b)(1) and (2) only refer to validation of the data. While we continue to believe that data validation is important and should remain a core function of the EQR process, a statement of validation alone is insufficient to provide insight into plan performance on quality, timeliness, and access to care. Therefore, under § 438.364(a)(1) we proposed that each EQR technical report include performance measurement data for any collected performance measures and implemented PIPs (in accordance with each EQR activity conducted in accordance with § 438.358(b)(1) and (2)).
In paragraph (a)(3), we proposed the inclusion of recommendations for how states can target the goals and objectives in the comprehensive quality strategy to better support improvement in the quality, timeliness, and access to health care services furnished to Medicaid beneficiaries. In paragraph (a)(4), we proposed deleting the language that allows the state alone to decide the appropriate methodology of comparative information about managed care plans, as we believe this should be a determination made by the state in conjunction with CMS (via the Protocols, as described in § 438.352).
In paragraph (b)(1), we proposed that states contract with a qualified EQRO to produce the final EQR technical report (that is, we clarified that there is no other entity which may produce the EQR technical report) and we proposed that this report be completed and available for public consumption no later than April 30th of each year. We also proposed that states may not substantively revise the content of the final EQR technical report without evidence of error or omission, or upon requesting an exception from CMS.
Paragraph (b)(2) proposed that states maintain the most recent copy of the EQR technical report on the state's Medicaid Web site, proposed under § 438.10(c)(3). We also proposed to separate out the existing language for states to make the information available in alternative formats for persons with disabilities in a new paragraph (b)(3). As part of this proposal, we replace the phrase “sensory impairments” with “disabilities”.
We received the following comments in response to our proposal to revise § 438.364.
There are additional provisions intended to improve transparency outside of the EQR process being finalized with this rulemaking, including a requirement that states operate a Web site (§ 438.10(b)(3)) which will include, at a minimum: The enrollee handbook (§ 438.10(g)); the provider directory (§ 438.10(h)); network adequacy standards (§ 438.68(e)); plan accreditation status (§ 438.332 of the final rule); quality ratings for managed care plans (§ 438.334); managed care quality strategies (§ 438.340); and EQR technical reports (§ 438.364(c)). We believe that these items will ensure that the public has access to a state's quality standards, more robust quality measurement data, and information on network adequacy.
Regarding the recommendation that EQR technical reports include information concerning violations uncovered during the compliance review and any corrective actions taken, we note that in accordance with section 1932(c)(2)(A)(iii) of the Act, the Secretary, in consultation with the National Governors' Association (NGA), will contract with an independent quality review organization to develop and revise protocols to guide states and EQROs in conducting EQR. We will include a review of public comments to CMS–2350–P, including this section, in the next EQR protocol review and revision process, at which time we will consider this recommendation. We are therefore finalizing this section as proposed, with modifications described below.
After consideration of the public comments, we are finalizing this section with modification to reflect the application of EQR per § 438.350 to PCCM entities described in § 438.310(c)(2) and with nonsubstantive modification to improve clarity.
This section sets forth the matching rates for expenditures for EQR, including the production of EQR results and the conduct of EQR-related activities when performed by a qualified EQRO or other entity. In the proposed rule, we proposed to revise the regulations to reflect the fact that the enhanced 75 percent EQR match rate provided for under section 1903(a)(3)(C)(ii) of the Act is only authorized for reviews conducted under section 1932(c)(2) of the Act. Section 1932(c)(2) of the Act provides that each contract under section 1903(m) with a Medicaid MCO must provide for EQR conducted by a qualified independent entity. PIHPs do not have contracts under section 1903(m) of the Act. Thus, the statute does not provide a basis for paying the 75 percent match rate for EQR conducted in connection with these entities.
In the 2003 final rule, we used the authority of section 1902(a)(4) of the Act to extend EQR to PIHPs. We determined that, because we were extending the performance of EQR under section 1932(c)(2) of the Act to PIHPs, such review could be considered to be performed “under” section 1932(c)(2) of the Act, even though it was not “required” by section 1932(c)(2) of the Act itself for purposes of qualifying for the enhanced federal match rate of 75 percent. In re-examining this issue in connection with this rulemaking, we believe that, in context, “under section 1932(c)(2),” as used in section 1903(a)(3)(C)(ii) of the Act, means review performed “under to” that provision, (that is, review required by that provision). Because that provision by its clear terms provides for and requires review only for MCOs that contract under section 1903(m) of the Act, we proposed in paragraph (a) that only EQR or EQR-related activities performed by EQROs for MCOs with contracts under section 1903(m) of the Act are eligible for the 75 percent match.
In paragraph (b), we proposed clarifying that EQR and EQR-related activities performed on entities other than MCOs (including PIHPs, PAHPs, primary care case management arrangements, or other types of integrated care models) would be eligible for a 50 percent administrative match, regardless of what type of entity performs the review (that is, the state, its agent that is not an MCO, PIHP, or PAHP, or an EQRO).
Finally, in paragraph (c), we proposed that states submit their EQRO contracts to CMS prior to claiming the 75 percent match. Although section 1932(c)(2) of the Act does not require review and approval by CMS of EQRO contracts, we believe the reason for doing so remains the same as it is today—to allow CMS to determine if the EQRO contract complies with the EQR-related provisions of this rule (for example, by confirming that contracting entities meet the standards set forth in § 438.354 for qualified EQROs), and, if so, which activities under the contract are eligible for the 75 percent match.
We received the following comments in response to our proposal to revise § 438.370.
One commenter stated that what the commenter called our “narrow reading” of section 1903(a)(3)(C)(ii) of the Act to only include those contracts “required” by section 1932(c)(2) of the Act, is not compelled by the statute, but is “an arbitrary change of policy.” The commenter stated that EQR of PIHPs could be construed to be provided for under section 1932(c)(2) of the Act because this section requires each contract “under section 1903(m)” with a Medicaid MCO to provide for annual external independent review, and while PIHPs do not enter into contracts that are subject to the contract requirements in section 1903(m)(2)(A) of the Act, they likely do meet the broad definition of
Others stated on fairness grounds that all entities subject to EQR, including PIHPs, PAHPs and PCCM entities, should be eligible for the 75 percent FFP match rate. These commenters noted that it appears contradictory to expand EQR to PAHPs and PCCM entities while not providing the enhanced FFP match rate for EQR review of these entities. Two commenters recommended that CMS either apply the 75 percent match rate for all entities subject to EQR or eliminate the requirement to review PIHPs and the proposed requirement to review PAHPs in the same manner. Commenters noted that the implications of this proposed policy change would be substantial and stated that an enhanced match rate would support States in conducting the variety of new quality requirements proposed in this regulation.
After consideration of the public comments, we are finalizing this section without modification. In addition, we are making a technical conforming change to § 433.15(b)(10) to cross-reference § 438.370(a) of this chapter (75 percent) and § 438.370(b) (50 percent).
In the proposed rule, we relied on the authority in section 1902(a)(4) of the Act to establish methods of administration for the proper and effective operation of the state plan to strengthen our state monitoring standards at § 438.66, noting that many of these practices are already employed by states. We also proposed a minor change in the title of this regulation section to clarify that the monitoring required here is a state activity.
In paragraph (a), we proposed that the state have a monitoring system for all of its managed care programs, using the term monitoring to include oversight responsibilities. In paragraph (b), we proposed that the state's monitoring system address, at a minimum, specific aspects of the managed care program that include: Administration and management; appeal and grievance systems; claims management; enrollee materials and customer services; finance, including MLR reporting; information systems, including encounter data reporting; marketing; medical management, including utilization management; program integrity; provider network management; quality improvement; the delivery of LTSS; and other items of the contract as appropriate. We noted that research has highlighted these program areas as critical for state success.
In § 438.66(c), we proposed that states use data collected from its monitoring activities to improve the performance of its managed care program. While we expect that many states already take this approach, our proposal would set out a baseline standard for all managed care programs. We also provided a list of activities for which data should be used for performance improvement. This list encompassed the areas that we believe are fundamental to every managed care program and for which data is readily available. We did not propose an exhaustive list in § 438.66(c) of the performance areas about which data may be used in improvement efforts to provide flexibility for the state to collect and use additional data they find useful and pertinent for its program.
In § 438.66(d), we proposed to establish a new standard for states to conduct readiness reviews of MCOs, PIHPs, PAHPs and PCCM entities prior to the effective date of new or modified managed care programs, although experience has shown that states employ this practice today. As proposed in paragraph (d)(1)(i) through (v), readiness reviews would have to be conducted: Prior to the start of a new managed care program; when a new contractor enters an existing program; or, when the state adds new benefits, populations or geographic areas to the scope of its contracted managed care plans. We proposed in paragraph (d)(2)(i) and (ii) that these readiness reviews would have to commence at least 3 months before the state implements any of those program changes, so that states ensure that critical MCO functions are operational far enough in advance for successful implementation. In paragraph (d)(2)(iii), we proposed that the results of those readiness reviews would have to be submitted to us to enable us to determine if the contract or contract amendment is approved, which would permit both CMS and the state to review the findings, discuss any possible issues, and arrive at a mutual understanding of expectations. In paragraph (d)(3), we proposed that the readiness reviews would consist of both a desk review of documents and an on-site visit that includes (at a minimum) interviews with staff and leadership that manage key operational areas. We did not propose to define the key operational areas but noted that we plan to rely on states to reasonably identify those areas in light of the areas which are identified in proposed paragraph (d)(4). Finally, we proposed in paragraph (d)(4) to require four broad areas for inclusion in the readiness review and outline subcomponents within each area. The broad areas include: (1) Operations and administration; (2) service delivery; (3) financial management; and (4) systems management.
We noted that these standards reflect our current guidance. For example, our guidance for MLTSS programs under section 1915(b) waivers and section 1115(a) demonstration projects set forth MCO readiness to implement LTSS as a key element under adequate planning; likewise under Special Terms and Conditions for new or expanding managed care programs under these waiver and demonstration authorities, states conduct readiness reviews of their contracted managed care plans. Additionally, managed care plans participating in the Capitated Financial Alignment Demonstration have to undergo an extensive readiness review process before the enrollment of dual-eligible beneficiaries will be permitted.
Finally, to address the fragmented program information we currently receive about states' managed care programs and to help improve our oversight efforts, we proposed in § 438.66(e) that states provide an annual program assessment report to us. In this proposal, states would have to submit these to us no later than 150 days after the end of the managed care plan's period of performance. We requested comment on whether 150 days is enough time after the end of a program year for the state to provide the type of information we proposed. In paragraph (e)(1), we proposed flexibility for states which already have to provide an annual report under section 1115(a) demonstrations to submit that report for this purpose if the information in the annual report is duplicative of the information specified here.
In proposed paragraph (e)(2), we identified the areas on which information and an assessment would have to be submitted by the state in the report. We proposed that the report include information about, and assessments of eight specific areas of the managed care program detailed in paragraph (e)(2). We took the opportunity to emphasize that states providing LTSS through managed care plans would also have to include areas specific to MLTSS in this assessment noting these could include alignment of payment rates and incentives/penalties with the goals of the program, any activities the managed care plans have undertaken to further the state's rebalancing efforts, and the satisfaction of enrollees with their service planners. In paragraph (e)(3), we also proposed that this annual program assessment would have to be posted publicly and provided to the Medical Care Advisory Committee and, if applicable the LTSS stakeholder group specified in § 438.70.
We received the following comments in response to our proposal to revise § 438.66.
Several commenters also suggested that CMS remove these requirements entirely, as states should determine the best approach regarding readiness reviews without federal intervention. Several commenters recommended that CMS allow an exemption for mature managed care programs and only enforce paragraph (d)(1) on new managed care programs. A few commenters recommended that CMS phase in the readiness review requirements to ensure states have the budget and staff to accommodate the new federal standards. Finally, a few commenters supported paragraph (d)(1) as proposed and stated that such standards would prevent states from fast tracking the implementation of managed care programs without ensuring a comprehensive review process.
However, we believe that paragraphs (d)(1)(i) through (iii) should be finalized as proposed, as we believe it is necessary for states to assess the readiness of each managed care plan when the state is implementing a new managed care program, when the managed care plan has not previously contracted with the state, or when the managed care plan will be providing or arranging for the provision of covered benefits to new eligibility groups. We believe that all three of these scenarios represent major changes to a state's Medicaid program and believe that states should assess the readiness of each managed care plan accordingly. We clarify here that new eligibility groups does not include minor changes in program eligibility as a result of ongoing program maintenance. The intent of paragraph (d)(1)(iii) is to trigger a comprehensive readiness review when a new and distinct eligibility group is being added to the managed care plan. We decline to adopt commenters' recommendation to add an exemption from paragraph (d)(1) for mature managed care programs, as we do not believe that such an exemption would be appropriate given the removal of paragraphs (d)(1)(iv) and (v).
We agree with commenters' concerns that 150 days might not be enough time to collect the necessary data and produce the report on each managed care plan. Therefore, we will adopt commenters' recommendation to lengthen the amount of time states have to submit the annual managed care program assessment report to CMS from 150 days to 180 calendar days. We believe that by lengthening the amount of time states have to prepare each report, states will have access to cleaner, more accurate, and more complete data. We are modifying the regulatory text to adopt this recommendation. Finally, we decline to revise the annual report requirement in favor of a report submitted once every 5 years. This recommendation is not consistent with our general approach to improve state monitoring requirements, nor is it consistent with the approach of CMS to generally require an annual report at the end of each program or contract year.
We agree with commenters that states should include information on and an assessment of the state's beneficiary support system. We believe this is important to not only report on the activities of the beneficiary support system, but we also believe that including the beneficiary support system will enhance and improve performance over time. To be consistent with our preamble discussion and regulatory text revisions at § 438.66(b)(4) and paragraph (c)(11), we are modifying the regulatory text at paragraph (e)(2) to include the beneficiary support system. We will designate the beneficiary support system at paragraph (e)(2)(ix) and move the current regulatory text at paragraph (e)(2)(ix) related to LTSS to paragraph (e)(2)(x).
Finally, we will clarify the current regulatory text at paragraph (e)(2)(vi) and include network adequacy standards, as we agree with commenters that network adequacy standards are an extension of the availability and accessibility of covered services. We are modifying the regulatory text to adopt this recommendation. We decline to add specific requirements for states to include structures for engagement of consumers, providers, advocates, and other stakeholders, as we find this to be a duplicative requirement. We have included requirements throughout part 438 to include stakeholder engagement, such as the LTSS stakeholder group required at § 438.70, the managed care plan's member advisory committee at § 438.110, and the requirement listed at § 438.66(e)(3) for states to provide the annual managed care program assessment report for each managed care plan to both the Medical Care Advisory Committee and the LTSS stakeholder group. We believe that structures for engagement of consumers, providers, advocates, and other stakeholders are appropriately included throughout part 438.
After consideration of the public comments, we are modifying the regulatory text at § 438.66(b)(4) and § 438.66(c)(11) to include the activities and performance of the beneficiary support system in a state's monitoring system. We are also modifying the regulatory text at § 438.66(e)(2) to include the beneficiary support system in the state's annual managed care program assessment report. We will designate the beneficiary support system at § 438.66(e)(2)(ix) and move the regulatory text at § 438.66(b)(10) to include specific state monitoring requirements regarding provider directories. We are also modifying the regulatory text at § 438.66(b)(11) and § 438.66(e)(2)(vi) to clarify and include specific state monitoring requirements regarding network adequacy standards and to clarify that network adequacy standards must be included in the state's annual managed care program assessment report. We are modifying the regulatory text at § 438.66(c)(5) to add “or provider” after enrollee to clarify that states should use data collected from the results of any enrollee or provider satisfaction survey.
We are modifying the regulatory text to remove § 438.66(d)(1)(iv) and (v) to reduce burden and allow state flexibility to consider whether the addition of new benefits or the expansion of coverage to new geographic areas should trigger a comprehensive readiness review. In addition, we are modifying the regulatory text at § 438.66(d)(2)(iii) to revise the reference from § 438.3 to § 438.3(a) to add more specificity regarding contract approval. We are also modifying the regulatory text at § 438.66(d)(3) to make onsite reviews for events described at § 438.66(d)(1)(iii), regarding new eligibility groups, optional and at the state's discretion. We are also modifying the regulatory text at § 438.66(d)(1)(iii) to correct a typo and change the word “provisions” to “provision.”
Finally, we are modifying the regulatory text at § 438.66(e)(1) to lengthen the amount of time states have to submit the annual managed care program assessment report to CMS from 150 days to 180 calendar days. We are also finalizing regulatory text at § 438.66(e)(1)(i) to include language that specifies that the initial report will be due after the contract year following the release of CMS guidance on the content and form of the report. We will also finalize at § 438.66(e)(1)(ii) the regulatory language proposed at paragraph (e)(1) that specifies that annual reports submitted under the authority of section 1115(a) of the Act will be deemed to satisfy the annual report requirement. We are also finalizing a technical correction at paragraph (e)(2) for clarification regarding the areas of the program report. We are finalizing all other sections as proposed.
In the preamble to the proposed rule, we described our concerns that current § 438.10 pertaining to information standards is not sufficiently clear or direct and does not reflect current technology advances that provide access to information more quickly and less expensively. For that reason, we proposed to replace the entire existing regulation section with a more organized and clear set of standards for beneficiary information. Electronic communications are becoming typical, and we proposed to explicitly permit both states and managed care plans to make beneficiary information available in electronic form, subject to certain standards. We noted that electronic information needs to be disseminated in a manner compliant with Section 504 of the Rehabilitation Act. In addition, we indicated that providing for electronic information delivery would further our goal of aligning Medicaid managed care beneficiary information dissemination practices with those of the private insurance market. We also proposed to remove the distinctions among MCO, PIHP and PAHP information requirements. We proposed that regardless of the scope of the managed care plan's benefits, the information that should be provided to potential enrollees and enrollees is the same for all types of plans.
We also proposed to move the current definitions in paragraph (a) to § 438.2 because those terms (“potential enrollee” and “enrollee”) are used throughout this part. We noted the differences in these definitions: “potential enrollee” refers to a beneficiary that has been determined eligible for Medicaid but is not yet enrolled in a managed care plan, while “enrollee” refers to a beneficiary who is a member of a specific MCO, PIHP, PAHP, PCCM or PCCM entity. In proposed paragraph (a), we revised the definition of “prevalent” and added a definition of “readily accessible” for use in this section. The term “prevalent” is currently defined in § 438.10(c)(1); we proposed to amend the current definition of “prevalent” to clarify that the non-English languages that are relevant are those spoken by a significant number or percentage of potential enrollees and enrollees in the state that are LEP, consistent with standards used by the Office for Civil Rights in enforcing anti-discrimination provisions related to individuals with limited English proficiency.
We proposed to add a definition of “readily accessible” to clarify parameters for the provision of electronic information. We noted that states, MCOs, PIHP, PAHPs, and PCCM entities should consult the latest section 508 guidelines issued by the U.S. Access Board or W3C's Web Content Accessibility Guidelines (WCAG) 2.0 AA (see
In paragraph (b), we clarified that the standards in this section apply to all managed care programs regardless of authority because the distinctions among managed care programs that operate under the state plan and waivers or demonstration projects are immaterial for purposes of beneficiary educational materials that are provided in a managed care program. We noted that this section incorporates those
In proposed paragraph (c), we specified basic standards for information in managed care programs. Several of the standards (that is, paragraphs (c)(1) through (c)(6)) were proposed to be applicable to the state as part of its responsibility for ensuring delivery of critical program information to beneficiaries. Paragraphs (c)(1), (c)(6) and (c)(7) were proposed to apply to MCOs, PIHPs, PAHPs, and PCCM entities; however, PCCMs would need to comply only with paragraph (c)(1).
In paragraph (c)(1), we proposed the fundamental standard that each state, enrollment broker, MCO, PIHP, PAHP, PCCM and PCCM entity provide all information in an easily understood and readily accessible manner and format. Such manner and formats include the use of TTY/TDY and American Sign Language interpreters. The proposed regulation is similar to the current regulation at § 438.10(b)(1) but would also include PCCM entities consistent with the provisions discussed in section I.B.6.e. of this final rule. Except for PIHPs and PAHPs, this language implemented the statutory provision in section 1932(a)(5)(A) of the Act for all enrollment, informational and instructional materials. We relied on section 1902(a)(4) of the Act authority to extend such standards on PIHPs, PAHPs, and PCCMs for the proper and efficient operation of the State plan to ensure that enrollees and potential enrollees receive information in a form and manner that they can understand. In paragraph (c)(2), we proposed that states must use the beneficiary support system proposed under § 438.71 to provide education and choice counseling to all beneficiaries. We proposed in paragraph (c)(3) that states would need to operate a Web site for information about the state's managed care program and could link to the Web sites of managed care plans for some of the information. We noted that all states already operate a Web site and that this proposal would merely codify existing practices. In paragraph (c)(4), states would be required to develop standardized managed care definitions and terminology, and model enrollee handbooks and notices for use by its contracted managed care plans. The suggested list of definitions and terminology had been adapted from the standards for a uniform glossary that private market insurers must include as part of their summary of benefits and coverage (SBC) in 45 CFR part 147. We proposed in paragraph (c)(5), that states would need to ensure, through their managed care contracts, that MCOs, PIHPs, PAHPs, and PCCM entities provide the information outlined in this section.
In proposed paragraph (c)(6), we identified the standards for providing information electronically. Specifically, electronic information would have to be compliant with language, formatting, and accessibility standards; be in a prominent place on the state's, MCO's, PIHP's, PAHP's, or PCCM entity's Web site; and be able to be retained and printed. Additionally, all information would be made available to enrollees and potential enrollees in paper format upon request at no cost and provided within 5 calendar days. We noted that these standards are consistent with those for QHPs operating in the Marketplace; thus, we believed that by finalizing them we further our goal of alignment across insurance affordability programs.
In proposed paragraph (d), we addressed federal standards for the language and format used for beneficiary information, and largely carries over existing standards from current paragraph (c). However, we proposed to add three new standards, which we believed were important beneficiary standards and recognize the cultural and linguistic diversity of Medicaid beneficiaries. The first two changes, proposed in paragraph (d)(2) and (d)(3), would have materials for potential enrollees disseminated by the state, as well as enrollee materials disseminated by MCOs, PIHPs, PAHPs or PCCM entities, to be available in prevalent languages and include taglines in each prevalent non-English language and large print explaining the availability of written materials in those languages as well as oral interpretation in understanding the materials. We also proposed, based on guidance from the American Printing House for the Blind, Inc., that large print must be no smaller than 18 point font. We also proposed in paragraph (d)(3) that written materials must also be made available in alternative formats and auxiliary aids and services must be made available upon request of the potential enrollee and enrollee at no cost. The third change we proposed was in paragraph (d)(3)(i), where we listed the `materials' which each MCO, PIHP, PAHP or PCCM entity would have to make available in each prevalent non-English language in its service area under our proposal. To determine the types of materials to which this standard should apply, we consulted guidance provided by HHS regarding access to programs and services for persons with LEP. See section I.B.6.d of the proposed rule for discussion of this topic. We proposed that provider directories, enrollee handbooks, appeal and grievance notices and other notices that are critical to obtaining services be considered vital documents, and therefore would have to be made available in each prevalent non-English language in its service area. The current standard for oral interpretation services would remain mostly unchanged in paragraphs (d)(4) except for adding a clarification that interpretive services include the use of auxiliary aids (such as TTY/TDY) and American Sign Language. Currently, under paragraphs (b)(5)(i) and (ii), states have to notify enrollees of the availability of interpretation and translation services and how to access them. We proposed to add a new paragraph (d)(5)(ii) clarifying that potential enrollees and enrollees must be also be notified that auxiliary aids and services are available upon request and at no cost for enrollees with disabilities. This proposed addition would clarify that interpretive services are not limited to LEP potential enrollees and enrollees. We proposed to redesignate current paragraph (d)(5)(ii) as (d)(5)(iii).
We proposed in paragraph (d)(6) to establish a standard that the availability of alternative formats for beneficiary materials must include a large print tagline and information on how to request auxiliary aids and services, including the provision of materials in alternative formats. Auxiliary aids would include but are not limited to the use of TTY/TDY and American Sign Language interpreters. We also proposed, based on guidance from the American Printing House for the Blind, Inc., that large print must be no smaller than 18 point font.
In paragraph (e), we proposed the information that must be provided to potential enrollees. We proposed in paragraph (e)(1) to provide flexibility to the states to provide this information in paper or electronic format to ease the administrative burden and cost of mailing paper materials to potential enrollees. Proposed paragraphs (e)(1)(i) and (ii) would maintain current timeframes for the provision of the information.
In paragraphs (e)(2)(i) through (x), we proposed a minimum list of topics that the state would need to provide in the information sent to potential enrollees including disenrollment rights, basic
The next paragraphs of proposed § 438.10 focused exclusively on information standards for managed care plan enrollees—that is, once they have selected and enrolled in a managed care plan. Paragraph (f) proposed general standards for both the state and managed care plans regarding enrollee information; paragraph (g) proposed the minimum content of enrollee handbooks; and paragraph (h) proposed the minimum content of provider directories. The products of the standards proposed in these paragraphs would provide enrollees with a substantial and valuable source of information on most aspects of how to access care and fully utilize the benefits of their managed care enrollment.
Proposed paragraph (f) set forth basic standards applicable to information that must be disclosed to enrollees of MCOs, PIHPs, PAHPs, and PCCMs. In proposed § 438.10(f)(1), we proposed to redesignate an existing regulatory standard in current § 438.10(f)(5); that standard is that the managed care plan must make a good faith effort to provide notice of the termination of a contracted (that is, in-network) provider to each affected enrollee within 15 days of receipt or issuance of the termination notice. For purpose of these standards, an affected enrollee is one who received his or her primary care from the provider or was seen on a regular basis by the provider. In paragraph (f)(2), we proposed to redesignate an existing regulatory standard in current § 438.10(f)(1); the state must notify all enrollees of their right to disenroll and clearly explain the process for doing so and, if enrollment is restricted for 90 days or more, provide this notice at least 60 calendar days in advance of each enrollment period. We proposed to add “calendar” before “days” to eliminate potential ambiguity. Lastly, in proposed paragraph (f)(3), MCOs, PIHPs, PAHPs, and, when appropriate, PCCM entities, would have to provide, upon request, copies of any physician incentive plans in place as specified in § 438.3(i).
The regulatory standards proposed in paragraphs (g), (h), and (i) address enrollee handbooks, provider directories, and formularies because we believe these are foundational tools to help enrollees utilize the benefits and services available to them from their managed care plan. We declined to propose regulatory standards for other types of plan-enrollee communications, recognizing that those decisions are best made at the state level based on the maturity and structure of each state's managed care program.
Proposed paragraph (g) outlined minimum content standards for the enrollee handbook; we attempted to align with private market insurance standards by reflecting similarities to the SBC in both content and appearance. In paragraph (g)(1), each MCO, PIHP, PAHP or PCCM entity would have to provide an enrollee handbook to each enrollee within a reasonable time after receiving the enrollment notice from the state. While the information proposed to be included in the handbook (in proposed paragraph (g)(2)), which already exists in current § 438.10), we noted that it is currently not well organized or all in one section for easy reference. Proposed paragraph (g)(2) listed all of the existing elements in one paragraph for easy reference. Taken together, these elements would be referred to as a “handbook” consistent with how the term is typically used in Medicaid managed care. While some minor grammatical revisions have been made for clarity, we noted that the elements remained the same as in current regulation. We also proposed to correct a reference in § 438.100(b)(2)(iii) to “§ 438.10(f)(6)(xii),” which was redesignated as “§ 438.10(g)(2)(ii)(A) and (B).
Paragraph (g)(3) proposed to clarify the circumstances under which the MCO, PIHP, PAHP, or PCCM entity would be considered to have provided the information in paragraph (g)(2). We proposed mail, email if enrollee consent was obtained, Web site with paper and electronic notification, auxiliary aids and services at no cost (upon request), and any other method that can reasonably be expected to result in the enrollee receiving the information. We proposed this last method to provide flexibility for communication methods not commonly used, such as alternative communication devices for persons with disabilities, and other technological advances in communication not yet widely available. In proposed paragraph (g)(4) we affirmed the current standard that enrollees be notified 30 days in advance of any significant change to any of the information in paragraph (g). Consistent with other proposed revisions throughout § 438.10, we proposed to delete the standard that this notice be written and let the provisions of paragraphs (c) and (d) control regarding the standards for the use of written and electronic communications. Proposed paragraph (h) specified the minimum content standards for provider directories. We noted that the content and accuracy of provider directories have long been an issue of contention between states, managed care plans and stakeholders and that the move to electronic provision of this document should improve the accuracy of the information. We also noted that even web-based provider directories can be out of date quickly without accurate information from participating providers to the managed care plans.
Paragraphs (h)(1)(i) through (viii) proposed all of the elements that exist currently in § 438.10(f)(6)(i) but expanded on them in four key ways. In addition to name, address, telephone number, and open panel status, we proposed to add four additional elements: A provider's group/site affiliation; Web site URL (if available); the provider's cultural and linguistic capabilities; and the accessibility of the provider's office to enrollees with physical disabilities. Paragraphs (h)(2)(i) through (v) proposed five provider types that would have to be included in the directory, if applicable under the contract: Physicians; hospitals; pharmacies; behavioral health; and LTSS. In paragraph (h)(3), we proposed that paper provider directories must be updated at least monthly and electronic directories within 3 business days of receiving updated provider information. Lastly, to align managed care with both QHPs and MA, in paragraph (h)(4), we proposed that provider directories be made available on the MCO's, PIHP's, PAHP's, or if applicable, PCCM entity's Web site. The current rule for MA plans (§ 422.111(h)) requires such plans to post provider directories online. Additionally, in a recent final rule (80 FR 10873), HHS finalized a requirement for QHPs in a federally facilitated Marketplace to post provider directories in a machine readable format specified by the Secretary. Therefore, to improve transparency and provide an opportunity for third party aggregating of information, we proposed that MCOs, PIHPs, PAHPs, and if applicable, PCCM entities, must post provider directories on their Web sites in a machine readable file and format specified by the Secretary.
We also proposed a new paragraph (i), Information for all enrollees of MCOs, PIHPs, PAHPs, and PCCM entities—Formulary. This proposed paragraph would have MCOs, PIHPs, PAHPs, and PCCM entities provide their medication formularies electronically or on paper, if requested. Under paragraphs (i)(1) and
We received the following comments in response to our proposal to revise § 438.10.
Additionally, many commenters expressed confusion over the provision of paper directories; specifically, whether we were proposing in § 438.10(h)(3) that they be sent routinely or only upon request. Commenters also explained that using the same data source file for the electronic and paper directories would be more efficient but would require the same updating timeframe for electronic and paper formats. One commenter proposed that printing on demand from the on-line directory be deemed acceptable.
Regarding questions about paper directories, we clarify that paper directories need only be provided upon request and that we encourage plans to find efficient ways to provide accurate directories within the required time frames. We encourage innovative methods such as single data source files or printing the on-line directory to provide accurate paper directories within the required timeframe to enrollees that request them. To adopt these revisions and clarifications, we will be finalizing § 438.10(h)(3) to reflect that paper directories are only upon request and that paper directories must be updated monthly and electronic provider directories must be updated within 30 calendar days after the receipt of updated provider information.
After consideration of the public comments, we are finalizing § 438.10 as proposed with the following revisions:
• In § 438.10(a), added a definition of “limited English proficient”; and removed “consistent with standards [used by OCR]” from the definition of “prevalent”; and supplemented the examples of “modern accessibility standards” in the definition of “readily accessible”.
• In § 438.10(c)(3), added a cross reference to § 438.10(i); removed references to §§ 438.68(e), 438.364(b)(2), and 438.602; and revised the text to improve its readability.
• In § 438.10(c)(4)(i), added “and devices” after “habilitation services” and “rehabilitation services”.
• In § 438.10(c)(4)(ii), changed “member” to “enrollee” in front of “handbook” for consistency as “member” is not defined in this part. This correction was made throughout part 438.
• In § 438.10(c)(6)(ii), used the phrase “applicable entity's” to refer to the State, MCO, PIHP, PAHP, PCCM or PCCM entity regulated by paragraph (c)(6).
• In § 438.10(c)(6)(v), removed “State, MCO, PIHP, PAHP, or PCCM entity” as it was duplicative of the list in paragraph (c)(6); moved “is informed” for grammatical flow; used “applicable
•In § 438.10(d)(2), added “interpretation” after “oral” and “translation” after “written” for clarity.
• In § 438.10(d)(3), added “denial and termination notices” to the list of documents that must be translated upon request; and rearranged some parts of the paragraph to improve readability.
• In § 438.10(d)(5)(i), revised “written information” to “written translation” for accuracy and consistency.
• In § 438.10(d)(5)(iii), replaced “those services” with a specific cross references for better clarity.
• In § 438.10(e)(1)(i), added “managed care” to references to voluntary and mandatory programs for clarity.
• In § 438.10(e)(2), added “all of” to clarify that items (i) through (x) are required.
• In § 438.10(e)(2)(iii), added requirement that notices to potential enrollees must include information on the length of the enrollment period and all disenrollment opportunities available to them.
• In § 438.10(e)(2)(vi), added “and formulary” and “and (i)” to information that must be provided to potential enrollees.
• In § 438.10(g)(2) replaced “member” with “enrollee” and in paragraph (ii)(A), added `by the MCO, PIHP, PAHP, or PCCM entity” at the end of the sentence for clarity.
• In § 438.10(g)(2)(ii)(B), replaced “those services” with a specific cross reference for better clarity.
• In § 438.10(g)(2)(vii), added a requirement that freedom of choice of family planning providers be included in the handbook.
• In § 438.10(g)(2)(xi)(E), and (h)(1)(viii), made revisions for grammatical flow.
• In § 438.10(h)(1)(vii), changed “spoken” to “offered” to recognize sign language and added a reference to cultural competence training to add consistency to the way the information is presented in the provider directory.
• In § 438.10(h)(1)(viii), changed “is accessible” to “has reasonable accommodations” for clarity.
• In § 438.10(h)(2)(v), added “as appropriate” after “LTSS providers” to acknowledge that certain types of providers may not be suitable for display in a provider directory.
After consideration of public comment, we are amending § 438.102(b)(2) to be consistent with § 438.10(g)(2)(ii)(B) and the underlying statutory requirements.
PCCM services have a unique status in the Medicaid program. PCCM services are considered a state-plan covered benefit through section 1905(a)(25) of the Act. Section 1905(t) of the Act defines PCCM services, the providers that may furnish them, and the standards for a PCCM contract—one of which is that the state's contract with the PCCM complies with applicable sections of 1932 of the Act (the managed care rules in the statute). A PCCM, as defined in section 1905(t)(2) of the Act, is considered a managed care entity under section 1932(a)(1)(B)(ii)of the Act. Current regulatory standards in part 438 have minimal standards that PCCM programs have to meet; they generally mirror the statutory standards specified in section 1932 of the Act.
Current regulations reflect the prevailing PCCM program design that existed in 1998. At that time, virtually all PCCM programs were intended to layer a `gatekeeper' model on top of states' FFS programs. Each primary care provider who acted as a PCCM was paid a small monthly fee (typically less than $5.00) per beneficiary in recognition of the provision of PCCM services, in addition to any direct service payment the provider might also receive from the state, to coordinate access to primary care services and manage referrals to specialty care for Medicaid beneficiaries. The Medicaid provider was not held accountable for quality or health outcomes for that enrollee. We believe the current regulatory structure still works reasonably well for these `gatekeeper' PCCM programs, which generally are very small and remain exclusively focused on individual primary care providers.
Over the past 8 years, however, states have determined that they need additional tools to better manage utilization of Medicaid services. In the proposed rule in section I.B.6.e, we discussed the history of the PCCM model, noting the evolution of PCCM entities and the fact that there current regulations in part 438 do not explicitly address them. We noted that typically, a more robust PMPM fee has been paid to these entities, depending upon the scope of activities under the contract; however, these payments are not considered risk-based capitation payments subject to the actuarial soundness standards of § 438.4 through § 438.7 because the entities are not responsible for the provision of medical services under the state plan. Rather, the state continues to pay for medical services on a FFS basis. As these PMPM fees are not subject to the actuarial soundness standards, federal review and approval of these payments has been limited. Therefore, we proposed to adopt a term for these more intensive care case management entities: PCCM entities. Our proposed term reflects our view that these entities are PCCMs subject to the statutory minimum standards for PCCMs but by distinguishing these entities from the traditional PCCM model—one based on the use of individual providers to act as gatekeepers—we proposed to exercise our authority under section 1902(a)(4) of the Act to adopt additional standards for those PCCM entities that provide more intensive case management and care coordination, measure performance outcomes and quality improvement activities, and receive higher reimbursement.
We proposed to also distinguish the PCCM programs that are considered managed care, and therefore, subject to the specified standards of part 438, from other health care delivery systems, such as integrated care models, patient-centered medical homes, and ACOs, which would remain outside the purview of the regulatory changes to part 438 we proposed. We also noted that SMDLs issued in 2012 outlined new flexibilities for states to implement integrated care models that fall on the spectrum between unmanaged FFS and full-risk managed care. SMDL #12–002, available at
Notwithstanding the guidance in those SMDLs, we noted that states continue to seek clarification on the attributes of a PCCM program that make it “managed care” and they perceive that there are additional burdens if the program is considered a managed care program. We clarified in the proposed rule that states may operate PCCM programs—under the rubric of integrated care models, ACOs or other similar terms—without triggering the standards of part 438 (which include additional contractual obligations) as long as enrollees' freedom of choice is not constrained and any willing and qualified provider can participate—that is, where traditional FFS rules for provider participation remain in place. For such programs that use FFS provider participation, only the statutory standards in section 1905(t) of the Act that apply to PCCM contracts will apply, and not our further
Specifically, we proposed in § 438.2 to update definitions for primary care case management and PCCM. We proposed to modify the existing definition in § 438.2 for a “primary care case management system” as a system under which a state contracts either with an individual (PCCM) to provide case management services or when a state contracts with an entity to furnish case management services or a defined set of functions that go beyond case management services. We also proposed to remove the reference to an “entity” under the existing definition of “primary care case manager” as an “entity” that provides primary care case management services is defined in the proposed new definition of “PCCM entity” that would permit a broader scope of functions to be provided than those focused on primary care case management services; these include such activities as intensive case management, development of enrollee care plans, execution of contracts and/or oversight responsibilities for the activities of FFS providers, provision of payments to FFS providers, enrollee outreach and education, operation of a customer service call center, provider profiling and quality improvement and measurement, coordination with behavioral health providers, and coordination with LTSS providers. We believe these functions are included in the range of functions that current PCCM programs cover.
We also proposed throughout the proposed and final rule and in the revisions to part 438, to include a reference to a PCCM entity wherever there was an existing standard on PCCMs. We also identified those standards that only apply to PCCM entities when they undertake certain responsibilities on behalf of the state. We proposed to move § 438.3(k) to § 438.3(q) which implements the statutory provisions in section 1905(t) of the Act for PCCM contracts.
In addition, we proposed a new § 438.3(r) to have states obtain our approval of PCCM entity contracts. This proposed paragraph also specifies new standards that we propose elsewhere in this rule. For PCCM entities that have the same administrative responsibilities and financial incentives as MCOs, PIHPs, and PAHPs, states which hold their PCCM entities accountable for provider behavior and quality outcomes would have to monitor and evaluate the performance of their networks accordingly. We noted that those PCCM entity contracts which provide for shared savings or other payment incentives—the same financial incentives that managed care plans have—should be held to higher standards in terms of enrollee information and quality improvement.
We also proposed changes to the following sections to effectuate these new standards related to PCCM entities that were also discussed in proposed § 438.3(r) in section I.B.2. of the proposed rule: §§ 438.10; 438.330; 438.340; and 438.350. However, we did not propose to subject traditional PCCMs to these standards because PCCMs are not responsible for the activities that PCCM entities are responsible for under our proposed framework. In § 438.10, we proposed to treat PCCM entities like MCOs, PIHPs and PAHPs in areas including oral and written translation standards; general and miscellaneous enrollee information standards; and enrollee handbook and provider directory content standards. In §§ 438.330, 438.340 and 438.350, we proposed small modifications in each section, as follows, to propose new standards for PCCM entities:
• In § 438.330, we proposed that states assess the performance of each PCCM entity to detect over- and underutilization of services; measure performance using standard measures; and conduct a program review.
• In § 438.340, we proposed that the state's quality strategy, consistent with the guidance provided in SMDL #13–007, describe how the state is assessing the performance and quality outcomes achieved by each PCCM entity.
• In § 438.350, we proposed, based on inquiries received by states with PCCM entities, that the state may have their EQRO perform an EQR of each PCCM entity. Since EQRs of MCOs, PIHPs, and PAHPs focus on the operation of the managed care plan, we believe that applying similar review principles to PCCM entities is reasonable and appropriate.
We received the following comments in response to our proposal to revise §§ 438.2, 438.3, 438.330, 438.340, and 438.350.
After consideration of the public comments, we are finalizing all sections discussing PCCMs and PCCM entities as proposed.
As noted in our proposed rule in section I.B.6.f., one of the key principles in federal statute and regulations is that enrollees—to the maximum extent possible—have a choice of more than one managed care plan. Section 1932(a)(3) of the Act requires that choice be an element of a mandatory managed care program for MCOs and PCCMs. In the 2002 final rule at current § 438.52, an application of that standard exists for PIHPs and PAHPs.
We proposed modifications to § 438.52(a) to clarify current standards regarding the choice of two entities. Under the current regulation, states must give enrollees a choice of at least two MCOs, PIHPs, PAHPs, or PCCMs if enrollment with such an entity is required to receive Medicaid benefits. In paragraph (a)(1), we proposed to remove the reference to PCCM and provide that states that enroll beneficiaries in an MCO, PIHP or PAHP must give those beneficiaries a choice of at least two MCOs, PIHPs or PAHPs. As background, in the proposed rule, we proposed to separate PCCMs that are an individual physician (or physician assistant or certified nurse mid-wife) or a physician group practice from an entity or organization that employs such providers and performs services on the state's behalf in addition to basic primary case management services. That proposal underlies the proposed amendments here for how the statutory choice standards would be implemented for PCCMs and PCCM entities. In paragraph (a)(2), we proposed that in a primary care case management system, as currently defined in § 438.2, beneficiaries must be permitted to choose from at least two PCCMs employed by or contracted with the state. In paragraph (a)(3), we proposed that beneficiaries who must enroll in a PCCM entity may be limited to one PCCM entity, but beneficiaries must be permitted to choose from at least two PCCMs employed by or contracted with the PCCM entity.
We received the following comments on proposed § 438.52(a).
While we understand commenters' concerns regarding choice for PCCM entities, that is, that choice would be operationalized at the PCCM level as is the case for PCCMs, we decline to require choice at the PCCM entity level. While PCCM entities and MCOs may share similar characteristics, such as quality improvement activities for providers, the operation of a customer service call center, or claims processing, we believe that PCCM entities are fundamentally different in that they are focused solely on care coordination activities and arranging for the provision of services outside of the PCCM entity. In other words, enrollees are not bound by a provider network to obtain services that the PCCM under the PCCM entity may coordinate with as those services are rendered FFS. We also believe that PCCM entity models vary greatly by state, and we recognize that a blanket choice requirement at the PCCM entity level could be disruptive to mature and successful programs already in operation.
After consideration of public comments, we are finalizing § 438.52(a) as proposed without modification.
Section 1932(a)(3)(B) of the Act provides an exception to the standard that an enrollee have the choice of at least two MCOs, or PCCMs, if applicable, for states with rural areas. This exception is reflected in the current regulations at § 438.52(b), wherein the exception to choice was extended to PIHPs and PAHPs. We proposed two significant changes to the implementation of the rural area exception. First, as a consequence of our proposal to change the implementation of the enrollee choice standards, we proposed to eliminate the rural exception for PCCMs.
We proposed to change the definition of a rural area for purposes of the state option to contract with one MCO, PIHP, PAHP, or PCCM under mandatory Medicaid managed care programs. The current definition of a rural area at § 438.52(b)(3) is any area other than an “urban” area as specified in the Office of Management and Budget's (OMB) delineation of Metropolitan Statistical Areas (hereinafter OMB Bulletin). We noted that the OMB Bulletin produces geographic distinctions focused on a core population center that has a high degree of social and economic integration with adjacent territories as measured by commuting ties, which can include less densely populated areas within a Metropolitan Statistical Area (MSA). Further, OMB has consistently warned against the non-statistical use of the delineations within the OMB Bulletin, noting that: “Metropolitan and Micropolitan Statistical Area Standards do not produce an urban-rural classification, and confusion of these concepts can lead to difficulties in program implementation [for programs that rely on such distinctions].”
Because we have encountered a number of states seeking to contract with one MCO, PIHP, PAHP, or PCCM system in sparsely populated counties that are classified as part of an MSA that cannot meet the current regulatory definition for a rural area, we proposed changes to this standard.
We proposed to adopt Medicare's county-based classifications to set network adequacy standards under the MA program. As noted in the proposed rule, Medicare establishes population and density parameters based on approaches taken by the Census Bureau in defining “urbanized areas” and OMB's delineation of “metropolitan” and “micropolitan” areas. These parameters are then used to set nationwide county designations as “large metro,” “metro,” “micro,” “rural,” or “Counties with Extreme Access Considerations (CEAC).” The county designations are published annually in the MA Health Services Delivery (HSD) Reference file, which is accessible at the MA Applications page at
We noted that we considered adopting the geographic distinctions used by the Office of Rural Health Policy (ORHP) within the Health Resources and Services Administration (HRSA) for purposes of determining a provider's eligibility for grant funding available through that agency. ORHP's definition of a rural area identifies lower population counties or census tracts within a county that otherwise fall under OMB's delineation of MSAs. Census tracts are defined at the zip code rather than county level, so it is possible for a county to include multiple census tracts of different population densities. If we were to adopt ORHP's approach, we would need to establish a review standard for a county that as a whole did not qualify as rural and states would have the burden of researching the nature and scope of the census tracts to meet the standard.
We received the following comments in response to our proposal to revise § 438.52(b).
A few commenters recommended that the requirements at paragraph § 438.52(b)(2)(ii)(C) regarding moral or religious objections be included broadly for all enrollees and not be limited only to enrollees of rural areas that have been limited to a single managed care plan. Finally, several commenters recommended that CMS include requirements at § 438.52(b)(2)(ii) to specify that the single managed care plan must provide the full range of reproductive health services covered in the State Plan and recommended that CMS include specific references to § 438.62 regarding continued services to enrollees and § 438.206(a) regarding access to State plan services.
We remind commenters that paragraph § 438.52(b)(2)(ii)(C) related to moral or religious objections is not limited to enrollees of rural areas that have been limited to a single managed care plan. Within part 438, we have included the appropriate references for moral and religious objections at §§ 438.10(e)(2)(v)(C), 438.10(g)(2)(ii)(A) and (B), and 438.100(b)(2)(iii) for all enrollees of managed care plans. We did not accept the suggestion to add requirements at § 438.52(b)(2)(ii) to specify that the single managed care plan must provide the full range of reproductive health services covered in the State plan or include specific references to § 438.62 regarding continued services to enrollees or § 438.206(a) regarding access to State plan services, as we find these recommendations to be duplicative of existing requirements. The requirements at §§ 438.62 and 438.206(a) are applicable for all enrollees of managed care plans; therefore, specific references are not required at § 438.52(b)(2)(ii). Consistent with § 438.206(a), each state must ensure that all services covered under the State Plan, including the full range of reproductive health services covered in the State Plan, are available and accessible to enrollees of managed care plans. Further, consistent with § 438.206(b)(4), if the managed care plan's network is unable to provide necessary services covered under the contract, to a particular enrollee, the managed care plan must adequately and timely cover these services out of network for the enrollee.
We believe that a consistent approach is necessary to ensure that the rural exception is applied uniformly across all managed care programs and populations. We disagree with the commenter that we should add specific criteria for managed care plans in metro areas that serve small and complex populations and include such areas in the definition and criteria of rural area for purposes of granting a rural exception and allowing the state to limit those enrollees to one single managed care plan. This recommendation is not consistent with the language in section 1932(a)(3)(B) of the Act, which provides the exception for an individual residing in a rural area. The recommendation is also not consistent with the requirement in section 1932 of the Act that states are expected to maintain enrollee choice in non-rural areas regardless of the populations served. We also decline to add requirements at § 438.52(b)(3) to ensure that states utilizing the rural exception have demonstrated that no additional managed care plans will serve the specific rural area. This recommendation is operational in nature, and we believe it is unnecessary to include in the regulatory text. Finally, we note and clarify that if multiple managed care plans are currently being offered in a rural area, it is our expectation that states continue to allow choice. It would not be appropriate for states to pursue the rural exception if multiple managed care plans meet the state's requirements and are willing to serve in specific rural areas.
After consideration of the public comments, we are finalizing § 438.52(b) as proposed with a modification with the correct reference to “County with Extreme Access Considerations” in the regulatory text at paragraph (b)(3).
We did not receive comments on proposed § 438.52(c) and (d) and will finalize those provisions as proposed without modification.
As states' managed care programs have matured, states have used PAHPs for a broader scope of services than was initially considered when the Medicaid managed care rules were finalized in
First, we proposed to change the section number of § 438.8 to § 438.9 because of additional sections added to the beginning of the subpart. Second, in an effort to avoid duplicative information, we proposed to delete the existing language in paragraphs (a) and (b) as all the PIHP and PAHP provisions listed in the existing paragraphs are specified throughout the regulatory text of part 438 and, therefore, it was unnecessary to include a separate section listing the standards applicable to PIHPs and PAHPs. We proposed a new paragraph (a) which defines an NEMT PAHP as an entity that provides only NEMT services to enrollees under contract with the state on a pre-paid capitated basis or other payment arrangement that does not use state plan payment rates. If a state chooses to use a PAHP to provide NEMT services along with any other ambulatory medical service, that PAHP would then be considered a traditional PAHP as defined in § 438.2 and all the PAHP provisions throughout part 438 would apply. Lastly, in paragraph (b), we list the specific provisions in part 438 that would apply to NEMT PAHPs in the same way they apply to any other PAHP. The provisions that apply include contracting provisions, actuarial soundness standards, information standards, anti-discrimination provisions, certain state responsibility provisions, certain enrollee rights and responsibilities, certain PAHP standards, enrollee right to fair hearings, and certain program integrity standards.
We received the following comments in response to our proposal to revise § 438.8 to include only the specific provisions applicable to NEMT PAHPs and to change the section number from § 438.8 to § 438.9.
After consideration of the public comments, we are finalizing § 438.9 as proposed with the addition of specific references to § 438.3 in § 438.9(b)(1), § 438.818 in § 438.9(b)(5), and the addition of the provisions of § 438.14 in § 438.9(b)(10).
Section 438.50 governs state plan requirements for programs with mandatory managed care enrollment and currently has a reference to “managed care entities.” Although defined in the statute, “managed care entities” is an undefined term in the regulation. Because this provision only applies to MCOs and PCCMs as referenced later in § 438.50, we proposed to replace the term “managed care entities” with “MCOs, PCCMs, or PCCM entities, as applicable.”
In addition, we proposed to delete paragraphs (e) and (f), which addressed priority and default enrollments for managed care programs operated under section 1932(a) of the Act. These processes, along with other general standards for enrollment, that are applicable to all authorities for managed care programs are provided in the proposed new § 438.54.
We received the following comments in response to our proposal to revise § 438.50.
After consideration of the public comments, we are finalizing § 438.50 as proposed without modification.
As explained in the proposed rule at I.B.7.a, sections 6402(c)(3) and 6504(b)(1) of the Affordable Care Act reorganize, amend, and add to sections 1903(i)(25) and 1903(m)(2)(A)(xi) of the Act by adding provisions related to routine reporting of encounter data as a condition for receiving federal matching payments for medical assistance. Section 1903(i)(25) of the Act mandates that, effective March 23, 2010, federal matching payments to the states must not be made for individuals for whom the state does not report enrollee encounter data to us. Further, section 1903(m)(2)(A)(xi) of the Act specifies that an MCO must report “patient encounter data” for contract years after January 1, 2010, to the state in a timeframe and level of detail specified by the Secretary. We noted in the proposed rule that the data that must be collected and reported under these provisions is the same, but the population of covered by section 1903(i)(25) of the Act, compared to the population covered by section 1903(m)(2)(A)(xi) of the Act, included enrollees of PIHPs and PAHPs.
Since effective monitoring of all programs from which enrollees receive services is a critical function, we proposed to expand the contract standards that apply the provisions of section 1903(m)(2)(A)(xi) of the Act to PIHPs and PAHPs by utilizing authority under section 1902(a)(4) of the Act to ensure the proper and efficient operation of the state plan by ensuring provision to the state of information that the state must provide to CMS.
We proposed to add the following:
• A definition of enrollee encounter data in § 438.2;
• Additional MCO, PIHP, and PAHP contract standards defining enrollee encounter data submission and maintenance standards;
• Clarifications to better align the basic elements of a health information system with the Affordable Care Act; and
• Standards on the state to report accurate, complete, and timely enrollee encounter data to us as a condition for receiving federal matching payments on its MCO, PIHP, and PAHP contract expenditures.
In § 438.2, we proposed to define enrollee encounter data as the information relating to the receipt of any item(s) or service(s) by an enrollee under a contract between a state and a MCO, PIHP, or PAHP that is subject to the standards of §§ 438.242 and 438.818.
We proposed to revise § 438.242 to clarify and align the basic elements of a MCO, PIHP, or PAHP health information system with the Affordable Care Act. The size and scope of today's Medicaid programs need robust, timely, and accurate data to ensure the highest financial and program performance, support policy analyses, and maintain ongoing improvement that enables data-driven decision making. In August 2013, we released SMDL #13–004 that issued guidance to states on the Transformed Medicaid Statistical Information System (T–MSIS)
In § 438.242(b)(1), we proposed a specific reference to the new standard in section 6504(a) of the Affordable Care Act, which would mandate that state claims processing and retrieval systems be able to submit data elements to us deemed necessary for Medicaid program integrity, oversight, and improvement. Existing paragraphs (b)(1) through (b)(3) were proposed to be redesignated, respectively, as paragraphs (b)(2) through (b)(4); in paragraph (b)(2), we also proposed to add “all” to clearly indicate that data collected by the state would have to include all services furnished to an enrollee. For similar reasons, we proposed to add “including capitated providers” in paragraph (b)(3)(i) as this is currently a data weakness for many states, MCOs, PIHPs, and PAHPs. Utilization data from capitated providers is frequently less
We proposed a new § 438.242(c) to add standards for enrollee encounter data that would have to be incorporated in all MCO, PIHP, and PAHP contracts. Contracts would have to specify that enrollee encounter data must: Include rendering provider information; include all information that the state is required to produce under § 438.818; and be submitted to the state in a format consistent with the industry standard ASC X12N 835, ASC X12N 837, and NCPDP formatting. In paragraph (c)(2), we also proposed that MCOs, PIHPs, and PAHPs submit data at a level of detail to be specified by CMS. To retain flexibility to adapt to changes in coding and payment practices over time, we anticipate issuing guidance in the future. At a minimum, we expect the initial guidance to address standards for MCOs', PIHPs', and PAHPs' submissions to the state: Enrollee and provider identifying information; service, procedure and diagnosis codes; allowed/paid, enrollee responsibility, and third party liability amounts; and service, claim submission, adjudication, and payment dates.
We proposed to add a new § 438.818 entitled Enrollee Encounter Data to implement the standard for enrollee encounter data reporting by the state to CMS. We proposed that federal matching payments would not be available for states that do not meet established data submission benchmarks for accuracy, completeness, and timeliness. Timeliness and frequency of reporting encounter data is a key issue in terms of alignment between the managed care delivery system and the FFS Medicaid delivery system. We released guidance in 2013
In addition to receipt of data in a timely manner, we noted that receipt of data that is accurate and complete is integral to our administration and oversight of state Medicaid programs. This means that encounter data submitted to us must represent all services received by an enrollee regardless of payment methodology, including services sub-capitated by a MCO, PIHP, or PAHP to a provider. In proposed § 438.818(a), we restated the statutory provision prohibiting FFP unless the state meets the standards for submitting sufficient and timely encounter data. Proposed paragraph (a)(1) would require that the submission of encounter data be compliant with current HIPAA security and privacy standards and in the format needed by the MSIS or any successor format. MSIS and T–MSIS are the repositories of all encounter data for the Medicaid program and although submission of data to MSIS has been a standard for years, states have not always invested the resources needed to ensure the quality of the submissions. We proposed these changes to support efforts currently underway to improve the accuracy, timeliness, and completeness of submissions. We proposed in paragraph (a)(2) that the state validate enrollee encounter data before each submission to us. States may use various methods to ensure the accuracy and completeness of the encounter data, including the protocol defining the optional EQR activity for Encounter Data Validation.
We proposed § 438.818(a)(3) to reinforce the importance of complying with all MSIS encounter data reporting standards as a condition for receipt of FFP and noted that encounter data is just one piece of a complete MSIS submission. To maximize our ability to fully integrate and utilize all MSIS data for comprehensive analysis and oversight, we emphasized that encounter data needs to be fully compliant.
In § 438.818(b) and (c), we proposed to review each encounter data submission for accuracy and potentially defer or disallow payment to a state if it is determined that the enrollee encounter data set is not complete, accurate, and timely. If, after review of an encounter data submission, we determine that it does not comply with established criteria, we proposed to provide the state with a reasonable opportunity to make the submission compliant. Further, if the state is unable to make the submission compliant within the time allowed, we proposed to defer and/or disallow FFP for the MCO, PIHP, or PAHP contract in question. We interpreted the statute as providing for a per-enrollee disallowance for a failure to report enrollee encounter data. We believe it is more accurate to calculate the deferral and/or disallowance amount based on the enrollee and the specific service type of the non-compliant data. Using this methodology, only the portion of the capitation payment attributable to that enrollee for the service type of the non-compliant data would be considered for deferral and/or disallowance under sections 1903(i)(25) and (m)(2)(A)(xi) of the Act. For example, if the non-compliant encounter data is for inpatient hospital services, then only the inpatient hospital portion of the capitation payment for that enrollee would be subject to deferral and/or disallowance. We proposed that any reduction in FFP would be effectuated through the processes outlined in § 430.40 and § 430.42. In § 438.818(d), we proposed that within 90 calendar days of the effective date of the final regulation, states would have to submit to us a detailed plan of their procedures to ensure that complete and accurate data are being submitted timely. We indicated our intention to work with the states to develop a comprehensive and workable procedure and would review and approve the states' plans for compliance.
We received the following comments in response to our proposal to revise §§ 438.2, 438.242 and 438.818.
However, § 438.242(c)(2) implements section 1903(m)(2)(a)(xi) of the Act, which we believe was intended to broadly support program integrity, program oversight, and administration before expending federal dollars. As proposed, § 438.242(c)(2) did not include specific elements to ensure that we have the ability to respond appropriately to new and emerging program integrity concerns, new methods of fraud waste and abuse, and changing oversight concerns. We believe that this flexibility is particularly important as new, more complex and vulnerable populations transition to managed care and as more federal Medicaid funding is flowing through managed care programs.
Additionally, we recognize that states need additional and different data elements, beyond the minimum required for submission under § 438.818, for other program activities (for example, rate setting, risk adjustment, quality measurement, and value-based purchasing). To make the flexibility we intended clearer and to provide the parameters and substantive standards for identification of the frequency and level of detail for these information submissions, we will revise § 438.242(c)(2) to state that this information must be specified by CMS and the state based on program administration, oversight and program integrity needs. For this reason, we decline to add a specific set of data elements to § 438.242(c)(2).
For EPSDT screenings, we are not aware of any reason why they would not be included in the encounter data submission to the state, if they are reported by the provider to the managed care plan. We note that there are no fields in T–MSIS for number of hours worked, travel time, and overtime for home care workers so the state would not be required to submit that data to MSIS/T–MSIS. Consequently, these data would not be covered by § 438.242(c)(3). The managed care plan, by contract, may be required to submit that data to the state; managed care plans should consult their contract and the state to determine the reporting requirements for that information, if appropriate. We note that § 438.242, as finalized in this rule, imposes a minimum requirement that the state must include and ensure through its contracts with managed care plans; states may impose additional requirements to serve state needs.
The standards identified in § 438.242(c)(4) have been developed and are maintained through Standards Setting Organizations. We would also note that there has been significant work to make these standards applicable to encounter data reporting. The ANSI ASC X12 has specifically developed the Post Adjudicated Claims Data Reporting standard for purposes of reporting encounter data. These standards were developed with broad support from the payer and provider community. Additionally, many states have modified definitions of data elements in the ASC X12N 837 standard while maintaining the formatting for purposes of submitting encounter data. This approach has allowed states to collect all necessary claim and remittance data from managed care plans. Although we believe that using a single standard such as the Post Adjudicated Claims Data Reporting is preferable, using the general formats identified in § 438.242(c)(4) will facilitate managed care plans and states moving toward greater standardization.
Managed care plans, providers, and states are required to use the HIPAA compliant versions of the standards identified in § 438.242(c)(4) for routine electronic business transactions. Because the standards are used for routine and necessary business transactions, the standard code sets needed to make the standards workable are also routinely updated. We believe that the more closely the encounter data requirements align with other existing business transactions, the easier it will be to collect high-quality encounter data.
We take this opportunity to clarify that § 438.242(c)(4) requires the use of a standard format. It does not require the use of a specific transaction (for example, a HIPAA compliant Health care claims or equivalent encounter information transaction). If states are using the standard format and modifying the definitions of particular data elements within the format, CMS would find this consistent with the requirements in § 438.242(c)(4). Many states have been able to use the standard formats to collect adjudicated data, therefore we decline to allow the use of proprietary formats.
The second type of validation intended under § 438.818(a)(2) was to require states to validate the data to CMS through MSIS/T–MSIS as complete and accurate. Submission of encounter data by managed care plans to the state consistent with the requirements in § 438.242 enables the state to submit data to CMS that is complete and accurate; under these regulations, states are responsible for reviewing the data and making sure that the regulation standards are met before submitting the data to CMS. Section 438.818 also requires that states submit all of the data elements required by MSIS/T–MSIS, for all of the services, for all of the enrollees enrolled in the states' managed care plans. We will clarify these requirements by modifying § 438.818(a)(2) to state that states must ensure that enrollee encounter data is validated for accuracy and completeness as required under § 438.242 before submitting data to CMS. States shall also validate that the data submitted to CMS is a complete and accurate representation of the information submitted to the State by the MCOs, PIHPs, or PAHPs.
In finalizing § 438.242(d) and § 438.818(a)(2), we eliminated the text, “States may use the EQR activity required in § 438.358 for the validation of encounter data to meet this requirement.” We eliminated this language for two reasons. First, the validation of encounter data is an optional activity under § 438.358 and it is not a required activity. Second, the use of an EQR to validate the encounter data reported by a managed care plan can be an important component of states' procedures and quality assurance protocols to ensure that enrollee encounter data submitted is a complete and accurate representation of the services. However, an annual validation alone is probably not adequate. Many states have been developing procedures and protocols to ensure that their data is complete and accurate, including evaluating the value of submitted claims against the managed care plan's general ledger, random sampling of claims within managed care plans' systems, and other types of reconciliation. States have found that performing validation activity on a monthly or quarterly basis has improved the data collection efforts. We support and encourage states' efforts to improve encounter data. CMS anticipates continuing to work with states and to publish guidance and best practices based on states' experiences.
After consideration of the public comments, we are adopting §§ 438.242 and 438.818 as proposed, with the
This section implements section 5006(d) of the American Reinvestment and Recovery Act of 2009, which created section 1932(h) of the Act governing the treatment of Indians, Indian health care providers and Indian managed care entities, participating in Medicaid managed care programs. We had previously provided guidance on this statutory provision in a SMDL on January 22, 2010 (SMDL #10–001, ARRA #6)
We proposed in paragraph (a) to define the following terms: “Indian,” “Indian health care provider (IHCP),” and “Indian managed care entity (IMCE)” consistent with statutory and existing regulatory definitions with minor modifications to extend the definitions, as applicable, to PIHPs and PAHPs.
In paragraph (b), we proposed that each MCO, PIHP, PAHP, PCCM, and PCCM entity's contract had to comply with the provisions of (b)(1) through (5):
• In (b)(1), we proposed that each MCO, PIHP, PAHP, and PCCM entity's contract must demonstrate sufficient IHCPs in the managed care network and that Indian enrollees be able to obtain services from them;
• In (b)(2), we proposed that IHCPs be paid for covered services provided to Indian enrollees who are eligible to receive services from such providers whether the IHCP participates in the managed care network or not;
• In (b)(3), we proposed to permit any Indian who is enrolled in a non-Indian MCO, PIHP, PAHP, PCCM, or PCCM entity and eligible to receive services from a participating IHCP to choose that IHCP as his or her primary care provider, as long as that provider has capacity to provide the services;
• In (b)(4), we proposed to permit Indian enrollees to obtain services covered under the MCO's, PIHP's, PAHP's, or PCCM entity's contract, from out-of-network IHCPs; and
• In (b)(5), we proposed that in any state where timely access to covered services cannot be ensured due to few or no IHCPs, a MCO, PIHP, PAHP, and PCCM would be considered to have met the standard for adequacy of IHCP providers if either Indian enrollees are permitted to access out-of-state IHCPs, or the state deems the lack of IHCP providers to justify good cause for an Indian's disenrollment from both the MCO, PIHP, PAHP, or PCCM entity and the state's managed care program in accordance with § 438.56(c).
Proposed § 438.14(c) outlined payment standards to implement section 1932(h) of the Act. Paragraph (c)(1) specified that when an IHCP is enrolled in Medicaid as a FQHC but is not a participating provider with a MCO, PIHP, PAHP, or PCCM entity, it must be paid FQHC payment rates, including any supplemental payment due from the state. Where the IHCPs is not enrolled in Medicaid as a FQHC, paragraph (c)(2) would have the MCO, PIHP, PAHP, or PCCM entity payment be the same payment as it would receive using a FFS payment methodology under the state plan or the applicable encounter rate published annually in the
Paragraph (d) would implement the statutory provision permitting an IMCE to restrict its enrollment to Indians in the same manner as Indian Health Programs may restrict the delivery of services to Indians, without being in violation of the standards in § 438.3(d).
This proposed rule has tribal implications and is therefore, subject to the CMS Tribal Consultation Policy (December 2015)
We solicited comment on the overall approach to this provision, including as to whether these proposals are adequate to ensure that Indian enrollees have timely and integrated access to covered services consistent with section 5006 of the ARRA. We solicited comment on how to facilitate a coordinated approach for care for Indian enrollees who receive services from a non-participating IHCP and who need Medicaid covered services through a referral to a specialty provider. Also, we solicited comment on the potential barriers to contracting with managed care plans for IHCPs and what technical assistance and resources should be made available to states, managed care plans, and IHCPs to facilitate these relationships.
We received the following comments in response to our proposal to revise § 438.14.
Many states use section 1115(a) demonstration authority to operate Medicaid managed care programs. For managed care programs operated under either section 1915(b) or 1115(a) authorities, tribal consultation must be conducted in accordance with the approved Tribal Consultation state plan, and as approval of waivers is at the discretion of the Secretary, we verify that the required processes were followed to solicit robust tribal input before determining whether to permit states to mandatorily enroll Indians into managed care. We take this opportunity to address the statement by commenters that past practice under section 1115(a) demonstrations was a decision not to waive section 1932(a)(2)(C) of the Act. That is not correct. Section 1115(a) of the Act authorizes the Secretary to waive provisions of section 1902 of the Act and grant expenditures of FFP under section 1903 of the Act. As discussed above, section 1932(a)(2)(C) of the Act applies only to managed care programs operated under section 1932(a) of the Act. Any past decisions not to permit mandatory enrollment of Indians into managed care under section 1115(a) demonstration authority was the result of negotiations with those specific states and tribes. We decline to formalize any past practice related to Indian enrollment into managed care under section 1115(a) demonstrations in this regulation.
However, in light of the significant comments received on the differences across managed care authorities and the parameters for mandatory enrollment of Indians, we intend to develop sub-regulatory guidance on mandatory enrollment of Indians under section 1932(a), 1915(b), and 1115(a) authorities through the tribal consultation process.
In reference to comments about including § 438.14 under subpart E, we interpret those comments as equating the requirements in relation to quality assessment in subpart E with a state's general oversight of the provisions in 42 CFR part 438. The quality assessment activities in § 438.330 are developed by the state and under this rule CMS may specify performance measures and performance improvement initiatives through a public notice and comment process. There are many provisions in subpart E related to performance improvement initiatives that would impact all populations covered under a managed care contract. Due to the scope of subpart E, it is not appropriate or necessary to include a cross-reference to the contractual requirements in § 438.14.
Commenters responded affirmatively to CMS' request for comment as to whether there should be a contract addendum for IHCP participation in Medicaid managed care networks similar to those created for QHPs and Medicare Part D plans and recommended that its use by Medicaid managed care plans be required rather than optional. Several commenters stated that managed care plans use non-negotiable network provider agreements that require IHCPs to waive their federal rights under the Indian Health Care Improvement Act and other laws and apply licensing and provider certification requirements on IHCPs that are also inconsistent with the Indian Health Care Improvement Act.
Notwithstanding out-of-network access, § 438.14(b) does require that managed care plans and PCCM entities, as appropriate, demonstrate that there are a sufficient number of IHCPs in the network unless there are no or too few IHCPs to ensure timely access to services for Indian enrollees. We appreciate the engagement and the work of the TTAG to date to develop a draft Indian Managed Care Addendum and we are committed to finalizing that addendum through subregulatory guidance to offer to managed care plans on a voluntary basis, to facilitate the network status of IHCPs. Because we do not have explicit statutory authority to require the use of an addendum by managed care plans for the provider agreements with IHCPs, we will follow an approach similar to QHPs operating under the FFM. CMS issued a Dear Tribal Leader Letter that introduced the QHP Addendum for IHCPs to facilitate QHP contracting with tribes, Urban Indian Health programs, and IHS providers, and specified that use of the addendum was encouraged by QHPs and providers but, ultimately, the addendum was optional,
After consideration of the public comments, we are finalizing with the following revisions. Technical corrections to punctuation and text (including deletions of unnecessary citations) have been made in paragraph (a). The heading of paragraph (b) has been made more accurate by adding “and coverage.” Additionally, throughout paragraphs (b) and (c) as appropriate, “and” was replaced with “or” in the lists of managed care plan types to be clear that an enrollee in any of the listed types of plans has the listed rights. Corrections related to references to a PCCM and/or PCCM entity have been made in paragraphs (b), (b)(2)(i), (b)(4), (b)(5), and (c)(3) to reflect the various activities and functions of each. We are also finalizing a new paragraph (b)(6) which permits IHCPs to refer Indians to network providers. Minor grammatical corrections have been made in paragraphs (c)(1) and (c)(3). Revisions for clarification to the applicable payment rates have been made in paragraph (c)(2). A citation has been added to paragraph (d) to clarify the definition of “Indian Health Program.”
We proposed to revise portions of § 438.114 to make technical corrections to the existing regulations. We did not propose any changes to paragraph (a), (d), and (f).
We proposed to correct an error in the current regulations at paragraph (b) by removing paragraph (b)(2) which refers to PCCMs with a risk contract. This provision is inconsistent with the rest of our managed care regulatory structure, in that a PCCM which accepts risk for medical services—including the emergency services referenced in this section—would be considered either a PAHP or PIHP (depending on the scope of medical services at risk). Because a PCCM would never be responsible for coverage and payment of emergency services, we proposed to remove that reference from paragraph (b). A state will always be responsible for coverage and payment of emergency services if it operates a PCCM program, which is reflected in the proposed revisions to paragraph (b)(2), where we proposed to move the existing text in paragraph (b)(3) with the addition of “PCCM entities.”
In paragraph (c)(1), we proposed to add PCCM entity to each reference to “MCO, PIHP, PAHP, or PCCM” for consistency with changes discussed in I.B.6.e of the proposed rule. In paragraph (c)(2), we proposed to redesignate paragraph (c)(2)(i) as (c)(2) and delete paragraph (c)(2)(ii) for the same reason as the proposal for paragraph (b).
Currently in paragraph (e), MCOs, PIHPs, and PAHPs must follow MA guidelines when covering post-stabilization services and be paid in accordance with Medicare guidelines. However, payment for post-stabilization services to Medicaid enrollees is governed by Medicaid and State rules. We corrected this misleading provision by proposing language that ensures that hospitals providing post-stabilization services receive payment consistent with federal and state Medicaid payment standards, not based on Medicare rates. The resulting language would apply MA coverage guidelines to MCOs, PIHPs and PAHPs but Medicaid payment standards for covered post-stabilization services.
We received the following comments in response to our proposal to revise § 438.114.
Regarding the PLP requirements of the BBA of 1997 and the use of approved lists of emergency diagnosis codes, we remind commenters that consistent with our discussion in the 2002 managed care final rule at 67 FR 41028–41031, we prohibit the use of codes (either symptoms or final diagnosis) for denying claims because we believe there is no way a list can capture every scenario that could indicate an emergency medical condition under the BBA provisions. Section 1932(b)(2)(B) of the Act defines emergency services as covered inpatient or outpatient services that are furnished by a provider qualified to furnish these services under Medicaid that are needed to evaluate or stabilize an “emergency medical condition.” An “emergency medical condition” is in turn defined in section 1932(b)(2)(C) of the Act as a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in placing the health of the individual (or for a pregnant woman, the health of the woman or her unborn child) in serious jeopardy, serious impairment to body functions, or serious dysfunction of any bodily organ or part. While this standard encompasses clinical emergencies, it also clearly requires managed care plans and states to base coverage decisions for emergency services on the apparent severity of the symptoms at the time of presentation, and to cover examinations when the presenting symptoms are of sufficient severity to constitute an emergency medical condition in the judgment of a prudent layperson. The final determination of coverage and payment must be made taking into account the presenting symptoms rather than the final diagnosis. The purpose of this rule is to ensure that enrollees have unfettered access to health care for emergency medical conditions, and that providers of emergency services receive payment for those claims meeting that definition without having to navigate through unreasonable administrative burdens. We note that managed care plans have a responsibility to reach out to enrollees and provide and manage care such that enrollees do not use the emergency room in place of primary care.
After consideration of the public comments, we are finalizing § 438.114 as proposed without modification.
We received comments on sections that were not discussed in the preamble of the proposed rule. In these instances, the proposed rule restated the current regulation text without change. We have included those sections, along with the comments and responses, below.
We disagree with the commenter that Medicaid managed care plans must allow contracted providers to prescribe or provide all services covered under the contract that are within the provider's scope of licensure. We reiterate that § 438.12 does not force managed care plans to contract with every provider for every covered service. Section 438.12(b) explicitly limits the effect of the prohibitions in paragraph (a) and does not prohibit flexibility in reimbursements or prohibit plans from establishing measures to maintain quality and control costs. Therefore, managed care plans can contract for less than the full scope of services available from a provider and/or for less than the full scope of services covered in the managed care plan's contract with the state. It is outside the scope of part 438 to mandate specific provisions in the contract between a managed care plan and its providers. We believe § 438.12 is sufficiently broad to address many forms of discrimination but cannot include an exhaustive list of all possible types of, or basis for, discrimination. We decline to amend § 438.12 in response to these comments.
After consideration of the public comments, we are not amending § 438.12 in response to these comments. Please refer to section I.B.9.a of this final rule for discussion of a change to § 438.12(a)(2) related to defined terms.
After consideration of the public comments, § 438.100 will be finalized as proposed except for an amendment to § 438.100(d) for consistency with § 438.3(f)(1).
After consideration of the public comments, we are amending § 438.102(b)(2) to be more consistent with § 438.10(g)(2)(ii)(B); see section I.B.6.d. for discussion of this revision.
After consideration of the public comments, we are not amending § 438.106.
We also note that effective January 1, 2014, the Affordable Care Act requires that Alternative Benefit Plans (ABPs) for beneficiaries, including individuals in the new adult eligibility group (that is, section 1902(a)(10)(A)(i)(VIII)) of the Act, cover preventive health services described in section 2713 of the Affordable Care Act as part of the set of Essential Health Benefits (EHBs). The preventive health services in section 2713 include the preventive health services authorized for increased match under section 4106 of the Affordable Care Act.
After consideration of the public comments, we are not amending § 438.108.
After consideration of the public comment, we are not amending § 438.116.
After consideration of the public comments, we are not amending § 438.224.
We decline to define practice guidelines, as we do not believe it is necessary to do so. Practice guidelines are developed by a variety of organizations in a variety of areas and are widely available for use by health care professionals. Practice guidelines assist health care professionals to apply the best evidence-based practice to clinical care. We therefore see no compelling reason for CMS to specifically define practice guidelines. We also decline to require review or use of post-approval adverse event data in adopting practice guidelines related to medication therapy, as we do not agree that such specificity is needed in the context of the regulatory language. This regulation has never specified the kinds of practice guidelines managed care plans must adopt but rather establishes criteria to be used by managed care plans in adopting guidelines. We also note that the scope of services in the managed care plan contract will determine the areas in which practice guidelines are appropriate.
After consideration of the public comments, we are not amending § 438.236.
We proposed to redesignate and add several definitions to § 438.2 in connection with changes we proposed to specific sections and subparts. In addition, we proposed several modifications and additions to § 438.2 to address terms used throughout this part. In § 438.2 we proposed to modify existing definitions for “comprehensive risk contract,” “health care professional,” “health insuring organization,” “managed care organization,” “nonrisk contract,” “prepaid ambulatory health plan,” “prepaid inpatient health plan,” and “risk contract.” In addition, we proposed to add definitions for “managed care program,” “network provider,” and “state,” which are terms used with some frequency in part 438 but are not currently defined.
For the existing definition of a “comprehensive risk contract” we proposed to add that the contract is “between the State and an MCO” to make clear that only MCOs can have comprehensive risk contracts and to identify the parties to the contract.
We received the following comments in response to the proposed changes to the definition of “comprehensive risk contract.”
After consideration of comments, we are finalizing the definition of “comprehensive risk contract” as proposed.
We proposed to revise the definition for “health care professional” to include language from the statutory definition that the physician's or provider's services are covered under the contract and to clarify that providers of services other than medical services, such as LTSS, would be included in this definition. We also proposed to delete the list of professionals in section 1932(b)(3)(C) of the Act from our regulatory definition of “health care professional” because the list was not intended to be exclusive and inclusion of this list in the regulatory definition does not clarify our intent for this definition. We requested comment on this approach.
We received the following comments on the definitions and use of “health care professional” and “provider.”
To the comment that recommended that a reference to “credentialing” be added, we appreciate the opportunity to clarify. Credentialing is included in the process of being a network provider and we are retaining “network provider” in this part. Therefore, there is no need to add a reference to credentialing to any other definition.
Therefore, we have added a definition for “provider” in § 438.2 and are not finalizing the definition of “health care professional.” As a result of this, we are replacing proposed uses of “health care professional” throughout part 438 with the terms “provider,” “network provider,” or “individual” (specifically in § 438.210) as appropriate.
In the existing definition of a “health insuring organization,” we proposed to correct a technical error to the citation to the Omnibus Budget Reconciliation Act of 1985 from “section 9517(e)(3)” to “section 9517(c)(3)” and update the reference to statutes that have since amended the HIO-related provisions established in the 1985 statute. We did not receive comments on the definition of an HIO and will finalize as proposed.
In the existing definition of a “managed care organization” we proposed to clarify, consistent with section 1903(m) of the Act that the Secretary determines if the conditions specified are met by an entity seeking to qualify for a comprehensive risk contract. The existing language does not identify who makes such a determination. We did not receive comments on the definition for a “managed care organization” and will finalize as proposed.
In the proposed definition of a “nonrisk contract,” we proposed language to clarify that such a contract is between the state and a PIHP or PAHP. This proposed revision was consistent with the proposed change to identify the parties subject to a “comprehensive risk contract.” We proposed to remove “medical” as the modifier for “services” in the definitions for “prepaid ambulatory health plan” and “prepaid inpatient health plan” because managed care plans may cover non-medical services such as LTSS. We also proposed to remove “agency” that follows “state” consistent with our proposal to add a definition for “state” as meaning the single state agency as specified in § 431.10. We did not receive comments on the proposals related to the definitions for “nonrisk contract,” “comprehensive risk contract,” “prepaid ambulatory health plan,” “prepaid inpatient health plan,' and “state,” and will finalize as proposed.
In the existing definition of a “risk contract,” we proposed to clarify that such a contract is between the state and MCO, PIHP or PAHP. This proposed revision is consistent with the proposed change to identify the parties subject to a “comprehensive risk contract.” We did not receive comments on the proposed modification to the definition of a “risk contract” and will finalize as proposed.
We proposed to add a definition for the phrase “managed care program,” which is currently used in several sections of this part. We proposed this term to mean a managed care delivery system operated by a state as authorized under sections 1915(a) or (b), 1932(a), or 1115(a) of the Act. We did not receive comments on the proposed addition of a definition for a “managed care program” and will finalize as proposed.
We proposed to add a definition for “network provider.” We intended this term to include all types of providers, either as an individual or through a group, and entities that order, refer, or render covered Medicaid services as a result of the state's arrangement with an MCO, PIHP, or PAHP. We also proposed to insert “network provider” in place of “affiliated provider” as used in this part for consistency in use of terminology. We received the following comments on the definition of “network provider.”
After consideration of public comments, we are finalizing the definition of “network provider” to clearly reflect that this term only applies to a provider that has a provider agreement with a managed care plan or a subcontractor of the managed care plan. To avoid any ambiguity, it is important to add subcontractor of a managed care plan because providers that have a provider agreement with a subcontractor of a managed care plan to order, refer, or render covered services are receiving Medicaid funding indirectly by virtue of the state's contract with the managed care plan. Additionally, we are removing “health care professional” from this definition and replacing it with “provider” as discussed above in section I.B.9.a. In addition, we will replace the word “contract” with “provider agreement” and delete “managed care plan”, as that term is not defined, and insert “MCO, PIHP, or PAHP.”
We received the following comments to add or modify other definitions in § 438.2.
After consideration of the public comments, we are finalizing the definition of “primary care” as proposed without modification.
We proposed to correct a limited number of technical and typographical errors identified in the June 14, 2002 final rule and the October 25, 2002 correcting amendment, as well as those identified through our review of the existing regulations in part 438.
• We proposed to update the cross-reference to cost-sharing rules in § 438.108 to reflect recent revisions to part 447.
• For purposes of consistency throughout part 438, we proposed to remove specific references to our Regional Office in § 438.806(a)(1) and replace it with a general reference to CMS. This proposed change does not represent a modification in the role of the Regional Offices; rather, we would prefer to establish workflow processes in sub-regulatory guidance rather than in regulation.
• We proposed to delete § 438.804 related the primary care provider payment increase under section 1202 of the Affordable Care Act as that provision expired at the close of CY 2014.
We did not receive comments on the proposed technical corrections and will finalize those changes as proposed.
To clarify the applicability and compliance dates of various sections in this final rule, we are also finalizing new regulations text, consistent with the statement on applicability and compliance in the Effective Dates and Supplementary Information of this rule, in the following sections: §§ 438.3(v), 438.10(j), 438.62(c), 438.66(f), 438.206(d), 438.207(f), 438.208(d), 438.210(f), 438.230(c), 438.242(e), 438.310(d), 438.400(c) and 438.600(c). We are also changing the name of §§ 438.400 and 438.600 to account for the addition of regulation text on applicability and compliance dates for those provisions.
ARRA, CHIPRA and the Affordable Care Act made applicable to CHIP several Medicaid managed care provisions in section 1932 of the Act, including section 1932(a)(4), Process for Enrollment and Termination and Change of Enrollment; section 1932(a)(5), Provision of Information; section 1932(b), Beneficiary Protections; 1932(c), Quality Assurance Standards; section 1932(d), Protections Against Fraud and Abuse; and section 1932(e), Sanctions for Noncompliance. In addition, the Affordable Care Act made applicable to CHIP and sections 1902(a)(77) and 1902(kk) of the Act related to provider and supplier screening, oversight, and reporting.
This rule implements these statutory provisions and builds on initial guidance on the implementation of section 403 of CHIPRA (section 2103(f) of the Act) provided in State Health Official (SHO) letters 09–008 and 09–013, issued on August 31, 2009 and October 21, 2009, respectively and codifies our policies. (SHO #09–008 is available at
Our overarching goal for these regulations is to align CHIP managed care standards with those of the Marketplace and Medicaid where practical to ensure consistency across programs. As discussed in section I of the preamble, in this final rule, we are revising existing Medicaid regulations in order to modernize managed care contracting and service delivery while improving health care outcomes and beneficiary experience in a cost effective manner. To the extent appropriate, the final regulations for CHIP are aligned with the revisions made for Medicaid.
We recognize that CHIP has historically had few regulations related to managed care. To that end, we proposed to apply the requirements of section 2103(f) of the Act in a manner that is consistent with the goal of aligning CHIP managed care with Marketplace and Medicaid managed care rules, without imposing any additional requirements. We similarly address provisions of section 1932 of the Act applicable to CHIP under section 2107(e)(1)M) of the Act, and certain program integrity authorities applicable to CHIP under section 2107(e)(1)(D) of the Act with the goal of
In the June 1, 2015 proposed rule (80 FR 31169 through 31175), we proposed to implement provisions of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) related to managed care.
We proposed adding a new subpart L to part 457 related to CHIP managed care plans. Most of the proposed regulations in this subpart are new, however we also proposed to move portions of § 457.940 and § 457.950 and all of § 457.955 from subpart I to the new subpart. This was to ensure that all information related to managed care would be contained in one subpart. We proposed to make revisions to § 457.204 related to FFP. In addition, we proposed to revise § 457.760 related to Strategic Planning, Reporting, and Evaluation.
Below we summarize the proposed provisions related to CHIP, as well as the public comments we received, and our responses to the comments. Comments related to the paperwork burden and the impact analyses are addressed in the “Collection of Information Requirements” and “Regulatory Impact Analysis” sections in this final rule.
We proposed to move the definitions of “fee-for-service entity” and “actuarially sound principles” in § 457.902 to § 457.10, to delete § 457.902 and to add new definitions of various terms used elsewhere in the proposed regulations for CHIP, including comprehensive risk contract, EQR, EQR organization, MCO, prepaid ambulatory health plan, prepaid inpatient health plan, primary care case management, primary care case management entity, PCCM, and risk contract.
We have added definitions for “federally qualified HMO” and “provider” to further align with the Medicaid regulatory language and made revisions to the definition of “managed care organization” to remove references to advanced directives as there are very few adults in CHIP and very few children need an advanced directive. After consideration of the public comments, we are finalizing §§ 457.10 and 457.902 as proposed with these stated additions and revisions.
We proposed to revise § 457.204(a) to expand the regulatory statement of when we may withhold FFP to make clear that non-compliance can be based on a finding by the CMS Administrator that the state plan or state practice is in substantial non-compliance with the regulations in part 457 that implement Title XXI of the Act. In addition, we proposed to explicitly provide that substantial non-compliance includes, but is not limited to, failure to comply with requirements that significantly affect federal or state oversight or state reporting.
We received the following comments in response to our proposal to revise § 457.204.
To streamline § 457.204 and make clear that compliance includes meeting requirements for state oversight, we are moving the definition of substantial noncompliance, which we proposed to include in paragraphs (a)(1) and (a)(2) to a separate (a)(3). After consideration of the public comments, we are making no additional changes to § 457.204.
In § 457.1200, we described the statutory basis and scope of proposed subpart L. Specifically, we proposed to implement the requirements expressly set forth in section 2103(f)(3) of the Act, as added by section 403 of CHIPRA, which applies sections 1932(a)(4), 1932(a)(5), 1932(b), 1932(c), 1932(d), and 1932(e) of the Act to CHIP; section 2107(e)(1)(M) of the Act, as added by section 5006 of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5, ARRA), which applies sections 1932(a)(2)(C) and 1932(h) of the Act, relating to protections for American Indians, to CHIP. We also proposed to implement statutory provisions related to program integrity, specifically sections 2107(b) and 2107(e)(2)(C) through (E) of the Act. Finally, the proposed regulations also rely on section 2101(a) of the Act, which provides that the purpose of Title XXI is to provide funds to states to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner.
After consideration of the public comments, we are finalizing § 457.1200 as proposed.
Previously, all CHIP contracting requirements, including managed care contracting requirements, were included in § 457.950. We proposed to move some provisions of § 457.950 related to managed care into new § 457.1201 and to eliminate others. We also proposed new contracting standards in § 457.1201. In some cases, we proposed CHIP-specific contracting requirements; in other cases, we proposed to adopt the Medicaid standards in § 438.3. The proposed CHIP-specific provisions at § 457.1201(a) would have states submit CHIP managed care contracts in accordance with standards that will be specified by the Secretary. We did not propose to condition FFP on CMS' prior approval of CHIP managed care contracts. This would have diverged from the proposed Medicaid regulations at §§ 438.3 and 438.806, providing increased flexibility for states under CHIP while still retaining a role for federal oversight.
Although we did not propose to adopt Medicaid rules related to rate review,
There are several standards at § 438.3 that we did not propose to adopt in CHIP, either because we do not have clear authority or because we wished to maintain flexibility, or because they are not appropriate for the CHIP population.
We received the following comments on the proposed revisions to § 457.950 and on proposed new § 457.1201.
However, we do not agree with commenters that we should adopt the standards in § 438.3(g) and § 438.3(s)(1), (4), (5) and (6). Section 438.3(g) refers to § 447.26, which prohibits payment for provider-preventable conditions as required by section 2702 of the Affordable Care Act. Section 2702 of the Affordable Care Act does not apply to CHIP and we did not propose to exercise rulemaking authority to make it applicable to CHIP. While we encourage states to apply a prohibition on payments for provider-preventable conditions, we are not requiring it at this time. Similarly, § 438.3(s)(1), (4), and (5) refer to standards related to outpatient drugs in section 1927 of the Act. Section 1927 of the Act does not apply to CHIP, we did not propose to make it applicable, and we are not imposing these standards to CHIP managed care entities at this time.
In contrast, some commenters expressed concern that the proposed contract submission requirements could cause administrative burden for states. One commenter stated that if the
After consideration of the public comments, we are:
• Revising paragraph (h) (redesignated as paragraph (i)).
• Revising paragraph (j) (redesignated as paragraph (k)).
• Clarifying the cross-references in paragraph (n) related to additional rules for contracts with PCCM entities; and
• Modifying the record retention standard in § 457.1201(q).
To streamline the regulatory language and better align with the requirements set forth in Medicaid, we also are:
• Making minor editorial revisions to paragraphs (a), (b), and (c);
• Adding paragraph (e), related to services that may be covered by an MCO, PIHP, or PAHP;
• Redesignating the paragraphs following paragraph (e);
• Updating the cross-references in paragraph (f) (related to additional rules for contracts with PCCMs; and
• Updating the paragraphs of § 457.1201 to cross-reference the Medicaid definitions in § 438.3 in order to streamline the regulation text where appropriate.
Other than redesignation, we are finalizing paragraphs (o) and (p) as proposed.
Currently, regulations related to CHIP managed care rate setting are in § 457.940(b)(2), (c), and (e). We proposed to move those standards to new § 457.1203. The standards would remain substantively unchanged, although we proposed to change the term “principles of actuarial soundness” to “actuarially sound principles,” to match the term defined in § 457.902, which we proposed to move to § 457.10. We did not propose to change or move the standards unrelated to managed care rate setting in § 457.940(a), (b)(1), and (d). In addition, to align with the private market and the Medicaid managed care proposal at § 438.4(b)(9) (related to medical loss ratio)), we proposed at § 457.1203(c) to adopt an MLR calculation and reporting requirement in CHIP and to require rates to be developed to meet a target MLR. We believe MLR calculation and reporting are important tools to ensure that the CHIP program is administered in an effective and efficient manner in accordance with section 2101(a) of the Act. We also proposed to align with the Medicaid proposed regulations at § 438.8 and § 438.74 at § 457.1203(c) in relation to MLR standards and state oversight.
We did not propose to adopt any of the other Medicaid standards related to rate development (§ 438.5), contract provisions related to payment (§ 438.6), or rate certification (§ 438.7).
We received the following comments in response to our proposal to revise § 457.940, and add § 457.1203 and § 457.1205.
We disagree with commenters that we should use a lower MLR as the target MLR used in rate development for CHIP. The 85 percent standard is consistent with both the Medicaid standard in § 438.4(b)(9) and the large group private insurance market standard in 45 CFR 158.210. Some commenters suggested that because CHIP plans tend to have comparable administrative costs to Medicaid, but cover children with, on average, lower medical costs, the resulting medical to overall cost ratio is lower. We disagree that this will significantly affect rate development using a target MLR of 85 percent MLR. We believe that the same standard is an appropriate target MLR for CHIP plans, as most CHIP plans are large enough to distribute fixed administrative costs such that a comparable MLR can be achieved. Smaller plans may take advantage of the credibility adjustment in § 438.8(h), effectively lowering their reported MLR. For similar reasons, we decline to allow states to ask for an MLR adjustment. We note that while 45 CFR 158.301 allows states to request an MLR adjustment, the adjustment is only for plans sold on the private individual insurance market. It is not applicable to either the large group or small group market, which are more comparable to CHIP. As noted, states are not required to take contract or enforcement action against a CHIP managed care plan if the plan reports an MLR which is less than 85 percent; that information can and should be considered in rate-setting for future years, as it may indicate that adjustments in capitation rates are necessary to meet the 85 percent MLR target.
After consideration of the public comments, we are finalizing proposed §§ 457.1203 and 457.1205 with modifications. First, we are moving the substance of the provisions of proposed § 457.1205 to § 457.1203(e) and (f), and renaming this section “Rate development standards and medical loss ratio” to streamline the regulation text. In § 457.1203, we are modifying the text in paragraph (a) to expressly provide that implementing value-based purchasing models for provider reimbursement is permitted. In paragraph (b), we are including the word “or” to clarify that a state may establish higher rates to assure sufficient provider participation or provider access or to enroll certain other providers. We are streamlining the text in paragraph (c). The language proposed in § 457.1205(a) (redesignated to § 457.1203(e)) is revised to clarify that states must submit summary MLR reports but that these reports are not required to be submitted with the actuarial certification required for Medicaid described in § 438.7.
States may use a PAHP structure to deliver NEMT services in CHIP, as is done in some states in Medicaid. As such, we proposed to adopt the Medicaid approach to regulating NEMT PAHPs, pursuant to which only certain provisions of the regulations would apply. However, under the proposed rule, if a state chooses to use a PAHP to provide NEMT services along with other ambulatory medical services, the PAHP is considered a traditional PAHP, as defined in § 457.10, and all the PAHP provisions throughout subpart L of this part applicable to PAHPs generally would apply.
At § 457.1206, we proposed largely to mirror the terms of § 438.9, which sets out the standards that apply to PAHPs that provide only NEMT services in Medicaid, with two exceptions. First, proposed § 457.1206 did not include standards related to advance directives or LTSS. Second, instead of requiring actuarial soundness, as is required
We received the following comments in response to proposed § 457.1206.
• § 457.1206(b)(1)(ii) excluded audited financial reports, while there was no similar exclusion in § 438.9 for NEMT PAHPs in Medicaid;
• § 457.1206(b)(7) was not fully aligned with § 438.9(b)(7); and
• § 457.1206 did not contain a reference to confidentiality provisions.
They also noted a technical error in § 457.1206(b)(1), in which they said we inadvertently referred to § 457.1202 rather than § 457.1201.
• In § 457.1206(b)(1), we removed the exclusion for audited financial reports.
• We corrected the cross reference in § 457.1206(b)(7) to § 457.1233(a), (b), and (d);
We also made the following technical corrections:
• In § 457.1206(b)(1), we corrected the cross reference to § 457.1201 and clarified that the standards related to physician incentive plans is located in § 457.1201(h) and the standards related to mental health parity are in § 457.1201(l);
• In § 457.1206(b)(2), we removed the proposed cross reference to the rate development standards in § 457.1203 because a similar cross reference to the Medicaid rate development standards in § 438.5 was not included § 438.9. Our intent was to align § 457.1206 with § 438.9;
• We redesignated the paragraphs following paragraph (b)(2) to account for the change in paragraph (b)(2);
• In § 457.1206(b)(8) we corrected the cross reference to § 438.610, as cross referenced by § 457.1285; and
• In § 457.1206(b)(9), we added text and a cross reference to § 457.1209 (relating to requirements for contacts involving Indians, Indian Health Care Providers, and Indian managed care entities) to maintain alignment with Medicaid regulations, which have added a similar cross reference to § 438.14 in § 438.9 of the final rule.
After consideration of the public comments, we are finalizing § 457.1206 substantially as proposed with revisions to paragraph (b) to improve the sentence flow, to correct cross-references, and to add new text to include cross references to apply to NEMT PAHPS both requirements for managed care contracts involving Indians, Indian Health Care Providers, and Indian Managed Care Entities. We are not finalizing the exclusion of the contract requirement for the NEMT PAHP to submit audited financial reports and the requirement that the rates for NEMT PAHP be developed pursuant to § 457.1203.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the provision of information standards at section 1932(a)(5) of the Act apply to CHIP managed care programs. As such, we proposed to align CHIP with Medicaid information standards at § 438.10, which effectuate section 1932(a)(5) of the Act. We proposed adding § 457.1207, which provides that states must require CHIP MCOs, PAHPs, PIHPs, PCCMs, and PCCM entities to provide enrollment notices, informational materials and instructional materials relating to enrollees and potential enrollees in the
We received the following comments in response to our proposal to add § 457.1207.
After consideration of the public comments, we are finalizing § 457.1207 as proposed with minor wordsmithing revisions.
Section 2107(e)(1)(M) of the Act, as added by section 5006 of ARRA, specifies that the provisions related to managed care contracts that involve Indians, Indian health care providers (IHCP), and Indian managed care entities (IMCE) at sections 1932(a)(2)(C) and 1932(h) of the Act apply to CHIP. As such, we proposed to align CHIP with Medicaid when MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities enroll Indians and to incorporate the requirements at § 438.14, which effectuate sections 1932(a)(2)(C) and 1932(h) of the Act into the CHIP regulations at § 457.1208.
We received the following comments on proposed § 457.1208, redesignated at § 457.1209 in the final rule.
After consideration of the public comments, we are finalizing § 457.1208 as proposed but redesignated at § 457.1209 with minor wordsmithing revisions.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the section 1932(a)(4) of the Act (relating to enrollment and disenrollment protections) applies to CHIP managed care programs. We proposed adding § 457.1210 to implement section 1932(a)(4)(C) and (D) of the Act (related to enrollment protections) for CHIP. We proposed adding § 457.1212 to implement section 1932(a)(4)(A) and (B) (related to disenrollment protections) for CHIP. Further discussion of § 457.1212 is below.
We did not propose to adopt in CHIP the full Medicaid enrollment provision for mandatory managed care enrollment in § 438.54, which as proposed, required states to give potential enrollees a set period to choose a plan and required them to use a default enrollment process when individuals did not actively choose a plan. We did not propose the application of the choice or default enrollment provisions to CHIP because there is no requirement under Title XXI that states offer more than one managed care plan in CHIP. In addition, Title XXI provides states with flexibility in establishing the enrollment start date for CHIP, such that some states do not consider a child enrolled in CHIP until the family has actively selected a managed care plan and paid the applicable premium.
Instead of adopting § 438.54, we proposed standards in § 457.1210 for states that elect to use a default enrollment process. The standards were similar, but not identical, to those proposed for the default enrollment process established for Medicaid in § 438.54(d).
We received the following comments in response to our proposal to add § 457.1210.
After consideration of the public comments, we are finalizing § 457.1210 with revisions. We are revising paragraph (a)(1) of this section to make a technical correction, revising the heading of the section, and adding paragraph (c) to clarify the information states should provide to beneficiaries about the enrollment process. We are not finalizing the proposal that states must “seek to preserve existing provider-beneficiary relationships and relationships with providers that have traditionally served CHIP beneficiaries” because a default enrollment process is not a requirement in CHIP, and instead provide states with flexibilities to use a variety of mechanisms, including previous encounter data and contacting enrollees, as a means to maintain provider-enrollee relationships. Additionally, as we are not requiring a default enrollment process in CHIP, we are finalizing an exception to the requirement that the state must evenly distribute beneficiaries equitably among contracted managed care plans. Also, we are simplifying the language at § 457.1210(a)(3) which is finalized at § 457.1210(a)(1)(iii).
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the enrollment provision at section 1932(a)(4) of the Act applies to CHIP managed care programs. We proposed adding § 457.1212, which implements section 1932(a)(4)(A) and (B) of the Act for CHIP. The proposed regulation provided that states must follow, and ensure MCOs, PAHPs, PIHPs, PCCMs, and PCCM entities follow, the Medicaid disenrollment standards provided at § 438.56. Section 403 of CHIPRA did not apply the choice of managed care entity (MCE) standard in section 1932(a)(3) of the Act; therefore, separate CHIPs do not need to offer an alternative plan or delivery system option at the time of enrollment. However, because section 1932(a)(4) of the Act gives individuals the right to disenroll from their MCE while still remaining eligible to receive benefits, the state must contract with at least two MCEs, or contract with one MCE and operate an alternate delivery system, such as FFS, to provide CHIP benefits to those who have disenrolled from the state's contracted MCE. The state could also contract with some, or all, of the state's existing Medicaid provider network.
We received the following comments in response to our proposal to add § 457.1212.
After consideration of the public comments, we are finalizing § 457.1212 substantively as proposed but with minor wordsmithing revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the conflict of interest provisions at section 1932(d)(3) of the Act apply to CHIP managed care programs. We proposed adding § 457.1214, which provides that states have safeguards against conflict of interest in accordance with the terms of § 438.58.
We received the following comments in response to our proposal to add § 457.1214.
After consideration of the public comments, we are finalizing § 457.1214 substantively as proposed but with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the enrollment provision at section 1932(a)(4) of the Act applies to CHIP managed care programs. This provision is described above in the discussion of the Medicaid provision at § 438.62. Related to change in enrollment, we proposed adding § 457.1216, which provides that states must follow the Medicaid standards related to continued services to enrollees at § 438.62.
We received the following comments in response to our proposal to add § 457.1216.
After consideration of the public comments, we are finalizing § 457.1216 substantively as proposed with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the provisions at section 1932(a)(5) of the Act, requiring that MCEs assure adequate capacity to serve expected enrollment, apply to CHIP managed care programs. As such, we proposed to align CHIP with Medicaid network adequacy standards at § 438.68, which effectuate section 1932(a)(5) of the Act. We proposed adding § 457.1218, which provides that states have network adequacy standards and ensure that MCOs, PIHPs, and PAHPs meet such standards in accordance with the terms of § 438.68. We solicited comment on whether we should include additional standards for additional types of pediatric providers, for example children's hospitals or child and adolescent behavioral health providers.
We received the following comments in response to our proposal to add § 457.1218.
One commenter suggested that CMS amend § 457.1218 by deleting the second sentence for additional requirements for pediatric specialists and dentists, as that requirement is already captured in § 438.68. Other commenters asked us to further clarify the second sentence to say that CHIP covers comprehensive services.
Many commenters responded to CMS' request for comments regarding whether states should require network adequacy standards for additional types of pediatric providers. Commenters recommended that CMS include standards for mental health and substance use providers, optometrists, developmental specialists, pediatric hospitals, as well as other pediatric subspecialists. One commenter recommended that networks should include providers that are capable of providing treatment in particular settings. Another commenter suggested that CMS apply standards based on adequate access to specialists rather than provider type. In contrast, some commenters stated that it was not necessary for CMS to include network adequacy standards for additional types of pediatric providers in CHIP.
After consideration of the public comments, we are deleting the second sentence of proposed § 457.1218, making minor revisions to improve the clarity of the text, but otherwise finalizing as proposed.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the enrollee rights provisions at section 1932(a)(5)(B)(ii) of the Act apply to CHIP managed care programs. As such, we proposed to align CHIP with Medicaid enrollee rights provisions at § 438.100, which effectuate section 1932(a)(5)(B)(ii) of the Act. We proposed adding § 457.1220, which provides that states must ensure that MCOs, PAHPs, PIHPs, PCCMs, and PCCM entities follow the enrollee rights standards in accordance with the terms of § 438.100.
We received the following comments in response to our proposal to add § 457.1220.
After consideration of the public comments, we are finalizing § 457.1220 substantively as proposed, with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the enrollee rights provisions at section 1932(b)(3) of the Act apply to CHIP managed care programs. As such, we proposed to align CHIP with Medicaid's enrollee rights protections of communications between providers and enrollees at § 438.102, which effectuate section 1932(b)(3) of the Act. We proposed adding § 457.1222, which provides that states must ensure that MCOs, PAHPs, and PIHPs protect communications between providers and enrollees in accordance with the terms of § 438.102.
We received the following comments in response to our proposal to add § 457.1222.
After consideration of the public comments, we are finalizing § 457.1222 substantively as proposed, with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the restrictions on
We solicited comment on whether our proposed approach was appropriate, or whether we should take an alternate approach, for example by following the QHP marketing regulations at 45 CFR 156.225 or adopting a subset of the Medicaid regulations. We also specifically solicited comment on our proposal to apply to CHIP the standard at § 438.104(c) that, in reviewing marketing materials, the state must consult with the Medical Care Advisory Committee or an advisory committee with similar membership.
We received the following comments in response to our proposal to add § 457.1224.
After consideration of the public comments, we are finalizing § 457.1224 as proposed, except that we are excluding the standards in § 438.104(c) for CHIP and making minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the protections for enrollees against liability for payment at section 1932(b)(6) of the Act apply to CHIP managed care programs. As such, we proposed to align CHIP with Medicaid liability protections at § 438.106, which effectuate section 1932(b)(6) of the Act. We proposed adding § 457.1226, which provides that states must ensure that MCOs, PAHPs, and PIHPs do not hold enrollees liable for services or debts of the MCO, PAHP, and PIHP in accordance with the terms of § 438.106.
We received the following comments in response to our proposal to add § 457.1226.
After consideration of the public comments, we are finalizing § 457.1226 substantively as proposed but with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the requirement that MCEs provide emergency and poststabilization services at section 1932(b)(2) of the Act applies to CHIP managed care programs. As such, we proposed to align CHIP with the Medicaid emergency and poststabilization services standard at § 438.114, which effectuates section 1932(b)(2) of the Act. We proposed adding § 457.1228, which provides that states must ensure that MCOs, PAHPs, and PIHPs make emergency and poststabilization services available, and that the state make emergency and poststabilization services available to enrollees of PCCMs and PCCM entities, in accordance with the terms of § 438.114.
After consideration of the public comments, we are finalizing § 457.1228 substantively as proposed, but with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the quality assurance standards at section 1932(c) of the Act apply to CHIP managed care programs. Section 1932(c)(1) of the Act requires states that contract with MCOs to
We proposed adding § 457.1230(a), which provides that states must require CHIP MCOs, PAHPs, and PIHPs to ensure that covered services are available and accessible to enrollees in accordance with the terms of § 438.206. At § 457.1230(b), we proposed that states must ensure that CHIP MCOs, PAHPs, and PIHPs have adequate capacity to serve expected enrollees in accordance with the terms of § 438.207. At § 457.1230(c), we proposed that states must ensure that CHIP MCOs, PAHPs, and PIHPs comply with the coordination and continuity of care standards in accordance with the terms of § 438.208.
Finally, at § 457.1230(d), we proposed that states must ensure that CHIP MCOs, PAHPs, and PIHPs comply with some of the coverage and authorization of services standards in accordance with the terms of § 438.210. There are several paragraphs of § 438.210 that we did not propose to apply to CHIP managed care, including the standards related to medically necessary services in § 438.210(a)(5), because CHIP does not need to use the same medical necessity standard as Medicaid, and states are not required to provide EPSDT benefits in CHIP. In addition, we did not propose to adopt the time frames for decisions in § 438.210(d). Instead, we proposed to follow the time frames described in § 457.1160. We also solicited comment on whether we should create an exception for § 438.210(b)(2)(iii) (related to authorizing LTSS based on an enrollee's current needs assessment and consistent with the person-centered service plan), since LTSS is not a required service and few separate CHIP programs provide this service. We made a technical error in § 457.1230(d)(2) of the proposed regulation. We stated that CHIP should follow the notice of adverse benefit determination requirements of § 457.1260, rather than those of § 438.210(c). However, both § 457.1260(c) and § 438.210(c) require that notices of adverse benefit determinations to meet the standards of § 438.404. Therefore, the exception we made in § 457.1230(d)(2) is not necessary, and we have removed it.
We received the following comments in response to our proposal to add § 457.1230.
After consideration of the public comments, we are finalizing § 457.1230 substantially as proposed, except that we are removing § 457.1230(d)(2) and (d)(3) from the exceptions and adding paragraph (b)(2)(iii) to the exceptions, for reasons described in the responses to comments. We are also finalizing minor revisions to the text to improve its clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that section 1932(c)(1) of the Act, relating to developing and implementing a quality and assessment improvement strategy, including access standards, examination of care and service delivery, and monitoring procedures applies to CHIP. Sections 438.214 (related to provider selection), 438.230 (related to subcontractual relationships and delegation), 438.236 (related to practice guidelines), and 438.242 (related to health information systems) effectuate section 1932(c)(1) of the Act. We proposed adding § 457.1233 to align CHIP with Medicaid standards in §§ 438.214, 438.230, 438.236, and 438.242. Section § 438.224 (relating to confidentiality) also implements section 1931(c)(1) of the Act. However, we did not propose that CHIP align with the Medicaid confidentiality provision as set forth in § 438.224 because there is an existing confidentiality requirement at § 457.1110, which is similar to the standard in § 438.224.
After consideration of the public comments, we are adding a cross reference to § 457.1110 in a new paragraph (e), and otherwise finalizing § 457.1233 as proposed.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that section 1932(c) of the Act applies to CHIP managed care programs. As such, we proposed (with minor exceptions) to align CHIP with Medicaid quality measurement and improvement standards at §§ 438.330, 438.332, 438.334, and 438.340, which implement section 1932(c) of the Act. We proposed adding § 457.1240(a), which describes the scope of the quality measurement and improvement standards. At § 457.1240(b), we proposed that states must ensure that CHIP MCOs, PIHPs and PAHPs have an ongoing comprehensive QAPI program for the services they furnish to enrollees as set forth in § 438.330. At § 457.1240(c), we proposed that states must review and approve the performance of each MCO, PIHP, and PAHP in accordance with the requirements set forth in § 438.332. At § 457.1240(d), we proposed that states must collect data and apply the methodology established under the process described in § 438.330(a)(2) to determine a Managed Care rating or ratings for each CHIP MCO, PIHP, and PAHP in accordance with the standards set forth in § 438.334. At § 457.1240(e), we proposed to adopt the elements of the state comprehensive quality strategy related to managed care set forth in § 438.340. Finally, at § 457.760, we proposed that states must incorporate CHIP into their state comprehensive quality strategy that establishes the minimum standards inclusive of all delivery systems as set forth in § 431 subpart I.
We received the following comments in response to our proposal to add § 457.760 and § 457.1240.
After consideration of the public comments, we are not finalizing the changes to § 457.700, and are not adding § 457.760. We are finalizing § 457.1240, with the following revisions:
• We are clarifying that the standards set forth in paragraphs (b) and (e) apply to risk-bearing PCCM entities by adding a reference to PCCM entities to paragraph (a) and are adding paragraph (f) to describe the subset of PCCM entities to which paragraphs (b) and (e) apply. In the proposed regulation, these requirements were described in § 457.1201(m), which specified the quality measurement and improvement standards that applied to PCCM entities, but they were not included in § 457.1240. In addition, we are revising paragraphs (b) and (e) to specify which paragraphs of § 438.330 and § 438.340 apply to PCCM entities. We are also correcting the cross-reference to § 438.330(d)(4), related to standards for plans that serve dual eligibles.
• We are removing the reference to § 438.330(a)(2) from paragraph (d), to align with changes to § 438.330.
• We are revising paragraph (c) to align with the changes made to § 438.332.
As discussed in section I.B.6.c of the preamble for § 438.334 above, we are not finalizing the proposed option for states to default to the MA Five-Star Rating system for those plans that serve dual eligible beneficiaries only, therefore all of the managed care quality rating system requirements in § 438.334 are incorporated here to apply to CHIP. The regulation text has been updated to reflect this change.
• Updating paragraph (e) to reflect the changes to the quality strategy.
• Finally, we are finalizing a new paragraph (f) to explain how and when these standards apply to PCCM entities in CHIP.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the EQR standards at section 1932(c) of the Act apply to CHIP managed care programs. Section 1932(c)(2) of the Act requires external independent review of managed care activities. As such, we proposed to align CHIP with Medicaid EQR standards at § 438.350, which effectuate section 1932(c)(2) of the Act. At § 457.1250(a), we proposed that each state that contracts with MCOs, PIHPs or PAHPs follow all applicable EQR standards as set forth in §§ 438.350, 438.352, 438.354, 438.356, 438.358, and 438.364. We did not propose to adopt provisions related to plans serving dual eligible populations, because CHIP has a very limited number of dual eligibles. We note that the cost of CHIP quality activities (including EQR) represents an administrative expense, subject to the 10 percent limit on administrative expenditures permitted for non-primary services as set forth in section 2105(a) and (c) of the Act.
Proposed § 457.1250(b), outlined the provisions that do not apply to the CHIP EQR process for states contracting with MCOs, PIHPs or PAHPs, including the nonduplication of mandatory activities at § 438.360 and the exemption from EQR at § 438.362. We also proposed allowing states to amend current EQR contracts for Medicaid to add CHIP.
We received the following comments in response to our proposal to add § 457.1250.
After consideration of the public comments, we are finalizing § 457.1250 with the following revisions
• We are incorporating the option for states to use information from private accreditation reviews in paragraph (a) and adding text to address PCCM entities;
• We are deleting paragraph (b)(1), because we believe it is unnecessary to state which provisions of part 438, subpart E do not apply to CHIP. If they are not listed in paragraph (a), they do not apply.
• We are redesignating paragraph (b)(2) as paragraph (b) and deleting the clause “provided that the existing contract meets the requirements in § 438.356.” This language is unnecessary because all Medicaid contracts must meet the requirements of § 438.356, which is not being changed through this rulemaking.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies section 1932(b)(4) of the Act, relating to grievances, applies to CHIP managed care programs. As such, we proposed generally to align CHIP with the Medicaid grievance and appeals sections in subpart F of part 438, which implement section 1932(b)(4) of the Act. We proposed adding § 457.1260, which provides that states must ensure that MCOs, PAHPs, and PIHPs comply with subpart F of part 438, with one exception. Specifically, we did not propose to adopt § 438.420, which requires continuation of benefits pending appeal. Proposed § 457.1260 also provides that references to fair hearings in subpart F of part 438 should be read as references to reviews as described in subpart K of part 457.
We received the following comments in response to our proposal to add § 457.1260.
After consideration of the public comments, we are finalizing § 457.1260 substantively as proposed but with minor revisions for clarity.
Section 2103(f)(3) of the Act, as amended by section 403 of CHIPRA, specifies that the sanctions provisions at section 1932(e) of the Act apply to CHIP managed care programs. As such, we proposed to align CHIP with the Medicaid sanctions sections at subpart I of part 438, which effectuate section 1932(e) of the Act. We proposed adding § 457.1270, which provides that states must ensure that MCOs, PAHPs, and PIHPs comply with the Medicaid sanctions.in accordance with the terms of subpart I of part 438.
We received the following comment in response to our proposal to add § 457.1270.
After consideration of the public comments, we are finalizing § 457.1270 substantively as proposed, with minor revisions for clarity.
Section 2107 of the Act includes several program integrity standards, including sections 2107(b), 2107(e)(1)(D), and 2107(e)(2) of the Act. We proposed to effectuate those standards by adopting many of the Medicaid program integrity standards in CHIP. In addition, we proposed to maintain but relocate the current CHIP regulations related to managed care program integrity.
We proposed to redesignate all of § 457.955 as § 457.1280. Section § 457.955 was located in the general CHIP program integrity subpart I. Because the section specifies conditions necessary for entities to contract as an MCO, PAHP, PIHP, we proposed to move it to the new subpart L. We proposed several minor changes to the regulation text: (1) To update references to MCE to MCO, PAHP, or PIHP; (2) to add at paragraph (b)(1) that MCOs, PAHPs, and PIHPs must comply with applicable state and Federal statutes and regulations, in addition to complying with state and Federal standards; and (3) to add at paragraph (b)(3) that there must be mechanisms for MCOs, PAHPs,
We also proposed to adopt nearly all of the of the Medicaid program integrity standards. In § 457.1285, we proposed to adopt subpart H of part 438, with the exception of § 438.604(a)(2), which does not apply because we did not propose to adopt in CHIP all of the Medicaid actuarial soundness requirements.
We received the following comments in response to our proposal to redesignate § 457.955 as new § 457.1280 and to newly proposed § 457.1285.
After consideration of the public comments, we are finalizing § 457.1280 as proposed, except that we are removing the final clause from § 457.1280(d) and specifying that states may inspect, evaluate, and audit MCOs, PIHPs, and PAHPs at any time, when a state determines there is a reasonable possibility of fraudulent “or” abusive activity as discussed in the comments above. We are also finalizing § 457.1285 as proposed.
Medicaid is the payer of last resort. This means that other available resources—known as third party liability, or TPL—must be used before Medicaid pays for services received by a Medicaid-eligible individual. Title XIX of the Act requires state Medicaid programs to identify and seek payment from liable third parties, before billing Medicaid. Specifically, section 1902(a)(25)(A) of the Act requires that states take all reasonable measures to ascertain legal liability of third parties to pay for care and services available under the plan. That provision further specifies that a third party is any individual, entity, or program that is or may be liable to pay all or part of the expenditures for medical assistance furnished under a state plan.
Examples of liable third parties include private insurance companies through employment-related or privately purchased health insurance; casualty coverage resulting from an accidental injury; payment received directly from an individual who has voluntarily accepted or been assigned legal responsibility for the health care of one or more Medicaid recipients; fraternal groups, unions, or state workers' compensation commissions; and medical support provided by a parent under a court or administrative order. Section 1902(a)(25)(A)(i) of the Act specifies that the state plan must provide for the collection of sufficient information to enable the state to pursue claims against third parties.
To support identification of TPL, and under the authority of in section 1902(a)(25)(A) of the Act, we issued regulations at § 433.138 in 1987 that established requirements for state Medicaid agencies to obtain information via data matching with the state workers compensation files or state motor vehicle accident reports. Additionally, we required states to identify all paid claims indicative of trauma as identified by diagnosis codes found in ICD–9–CM, 800 through 999, except 994.6.
Section 433.138(e) specifically references the use and application of the ICD–9–CM medical coding system to assist in identifying liable third parties as primary payers before Medicaid. By 1990, however, we realized it had been too prescriptive to require states to review all ICD–9–CM trauma codes, and amended § 433.138 to allow states to submit waiver requests to cease editing codes proven to be unproductive in identifying liable third parties. States have over 25 years of experience identifying trauma codes indicating the likelihood of third party liability, which contributes to payment of Medicaid expenses.
In 1990, the World Health Organization (WHO) approved the International Classification of Diseases,
In the June 1, 2015 proposed rule (80 FR 31175 through 31176), we proposed to address third party liability for trauma codes. Brief summaries of each proposed provision, a summary of the public comments we received (with the exception of specific comments on the paperwork burden or the economic impact analysis), and our responses to the comments are as follows. Comments related to the paperwork burden and the impact analyses are addressed in the “Collection of Information Requirements” and “Regulatory Impact Analysis” sections in this final rule.
Section 433.138(e), requiring the use of ICD–9–CM coding, had to be amended to account for the implementation of ICD–10 coding for health services provided on or after October 1, 2015. We considered ways to best achieve this, keeping in mind that states bear the responsibility for interpreting and applying the increased number of new ICD–10 codes and that state Medicaid programs need greater discretionary authority in developing trauma code edits to best identify liable third parties and achieve the highest TPL return from their efforts. We reviewed previous regulatory amendments, which demonstrated a progression from explicit federally-prescribed requirements to less prescriptive approaches that, while maintaining the federal designation of trauma codes subject to review, allowed states to propose waivers of editing for trauma codes that were not cost-effective to pursue.
This regulation was last amended in 1995 to remove trauma code-specific waiver authority from § 433.138(e) and add § 433.138(l), establishing the possibility of waiver of non-statutory requirements in §§ 433.138 and 433.139, including § 433.138(e), permitting states to request adjustments to any of several non-statutory requirements, including the code editing requirements, if they determined the activity to not be cost-effective. Section 433.138(l) specified that an activity would not be cost-effective if the cost of the required activity exceeded the TPL recoupment and the required activity accomplishes, at the same or at a higher cost, the same objective as another activity that is being performed by the state.
The background information in the preamble for the regulatory amendment published in the July 10, 1995
The proposed revision amendment to § 433.138(e), which would remove references to ICD–9–CM, offered an opportunity to make a substantive change to this regulation while affirming the continued responsibility of state Medicaid programs to identify trauma-related claims to determine TPL and ensure that state Medicaid programs remain secondary payers. Therefore, we proposed to replace the reference to a specific coding system with a general description of the types of medical diagnoses indicative of trauma for which states are expected to edit claims. This revision did not propose that any state change its current trauma code editing process with regard to codes that the state has identified as not yielding third party recoveries and that CMS has agreed the state may discontinue editing. In § 433.138(e)(1), we proposed to remove the reference to the ICD–9–CM code range 800 through 999 that defined the codes that were indicative of traumatic injury. The ICD–9–CM coding system has now been replaced by the ICD–10 coding system, which had an October 1, 2015 compliance date.
We proposed to retain the regulatory references to complete trauma code editing and the state's ability to request a waiver of these requirements to adjust the trauma code editing process beyond the scope allowed by these changes to § 433.138(e).
We also proposed to remove § 433.138(e)(2), as the regulation specifically refers to exclusion of the ICD–9–CM code for motion sickness for consistency with the proposal to remove all references to ICD–9–CM-specific coding in this section. The deletion of paragraph (e)(2) of § 433.138 would eliminate the necessity to identify the remaining regulatory text as § 433.138(e)(1), so we proposed to delete paragraph (e)(1).
We received the following comments in response to our proposal to revise § 433.138.
After consideration of the public comments, we are finalizing § 433.138(e) as proposed.
Under 5 U.S.C. 553(d) of the Administrative Procedure Act (APA), there is a mandatory minimum 30-day delay in effective date after issuance or publication of a rule. This 30-day delay in the effective date can be waived, however, if an agency finds for good cause that the delay is impracticable, unnecessary or contrary to the public interest, and the agency incorporates a statement of the finding and its reasons in the rule issued. Under 5 U.S.C. 801
These regulations governing the amount of federal financial participation are based on section 1903(a)(3)(C)(ii) and 1903(a)(7) of the Act. Section 1903(a)(3)(C)(ii) of the Act provides a 75 percent rate for federal financial participation for costs “attributable to the performance of independent external reviews conducted under section 1932(c)(2)” while section 1903(a)(7) of the Act provides a 50 percent rate for federal financial participation for costs of the administration of the state plan. Section 1932(c)(2) of the Act requires external quality review of MCOs and refers specifically both to MCOs and contracts under section 1903(m) of the Act, which, in turn, authorizes MCO contracts. Neither section 1903(a)(3)(C)(ii) of the Act nor section 1932(c)(2) of the Act mention or require additional review of non-MCO contracts, such as contracts with pre-paid inpatient health plans (PIHPs), pre-paid ambulatory health plans (PAHPs), or primary care case managers (PCCMs or PCCM entities). Therefore, the cost of external quality review of these non-MCO contracts is eligible only for the 50 percent match rate authorized by section 1903(a)(7) of the Act. Payment of an amount in excess of what is authorized under section 1903(a)(7) of the Act is beyond our authority and could constitute an improper payment. Having recognized the limits of section 1903(a)(3)(C)(ii) of the Act and the applicability of section 1903(a)(7) of the Act—and the 50 percent match rate—to the cost of external quality review of non-MCO contracts, we lack authority to continue paying federal financial participation at the higher rate. Continuing to make payment in unauthorized amounts is contrary to the public interest. Therefore, we find that there is good cause to waive the requirement for a delay in the effective date of the rules finalized here at §§ 433.15(b)(10) and 438.370.
Under the Paperwork Reduction Act of 1995 (PRA), we are required to publish a 60-day notice in the
To fairly evaluate whether an information collection should be approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit comment on the following issues:
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our burden estimates.
• The quality, utility, and clarity of the information to be collected.
• Our effort to minimize the information collection burden on the affected public, including the use of automated collection techniques.
Our June 1, 2015 proposed rule (80 FR 31098) solicited public comment on each of the section 3506(c)(2)(A)-required issues for the following information collection requirements (ICRs) in this final rule. PRA-related comments were received and are summarized below along with our response. The comments addressed
The burden associated with the requirements under part 438 is the time and effort it will take each of the Medicaid programs to comply with this rule's requirements. More specifically, this rule revises the Medicaid managed care regulations to implement statutory provisions, strengthens actuarial soundness and other payment regulations improving accountability of rates paid in the Medicaid managed care program, implements changes supporting alignment with other public and insurance affordability programs, strengthens beneficiary protections, and modernizes the regulations recognizing changes in usage of managed care delivery systems since the release of the part 438 final rule in 2002.
Section 433.138(e)(1) makes a technical correction addressing state Medicaid agencies' review of claims with trauma codes, to identify instances where third party liability (TPL) may exist for expenditures for medical assistance covered under the state plan. The correction will remove references to the International Classification of Disease, 9th edition, Clinical Modification Volume 1 (ICD–9–CM) by replacing the references with a general description of the types of medical diagnoses indicative of trauma. States must use the International Classification of Disease that they are using at the time of claims processing. There is no additional cost to the state related to the changes to § 433.138(e) since the changes do not require any action by the state, if the state wishes to continue editing for the same types of traumatic injuries currently identified with ICD–9–CM codes after the conversion of the claims processing system to ICD–10 codes. Further, since trauma code editing is based on current MMIS claims processing, revisions to accommodate the coding system change from ICD–9–CM to ICD–10 are already in progress as a required adjustment of each state's MMIS. This final rule allows states to make adjustments to certain TPL activities without preparing a formal waiver request to seek CMS's permission. There is no requirement for a state to make such adjustments.
The June 1, 2015 proposed rule (80 FR 31098) included a proposed part 431 subpart I, which laid out the requirements for the proposed comprehensive quality strategy, which would have applied to all services covered under state Medicaid programs, not just those covered through an MCO or PIHP. The burden associated with proposed §§ 431.502 and 431.504 was captured in ICRs 1 and 2 of the proposed rule. Based upon comments received in response to the proposed rule, we have withdrawn the proposal for a comprehensive quality strategy that applied to Medicaid services delivered by FFS and managed care (see discussion in section I.B.6.b(2)(f)). We are retaining the requirement in § 438.340 of the final rule for a quality strategy that addresses services delivered by MCOs, PIHPs, PAHPs, and PCCM entities described in § 438.310(c)(2) of the final rule. As appropriate, burden estimates from proposed part 431 subpart I are moved to the burden estimate for § 438.340 of the final rule, with revisions based on the application to only managed care.
We have added a new subpart L to part 457, which contains the regulations related to CHIP managed care plans. While most of the requirements in this subpart are new, we have also moved portions of § 457.950 and all of § 457.955 from subpart I to the new subpart L. This will ensure that all related information is contained in one subpart.
Burden estimates for Part 438 utilized enrollment, managed care plan, and state data for CY 2012 from the MSIS. Enrollment data was trended forward as appropriate for certain estimates utilizing a 3.3 percent annual growth rate as determined by the Office of the Actuary. The enrollment data reflected 31,827,858 enrollees in MCOs, 12,116,645 enrollees in PIHPs, 1,0985,021 enrollees in PAHPs, and 7,775,297 enrollees in PCCMs, for a total of 62,704,821 managed care enrollees. This includes duplicative counts when enrollees are enrolled in multiple managed care plans concurrently. This data also showed 36 states that contract with 335 MCOs, 20 states that contract with 176 PIHPs, 12 states that contract with 41 PAHPs, 18 states that contract with 20 non-emergency transportation PAHPs, 25 states with 25 PCCM and 9 PCCM entities, and 16 states that contract with one or more managed care plan for MLTSS. Many states contract with more than one entity; however, we de-duplicated to determine that 40 states contract with MCOs, PIHPs, and/or PAHPs; and 42 states contract with MCOs, PIHPs, PAHPs, and/or PCCMs.
To derive average costs, we used data from the U.S. Bureau of Labor Statistics' May 2014 National Occupational Employment and Wage Estimates for all salary estimates (
As indicated, we are adjusting our employee hourly wage estimates by a factor of 100 percent. This is necessarily a rough adjustment, both ecause fringe benefits and overhead costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, there is no practical alternative and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.3 contains a list of provisions that must be included in MCO, PIHP, PAHP, HIO, and/or PCCM contracts. While the burden associated with the implementation and operation of the contracts is set out when warranted under the appropriate CFR section, the following burden estimate addresses the effort to amend existing contracts. The estimate also includes the burden for additional contract amendments are required under:
• § 438.10(c)(5) requires specific information to be provided to enrollees.
• § 438.14(b) specifies requirements for Indian enrollees and providers.
• § 438.110(a) requires the establishment and maintenance of member advisory committees.
• § 438.210(b)(2)(iii) requires LTSS to be authorized consistent with the enrollee's needs assessment and person centered plan.
• § 438.242(c) requires specific provisions for encounter data.
• § 438.608 requires administrative and management arrangements and procedures to detect and prevent fraud, waste, and abuse.
We estimate a one-time state burden of 6 hr at $64.46/hr for a business operations specialist to amend all contracts. In aggregate, we estimate 3,636 hr (335 MCO + 176 PIHP + 61 PAHP + 34 PCCM contracts × 6 hr) and $234,376.56 (3,636 hr × $64.46/hr).
We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.5 describes the development and documentation of capitation rates paid to risk-based MCOs, PIHPs and PAHPs. Generally, we require: The use of appropriate base data; the application of trends that have
We believe that the requirements related to the use appropriate base data and the adequate description of rate setting standards, such as trend, the non-benefit component, adjustments, and risk adjustment, are already required as part of actuarial standards of practice and accounted for in § 438.7. We clarified that risk adjustment should be done in a budget neutral manner, but the manner in which risk adjustment is applied should not create additional burden on the state.
In § 438.5(g), the certification of final contract rates places additional burden on the states. We estimate that most states currently certify a range as compared to the actual contract rate paid to the managed care plan. Therefore, out of the total 70 certifications submitted to CMS from 39 states, the process underlying 50 certifications will need to be modified.
We estimate it will take approximately 10 hr at $92.44/hr for an actuary and 1 hr at $140.80/hr for a general and operations manager to comply with this requirement. In aggregate, we estimate an annual state burden of 550 hr (50 certifications × 11 hr) and $53,260 [50 certifications × ((10 hr × $92.44/hr) + (1 hr × $140.80/hr))].
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.7 describes the submission and documentation requirements for all managed care actuarial rate certifications. The certification will be reviewed and approved by CMS concurrently with the corresponding contract(s). Section 438.7(b) details CMS' expectations for documentation in the rate certifications. We believe these requirements are consistent with actuarial standards of practice and previous Medicaid managed care rules.
While the 2002 final rule (under § 438.6(c)) set out the burden per contract (15,872 hr based on 32 hr per plan), experience has shown that states do not submit certifications per plan. We believe a better estimation of the burden is associated with the development of the rate certification. In this regard, we estimate it takes 230 hr to develop each certification, consisting of 100 hr (at $92.44/hr) for an actuary, 10 hr (at $140.80/hr) for a general and operations manager, 50 hr (at $78.32/hr) for a computer programmer, 50 hr (at $64.46/hr) for a business operations specialist, and 20 hr (at $36.54/hr) for an office and administrative support worker.
The revised burden of 228 hours is based on a total of 16,100 hr (230 hr × 70 certifications) which is an increase of 228 hr (16,100 hr–15,872 hr) for all 70 certifications due to the new regulatory requirements, adjusted to 3.3 hr per certification (228 hr/70 certifications). In aggregate, we estimate an annual state burden of $18,948.57 [70 certifications × ((1.5 hr × $92.44/hr) + (0.13 hr × $140.80/hr) + (0.73 hr × $78.32/hr) + (0.73 hr × $64.46/hr) + (0.26 hr × $36.54/hr))]. (Prorating the time of the actuary, general operations manager, computer programmer, business operations specialist, and office and administrative support worker across the 3.3 hr per certification.)#
While one PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comment and are adopting the proposed provisions/estimates without change. See below for our finalized estimates along with a summary of the comment and our response.
Section 438.8(c) requires that MCOs, PIHPs, and PAHPs report to the state annually their total expenditures on all claims and non-claims related activities, premium revenue, the calculated MLR, and, if applicable, any remittance owed.
We estimate the total number of MLR reports that MCOs, PIHPs, and PAHPs are required to submit to states amount to 572 contracts. While the number of contracts includes 549 credible contracts and 23 non-credible contracts, all MCOs, PIHPs, and PAHPs will need to report the information required under § 438.8 regardless of their credibility status.
We estimate a one-time private sector burden of 168 hr for the initial administration activities. We estimate that 60 percent of the time will be completed by a computer programmer (101 hr at $78.32/hr), 30 percent will be completed by a business operations specialist (50 hr at $64.46/hr), and 10 percent will be completed by a general and operations manager (17 hr at $140.80/hr). This amounts to $13,526.92 ((101 hr × $78.32) + (50 hr × $64.46) + (17 hr × $140.80)) per report or $7,737,398.24 (572 × $13,526.92) for 572 MCOs, PIHPs, and PAHPs in 2017 (the one-time burden). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
In subsequent years, since the programming and processes established in 2017 will continue to be used, the burden will decrease from 168 hr to approximately 53 hr. Using the same proportions of labor allotment, we estimate an annual private sector burden of $4,241.60 per report and a total of $2,426,195.20 [572 contracts × $4,241.60 ((32 hr × $78.32/hr) + (16 hr × $64.46/hr) + (5 hr × $140.80/hr)]. We expect that states will permit MCOs, PIHPs, and PAHPs to submit the report electronically. Since the submission time is included in our reporting estimate, we are not setting out the burden for submitting the report.
We received the following comment:
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.10(c)(3) requires states to operate a Web site that provides the information required in § 438.10(f). Since states already have Web sites for their Medicaid programs and most also include information about their managed care program, most states will only have to make minor revisions to their existing Web site.
We estimate 6 hr at $78.32/hr for a computer programmer to make the initial changes. In aggregate, we estimate a one-time state burden of 252 hr (42 states × 6 hr) and $19,736.64 (252 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate 3 hr for a computer programmer to periodically add or update documents and links on the site. In subsequent years, we estimate an annual state burden of 126 hr (42 states × 3 hr) and $9,868.32 (126 hr × $78.32/hr).
Section 438.10(c)(4)(i) recommends that states develop definitions for commonly used terms to enhance consistency of the information provided to enrollees. We estimate it will take 6 hr at $64.46/hr for a business operations specialist to develop these definitions. In aggregate, we estimate a one-time state burden of 252 hr (42 states × 6 hr) and $16,243.92 (252 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.10(c)(4)(ii) recommends that states create model enrollee handbooks and notices. Since many states already provide model handbooks and notices to their entities, we estimate 20 states may need to take action to comply with this provision. We estimate it will take 20 hr at $64.46/hr for a business operations specialist to create these documents. We also estimate 2 hr per year for a business operations specialist to revise these documents, if needed. In aggregate, we estimate a one-time state burden of 400 hr (20 states × 20 hr) and $25,784 (400 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In subsequent years we estimate an annual burden of 40 hr (20 states × 2 hr) and $2,578.40 (40 hr × $64.46/hr).
Section 438.10(d)(2)(i) requires that states add taglines to all printed materials for potential enrollees explaining the availability of translation and interpreter services as well as the phone number for choice counseling assistance. As the prevalent languages within a state do not change frequently, we are not estimating the burden for the rare updates that will be needed to update these taglines. We estimate it will take 2 hr at $64.46/hr for a business operations specialist to create the taglines and another 4 hr to revise all document originals. In aggregate, we estimate a one-time state burden of 252 hr (42 states × 6 hr) and $16,243.92 (252 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.10(e)(1) clarifies that states can provide required information in paper or electronic format. As this is an existing requirement, the only burden change we estimate is adding two new pieces of information generated in § 438.68 (network adequacy standards) and § 438.330 (quality and performance indicators). We estimate 1 hr at $64.46/hr for a business operations specialist to update or revise existing materials and 1 min at $30.92/hr for a mail clerk to mail the materials to 5 percent of the enrollees that are new (3,135,242). In aggregate, we estimate a one-time state burden of 42 hr (42 states × 1 hr) and $2,707.32 (42 hr × 64.46/hr) to update/revise existing materials. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. The currently approved burden estimates 5 min per mailing for 65,000 total hour. By updating the enrollment count from the current burden estimate to 2,069,259 (62,704,821 total enrollees × .033 growth rate) and reducing the time from 5 min to 1 min (to acknowledge automated mailing processes), we estimate the annual state burden for mailing as −30,512 hr (34,488 hr − 65,000 hr) and −$943,431.04 (−30,512 hr × $30.92/hr).
Section 438.10(g)(1) requires that MCOs, PIHPs, PAHPs, and PCCMs provide an enrollee handbook. Since § 438.10(g) has always required the provision of this information (although it did not specifically call it a “handbook”), we believe only new managed care entities will need to create this document. Given the requirement in § 438.10(c)(4)(ii) for the state to provide a model template for the handbook, the burden on a new entity will be greatly reduced.
For existing entities that already have a method for distributing the information, we believe that 100 entities will need to modify their handbook to comply with a new model provided by the state. We estimate that 100 entities rely on a business operations specialist to spend 4 hr at $64.46/hr to update their handbook. Once revised, the handbooks need to be sent to enrollees. We estimate 1 min by a mail clerk at $32.23/hr to send handbooks to 10,659,819 enrollees (17 percent of 62,704,821 total enrollment). To update the handbook, we estimate a one-time private sector burden of 400 hr (100 entities × 4 hr) and $25,784 (400 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. To send the handbook to existing enrollees in the 100 entities, we estimate a one-time private sector burden of 178,019 hr (10,659,819 enrollees × 1 min) and $5,504,346.78 (178,019 hr × $30.92/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
With regard to new enrollees, they must receive a handbook within a reasonable time after receiving notice of the beneficiary's enrollment. We assume a 3.3 percent enrollee growth rate thus 2,069,259 enrollees (3.3% percent of 62,704,821) will need to receive a handbook each year. We estimate 1 min by a mail clerk at $30.92/hr to mail the handbook or 34,557 hr (2,069,259 enrollees × 1 min). The currently approved burden estimates 5 min per mailing for 390,000 enrollees or 32,500 total hour. Updating the enrollment figure and reducing the time from 5 min to 1 min (to acknowledge current automated mailing processes), the annual private sector burden is increased by 2,057 hr (34,557 hr − 32,500 hr) and $63,602.44 (2,057 hr × $30.92/hr).
Since all of the 335 MCO + 176 PIHP + 61 PAHP + 9 PCCM entities will need to keep their handbook up to date, we estimate it will take 1 hr at $64.46/hr for a business operations specialist to update the document. While the updates are necessary when program changes occur, we estimate 1 hr since each change may only take a few minutes to make. In aggregate, we estimate an annual private sector burden of 581 hr (335 MCO + 176 PIHP + 61 PAHP + 9 PCCM entities × 1 hr) and $37,451.26 (581 hr × $64.46/hr).
Section 438.10(h) requires that all MCO, PIHP, PAHP, and PCCM entities make a provider directory available in electronic form, and on paper upon request. Producing a provider directory is a longstanding requirement in § 438.10 and in the private health insurance market. Given the time sensitive nature of provider information and the high error rate in printed directories, most provider information is now obtained via the Internet or by calling a customer service representative. In this regard, the only
We estimate that it takes approximately 1 hr at $78.325/hr for a computer programmer to update the existing directory. Updates after the creation of the original program will be put on a production schedule as part of usual business operations and would not generate any additional burden. In aggregate, we estimate a one-time private sector burden of 581 hr (335 MCO + 176 PIHP + 61 PAHP + 9 PCCM entities × 1 hr) and $45,503.92 (581 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.14(c) requires states to make supplemental payments to Indian providers if the MCO, PIHP, PAHP, and PCCM entity does not pay at least the amount paid to Indian providers under the FFS program. There are approximately 31 states with 463 managed care entities with Indian providers. This type of payment arrangement typically involves the managed care entity sending a report to the state that then calculates and pays the amount owed to the Indian health care provider.
We estimate it takes 1 hr at $78.32/hr for a private sector computer programmer to create the claims report and approximately 12 hr at $64.46/hr for a state business operations specialist to process the payments. We estimate that approximately 25 of the 31 states will need to use this type of arrangement; the remaining six require the managed care plan to pay the full amount due to the IHCP and no supplemental is needed. In aggregate, we estimate a one-time private sector burden of 463 hr (463 entities × 1 hr) and $36,262.16 (463 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate an annual state burden of 300 hr (25 states × 12 hr) and $19,338 (300 hr × $64.46/hr).
After the MCO, PIHP, PAHP, and PCCM report is created, it will most likely run automatically at designated times and sent electronically to the state as the normal course of business operations; therefore, no additional private sector burden is estimated after the first year. (Note: this process is not necessary when the MCO, PIHP, PAHP, or PCCM entity pays the IHCP at least the full amount owed under this regulation.)
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revisions and minor adjustments to hourly rates. No comments were received.
Section 438.54(c)(3) and (d)(3) requires states to notify the potential enrollee of the implications of not making an active choice during the allotted choice period. This information should be included in the notice of eligibility determination (or annual redetermination) required under § 445.912, thus no additional burden is estimated here.
Section 438.54(c)(8) requires states to send a notice to enrollees in voluntary programs that utilize a passive enrollment process confirming their managed care enrollment when the enrollee's initial opportunity to select a delivery system has ended. We assume 15 states will continue using a passive enrollment process, with a total of 22,394,579 enrollees. Assuming that 5 percent of these will be new each year, and of those, approximately 75 percent will not take action within the allotted time and will remain enrolled in the managed care plan passively assigned by the state (22,394,579 × 0.05 × 0.75 = 839,797) we estimate 1 min per notification by a mail clerk at $30.92/hr. In aggregate, we estimate an annual state burden of 9,350 hours (839,797 enrollees × 1 min) and $433,640.94 (14,025 hr × $30.92/hr).
In § 438.54(c)(2), our proposed rule had set out requirements and burden which would have required states having voluntary programs that use a passive enrollment process to provide a 14 day choice period before enrolling the potential enrollee into a managed care plan. To accommodate the 14 day choice period, we estimated that 15 states would have to alter the programming of their passive enrollment algorithm to delay the enrollment in a managed care plan until the enrollee makes a plan selection or the 14 day period expires. This burden estimate has been deleted because the 14 day choice period is not being finalized. This is discussed in section I.B.5.a.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.62(b)(1) requires states to have a transition of care policy for all beneficiaries moving from FFS Medicaid into a MCO, PIHP, PAHP or PCCM, or when an enrollee is moving from one MCO, PIHP, PAHP, or PCCM to another and that enrollee experiences a serious detriment to health or be at risk of hospitalization or institutionalization without continued access to services. As states are currently required to ensure services for enrollees during plan transitions, they have a policy but it may need to be revised to accommodate the requirements and to include transitions from FFS. We estimate it will take 42 states 5 hours at $64.46/hr for a state business operations specialist to revise their policies and procedures and 4 hr at $78.32/hr for a computer programmer to create a program to compile and send the data. In aggregate, we estimate a one-time state burden of 378 hr (42 states −9 hr) and $26,694.36 (210 hr (42 × 5) −$64.46/hr + 168 hr (42 × 4) × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We are not estimating additional burden for the routine running of these reports since they will be put into a normal production schedule.
Section 438.62(b)(2) requires that MCOs, PIHPs, PAHPs, and PCCMs implement their own transition of care policy that meets the requirements of § 438.62(b)(1). Under current requirements and as part of usual and customary business practice for all managed care plans, the MCOs, PIHPs, PAHPs, or PCCMs already exchange data with each other for this purpose. To revise their existing policies to reflect the standards in (b)(1), we estimate 1 hr at $64.46 for a business operations specialist. To develop computer programs to receive and store FFS data, we estimate 4 hr at $78.32/hr for a computer programmer. We are not estimating additional burden for the routine running of these reports since they will likely be put into a production schedule. In aggregate, we estimate a
For transitions, we estimate 10 min (per request) at $66.92/hr for a registered nurse to access the stored data and take appropriate action. We also estimate that approximately 0.05 percent of 6,274,080 new enrollees (313,704) may meet the state defined criteria for serious detriment to health and/or risk of hospitalization or institutionalization. In aggregate, we estimate an annual private sector burden of 52,294 hr (313,704 enrollees × 10 min) and $3,499,545.05 (52,294 hr × $66.92/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.66(a) and (b) requires states with MCO, PIHP, PAHP, or PCCM programs to have a monitoring system including at least the 13 areas specified in paragraph (b). While having a monitoring system is a usual and customary business process for all of the state Medicaid agencies, including all 13 areas will require most states to make at least some revisions to their existing processes and policies. We estimate 8 hr at $64.46/hr for a business operations specialist to expand or revise existing policies and procedures. In aggregate, we estimate a one-time state burden of 336 hr (42 states × 8 hr) and $21,658.56 (336 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.66(c) requires states with MCO, PIHP, PAHP, or PCCM programs to utilize data gathered from its monitoring activities in 12 required areas to improve the program's performance. While all states currently utilize data for program improvement to some degree, incorporating all 12 areas will likely require some revisions to existing policies and procedures. We estimate a one-time state burden of 20 hr at $64.46/hr for a business operations specialist to revise existing or to create new policies and procedures for utilizing the collected data. In aggregate, we estimate 840 hr (42 states × 20 hr) and $54,146.40 (840 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.66(d)(1) through (3) requires that states include a desk review of documents and an on-site review for all readiness reviews when certain events occur. For preparation and execution of the readiness review, we estimate 5 hr (at $140.80/hr) for a general and operations manager, 30 hr (at $64.46/hr) for a business operations specialist, and 5 hr (at $78.32/hr) for a computer programmer. The time and staff types are estimated for a new program or new entity review and may vary downward when the review is triggered by one of the other events listed in (d)(1). Given the varying likelihood of the 3 events listed in (d)(1), we will use an average estimate of 20 states per year having one of the triggering events. In aggregate, we estimate an annual state burden of 800 hr (20 states × 40 hr) and $60,588 [20 states × ((5 × $140.80/hr) +(30 × $64.46/hr) + (5 × $78.32/hr))].
For MCO, PIHP, PAHP, or PCCM preparation and execution, we estimate 5 hr (at $140.80/hr) for a general and operations manager, 30 hr (at $64.46/hr) for a business operations specialist, and 5 hr (at $78.32/hr) for a computer programmer. In aggregate, we estimate an annual private sector burden of 800 hr (20 entities × 40 hr) and $60,588 [20 entities × ((5 × $140.80/hr) + (30 × $64.46/hr) + (5 × $78.32/hr))].
Section 438.66(e)(1) and (2) requires that states submit an annual program assessment report to CMS covering the topics listed in § 438.66(e)(2). The data collected for § 438.66(b) and the utilization of the data in § 438.66(c) will be used to compile this report. We estimate an annual state burden of 6 hr at $64.46/hr for a business operations specialist to compile and submit this report to CMS. In aggregate, we estimate an annual state burden of 252 hr (42 states × 6 hr) and $16,243.92 (252 hr × $64.46/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.68(a) requires that states set network adequacy standards that each MCO, PIHP and PAHP must follow. Section 438.68(b) and (c) would require that states set standards which must include time and distance standards for specific provider types and must develop network standards for LTSS if the MCO, PIHP or PAHP has those benefits covered through their contract.
We estimate states will spend 10 hr in the first year developing the network adequacy standards for the specific provider types found in § 438.68(b)(1). While 40 states have contracted with at least one MCO, PIHP or PAHP, we believe that 20 will need to develop the standards and 20 already have a network adequacy standard in place. After the network standards have been established, we estimate that the maintenance of the network standards will occur only periodically as needs dictate; therefore, we do not estimate additional burden for states after the first year.
To develop network standards meeting the specific provider types found in § 438.68(b)(1), we estimate a one-time state burden of 10 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate 200 hr (20 states × 10 hr) and $12,892 (200 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
To develop LTSS standards, we estimate a one-time state burden of 10 additional hr at $64.46/hr for a business operations specialist to develop those standards. In aggregate, we estimate 160 hr (16 states with MLTSS programs × 10 hr) and $10,313.60 (160 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.68(d) requires that states develop an exceptions process for use by MCOs, PIHPs, and PAHPs unable to meet the network standards established in § 438.68(a). We estimate a one-time state burden of 3 hr at $64.46/hr for a business operations specialist to design an exceptions process for states to use to evaluate requests from MCOs, PIHP, and PAHPs for exceptions to the network standards. With a total of 40 states contracting with at least one MCO, PIHP or PAHP, we estimate a one-time aggregate state burden of 120 hr (40 states × 3 hr) and $7,735.20 (120 hr × $64.46). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The exception process should not be used very often as MCOs, PIHPs, and PAHPs meeting the established standards is critical to enrollee access to care. As such, after the exceptions process is established, we estimate that the occasional use of it will not generate
States' review and reporting on exceptions granted through the process developed in § 438.68(d) is estimated under § 438.66 so we do not estimate any additional burden for this requirement.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.70(c) requires that states continue to solicit and address public input for oversight purposes. Existing MLTSS programs already meet this requirement and we estimate no more than 14 new programs will be established by states.
We estimate an annual state burden of 4 hr at $64.46/hr for a business operations specialist to perform this task. In aggregate, we estimate 56 hr (14 states × 4 hr) and $3,609.76 (152 hr × $64.46/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revision and minor adjustments to hourly rates. Two comments were received.
Section 438.71(a) requires that state develop and implement a system for support to beneficiaries before and after enrollment in a MCO, PIHP, PAHP, or PCCM. This will most likely be accomplished via a call center including staff having email capability—internal to the state or subcontracted—that will assist beneficiaries with questions. As most state Medicaid programs already provide this service, we estimate only 20 states may need to take action to address this requirement.
A state has multiple ways to implement this provision; it could procure a vendor for this function, amend an existing contract (for example, enrollment broker), or add staff or train existing internal call center, outreach, or ombudsman staff. We offer a burden here for procuring a new contractor or establishing a new call center, although we do not believe these are the options that most states will elect. We include a 150 hour burden here as an average for the more costly options available to states- procuring a new vendor or creating a call center. The one-time state burden would consist of 125 hr (at $64.46/hr) for a business operations specialist, and 25 hr (at $140.80/hr) for a general and operations manager. In aggregate, we estimate 3,000 hr (20 states × 150 hr) and $231,550 [20 states × ((125 hr × $64.46/hr) + (25 hr × $140.80/hr))]. We acknowledge that there may be on-going burden associated with this provision; however, given the multiple options for implementing it, we are unable to estimate that burden at this time.
Section 438.71(b) requires that the system include choice counseling for enrollees, outreach for enrollees, and education and problem resolution for services, coverage, and access to LTSS. This system must be accessible in multiple ways including at a minimum, by telephone and email. Some in-person assistance may need to be provided in certain circumstances. Most states will likely use the call center created in § 438.71(a) to handle the majority of these responsibilities and use existing community-based outreach/education and ombudsman staff, whether state employees or contractors, for the occasional in person request. The use of existing staff will add no additional burden as it is part of standard operating costs for operating a Medicaid program.
In § 438.71(d), our proposed rule had set out requirements and burden which would have required that states develop training materials for provider education on MLTSS. That requirement is not being finalized, as discussed in I.B.5.c.
We received the following comments:
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.110(a) requires that each MCO, PIHP, and PAHP establish and maintain a member advisory board if the LTSS population is covered under the contract. We estimate an annual private sector burden of 6 hr at $64.46/hr for a business operations specialist to maintain the operation of the committee (hold meetings, distribute materials to members, and maintain minutes) for up to 14 new programs. Existing programs already meet this requirement and we estimate no more than 14 new programs will be established by states. In aggregate, we estimate 84 hr (14 states × 6 hr) and $5,414.64 (84hr × $64.46/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.207(c) requires that the documentation required in § 438.207(b) be submitted to the state at least annually. As the MCOs, PIHPs, and PAHPs will already run and review these reports periodically to monitor their networks as part of normal network management functions and as part of the provisions of § 438.68, the only additional burden would possibly be (if the state doesn't already require this at least annually) for the MCOs, PIHPs, and PAHPs to revise their policy to reflect an annual submission. We estimate a one-time private sector burden of 1 hr at $64.46/hr for a business operations specialist to revise the policy, if needed. We are annualizing the one-time development
In aggregate, we estimate 552 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 1 hr) and $35,581.92 (552 hr × $64.46/hr) for policy revision. We also estimate an annual private sector burden of 2 hr to compile and submit the information necessary to meet the requirements in § 438.207(b) through (d). For compilation and submission, we estimate 1,104 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 2 hr) and $71,163.84 (1,104 hr × $64.46/hr).
While one PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comment and are adopting the proposed provisions/estimates without change. See below for our finalized provisions/estimates along with a summary of the comment and our response.
Section 438.208(b)(2)(iii) requires that MCOs, PIHPs and PAHPs coordinate service delivery with the services the enrollee receives in the FFS program (carved out services). This involves using data from the state to perform the needed coordination activities. The exchange of data and the reports needed to perform the coordination activity is addressed in the requirements in § 438.62(b)(2). Since only a small percentage of enrollees receive carved out services and need assistance with coordination, we estimate 5 percent of all MCO, PIHP, and PAHP enrollees (2,331,626 of 46,632,522 MCO, PIHP, and PAHP enrollees) will be affected. We estimate an ongoing private sector burden of 10 min (per enrollee) at $51.54/hr for a healthcare social worker to perform the care coordination activities. In aggregate, we estimate 457,838 hr (2,331,626 enrollees × 10 min) and $23,596,970.52 (457,746 hr × $51.54/hr).
Section 438.208(b)(3) requires that a MCO, PIHP or PAHP make its best effort to conduct an initial assessment of each new enrollee's needs within 90 days of the enrollment. We believe that most MCOs and PIHPs already meet this requirement and only 25 percent of the MCOs and PIHPs (84 MCOs + 44 PIHPs) will need to alter their processes; however, we do not believe this to be as common a practice among PAHPs and assume that all 41 non-NEMT PAHPs will need to add this assessment to their initial enrollment functions. We estimate a one-time private sector burden of 3 hr at $64.46/hr for a business operations specialist to revise their policies and procedures. In aggregate, we estimate 507 hr [(84 MCOs + 44 PIHPs + 41 PAHPs) × 3 hr] and $32,681.22 (507 hr × $64.46/hr). While PRA-related public comments were received with regard to our proposed requirements and burden estimates, we have considered the comments and are adopting the proposed provisions/estimates without change. See below for our finalized provisions/estimates along with a summary of the comments and our response.
We estimate that in a given year, only 5 percent (726,143) of 25 percent of MCO and PIHP (10,703,220) and all (3,819,643 non-NEMT) PAHP enrollees are new to a managed care plan. We estimate an annual private sector burden of 10 min (on average) at $35.86/hr for a customer service representative to complete the screening. In aggregate, we estimate 121,023 hr (726,143 enrollees × 10 min) and $4,320,550 (121,023 hr × $35.86/hr).
Section 438.208(b)(4) requires that MCOs, PIHPs, and PAHPs share with other MCOs, PIHPs, and PAHPs serving the enrollee the results of its identification and assessment of any enrollee with special health care needs so that those activities are not duplicated. The burden associated with this requirement is the time it takes each MCO, PIHP or PAHP to disclose information on new enrollees to the MCO, PIHP or PAHP providing a carved out service. This would most likely be accomplished by developing a report to collect the data and electronically posting the completed report for the other MCO, PIHP, or PAHP to retrieve.
We estimate a one-time burden of 4 hr at $78.32/hr for a computer programmer to develop the report. In aggregate, we estimate 2,272 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 4 hr) and $177,943.04 (2,272 hr × $78.32/hr). However, while the currently approved burden sets out 45 min per enrollee and 464,782 annual hours, to provide more accurate estimates we are adjusting the burden by using one-time per plan estimates and recognizing the use of automated reporting. In aggregate, we estimate a one-time private sector burden of −462,510 hr (2,272 hr − 464,782 hr) and −$36,223,783.20 (−462,510 hr × $78.32/hr). While a PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comments and are adopting the proposed provisions/estimates without change. See below for our finalized provisions/estimates along with a summary of the comments and our response. Once put on a production schedule, no additional staff time will be needed, thus no additional burden is estimated.
Section 438.208(c)(2) and (3) currently require that MCOs, PIHPs and PAHPs complete an assessment and treatment plan for all enrollees that have special health care needs; this rule adds “enrollees who require LTSS” to this section. These assessments and treatment plans should be performed by providers or MCO, PIHP or PAHP staff that meet the qualifications required by the state. We believe the burden associated with this requirement is the time it takes to gather the information during the assessment. (Treatment plans are generally developed while the assessment occurs so we are not estimating any additional time beyond the time of the assessment.) We believe that only enrollees in MCOs and PIHPs will require this level of assessment as most PAHPs provide limited benefit packages that do not typically warrant a separate treatment plan.
While this is an existing requirement, we estimate an additional 1 percent of the total enrollment of 42,812,879 in MCOs and PIHPs (42,812,879 × .01 = 428,128) given the surge in enrollment into managed care of enrollees utilizing LTSS. We estimate an annual private sector burden of 1 hr (on average) at $66.92/hr for a registered nurse to complete the assessment and treatment planning. In aggregate, we estimate an additional 428,128 hr (428,128 enrollees × 1 hr) and $28,650,325.76 (428,128 hr × $66.92/hr).
Section 438.208(c)(3)(v) requires that treatment plans be updated at least annually or upon request. We estimate a one-time private sector burden of 1 hr at $64.46/hr for a business operations specialist to revise policies and procedures to reflect a compliant time frame. In aggregate, we estimate 552 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 1 hr) and $35,581.92 (552 hr × $64.46/hr).
We received the following comment:
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.210(a)(4)(ii)(B) requires that MCOs, PIHPs, and PAHPs authorize services for enrollees with chronic conditions or receiving LTSS in a way that reflects the on-going nature of the service. While we expect this to already be occurring, we also expect that most MCOs, PIHPs, and PAHPs will review their policies and procedures to ensure compliance. We estimate a one-time private sector burden of 20 hr at $66.92/hr for a registered nurse to review and revise, if necessary, authorization policies and procedures. In aggregate, we estimate 11,440 hr (335 MCOs + 176 PIHPs + 61 PAHPs × 20 hr) and $765,564.80 (11,440 × $66.92/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.210(c) currently requires that each contract provide for the MCO or PIHP to notify the requesting provider of a service authorization request denial, and give the enrollee written notice of any decision by the MCO, PIHP, or PAHP to deny a service authorization request, or to authorize a service in an amount, duration, or scope that is less than requested. In this final rule, PAHPs are be added to this requirement.
The burden associated with sending adverse benefit determination notices is included in § 438.404. While we believe PAHPs already provide notification of denials, we expect they may need to be revised to be compliant with § 438.404. We estimate a one-time public sector burden of 1 hr at $64.46/hr for a business operations specialist to revise the template. In aggregate, we estimate 61 hr (61 PAHPs × 1 hr) and $3,932.06 (61 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change, except for the minor adjustments to hourly rates. No comments were received.
Section 438.230 would require additional provisions in MCO, PIHP, or PAHP subcontracts, other than agreements with network providers. We estimate a one-time private sector burden of 3 hr at $64.46/hr for a business operations analyst to amend appropriate contracts. In aggregate, we estimate 1,716 hr (335 MCO + 176 PIHPs + 61 PAHPs × 3 hr) and $110,613.36 (1,716 × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
While one PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comment and are adopting the proposed provisions/estimates without change. See below for our finalized provisions/estimates along with a summary of the comment and our response.
Section 438.242(b) and (c) currently requires MCOs and PIHPs to collect and submit to the state enrollee encounter data. This rule adds non-NEMT PAHPs to the requirement. We estimate a one-time private sector burden of 20 hr at $78.32/hr for a computer programmer to extract this data from a PAHP's system and report it to the state. In aggregate, we estimate 820 hr (41 PAHPs × 20 hr) and $64,222.40 (820 hr × $78.32/hr). After creation, these reports would be set to run and sent to the state at on a production schedule. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
We received the following comment on this collection of information estimate:
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.310(c)(2) applies § 438.330(b)(2), (b)(3), (c), and (e), § 438.340(e) and § 438.350 to states whose contracts with PCCM entities include shared savings, incentive payments, or other financial reward for the PCCM entity for improved quality outcomes. This will affect a specific subset of approximately 9 PCCM entities and 5 states.
We estimate a one-time state burden of 2 hr at $64.46/hr for a business operations specialist to address the performance assessment of PCCM entities described in § 438.310(c)(2) by revising a state's policies and procedures. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 10 hr (5 states × 2 hr) and $644.60 (10 hr × $64.46/hr), annualized to 3.3 hr and $214.87.
20. ICRs Regarding Quality Assessment and Performance Improvement Program (§ 438.330, formerly § 438.240)
While one PRA-related public comment was received with regard to our proposed requirements and burden estimates for this section, we have considered the comment and are adopting the proposed provisions/estimates without change except for the minor adjustments to hourly rates. See below for our finalized provisions/
Section 438.330(a)(2) specifies the process CMS will use if it elects to specify a common set of national QAPI performance measures and PIP topics, which will include a public notice and comment process. Assuming that we do use this process to identify QAPI performance measures and PIP topics at least once every 3 years, the burden for states will be altered. Some may experience a decrease in the time spent selecting performance measures and PIP topics while others might experience a slight increase in the form of programming their MMIS systems to account for the specified performance measures and PIP topics.
We estimate a state burden of 10 hr (every 3 years) at $78.32/hr for a computer programmer to make the MMIS programming changes. In aggregate, we estimate an annualized burden of 133.3 hr [(40 states × 10 hr)/3 years] and $10,440.06 (133.3 hr × $78.32/hr). We cannot estimate the amount of possible decrease in burden as we have no way to know the average amount of time a state expended on selecting performance measures or PIP topics and how this might change based on this revision.
Section 438.330(a)(2) also will allow states to apply for an exemption from the CMS-specified QAPI performance measures and PIP topics established under § 438.330(a)(2). While we have no data on how many states will take advantage of this option, given that the performance measures and PIP topics under § 438.330(a)(2) will be identified through a public notice and comment process, we estimate that approximately 11 states will ask for an exemption every 3 years. We estimate a state burden of 1 hr (every 3 years) at $64.46/hr for a business operations specialist to comply with the exemption process. In aggregate, we estimate an annualized burden of 3.7 hr [(11 states × 1 hr)/3 years] and $238.50 (3.7 hr × $64.46/hr).
Proposed § 438.330(a)(2)(ii) would allow states to select performance measures and PIPs in addition to those specified by CMS under § 438.330(a)(2)). Since this requirement exists under § 438.330(c) of the final rule, we are not finalizing proposed § 438.330(a)(2)(ii). This has no impact on the burden as compared to the proposed rule.
Section 438.330(a)(3) identifies the regulatory components of § 438.330 that apply to the QAPI of a PCCM entity described in § 438.310(c)(2). The burden associated with these regulatory components in regards to PCCM entities in §§ 438.330(b)(3), (c), and (e) is described below.
Section 438.330(b)(3) clarifies that MCOs, PIHPs, and PAHPs will have an approach to evaluate and address findings regarding the underutilization and overutilization of services. Because utilization review in managed care has become commonplace in the private, Medicare, and Medicaid settings, we do not believe that this regulatory provision imposes any new burden on MCOs, PIHPs, or PAHPs. However, in accordance with § 438.310(c)(2), PCCM entities (we estimate there are 9 total) will now be subject to this operational component.
We recognize that PCCM entities may not currently have in place mechanisms to assess and address underutilization and overutilization of services in accordance with § 438.330(b)(3). We estimate a one-time private sector burden of 10 hr at $64.46/hr for a business operations specialist to establish the policies and procedures. We are annualizing the one-time development burden since we do not anticipate any additional development burden after the 3-year approval period expires. In aggregate, we estimate 90 hr (9 PCCM entities × 10 hr) and $5,801.4 (90 hr × $64.46/hr), annualized to 30 hr and $1933.8, for the establishment of policies and procedures. We also estimate an ongoing annual burden of 10 hr to evaluate and address the findings. In aggregate, we estimate 90 hr (9 PCCM entities × 10 hr) and $5801.4 (90 hr × $64.46/hr) for program maintenance.
Section 438.330(c) addresses QAPI performance measurement. Section 438.330(c)(1) requires that the state identify standard performance measures for their managed care plans, including LTSS measures if appropriate. These must include any performance measures specified by CMS under § 438.330(a)(2). We believe that it is standard practice for states to identify performance measures for their contracted managed care plans; therefore there is no burden associated with this paragraph.
Section 438.330(c)(2) requires each MCO, PIHP, PAHP, and PCCM entity (described in § 438.310(c)(2)) to annually measure its performance using the standard measures specified by the state in § 438.330(c)(1) and to report on its performance to the state. We assume that each of the 335 MCOs and 176 PIHPs will report on three performance measures to the state. The use of performance measures is commonplace in private, Medicare, and Medicaid managed care markets; therefore we believe that MCOs and PIHPs already collect performance measures.
For MCOs (335) and PIHPs (176), we estimate an annual private sector burden of 0.1 hr at $64.46/hr for a business operations specialist to report on a single performance measure to the state. In aggregate, we estimate 153.3 hr (511 MCOs and PIHPs × 3 performance measures × 0.1 hr) and $9,881.72 (153.3 hr × $64.46/hr).
We recognize that PAHPs and PCCM entities (described in § 438.310(c)(2)) may not currently engage in performance measurement as described in § 438.330(c)(2). We estimate that each PCCM entity and each PAHP will report to the state on 3 performance measures annually. For the 41 PAHPs and 9 PCCM entities, we estimate an annual private sector burden of 4 hr (per measure) at $64.46/hr for a business operations specialist to collect, calculate, and submit each performance measure to the state. In aggregate, we estimate 600 hr (51 PAHPs and PCCMs × 3 performance measures × 4 hr) and $38,676 (600 hr × $64.46/hr).
Section 438.330(c)(2) also requires each MCO, PIHP, PAHP, and PCCM entity (described in § 438.310(c)(2)) providing LTSS to annually measure its performance using the standard measures specified by the state in § 438.330(c)(1)(ii) and to report on its performance to the state. Section 438.330(c)(1)(ii) requires states to identify standard performance measures in two LTSS-specific categories for managed care plans that provide LTSS. Assuming that each of the 179 MLTSS plans will report on at least one measure per category and a burden of 4 hr (per measure) at $64.46/hr for a business operations specialist to collect, calculate, and submit each LTSS performance measure to the state, we estimate an aggregated annual private sector burden of 1,432 hr (179 MLTSS plans × 2 performance measures × 4 hr) and $92,306.72 (1,432 hr × $64.46/hr).
Under § 438.330(d)(1) through (3), states must ensure that each MCO, PIHP, and PAHP has an ongoing program of PIPs, designed to achieve sustainable improvement, which the managed care plan will report on to the state as requested, but at least once per year. We assume that each MCO and PIHP will conduct at least 3 PIPs in any given year. We further expect that states would request the status and results of each entity's PIPs annually. The currently approved burden under this control number estimates that each of the 539 MCOs and PIHPs conducts 3 PIPs, for a burden of 12,936 hr (539 MCOs and PIHPs × 3 PIPs × 8 hr). However, this figure overestimates the number of MCOs and PIHPs. Therefore, we estimate an annual private sector burden of 8 hr at $64.46/hr for a business operations specialist to report
We assume that each PAHP will conduct at least one PIP each year, and that states will request the status and results of each PAHP's PIP annually. We estimate a one-time private sector burden of 2 hr at $64.46/hr for a business operations specialist to develop policies and procedures. We are annualizing the one-time development burden since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 82 hr (41 PAHPs × 2 hr) and $5,285.72 (82 hr × $64.46/hr), annualized to 27.3 hr and $1,761.91. We also estimate an annual private sector burden of 8 hr to prepare a PIP report. In aggregate, we estimate 328 hr (41 PAHPs × 1 PIP × 8 hr) and $21,142.88 (328 hr × $64.46/hr).
Section 438.330(e)(1) requires the state to review the impact and effectiveness of each MCO's, PIHPs, and PAHP's QAPI at least annually. States must also review the QAPI of each PCCM entity (described in § 438.310(c)(2)). We estimate an annual state burden of 15 hr at $64.46/hr for a business operations specialist to assess the performance of a single PCCM entity (described in § 438.310(c)(2)). In aggregate, we estimate 135 hours (9 PCCM entities × 15 hr) and $8702.1 (135 hr × $64.46/hr).
Under section 438.330(e)(1)(ii), states will include outcomes and trended results of each MCO, PIHP, and PAHP's PIPs in the state's annual review of QAPI programs. We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to modify policies and procedures for the 40 states with MCOs, PIHPs and PAHPs. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 20 hr (40 states × 0.5 hr) and $1,289.20 (20 hr × $64.46/hr), annualized to 6.7 hr and $429.73. We also estimate an annual state burden of 1 hr to conduct the additional annual review of the outcomes and trended results for each of the 552 MCOs, PIHPs, and PAHPs (335 MCOs, 176 PIHPs, 41 PAHPs). In aggregate, we estimate 552 hr (552 MCOs, PIHPs, and PAHPs × 1 hr) and $35,581.92 (552 hr × $64.46/hr).
Section 438.330(e)(1)(iii) is a new program component, related to § 438.330(b)(5), which will require a state (in its annual review) to assess the results of any efforts to support state goals to promote community integration of beneficiaries using LTSS in place at the MCO, PIHP, or PAHP. We estimate that the 16 states with MLTSS plans will need to modify their policies and procedures regarding the annual review of QAPI programs in their managed care entities. We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to modify the state's policies and procedures. We are annualizing the one-time development burden since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 8 hr (16 states × 0.5 hr) and $515.68 (8 hr × $64.46/hr), annualized to 2.7 hr and $171.89. We also estimate an annual burden of 1 hr for the assessment of rebalancing efforts of each of the 179 MLTSS plans. In aggregate, we estimate 179 hr (179 MLTSS plans × 1 hr) and $11,538.34 (179 hr × $64.46/hr) for the assessment.
We received the following comments regarding the proposed ICRs regarding QAPI program:
Under § 438.332 of the proposed rule, titled “State Review and Approval of MCOs, PIHPs, and PAHPs,” we proposed that states would review and approve MCO, PIHP, and PAHP performance, at least once every 3 years, in accordance with standards at least as strict as those used by a private accrediting entity that is approved or recognized by CMS under the existing Marketplace and MA programs, as a condition of contracting with the state. We also proposed to grant states the option of allowing MCOs, PIHPs, and PAHPs to meet this standard by presenting proof of accreditation by a private accrediting entity recognized by CMS. MCOs, PIHPs, and PAHPs would have been required to maintain state approval for the duration of participation in the Medicaid program. State approval of MCOs, PIHPs, and PAHPs would have been renewed every 3 years.
As discussed in section I.B.6.b(2)(e) of this rule, in response to public comments also discussed in that section, we are not finalizing our proposal to require states to review and approve MCO, PIHP, and PAHP performance; instead, we are finalizing § 438.332 with modification to require states to confirm the accreditation status (accredited or not) of each contracted MCO, PIHP, and PAHP annually. As a part of this revision, we are finalizing proposed § 438.332(c), with modification, to require this information to be posted online each year. Therefore we are deleting the burden estimate associated with proposed §§ 438.332(a) and (b) and replacing it with the burden associated with states annually confirming the accreditation status of contract MCOs, PIHPs, and PAHPs and posting this information online.
Under § 438.332(a), states must confirm the accreditation status of contracted MCOs, PIHPs, and PAHPs once a year. We estimate an annual state burden of 0.25 hr at $64.46/hr for a business operations specialist to review the accreditation status of each of the estimated 552 MCOs, PIHPs, and PAHPs. In aggregate, we estimate an annual burden of 138 hr (0.25 hr × 552 MCOs, PIHPs, and PAHPs) and $8,895.48 (138 hr × $64.46/hr).
Section 438.332(b) describes the information MCOs, PIHPs, and PAHPs must authorize the private accrediting entity to release to the state regarding the plan's accreditation status. We believe that states will need to amend their MCO, PIHP, and PAHP contracts to reflect this requirement, and estimate a one-time burden of 0.25 hr per contract amendment. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate a one-time burden of 138 hr (0.25 hr × 552 MCOs, PIHPs, and PAHPs) and $8,895.48 (138 hr × $64.46/hr), annualized to 46 hr and $2,965.16.
Under § 438.332(c), states will document the accreditation status of each contracted MCO, PIHP, and PAHP on the state's Web site, and will update this information at least annually. The burden is included in § 438.10.
We received comments that expressed concern that we had underestimated the burden associated with the proposed MMC QRS. While no specific alternative estimates were provided, we increased the hour estimates associated with this ICR to respond to commenters' concerns. We have also made minor adjustments to hourly rates. Additional detail about this comment and our response may be found at the end of this section.
We received a number of comments on the MMC QRS proposal. In response to these comments, and to improve clarity, we restructured this section. Under the final rule, § 438.334(a) provides the general rule that states must operate a MMC QRS, as did proposed § 438.334(a)(1). Section 438.334(b) of the final rule describes the CMS-developed MMC QRS, which was previously described in proposed § 438.334(a)(2) and (3). Section 438.334(c) of the final rule describes the option for states to operate, contingent on CMS approval, an alternative MMC QRS, which was described in § 438.334(c) of the proposed rule. In the final rule, § 438.334(c) provides additional detail regarding the public engagement process required for an alternative MMC QRS. The requirement for states to collect data from MCOs, PIHPs, and PAHPs each year and to use that data to generate a quality rating for the plan is finalized at § 438.334(d), and was proposed at § 438.334(b). Finally, § 438.334(e) of the final rule, as in the proposed rule, requires states to post the quality ratings online. In response to public comments regarding proposed § 438.334(d), we are not finalizing our proposal to allow states to elect to utilize the MA Five-Star rating for MCOs, PIHPs, or PAHPs and therefore are deleting the burden associated with that proposal. See section I.B.6.b(2)(e) for additional discussion of this restructuring and other revisions made in response to public comments.
Section 438.334(a) requires each state that contracts with an MCO, PIHP or PAHP to adopt a MMC QRS to generate plan ratings annually. States must either adopt the quality rating system developed by CMS in accordance with § 438.334(b) or an alternative MMC QRS in accordance with § 438.334(c). We assume each state will create a single MMC QRS for all of the state's contracted MCOs, PIHPs, and PAHPs. We are aware of 8 states that currently operate a quality rating system or quality report card for the state's Medicaid managed care program; we assume that these states may want to continue to use their existing system given the investments already made in these systems. We also assume that a couple of states may determine that a state-specific approach is most suitable for them. Therefore, we estimate that of the 40 states that contract with MCOs, PIHPs, and PAHPs, 30 states will elect to adopt the MMC QRS developed by CMS in accordance with § 438.334(b), while the reminder (10 states) will elect to utilize an alternative MMC QRS in accordance with § 438.334(c). We further estimate that 75 percent (414) of MCOs, PIHPs, and PAHPs operate in these 30 states. We assume that, given the robust public engagement process CMS will use to develop the MMC QRS in accordance with § 438.334(b), states electing to adopt the CMS-developed MMC QRS will not need to conduct additional public engagement and will require less time to develop their MMC QRS as compared to states which elect to adopt an alternative MMC QRS consistent with § 438.334(c).
Therefore, for states adopting the CMS-developed MMC QRS under § 438.334(b), we estimate the state burden for the development and implementation of the MMC QRS as 200 hr at $64.46/hr for a business operations specialist, 100 hr at $78.32/hr for a computer programmer, and 30 hr at $140.80/hr for a general and operations manager. We are annualizing the one-time development burden since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate a one-time state burden of 9,900 hr (30 states × 330 hr) and $748,440 [30 states × ((200 hr × $64.46/hr) + (100 hr × $78.32/hr) + (30 hr × $140.80/hr)], annualized to 3,300 hr and $249,480, for the development of states' MMC QRS consistent with 438.334(b).
The burden is more variable for states seeking CMS approval for the adoption of an alternative MMC QRS per § 438.334(c). A state may submit an existing MMC QRS, may submit a modified version of an existing MMC QRS, or may develop a new MMC QRS. We assume that the burden for each of these options will vary by state and will be lowest for states that submit an existing MMC QRS for CMS approval and highest for states that develop a new MMC QRS. For the purposes of this estimate, we assume a standard burden across all states for the development of an alternative MMC QRS. We believe that the average alternative MMC QRS burden will exceed the burden to adopt the CMS-developed MMC QRS, and will require public engagement by the state. Therefore, we estimate the average state burden for the development and implementation of an alternative MMC QRS as 800 hr at $64.46/hr for a business operations specialist, 400 hr at $78.32/hr for a computer programmer, and 120 hr at $140.80/hr for a general and operations manager. We estimate an additional 20 hr at $36.54/hr for an office and administrative support worker for the public engagement process and an additional 50 hr at $64.46/hr for a business operations specialist to review and incorporate public feedback. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate a one-time state burden of 13,900 hr (10 states × 1,390 hr) and $1,037,458 [10 states × ((800 hr × $64.46/hr) + (400 hr × $78.32/hr) + (120 hr × $140.80/hr) + (20 hr × $36.54/hr) + (50 hr × $64.46/hr))], annualized to 4,633.3 hr and $345,819.33, for the development of states' alternative MMC QRS consistent with § 438.334(c).
To elect the option under § 438.334(c) to use an alternative MMC QRS, a state will submit a request to CMS and must receive written CMS approval. We estimate a one-time state burden of 20 hr at $64.46/hr for a business operations specialist to seek and receive approval from CMS for the state's Medicaid managed care alternative quality rating system. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 200 hr (10 states × 20 hr) and $12,892 (200 hr × $64.46/hr), annualized to 66.7 hr and $4,297.33.
Section 438.334(c)(3) outlines the process for a state to make changes to an approved alternative MMC QRS. We estimate that it will require 5 hr at $36.54/hr for an office and administrative support worker and 25 hr at $64.46/hr for a business operations specialist to complete the public comment process, and an additional 5 hr at $64.46/hr from a business operations specialist to seek and receive approval from CMS for the change. While we have no data to estimate how frequently a state may elect to alter an approved alternative MMC QRS, we estimate that CMS will revise the MMC QRS under § 438.334(b) on average approximately once every three years. We assume that states will revise their alternative QRS on a similar frequency (once every three years) to ensure that the alternative QRS continues to yield substantially comparable information regarding MCO, PIHP, and PAHP performance, and apply this assumption here. Therefore, we estimate an aggregate annualized burden of 116.7 hr
Under § 438.334(d), each state will collect information from its MCOs, PIHPs, and PAHPs to calculate and then issue a quality rating each year. We expect that states will rely on information and data already provided to them by their MCOs, PIHPs, and PAHPs; therefore, we do not expect this data collection to pose an additional burden on the private sector. However, each year states will rate each MCO, PIHP, or PAHP with which they contract. We estimate 40 hr at $64.46/hr for a business operations specialist for a state to rate a MCO, PIHP, or PAHP. We believe this burden will be similar for states regardless of if they adopt the CMS-developed MMC QRS consistent with § 438.334(b) or the alternative MMC QRS consistent with § 438.334(c). In aggregate, we estimate an annual state burden of 22,080 hr (552 MCOs, PIHPs, and PAHPs × 40 hr) and $1,423,276.80 (22,080 hr × $64.46/hr).
Section 438.334(e) requires states to prominently display quality rating information for plans on the state Web site described in § 438.10. The burden associated with this process is captured in § 438.10.
We received the following comments regarding the proposed ICRs regarding the MMC QRS:
In part 431 subpart I and § 438.340, we proposed that states would maintain a written comprehensive quality strategy that applied to services provided through all delivery systems, including FFS and managed care. Proposed part 431 subpart I described the general rule for the CQS, the CQS elements, the development and revision process, and connected the CQS to the managed care quality strategy elements in proposed § 438.340, which would apply to states contracting with MCOs, PIHPs, PAHPs, and some PCCM entities. Based on public comment, we are not finalizing the requirement for a CQS as described in proposed part 431 subpart I. However, we are continuing to require a managed care quality strategy (which applies to states contracting with MCOs, PIHPs, PAHPs, and PCCM entities described in § 438.310(c)(2)), and are redesignating sections from proposed part 431 subpart I into § 438.340 of the final rule. The general rule for the managed care quality strategy is redesignated at § 438.340(a) and is a revised version of the general rule from proposed § 431.502(a). Section 438.340(b) of the final rule describes the required elements of the managed care quality strategy, and combines the language from proposed §§ 431.502(b) and 438.340. It also contains additional revisions to reflect cross-references from other sections and responses to public comment. This includes the addition of an element focused on the state's plan to identify, evaluate, and reduce health disparities, which incorporates the requirement previously located at § 438.204(b)(2) that states provide certain demographic information to MCOs and PIHPs at the time of enrollment. Proposed § 431.504 is finalized as § 438.340(c) with revisions to reflect the more limited scope (to Medicaid managed care) and for clarity. Proposed § 431.504(d) is finalized as § 438.340(d) with minor revisions. For additional discussion of these revisions, please see section I.B.6.b(2)(f).
While a PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comment and are not revising our burden estimates in response to these PRA-related comment. However, our finalized burden estimates for § 438.340 have been revised to reflect the finalized version of this section (which takes into account non-PRA-related comments), and minor adjustments to hourly rates. See below for our finalized provisions/estimates along with a summary of the comments and our response.
Previous regulations at § 438.204(b)(2) described a quality strategy element, specifically that states contracting with MCOs and/or PIHPs identify the race, ethnicity, and primary language spoken of each Medicaid enrollee, and report this information to MCOs and PIHPs upon enrollment into a plan. While we had inadvertently proposed to delete this quality strategy element, under the final rule we are retaining this element and incorporating it into § 438.340(b)(6), which requires states to include a plan to identify, evaluate, and reduce health disparities in the managed care quality strategy. Therefore, under the final rule there is a burden on states to provide the identified demographic data (age, race, ethnicity, sex, primary language, and disability status) to MCOs, PIHPs, and PAHPs. The burden associated with previous regulations at § 438.204(b)(2) was estimated at 80 hr per state (for 15 states) to complete the programming necessary to collect and report on the race, ethnicity, and primary language spoken, for an aggregate burden of 1,200 hr (15 states × 80 hr) (note that the previous burden did not include an associated hourly wage). We are replacing that burden with a new estimate to account for the additional demographic information which states must provide to MCOs, PIHPs, and PAHPs under § 438.340(b)(6). Assuming that the estimated 40 states that contract with MCOs, PIHPs, and PAHPs provide demographic information electronically to these plans once each year, we estimate a burden for the reporting of these six demographic factors to MCOs, PIHPs, and PAHPs of 130 hr, half at $64.46/hr for a business operations analyst and half at $36.54/hr for an office and administrative support worker. In aggregate, we estimate an ongoing annual state burden of 5,200 hr (130 hr × 40 states) and $262,600 [40 states × ((65 hr × $64.46/hr) + (65 hr × $36.54/hr))].
In accordance with § 438.340(c)(2), states will review and revise their quality strategies as needed, but no less frequently than once every 3 years. While the 37 states that contract with MCOs and/or PIHPs currently revise their quality strategies periodically, approximately half of those states (18) revise their quality strategies less frequently than proposed. We estimate a burden for the revision of a quality strategy of, once every 3 years, 25 hr at $64.46/hr for a business operations analyst to review and revise the comprehensive quality strategy, 2 hr at $36.54/hr for an office and administrative support worker to
The revision of a quality strategy will be a new process for the estimated three states with only PAHPs and the estimated two states with only PCCM entities. We estimate that those states need 0.5 hr at $64.46/hr for a business operations specialist to revise their policies and procedures. We are annualizing the one-time development burden since we do not anticipate any additional development burden after the 3-year approval period expires. In aggregate, we estimate a one-time state burden of 2.5 hr (5 states × 0.5 hr) and $161.15 (2.5 hr × $64.46/hr), annualized to 0.8 hr and $53.72, to update policies and procedures.
We assume that it will be less burdensome to revise an existing quality strategy than to draft an initial strategy. Therefore, we estimate an ongoing burden for the quality strategy revision process for states with only PAHPs and PCCM entities, once every 3 years, of 25 hr at $64.46/hr for a business operations analyst to review and revise the comprehensive quality strategy, 2 hr at $36.54/hr for an office and administrative support worker to publicize the strategy, 5 hr at $64.46/hr for a business operations specialist to review and incorporate public comments, and 1 hr at $36.54/hr for an office and administrative support worker to submit the revised quality strategy to CMS. In aggregate, we estimate an ongoing annualized state burden of 55 hr [(5 states × (33 hr)/3 years] and $3,405.70 [(5 states × ((30 hr × $64.46/hr) + (3 hr × $36.54/hr)))/3 years].
Consistent with § 438.340(c)(2), the review of the quality strategy will include an effectiveness evaluation conducted within the previous 3 years. We estimate the burden of this evaluation at 40 hr at $64.46/hr for a business operations specialist once every 3 years for all 42 states that contract with MCOs, PIHPs, PAHPs, and/or PCCM entities (described in § 438.310(c)(2)). The currently approved burden estimates for creating and submitting an implementation and effectiveness report to CMS for the 37 states with MCOs and/or PIHPs takes 40 hr per state once every 3 years, for an annualized burden of 493.3 hr [(37 states × 40hr)/3]; therefore, the only new burden is associated with the estimated 3 states with only PAHPs and the estimated 2 states with only PCCM entities. Therefore, we estimate a net ongoing annualized burden of 66.7 hr [((42 states × 40 hr) − (37 states × 40 hr))/3 years] and $4,299.48 (66.7 hr × $64.46/hr) to evaluate the effectiveness of a quality strategy.
Section § 438.340(c)(2)(ii) requires states to post the managed care quality strategy effectiveness evaluation on the state's Medicaid Web site. In the proposed rule we stated that while this standard was subject to the PRA, we believed that the associated burden was exempt from the PRA in accordance with 5 CFR 1320.3(b)(2). We believed that the time, effort, and financial resources necessary to comply with the aforementioned standards would be incurred by persons during the normal course of their activities and, therefore, should be considered a usual and customary business practice. Upon further consideration, however, we determined that states today do not necessarily post the quality strategy effectiveness evaluation online. Therefore, we estimate that posting the quality strategy effectiveness evaluation online will require 0.25 hr at $64.46 from a business operations specialist once every 3 years. In aggregate, we estimate an ongoing annualized burden of 3.5 hr [(42 states × 0.25 hr)/3 years] and $225.61 (3.5 hr × $64.46/hr).
As described in § 438.340(c)(3), states will submit to CMS a copy of the initial quality strategy and any subsequent revisions. The burden associated with this standard has been incorporated into burden estimates for initial and revised quality strategies. As this will be a new standard for the estimated 3 states with only PAHPs and the estimated 2 states with only PCCM entities, we believe that these states will need to modify their policies and procedures to incorporate this action. We estimate a burden of 0.5 hr at $64.46/hr for a business operations specialist. We are annualizing the one-time development burden since we do not anticipate any additional development burden after the 3-year approval period expires. In aggregate, we estimate a one-time state burden of 2.5 hr (5 states × 0.5 hr) and $161.15 (2.5 hr × $64.46/hr), annualized to 0.8 hr and $53.72.
Section 438.340(d) requires states to post the final quality strategy to their Medicaid Web sites. In the proposed rule, we stated that while this standard is subject to the PRA, we believed that the associated burden was exempt from the PRA in accordance with 5 CFR 1320.3(b)(2). We believed that the time, effort, and financial resources necessary to comply with the aforementioned standards would be incurred by persons during the normal course of their activities and, therefore, should be considered a usual and customary business practice. Upon further consideration, however, we determined that states today do not necessarily post the final quality strategy online, though some do. Therefore, we estimate that posting the final quality strategy online will require 0.25 hr at $64.46 from a business operations specialist once every 3 years. In aggregate, we estimate an ongoing annualized burden of 3.5 hr [(42 states × 0.25 hr)/3 years] and $225.61 (3.5 hr × $64.46/hr).
We received the following comments regarding the proposed ICRs regarding the managed care State quality strategy:
While the proposed rule expanded EQR to PAHPs (it already applied to MCOs and PIHPs), we did not develop a burden estimate for § 438.350, though we did for other EQR provisions. Upon further consideration, and in light of the clarification in 438.310(c)(2) that certain PCCM entities will be required to undergo an annual EQR, we have determined it necessary to develop a burden for the amendment of EQRO contracts in states with MCOs and PIHPs which we assume will amend existing EQRO contracts to include PAHPs and PCCM entities.
We estimate that there are 12 states that contract with PAHPs (of which 3 states contract with only PAHPs) and 5 states that contract with PCCM entities
Proposed § 438.3(r) stated that PCCM entities whose contract with the state provides for shared savings, incentive payments or other financial reward for improved quality outcomes would be subject to EQR. However, proposed § 438.350(b) and its associated preamble, inaccurately described EQR as optional for these PCCM entities (see section I.B.6.b(2)(h) for additional discussion). In the final rule, we clarified that EQR of PCCM entities (described in § 438.310(c)(2) of the final rule) are required to undergo an annual EQR. Therefore, we are revising this ICR to include the burden associated with conducting the EQR-related activities on PCCM entities (described in § 438.310(c)(2) of the final rule). Additionally, in response to public comments, we are finalizing an optional EQR-related activity at § 438.358(c)(6) of the final rule which can assist states with the quality rating of MCOs, PIHPs, and PAHPs (for additional discussion, see section I.B.6.b(2)(e)).
While a PRA-related public comment was received with regard to our proposed requirements and burden estimates, we have considered the comment and are not modifying this estimate in response to the comment. However, we are revising this ICR to reflect the changes described above and minor adjustments to hourly rates. See below for our finalized provisions/estimates along with a summary of the comment and our response.
Section 438.358 addresses the EQR-related activities. Per § 438.358(a)(1), the EQR-related activities described in paragraphs (b) and (c) of this section may be conducted by the state, its agent that is not an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)), or an EQRO; we describe the burden assuming that the state conducts these activities, though we believe the burdens will be similar regardless of who conducts each activity.
The burden associated with the mandatory EQR-related activities described in § 438.358(b)(1) is the time and effort for a state to conduct and document the findings of the four mandatory activities: (1) The annual validation of PIPs conducted by the MCO, PIHP, or PAHP, (2) the annual validation of performance measures calculated by the MCO, PIHP, or PAHP, (3) a review of MCO, PIHP, or PAHP compliance with structural and operational standards, performed once every 3 years; and (4) validation of MCO, PIHP, or PAHP network adequacy during the preceding 12 months. Each of the activities will be conducted on the 552 MCOs, PIHPs, and PAHPs that we estimate provide Medicaid services.
The types of services provided by MCOs, PIHPs, and PAHPs, and the number of PIPs conducted and performance measures calculated will vary. The previously approved burden under control number 0938–0786 (CMS–R–305) for these three activities assumed that each of the then-estimated 458 MCOs and PIHPs validate one PIP by a professional at $63/hr for 65 hr, validate one performance measure by a professional at $63/hr for 53 hr, and complete an annual a compliance review by a professional at $63/hr for 361 hr. The previously approved annual burden was 219,382 hr (479 hr × 458 MCOs and PIHPs) and $13,821,066 (219,382 hr × $63/hr). However, based on recent experience (for MCOs and PIHPs), we estimate that each MCO or PIHP will conduct 3 PIPs, each PAHP will conduct 1 PIP, and that each MCO, PIHP, or PAHP will calculate 3 performance measures. Furthermore, using the time estimates developed for MCOs and PIHPs for the previously approved burden estimates under control number 0938–0786 (CMS–R–305) (and assuming that the same time estimates will also apply to PAHPs), we estimate it will take an average of 65 hr/PIP validation, 53 hr/performance measure validation, and 361 hr/compliance review (occurs once every 3 years) for a business operations specialist, at $64.46/hr, to conduct the mandatory EQR activities. For MCOs and PIHPS, we estimate an annual state burden of 242,367.3 hr (511 MCOs and PIHPs × [(65 hr × 3 PIPs) + (53 hr × 3 performance measures) + (361 hr/3 year)]) and $15,622,996.16 (242,367.3 hr × $64.46/hr) for the first three mandatory EQR-related activities. This estimate replaces the previous burden; the net change in annual state burden for MCOs and PIHPs is 22,985.3 hr (242,367.3 hr−219,382 hr) and $1,801,930.16 ($15,622,996.16 − $13,821,066).
For PAHPs, we estimate an aggregate annual state burden of 14,116.3 hr (41 PAHPs × 344.3 hr [(65 hr × 1 PIPs) + (53 hr × 3 performance measures) + (361 hr/3 years)]) and $909,936.70 (14,116.3 hr × $64.46/hr) for the first three mandatory EQR-related activities.
The fourth mandatory EQR-related activity described in § 438.358(b)(1)(iv) requires the validation of MCO, PIHP, and PAHP network adequacy during the preceding 12 months. States will conduct this activity for each MCO, PIHP, and PAHP. Given that this is a new activity, we do not have historic data on which to base an hourly burden estimate for the network validation process. We estimate that it will take less time than the validation of a PIP but more time than the validation of a performance measure. Therefore, we estimate an annual state burden of 60 hr at $64.46/hr for a business operations specialist to support the validation of network adequacy activity. In aggregate, we estimate 33,120 hr (552 MCOs, PIHPs, and PAHPs × 60 hr) and $2,134,915.20 (33,120 hr × $64.46/hr) for the validation of network adequacy activity.
Section 438.358(b)(2) describes the mandatory EQR-related activities which must be conducted for each PCCM entity (described in § 438.310(c)(2)), specifically the activities described in § 438.358(b)(1)(ii) and (iii). Given that we do not have data to estimate the time required for each of these activities for these PCCM entities, we rely on the time per activity estimates used for MCOs, PIHPs, and PAHPs; we assume the validation of one performance measure per PCCM entity (described in § 438.310(c)(2)). Therefore, we estimate an annual state burden of 1,560 hr (9 PCCM entities × 173.3 hr [(53 hr × 1 performance measure) + (361 hr/3 years)]) and $100,557.60 (1,560 hr × $64.46/hr) for the mandatory EQR-related activities for PCCM entities (described in § 438.310(c)(2)).
The burden associated with § 438.358(b)(1) also includes the time for an MCO, PIHP, or PAHP to prepare the information necessary for the state to conduct the mandatory EQR-related activities. We estimate that it will take each MCO, PIHP, or PAHP 200 hr to prepare the documentation for these four activities, half (100 hr) at $64.46/hr by a business operations specialist and half (100 hr) at $36.54/hr by an office and administrative support worker. The burden associated with § 438.358(b)(2) also includes the time
Section 438.358(c) describes the six optional EQR-related activities: (1) Validation of client level data (such as claims and encounters); (2) administration or validation of consumer or provider surveys; (3) calculation of performance measures; (4) conduct of PIPs; (5) conduct of focused studies; and (6) assist with the quality rating of MCOs, PIHPs, and PAHPs consistent with § 438.334. As with the mandatory activities described in § 438.358(b), these activities may be conducted by the state, its agent that is not an MCO, PIHP, or PAHP, or an EQRO, but for the purposes of this burden estimate we assume that the state conducts the activities.
We have no data to estimate the hours associated with how long it will take to conduct the optional EQR activities. Without that information, our best guess is that it will take 350 hr to validate client level data and 50 hr to validate consumer or provider surveys. We estimate it will take three times as long to calculate performance measures (159 hr) as it takes on average to validate and three times as long to conduct PIPs and focused studies (195) as it takes on average to validate PIPs. We also estimate that it will take three times as long to administer a consumer or provider survey than it takes to validate a survey (150 hr).
The previously approved burden under control number 0938–0786 (CMS–R–305) uses state-reported data from 2001 to estimate that states will: (1) Validate the encounter data of 69 percent (316) of MCOs and PIHPs; (2) administer or validate consumer or provider surveys of 43 percent (197) of MCOs and PIHPs; (3) calculate performance measures of 29 percent (133) of MCOs and PIHPs; (4) conduct PIPs of 38 percent (174) of MCOs and PIHPs; and (5) conduct focused studies of 76 percent (348) of MCOs and PIHPs. Using the hourly estimates (above) for each task and assuming the work is completed by a professional at $63/hr (the job title and wage used in the previously approved burden under control number 0938–0786 (CMS–R–305)), CMS–R–305 previously estimated a total burden of 240,759 hr and $15,167,817. However, based on our review of EQR technical report submissions since the original promulgation of these regulations, we have observed that many states do not conduct the optional EQR-related activities as frequently as assumed in our original estimates. While the exact states and number vary from year to year, we have not observed participation at the level observed in 2001 state-reported data.
Therefore, we revise our estimate and assume that each year 10 percent (51) of MCOs and PIHPs will be subject to each of the optional EQR-related activities. Regarding the administration or validation of consumer or provider surveys, we assume that half of the MCOs and PIHPs (25) will administer surveys while half (26) will validate surveys. We also estimate that a mix of professionals will work on each optional EQR-related activity: 20 Percent by a general and operations manager ($140.80/hr); 25 percent by a computer programmer ($78.32/hr); and 55 percent by a business operations specialist ($64.46/hr). For the purposes of this estimate, we assume that the 10 percent of affected MCOs and PIHPs operate within 10 percent of states that contract with MCOs and PIHPs (4 states). We understand that this estimate may not reflect the number of states that require these optional EQR-related activities, and that there is variation in the number of plans that operate within a given state.
To validate client level data, we estimate 17,850 hr (51 MCOs and PIHPs × 350 hr) and $1,484,995.05 [(17,850 hr × 20 percent × $140.80/hr) + (17,850 hr × 25 percent × $78.32/hr) + (17,850 hr × 55 percent × $64.46/hr)]. To administer consumer or provider surveys, we estimate 3,750 hr (25 MCOs and PIHPs × 150 hr) and $311,973.75 [(3,750 hr × 20 percent × $140.80/hr) + (3,750 hr × 25 percent × $78.32/hr) + (3,750 hr × 55 percent × $64.46/hr)]. To validate consumer or provider surveys, we estimate 1,300 hr (26 MCOs and PIHPs × 50 hr) and $108,150.90 [(1,300 hr × 20 percent × $140.80/hr) + (1,300 hr × 25 percent × $78.32/hr) + (1,300 hr × 55 percent × $64.46/hr)]. To calculate performance measures, we estimate 8,109 hr (51 MCOs and PIHPs × 159 hr) and $674,612.04 [(8,109 hr × 20 percent × $140.80/hr) + (8,109 hr × 25 percent × $78.32/hr) + (8,109 hr × 55 percent × $64.46/hr)]. To conduct PIPs, we estimate 9,945 hr (51 MCOs and PIHPs × 195 hr) and $827,354.39 [(9,945 hr × 20 percent × $140.80/hr) + (9,945 hr × 25 percent × $78.32/hr) + (9,945 hr × 55 percent × $64.46/hr)]. To conduct focused studies, we estimate 9,945 hr (51 MCOs and PIHPs × 195 hr) and $827.354.39 [(9,945 hr × 20 percent × $140.80/hr) + (9,945 hr × 25 percent × $78.32/hr) + (9,945 hr × 55 percent × $64.46/hr)]. In aggregate, the annual state burden for optional EQR-related activities for MCOs and PIHPs is 50,899 hr (17,850 hr + 3,750 hr + 1,300 hr + 8,109 hr + 9,945 hr + 9,945 hr) and $4,234,440.51 [(50,899 hr × 20 percent × $140.80/hr) + (50,899 hr × 25 percent × $78.32/hr) + (50,899 hr × 55 percent × $64.46/hr)].
The optional EQR-related activities described in § 438.358(c) may also be conducted on PAHPs and PCCM entities (described in § 438.310(c)(2)). Since neither PAHPs or PCCM entities (described in § 438.310(c)(2)) have historically been subject to EQR, we do not have any data on which to base an estimate regarding how states will apply the optional EQR-related activities to these delivery systems. Therefore, we will apply the time, wage, and participation estimates developed for MCOs and PIHPs to PAHPs and PCCM entities (described in § 438.310(c)(2)). To validate client level data, we estimate 2,100 hr (6 PAHPs and PCCM
Section 438.358(c)(6) allows a state to contract with an EQRO to support the quality rating of MCOs, PIHPs, and PAHPs consistent with § 438.334. We do not believe that the effort required to rate a plan changes based on which entity (state or EQRO) develops the plan rating. Therefore, we believe that any burden associated with this optional EQR-related activity will only offset the burden associated with § 438.334(d).
We received the following comments regarding the proposed ICRs regarding the activities related to EQR:
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.360(a) grants states the option to use the information obtained from a Medicare or private accreditation review of an MCO, PIHP, or PAHP in place of information otherwise generated from the three mandatory activities specified in § 438.358(b)(1)(i) through (iii). Specifically, this section allows states to apply the non-duplication option to all MCOs, PIHPs, and PAHPs and it allows states to apply the non-duplication option to the validation of performance measures, the validation of PIPs, and to the compliance review. Section 438.360(c) requires states to address the use of non-duplication as an element of the quality strategy.
Section 438.360(b) describes when a state may elect to use information from a Medicaid or private accreditation review in place of information that would otherwise be generated by the mandatory EQR-related activities in § 438.358(b)(1)(i) through (iii). The burden associated with non-duplication is the time and effort for an MCO, PIHP, or PAHP to disclose the reports, findings, and other results of the Medicare or private accreditation review to the state agency.
While states could elect to allow all 552 MCOs, PIHPs, and PAHPs to substitute information from a Medicare or private accreditation review for the three mandatory EQR-related activities specified at § 438.358(b)(1)(i) through (iii), in practice we find that states utilize this option infrequently. Therefore, we estimate that states will apply the non-duplication option to 10 percent (55) of MCOs (33), PIHPs (18), and PAHPs (4). The currently approved burden under control number 0938–0786 (CMS–R–305)) estimates that 336 MCOs and/or PIHPs take advantage of the nonduplication provision, requiring 8 hr at $37.50/hr per MCO or PIHP to disclose the necessary information to the state, for a total currently approved burden of 2,688 hr (336 MCOs and PIHPs × 8 hr) and $100,800 (2,688 hr × $37.50/hr). Since this appears to be an overestimate of the burden for MCOs and PIHPs, we estimate a revised annual private sector burden of 2 hr at $64.46/hr for a business operations specialist and 6 hr at $36.54/hr for an office and administrative support worker to disclose the necessary documentation to the state each year for a single MCO or PIHP. In aggregate, we estimate a private sector burden of 408 hr (51 MCOs and PIHPs × 8 hr) and $17,756.16 [(51 MCOs and PIHPs × (2 hr × $64.46/hr) + (6 hr × $36.54/hr)]. Under this rule, states may apply the nonduplication provisions to PAHPs. In aggregate, we estimate 32 hr (4 PAHPs × 8 hr) and $1,392.64 [4 PAHPs × (2 hr × $64.46/hr) + (6 hr × $36.54/hr)].
The process in § 438.360(b) includes the provision of all of the reports, findings, and other results of the Medicare or private accreditation review to the appropriate EQRO by the state agency. The currently approved burden under control number 0938–0786 (CMS–R–305) estimates that sharing the reports, findings, and results with EQROs for 336 MCOs and PIHPs will take states 8 hr at $37.50/hr per plan, for a total burden of 2,688 hr (336 MCOs × 8 hr) and $100,800 (2,688 hr × $37.50/hr). However, we estimate it will take, on average, 2 hr at $36.54/hr for an office and administrative support worker to disclose the necessary documentation to the appropriate EQRO. This represents a decrease in the estimated hourly burden for this task, as we believe that the use of electronic tracking and transmission tools has significantly decreased the hourly burden associated with state staff forwarding the documentation to the EQRO. In aggregate, we estimate an annual state burden of 110 hr (55 MCOs, PIHPs, and PAHPs × 2 hr) and $4,019.40 (110 hr × $36.54/hr) to forward non-duplication-related documentation to the EQROs.
Assuming that states will apply the non-duplication provision to 10 percent of MCOs, PIHPs, and PAHPs, we
Additionally, the MCOs, PIHPs, and PAHPs subject to non-duplication will not have to prepare the documentation necessary for the three mandatory EQR-related activities. Based on the assumption in § 438.358(b)(1) that an MCO, PIHP, or PAHP will need 200 hr to prepare the documentation for the four mandatory activities, we estimate that it will take 150 hr to prepare the documentation for the three activities subject to non-duplication, half (100 hr) at $64.46/hr by a business operations specialist and half (100 hr) at $36.54/hr by an office and administrative support worker. In aggregate, we estimate a decrease in annual private sector burden of −8,250 hr (−55 MCOs, PIHPs, and PAHPs × 150 hr) and −$416,625 [(−4,125 hr × $64.46/hr) + (−4,125 × $36.54)].
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.362 reflects that PIHPs cannot be exempted from EQR, as they do not qualify as a MA Organization under part C of Title XVII of the Act or under section 1876 of the Act, and they do not qualify as an MCO under section 1903(m) of the Act. This led to a decrease in our estimate of the number of plans that might be exempt from the EQR process.
Under § 438.362, exempted MCOs have to provide (annually) to the state agency the most recent Medicare review findings reported to the MCO by CMS or its agent. Of the approximately 335 MCOs, we estimate that approximately half (168) might provide Medicare services in addition to Medicaid services. Of these 168 MCOs that might potentially provide Medicare services in addition to Medicaid services, we further estimate that state agencies will allow approximately 10 percent (17) of the MCOs to be exempt from the EQR process.
We estimate an annual private sector burden of 8 hr (2 hr at $64.46/hr for a business operations specialist and 6 hr at $36.54/hr for an office and administrative support worker) for an MCO to prepare and submit the necessary documentation to the state agency. In aggregate, we estimate 136 hr (17 MCOs × 8 hr) and $5,918.72 (17 MCOs × [(2 hr × $64.46/hr) + (6 hr × $36.54/hr)]). The previously approved burden under control number 0938–0786 (CMS–R–305) estimated that states would allow 10 percent (20) of the 202 MCOs (which might provide Medicare services in addition to Medicaid services) to be exempt from the EQR process, and that it would take each MCO approximately 8 hr at $37.50/hr to prepare the necessary materials for a total burden of 160 hr (20 MCOs × 8 hr) and $6,000 (160 hr × $37.50/hr). Therefore, we estimate a change in burden of −24 hr (136 hr −160 hr) and −$81.28 ($5,918.72−$6,000). We note that in the proposed rule, Table 2 identified the net burden associated with § 438.362; in this final rule, Table 2a shows the revised burden for this section.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates and to reflect the mandatory application of EQR to PCCM entities described in § 438.310(c)(2), which increases the estimated number of states impact by this section to 42. No comments were received.
Section 438.364(a) describes the information that will be included in the annual detailed technical report that is the product of the EQR. Section 438.364(a)(1)(iii) specifies that the EQR technical report includes baseline and outcomes data regarding PIPs and performance measures. Many states already provide much of this information in their final EQR technical report. The burden of compiling this data for MCOs, PIHPs, PAHPs, and select PCCM entities is captured in § 438.358. Under § 438.364(a)(3), EQR technical reports will include recommendations on how the state can use the goals and objectives of its managed care quality strategy to support improvement in the quality, timeliness, and access to care for beneficiaries. We believe that states will amend their EQRO contracts to address the changes to § 438.364(a). We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to amend the EQRO contract in the estimated 37 states with existing EQRO contracts. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 18.5 hr (37 states × 0.5 hr) and $1,192.51 (18.5 hr × $64.46/hr), annualized to 6.2 hr and $397.50. We believe that the 5 states that contract only with PAHPs and PCCM entities will incorporate this section into their initial EQRO contracts, and therefore we do not believe there is an EQRO amendment burden associated with the changes to this section for those 5 states.
Section 438.364(b)(1) clarifies that the EQRO will produce and submit to the state an annual EQR technical report, and that states may not substantively revise the report without evidence of error or omission. This is consistent with existing policy and should not pose a burden on the states or the private sector. The April 30th deadline for the finalization and submission of EQR technical reports is consistent with existing subregulatory guidance.
While we do not anticipate that these changes would pose a significant burden on states or the private sector, we estimate that this provision may necessitate a change in a state's EQRO contract for approximately 10 states. In this regard, we estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to modify the EQRO contract. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 5 hr (10 states × 0.5 hr) and $322.30 (5 hr × $64.46/hr), annualized to 1.7 hr and $107.43.
Under § 438.364(c)(ii), each state agency will provide copies of technical reports, upon request, to interested parties such as participating health care providers, enrollees and potential enrollees of the MCO, PIHP, or PAHP, beneficiary advocacy groups, and members of the general public. States will also make the most recent EQR technical report publicly available on the state's Web site, the burden for which is included in § 438.10.
We believe that by making these reports available online, states will be able to significantly decrease the burden associated with responding to requests from the public for this information, as it will already be easily accessible. The burden associated with section is the time and effort for a state agency to furnish copies of a given technical report to interested parties. The currently approved burden under control number 0938–0786 (CMS–R–
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.370(c) will require states to submit their EQRO contracts to CMS for review and approval prior to claiming FFP at the 75 percent rate. Since most states already consult with CMS regarding EQRO contracts, we estimate only 12 states will need to amend their policies and procedures to comply with this process. We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to amend their state's policies and procedures. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 6 hr (12 states × 0.5 hr) and $386.76 (6 hr × $64.46/hr), annualized to 2.0 hr and $128.92.
The 12 states which do not currently work with CMS on their EQRO contracts will need to submit the EQRO contracts to CMS for review and approval if they plan to claim the enhanced 75 percent federal match. We estimate a one-time state burden of 0.25 hr at $36.54/hr for an office and administrative support worker to submit the EQRO contract to CMS. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 3 hr (12 states × 0.25 hr) and $109.62 (3 hr × $36.54/hr), annualized to 1.0 hr and $36.54.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.400(b) replaces “action” with “adverse benefit determination” and revises the definition. It also revises the definitions of “appeal” and “grievance” and add a definition for “grievance system.” In response, states, MCOs and PIHPs need to update any documents where these terms are used. (PAHPs will use these updated definitions when they develop their systems in § 438.402.)
We estimate a one-time private sector burden of 5 hr at $64.46/hr for a business operations specialist to amend all associated documents to the new nomenclature and definitions. In aggregate, we estimate 2,555 hr (335 MCO + 176 PIHP × 5 hr) and $164,695.30 (2,555 hr × $64.46/hr). We also estimate a one-time state burden for states of 200 hr (40 states × 5 hr) and $12,892 (200 hr × $64.46/hr) to make similar revisions. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.402(a) adds non-NEMT PAHPs to the existing requirement for MCOs and PIHPs to have a grievance system. There are 41 PAHPs that will need to have their contract amended. The burden for revising their contract is included in § 438.3.
To set up a grievance system, we estimate it takes 100 hr (10 hr at $140.80/hr for a general and operations manager, 75 hr at $64.46/hr for a business operations specialist, and 15 hr at $78.32/hr for a computer programmer) for each PAHP. In aggregate, we estimate a one-time private sector burden of 4,100 hr (41 PAHPs × 100 hr) and $304,109.30 [41 PAHPs × ((10 hr × $140.80/hr) + (75 hr × $64.46/hr) + (15 hr × $78.32/hr))]. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
We further estimate that the average PAHP only receives 10 grievances per month due to their limited benefit package and will only require 3 hr at $64.46/hr for a business operations specialist to process and handle grievances and adverse benefit determinations. In aggregate, we estimate an annual private sector burden of 14,760 hr (41 PAHPs × 10 grievances × 3 hr × 12 months) and $951,429.60 (14,760 hr × $64.46/hr).
Section 438.402(b) limits MCOs, PIHPs, and PAHPs to one level of appeal for enrollees. This will likely eliminate a substantial amount of burden from those that currently have more than one, but we are unable to estimate that amount since we do not know how many levels each managed care plan currently utilizes. We requested comment from managed care plans to help us estimate the savings from this provision. We received no comments and will finalize this section with no estimated cost savings.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.404(a) adds PAHPs as an entity that must give the enrollee timely written notice. It also sets forth the requirements of that notice. Consistent with the requirements for MCOs and PIHPs, PAHPs must give the enrollee timely written notice if it intends to: deny, limit, reduce, or terminate a service; deny payment; deny the request of an enrollee in a rural area with one plan to go out of network to obtain a service; or fails to furnish, arrange, provide, or pay for a service in a timely manner.
We estimate an annual private sector burden of 1 min at $30.92/hr for a mail clerk to send this notification. We also estimate that 2 percent (240,000) of the 12 million PAHP enrollees will receive one notice of adverse benefit determination per year from a PAHP. In aggregate, we estimate an annual state burden of 4,000 hr (240,000 enrollees × 1 min) and $123,927.36 (4,000 hr × $30.92/hr).
The following requirements and burden estimates were set out in the
Section 438.408(b) changes the time frame for appeal resolution from 45 days to 30 days. For MCOs, PIHPs, and PAHPs that have Medicare and/or QHP lines of business, this reflects a reduction in burden as this aligns Medicaid time frames with Medicare and QHP. For MCOs, PIHPs, and PAHPs that do not have Medicare and/or QHP lines of business, and whose state has an existing time frame longer than 30 days, they will need to revise their policies and procedures. Of the 568 MCOs, PIHPs, and PAHP, we assumed at least 50 percent offered either a Medicare or QHP product line. Of that, we then assumed that some plans already had 30 day timeframes. Of those plans remaining, we believed 200 to be a reasonable estimate. Among the 200 MCOs, PIHPs, and PAHPs, we estimate a one-time private sector burden of 1 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate 200 hr (200 MCOs, PIHPs, and PAHPs × 1 hr) and $12,892 (200 hr × $64.46). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
This section adds PAHPs to the requirement to maintain records of grievances and appeals. We estimate that approximately 240,000 enrollees (2 percent) of the approximately 12 million PAHP enrollees file a grievance or appeal with their PAHP. As the required elements will be stored and tracked electronically, we estimate 1 min per grievance and appeal at $36.54/hr for an office and administrative support worker to maintain each grievance and appeals record. In aggregate, we estimate an annual private sector burden of 4,000 hr (240,000 grievances × 1 min) and $146,452.32 (4,000 hr × $36.54/hr).
Maintaining records for grievances and appeals has always been required for MCOs and PIHPs. However, this rule requires specific data so a few MCOs and PIHPs (10 percent 335 MCOs + 176 PIHPs) may have to revise their policies and systems to record the required information. We estimate 3 hr at $78.32 for a computer programmer to make necessary changes. We estimate a one-time private sector burden of 153 hr (51 MCOs and PIHPs × 3 hr) and $11,982.96 (153 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. As the required elements will be stored and tracked electronically, we estimate 1 min per grievance and appeal at $36.54/hr for an office and administrative support worker to maintain each grievance and appeals record. In aggregate, we estimate an annual private sector burden of 14,299 hr (856,257 grievances (.02 × 4,394,450 (.10 × 43,944,503 MCO and PIHP enrollees) × 1 min) and $522,503.43 (14,299 hr × $36.54/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.420(c)(4) removes the time period or service limit of a previously authorized service has been met as a criteria for defining the duration of continued benefits and adds “PAHP” as a conforming change to § 438.400. This action requires that MCOs and PIHPs revise current policies and procedures to reflect having only 3 criteria instead of 4. PAHPs would incorporate the options in § 438.420(c)(1) through (3) when developing their system under § 438.402 and thus the elimination of § 438.420 (c)(4) would have no impact on PAHPs.
For MCOs and PIHPs, we estimate a one-time private sector burden of 4 hr at $64.46/hr for a business operations specialist to revise current policies and procedures. In aggregate, we estimate 2,044 hr (335 MCOs + 176 PIHPs × 4 hr) and $131,756.24 (2,044 hr × $64.46/hr).
Section 438.420(d) adds PAHPs to the list of entities that can recover costs if the adverse determination is upheld. PAHPs are required to include the policies and procedures necessary to recover costs when developing their system under § 438.402 and thus will not incur additional burden.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.602(a) details state responsibilities for monitoring MCO, PIHP, PAHP, PCCM or PCCM's compliance with §§ 438.604, 438.606, 438.608, 438.610, 438.230, and 438.808. As all of these sections are existing requirements, the only new burden is for states to update their policies and procedures, if necessary, to reflect revised regulatory text. We estimate a one-time state burden of 6 hr at $64.46/hr for a business operations specialist to create and/or revise their policies. In aggregate, we estimate 252 hr (42 states × 6 hr) and $16,243.92 (252 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.602(b) requires states to screen and enroll MCO, PIHP, PAHP, PCCM and PCCM entity providers in accordance with 42 CFR part 455, subparts B and E. Given that states already comply with these subparts for their FFS programs, the necessary processes and procedures have already been implemented. Additionally, since some states require their managed care plan providers to enroll with FFS, the overlap that occurs in many states due to provider market conditions, and the exemption from this requirement for Medicare approved providers, we believe the pool of managed care providers that will have to be newly screened and enrolled by the states is small. We expect the MCOs, PIHPs, and PAHPs will need to create data files to submit new provider applications to the state for the screening and enrollment processes. As PCCMs and PCCM entities are already FFS providers, there would be no additional burden on them or the state. As such, we estimate a one-time private sector burden of 6 hr at $78.32/hr for a computer programmer to create the necessary programs to send provider applications/data to the state. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 3,432 hr (335 MCOs + 176 PIHPs + 61 PAHPs × 6 hr) and $268,794.24 (3,432 hr × $78.32/hr). Once created, the report will likely be put on a production schedule and generate no additional burden.
Section 438.602(e) requires states to conduct or contract for audits of MCO, PIHP, and PAHP encounter and financial data once every 3 years. As validation of encounter data is also required in § 438.818(a), we assume no additional burden. For the financial audits, states could use internal staff or an existing contractual resource, such as their actuarial firm. For internal staff,
Section 438.602(g) requires states to post the MCO's, PIHP's, and PAHP's contracts, data from § 438.604, and audits from § 438.602(e) on their Web site. As most of these activities will only occur no more frequently than annually, we estimate an annual state burden of 1 hr at $78.32/hr for a computer programmer to post the documents. In aggregate, we estimate 40 hr (40 states × 1 hr) and $3,132.80 (40 hr × $78.32/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.608(a) requires that MCOs, PIHPs, and PAHPs to have administrative and management arrangements or procedures which are designed to guard against fraud and abuse. The arrangements or procedures must include a compliance program as set forth under § 438.608(a)(1), provisions for reporting under § 438.608(a)(2), provisions for notification under § 438.608(a)(3), provisions for verification methods under § 438.608(a)(4), and provisions for written policies under § 438.608(a)(5).
The compliance program under § 438.608(a)(1), must include: Written policies, procedures, and standards of conduct that articulate the organization's commitment to comply with all applicable federal and state standards and requirements under the contract; the designation of a Compliance Officer; the establishment of a Regulatory Compliance Committee on the Board of Directors; effective training and education for the organization's management and its employees; and provisions for internal monitoring and a prompt and effective response to noncompliance with the requirements under the contract.
While § 438.608(a)(1) is an existing regulation, we expect all MCOs, PIHPs, and PAHPs review their policies and procedures to ensure that all of the above listed items are addressed. We estimate a one-time private sector burden of 2 hr at $64.46/hr for a business operations specialist to review and (if necessary) revise their policies and procedures. In aggregate, we estimate 1,104 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 2 hr) and $71,163.84 (1,104 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. Section 438.608(a)(2) and (3) requires the reporting of overpayments and enrollee fraud. As these would be done via an email from the MCO, PIHP, or PAHP to the state and do not occur very often, we estimate an annual private sector burden of 2 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate 1,104 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 2 hr) and $71,163.84 (1,104 hr × $64.46/hr).
Section 438.608(a)(4) requires that the MCO, PIHP, or PAHP use a sampling methodology to verify receipt of services. Given that this is already required of all states in their FFS programs, many states already require their MCOs, PIHPs, and PAHPs to do this. Additionally, many managed care plans perform this as part of usual and customary business practice. Therefore, we estimate only approximately 200 MCOs, PIHPs, or PAHPs may need to implement this as a new procedure. As this typically involves mailing a letter or sending an email to the enrollee, we estimate that 200 MCOs, PIHPs, or PAHPs will mail to 100 enrollees each. We estimate an annual private sector burden of 1 min at $30.92/hr for a mail clerk to send each letter. In aggregate, we estimate 333 hr (20,000 letters × 1 min/letter) and $10,327.28 (333 hr × $30.92/hr). This estimate will be significantly reduced as the use of email increases.
Section 438.608(b) reiterates the requirement in § 438.602(b) whereby the burden is stated in section V.C.36. of this final rule.
Section 438.608(c) and (d) requires that states include in all MCO, PIHP, and PAHP contracts, the process for the disclosure and treatment of certain types of recoveries and reporting of such activity. While the burden to amend the contracts is included in § 438.3, we estimate a one-time private sector burden of 1 hr at $78.32/hr for a computer programmer to create the report. In aggregate, we estimate 552 hr (335 MCOs + 176 PIHPs + 41 PAHPs × 1 hr) and $43,232.64 (552 hr × $78.32/hr). Once developed, the report will be put on a production schedule and add no additional burden.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
After a state has notified an MCO, PIHP, PAHP or PCCM of its intention to terminate its contract, § 438.722(a) provides that the state may give the entity's enrollees written notice of the state's intent to terminate its contract. States already have the authority to terminate contracts according to state law and some have previously already opted to provide written notice to MCO and PCCM enrollees when exercising this authority.
We estimate that no more than 12 states may terminate 1 contract per year. We also estimate an annual state burden of 1 hr at $64.46/hr for a business operations specialist to prepare the notice. In aggregate, we estimate a one-time state burden of 12 hr (12 states × 1 hr) and $773.52 (12 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
To send the notice, we estimate 1 min (per beneficiary) at $30.92/hr for a mail clerk. We estimate an aggregate annual state burden of 18,075 hr (12 states × 90,378 enrollees/60 mins per hour) and $560,015.35 (18,075 hr × $30.92/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 438.818(a)(2) requires that the encounter data be validated prior to its submission. States can perform this validation activity themselves, contract it to a vendor, or contract it to their EQRO. In this regard, a state already using EQRO to validate its data at an appropriate frequency will incur no additional burden. Since approximately 10 states already use their EQRO to validate their data, only 27 states that use a MCO and/or PIHP may need to take action to meet this requirement. The method selected by the state will determine the amount of burden incurred. We assume an equal distribution of states selecting each method, thus 9 states per method.
A state using EQRO to validate data on less than an appropriate frequency may need to amend their EQRO contract. In this case, we estimate 1 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate a one-time state burden of 9 hr (9 states × 1 hr) and $580.14 (9 hr × $64.46/hr). We are annualizing the one-time
A state electing to perform validation internally needs to develop processes and policies to support implementation. In this case, we estimate 10 hr at $64.46/hr for a business operations specialist to develop policy and 100 hr at $78.32/hr for a computer programmer to develop, test, and automate the validation processes. In aggregate, we estimate a one-time state burden of 990 hr (9 states × 110 hr) and $76,289.40 [9 states ×((10 hr × $64.46/hr) + (100 hr × $78.32hr))].
For a state electing to procure a vendor, given the wide variance in state procurement processes, our burden is conservatively estimated at 150 hr for writing a proposal request, evaluating proposals, and implementing the selected proposal. We estimate 125 hr at $64.46/hr for a business operations specialist to participate in the writing, evaluating, and implementing, and 25 hr at $140.80/hr for a general and operations manager to participate in the writing, evaluating, and implementing. In aggregate, we estimate an annual state burden of 1,350 hr [9 states × (150 hr)] and $104,197.50 [9 states × ((125 hr × $64.46/hr) + (25 hr × $140.80/hr))].
The following requirements and burden estimates were set out in the proposed rule and are being adopted with the following changes: As stated above, we have updated the projected enrollment of children in managed care in CHIP (to approximately 2.3 million children) with updated enrollment numbers obtained from the SEDS, as well as updated the number of states and plans with managed care upon further information gathering from states (to 62 entities that contract with CHIP separately from their Medicaid contracts, including approximately 55 MCOs and PIHPs, 3 PAHPs, and 4 PCCMs). We have also made minor adjustments to the hourly rates. No comments were received. Section 457.1201 contains a list of standard requirements that must be included in MCO, PIHP, PAHP, and PCCM contracts. The following burden estimate addresses the effort to amend such contracts in addition to the contract amendments associated with §§ 457.1203, 457.1207, 457.1208, 457.1209, 457.1210, 457.1212, 457.1218, 457.1220, 457.1222, 457.1224, 457.1226, 457.1228, 457.1230, 457.1233, 457.1240, 457.1250, 457.1260, 457.1270, and 457.1285. We estimate a one-time state burden of 6 hr at $64.46/hr for a business operations specialist to amend all contracts associated with the aforementioned requirements. In aggregate, we estimate 372 hr (62 contracts × 6 hr) and $23,979.12 (372 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to account for the number of contracts and to provide for minor adjustments to hourly rates. No comments were received.
Section 457.1203 (which has been modified in this final rule to include the requirements proposed at § 457.1205) applies the requirements of § 438.8 to CHIP. Section 438.8(c) requires that MCOs, PIHPs, and PAHPs report to the state annually their total expenditures on all claims and non-claims related activities, premium revenue, the calculated MLR, and, if applicable under other authority, any remittance owed.
We estimate the total number of MLR reports that MCOs, PIHPs, and PAHPs will be required to submit to the state will amount to 58 reports. We estimate a one-time burden of 168 hr for the initial administration activities. In the first year, we estimate that 60 percent of the time will be completed by a computer programmer (101 hr at $78.32/hr), 30 percent will be completed by a business operations specialist (50 hr at $64.46/hr), and 10 percent will be completed by a general and operations manager (17 hr at $140.80/hr). The first year burden amounts to 168 hr and $13,526.92 ((101 hr × $78.32) + (50 hr × $64.46) + (17 hr × $140.80)) per report or, in aggregate, 9,744 hr (58 reports × 168 hr) and $784,561.36 (58 × $13,526.92).
In subsequent years, since the programming and processes established in year 1 will continue to be used, the burden will be decrease from 168 hr to an ongoing burden of approximately 53 hr. Using the same proportions of labor allotment, we estimate 53 hr and $4,261.73 ((31.8 hr × $78.32) + (15.9 hr × $64.46) + (5.3 hr × $140.80)) per report and a total of 3,074 hr (53 hr × 58 reports) and $247,180.34 (58 reports × $4,261.73). We expect states to permit MCOs and PIHPs to submit the report electronically. Since the submission time is included in our reporting estimate, we are not setting out the burden for submitting the report.
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change except for the minor adjustments to hourly rates. No comments were received.
Section 457.1206 provides a list of standard requirements that must be included in NEMT PAHP contracts. The following burden estimate addresses the effort to amend such contracts in addition to the contract amendments associated with §§ 457.1203, 457.1207, 457.1208, 457.1209, 457.1212, 457.1214, 457.1216, 457.1220, 457.1222, 457.1224, 457.1226, 457.1230, and 457.1233. We estimate a one-time state burden of 4 hr at $64.46/hr for a business operations specialist to amend all contracts associated with the aforementioned requirements. In aggregate, we estimate 12 hr (3 contracts × 4 hr) and $773.52 (12 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with the minor adjustments to hourly rates and a lower estimate as to the number of states affected by this
Section 457.1207 applies the requirements of § 438.10 to CHIP. Section 438.10(c)(1) requires that states with separate CHIPs with managed care (25) to provide enrollment notices, informational materials, and instructional materials in an easily understood format. We anticipate that most states already do this and will only have to make minor revisions. We estimate an annual burden of 4 hr at $64.46/hr for a business operations specialist to make these revisions. In aggregate, we estimate 100 hr (25 states × 4 hr) and $6,446 (100 hr × $64.46/hr).
Section 438.10(c)(3) requires that states operate a Web site which provides the information set out under § 438.10(f). Since all states already have Web sites for their Medicaid programs and most also include information about their managed care program, most states will probably only have to make minor revisions to their existing Web site. We estimate a one-time state burden of 6 hr at $78.32/hr for a computer programmer to make the initial changes. In aggregate, we estimate 150 hr (25 states × 6 hr) and $11,748 (150 hr × $78.32/hr). We also estimate an annual burden of 3 hr at $78.32/hr for a computer programmer to periodically add or update documents and links on the Web site. In aggregate, we estimate 75 hr (25 states × 3 hr) and $5,874 (75 hr × $78.32/hr).
Section 438.10(c)(4)(i) recommends that states develop definitions for commonly used terms to enhance consistency of the information provided to enrollees. We estimate a one-time state burden of 6 hr at $64.46/hr for a business operations specialist to develop these definitions. In aggregate, we estimate 150 hr (25 states × 6 hr) and $9,669 (150 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.10(c)(4)(ii) recommends that states create model enrollee handbooks and notices. Since many states already provide model handbooks and notices to their entities, we estimate that 15 states may need to take action to comply with this provision. We estimate a one-time state burden of 40 hr at $64.46/hr for a business operations specialist to create these documents. In aggregate, we estimate 600 hr (15 states × 40 hr) and $38,676.00 (600 hr × $64.46/hr). We also estimate an annual state burden of 2 hr at $64.46/hr for a business operations specialist to maintain these documents. In aggregate, we estimate 30 hr (15 states × 2 hr) and $1,933.80 (30 hr × $64.46/hr).
Section 438.10(d)(1) requires that states identify prevalent non-English languages spoken in each managed care entity's service area. Given that states must already determine the prevalent non-English languages spoken in their entire Medicaid service area based on the policy guidance “Enforcement of Title VI of the Civil Rights Act of 1964—National Origin Discrimination Against Persons With Limited English Proficiency” from the U.S. Department of Justice, we believe that dividing the information by plan service area requires only minimal IT programming. More specifically, we estimate a one-time state burden of 4 hr at $78.32/hr for a computer programmer to create these reports. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. In aggregate, we estimate 100 hr (25 states × 4 hr) and $7,832 (100 hr × $78.32/hr) to create these reports. We estimate no additional burden for the running of these reports as they will be put into a production schedule, and putting a report into production adds no additional burden.
Section 438.10(d)(2)(i) requires that states add taglines to all printed materials for potential enrollees explaining the availability of translation and interpreter services as well as the phone number for choice counseling assistance. We estimate a one-time state burden of 2 hr at $64.46/hr for a business operations specialist to create the taglines and another 4 hr to revise all document originals. In aggregate, we estimate 150 hr (25 states × 6 hr) and $9,669 (150 hr × $64.46/hr). As the prevalent languages within a state do not change frequently, we are not estimating burden for the rare updates that will be needed to these taglines.
Section 438.10(e)(1) clarifies that states can provide required information in paper or electronic format. As the amount and type of information that can be provided electronically will vary greatly among the states due to enrollee access and knowledge of electronic communication methods, it is not possible to estimate with any accuracy the amount that will be able to be converted from written to electronic format. Therefore, we will use estimates for all written materials knowing that some of this burden will be alleviated as the states are gradually able to convert to electronic communication methods. In this regard, we estimate a one-time state burden of 40 hr at $64.46/hr for a business operations specialist to create the materials. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. Many states already provide similar information to potential enrollees, so we anticipate that only 15 states will need to create these materials. We also estimate 1 min at $36.54/hr for an office and administrative support worker to mail the materials annually. For existing states, we estimate 1 hr at $64.46/hr for a business operations specialist to update or revise existing materials and 1 min at $36.54/hr for an office and administrative support worker to mail the materials to 5 percent of the enrollees that are new (115,000 enrollees). In aggregate, we estimate a one-time state burden of 600 hr (15 states × 40 hr) and $38,676.00 (600 hr × $64.46/hr) to create materials. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We estimate a one-time state burden of 25 hr (25 states × 1 hr) and $1,611.50 (25 hr × $64.46/hr) to update or revise existing materials. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. The state will also need to mail the materials. We estimate an ongoing burden of 1,916.67 hr (115,000 enrollees × 1 min) and $59,263.44 (1,916.67 hr × $36.54/hr) to mail materials.
Although § 438.10(g)(1) and (2) require the provision of an enrollee handbook, Medicaid regulations have always required the provision of this information (although it did not specifically call it a “handbook”) so we do not anticipate that all entities will need to create a new handbook. Additionally, given the requirement in § 438.10(c)(4)(ii) (which is adopted in CHIP through § 457.1207) for the state to provide a model template for the handbook, the burden on an entity is greatly reduced. We estimate approximately 5 new managed care entities per year using 10 hr at $64.46/hr for a business operations specialist to create a handbook using their state's model template. In aggregate, we estimate 50 hr (5 entities × 10 hr) and $3,223.00 (50 hr × $64.46/hr). For existing MCOs, PIHPs, PAHPs, and PCCMs that already have a method for distributing the information, we believe that 20 entities will need to modify their existing handbook to comply with a new model provided by the state. We also estimate a one-time private sector burden of 4 hr at $64.46/hr for a business operations specialist to update
All new enrollees must receive a handbook within a reasonable time after receiving notice of the beneficiary's enrollment. We assume a 5 percent enrollee growth rate thus 115,000 enrollees (5 percent of 2,300,000) will need to receive a handbook each year. (Existing enrollees typically do not receive a new handbook annually unless significant changes have occurred so this estimate is for new beneficiaries only.) We estimate a private sector state burden of 1 min at $36.54/hr for an office and administrative support worker to mail the handbook. In aggregate, we estimate 1,916.67 hr (115,000 enrollees × 1 min) and $70,035.12 (1,916.67 hr × $36.54/hr) to send handbooks to new enrollees.
All entities will need to keep their handbook up to date. In this regard, we estimate an annual private sector burden of 1 hr at $64.46/hr for a business operations specialist to update the handbook. While the updates need to be made as program changes occur, we estimate 1 hr since each change may only take a few minutes to make. In aggregate, we estimate 62 hr (62 entities × 1 hr) and $3,996.52 (62 hr × $64.46/hr).
Section 438.10(h) requires that MCOs, PIHPs, PAHPs, and PCCMs make a provider directory available in paper or electronic form. Producing a provider directory is a longstanding Medicaid requirement in § 438.10, as well in the private health insurance market. Additionally, given the time sensitive nature of provider information and the notorious high error rate in printed directories, most provider information is now obtained via Web site or by calling the customer service unit. Thus, the only new burden estimated is the time for a computer programmer to add a few additional fields of data as appropriate, specifically, provider Web site addresses, additional disability accommodations, and adding behavioral and long-term services and support providers. We estimate a one-time private sector burden of 1 hr at $78.32/hr for a computer programmer to update the existing directory. In aggregate, we estimate 62 hr (62 entities × 1 hr) and $4,855.84 (62 hr × $78.32/hr). Updates after creation of the original program will be put on a production schedule, which generates no additional burden.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revisions to reduce the estimate of states affected, as well as minor revisions to reflect updated wage data. No comments were received.
Section 457.1209 (incorrectly listed as § 457.1208 in the proposed rule) applies the requirements of § 438.14 to CHIP. Section 438.14(c) requires states to make supplemental payments to Indian providers if the managed care entity does not pay at least the amount paid to Indian providers under the FFS program. There are approximately 18 states with separate CHIPs that have federally recognized tribes. We do not know how many managed care entities have Indian providers, but estimate that it is approximately 40 entities. This type of payment arrangement typically involves the managed care entity sending a report to the state, which then calculates and pays the amount owed to the Indian health care provider. We estimate it will take 1 hr at $78.32/hr for a computer programmer to create the claims report and approximately 12 hr at $64.46/hr for a state business operations specialist to process the payments. We estimate that approximately 18 states will need to use this type of arrangement. In aggregate, we estimate a one-time private sector burden of 40 hr (40 entities × 1 hr) and $3,132.80 (40 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate an ongoing state burden of 216 hr (18 states × 12 hr) and $13,923.36 (216 hr × $64.46/hr).
After the MCO, PIHP, PAHP, and PCCM report is created, it will most likely run automatically at designated times and sent electronically to the state as the normal course of business operations; therefore, no additional burden is estimated after the first year.
(Note: This process is not necessary when the MCO, PIHP, PAHP, or PCCM entity pays the IHCP at least the full amount owed under this regulation.)
This burden estimate has been revised because of the additions to the regulation in § 457.1210(c), which are discussed in section II.B.9.
Section 457.1210(a) requires states to establish a process for prioritizing individuals for enrollment into managed care plans. Establishing a default enrollment process requires policy changes and require the state to send notices to enrollees once they have been enrolled in a plan. We estimate that states will need to use the default enrollment process specified in § 457.1210(a) for 5 percent of enrollees (115,000), and that it will take 1 min at $36.54/hr for an office and administrative support worker to send the notice. In aggregate, we estimate 1,916.67 hr (115,000 beneficiaries × 1 min) and $70,035.12 (1,916.67 hr × $36.54/hr) to send the notices.
Section 457.1210(c) requires states to send a notice to potential enrollees. We believe some states already send such notices, so that only 15 states will have to develop new notices. We estimate that it will take 4 hr at $64.46/hr for a business operations specialist to create the notice. We estimate a one-time burden of 60 hr (4 hr × 15 states) and $3,867.60 (60 hr × $64.46) to develop the notice. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
In addition, we estimate that states would need to send notices to 5 percent of enrollees (115,000) who would be new to managed care each year. We estimate it would take 1 min/enrollee 1 min at $36.54/hr for an office and administrative support worker to mail each notice. We estimate a total annual burden of 1,916.67 hr (115,000 beneficiaries × 1 min) and $70,035.12 (1,916.67 hr × $36.54/hr) to send the notices.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to reflect updated wage data. No comments were received.
Section 457.1212 applies the requirements of § 438.56 to CHIP. To disenroll, § 438.56(d)(1) requires that the beneficiary (or his or her representative) submit an oral or written request to the state agency (or its agent) or to the MCO, PIHP, PAHP, or PCCM, where permitted. We estimate that 5 percent of MCO, PIHP, PAHP, and PCCM enrollees will request that they be disenrolled from an MCO, PIHP, PAHP, or PCCM each year. We also estimate approximately one-fourth of the enrollees will choose a written rather than an oral request.
We estimate an ongoing burden of 10 min for an enrollee to generate a written disenrollment request and 3 min per oral request. In aggregate, we estimate an annual burden (written requests) of 4,791.67 hr (28,750 enrollees × 10 min) and 4,312.5 hr (86,250 enrollees × 3 min) for oral requests.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to reflect updated wage data. No comments were received.
Section 457.1214 applies the requirements of § 438.58 to CHIP. Section 438.58 requires that states have in place safeguards against conflict of interest for employees or agents of the state who have responsibilities relating to the MCO, PIHP, or PAHP. We anticipate that most states already have such safeguards in place, and only 5 states will need to develop new standards to comply with this provision. We estimate a one-time state burden of 10 hr at $64.46/hr for a business operations specialist to develop those standards. In aggregate, we estimate 50 hr (5 states × 10 hr) and $3,223.00 (50 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revisions to reduce the estimate of states affected, as well as minor revisions to reflect updated wage data. No comments were received.
Section 457.1216 applies the requirements of § 438.62 to CHIP. Section 438.62(b)(1) requires that states have a transition of care policy for all beneficiaries moving from FFS CHIP into a MCO, PIHP, PAHP or PCCM, or when an enrollee is moving from one MCO, PIHP, PAHP, or PCCM to another and that enrollee would experience a serious detriment to health or be at risk of hospitalization or institutionalization without continued access to services. We estimate a one-time state burden of 10 hr at $64.46/hr for a business operations specialist to develop the transition of care policy. In aggregate, we estimate 250 hr (25 states × 10 hr) and $16,115 (250 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.62(b)(2) requires that MCOs, PIHPs, PAHPs, or PCCMs implement their own transition of care policy that meets the requirements of § 438.62(b)(1). We estimate it will take 4 hr at $78.32/hr for a computer programmer to create the program that gathers and sends the FFS data to the MCOs, PIHPs, PAHPs, or PCCMs. We also estimate each MCO, PIHP, PAHP, or PCCM will use 4 hr of a computer programmer time to create programs to receive and store data as well as gather and send data to other plans. We are not estimating additional ongoing burden for the routine running of these reports as they will be put into a production schedule. In aggregate, we estimate a one-time state burden of 100 hr (25 states × 4 hr) and $7,832 (100 hr × $78.32/hr) to create the program that gathers and sends the FFS data to the MCOs, PIHPs, PAHPs, or PCCMs. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate a one-time private sector burden of 248 hr (62 MCOs, PIHPs, PAHPs, or PCCMs × 4 hr) and $19,423.36 (248 hr × $78.32/hr) to create programs to receive and store data as well as gather and send data to other plans. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Once a MCO, PIHP, PAHP, or PCCM receives a request or identifies a need to arrange for the transition of services, we estimate a registered nurse at the managed care plan may need 10 min, on average, to access the stored information and take appropriate action. We believe that an average of 25,000 beneficiaries will transition into managed care each year from FFS and 5,000 may switch between plans that meet the state defined standards to qualify for the transition of care policy. In aggregate, we estimate an annual for private sector burden of 5,000 hr (30,000 beneficiaries × 10 min) and $334,600.00 (5,000 hr × $66.92/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to reflect updated wage data. No comments were received.
Section 457.1218 applies the requirements of § 438.68 to CHIP. Section 438.68(a) requires that states set network adequacy standards that each MCO, PIHP and PAHP must follow. Section 438.68(b) and (c) require that states set standards that must include time and distance standards for specific provider types and network standards for LTSS (if the MCO, PIHP or PAHP has those benefits covered through their contract).
We believe some states already comply with these requirements and that only 12 states will need to develop the standards. We estimate a one-time first year burden of 15 hr at $64.46/hr for a business operations specialist to develop network standards meeting the specific provider types found in § 438.68(b)(1). In aggregate, we estimate 180 hr (12 states × 15 hr) and $11,602.80 (180 hr × 64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Very few states include LTSS in CHIP, therefore we estimate only 5 states will need to develop related standards. We estimate a one-time burden of 10 additional hr at $64.46/hr for a business operations specialist to develop those standards. In aggregate, we estimate 50 hr (5 states × 10 hr) and $3,223.00 (50 hr × $64.46/hr) for the development of LTSS standards. After network standards are established, we estimate that the maintenance of the network standards will be part of usual and customary business practices and therefore, we do not estimate any burden for states after the first year.
Section 438.68(d) requires that states: (1) Develop an exceptions process for plans unable to meet the state's standards; and (2) review network performance for any MCO, PIHP or PAHP to which the state provides an exception. We estimate a one-time state burden of 3 hr at $64.46/hr for a business operations specialist to establish an exceptions process. In aggregate, we estimate 75 hr (25 states × 3 hr) and $4,834.50 (75 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The exception process should not be used very often as MCOs, PIHPs, and PAHPs meeting the established standards is critical to enrollee access to care. As such, after the exceptions process is established, we estimate that the occasional use of it will not generate any measurable burden after the first year.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to reflect updated wage data. No comments were received.
Section 457.1220 applies the requirements of § 438.100 to CHIP. We do not anticipate a burden associated with implementing this section because the requirements to provide enrollees with treatment options and alternatives, allow enrollees to participate in decisions regarding health care, ensure that enrollees are free from restraint or seclusion, are standard practice in the field. The burden associated with providing information in accordance with 45 CFR 164.524 and 164.526 is accounted for in the collection of information associated with those regulations. The burden associated with modifying contracts to comply with this regulation are accounted for under § 457.1202.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to update the wage data. No comments were received.
Section 457.1222 applies the requirements of § 438.102 to CHIP. Section 438.102(a)(2) provides that MCOs, PIHPs, and PAHPs are not required to cover, furnish, or pay for a particular counseling or referral service if the MCO, PIHP, or PAHP objects to the provision of that service on moral or religious grounds and that written information on these policies is available to: (1) Prospective enrollees, before and during enrollment; and (2) current enrollees, within 90 days after adopting the policy for any particular service.
We believe the burden for providing written notice to current enrollees within 90 days of adopting the policy for a specific service, will affect no more than 3 MCOs or PIHPs annually since it will apply only to the services they discontinue providing on moral or religious grounds during the contract period. PAHPs are excluded from this estimate because they generally do not provide services that are affected by this provision.
We estimate that each of the 3 MCOs or PIHPs will have such a policy change only once annually. We estimate that it will take 1 hr at $64.46/hr for a business operations analyst to update the policies. In aggregate, we estimate 3 hr (3 MCOs/PIHPs × 1 hr) and $193.38 (3 hr × $64.46/hr). We further estimate that it will take 4 hr at $64.46/hr for a business operations specialist to create the notice and 1 min at $36.54/hr for an office and administrative support worker to mail each notice. With an average MCO/PIHP enrollment of 78,000 enrollees, we estimate a total annual burden of 12 hr (3 MCOs/PIHPs × 4 hr/notice) and $773.52 (12 hr × $64.46/hr) to create the notice. To mail the notice we estimate 3,900 hr (3 MCOs/PIHPs × 78,000 enrollees × 1 min/notice) and $142,506.00 (3,900 hr × $36.54/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to update the wage data. No comments were received.
Section 457.1224 applies the requirements of § 438.104 to CHIP. Section 438.104(c) requires that the state review marketing materials submitted by managed care entities. We believe that each entity will revise its materials once every 3 years. We estimate a state burden of 3 hr at $64.46/hr for a business operations specialist to review an entity's materials. In aggregate, we estimate an annual state burden of 75 hr [3 hr × 25 entities (one third of the total entities)] and $4,834.50 (75 hr × $64.46/hr).
We estimate that 5 entities may need to revise and submit updated materials. We estimate a private sector burden of 2 hr at $64.46/hr for a business operations specialist to update and submit the materials. In aggregate, we estimate a one-time burden of 10 hr (5 entities × 2 hr) and $644.60 (10 hr × $64.46).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revisions to the wage data and updated estimates on the number of plans. No comments were received.
Section 457.1230 applies the requirements of §§ 438.206, 438.207, 438.208, and 438.210 to CHIP. Section 438.206(c)(3), adopted in CHIP through § 457.1230(a), requires that MCOs, PIHPs, and PAHPs ensure that providers assure access, accommodations, and equipment for enrollees with physical and/or mental disabilities. We believe that MCOs, PIHPs, and PAHPs will need to review and revise (possibly) their policies and procedures for network management to ensure compliance with this requirement.
We estimate a one-time private sector burden of 3 hr at $64.46/hr for a business operations specialist to review and revise their network management policies and procedures. In aggregate, we estimate 174 hr (58 MCO/PIHP/PAHPs × 3 hr) and $11,216.04 (174 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.207(b), adopted in CHIP through § 457.1230(b) would require that each MCO, PIHP, and PAHP (where applicable) submit documentation to the state, in a format specified by the state, to demonstrate that it: (1) Complies with specified requirements, and (2) has the capacity to serve the expected enrollment in its service area in accordance with the state's standards for access to care. Section 438.207(c) would require that the documentation be submitted to the state at least annually, at the time the MCO, PIHP, or PAHP enters into a contract with the state, and at any time there has been a significant change (as defined both by the state) in the MCO, PIHP, or PAHP's operations that would affect adequate capacity and services.
We estimate an annual private sector burden of 20 hr at $64.46/hr for a business operations specialist to compile the information necessary to meet this requirement. In aggregate, we estimate 1,160 hr (58 entities × 20 hr) and $74,773.60 (1,160 hr × $64.46/hr).
After reviewing the documentation, § 438.207(d), adopted in CHIP through § 457.1230(b), would require that the state certify (to CMS) that the entity has complied with the state's requirements regarding the availability of services, as set forth at § 438.68. We estimate an annual state burden of 1 hr/contract at $64.46/hr for a business operations specialist to review documentation and submit the certification to CMS. In aggregate, we estimate 58 hr (58 entities × 1 hr) and $3,738.68 (59 hr × $64.46/hr).
Section 438.208(b)(2)(iii) through § 457.1230(c), requires that MCOs, PIHPs and PAHPs coordinate service delivery with the services the enrollee receives in the FFS program (carved out services). This would involve using data from the state to perform the needed coordination activities. Since only a small percentage of enrollees receive carved out services and need assistance with coordination, we estimate 2 percent of all MCO, PIHP, and PAHP enrollees (64,000) will be affected.
We estimate an annual private sector burden of 10 min/enrollee at $51.54/hr for a healthcare social worker. In aggregate, we estimate 10,666 hr (64,000 enrollees × 10 min) and $589,440 (10,666 hr × $55.26/hr).
Section 438.208(b)(3), adopted in CHIP through § 457.1230(c), would require that an MCO, PIHP or PAHP make its best effort to conduct an initial assessment of each new enrollee's needs within 90 days of the enrollment. We believe that most MCOs and PIHPs
We estimate that in a given year, approximately 10 percent of all enrollees are new to a managed care plan. Thus, 230,000 enrollees would be considered new and in need of an initial assessment. As PAHPs are typically a single entity within the state, we estimate that only 5 percent of their enrollees (10,000 enrollees) would need an initial assessment. In general, we believe these assessments will take 10 min on average to complete by Call Center staff at $36.54/hr. In aggregate, we estimate an annual private sector burden of 38,333 hr (230,000 enrollees × 10 min) and $1,400,700 (38,333 hr × $36.54/hr).
Section 438.208(b)(4), adopted in CHIP through § 457.1230(c), requires that MCOs, PIHPs, and PAHPs share with other MCOs, PIHPs, and PAHPs serving the enrollee the results of its identification and assessment of any enrollee with special health care needs so that those activities need not be duplicated. The burden associated with this requirement is the time it takes each MCO, PIHP or PAHP to disclose information on enrollees with special health care needs to the MCO, PIHP or PAHP providing a carved out service. This would most likely be accomplished by developing a report to collect the data and sending that report to the other MCO, PIHP, or PAHP.
We estimate a one-time private sector burden of 4 hr at $78.32/hr for a computer programmer to develop the report. In aggregate, we estimate of 232 hr (58 MCOs, PIHP, and PAHPs × 4 hr) and $18,170.24 (232 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. Once put into production on a schedule, no additional staff time would be needed, thus no additional burden is estimated.
Section 438.208(c)(2) and (3), adopted in CHIP through § 457.1230(c), requires that the MCOs, PIHPs and PAHPs complete a comprehensive assessment and treatment plan for all enrollees that have special health care needs. The assessments and treatment plans should be completed by providers or MCO, PIHP or PAHP staff that meet the qualifications specified by the state. We believe the burden associated with this requirement is the time it takes to gather the information during the assessment. (Treatment plans are generally developed while the assessment occurs so we are not estimating any additional time beyond the time of the assessment.) We believe that only enrollees in MCOs and PIHPs will require this level of assessment as most PAHPs provide limited benefit packages that do not typically warrant a separate treatment plan.
We estimate that 1 percent of the total enrollment of 2,300,000 (23,000) are enrolled in either a MCO, PIHP or both, and would qualify as an individual with special health care needs. The time needed for the assessment and for treatment planning will, on average, take 1 hr at $66.92/hr for a registered nurse to complete. In aggregate, we estimate an annual private sector burden of 23,000 hr (23,000 enrollees × 1 hr) and $1,539,160 (23,000 hr × $66.92/hr).Section 438.210(c), adopted in CHIP through § 457.1230(d), requires that each contract provide that the MCO, PIHP, or PAHP notify the requesting provider, and give the enrollee written notice of any decision by the MCO, PIHP, or PAHP to deny a service authorization request, or to authorize a service in an amount, duration, or scope that is less than requested.
We estimate an annual private sector burden of 30 min at $66.92/hr for a registered nurse to generate the notice. We estimate that each of 58 MCOs, PIHPs and PAHPs will process 20 denials/service reductions per 1,000 members. This is our best estimate based on the data available in the SEDS, conversations with states and observations of trends in Medicaid and the commercial market. With average enrollment of 78,000, each entity is estimated to process a total of 1,560 denials and service reductions annually. In aggregate, we estimate 45,240 hr (58 entities × 1,560 denials or service reductions/entity × 30 min) and $3, 027,460.80 (45,240 hr × $66.92/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with revisions to update the wage data and amend the estimates on the number of plans affected. No comments were received. Although we added paragraph § 457.1233(d) in response to comments (as discussed in section II.B.20), it references an existing CHIP requirement, and will not create additional burden.
Section 457.1233 applies the requirements of §§ 438.214, 438.230, 438.236, and 438.242 to CHIP. Section 438.214 requires that MCOs, PIHPs, and PAHPs have policies for the selection and retention of providers. As described in section V.C.54. of this final rule, we believe that the requirements in § 438.214 are part of the usual course of business and will not add additional burden onto entities because the entities will have policies for selecting and retaining providers even in the absence of these regulations.
Section 438.230, adopted in CHIP through § 457.1233(b), requires that MCOs, PIHPs, and PAHPs oversee subcontractors and specifies the subcontracted activities. We estimate 3 hr at $64.46/hr for a business operations analyst to amend appropriate contracts. We estimate a one-time private sector burden of 174 hr (58 MCOs, PIHPs, and PAHPs × 3 hr) and $11,216.04 (174 hr × $64.46). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.236(c), adopted in CHIP through § 457.1233(c), requires that each MCO, PIHP, and PAHP disseminate guidelines to its affected providers and, upon request, to enrollees and potential enrollees. The burden associated with this requirement is the time required to disseminate the guidelines, usually by posting on their Web site. This is typically done annually. We estimate an annual private sector burden of 2 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate 116 hr (58 entities × 2 hr) and $7, 477.36 (116 hr × $64.46/hr). In § 438.242(b)(2), adopted in CHIP through § 457.1233(b), the state is required to stipulate that each MCO and PIHP collect data on enrollee and provider characteristics (as specified by the state) and on services furnished to enrollees (through an encounter data system or other such methods as may be specified by the state). We estimate a one-time private sector burden of 20 hr at $78.32/hr for a computer programmer to extract this data from an entity's system and report to the state. In aggregate, we estimate 1,100 hr (55 entities × 20 hr) and $86,152 (1,100 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. After the initial
No comments were received on the burden estimates in the proposed rule. However, we are revising the burden estimates in response to the changes to the regulation discussed in II.B.21.
Section 457.1240 applies the requirements of §§ 438.330, 438.332, 438.334, and 438.340 to CHIP. Section 438.330(a)(2), adopted in CHIP through § 457.1240(b), specifies the process CMS will use if it elects to specify national QAPI and PIP topics, which will include a public notice and comment process. Assuming that we do use this process to identify performance measures and PIP topics at least once every 3 years, the burden for states will be altered. Some may experience a decrease in the time spent selecting performance measures and PIP topics while others might experience a slight increase in the form of programming their MMIS systems to account for the specified performance measures and PIP topics.
We estimate that MMIS programming changes requires 10 hr (every 3 years) at $78.32/hr for a computer programmer. In aggregate, we estimate an ongoing annualized state burden of 83 hr [(25 states × 10 hr)/3 years] and $6,500.56 (83 hr × 78.32/hr). We cannot estimate the amount of possible decrease in burden as we have no way to know the average amount of time a state expended on selecting performance measures or PIP topics and how this might change based on this revision. Section 438.330(a)(2)(i) allows states to apply for an exemption from the CMS-required performance measure and PIP topic requirements established under § 438.330(a)(2). While we have no data on how many states would take advantage of this option, given that the performance measures and PIP topics under § 438.330(a)(2) would be identified through a public notice and comment process, we estimate that 2 states would ask for an exemption every 3 years. We estimate that the exemption process would require 1 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate an ongoing annualized state burden of 0.67 hr [(2 states × 1 hr)/3 years] and $42.54 (0.67 hr × $64.46/hr).
Section 438.330(a)(2)(ii), adopted in CHIP through § 457.1240(b), allows states to select performance measures and PIPs in addition to those specified by CMS under § 438.330(a)(2). Since this language continues the flexibility available to states today, we do not believe this creates any change in burden for states or the private sector.
Section 438.330(b)(3) clarifies that MCOs, PIHPs, and PAHPs must have an approach to evaluate and address findings regarding the underutilization and overutilization of services. Because utilization review in managed care has become commonplace in the private, Medicare, and Medicaid settings, we do not believe that this regulatory provision imposes any new burden on MCOs, PIHPs, or PAHPs.
In accordance with § 438.310(c)(2), some PCCM entities (we estimate 3) will now be subject to the requirements of § 438.330(b)(3). We estimate a one-time private sector burden of 10 hr at $64.46/hr for a business operations specialist to establish the policies and procedures. In aggregate, we estimate 30 hr (3 PCCMs × 10 hr) and $1,933.80 (30 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate an ongoing burden of 10 hr to evaluate and address the findings. In aggregate, we estimate an annual burden of 30 hr (3 PCCMs × 10 hr) and $1,933.80 (30 hr × $64.46/hr) for program maintenance.
Section 438.330(c) addresses QAPI performance measurement. Section 438.330(c)(1), adopted in CHIP through § 457.1240(b), requires the state to identify standard performance measures for their managed care plans, including LTSS measures if appropriate. We believe that it is standard practice for states to identify performance measures for their contracted managed care plans; therefore there is no burden associated with this paragraph.
Section 438.310(c)(2), adopted in CHIP through § 457.1240(b), requires each MCO, PIHP, PAHP, and PCCM entity (described in § 438.310(c)(2)) to annually measure its performance using the standard measures specified by the state in paragraph (c)(1) and to report on its performance to the state. We assume that each of the MCOs and PIHPs would report on three performance measures to the state. The use of performance measures is commonplace in private, Medicare, and Medicaid managed care markets; therefore we believe that MCOs and PIHPs already collect performance measures.
We recognize that PAHPs and PCCM entities (described in § 438.310(c)(2)) may not currently engage in performance measurement as described in § 438.330(c)(2), and estimate that 7 entities might be impacted. We estimate that, in any given year, each PCCM entity and each PAHP would report to the state on 3 performance measures. We estimate an annual private sector burden of 4 hr per measure at $64.46/hr for a business operations specialist to prepare a report for each performance measure. In aggregate, we estimate 84 hr [(3 PAHPs + 4 PCCMs) × 3 performance measures × 4 hr] and $5,414.64 (84 hr × $64.46/hr).
Section 438.330(c)(1)(ii) requires states to identify standard performance measures in two LTSS-specific categories for managed care plans that provide LTSS. We do not know of any states that have an LTSS plan in CHIP, so there is no burden associated with the proposed provision.
In § 438.330(d), adopted in CHIP through § 457.1240(b), states must ensure that each MCO, PIHP and PAHP have an ongoing program of PIPs, designed to achieve sustainable improvement, which the managed care plan will report on to the state as requested, but at least once per year. We assume that each MCO and PIHP will conduct at least 3 PIPs and each of the 3 PAHPs would conduct at least 1 PIP. We further expect that states will request the status and results of each entity's PIPs annually. Given that PAHPs may not currently conduct PIPs, we estimate a one-time private sector burden of 2 hr at $64.46/hr for a business operations specialist to develop policies and procedures, for an aggregate burden of 6 hr (3 PAHPs × 2 hr) and $386.76 (6 hr × 64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We estimate an annual burden of 8 hr to prepare a report on each PIP. In aggregate, we estimate 1,344hr [((55 MCOs and PIHPs × 3 PIPs) + (3 PAHPs × 1 PIP)) × 8 hr] and $86,634.24 (1,344hr × $64.46/hr) to prepare the report.
Per § 438.310(c)(2), PCCM entities specified are also subject to the requirements in § 438.330(e) through § 457.1240(b). We estimate an annual state burden of 15 hr at $64.46/hr for a business operations specialist to assess the performance of a single § 438.3(r) PCCM entity. In aggregate, we estimate 45 hours (3 PCCM entities × 15 hr) and $2,900.70 (45 hr × $64.46/hr).
Section 438.330(e)(1)(ii), adopted in CHIP through § 457.1240(b), requires that states include outcomes and trended results of each MCO, PIHP, and PAHP's PIPs in the state's annual review of QAPI programs. We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to modify the state's policies and procedures. We are annualizing the one-
Section 438.330(e)(1)(iii) sets out a new requirement, related to § 438.330(b)(5), requiring that the state must assess the rebalancing effort results for LTSS in its annual review. We do not know of any states that have an LTSS plan in CHIP, so there is no burden associated with the proposed provision.
Under § 438.332(a), adopted in CHIP through § 457.1240(c), states must confirm the accreditation status of contracted MCOs, PIHPs, and PAHPs once a year. We estimate an annual state burden of 0.25 hr at $64.46/hr for a business operations specialist to review the accreditation status of each of the estimated 58 MCOs, PIHPs, and PAHPs. In aggregate, we estimate an annual burden of 14.5 hr (0.25 hr × 58 MCOs, PIHPs, and PAHPs) and $934.67 (14.5 hr × $64.46/hr).
Section 438.332(b), adopted in CHIP through § 457.1240(c), describes the information MCOs, PIHPs, and PAHPs must authorize the private accrediting entity to release to the state regarding the plan's accreditation status. We believe that states will need to amend their MCO, PIHP, and PAHP contracts to reflect this requirement, and estimate a one-time burden of 0.25 hr per contract amendment. In aggregate, we estimate a one-time burden of 15.5 hr (0.25 hr × 58 MCOs, PIHPs, and PAHPs) and $934.67 (14.5 hr × 64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Under § 438.332(c), adopted in CHIP through § 457.1240(c), states will document the accreditation status of each contracted MCO, PIHP, and PAHP on the state's Web site, and will update this information at least annually. The burden is included in § 457.1207.
Section 438.334, adopted in CHIP through § 457.1240(d), requires each state that contracts with an MCO, PIHP, or PAHP to adopt a quality ratings system to generate plan ratings annually. States must either adopt the quality rating system developed by CMS in accordance with § 438.334(b) or an alternative quality rating system in accordance with § 438.334(c).
We assume that states will utilize the same system and processes developed for CHIP managed care plans as was developed for Medicaid managed care plans. Using the assumptions developed for § 438.332, we estimate that 17 states (with 46 MCOs, PIHPs, and PAHPs) will elect to adopt the quality rating system developed by CMS in accordance with § 438.334(b), while the remainder (8 states with 16 MCOs, PIHPs, and PAHPs) will elect to use an alternative quality rating system in accordance with § 438.334(c). We assume that, given the robust public engagement process CMS will use to develop the QRS in accordance with § 438.334(b), states electing to adopt the CMS-developed QRS will not need to conduct additional public engagement and will require less time to develop their QRS as compared to states which elect to adopt an alternative QRS consistent with § 438.334(c).
Therefore, for states adopting the CMS-developed QRS under § 438.334(b), we estimate the state burden for the development and implementation of the QRS as 200 hr at $64.46/hr for a business operations specialist, 100 hr at $78.32/hr for a computer programmer, and 30 hr at $140.80/hr for a general and operations manager. In aggregate, we estimate a one-time state burden of 5,610 hr (17 states × 330 hr) and $424,116 [17 states × ((200 hr × $64.46/hr) + (100 hr × $78.32/hr) + (30 hr × $140.80/hr)] for the development of a state's quality rating system consistent with 438.334(b). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
The burden is more variable for states seeking CMS approval for the adoption of an alternative QRS per § 438.334(c). A state may submit an existing QRS, may submit a modified version of an existing QRS, or may develop a new QRS. We assume that the burden for each of these options would vary by state; therefore, we estimate an average burden for the development of an alternative QRS. We believe that the average alternative QRS burden will exceed the burden to adopt the CMS-developed QRS, and will require public engagement by the state. Therefore, we estimate the average state burden for the development and implementation of an alternative QRS as 800 hr at $64.46/hr for a business operations specialist, 400 hr at $78.32/hr for a computer programmer, and 120 hr at $140.80/hr for a general and operations manager. We estimate an additional 20 hr at $36.54/hr for an office and administrative support worker for the public engagement process and an additional 50 hr at $64.46/hr for a business operations specialist to review and incorporate public feedback. In aggregate, we estimate a one-time state burden of 11,120 hr (8 states × 1,390 hr) and $829,966.40 [8 states × ((800 hr × $64.46/hr) + (400 hr × $78.32/hr) + (120 hr × $140.80/hr) + (20 hr × $36.54/hr) + (50 hr × $64.46/hr))] for the development of a state's alternative quality rating system consistent with § 438.334(c). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
To elect the option under § 438.334(c) to use an alternative QRS, a state will submit a request to CMS and must receive written CMS approval. We estimate a one-time state burden of 20 hr at $64.46/hr for a business operations specialist to seek and receive approval from CMS for the state's alternative quality rating system. In aggregate, we estimate 160 hr (8 states × 20 hr) and $10,313.60 (160 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.334(c)(3) outlines the process for a state to make changes to an approved alternative QRS. We estimate that it will require 5 hr at $36.54/hr for an office and administrative support worker and 25 hr at $64.46/hr for a business operations specialist to complete the public comment process, and an additional 5 hr at $64.46/hr from a business operations specialist to seek and receive approval from CMS for the change. While we have no data to estimate how frequently a state may elect to alter an approved alternative QRS, we estimate that CMS will revise the QRS under § 438.334(b) on average approximately once every 3 years. We assume that states will revise their alternative QRS on a similar frequency to ensure that the alternative QRS continues to yield substantially comparable information regarding MCO, PIHP, and PAHP performance, and apply this assumption here. Therefore, we estimate an aggregate annualized burden of 93 hr [(8 states × 35 hr)/3 years] and $5,644 [(8 states × (5 hr × $36.54/hr) + (30 × $64.46/hr))/3 years]. Under § 438.334(d), each state will collect information from its MCOs, PIHPs, and PAHPs to calculate and then issue a quality rating each year. We expect that states will rely on information and data already provided to them by their MCOs, PIHPs, and PAHPs; therefore, we do not expect this data collection to pose an additional burden on the private sector. However, each year states will rate each MCO, PIHP, or PAHP with which they contract. We estimate 40 hr at $64.46/hr for a business operations specialist
Section 438.340, adopted in CHIP through § 457.1240(e), requires states to have a quality strategy for managed care. In accordance with § 438.340(c)(2), states will review and revise their quality strategies as needed, but no less frequently than once every 3 years. While the 25 states that contract with MCOs and/or PIHPs currently revise their quality strategies periodically, approximately half of those states (13) revise their quality strategies less frequently than proposed. We estimate a burden for the revision of a quality strategy of, once every 3 years, 25 hr at $64.46/hr for a business operations analyst to review and revise the comprehensive quality strategy, 2 hr at $36.54/hr for an office and administrative support worker to publicize the strategy, 5 hr at $64.46/hr for a business operations specialist to review and incorporate public comments, and 1 hr at $36.54/hr for an office and administrative support worker to submit the revised quality strategy to CMS. In aggregate, we estimate an ongoing annualized state burden of 143 hr [(13 states × 33 hr)/3 years] and $8,854.82 [(13 states × (30 hr × $64.46/hr) + (3 hr × $36.54/hr))/3 years].
The revision of a quality strategy will be a new process for the estimated three states with only PAHPs and the estimated two states with only PCCM entities. We estimate that those states need 0.5 hr at $64.46/hr for a business operations specialist to revise their policies and procedures. In aggregate, we estimate a one-time state burden of 2.5 hr (5 states × 0.5 hr) and $161.15 (2.5 hr × $64.46/hr) to update policies and procedures. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
We assume that it will be less burdensome to revise an existing quality strategy than to draft an initial strategy. Therefore, we estimate a burden for the quality strategy revision process, once every 3 years, of 25 hr at $64.46/hr for a business operations analyst to review and revise the comprehensive quality strategy, 2 hr at $36.54/hr for an office and administrative support worker to publicize the strategy, 5 hr at $64.46/hr for a business operations specialist to review and incorporate public comments, and 1 hr at $36.54/hr for an office and administrative support worker to submit the revised quality strategy to CMS. In aggregate, we estimate an ongoing annualized state burden of 55 hr [(5 states × (33 hr)/3 years] and $3,405.70 [(5 states × ((30 hr × $64.46/hr) + (3 hr × $36.54/hr))/3 years].
Consistent with § 438.340(c)(2), the review of the quality strategy will include an effectiveness evaluation conducted within the previous 3 years. We estimate the burden of this evaluation at 40 hr at $64.46/hr for a business operations specialist once every 3 years for all 25 states that contract with MCOs, PIHPs, PAHPs, and/or PCCM entities (described in § 438.310(c)(2)). We estimate an annualized burden of 333 hr [(25 states × 40 hr)/3 years] and $21,486.67 (333 hr × $64.46/hr) to evaluate the effectiveness of a quality strategy.
States will post the effectiveness evaluation on the state's Medicaid Web site under § 438.340(c)(2)(iii). In the proposed rule we states that while this standard was subject to the PRA, we believed that the associated burden is exempt from the PRA in accordance with 5 CFR 1320.3(b)(2). We believed that the time, effort, and financial resources necessary to comply with the aforementioned standards will be incurred by persons during the normal course of their activities and, therefore, should be considered a usual and customary business practice. Upon further consideration, however, we determined that states today do not necessarily post the quality strategy effectiveness evaluation online. Therefore, we estimate that posting the quality strategy effectiveness evaluation online will require 0.25 hr at $64.46 from a business operations specialist once every 3 years. In aggregate, we estimate an ongoing annualized burden of 3.5 hr [(42 states × 0.25 hr)/3 years] and $225.61 (3.5 hr × $64.46/hr).
As described in § 438.340(c)(3), states will submit to CMS a copy of the initial quality strategy and any subsequent revisions. The burden associated with this standard has been incorporated into burden estimates for initial and revised quality strategies. As this will be a new standard for the estimated 3 states with only PAHPs and the estimated 2 states with only PCCM entities, we believe that these states will need to modify their policies and procedures to incorporate this action. We estimate a burden of 0.5 hr $64.46/hr for a business operations specialist. In aggregate, we estimate a one-time state burden of 2.5 hr (5 states × 0.5 hr) and $161.15 (2.5 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Finally, § 438.340(d) requires states to post the final quality strategy to their Medicaid Web sites. In the proposed rule, we stated that while this standard was subject to the PRA, we believed that the associated burden is exempt from the PRA in accordance with 5 CFR 1320.3(b)(2). We believed that the time, effort, and financial resources necessary to comply with the aforementioned standards will be incurred by persons during the normal course of their activities and, therefore, should be considered a usual and customary business practice. Upon further consideration, however, we determined that states today do not necessarily post the final quality strategy online, though some do. Therefore, we estimate that posting the final quality strategy online will require 0.25 hr at $64.46 from a business operations specialist once every 3 years. In aggregate, we estimate an ongoing annualized burden of 3.5 hr [(42 states × 0.25 hr)/3 years] and $225.61 (3.5 hr × $64.46/hr).
No comments were received on the burden estimates in the proposed rule. However, we are revising the burden estimates in response to the changes to the regulation discussed in II.B.22.
Section 457.1250 applies the requirements of §§ 438.350, 438.352, 438.354, 438.356, 438.358, and 438.364 to CHIP. Section 438.350, adopted in CHIP through § 457.1250(a), requires that states include CHIP in their EQR. We anticipate that most states includes CHIP in their Medicaid contract with the EQRO and that the burden for adding CHIP will be included in the burden for adding PAHPs to the EQRO contract. We anticipate that 5 states may contract separately for CHIP EQR services and that this requires states to procure a new vendor.
Section 438.358, adopted in CHIP through § 457.1250(a), addresses the EQR-related activities. Per § 438.358(a)(1) of this section, the EQR-related activities described in paragraphs (b) and (c) of this section may be conducted by the state, its agent that is not an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)), or an EQRO; we describe the burden assuming that the state conducts these activities, though we believe the burdens will be similar regardless of who conducts each activity.
The burden associated with the mandatory EQR-related activities described in § 438.358(b)(1) of this section is the time for a state to conduct and document the findings of the four mandatory activities: (1) The annual validation of PIPs conducted by the MCO/PIHP/PAHP; (2) the annual validation of performance measures calculated by the MCO/PIHP/PAHP; (3) once every 3 years, a review of MCO/PIHP/PAHP compliance with structural and operational standards; and (4) validation of MCO, PIHP, and PAHP network adequacy. Each of these activities will be conducted on the 5 MCOs/PIHPs/PAHPs that are currently providing CHIP services separately from Medicaid.
The types of services provided by these managed care entities, the number of PIPs conducted, and the performance measures calculated will vary. We assume that each MCO/PIHP will conduct at least 3 PIPs, each PAHP will conduct at least 1 PIP, and that each MCO/PIHP/PAHP will calculate at least 3 performance measures.
For a business operations specialist to conduct the mandatory EQR activities at $64.46/hr, we estimate an annual state burden of 65 hr (PIP validation), 53 hr (performance measure validation), 361 hr (compliance review; occurs once every 3 years), and 60 hr (validation of network adequacy activity). In aggregate, we estimate 2,671.67hr (5 × [(65 hr × 3 PIPs) + (53 hr × 3 performance measures) + (361 hr/3) + 60 hr]) and $142,453.27 (2,372 hr × $64.46/hr).
In § 438.358(b), the burden will include the time for an MCO/PIHP/PAHP to prepare the information necessary for the state to conduct the three mandatory activities. We estimate that it will take each MCO/PIHP/PAHP 160 hr to prepare the documentation for these activities. We estimate that one-half of the time will be for preparing the information which will be performed by a business operations specialist at $64.46/hr while the other half will be performed by office and administrative support worker at $36.54/hr. In aggregate, we estimate a private sector burden of 800 hr (5 states × 160 hr) and $40,400.00 [(5 states × 80 hr × $64.46/hr) + (5 states × 80 hr × $36.54/hr).
The fourth mandatory EQR-related activity described in § 438.358(b)(1)(iv) requires the validation of MCO, PIHP, and PAHP network adequacy during the preceding 12 months. States will conduct this activity for each MCO, PIHP, and PAHP. Given that this is a new activity, we do not have historic data on which to base an hourly burden estimate for the network validation process. We estimate that it will take less time than the validation of a PIP but more time than the validation of a performance measure. Therefore, we estimate an annual state burden of 60 hr at $64.46/hr for a business operations specialist to support the validation of network adequacy activity. In aggregate, we estimate 3,480hr (58 MCOs, PIHPs, and PAHPs × 60 hr) and $224,320.80 (3,480 hr × $64.46/hr) for the validation of network adequacy activity.
Section 438.358(b)(2) describes the mandatory EQR-related activities which must be conducted for each PCCM entity (described in § 438.310(c)(2)), specifically the activities described in paragraphs (b)(1)(ii) and (b)(1)(iii) of this section. Given that we do not have data to estimate the time required for each of these activities for these PCCM entities, we rely on the time per activity estimates used for MCOs, PIHPs, and PAHPs; we assume the validation of one performance measure per PCCM entity (described in § 438.310(c)(2)). Therefore, we estimate an annual state burden of 693.2 hr (4 PCCM entities × 173.3 hr [(53 hr × 1 performance measure) + (361 hr/3 years)]) and $33,512.75 (693.2 hr × $64.46/hr) for the mandatory EQR-related activities for PCCM entities (described in § 438.310(c)(2)). The burden associated with § 438.358(b)(1) also includes the time for an MCO, PIHP, or PAHP to prepare the information necessary for the state to conduct the mandatory EQR-related activities. We estimate that it will take each MCO, PIHP, or PAHP 200 hr to prepare the documentation for these four activities, half (100 hr) at $64.46/hr by a business operations specialist and half (100 hr) at $36.54/hr by an office and administrative support worker. The burden associated with § 438.358(b)(2) also includes the time for a PCCM entity (described in § 438.310(c)(2)) to prepare the information necessary for the state to conduct the mandatory EQR-related activities. Given the estimate of 200 hr for an MCO, PIHP, or PAHP, and that there are only 2 mandatory EQR-related activities for PCCM entities (described in § 438.310(c)(2)), we estimate it will take 100 hr to prepare the documentation for these 2 activities, half (50 hr) at $64.46/hr by a business operations specialist and half (50 hr) at $36.54/hr by an office an administrative support worker. In aggregate, we estimate an annual private sector burden of 12,000 hr [(58 MCOs, PIHPs, and PAHPs × 200 hr) + (3 PCCM entities × 100 hr)] and $641,350 [(6,000 hr × $64.46/hr) + (6,000 hr × $36.54/hr)].
Section 438.358(c), adopted in CHIP through § 457.1250(a), describes optional EQR-related activities. The number of MCOs/PIHPs engaged in optional EQR-related activities will vary. We estimate 48 MCOs/PIHPs will be engaged in validation of client encounter data through a state contract with an EQR; 30 MCOs/PIHPs will be engaged in validation of consumer or provider surveys through a state contract with an EQR; 26 MCOs/PIHPs will be engaged in performance improvement projects (PIPs) conducted by an EQR; 20 MCO/PIHPs will be engaged in calculating performance measures through a state contract with an EQR; and 52 MCOs/PIHPs will be engaged in conducting focused studies. For the optional EQR activities, we have no data to estimate how long it will take to conduct these activities. We, therefore, estimate that it will take 350 hr to validate client level data and 50 hr to validate consumer or provider surveys. We estimate it will take three times as long to calculate performance measures as it takes on average to validate (159 hr) and three times as long to conduct PIPs and focused studies as it takes on average to validate PIPs (195 hr) (see discussion at IV.C.25). We also estimate that it will take three times as long to administer a consumer or provider survey than it takes to validate a survey (60 hr).
For a business operations specialist $64.46/hr, we estimate: (1) 16,800 hr (350 hr × 48 MCOs/PIHPs) and $1,082,928.00 (16,800hr × $64.46/hr) to validate client level data; (2) 1500 hr (50 hr × 30 MCOs/PIHPs) and $96,690.00 (1500 hr × 64.46/hr) to validate consumer or provider surveys; (3) 3,180 hr (159 hr × 20 MCOs/PIHPs) and $204,982.80 (3,180 hr × $64.46/hr) to calculate performance measures; (4) 5,070 hr (195 hr × 26 MCOs/PIHPs) and $326,812.20 (5,070 hr × $64.46/hr) to conduct PIPs; and (5) 8,268 hr (159 hr × 52 MCOs/PIHPs) and $532,955.28 (8,268 hr × $64.46/hr) to conduct focused studies. In aggregate, we estimate 34,818 hr and $1,856,495.76 for the optional EQR-related activities.
The optional EQR-related activities described in § 438.358(c) may also be conducted on PAHPs and PCCM entities (described in § 438.310(c)(2)). Since neither PAHPs or PCCM entities (described in § 438.310(c)(2)) have historically been subject to EQR, we do not have any data on which to base an estimate regarding how states will apply the optional EQR-related activities to these delivery systems. Section 438.358(c)(6) allows a state to contract with an EQRO to support the quality rating of MCOs, PIHPs, and PAHPs consistent with § 438.334. We do not believe that the effort required to rate a
Section 438.364(a), adopted in CHIP through § 457.1250(a), describes the information that will be included in the annual detailed technical report that is the product of the EQR. Section 438.364(a)(1)(iii) specifies that the EQR technical report includes baseline and outcomes data regarding PIPs and performance measures. Many states already provide much of this information in their final EQR technical report. The burden of compiling this data for MCOs, PIHPs, and PAHPs is captured in § 438.358. Under § 438.364(a)(3), EQR technical reports will include recommendations on how the state can use the goals and objectives of its comprehensive quality strategy to support improvement in the quality, timeliness, and access to care for beneficiaries. We believe that states will amend their EQRO contracts to address the changes to § 438.364(a). We estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to amend the EQRO contract. In aggregate, we estimate 12.5 hr (25 states × 0.5 hr) and $805.75 (12.5 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.364(c)(1), adopted in CHIP through § 457.1250(a), clarifies that the EQRO will produce and finalize the annual EQR-technical report and that states may not substantively revise the report without evidence of error or omission. The April 30th deadline for the finalization and submission of EQR technical reports is consistent with existing Medicaid sub-regulatory guidance.
While we do not anticipate that these changes will pose a significant burden on states or the private sector, we estimate that this provision may necessitate a change in a state's EQRO contract for approximately 5 states. In this regard, we estimate a one-time state burden of 0.5 hr at $64.46/hr for a business operations specialist to modify the EQRO contract. In aggregate, we estimate 2.5 hr (5 states × 0.5 hr) and $161.15 (2.5 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.364(c)(2)(ii), adopted in CHIP through § 457.1250(a), requires that each state agency provide copies of technical reports, upon request, to interested parties such as participating health care providers, enrollees and potential enrollees of the MCO/PIHP/PAHP, beneficiary advocacy groups, and members of the general public. States will also be required to make the most recent EQR technical report publicly available in a manner specified by CMS. This will likely be accomplished by posting to the state's Web site, the burden for which is included in § 457.1206.
We believe that by making these reports available online, states will be able to significantly decrease the burden associated with responding to requests from the public for this information, as it will already be easily accessible. The burden associated with this requirement is the time for a state agency to disclose copies of a given technical report to interested parties.
We estimate an annual state burden of 5 min at $36.54/hr for office and administrative support worker to disclose the required information per request. We also estimate that each state will receive 5 requests per MCO/PIHP/PAHP per year. In aggregate, we estimate 24.1 hr (58 MCOs/PIHPs/PAHPs × 5 requests × 5 min) and $880.61 (24.1 hr × $36.54/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to update the wage estimates and to reduce the number of states affected based on updated information obtained from SEDS. No comments were received.
Section 457.1260 applies subpart F of part 438 to CHIP. We anticipate that most states currently follow the Medicaid grievance procedures, so we adopt the burden associated with the proposed changes to the Medicaid regulation.
Section 438.400(b), adopted in CHIP through § 457.1260, updates the definition of “Action” to “Adverse benefit determination,” clarify “appeal” and “grievance,” and add the definition of “grievance system.” We estimate a one-time state burden of 5 hr at $64.46/hr for a business operations specialist to amend all relevant documents to the new nomenclature and definitions. In aggregate, we estimate 165 hr (5 hr × 25 states) and $8,057.50 (125 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Aligning the definition of “adverse benefit determination” to include medical necessity, appropriateness, health care setting, or effectiveness requires that plans provide additional hearing resources to actions previously not included. We estimate 3 hr at $64.46/hr for a business operations specialist and expect that each plan will provide 3 additional hearings per month (36 per year). In aggregate, we estimate an annual private sector burden of 6,264 hr (58 MCOs, PIHPs, and PAHPs × 36 hearings × 3 hr) and $403,777.44 (6,264 hr × $64.46/hr). Section 438.402, adopted in CHIP through § 457.1260, specifies the general requirements associated with the grievance system. More specifically, § 438.402: (1) Requires MCOs, PIHPs, and PAHPs to have a grievance system; (2) sets out general requirements for the system; (3) establishes filing requirements; and (4) provides that grievances and appeals may be filed either orally or in writing. The proposed provisions apply to 58 entities. The burden for revising the contracts for these entities is included in § 457.1201.
With regard to setting up a grievance system, we estimate it will take 100 hr (10 hr at $140.80/hr for a general and operations manager, 75 hr at $64.46/hr for a business operations specialist, and 15 hr at $78.32/hr for a computer programmer) for each entity. We estimate that the entities will receive 400 grievances per month. We estimate it will take a business operations specialist 30 min to process and handle each grievance and adverse benefit determinations.
We estimate a one-time private sector burden of 5,800 hr and $430,203.40 [58 MCOs, PIHPs, and PAHPs × ((10 × $140.80/hr) + (75 × $64.46/hr) + (15 × $78.32/hr)). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. We also estimate an ongoing annual burden of 139,200 hr [58 MCOs, PIHPs, and PAHPs × 400 grievances/month × 12 months × 0.5 hr/grievance] and $8,972,832.00 (139,200 hr × $64.46/hr) for processing each grievance and adverse benefit determination.
Section 438.404(a), adopted in CHIP through § 457.1260, adds PAHPs as an entity that must give the enrollee timely written notice and sets forth the requirements of that notice. More specifically, the enrollee must be provided timely written notice if an MCO, PIHP, or PAHP intends to: (1) Deny, limit, reduce, or terminate a service; (2) deny payment; (3) deny the request of an enrollee in a rural area with one plan to go out of network to obtain a service; or (4) fails to furnish, arrange, provide, or pay for a service in a timely manner.
We estimate an annual private sector burden of 1 min at $36.54/hr for an office and administrative support worker to provide written notice of the MCO, PIHP, or PAHP's intended action. We estimate that 5 percent (115,000) of the approximately 2.3 million MCO, PIHP, or PAHP enrollees will receive one notice of intended action per year from their MCO, PIHP, or PAHP. In aggregate, we estimate 1,916.67 hr (115,000 × 1 min) and $70,035 (1,916.67 hr × $36.54/hr).
In § 438.416, adopted in CHIP through § 457.1260, the state must require that MCOs, PIHPs and PAHPs maintain records of grievances and appeals. We estimate that approximately 23,000 enrollees (1 percent) of the approximately 2.3 million MCO and PIHP enrollees file a grievance or appeal with their MCO or PIHP. We estimate an annual private sector burden of 1 min (per request) at $36.54/hr for an office and administrative support worker to record and track grievances. In aggregate, we estimate 383 hr (23,000 grievances × 1 min) and $14,007 (383 hr × $36.54/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to update the wage data. No comments were received.
Section 457.1270 applies subpart I of part 438 to CHIP. In § 438.722(a) adopted in CHIP through § 457.1270, states are provided the option to give MCO, PIHP, PAHP, or PCCM enrollees written notice of the state's intent to terminate its MCO, PIHP, PAHP, or PCCM contract. Notice may be provided after the state has notified the entity of its intention to terminate their contract.
States already have the authority to terminate MCO, PIHP, PAHP or PCCM contracts according to state law and have been providing written notice to the MCO, PIHP, PAHP or PCCM enrollees. While it is not possible to gather an exact figure, we estimate that 8 states may terminate 1 contract per year.
We estimate an annual state burden of 1 hr at $64.46/hr for a business operations specialist to prepare the notice to enrollees. In aggregate, we estimate 8 hr (1 hr × 8 states × 1 contract/yr.) and $426.56 (8 hr × $64.46/hr). We also estimate 1 hr at $64.46/hr for a business operations specialist to prepare the notice. In aggregate, we estimate an annual state burden of 8 hr (8 states × 1 hr) and $515.68 (8 hr × $64.46/hr). To send the notice, we estimate an average enrollment of 30,000 beneficiaries and 1 min (per beneficiary) at $30.92/hr for a mail clerk. In aggregate we estimate 500 hr (30,000 beneficiaries × 1 min) and $15,840.00 (500 hr × $30.92/hr).
Section 438.724, adopted in CHIP through § 457.1270, requires that the state give the CMS Regional Office written notice whenever it imposes or lifts a sanction. The notice must specify the affected MCO, PIHP, PAHP, or PCCM, the kind of sanction, and the reason for the state's decision to impose or lift a sanction.
We anticipate that no more than 15 states will impose or lift a sanction each year and that it will take 30 min at $64.46/hr for a business operations specialist to give the regional office notice. In aggregate, we estimate an annual burden of 7.5 hr (15 states × 30 min) and $483.45 (7.5 hr × $64.46/hr).
The following requirements and burden estimates were set out in the proposed rule and are being adopted without change. No comments were received. The requirements in this section have not changed, rather they have been redesignated from another section of part 457, so we do not estimate any additional burden.
The following requirements and burden estimates were set out in the proposed rule and are being adopted with minor revisions to update the wage data and to revise the number of states affected based on updated information from the SEDS. No comments were received.
Section 457.1285 applies most of subpart H of part 438 to CHIP. Section 438.602(a), adopted in CHIP through § 457.1285, details state responsibilities for monitoring MCO, PIHP, PAHP, PCCM or PCCM's compliance with other sections of part 438, screening and enrollment of providers, reviewing ownership and control information, performing periodic audits, investigating based on whistleblower information, and imposing sanctions as appropriate. States will need to revise their policies and implement these activities, as needed.
We estimate 50 hr at $64.46/hr for a business operations specialist to create and/or revise their policies for the activities set out under § 438.602(a). In aggregate, we estimate a one-time state burden of 1,250 hr (25 states × 50 hr) and $80,575.00 (1,250 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
Section 438.602(b), adopted in CHIP through § 457.1285, requires states to screen and enrollee MCO, PIHP, PAHP, PCCM and PCCM entity providers in accordance with 42 CFR part 455, subparts B and E. States are already required to screen and enroll providers in both FFS and managed care in their CHIP programs through § 457.990, so there is no additional burden associated with this requirement.
Section 438.602(e), adopted in CHIP through § 457.1285, requires states to conduct or contract for audits of MCO, PIHP, and PAHP encounter and financial data once every 3 years. Some states already use their EQRO to validate data. If they conduct this task at an appropriate frequency, it will incur no additional burden. We estimate 12 states already use their EQRO to validate their data, so only 21 states may need to take action to meet this requirement. The method selected by the state will determine the amount of burden incurred. We assume an equal distribution of states selecting each method, thus 7 states per method.
A state using EQRO to validate data on less than an appropriate frequency may need to amend their EQRO contract. In this case, we estimate 1 hr at $64.46/hr for a business operations specialist. In aggregate, we estimate a one-time state burden of 7 hr (7 states × 1 hr) and $451.22 (7 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
A state electing to perform validation internally must develop processes and policies to support implementation. In this case, we estimate 10 hr at $64.46/hr for a business operations specialist to develop policy and 100 hr at $78.32/hr for a computer programmer to develop, test, and automate the validation processes. In aggregate, we estimate a one-time state burden of 770 hr (7 states × 110 hr) and $59,336.20 [7 states × ((10 hr × $64.46/hr) + (100 hr × $78.32/hr))]. We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires.
For a state electing to procure a vendor, given the wide variance in state procurement processes, our burden is conservatively estimated at 150 hr for writing a proposal request, evaluating proposals, and implementing the selected proposal. We estimate 125 hr at $64.46/hr for a business operations specialist to participate in the writing, evaluating, and implementing, and 25
Section 438.602(g), adopted in CHIP through § 457.1285, requires states to post the MCO's, PIHP's, and PAHP's contracts, data from § 438.604, and audits from § 438.602(e) on their Web site. As most of these activities will only occur no more frequently than annually, we estimate an annual state burden of 1 hr at $78.32/hr for a computer programmer to post the documents. In aggregate, we estimate 25 hr (25 states × 1 hr) and $1,958 (25 hr × $78.32/hr).
Section 438.608(a), adopted in CHIP through § 457.1285, requires that MCOs, PIHPs, and PAHPs have administrative and management arrangements or procedures that are designed to guard against fraud and abuse. The arrangements or procedures must include a compliance program as set forth under § 438.608(a)(1), provisions for reporting under § 438.608(a)(2), provisions for notification under § 438.608(a)(3), provisions for verification methods under § 438.608(a)(4), and provisions for written policies under § 438.608(a)(5).
The compliance program must include: Written policies, procedures, and standards of conduct that articulate the organization's commitment to comply with all applicable federal and state standards and requirements under the contract; the designation of a Compliance Officer; the establishment of a Regulatory Compliance Committee on the Board of Directors; effective training and education for the organization's management and its employees; and provisions for internal monitoring and a prompt and effective response to noncompliance with the requirements under the contract.
We estimate that reviewing their policies and procedures to ensure that all of the above listed items are addressed. We estimate this will require 5 hr at $64.46/hr for a business operations specialist to review and (if necessary) revise their policies and procedures. In aggregate, we estimate a one-time private sector burden of 290 hr (58 MCOs, PIHPs, and PAHPs × 5 hr) and $18,693.40 (290 hr × $64.46/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. Section 438.608(a)(2) and (3), adopted in CHIP through § 457.1285, require reporting of overpayments and enrollee fraud. As these will be done via an email from the MCO, PIHP, or PAHP to the state and do not occur very often, we estimate only 2 hr per year by a business operations specialist at $64.46/hr. We estimate an annual burden of 116 hr (58 MCOs, PIHPs, and PAHPs × 2 hr) and $7, 77.36 (116 hr × $64.46/hr).
Section 438.608(a)(4), adopted in CHIP through § 457.1285, requires the MCO, PIHP, or PAHP to use a sampling methodology to verify receipt of services. This typically involves mailing a letter or sending an email to the enrollee, we estimate 25 states mail to 100 enrollees each (25 × 100 = 2,500 mailings) taking 1 min at $30.92/hr for a mail clerk. We estimate a total annual aggregate burden for private sector of 42 hr (2,500 mailings × 1 min) and $1,298.64 (42 hr × $30.92/hr). This burden will be significantly reduced as the use of email increases.
Section 438.608(c) and (d), adopted in CHIP through § 457.1285, requires states to include in all MCO, PIHP, and PAHP contracts, the process for the disclosure and treatment of certain types of recoveries and reporting of such activity. The burden to amend the contracts is included in § 457.1201. We estimate the burden to comply with the reporting to include 1 hr at $78.32/hr for a computer programmer to create the report. In aggregate, we estimate a one-time private sector burden of 58 hr (58 MCOs, PIHPs, and PAHPs × 1 hr) and $4,542.56 (58 hr × $78.32/hr). We are annualizing the one-time development since we do not anticipate any additional burden after the 3-year approval period expires. Once developed, the report will be put on a production schedule and add no additional burden.
Tables 2a, 2b, and 2c set out our annual burden estimates. While the annual burden estimates (under Frequency) are unchanged, the one-time estimates have been annualized by dividing the one-time hour and cost figures by 3 to account for OMB's 3-year approval period.
The burden associated with this final rule is divided amongst four Paperwork Reduction Act (PRA) packages. We are finalizing the four proposed PRA packages, with some modification. Under our proposal, CMS–10108 would continue to contain all of part 438, except for those provisions related to EQR (§§ 438.350, 438.352, 438.354, 438.356, 438.358, 438.360, 438.362, 438.364, and 438.370), which would remain in the separate CMS–R–305. With this final rule, OMB Control #0938–0920, CMS–10108 will contain all of part 438 except for subpart E, which will be contained in OMB Control #0938–0786, CMS–R–305 and OMB Control #0938–New, CMS–10553. Since our original final rule in 2003, the provisions related to EQR (§§ 438.350, 438.352, 438.354, 438.356, 438.358, 438.360, 438.362, 438.364, and 438.370) have been contained in a separate PRA package (CMS–R–305). We believe this continues to be appropriate, given the EQR protocols, which are also associated with CMS–R–305, are modified on a different schedule from other pieces of this rule. Therefore we will finalize EQR (§§ 438.350, 438.352, 438.354, 438.356, 438.358, 438.360, 438.362, 438.364, and 438.370) in OMB Control #0938–0786, CMS–R–305 as proposed.
We believe that pulling the non-EQR quality provisions (§§ 438.310, 438.320, 438.330, 438.332, 438.334, and 438.340) out of CMS–10108 will make the impact of any future burden revisions and associated subregulatory guidance on these provisions easier to describe and present to the public for consideration. As described in this rulemaking, some non-EQR provisions of subpart E will have associated subregulatory guidance, specifically the Medicaid and CHIP QRS (§ 438.334) and potentially QAPI (§ 438.330; if CMS elects to identify a common set of national QAPI performance measures and PIP topics). Given this, and based on our experience with a standalone PRA package for EQR, we believe that placing the provisions in a separate package will allow any burden changes associated with future guidance to more clearly be presented to the public. We previously proposed that the burden for proposed part 431 subpart I would be contained in a new PRA package (OMB Control# 0938–New, CMS–10553); as we are withdrawing proposed part 431 subpart I, CMS–10553 will instead contain the non-EQR subpart E provisions (§§ 438.310, 438.320, 438.330, 438.332, 438.334, and 438.340). We do not believe this revision will have any negative impacts on the public, as it should serve only to make it easier to assess the impact of future subregulatory guidance.
We proposed that the CHIP managed care regulation burden be in a new PRA package, CMS–10554; we are finalizing the CHIP burden in this package as proposed.
No comments were received on these burden estimates.
While the requirements under §§ 431.220(a)(5) and (6), 431.220(b), 438.710(b)(2), 438.730(b), and 457.1270(a), (b), and (c) are subject to the PRA, since the information collection requirements are associated with an administrative action (5 CFR 1320.4(a)(2) and (c)), they are exempt from the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Section 431.220(a)(5) and (6) would add PAHP enrollees as eligible for a state fair hearing as permitted in subpart B of 42 CFR part 438. Section 431.220(b) prescribes procedures for an opportunity for a hearing if the state agency or non-emergency transportation PAHP takes action to suspend, terminate, or reduce services, or an MCO, PIHP or PAHP takes action under subpart.
Before imposing any of the sanctions specified in subpart I, § 438.710(a) would require that the state give the affected MCO, PIHP, PAHP or PCCM written notice that explains the basis and nature of the sanction. Section 438.710(b)(2) states that before terminating an MCO's, PIHP's, PAHP's or PCCM's contract, the state would be required to: (1) Give the MCO or PCCM written notice of its intent to terminate, the reason for termination, the time and place of the hearing; (2) give the entity written notice (after the hearing) of the decision affirming or reversing the proposed termination of the contract and, for an affirming decision, the effective date of termination; and (3) give enrollees of the MCO or PCCM notice (for an affirming decision) of the termination and information, consistent with § 438.10, on their options for receiving Medicaid services following the effective date of termination.
Section 438.730(b) would require that if CMS accepts a state agency's recommendation for a sanction, the state agency would be required to give the MCO written notice of the proposed sanction. Section 438.730(c) would require that if the MCO submits a timely response to the notice of sanction, the state agency must give the MCO a concise written decision setting forth the factual and legal basis for the decision. If CMS reverses the state's decision, the state must send a copy to the MCO.
Section 457.1270 would apply subpart I (Sanctions) of part 438 to CHIP. Within subpart I, § 438.710(a) would require that the state provide the affected entity with timely written notice of the basis of the sanction. Section 438.710(b) would require that the state provide an entity a pre-termination hearing. If CMS accepts a state agency's recommendation for a sanction, § 438.730(b) would require that the agency provide the MCO, PIHP or PAHP written notice of the proposed sanction. If the MCO submits a timely response to the notice of sanction, § 438.730(c) would require that the state agency provide the MCO, PIHP or PAHP with a concise written decision setting forth the factual and legal basis for the decision. If we reverse the state's decision, the state must send a copy to the affected MCO, PIHP or PAHP.
While the requirements under §§ 438.8(m), 438.70(a), 438.102(a)(2), 438.340(a), 438.350, 438.360(c), 438.724, and 438.818(d) are subject to the PRA, in each instance we estimate fewer than 10 respondents. Consequently, the information collection requirements are exempt (5 CFR 1320.3(c)) from the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Section 438.8(m) would require the MCO, PIHP, or PAHP to recalculate its MLR for any year in which a retroactive capitation change is made. In our experience working with states on rate setting, retroactive adjustments are not a common practice; therefore, we estimate that no more than three plans per year may have to recalculate their MLR.
Section 438.70(a) would require that states have a process to solicit and address viewpoints from beneficiaries, providers, and other stakeholders as part of the design, implementation, and oversight of the managed LTSS program. Based on our experience approving MLTSS programs and the number of states that have not yet implemented, we estimate no more than 3 states per year would elect to move to a managed LTSS program.
Section 438.102(a)(2) specifies that MCOs, PIHPs, and PAHPs are not required to cover, furnish, or pay for a particular counseling or referral service if the MCO, PIHP, or PAHP objects to the provision of that service on moral or
Section 438.340(a) requires each state that contracts with an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) to write and implement a quality strategy. We estimate that there are three states that contract only with PAHPs and two states that contract only with PCCM entities (described in § 438.310(c)(2)), and thus do not already have a quality strategy (the other states with PAHPs and PCCM entities (described in § 438.310(c)(2)) also contract with MCOs and/or PIHPs, and thus, already have an initial quality strategy). We estimate that these five states will draft an initial quality strategy.
Section 438.350 adds PAHPs and PCCM entities (described in § 438.310(c)(2)) to the EQR process. We estimate that there are three states with PAHPs and two states with PCCM entities (described in § 438.310(c)(2)) that do not currently have an EQRO contract and will need to enter into a contract with an EQRO.
Section 438.360(c) requires states to document, in the quality strategy required at § 438.340, which mandatory EQR-related activities it will apply the non-duplication provisions to, and why it believes these activities are duplicative. Given that this is already standard practice for the 37 states that currently contract with MCOs and/or PIHPs, only the three states that contract only with PAHPs and the two states that contract only with PCCM entities (described in § 438.310(c)(2)) will have to revise their policies and procedures to include this in their quality strategy.
Section 438.724 would require that the state provide written notice to their CMS Regional Office whenever it imposes or lifts a sanction on a PCCM or PCCM entity. Given the limited scope of benefits provided by a PCCM or PCCM entity and the Regional offices' experience, we anticipate that no more than 3 states may impose or lift a sanction on a PCCM or PCCM entity in any year.
Section 438.818(d) would have required states new to managed care and not previously submitting encounter data to MSIS to submit an Implementation plan. There are currently only 8 states that do not use MCOs thus these would be the only states that may have to submit an Implementation plan should they adopt managed care in the future. This estimate is no longer needed as this provision is not being finalized.
Section 433.138(e)(1) would make a technical correction addressing state Medicaid agencies' review of claims with trauma codes, to identify instances where third party liability (TPL) may exist for expenditures for medical assistance covered under the state plan. The correction would remove references to the International Classification of Disease, 9th edition, Clinical Modification Volume 1 (ICD–9–CM) by replacing the references with a general description of the types of medical diagnoses indicative of trauma. States would use the International Classification of Disease that they are using at the time of claims processing. There is no additional cost to the state related to the proposed changes to § 433.138(e) because the proposed changes do not require any action by the state, if the state wishes to retain their usual and customary editing for the same types of traumatic injuries currently identified with ICD–9–CM.
While the requirements under §§ 438.10(c)(7), 438.208(b)(2), 438.208(b)(5), 438.210(b), 438.214, 438.360(c), 438.406(b)(5), 438.408(b)(2) and (3), 438.408(f)(1) and (2), and 438.416(b) and (c) are subject to the PRA, we believe the associated burden is exempt from the PRA in accordance with 5 CFR 1320.3(b)(2). We believe that the time, effort, and financial resources necessary to comply with the aforementioned requirements would be incurred by persons during the normal course of their activities and, therefore, should be considered usual and customary business practices.
Section 438.10(c)(7) would add PAHPs and PCCMs to the managed care entities that must have mechanisms in place to help enrollees and potential enrollees understand the requirements and benefits of managed care. These practices are customarily performed to maintain and improve market share.
Section 438.208(b)(2) would require that MCOs, PIHPs and PAHPs coordinate an enrollee's care between settings or with services received through a different MCO, PIHP, PAHP and FFS. Section 438.208(b)(2)(i) would require discharge planning which has been a long standing industry practice since managed care plans consistently require authorization for all inpatient and facility care. Coordination of care, including discharge planning, is fundamental to managed care and is not unique to Medicaid. It is customarily performed by all managed care insurers, particularly for high-risk or high-cost populations.
Section 438.208(b)(5) would require providers to maintain a record according to medical industry accepted professional standards. Record maintenance is customarily performed as a condition of licensure.
Section 438.210(b) would require contracts with MCOs, PIHPs, or PAHPs and its subcontractors to have written policies and procedures for the processing of requests for initial and continuing authorizations of services. The burden associated with this requirement is the time required to develop the policies and procedures which is standard industry practice for managed care plans. Building and maintaining a network is fundamental to managed care and is not unique to Medicaid. It is customarily performed by all managed care insurers.
In § 438.214, each state must ensure, through its contracts, that each MCO, PIHP, or PAHP implements written policies and procedures for the selection and retention of providers. Since all managed care programs utilize provider networks, this is industry standard practice.
Section 438.406(b)(5) would modify the language for evidence standards for appeals to mirror the private market evidence standards. This aligns the text with private market requirements but does not alter the meaning. Based on our experience approving managed care plan contracts, most insurers offer more than one line of business, and therefore we believe this will make Medicaid consistent with usual and customary business practices.
Section 438.408(b)(2) would change the timeframe an entity has to reach a determination from 45 days to 30 days to align with Medicare. Most insurers offer more than one line of business, and therefore we believe this timeframe will allow MCOs, PIHPs, and PAHPs to be consistent with their usual and customary business practices and reduce their burden. Section 438.408(b)(3) would change the timeframe an entity has to reach a determination in an expedited appeal from 3 days to 72 hr to align with
Section 438.408(f)(1) and (2) would require that an enrollee exhaust the appeals process before proceeding to the state fair hearing process, and change the timeframe in which a beneficiary must request a state fair hearing to 120 days. MCOs, PIHPs, and PAHPs would no longer have to maintain an appeal and a fair hearing simultaneously which will decrease administrative burdens. The changing of the timeframe to request a state fair hearing from “not less than 20 or in excess of 90 days” to 120 days aligns with the private market. Based on our experience approving plan contracts, most insurers offer more than one line of business, and therefore we believe aligning these timeframes will make Medicaid consistent with their usual and customary business practices.
Section 438.416(b) and (c) would set forth a standard for the minimum types of information an entity must record during the appeals process and how that information must be stored. This standard aligns with the standards in the private market. Based on our experience approving plan contracts, most insurers offer more than one line of business, and therefore, we believe aligning record keeping standards will make Medicaid consistent with usual and customary business practices.
This final rule modernizes the Medicaid managed care regulations recognizing changes in the usage of managed care delivery systems since the release of the final rule in 2002. As Medicaid managed care programs have developed and matured in the intervening years, states have taken various approaches to implementing part 438. This has resulted in inconsistencies and, in some cases, less than optimal results. To improve consistency and adopt policies and practices from states that have proven the most successful, we are finalizing revisions to strengthen beneficiary protections, support alignment with rules governing managed care in other public and private sector programs, strengthen actuarial soundness and the accountability of rates paid in the Medicaid managed care program, and implement statutory provisions issued since 2002.
According to the 2014 Actuarial Report on the Financial Outlook for Medicaid, total Medicaid outlays in federal FY 2013 exceeded $457 billion; $265 billion, or 58 percent represented federal spending, and $192 billion, or 42 percent represented state spending.
Additionally, the prevalence of MLTSS being delivered through a risk-based capitated system has increased from fewer than 8 programs in 2004 to 20 programs in 2014. Beneficiaries using MLTSS are among the most vulnerable and often require enhanced protections to assure health and welfare. This regulation codifies these necessary beneficiary protections in MLTSS. The changes finalized for rate setting, MLR, encounter data, and reporting, will support and reflect the increased efforts of states and managed care plans to provide more comprehensive, coordinated, and effective care while achieving better health outcomes.
The Congress established CHIP in 1997 through the passage of the Balanced Budget Act (BBA) and reauthorized it in 2009 with the passage of the CHIPRA. Since CHIP was established, participation has grown steadily, and the rate of uninsured children has been reduced by half. The most recent data indicate that more than 87 percent of eligible children are enrolled in CHIP or Medicaid. Managed care has always been a large part of CHIP, because the program was established in an era of increased use of managed care in all health care sectors and the flexibility granted to states in administering the program. Many states enroll all or nearly all of their CHIP population in managed care plans. At the same time, CHIP has historically had few regulations related to the use of managed care.
When the Congress reauthorized CHIP in 2009 in section 403 of CHIPRA, it applied a number of the Medicaid managed care provisions in section 1932 of the Act to CHIP. In response, we released two State Health Official (SHO) letters 09–008 and 09–013, issued on August 31, 2009 and October 21, 2009, respectively, which provided initial guidance on the implementation of section 403 of CHIPRA. (SHO #09–008 is available at
The BBA established quality standards for Medicaid managed care programs: A quality assessment and improvement strategy; and an external, independent review. While these standards initially applied only to MCOs, the application of several of them has spread to PIHPs (via the regulations at part 438, subparts D (Quality Assessment and Performance Improvement, effective on August 13, 2002 (67 FR 40989)) and E (External Quality Review, effective on March 25, 2003 (68 FR 3586)) and to CHIP managed care programs (per the CHIPRA).
Under this final rule, we restructure the quality provisions of part 438 into a single subpart, subpart E, and apply these provisions to states contracting with MCOs, PIHPs, PAHPs, and PCCM entities (described in § 438.310(c)(2)). States that utilize one or more of these four managed care delivery systems will require their plans to operate a QAPI program, will themselves operate a managed care quality strategy, and will contract with a qualified EQR organization to conduct an annual EQR. States will report publicly on the accreditation status of their contract MCOs, PIHPs, and PAHPs; states will also issue an annual quality rating for each of these plans using the state's Medicaid manage care quality rating system. The changes finalized in this rule-making will further align Medicaid with other healthcare programs, specifically Medicare and the Marketplace. The improvements to Medicaid and CHIP managed care quality finalized in this rule give states additional tools to evaluate and improve the care received by beneficiaries.
For all of these reasons, the current regulatory framework is no longer the most appropriate or efficient to achieve program goals. We believe that it is necessary to modernize the Medicaid and CHIP managed care regulations to support health care delivery system reform, improve population health outcomes, and improve the beneficiary experience in a cost effective and consistent manner in all states.
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimate that this rule is “economically significant” as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we have prepared a RIA that to the best of our ability presents the costs and benefits of this rule. The numbers presented in this RIA are rounded depending on the level of precision in the data used to generate them. Specifically, all COI costs are rounded to $0.1 million while transfers are rounded to the nearest $100 million. This difference also allows us to display the smaller numbers in the COI costs, which would reflect zero if rounded to the nearest $100 million.
All burden estimates in this final rule utilized 2012 data submitted by states to the MSIS. That data reflected almost 63,000,000 beneficiaries enrolled in 606 MCOs, PIHPs, PAHPs, or PCCMs in 42 states (335 MCOs, 176 PIHPs, 41 PAHPs, 20 NEMT PAHPs, 25 PCCMs, and 9 PCCM entities). For CHIP, burden estimates utilized 2015 data submitted by states to the SEDS. We estimate that there are 62 plans that states use to contract with CHIP separately from their Medicaid programs as a result of discussions with states since the publication of the proposed rule. Utilizing SEDS data available as of December 2015, there are 25 states with approximately 2.3 million children enrolled in managed care in separate CHIP programs.
Tables 3 and 4 show the overall estimates of the financial impact of this final rule. These tables and analyses use administrative burden estimates from the Paperwork Reduction Act documentation as well as any other quantifiable and qualitative benefits and costs when available. Table 3 divides the overall cost estimates into federal costs, state costs, and private sector costs with high and low estimates as appropriate. Table 4 divides the overall transfer estimates into federal and state transfers with high and low estimates as appropriate. Utilizing burden estimates from section V of this final rule (COI) and estimated transfers, federal, state, and private sector costs and transfers were derived by applying the appropriate FMAP to the corresponding burdens in section V of this final rule. For the revisions in part 438, we apply a weighted FMAP of 58.44 percent (weighted for enrollment) to estimate the federal share of private sector costs. This is done to account for private sector costs that are passed to the federal government through the managed care capitation rates. For part 457, we apply an enhanced FMAP of 93.9 for 2016 through 2019 and an enhanced FMAP of 71.5 for 2020 for both state and private sector costs. These represent the average CHIP FMAP in the respective years under current law. Federal CHIP funding is capped and is currently appropriated through 2017; therefore, federal CHIP expenditures will not exceed the total allotments described in section 2104(a) of the Act.
Table 3 separates the overall costs by part 438, which represents Medicaid managed care and part 457, which represents CHIP. As shown in Table 3, the total projected cost associated with this final rule is a cumulative $91.7 million in the first year for revisions to part 438, and a cumulative $22.1 million in the first year for revisions to part 457, for a total cost of a cumulative $113.8 million for all revisions in the first year. Table 4 represents the overall transfer estimates for part 438 only, as part 457 has no estimated transfers. As shown in Table 4, the total estimated
The COI costs estimated for some of the provisions are based on the number of enrollees. As such, as enrollment grows each year, the cost for these provisions will grow accordingly. For this analysis, we used the projected average enrollment growth rate for Medicaid of 3.3 percent
This RIA includes the administrative costs (wage and labor) related to implementing and operating a Medicaid managed care delivery system, as well as non-administrative benefit and cost estimates when available. The burden estimates presented in section V of this final rule provide the detail supporting the summary COI burden estimates presented in this RIA.
All state Medicaid programs receive a federal matching rate of at least 50 percent for administrative expenses and 50 to 73 percent (determined individually by state) for covered service expenses, with exceptions for certain services and eligibility groups. State CHIP programs receive a higher federal funding rate, ranging from 88 to 100 percent for 2016 through 2019 and ranging from 65 to 82 percent for 2020; states receive the same federal funding rate for administrative expenses, but they are capped at 10 percent of a state's total CHIP expenditures. The Medicaid managed care plans are paid actuarially sound capitation rates to cover the costs of fulfilling their obligations under their contract. These rates are included in the expenditures by the state and subsequently submitted to CMS for federal matching payments at the state's assigned rate. This is reflected in Table 3 in the “Private Sector” row. State expenditures for EQR and EQR-related activities performed by EQROs for MCOs with contracts under section 1903(m) of the Act are eligible for a federal matching rate of 75 percent; EQR on other types of managed care entities or EQR-related activities conducted by non-EQROs are eligible for a 50 percent federal matching rate. CHIP EQR activities are considered administrative activities, which receive the CHIP federal funding rate, and count towards the administrative cap.
Table 5 shows the estimate of the impact for the COI costs of this final rule, divided into fixed and variable costs. Fixed costs are those which do not change with the number of enrollees while variable costs change with the number of enrollees.
The principles discussed below guided the policy development and changes made in the final rule. These guiding principles and finalized regulatory changes support the coordination and integration of health care, promote effective forms of information sharing, and require transparency on cost and quality information to support greater overall accountability in the Medicaid and CHIP programs. Detailed COI burden estimates can be found in section V of this final rule. This section details the significant COI costs and transfers related to benefits and costs associated with this final rule.
This guiding principle seeks to provide more data, analytical rigor, documentation, and transparency in the managed care rate setting process and includes setting actuarially sound capitation rates and program integrity. The estimated first-year COI costs associated with the provisions under this guiding principle account for a cumulative $1 million of the total estimated first-year burden for the revisions to part 438 and part 457 (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.2 and IV.C.3 for rates and IV.C.36 and IV.C.37 for program integrity).
The final rule also contains requirements related to setting actuarially sound capitation rates in sections § 438.4 through § 438.7. Many of these requirements will codify current policy on developing capitation rates for Medicaid managed care plans. Other requirements set standards for actuaries developing the capitation rates, specify requirements for data and information that must be included in the actuarial certification of the rates, and describe the CMS process for reviewing and approving the rates. As such, we believe that many of these provisions are unlikely to have a direct effect on the actual capitation rates or future Medicaid expenditures. To the extent that these new standards or requirements do have an effect on capitation rates or Medicaid expenditures, we believe this could lead to increases in some cases and decreases in other cases in the capitation payment rates and Medicaid expenditures.
We believe that the combination of the new finalized requirements related to actuarial soundness and to no longer allow states to certify rate ranges and to require states to certify specific capitation rates may have some financial impact. Currently, 40 states and the District of Columbia have at least one managed care program as part of their Medicaid program. Of these, 26 states and the District of Columbia currently certify rate ranges instead of rates for at least one managed care program in the state (Arkansas; California; Colorado; Delaware; District of Columbia; Georgia; Idaho; Indiana; Iowa; Kansas; Kentucky; Louisiana; Maryland; Massachusetts; Minnesota; Missouri; Nebraska; New Mexico; New York; North Carolina; North Dakota; Oregon; Pennsylvania; Tennessee; Utah; Virginia; and West Virginia). The certified rate ranges in many cases can be large. Based on our review of the most recent actuarial certifications in states that use rate ranges, the width of the rate range is 10 percent or smaller in 14 states (that is, the low end and the high end of the range are within 5 percent of the midpoint of the range), but in some states the ranges may be as wide as 30 percent (that is, the low end and the high end are within 15 percent of the midpoint of the range). In addition, most states tend to set the contracted capitation payment rates toward the lower end of the rate range.
For states that currently use relatively narrower rate ranges (which we would generally define as 10 percent or less), we believe that the states will be able to meet the requirements and reasonably set rates that will be equivalent to those at the low end of the rate ranges (if the states were still able to certify a rate range). For states with relatively wider rate ranges (those that are greater than 10 percent), we believe that these states may not be able to set rates equivalent to the current low end of the rate range. In general, our opinion is that in cases where the rates would be more than 5 percent below the midpoint of the rate ranges it will be more difficult for a state to certify that rate as actuarially sound (and at the same time meet all of the other actuarial soundness requirements).
To estimate the high end of the range of the potential financial impact, we assumed that in states that had rate ranges wider than 10 percent and set rates at the low end of the rate range, that future Medicaid MCO, PIHP, and PAHP premiums would increase 2.5 percent (that is, roughly the average across all states of how much the low end of the rate range would need to increase to bring the width of the rate range to about 10 percent). We also included states for which the rate certification provided no information about the actual contracted capitation payment rates. For states with wide rate ranges but that paid rates at different points within the rate ranges, we assumed that the rates would increase by 1.25 percent (that is, half of the increase in rates for states that paid at the low end of the rate range). We assumed no impact on states with relatively narrower rate ranges (10 percent or less).
The newly finalized requirements related to actuarial soundness and to no longer allow states to certify rate ranges and to require states to certify specific capitation rates are estimated to increased projected Medicaid managed care expenditures by $3.7 billion from 2016 to 2020, or about 0.3 percent overall of about $1.4 trillion in projected Medicaid expenditures on MCOs, PIHPs, and PAHPs over the 5-year period. These estimates will be an increase of about 1.5 percent in costs in states assumed to be affected by this change. We believe that these estimates are a reasonable upper bound on the projected effect of the final rule.
In addition, we believe that there may be cases where these changes would reduce capitation rates and Medicaid expenditures. In particular, there are some states that make significant retroactive changes to the contracted rates at or after the end of the rating period. We do not believe that these changes are made to reflect changes in the underlying assumptions used to develop the rates (for example, the utilization of services, the prices of services, or the health status of the enrollee), but rather believe that they are used to provide additional reimbursements to the plans or to some providers. We believe that the requirements for actuarial soundness and certifying the specific capitation rates would limit these types of changes and may result in some reduction in Medicaid expenditures.
To estimate the high end of the range of the potential financial impact, we assumed that in states that we are aware of that make these types of changes to the capitation rates, an amount equal to 50 percent of the difference between paying MCOs, PIHPs, and PAHPs at the low end and the high end of the rate ranges would not be paid to the plans. Limiting these changes by states decreased projected Medicaid managed care expenditures by $8.7 billion from 2016 to 2020, or about 0.6 percent of about $1.4 trillion in projected expenditures on MCOs, PIHPs, and PAHPs over those 5 years. We believe that these estimates are a reasonable upper bound on the projected effect of the final requirements.
Thus, we believe that the effects of these finalized Medicaid managed care actuarial soundness requirements and the requirement to certify the capitation rates could increase expenditures as much as $3.7 billion from 2016 to 2020 and could decrease expenditures as much as $8.7 billion from 2016 to 2020. We believe that these estimates reflect reasonable upper and lower bounds on the potential effect of these changes in the final regulation. Assuming that these changes in the regulation go into effect mid-way through 2016, we estimate that the changes related to actuarial soundness requirements and certifying the capitation rates would have the following effects shown in Table 6.
It is possible that the impacts could be more or less than estimated here. More or fewer states may need to adjust capitation rates than we have assumed here. In particular, it is possible that states with relatively narrower ranges may decide that the capitation rates would still need to be higher than what would have been the low end of the rate range previously. States that use rate ranges as wide as 10 percent may still be affected by these changes. In addition, states may adjust their capitation rates to a greater or lesser extent than we have assumed here. While we believe that the final changes related to rate setting may be more likely to affect states that currently use relatively wide rate ranges, it is also possible that this may affect other states, including those that do not use rate ranges at all.
In addition, for states that historically have made significant changes to capitation rates within the rate ranges at the end or after the end of the rating period, those states may adjust their rate setting approaches as well. The payments might be closer to or farther from the final payments than we have estimated. Finally, these projections rely on the data, assumptions, and methodology used to develop the President's FY 2017 Budget projections for Medicaid. Changes in enrollment, health care costs, and the use of managed care plans within Medicaid may differ from these projections and may lead to greater or lesser Medicaid MCO, PIHP, and PAHP expenditures.
We received the following comment on the RIA.
Another aspect of this rule that we evaluated under this principle was enhancements to program integrity. We believe that many of these program integrity activities are currently being performed by states and MCOs, PIHPs, and PAHPs. For program integrity activities that would be new or expanded under the final rule, there is very limited information on the effect that program integrity activities in general have on Medicaid expenditures. The total estimated burden on states and managed care plans to implement the finalized provisions is $471,691.30 (detailed in the Collection of Information). The lack of information is especially true for specific program integrity activities. While we believe these new activities may lead to some additional recoveries from plans, providers, or other individuals and may also deter entities from committing fraud or violating program requirements, it is difficult to determine the financial impacts of these activities and we believe that any financial impact is unknown. Therefore, we are not estimating the financial impact on future Medicaid expenditures.
This guiding principle seeks to align Medicaid and CHIP managed care requirements with the Marketplace or MA to better streamline the beneficiary experience and to reduce operational burdens on health plans across publicly-funded programs and the private market. This guiding principle covers the regulatory topics of marketing, appeals and grievances, MLR, and standard contract provisions. As shown in Table 7, the COI costs associated with the provisions under this principle account for a cumulative $6.9 million in the first year for the revisions to part 438.
Similarly, as shown in Table 8, the COI costs associated with implementing the provisions under this principle account for a cumulative $10.1 million in the first year for the revisions to part 457.
As an increasing and more diverse set of Medicaid services are being delivered through managed care, good measurement systems are increasingly important to ensure that Medicaid funding is used prudently and that capitation rates are sufficiently based on the expenses associated with services. The implementation of MLR-related requirements are an integral part of the overall financial accountability aspects of the proposal and would align Medicaid and CHIP with the private health insurance market, as well as with MA. MLR reporting is a valuable tool to ensure that capitation rates for MCOs, PIHPs, and PAHPs are actuarially sound and adequately based on reasonable expenditures for covered services. Acknowledging that basis for an MLR requirement, there are four benefits to having a common national standard for the calculation, reporting and use of MLR: (1) It will provide greater transparency for the use of Medicaid funding; (2) it will allow comparisons across states and facilitate better rate setting; (3) it will facilitate better comparisons to MLRs in MA and the private health market; and (4) it will reduce the administrative burden on managed care plans by providing a consistent approach to ensuring financial accountability for plans with multiple product lines and/or operating in multiple states. The final provisions in §§ 438.4, 438.5, 438.8, 457.1203 and 457.1205 require MCOs, PIHPs, and PAHPs to calculate, report, and use a MLR in the development of capitation rates. The estimated first-year COI cost for the provisions in part 438 is a cumulative $5 million (detailed burden estimates can be found in the COI section of this final rule at section V.C.4 for MLR). The total estimated first-year COI cost associated with implementing the final MLR provisions of part 457 is a cumulative $0.5 million.
We finalized standards that require the states to calculate and report the MLRs for Medicaid MCOs, PIHPs, and PAHPs in § 438.4 and § 438.5, and to add new § 438.8 and § 438.74, as well as incorporate an MLR assumption in the rate setting process. These changes, however, do not require that states assess any financial penalties on MCOs, PIHPs, and PAHPs that do not meet a minimum MLR. We encourage states to adopt minimum MLRs (of at least 85 percent) or to develop similar financial arrangements to incentivize better plan performance; however, as states are already permitted to implement a minimum MLR or similar standards and some choose not to do so, we believe that this rule is unlikely to encourage more states to do so and therefore is unlikely to have any direct financial impact on Medicaid expenditures for MCOs, PIHPs, and PAHPs. Despite this, we believe that there is the potential for some financial impact when considering the MLR requirements and the actuarial soundness standards requirements.
We do not collect data or information on the MLRs of Medicaid MCOs, PIHPs, and PAHPs, nor do we collect the data or information necessary to calculate the
From 2011 to 2014, the mean MLR varied between 85.5 percent and 87.9 percent, with an average of 86.7 percent over the 4-year period (weighted by the number of plans reporting each year). A significant percentage of plans experienced loss ratios below the 85-percent target noted in this final rule. In each year, 10 percent of plans experienced loss ratios below 77.4 percent to 79.4 percent, and 25 percent of plans experienced loss ratios below 81.8 percent to 83.6 percent. Thus, we would expect a substantial number of plans would likely not meet a minimum loss ratio of 85 percent each year.
We fit a normal distribution to the MLRs based on the average loss ratios at each percentile shown in the Milliman reports (10th, 25th, 50th, 75th, and 90th) for 2011, 2012, 2013, and 2014. This suggested that between 37 percent and 39 percent of plans would have loss ratios equal to or less than 85 percent over this period. Assuming that the distribution of loss ratios is not affected by the size of the MCO or the MCO's total revenue (in general, the Milliman reports did not suggest any apparent correlation), we calculate that if all states enforced a minimum MLR of 85 percent and if MCOs with smaller loss ratios had to return revenue such that the effective loss ratio would be equal to 85 percent, then managed care plans would, on average, return 1.5 percent to 1.9 percent of total revenue. To the extent that smaller MCOs, PIHPs, and PAHPs would receive a credibility adjustment, which would effectively lower the minimum MLR standard for those plans; we estimated that the impact of the credibility adjustment would be less than 0.1 percent, and have not made adjustments to the estimates to account for the relatively smaller impact of the credibility adjustment.
In 2013, the sum of MCO, PIHP, and PAHP payments was $132 billion (CMS, Financial Management Report—Base Payments);
As of 2013, we found, based on an internal review, that of the 12 states that had minimum MLR requirements, 6 states did not enforce any financial penalties, and 2 of the 6 states that did enforce penalties had minimum MLRs of less than 85 percent. The 6 states that did enforce financial penalties accounted for about 13 percent of Medicaid MCO, PIHP, and PAHP expenditures in 2014.
There is significant variation in the standards currently in place, as states may have different methods of calculating MLRs (for example, which medical expenses and losses are included, and whether they make certain adjustments to plans' revenues) and different minimum MLRs (although all such minimums are between 80 percent and 88 percent). In addition, many states that implemented the eligibility expansion under the Affordable Care Act to all adults up to age 65 with household incomes of 138 percent or less included a minimum MLR requirement or a similar risk-sharing arrangement in its contracts with MCOs, PIHPs, and PAHPs for 2014. These current requirements and standards may have some effect on the potential impact of the final changes.
For the purpose of illustrating the potential impact of these changes in the regulation, we have developed estimates assuming that all states would require a minimum MLR. If all states implemented the 85 percent minimum MLR requirement that is required by the final rule, we estimate that the federal government would collect about $7 billion to $9 billion between 2018 and 2020 and the states would collect about $4 billion to $5 billion over the 3-year period. This calculation also accounts for states that already have a minimum loss ratio requirement in place by excluding any effect on states that currently enforce remittances for plans with MLRs below 85 percent and including only a partial impact from states that currently enforce remittances on plans with MLRs at lower minimum MLR. These estimated amounts would account for about 1.3 percent to 1.7 percent of projected MCO, PIHP, and PAHP expenditures.
We assume that this rule would not lead more states to implement an enforceable, minimum MLR; we therefore conclude that there would be no direct significant financial impact of the MLR provisions of the final rule on MCOs, PIHPs, and PAHPs. For the 2 states that currently enforce penalties at a lower minimum MLR, the estimated effect would be less than 0.1 percent of total MCO, PIHP, and PAHP payments if they increased the minimum MLR to 85 percent. (It is also possible those states may choose to eliminate any MLR penalty, in which case total payments may slightly increase instead.)
Considering the final MLR requirements and changes to the requirements for actuarial soundness in § 438.4(b)(9) that require rates to be developed in such a way that the MCO, PIHP, or PAHP would reasonably achieve an MLR of at least 85 percent for the rate year, we believe it is possible that collecting and reporting MLRs for each MCO, PIHP, or PAHP and additional oversight of the rate setting process may lead states in the future to make adjustments to how they set capitation rates. For example, if this additional information led a state to realize that the loss ratios for the MCOs, PIHPs, or PAHPs were consistently higher or lower than expected, the state may adjust future rates lower or higher. We believe that there may be cases that lead to rate increases and other cases that lead to rate decreases relative to what the rates otherwise would have been.
As the states have the discretion to determine whether or not to require a remittance if plans do not meet the minimum MLR, it is possible that actual savings due to the MLR provisions of the regulation would be less than the estimated savings if remittances were required from all plans. Requiring reporting of the MLR and the actuary to consider those results in developing rates is expected to have some impact, which are described in the following section of this analysis.
Using a similar methodology as described previously to estimate the potential impact if all states were to require a minimum MLR of 85 percent, we have estimated what the effects of reporting the MLR and the other actuarial soundness requirements would
Similarly, we calculated the amount of additional payments that would need to be made for plans with high MLRs, which we assumed to be 95 percent or greater. In these cases, we believe that the plans may have a higher likelihood of experiencing a loss. A report on Medicaid managed care administrative costs found that 10 percent of plans had administrative cost ratios (net of taxes) of 6.1 percent or less (“Medicaid Risk-Based Managed Care: Analysis of Administrative Costs for 2014,” Palmer, Pettit, and McCulla, June 2015.) Thus, for the vast majority of plans, an MLR of 95 percent or more would likely imply a loss in that year for the managed care plan. The Milliman reports found that between 2011 and 2014, 25 percent of all managed care plans had MLRs above 90.0 to 91.9 percent and 10 percent of plans had MLRs above 96.4 to 97.3 percent. We believe that in these cases, the states may adjust future capitation rates and payments to be higher than they otherwise would have been and further assumed that these adjustments would equal 50 percent of the difference between a MLR of 95 percent and the actual MLR. We estimated that the percentage of all MCO, PIHP, and PAHP payments would be increased by between 0.1 and 0.2 percent due to these changes or about $2 billion to $4 billion of 2014 Medicaid managed care plan payments.
The net effect of these changes is estimated to be a decrease in MCO, PIHP, and PAHP payments of about 0.2 to 0.3 percent. Between 2018 and 2020, a 0.3 percent decrease in MCO, PIHP, and PAHP expenditures is projected to be a reduction of $1.3 billion in federal expenditures and of $0.7 billion in state expenditures. We believe that this is a reasonable lower bound of the effect of the final changes. We believe that a reasonable upper bound of these estimates would be $0, assuming that the changes resulted in no financial impact. These estimates are shown in Table 9.
There is a significant amount of uncertainty in these estimates beyond whether or not states would elect to implement an enforceable minimum MLR requirement. States and managed care plans may also adjust their behavior as a result of the minimum MLR requirements; for example, states may set capitation payment rates differently to target certain loss ratios, and managed care plans may make changes to the way they manage health care costs and utilization for their enrollees. These changes may lead to differences in future expenditures for MCO, PIHP, and PAHP expenditures, and thus, the actual experience may differ from our estimates.
In addition, it is not clear that the reports we relied on measure the MLR the same way as is finalized in the regulation. To the extent that there are differences, the actual range and distribution of MLRs among MCOs, PIHPs, and PAHPs that would be measured under the final rule may be different than as shown in the studies (for example, if there are expenditures that would be considered medical losses under the final regulation but were not considered medical losses in the Milliman studies). This could lead to the actual effects of the MLR and
Moreover, the extent and effectiveness of CMS' and states' efforts to adjust future capitation rates to target certain MLRs are difficult to predict. How CMS and the states respond to these changes would likely have a large bearing on the effect that these sections of the regulation have on future Medicaid expenditures. Finally, these projections rely on the data, assumptions, and methodology used to develop the President's FY 2017 Budget projections for Medicaid. Changes in enrollment, health care costs, and the use of managed care plans within Medicaid may differ from these projections and may lead to greater or lesser Medicaid MCO, PIHP, and PAHP expenditures.
Final changes to the appeals and grievances provisions in §§ 438.400 through 438.416 and § 457.1260 focus on creating state and health plan processes that are consistent across product lines (that is, MA, Medicaid, CHIP, and QHPs). Medicaid currently differs from MA organizations and QHPs in several key ways and these differences hinder a streamlined grievance and appeals process across the public and private managed care sectors, and creates unnecessary administrative complexity for health issuers participating across product lines. Our finalized revisions will allow enrollees to better understand the grievance and appeals processes and receive a resolution of their grievances and appeals more quickly. We believe this will be a tremendous benefit to families that have some family members eligible for Medicaid and other family members eligible for marketplace coverage; enrollees that change between Medicaid and the QHPs due to life changes that affect eligibility; and enrollees that are dually eligible for Medicaid and Medicare. We believe consistency and quicker resolution of issues will not only make the enrollee more comfortable using the grievance and appeal systems, but also more confident that there is benefit in utilizing them when needed. Health issuers have indicated that alignment of these provisions would reduce operational burden for those that operate across product lines and in different states as it would enable them to create and implement one set of uniform processes and procedures. A significant portion of the burden associated with this principle is the result of the final rule that Medicaid non-NEMT PAHPs comply with the same standards as MCOs and PIHPs. This will require non-NEMT PAHPs to develop compliant grievance and appeals systems, which will generate some one-time burdens, but we believe it is important for enrollees to have an avenue within these entities to raise and receive resolution to their grievances and appeals. The total estimated first-year COI costs for requiring Medicaid non-NEMT PAHPs to meet the same standards as MCOs and PIHPs and provide due process to beneficiaries through provisions in part 438 is a cumulative $1.9 million (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.30 through IV.C.35 for appeals and grievances). We finalized most of the Medicaid grievance regulations to CHIP MCOs, PIHPs, and PAHPs. The total estimated first-year COI costs associated with implementing the grievance provisions of part 457 under this principle is a cumulative $9.6 million.
To develop estimates of the impact of the change in policy regarding institutions of mental disease (IMDs), OACT reviewed 2010 data from the Medicaid Analytic eXtract (MAX). Fee-for-service and managed care encounter data were reviewed where the place of service was an inpatient psychiatric facility, which is expected to reflect IMD claims and encounters. Data was reviewed by state and by age of the enrollee.
Using the FFS data for persons ages 22–64,
OACT compared the number of enrollees ages 22–64 with an inpatient psychiatric facility encounter to the total number of enrollees ages 22–64. States in which 0.1 percent or more of the Medicaid enrollees had an inpatient psychiatric facility encounter in managed care were considered likely to be using IMDs as an in lieu of service provider; there were 17 states that met this criteria in 2010. (There were another 9 states that reported a smaller percentage of enrollees with these encounters that could potentially be using IMDs as an in lieu of service provider.) This accounted for an estimated $6.0 million in expenditures in 2010.
For these 17 states, the ratio of estimated managed care costs for inpatient psychiatric facility services to total expenditures for enrollees ages 22–64 was calculated for each state and an overall average. The average ratio was 0.009 percent (with the highest ratio among these 17 states being 0.029 percent). This represents the average percentage of Medicaid expenditures for enrollees that are for inpatient psychiatric facility services through managed care. OACT assumed that this represents the extent to which IMD services are used in managed care in states that do use IMDs as an in lieu of service provider.
To calculate the impact of the policy, OACT multiplied this ratio (0.009 percent) by the total amount of expenditures for adult enrollees and enrollees with disabilities (which includes adults ages 22–64). This total represented the amount of expenditures if all states used this option to the same extent that states currently using it have done. In 2010, this would have increased expenditures for inpatient psychiatric facility services for adults ages 22–64 through managed care from $6.0 million to $17.9 million, or an increase of $11.9 million.
These amounts were then projected forward using historical data from 2010 through 2014 and the projections of enrollment and expenditures in the President's FY 2017 Budget, with the assumption that this change would be effective for contracts starting July 1, 2017 or later.
This estimate is subject to significant uncertainty, and more so than other estimates given the limitations with the data. While we believe that this represents a reasonable estimate of potential impacts, given the lack of clarity about how states allow IMD services to be used as in lieu of services currently makes it more difficult to assess the impact of this section of the regulation. As these are services not allowed for adults under Medicaid, it is not clear how accurate the data is (under FFS or managed care), which contributes to the uncertainty regarding these estimates. Some of the expenditures in the data may be for non-IMD providers; similarly, expenditures for IMDs could be reported elsewhere in the data (for example, as other types of facilities). In addition, it is not clear how many current IMD stays exceed 15 days; we have assumed that none of the IMD stays in the data exceed 15 days. More or fewer states may be using IMDs as an in lieu of service provider than in 2010, or states may be using this to a greater or lesser extent than in 2010. This estimate assumes that states do not use IMDs more widely than in the past; however, it is possible that they may use IMDs more widely than we are aware of. This estimate also does not account for reductions in other expenditures (either directly, with IMD services replacing inpatient hospital services, or indirectly, with the use of IMD services potentially preventing other utilization in the future).
This guiding principle seeks to protect beneficiaries from harm and encompasses regulatory provisions related to enrollment and disenrollment; beneficiary support system; continuation of benefits pending appeal; authorization of services; continued services and coordination of care; managed LTSS; and stakeholder engagement. As the use of managed care to deliver Medicaid benefits has grown, so has the inclusion of more vulnerable populations into managed care. These new populations include persons with disabilities, individuals with behavioral health needs, and beneficiaries needing LTSS. The unique needs and vulnerability of these newer populations heightens the need for added beneficiary protections and thus, contributed to the final revisions to the regulations. These protections are expected to benefit all Medicaid beneficiaries.
As shown in Table 11, the COI costs associated with the provisions under this principle account for a cumulative $50.4 million in the first year for the revisions to part 438 (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.8 and IV.C.15 for coordination/continuity of care and IV.C.16 for authorization of services).
Similarly, as shown in Table 12, the COI costs associated with implementing the provisions under this principle account for a cumulative $7 million in the first year for the revisions to part 457.
The provisions for coordination and continuity of care are in § 438.62 and § 438.208. Under current regulations, these sections focus only on primary and acute medical care, which may not be appropriate or consistent with the needs of people with disabilities, frail elders, and other LTSS populations. These populations rely heavily on less traditional services, such as support services for work, community activity access, and assistance with activities of daily living. For example, people with dementia may prefer and be able to live in the community with personal care assistance, memory aids, and alerting systems, but may not be able to identify and notify a care coordinator in situations of neglect or abuse. A young adult with an intellectual disability may be able to work with supports in place, but be at risk of harm if transportation falls through or a support worker does not show up for a scheduled time. These populations often require heightened levels of monitoring and oversight by the care coordinator to ensure that they are able to fully access the services and supports needed to thrive in the community and to be sure that risks of harm or abuse are mitigated. Additionally, some providers of LTSS are unaccustomed to working with managed care plans and care coordinators can be the bridge to establishing and building a productive
The final regulations address these enhanced care coordination needs by finalizing provisions to strengthen the role of care coordinators who help beneficiaries transition from providers and services available through their current delivery system to providers and services available through a managed care plan. Care coordinators can help enrollees with finding specialty providers, understanding how the managed care program works, setting appointments, verifying delivery of services, and reminding enrollees of their appointments. The final regulations have been strengthened to ensure that individuals with LTSS needs complete an accurate and timely person-centered assessment and service planning process with more frequent monitoring to assist beneficiaries in fully utilizing services. The changes to these provisions are designed to enable people with disabilities and LTSS enrollees to live, work, and participate in the setting of their choice more safely, effectively, and with fewer lapses in care. Additionally, we enhanced existing requirements for coordination and continuity of care when enrollees move between managed care plans or programs. While this has always been a requirement in part 438, we are aware of gaps in some states' and managed care plans' implementation for the LTSS population.
Behavioral health, substance use disorders, and institutional services are the most common services that managed care enrollees receive through FFS; coordinating these services with the managed care services is crucial to comprehensive care management. Enrollees receiving behavioral health or substance use treatment on a frequent, sometimes daily, basis are at high risk for emergency department visits or setbacks to their recovery if they experience a disruption in their services. The added protections provided by the finalized changes will ensure that enrollees, particularly those with complex health needs, experience smoother transitions, have fewer incidents of abuse or neglect, are able to retain the ability to live in their communities, and have fewer emergency department visits or admissions. For enrollees receiving on-going care and LTSS, lapses in care can trigger acute events and even be life threatening. Putting additional protections in place to prevent such occurrences is critical to enrollees' health outcomes. Care coordinators can help enrollees in these situations with finding appropriate providers, understanding how the managed care program works, setting appointments, and ensuring that appropriate authorizations are in the system to facilitate claims payment.
While we believe that the benefits of care coordination have a significant positive impact on the quality of life, consumer experience, and health outcomes for enrollees, we acknowledge that the activities that would bring about these positive impacts will likely generate costs. From an administrative perspective, the provisions in §§ 438.62 and 438.208 have an estimated first-year COI cost of $49.8 million (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.8 and IV.C.15, respectively). In general, we expect that most of the activities that would be required under the regulation are already being provided in some form by the state Medicaid program or by their MCOs, PIHPs, and PAHPs. We anticipate little to no new impacts in practice or in expenditures on activities already occurring with existing populations and benefits. However, we believe there is a greater likelihood that the finalized changes in the regulation specific to MLTSS could lead to new or additional care coordination expenditures. There are currently 20 states that use MLTSS. Unfortunately, there is very limited data available to determine the potential impact of this section of the final regulation. We do not collect consistent or validated cost data on Medicaid managed care encounters or administrative costs and, therefore, it is not possible to determine the amount of new expenditures for MCOs, PIHPs, and PAHPs to provide particular services or to serve particular enrollees. In any managed care program, we would generally expect care coordination expenditures to be a notable portion of MCO, PIHP, and PAHP administrative costs. Milliman has published studies
Unfortunately, there is also little data or research available on the amount of care coordination expenditures provided by MCOs, PIHPs, or PAHPs and the effectiveness of care coordination. Some studies have found that care coordination may lead to reductions in preventable inpatient readmissions and costs related to screening, testing, and evaluation. Studies
It should be noted that these studies, and most other studies available, have examined the effects of care coordination on hospitalizations and
While we do not collect the amount of managed care capitation payments or expenditures in such a way that the amount paid for managed long-term care services can be determined, we estimate about 38 percent of total Medicaid managed care expenditures were provided for aged and disabled enrollees in 2013 ($50 billion of $132 billion), and we expect a significant amount of those expenditures covered acute care services. Thus, the potential amount of expenditures on LTSS under Medicaid managed care programs is expected to be relatively small compared to the rest of the program. We believe that enrollees will benefit from increased care coordination activity; however, at this time, we believe a reasonable estimate of the financial impact of the changes to care coordination requirements under the regulation is that there would be a net impact of $0. We believe that the expected increase in care coordination costs is likely to be small and that the effect of those activities on overall health benefit expenditures would be limited. The effect on overall expenditures would vary significantly depending on how successfully the managed care plans implement and/or enhance their current coordination efforts. We expect that provisions finalized in this rule related to setting actuarially sound rates, performance reporting, and encounter data reporting would enable more robust analysis of the effects of care coordination and transition efforts on expenditures in the future.
We finalized some of the Medicaid beneficiary protections to CHIP, specifically the requirements in § 438.62, § 438.208, and § 438.210. We believe these protections will ensure that enrollees, particularly those with complex health needs, experience smoother transitions, and have fewer emergency department visits or admissions. The final provisions in §§ 438.62, 438.208, and 438.210 associated with implementing the beneficiary protection provisions of part 457 have an estimated first-year COI cost of a cumulative $7 million.
This guiding principle seeks to incorporate the numerous advancements in state activities, managed care plan practices, and federal oversight interests since part 438 was finalized in 2002, with the exception of subpart E which was finalized in 2003. This guiding principle covers the regulatory topics of network adequacy and accessibility of services; quality measurement and improvement; state monitoring standards; information standards; primary care case management; choice of managed care plans; non-emergency transportation; and state plan standards. As shown in Table 13, the COI costs associated with the provisions under this principle account for a cumulative $31.4 million in the first year for the revisions to part 438 (detailed burden estimates can be found in the COI section of this final rule at section V.C.5 for information standards and sections IV.C.19 through IV.C.29 for quality framework).
Similarly, as shown in Table 14, the COI costs associated with implementing the provisions under this principle account for a cumulative $4.6 million in the first year for the revisions to part 457.
The provision of information to potential enrollees by the state and to enrollees by the managed care plans has always been a requirement in § 438.10. However, we have finalized changes to this section to better organize and clarify the standards for states and managed care plans. These changes are necessary, and important, since the information provided to potential and current enrollees is critical in aiding them to make informed decisions when selecting a managed care plan and to sufficiently understand the managed care program to maximize the benefits and rights available to them. For example, without information presented in an easily understood way, an enrollee may choose a managed care plan that does not have their existing providers in the network, which may force the enrollee to change their providers. This is particularly challenging for enrollees with disabilities or receiving LTSS, because these individuals often receive services that assist with activities of daily living in their home. Disruption in services from their usual providers can cause numerous problems and may prevent them from living safely and effectively in their chosen setting.
We finalized changes to the content and delivery methods for notices, handbooks, formularies, and provider directories to facilitate the dissemination of timely and complete information that potential enrollees and enrollees need. Current § 438.10 pertaining to information requirements do not reflect current technology advances that enable states and managed care plans to provide access to information more quickly, accurately, and less expensively. As more
There are several items that drive the new burden associated with the finalized quality provisions. Given that some PAHPs may provide clinical services, such as dental or behavioral health services, we will apply the quality standards in part 438 subpart E to PAHPs. This will ensure that they are subject to the same approach to measuring and improving quality as are MCOs and PIHPs, which will allow for better oversight and accountability. We will also apply select provisions of part 438 subpart E (specifically, § 438.330(b)(2), (b)(3), (c), and (e), § 438.340, and § 438.350) to PCCM entities whose contracts with the state provide for shared savings, incentive payments or other financial reward for the PCCM entity for improved quality outcomes. This will ensure appropriate oversight of PCCM entities whose compensation is tied to quality improvement. The QAPI program provisions at § 438.330 reflect the expansion of managed care to LTSS. By specifically addressing LTSS within their QAPI program, MCOs, PIHPs, and PAHPs will have tools that can be used to provide accountability for the care provided to this vulnerable population. The new mandatory EQR-related activity (validation of network adequacy) and the state review of the accreditation status of MCOs, PIHPs, and PAHPs will also support state oversight of managed care plans, and help to ensure that consumers have access to high-quality plans. Similarly, state-based MMC QRSs for MCOs, PIHPs, and PAHPs will assist consumers in identifying the plan that best meets their needs. States contracting with MCOs or PIHPs currently maintain a written strategy for assessing and improving the quality of managed care services offered by all MCOs and PIHPs. Under the final rule, we have expanded the requirement in § 438.340 for a quality strategy to states contracting with PAHPs and PCCM entities described in § 438.310(c)(2). The total estimated first-year COI costs associated with the finalized modifications to the managed care quality components of the regulations is a cumulative $30.6 million (detailed burden estimates can be found in the COI section of this final rule at section V.C.19 through V.C.29 for quality framework).
As required by section 2101(f)(3) of the Act, added by section 403 of CHIPRA, and consistent with the requirements of section 2101(a) of the Act to provide coverage in an effective and efficient manner, we also propose to apply the quality standards of 438 subpart E and 431 subpart I to CHIP in §§ 457.760, 457.1240, and 457.1250. The total estimated first-year COI costs associated with implementing the quality standards in part 457 is a cumulative $4.2 million.
The final regulation makes a number of changes related to Medicaid quality of care, primarily for Medicaid managed care programs, including requirements for state managed care quality strategies, QAPI programs, MMC QRSs, state review of the accreditation status of contracted Medicaid managed care plans, and EQRs. While these changes are expected to lead to improvements in the quality of care delivered by states and Medicaid managed care plans, it is difficult to determine whether or not these changes would have any financial impacts on Medicaid expenditures. We would expect some activities would be unlikely to have a financial impact (such as the posting online of the accreditation status of Medicaid managed care plans per § 438.332), while other activities may lead to some small increases or decreases in expenditures. For example, some activities may require managed care plans to increase expenditures to improve the quality of care and meet certain quality standards associated with some of the changes in the regulation, while other activities may improve the quality of care and lead to a net decrease in benefit expenditures. We believe that it is not possible to estimate the potential financial impacts of these changes and believe that any impacts on net Medicaid expenditures would be negligible. While we invited comment on possible ways to quantify the costs and/or benefits associated with these proposed provisions, no comments were received on this topic.
We finalized § 438.68 to establish minimum standards in the area of network adequacy. This section aims to maintain state flexibility while modernizing the current regulatory framework to reflect the maturity and prevalence of Medicaid managed care delivery systems, promote processes for ensuring access to care, and align, where feasible, with other private and public health care coverage programs. Therefore, we finalized standards to ensure ongoing state assessment and certification of MCO, PIHP, and PAHP networks, set threshold standards for the establishment of network adequacy measures for a specified set of providers, establish criteria for developing network adequacy standards for MLTSS programs, and ensure the transparency of network adequacy standards. As many states currently have some network standards in place, we estimate only a small administrative burden to states to implement these provisions.
In general, we would expect strengthening network adequacy standards could increase expenditures, as some plans may need to add more providers to in their networks and, in doing so, may need to increase provider reimbursement rates. In addition, adding more providers to plan networks could potentially lead to more use of health care services among the providers added, whether primary care physicians, specialists, or other providers. However, the changes in the regulation are limited and only include requirements about setting and reporting network adequacy standards. The final regulation does not establish network adequacy standards. Thus, while a state may need to adapt its network adequacy standards to include criteria specified in the regulation or to provide additional reports and information about those standards, we do not assume that these changes would necessitate significant changes to the standards currently in place in states.
This guiding principle seeks to implement the statutory provisions impacting Medicaid and CHIP managed care that have passed since the Balanced Budget Act of 1997 (BBA). This principle covers the regulatory topics of incorporating provisions for encounter data and health information systems requirements established in the Affordable Care Act and requirements for contracts involving Indians established in the American Recovery and Reinvestment Act (ARRA). The total estimated first-year COI costs associated to the provisions under this principle account for a cumulative $0.1 million (provisions in §§ 438.14, 438.242, and 438.818) (detailed COI burden estimates can be found in the COI section of this final rule at sections IV.C.18 and IV.C.39 for encounter data and health information systems and IV.C.6 for contracts involving Indians). No additional quantifiable benefits or costs were identified for these provisions.
Changes in Subpart F of part 438 that include references to part 431 require minor changes to § 431.220 and § 431.244. Without these changes, the sections would be inconsistent with the changes in part 438. There is no burden associated with this change as it is a technical correction and any related burden is included in § 438.408(f).
In § 433.138, technical corrections remove an obsolete reference to “ICD–9” and replace it with text that does not alter the meaning or need to be updated as newer versions of the International Classification of Diseases are published in the future. There is no burden associated with this change as states are not mandated to make any changes to their policies or procedures as a result of this revised text.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that some PAHPs, PCCMs, and PCCM entities are likely to be small entities as that term is used in the RFA. For purposes of the RFA, we estimate that most MCOs and PIHPs are not small entities as that term is used in the RFA. For purposes of the RFA and according to the Small Business Administration (SBA) and the Table of Small Business Size Standards,
As of 2012, there are 335 MCOs, 176 PIHPs, 41 PAHPs, 20 NEMT PAHPs, 25 PCCMs, and 9 PCCM entities participating in the Medicaid managed care program. We estimate that there are an additional 62 entities that serve only CHIPs, including approximately 55 MCOs and PIHPs, 3 PAHPs, and 4 PCCMs. We believe that only a few of these entities qualify as small entities. Research on publicly available records for the entities allowed us to determine the approximate counts presented. Specifically, for the managed care entities participating in Medicaid managed care programs, we believe that 10 to 20 PAHPs, 8 to 15 PCCMs, and 2 to 5 PCCM entities are likely to be small entities. For the managed care entities that serve only CHIP, we believe that 2 to 4 PCCMs and PAHPs are likely to be small entities. We believe that the remaining MCOs and PIHPs have average annual receipts from Medicaid and CHIP contracts and other business interests in excess of $38.5 million. In analyzing the scope of the impact of these regulations on small entities, we examined the United States Census Bureau's Statistics of U.S. Businesses for 2012. According to the 2012 data, there are 4,506 direct health and medical insurance issuers with less than 20 employees and 156,408 offices of physicians or health practitioners with less than 20 employees. For purposes of the RFA, we believe that we are impacting less than 1 percent of the small entities that we have identified.
The primary impact on small entities will be through the standards placed on PAHPs, PCCMs, and PCCM entities through the following requirements: (1) Adding PCCMs and PCCM entities, where appropriate, to the information standards in §§ 438.10 and 457.1207 regarding enrollee handbooks, provider directories, and formularies; (2) adding PAHPs, PCCMs, and PCCM entities in § 438.62 to implement their own transition of care policies and PAHPs in § 438.208 to perform initial assessments and care coordination activities and applying these standards to CHIP in §§ 457.1216 and 457.1230(c); (3) adding PAHPs in § 438.242 to collect data on enrollee and provider characteristics and on services furnished to enrollees through an encounter data system or other such methods and applying these standards to CHIP in § 457.1230(d); (4) adding PCCM entities to the QAPI program standards in § 438.330 and applying these standards to CHIP in § 457.1240; (5) adding PAHPs in § 438.350 to the list of affected entities regarding the EQR process and applying these standards to CHIP in § 457.1250; and (6) adding PAHPs to the types of entities subject to the standards of subpart F to establish a grievances and appeals system and process and applying these standards to CHIP in § 457.1260. We do not believe that the remaining impacts or burdens of the provisions of this final rule are great on the small entities that we have identified.
For purposes of the RFA, all cost estimates were derived from the Collection of Information calculations in section V. of this final rule. The estimated costs associated with the impacts on small entities listed above are primarily attributable to the transition of care policies for PAHPs, PCCMs, and PCCM entities, initial assessments and care coordination activities for PAHPs, and the establishment of a grievances and appeals system and process for PAHPs. Due to the small number of small entities participating in CHIP managed care which we believe will be affected, the Secretary has determined that the regulations in part 457 of this rulemaking will not have a significant economic impact on a substantial number of small entities. With respect to Medicaid, the transition of care policies, initial assessments, and care coordination activities for PAHPs account for approximately $2.4 million of the cumulative $4.5 million annual impact on the 41 PAHPs (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.8 and IV.C.15 for coordination/continuity of care). The establishment of a grievances and appeals system and process accounts for approximately $1.1 million of the cumulative $4.5 million annual impact on the 41 PAHPs (detailed burden estimates can be found in the COI section of this final rule at sections IV.C.30 through IV.C.35 for grievances and appeals). The total estimated annual burden per PAHP is less than $0.1 million, or less than 1 percent of the $38.5 million threshold. The transition of care policies for PCCMs and PCCM entities account for approximately $0.4 million of the cumulative $0.6 million annual impact
These small entities must meet certain standards as identified in the provisions of this final rule; however, we believe these are consistent with the nature of their business in contracting with state governments for the provision of services to Medicaid and CHIP managed care enrollees. Therefore, based on the estimates in the COI (section V of this final rule), we have determined, and the Secretary certifies, that this final rule will not have a significant economic impact on a substantial number of small entities. In the proposed rule, we invited comment on our proposed analysis of the impact on small entities and on possible alternatives to provisions of the proposed rule that would reduce burden on small entities. We received no comments and are finalizing our analysis as proposed in this final rule.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis for any rule that may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside a Metropolitan Statistical Area and has fewer than 100 beds.
We do not anticipate that the provisions in this final rule will have a substantial economic impact on most hospitals, including small rural hospitals. Provisions include some new standards for State governments, MCOs, PIHPs, PAHPs, PCCMs, and PCCM entities but no direct requirements on individual hospitals. The impact on individual hospitals will vary according to each hospital's current and future contractual relationships with MCOs, PIHPs, PAHPs, PCCMs, and PCCM entities, but any additional burden on small rural hospitals should be negligible. In the proposed rule, we invited comment on our proposed analysis of the impact on small rural hospitals regarding the provisions of the proposed rule. We received no comments.
We are not preparing analysis for either the RFA or section 1102(b) of the Act because we have determined, and the Secretary certifies, that this final rule will not have a significant economic impact on a substantial number of small entities or a significant impact on the operations of a substantial number of small rural hospitals in comparison to total revenues of these entities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2015, that is approximately $144 million. This final rule does not contain any federal mandate costs resulting from (A) imposing enforceable duties on state, local, or tribal governments, or on the private sector, or (B) increasing the stringency of conditions in, or decreasing the funding of, State, local, or tribal governments under entitlement programs. We have determined that this final rule does not impose any mandates on state, local, or tribal governments, or the private sector that will result in an annual expenditure of $144 million or more.
We received the following comment on section 202 of the UMRA:
Executive Order 13132 establishes certain requirements that an agency must meet when it issues a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. We believe this final regulation gives states appropriate flexibility regarding managed care standards (for example, setting network adequacy standards, setting credentialing standards, EQR activities), while also aligning Medicaid and CHIP managed care standards with those for plans in the Marketplace and MA to better streamline the beneficiary experience and to reduce administrative and operational burdens on states and health plans across publicly-funded programs and the private market. We have determined that this final rule would not significantly affect states' rights, roles, and responsibilities.
The providers directly affected by the provisions of this rule are the MCOs, PIHPs, PAHPs, PCCMs, and PCCM entities under contract to a state Medicaid or CHIP agency. As detailed in the sections above, the effect of the final rule varies by entity type and amount of burden. Setting actuarially sound rates and MLR are the areas with the largest impact on the managed care plans. We believe that many of the final rate setting provisions are unlikely to have a direct effect on the actual capitation rates or future Medicaid expenditures. To the extent that these new standards or requirements do have an effect on capitation rates or Medicaid expenditures, we believe that generally it is likely that this could lead to increases in some cases and decreases in other cases in the capitation payment rates and Medicaid expenditures. The sum of the estimated financial impacts of these changes could increase expenditures as much as $3.7 billion from 2016 to 2020, and could decrease expenditures as much as $8.7 billion from 2016 to 2020.
The regulation finalizes new requirements that would require the states to calculate and report the MLRs for Medicaid MCOs, PIHPs, and PAHPs in § 438.4 and § 438.5, and to add new § 438.8 and § 438.74. These changes, however, do not require that states assess any financial penalties on MCOs, PIHPs, and PAHPs that do not meet a minimum MLR. The net effect of these changes is estimated to range from zero impact to a decrease in MCO, PIHP, and PAHP payments of about 0.2 to 0.3 percent. Between 2018 and 2020, a 0.3-percent decrease in MCO, PIHP, and PAHP expenditures is projected to be a reduction of $1.3 billion in federal expenditures and of $0.7 billion in state expenditures.
Many other changes in this final rule will have small COI costs for MCOs, PIHPs, and PAHPs; however, they are negligible. All COI costs are described in section V. of this final rule.
This final rule may have some positive effect on Medicare, but that effect is not quantifiable. Sections 438.62 and 438.208 finalize enhanced care planning, transition, and coordination activities. Many of these activities will affect dually eligible enrollees. If, as expected, those efforts generate savings from more efficient and appropriate use of services, then
The provisions of final part 438 will apply to all states using a managed care delivery system for the Medicaid program. Federal matching rates are discussed more fully in section VI.B, Overall Impact. This final rule will help states fulfill the goals and mission of the Medicaid program through better oversight and accountability of their programs and will enable them to detect deficiencies and implement corrective action more quickly and consistently.
One alternative considered was leaving part 438 as it is today. While it has been the guiding regulation for Medicaid managed care since its finalization in 2002, many questions and issues have arisen in the intervening 13 years due to the current version's lack of clarity or detail in some areas. The final revisions to the topics of rate setting and enrollment are good examples of this. With no guidance in these areas, states have created various standards, leading to inconsistency and, in some cases, less than optimal program performance. Additionally, many issues have arisen from the evolution of managed care in the last 12 years that have rendered parts of parts 438 nearly obsolete. For example, the existing version gives little acknowledgement to the use of electronic means of communication and no recognition to the recently created health care coverage options offered through the federal and state marketplaces. This creates gaps that leave states and managed care plans with unclear, non-existent, or confusing guidance and standards for program operation. We believe that with consistent standards and clearly defined flexibilities for states, programs can develop in ways that not only transform the healthcare delivery system and fulfill the mission of the Medicaid program, but can improve the health and wellness of Medicaid enrollees. For these reasons, we believe that leaving part 438 as it is now is not a viable option.
Another option was to align completely with standards applicable to plans in Medicare and/or the Marketplace. Given the high rate of cross program participation among the managed care plans in some states, we believe it is important to allow managed care plans to take advantage of operational efficiencies by aligning part 438 with Medicare and the private insurance market wherever possible by creating and implementing uniform policies and procedures. Alignment also adds consistency and ease of understanding for enrollees as they move between healthcare coverage programs as their life circumstances change. For each regulatory area where a comparable Medicare or Marketplace practice or policy existed, staff evaluated the information against existing Medicaid regulations. When differences were identified, they were evaluated to determine the benefits and drawbacks to adopting and the degree of impact the change would have on the Medicaid population, which is often significantly different from Medicare and the Marketplace populations. Additionally, as Medicaid is a federal-state partnership, we wanted to preserve the flexibility historically provided to states in the design and administration of their programs. As such, complete alignment was only an option in some provisions, while partial alignment was selected in others to recognize and accommodate the unique aspects of the Medicaid program.
We received no public comments on the alternatives considered above.
Regarding quality measurement and improvement (part 438 subpart E), two alternatives were considered: (1) Leaving the language as it exists today; and (2) expanding the application of the quality strategy from Medicaid and CHIP managed care to include services provided FFS. While our regulatory language has remained unchanged since 2002, there have been significant improvements regarding quality measurement and improvement for Medicaid. Under the authority of CHIPRA and the Affordable Care Act, we have developed and issued a set of performance measures to assess the quality of care received by adults and children in the Medicaid and CHIP programs. The National Quality Strategy and CMS Quality Strategy now offer national guidance regarding how we move forward as a nation to offer better health care, improved affordability, and support healthy people and healthy communities. At a state level, Medicaid managed care programs have undergone shifts both in terms of populations and benefits since 2002. Given these changes, we believe that is it necessary and appropriate to revise our regulatory language to address needs of the Medicaid programs both today and into the future.
While the role of managed care in both Medicaid has grown since 2002, we cannot forget that many individuals still receive care through a FFS delivery model, and that certain services are still provided FFS to individuals otherwise enrolled in managed care programs. We believe that, regardless of delivery system, it is important for states to measure performance to develop a plan to strengthen and improve the quality of care. This led us to propose the expansion of the quality strategy to include services delivered FFS. However, the comments received highlighted the potential challenges and burden associated with this proposal. While we continue to encourage states to measure and improve quality for services provided FFS, we understand that mandating a comprehensive quality strategy may not be the most appropriate approach at this time. Therefore, we determined that the most appropriate course of action would be to revise the Medicaid and CHIP managed care quality regulations to apply to states contracting with MCOs, PIHPs, PAHPs, and select PCCM entities.
For CHIP, we considered two alternatives: (1) Not regulating; or (2) adopting additional Medicaid requirements. CHIPRA applied several of the Medicaid managed care standards to CHIP. In response, we released two SHOs conveying those requirements to states, but have not provided additional guidance. As a result, states do not have clear understanding of the expectations of the federal requirements for CHIP managed care, and CMS does not have needed information about state oversight of managed care plans. Therefore, we determined that regulations were appropriate. When deciding whether to adopt all of the Medicaid regulations, or only the subset finalized in this regulation, we have worked to balance the need for information about state oversight of CHIP managed care plans against the administrative burden of complying with the final regulations. To that end, we only apply the rules that are most important for aligning CHIP managed care with Marketplace and Medicaid managed care rules. The scope of the CHIP regulations is narrower than the revisions and amendments to the Medicaid managed care regulations as discussed throughout section II of this final rule.
The estimates that appear in the Transfers section of Table 15 combine both cost savings and transfers between members of society. To the extent that the final rule changes provision of medical care, the impacts represent cost savings. Otherwise, the rule's impacts represent transfers to the federal and state governments from MCOs, PIHPs and PAHPs.
Grant programs-health, Health facilities, Medicaid, Privacy, Reporting and recordkeeping requirements.
Administrative practice and procedure, Child support, Claims, Grant programs-health, Medicaid, Reporting and recordkeeping requirements.
Grant programs-health, Medicaid, Reporting and recordkeeping requirements.
Grant programs-health, Medicaid.
Administrative practice and procedure, Grant programs-health, Health insurance, Reporting and recordkeeping requirements.
Administrative practice and procedure, Electronic health records, Health facilities, Health professions, Health maintenance organizations (HMO), Medicaid, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below:
Sec. 1102 of the Social Security Act, (42 U.S.C. 1302).
(b) Prescribes procedures for an opportunity for a hearing if the State agency or non-emergency transportation PAHP (as defined in § 438.9(a) of this chapter) takes action, as stated in this subpart, to suspend, terminate, or reduce services, or of an adverse benefit determination by an MCO, PIHP or
(a) * * *
(5) Any MCO, PIHP, or PAHP enrollee who is entitled to a hearing under subpart F of part 438 of this chapter.
(6) Any enrollee in a non-emergency medical transportation PAHP (as that term is defined in § 438.9 of this chapter) who has an action as stated in this subpart.
The revisions read as follows:
(f) * * *
(1) Ordinarily, within 90 days from the date the enrollee filed an MCO, PIHP, or PAHP appeal, not including the number of days the enrollee took to subsequently file for a State fair hearing.
(2) As expeditiously as the enrollee's health condition requires, but no later than 3 working days after the agency receives, from the MCO, PIHP, or PAHP, the case file and information for any appeal of a denial of a service that, as indicated by the MCO, PIHP, or PAHP—
Sec. 1102 of the Social Security Act, (42 U.S.C. 1302).
(b) * * *
(10) Funds expended for the performance of external quality review or the related activities described in § 438.358 of this chapter consistent with § 438.370(a) of this chapter: 75 percent; consistent with § 438.370(b): 50 percent.
(e)
Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
(a) FFP at the 75 percent rate is available in expenditures for EQR (including the production of EQR results) and the EQR-related activities set forth in § 438.358 performed on MCOs and conducted by EQROs and their subcontractors.
(b) FFP at the 50 percent rate is available in expenditures for EQR-related activities conducted by any entity that does not qualify as an EQRO, and for EQR (including the production of EQR results) and EQR-related activities performed by an EQRO on entities other than MCOs.
(c) Prior to claiming FFP at the 75 percent rate in accordance with paragraph (a) of this section, the State must submit each EQRO contract to CMS for review and approval.
(a)
(1) Section 1902(a)(4) of the Act requires that States provide for methods of administration that the Secretary finds necessary for proper and efficient operation of the State plan. The application of the requirements of this part to PIHPs and PAHPs that do not meet the statutory definition of an MCO or a PCCM is under the authority in section 1902(a)(4) of the Act.
(2) Section 1903(i)(25) of the Act prohibits payment to a State unless a State provides enrollee encounter data required by CMS.
(3) Section 1903(m) of the Act contains requirements that apply to comprehensive risk contracts.
(4) Section 1903(m)(2)(H) of the Act provides that an enrollee who loses Medicaid eligibility for not more than 2 months may be enrolled in the succeeding month in the same MCO or PCCM if that MCO or PCCM still has a contract with the State.
(5) Section 1905(t) of the Act contains requirements that apply to PCCMs.
(6) Section 1932 of the Act—
(i) Provides that, with specified exceptions, a State may require Medicaid beneficiaries to enroll in MCOs or PCCMs.
(ii) Establishes the rules that MCOs, PCCMs, the State, and the contracts between the State and those entities must meet, including compliance with requirements in sections 1903(m) and 1905(t) of the Act that are implemented in this part.
(iii) Establishes protections for enrollees of MCOs and PCCMs.
(iv) Requires States to develop a quality assessment and performance improvement strategy.
(v) Specifies certain prohibitions aimed at the prevention of fraud and abuse.
(vi) Provides that a State may not enter into contracts with MCOs unless it has established intermediate sanctions that it may impose on an MCO that fails to comply with specified requirements.
(vii) Specifies rules for Indian enrollees, Indian health care providers, and Indian managed care entities.
(viii) Makes other minor changes in the Medicaid program.
(b)
As used in this part—
(1) Outpatient hospital services.
(2) Rural health clinic services.
(3) Federally Qualified Health Center (FQHC) services.
(4) Other laboratory and X-ray services.
(5) Nursing facility (NF) services.
(6) Early and periodic screening, diagnostic, and treatment (EPSDT) services.
(7) Family planning services.
(8) Physician services.
(9) Home health services.
(1) Through payments to, or arrangements with, providers;
(2) Under a comprehensive risk contract with the State; and
(3) Meets the following criteria—
(i) First became operational prior to January 1, 1986; or
(ii) Is described in section 9517(c)(3) of the Omnibus Budget Reconciliation Act of 1985 (as amended by section 4734 of the Omnibus Budget Reconciliation Act of 1990 and section 205 of the Medicare Improvements for Patients and Providers Act of 2008).
(1) A Federally qualified HMO that meets the advance directives requirements of subpart I of part 489 of this chapter; or
(2) Any public or private entity that meets the advance directives requirements and is determined by the Secretary to also meet the following conditions:
(i) Makes the services it provides to its Medicaid enrollees as accessible (in terms of timeliness, amount, duration, and scope) as those services are to other Medicaid beneficiaries within the area served by the entity.
(ii) Meets the solvency standards of § 438.116.
(1) Is not at financial risk for changes in utilization or for costs incurred under the contract that do not exceed the upper payment limits specified in § 447.362 of this chapter; and
(2) May be reimbursed by the State at the end of the contract period on the basis of the incurred costs, subject to the specified limits.
(1) Provides services to enrollees under contract with the State, and on the basis of capitation payments, or other payment arrangements that do not use State plan payment rates.
(2) Does not provide or arrange for, and is not otherwise responsible for the provision of any inpatient hospital or institutional services for its enrollees; and
(3) Does not have a comprehensive risk contract.
(1) Provides services to enrollees under contract with the State, and on the basis of capitation payments, or other payment arrangements that do not use State plan payment rates.
(2) Provides, arranges for, or otherwise has responsibility for the provision of any inpatient hospital or institutional services for its enrollees; and
(3) Does not have a comprehensive risk contract.
(1) A primary care case manager (PCCM) contracts with the State to furnish case management services (which include the location, coordination and monitoring of primary health care services) to Medicaid beneficiaries; or
(2) A PCCM entity contracts with the State to provide a defined set of functions.
(1) Provision of intensive telephonic or face-to-face case management, including operation of a nurse triage advice line.
(2) Development of enrollee care plans.
(3) Execution of contracts with and/or oversight responsibilities for the activities of FFS providers in the FFS program.
(4) Provision of payments to FFS providers on behalf of the State.
(5) Provision of enrollee outreach and education activities.
(6) Operation of a customer service call center.
(7) Review of provider claims, utilization and practice patterns to conduct provider profiling and/or practice improvement.
(8) Implementation of quality improvement activities including administering enrollee satisfaction surveys or collecting data necessary for performance measurement of providers.
(9) Coordination with behavioral health systems/providers.
(10) Coordination with long-term services and supports systems/providers.
(1) A physician assistant.
(2) A nurse practitioner.
(3) A certified nurse-midwife.
(1) Assumes risk for the cost of the services covered under the contract; and
(2) Incurs loss if the cost of furnishing the services exceeds the payments under the contract.
(a)
(b)
(1) An MCO.
(2) The entities identified in section 1903(m)(2)(B)(i), (ii), and (iii) of the Act.
(3) Community, Migrant, and Appalachian Health Centers identified in section 1903(m)(2)(G) of the Act. Unless they qualify for a total exemption under section 1903(m)(2)(B) of the Act, these entities are subject to the regulations governing MCOs under this part.
(4) An HIO that arranges for services and became operational before January 1986.
(5) An HIO described in section 9517(c)(3) of the Omnibus Budget Reconciliation Act of 1985 (as amended by section 4734(2) of the Omnibus Budget Reconciliation Act of 1990).
(c)
(1) The final capitation rate for each MCO, PIHP or PAHP must be:
(i) Specifically identified in the applicable contract submitted for CMS review and approval.
(ii) The final capitation rates must be based only upon services covered under the State plan and additional services deemed by the State to be necessary to comply with the requirements of subpart K of this part (applying parity standards from the Mental Health Parity and Addiction Equity Act), and represent a payment amount that is adequate to allow the MCO, PIHP or PAHP to efficiently deliver covered services to Medicaid-eligible individuals in a manner compliant with contractual requirements.
(2) Capitation payments may only be made by the State and retained by the MCO, PIHP or PAHP for Medicaid-eligible enrollees.
(d)
(1) The MCO, PIHP, PAHP, PCCM or PCCM entity accepts individuals eligible for enrollment in the order in which they apply without restriction (unless authorized by CMS), up to the limits set under the contract.
(2) Enrollment is voluntary, except in the case of mandatory enrollment programs that meet the conditions set forth in § 438.50(a).
(3) The MCO, PIHP, PAHP, PCCM or PCCM entity will not, on the basis of health status or need for health care services, discriminate against individuals eligible to enroll.
(4) The MCO, PIHP, PAHP, PCCM or PCCM entity will not discriminate against individuals eligible to enroll on the basis of race, color, national origin, sex, sexual orientation, gender identity, or disability and will not use any policy or practice that has the effect of discriminating on the basis of race, color, or national origin, sex, sexual orientation gender identity, or disability.
(e)
(i) Any services that the MCO, PIHP or PAHP voluntarily agree to provide, although the cost of these services cannot be included when determining the payment rates under paragraph (c) of this section.
(ii) Any services necessary for compliance by the MCO, PIHP, or PAHP with the requirements of subpart K of this part and only to the extent such services are necessary for the MCO, PIHP, or PAHP to comply with § 438.910.
(2) An MCO, PIHP, or PAHP may cover, for enrollees, services or settings that are in lieu of services or settings covered under the State plan as follows:
(i) The State determines that the alternative service or setting is a medically appropriate and cost effective substitute for the covered service or setting under the State plan;
(ii) The enrollee is not required by the MCO, PIHP, or PAHP to use the alternative service or setting;
(iii) The approved in lieu of services are authorized and identified in the MCO, PIHP, or PAHP contract, and will be offered to enrollees at the option of the MCO, PIHP, or PAHP; and
(iv) The utilization and actual cost of in lieu of services is taken into account in developing the component of the capitation rates that represents the covered State plan services, unless a statute or regulation explicitly requires otherwise.
(f)
(1) Comply with all applicable Federal and State laws and regulations including Title VI of the Civil Rights Act of 1964; Title IX of the Education Amendments of 1972 (regarding education programs and activities); the Age Discrimination Act of 1975; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990 as amended; and section 1557 of the Patient Protection and Affordable Care Act.
(2) Comply with the conflict of interest safeguards described in § 438.58 and with the prohibitions described in section 1902(a)(4)(C) of the Act applicable to contracting officers, employees, or independent contractors.
(g)
(h)
(i)
(2) In applying the provisions of §§ 422.208 and 422.210 of this chapter, references to “MA organization,” “CMS,” and “Medicare beneficiaries” must be read as references to “MCO, PIHP, or PAHP,” “State,” and “Medicaid beneficiaries,” respectively.
(j)
(2) All PAHP contracts must provide for compliance with the requirements of § 422.128 of this chapter for maintaining written policies and procedures for advance directives as if such regulation applied directly to PAHPs if the PAHP includes, in its network, any of those providers listed in § 489.102(a) of this chapter.
(3) The MCO, PIHP, or PAHP subject to the requirements of this paragraph (j) must provide adult enrollees with written information on advance directives policies, and include a description of applicable State law.
(4) The information must reflect changes in State law as soon as possible, but no later than 90 days after the effective date of the change.
(k)
(l)
(m)
(n)
(2) Any State providing any services to MCO enrollees using a delivery system other than the MCO delivery system must provide documentation of how the requirements of subpart K of this part are met with the submission of the MCO contract for review and approval under paragraph (a) of this section.
(o)
(p)
(q)
(1) Provide for reasonable and adequate hours of operation, including 24-hour availability of information, referral, and treatment for emergency medical conditions.
(2) Restrict enrollment to beneficiaries who reside sufficiently near one of the PCCM's delivery sites to reach that site within a reasonable time using available and affordable modes of transportation.
(3) Provide for arrangements with, or referrals to, sufficient numbers of physicians and other practitioners to ensure that services under the contract can be furnished to enrollees promptly and without compromise to quality of care.
(4) Prohibit discrimination in enrollment, disenrollment, and re-enrollment, based on the beneficiary's health status or need for health care services.
(5) Provide that enrollees have the right to disenroll in accordance with § 438.56(c).
(r)
(s)
(1) The MCO, PIHP or PAHP provides coverage of covered outpatient drugs as defined in section 1927(k)(2) of the Act, that meets the standards for such coverage imposed by section 1927 of the Act as if such standards applied directly to the MCO, PIHP, or PAHP.
(2) The MCO, PIHP, or PAHP reports drug utilization data that is necessary for States to bill manufacturers for rebates in accordance with section 1927(b)(1)(A) of the Act no later than 45 calendar days after the end of each quarterly rebate period. Such utilization information must include, at a minimum, information on the total number of units of each dosage form, strength, and package size by National Drug Code of each covered outpatient drug dispensed or covered by the MCO, PIHP, or PAHP.
(3) The MCO, PIHP or PAHP establishes procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports required under paragraph (s)(2) of this section when states do not require submission of managed care drug claims data from covered entities directly.
(4) The MCO, PIHP or PAHP must operate a drug utilization review program that complies with the requirements described in section 1927(g) of the Act and 42 CFR part 456, subpart K, as if such requirement applied to the MCO, PIHP, or PAHP instead of the State.
(5) The MCO, PIHP or PAHP must provide a detailed description of its drug utilization review program activities to the State on an annual basis.
(6) The MCO, PIHP or PAHP must conduct a prior authorization program that complies with the requirements of section 1927(d)(5) of the Act, as if such requirements applied to the MCO, PIHP, or PAHP instead of the State.
(t)
(u)
(v)
(a)
(b)
(1) Have been developed in accordance with standards specified in § 438.5 and generally accepted actuarial principles and practices. Any proposed differences among capitation rates according to covered populations must be based on valid rate development standards and not based on the rate of Federal financial participation associated with the covered populations.
(2) Be appropriate for the populations to be covered and the services to be furnished under the contract.
(3) Be adequate to meet the requirements on MCOs, PIHPs, and PAHPs in §§ 438.206, 438.207, and 438.208.
(4) Be specific to payments for each rate cell under the contract.
(5) Payments from any rate cell must not cross-subsidize or be cross-subsidized by payments for any other rate cell.
(6) Be certified by an actuary as meeting the applicable requirements of this part, including that the rates have been developed in accordance with the requirements specified in § 438.3(c)(1)(ii) and (e).
(7) Meet any applicable special contract provisions as specified in § 438.6.
(8) Be provided to CMS in a format and within a timeframe that meets requirements in § 438.7.
(9) Be developed in such a way that the MCO, PIHP, or PAHP would reasonably achieve a medical loss ratio standard, as calculated under § 438.8, of at least 85 percent for the rate year. The capitation rates may be developed in such a way that the MCO, PIHP, or PAHP would reasonably achieve a medical loss ratio standard greater than 85 percent, as calculated under § 438.8, as long as the capitation rates are adequate for reasonable, appropriate, and attainable non-benefit costs.
(a)
(b)
(1) Consistent with paragraph (c) of this section, identify and develop the base utilization and price data.
(2) Consistent with paragraph (d) of this section, develop and apply trend factors, including cost and utilization, to base data that are developed from actual experience of the Medicaid population or a similar population in accordance with generally accepted actuarial practices and principles.
(3) Consistent with paragraph (e) of this section, develop the non-benefit component of the rate to account for reasonable expenses related to MCO, PIHP, or PAHP administration; taxes; licensing and regulatory fees; contribution to reserves; risk margin; cost of capital; and other operational costs associated with the MCO's, PIHP's, or PAHP's provision of State plan services to Medicaid enrollees.
(4) Consistent with paragraph (f) of this section, make appropriate and reasonable adjustments to account for changes to the base data, programmatic changes, non-benefit components, and any other adjustment necessary to establish actuarially sound rates.
(5) Take into account the MCO's, PIHP's, or PAHP's past medical loss ratio, as calculated and reported under § 438.8, in the development of the capitation rates, and consider the projected medical loss ratio in accordance with § 438.4(b)(9).
(6) Consistent with paragraph (g) of this section, if risk adjustment is applied, select a risk adjustment methodology that uses generally accepted models and apply it in a budget neutral manner across all MCOs, PIHPs, or PAHPs in the program to calculate adjustments to the payments as necessary.
(c)
(2) States and their actuaries must use the most appropriate data, with the basis of the data being no older than from the 3 most recent and complete years prior to the rating period, for setting capitation rates. Such base data must be derived from the Medicaid population, or, if data on the Medicaid population is not available, derived from a similar population and adjusted to make the utilization and price data comparable to data from the Medicaid population. Data must be in accordance with actuarial standards for data quality and an explanation of why that specific data is used must be provided in the rate certification.
(3)
(ii) States that request an exception from the base data standards established in this section must set forth a corrective action plan to come into compliance with the base data standards no later than 2 years from the rating period for which the deficiency was identified.
(d)
(e)
(f)
(g)
(a)
(b)
(2) Contracts with incentive arrangements may not provide for payment in excess of 105 percent of the approved capitation payments attributable to the enrollees or services covered by the incentive arrangement, since such total payments will not be considered to be actuarially sound. For all incentive arrangements, the contract must provide that the arrangement is—
(i) For a fixed period of time and performance is measured during the rating period under the contract in which the incentive arrangement is applied.
(ii) Not to be renewed automatically.
(iii) Made available to both public and private contractors under the same terms of performance.
(iv) Does not condition MCO, PIHP, or PAHP participation in the incentive arrangement on the MCO, PIHP, or PAHP entering into or adhering to intergovernmental transfer agreements.
(v) Necessary for the specified activities, targets, performance measures, or quality-based outcomes that support program initiatives as specified in the State's quality strategy at § 438.340.
(3) Contracts that provide for a withhold arrangement must ensure that the capitation payment minus any portion of the withhold that is not reasonably achievable is actuarially sound as determined by an actuary. The total amount of the withhold, achievable or not, must be reasonable and take into consideration the MCO's, PIHP's or PAHP's financial operating needs accounting for the size and characteristics of the populations covered under the contract, as well as the MCO's, PIHP's or PAHP's capital reserves as measured by the risk-based capital level, months of claims reserve, or other appropriate measure of reserves. The data, assumptions, and methodologies used to determine the portion of the withhold that is reasonably achievable must be submitted as part of the documentation required under § 438.7(b)(6). For all withhold arrangements, the contract must provide that the arrangement is—
(i) For a fixed period of time and performance is measured during the rating period under the contract in which the withhold arrangement is applied.
(ii) Not to be renewed automatically.
(iii) Made available to both public and private contractors under the same terms of performance.
(iv) Does not condition MCO, PIHP, or PAHP participation in the withhold arrangement on the MCO, PIHP, or PAHP entering into or adhering to intergovernmental transfer agreements.
(v) Necessary for the specified activities, targets, performance measures, or quality-based outcomes that support program initiatives as specified in the State's quality strategy under § 438.340.
(c)
(i) The State may require the MCO, PIHP or PAHP to implement value-based purchasing models for provider reimbursement, such as pay for performance arrangements, bundled payments, or other service payment models intended to recognize value or outcomes over volume of services.
(ii) The State may require MCOs, PIHPs, or PAHPs to participate in a multi-payer or Medicaid-specific delivery system reform or performance improvement initiative.
(iii) The State may require the MCO, PIHP or PAHP to:
(A) Adopt a minimum fee schedule for network providers that provide a particular service under the contract; or
(B) Provide a uniform dollar or percentage increase for network providers that provide a particular service under the contract.
(C) Adopt a maximum fee schedule for network providers that provide a particular service under the contract, so long as the MCO, PIHP, or PAHP retains the ability to reasonably manage risk and has discretion in accomplishing the goals of the contract.
(2)
(A) Is based on the utilization and delivery of services;
(B) Directs expenditures equally, and using the same terms of performance, for a class of providers providing the service under the contract;
(C) Expects to advance at least one of the goals and objectives in the quality strategy in § 438.340;
(D) Has an evaluation plan that measures the degree to which the arrangement advances at least one of the goals and objectives in the quality strategy in § 438.340;
(E) Does not condition network provider participation in contract arrangements under paragraphs (c)(1)(i) through (iii) of this section on the network provider entering into or adhering to intergovernmental transfer agreements; and
(F) May not be renewed automatically.
(ii) Any contract arrangements that direct the MCO's, PIHP's or PAHP's expenditures under paragraphs (c)(1)(i) or (c)(1)(ii) of this section must also demonstrate, in writing, that the arrangement—
(A) Must make participation in the value-based purchasing initiative, delivery system reform or performance improvement initiative available, using the same terms of performance, to a class of providers providing services under the contract related to the reform or improvement initiative;
(B) Must use a common set of performance measures across all of the payers and providers;
(C) May not set the amount or frequency of the expenditures; and
(D) Does not allow the State to recoup any unspent funds allocated for these arrangements from the MCO, PIHP, or PAHP.
(d)
(2)
(i) For inpatient and outpatient hospital services that will be provided to eligible populations through the MCO, PIHP, or PAHP contracts for the rating period that includes pass-through payments and that were provided to the eligible populations under MCO, PIHP, or PAHP contracts two years prior to the rating period, the State must determine reasonable estimates of the aggregate difference between:
(A) The amount Medicare FFS would have paid for those inpatient and outpatient hospital services utilized by the eligible populations under the MCO, PIHP, or PAHP contracts for the 12-month period immediately two years prior to the rating period that will include pass-through payments; and
(B) The amount the MCOs, PIHPs, or PAHPs paid (not including pass through payments) for those inpatient and outpatient hospital services utilized by the eligible populations under MCO, PIHP, or PAHP contracts for the 12-month period immediately 2 years prior to the rating period that will include pass-through payments.
(ii) For inpatient and outpatient hospital services that will be provided to eligible populations through the MCO, PIHP, or PAHP contracts for the rating period that includes pass-through payments and that were provided to the eligible populations under Medicaid FFS for the 12-month period immediately 2 years prior to the rating period, the State must determine reasonable estimates of the aggregate difference between:
(A) The amount Medicare FFS would have paid for those inpatient and outpatient hospital services utilized by the eligible populations under Medicaid FFS for the 12-month period immediately 2 years prior to the rating period that will include pass-through payments; and
(B) The amount the State paid under Medicaid FFS (not including pass through payments) for those inpatient and outpatient hospital services utilized by the eligible populations for the 12-month period immediately 2 years prior to the rating period that will include pass-through payments.
(iii) The base amount must be calculated on an annual basis and is recalculated annually.
(iv) States may calculate reasonable estimates of the aggregate differences in paragraphs (d)(2)(i) and (ii) of this section in accordance with the upper payment limit requirements in 42 CFR part 447.
(3)
(4)
(i) The data, methodologies, and assumptions used to calculate the base amount;
(ii) The aggregate amounts calculated for paragraphs (d)(2)(i)(A), (d)(2)(i)(B), (d)(2)(ii)(A), (d)(2)(ii)(B) of this section; and
(iii) The calculation of the applicable percentage of the base amount available for pass-through payments under the schedule in paragraph (d)(3) of this section.
(5)
(e)
(a)
(b)
(1)
(2)
(i) The calculation of each trend used for the rating period and the reasonableness of the trend for the enrolled population.
(ii) Any meaningful difference in how a trend differs between the rate cells, service categories, or eligibility categories.
(3)
(4)
(i) How each material adjustment was developed and the reasonableness of the material adjustment for the enrolled population.
(ii) The cost impact of each material adjustment and the aggregate cost impact of non-material adjustments.
(iii) Where in the rate setting process the adjustment was applied.
(iv) A list of all non-material adjustments used in the rate development process.
(5)
(A) The data, and any adjustments to that data, to be used to calculate the adjustment.
(B) The model, and any adjustments to that model, to be used to calculate the adjustment.
(C) The method for calculating the relative risk factors and the reasonableness and appropriateness of the method in measuring the risk factors of the respective populations.
(D) The magnitude of the adjustment on the capitation rate per MCO, PIHP, or PAHP.
(E) An assessment of the predictive value of the methodology compared to prior rating periods.
(F) Any concerns the actuary has with the risk adjustment process.
(ii) All retrospective risk adjustment methodologies must be adequately described with enough detail so that CMS or an actuary applying generally accepted actuarial principles and practices can understand and evaluate the following:
(A) The party calculating the risk adjustment.
(B) The data, and any adjustments to that data, to be used to calculate the adjustment.
(C) The model, and any adjustments to that model, to be used to calculate the adjustment.
(D) The timing and frequency of the application of the risk adjustment.
(E) Any concerns the actuary has with the risk adjustment process.
(iii) Application of an approved risk adjustment methodology to capitation rates does not require a revised rate certification because payment of capitation rates as modified by the approved risk adjustment methodology must be within the scope of the original rate certification. The State must provide to CMS the payment terms updated by the application of the risk adjustment methodology consistent with § 438.3(c).
(6)
(c)
(1) The State may pay each MCO, PIHP or PAHP a capitation rate under the contract that is different than the capitation rate paid to another MCO, PIHP or PAHP, so long as each capitation rate per rate cell that is paid is independently developed and set in accordance with this part.
(2) If the State determines that a retroactive adjustment to the capitation rate is necessary, the retroactive adjustment must be supported by a rationale for the adjustment and the data, assumptions and methodologies used to develop the magnitude of the adjustment must be adequately described with enough detail to allow CMS or an actuary to determine the reasonableness of the adjustment. These retroactive adjustments must be certified by an actuary in a revised rate certification and submitted as a contract amendment to be approved by CMS. All such adjustments are also subject to Federal timely claim filing requirements.
(3) The State may increase or decrease the capitation rate per rate cell, as required in paragraph (c) of this section and § 438.4(b)(4), up to 1.5 percent without submitting a revised rate certification, as required under paragraph (a) of this section. Such changes of the capitation rate within the permissible 1.5 percent range must be consistent with a modification of the contract as required in § 438.3(c).
(d)
(a)
(b)
(c)
(d)
(e)
(2)
(A) Direct claims that the MCO, PIHP, or PAHP paid to providers (including under capitated contracts with network providers) for services or supplies covered under the contract and services meeting the requirements of § 438.3(e) provided to enrollees.
(B) Unpaid claims liabilities for the MLR reporting year, including claims reported that are in the process of being adjusted or claims incurred but not reported.
(C) Withholds from payments made to network providers.
(D) Claims that are recoverable for anticipated coordination of benefits.
(E) Claims payments recoveries received as a result of subrogation.
(F) Incurred but not reported claims based on past experience, and modified to reflect current conditions, such as changes in exposure or claim frequency or severity.
(G) Changes in other claims-related reserves.
(H) Reserves for contingent benefits and the medical claim portion of lawsuits.
(ii) Amounts that must be deducted from incurred claims include the following:
(A) Overpayment recoveries received from network providers.
(B) Prescription drug rebates received and accrued.
(iii) Expenditures that must be included in incurred claims include the following:
(A) The amount of incentive and bonus payments made, or expected to be made, to network providers.
(B) The amount of claims payments recovered through fraud reduction efforts, not to exceed the amount of fraud reduction expenses. The amount of fraud reduction expenses must not include activities specified in paragraph (e)(4) of this section.
(iv) Amounts that must either be included in or deducted from incurred
(v) Amounts that must be excluded from incurred claims:
(A) Non-claims costs, as defined in paragraph (b) of this section, which include the following:
(
(
(
(
(B) Amounts paid to the State as remittance under paragraph (j) of this section.
(C) Amounts paid to network providers under to § 438.6(d).
(vi) Incurred claims paid by one MCO, PIHP, or PAHP that is later assumed by another entity must be reported by the assuming MCO, PIHP, or PAHP for the entire MLR reporting year and no incurred claims for that MLR reporting year may be reported by the ceding MCO, PIHP, or PAHP.
(3)
(i) An MCO, PIHP, or PAHP activity that meets the requirements of 45 CFR 158.150(b) and is not excluded under 45 CFR 158.150(c).
(ii) An MCO, PIHP, or PAHP activity related to any EQR-related activity as described in § 438.358(b) and (c).
(iii) Any MCO, PIHP, or PAHP expenditure that is related to Health Information Technology and meaningful use, meets the requirements placed on issuers found in 45 CFR 158.151, and is not considered incurred claims, as defined in paragraph (e)(2) of this section.
(4)
(f)
(2)
(i) State capitation payments, developed in accordance with § 438.4, to the MCO, PIHP, or PAHP for all enrollees under a risk contract approved under § 438.3(a), excluding payments made under to § 438.6(d).
(ii) State-developed one time payments, for specific life events of enrollees.
(iii) Other payments to the MCO, PIHP, or PAHP approved under § 438.6(b)(3).
(iv) Unpaid cost-sharing amounts that the MCO, PIHP, or PAHP could have collected from enrollees under the contract, except those amounts the MCO, PIHP, or PAHP can show it made a reasonable, but unsuccessful, effort to collect.
(v) All changes to unearned premium reserves.
(vi) Net payments or receipts related to risk sharing mechanisms developed in accordance with § 438.5 or § 438.6.
(3)
(i) Statutory assessments to defray the operating expenses of any State or Federal department.
(ii) Examination fees in lieu of premium taxes as specified by State law.
(iii) Federal taxes and assessments allocated to MCOs, PIHPs, and PAHPs, excluding Federal income taxes on investment income and capital gains and Federal employment taxes.
(iv) State and local taxes and assessments including:
(A) Any industry-wide (or subset) assessments (other than surcharges on specific claims) paid to the State or locality directly.
(B) Guaranty fund assessments.
(C) Assessments of State or locality industrial boards or other boards for operating expenses or for benefits to sick employed persons in connection with disability benefit laws or similar taxes levied by States.
(D) State or locality income, excise, and business taxes other than premium taxes and State employment and similar taxes and assessments.
(E) State or locality premium taxes plus State or locality taxes based on reserves, if in lieu of premium taxes.
(v) Payments made by an MCO, PIHP, or PAHP that are otherwise exempt from Federal income taxes, for community benefit expenditures as defined in 45 CFR 158.162(c), limited to the highest of either:
(A) Three percent of earned premium; or
(B) The highest premium tax rate in the State for which the report is being submitted, multiplied by the MCO's, PIHP's, or PAHP's earned premium in the State.
(4)
(g)
(ii) Expenditures that benefit multiple contracts or populations, or contracts other than those being reported, must be reported on a pro rata basis.
(2)
(ii) Shared expenses, including expenses under the terms of a management contract, must be apportioned pro rata to the contract incurring the expense.
(iii) Expenses that relate solely to the operation of a reporting entity, such as personnel costs associated with the adjusting and paying of claims, must be borne solely by the reporting entity and are not to be apportioned to the other entities.
(h)
(2) A MCO, PIHP, or PAHP may not add a credibility adjustment to a calculated MLR if the MLR reporting year experience is fully credible.
(3) If a MCO's, PIHP's, or PAHP's experience is non-credible, it is presumed to meet or exceed the MLR calculation standards in this section.
(4) On an annual basis, CMS will publish base credibility factors for MCOs, PIHPs, and PAHPs that are developed according to the following methodology:
(i) CMS will use the most recently available and complete managed care encounter data or FFS claims data, and enrollment data, reported by the states to CMS. This data may cover more than 1 year of experience.
(ii) CMS will calculate the credibility adjustment so that a MCO, PIHP, or PAHP receiving a capitation payment that is estimated to have a medical loss ratio of 85 percent would be expected to experience a loss ratio less than 85 percent 1 out of every 4 years, or 25 percent of the time.
(iii) The minimum number of member months necessary for a MCO's, PIHP's, or PAHP's medical loss ratio to be determined at least partially credible will be set so that the credibility adjustment would not exceed 10 percent for any partially credible MCO, PIHP, or PAHP. Any MCO, PIHP, or PAHP with enrollment less than this number of member months will be determined non-credible.
(iv) The minimum number of member months necessary for an MCO's, PIHP's, or PAHP's medical loss ratio to be determined fully credible will be set so that the minimum credibility adjustment for any partially credible MCO, PIHP, or PAHP would be greater than 1 percent. Any MCO, PIHP, or PAHP with enrollment greater than this number of member months will be determined to be fully credible.
(v) A MCO, PIHP, or PAHP with a number of enrollee member months between the levels established for non-credible and fully credible plans will be deemed partially credible, and CMS will develop adjustments, using linear interpolation, based on the number of enrollee member months.
(vi) CMS may adjust the number of enrollee member months necessary for a MCO's, PIHP's, or PAHP's experience to be non-credible, partially credible, or fully credible so that the standards are rounded for the purposes of administrative simplification. The number of member months will be rounded to 1,000 or a different degree of rounding as appropriate to ensure that the credibility thresholds are consistent with the objectives of this regulation.
(i)
(j)
(k)
(i) Total incurred claims.
(ii) Expenditures on quality improving activities.
(iii) Expenditures related to activities compliant with § 438.608(a)(1) through (5), (7), (8) and (b).
(iv) Non-claims costs.
(v) Premium revenue.
(vi) Taxes, licensing and regulatory fees.
(vii) Methodology(ies) for allocation of expenditures.
(viii) Any credibility adjustment applied.
(ix) The calculated MLR.
(x) Any remittance owed to the State, if applicable.
(xi) A comparison of the information reported in this paragraph with the audited financial report required under § 438.3(m).
(xii) A description of the aggregation method used under paragraph (i) of this section.
(xiii) The number of member months.
(2) A MCO, PIHP, or PAHP must submit the report required in paragraph (k)(1) of this section in a timeframe and manner determined by the State, which must be within 12 months of the end of the MLR reporting year.
(3) MCOs, PIHPs, or PAHPs must require any third party vendor providing claims adjudication activities to provide all underlying data associated with MLR reporting to that MCO, PIHP, or PAHP within 180 days of the end of the MLR reporting year or within 30 days of being requested by the MCO, PIHP, or PAHP, whichever comes sooner, regardless of current contractual limitations, to calculate and validate the accuracy of MLR reporting.
(l)
(m)
(n)
(a) For purposes of this section, Non-Emergency Medical Transportation (NEMT) PAHP means an entity that provides only NEMT services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.
(b) Unless listed in this paragraph (b), a requirement of this part does not apply to NEMT PAHPs, NEMT PAHP contracts, or States in connection with a NEMT PAHP. The following requirements and options apply to NEMT PAHPs, NEMT PAHP contracts, and States in connection with NEMT PAHPs, to the same extent that they apply to PAHPs, PAHP contracts, and States in connection with PAHPs.
(1) All contract provisions in § 438.3 except requirements for:
(i) Physician incentive plans at § 438.3(i).
(ii) Advance directives at § 438.3(j).
(iii) LTSS requirements at § 438.3(o).
(iv) MHPAEA at § 438.3(n).
(2) The actuarial soundness requirements in § 438.4.
(3) The information requirements in § 438.10.
(4) The provision against provider discrimination in § 438.12.
(5) The State responsibility provisions in §§ 438.56, 438.58, 438.60, 438.62(a), and 438.818.
(6) The provisions on enrollee rights and protections in subpart C of this part except for §§ 438.110 and 438.114.
(7) The PAHP standards in §§ 438.206(b)(1), 438.210, 438.214, 438.224, 438.230, and 438.242.
(8) An enrollee's right to a State fair hearing under subpart E of part 431 of this chapter.
(9) Prohibitions against affiliations with individuals debarred or excluded by Federal agencies in § 438.610.
(10) Requirements relating to contracts involving Indians, Indian Health Care Providers, and Indian managed care entities in § 438.14.
(a)
(b)
(c)
(2) The State must utilize its beneficiary support system required in § 438.71.
(3) The State must operate a Web site that provides the content, either directly or by linking to individual MCO, PIHP, PAHP, or PCCM entity Web sites, specified in paragraphs (g), (h), and (i) of this section.
(4) For consistency in the information provided to enrollees, the State must develop and require each MCO, PIHP, PAHP and PCCM entity to use:
(i) Definitions for managed care terminology, including appeal, co-payment, durable medical equipment, emergency medical condition, emergency medical transportation, emergency room care, emergency services, excluded services, grievance, habilitation services and devices, health insurance, home health care, hospice services, hospitalization, hospital outpatient care, medically necessary, network, non-participating provider, physician services, plan, preauthorization, participating provider, premium, prescription drug coverage, prescription drugs, primary care physician, primary care provider, provider, rehabilitation services and devices, skilled nursing care, specialist, and urgent care; and
(ii) Model enrollee handbooks and enrollee notices.
(5) The State must ensure, through its contracts, that each MCO, PIHP, PAHP and PCCM entity provides the required information in this section to each enrollee.
(6) Enrollee information required in this section may not be provided electronically by the State, MCO, PIHP, PAHP, PCCM, or PCCM entity unless all of the following are met:
(i) The format is readily accessible;
(ii) The information is placed in a location on the State, MCO's, PIHP's, PAHP's, or PCCM's, or PCCM entity's Web site that is prominent and readily accessible;
(iii) The information is provided in an electronic form which can be electronically retained and printed;
(iv) The information is consistent with the content and language requirements of this section; and
(v) The enrollee is informed that the information is available in paper form without charge upon request and provides it upon request within 5 business days.
(7) Each MCO, PIHP, PAHP, and PCCM entity must have in place mechanisms to help enrollees and potential enrollees understand the requirements and benefits of the plan.
(d)
(1) Establish a methodology for identifying the prevalent non-English languages spoken by enrollees and potential enrollees throughout the State, and in each MCO, PIHP, PAHP, or PCCM entity service area.
(2) Make oral interpretation available in all languages and written translation available in each prevalent non-English language. All written materials for potential enrollees must include taglines in the prevalent non-English languages in the State, as well as large print, explaining the availability of written translations or oral interpretation to understand the information provided and the toll-free telephone number of the entity providing choice counseling services as required by § 438.71(a). Large print means printed in a font size no smaller than 18 point.
(3) Require each MCO, PIHP, PAHP, and PCCM entity to make its written materials that are critical to obtaining services, including, at a minimum, provider directories, enrollee handbooks, appeal and grievance notices, and denial and termination notices, available in the prevalent non-English languages in its particular service area. Written materials must also be made available in alternative formats upon request of the potential enrollee or enrollee at no cost. Auxiliary aids and services must also be made available upon request of the potential enrollee or enrollee at no cost. Written materials must include taglines in the prevalent non-English languages in the state, as well as large print, explaining the availability of written translation or oral interpretation to understand the information provided and the toll-free and TTY/TDY telephone number of the MCO's, PIHP's, PAHP's or PCCM entity's member/customer service unit. Large print means printed in a font size no smaller than 18 point.
(4) Make interpretation services available to each potential enrollee and require each MCO, PIHP, PAHP, and PCCM entity to make those services available free of charge to each enrollee. This includes oral interpretation and the use of auxiliary aids such as TTY/TDY and American Sign Language. Oral interpretation requirements apply to all non-English languages, not just those that the State identifies as prevalent.
(5) Notify potential enrollees, and require each MCO, PIHP, PAHP, and PCCM entity to notify its enrollees—
(i) That oral interpretation is available for any language and written translation is available in prevalent languages;
(ii) That auxiliary aids and services are available upon request and at no cost for enrollees with disabilities; and
(iii) How to access the services in paragraphs (d)(5)(i) and (ii) of this section.
(6) Provide, and require MCOs, PIHPs, PAHPs, PCCMs, and PCCM entities to provide, all written materials for potential enrollees and enrollees consistent with the following:
(i) Use easily understood language and format.
(ii) Use a font size no smaller than 12 point.
(iii) Be available in alternative formats and through the provision of auxiliary aids and services in an appropriate manner that takes into consideration the special needs of enrollees or potential enrollees with disabilities or limited English proficiency.
(iv) Include a large print tagline and information on how to request auxiliary aids and services, including the
(e)
(i) At the time the potential enrollee first becomes eligible to enroll in a voluntary managed care program, or is first required to enroll in a mandatory managed care program; and
(ii) Within a timeframe that enables the potential enrollee to use the information in choosing among available MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities.
(2) The information for potential enrollees must include, at a minimum, all of the following:
(i) Information about the potential enrollee's right to disenroll consistent with the requirements of § 438.56 and which explains clearly the process for exercising this disenrollment right, as well as the alternatives available to the potential enrollee based on their specific circumstance;
(ii) The basic features of managed care;
(iii) Which populations are excluded from enrollment, subject to mandatory enrollment, or free to enroll voluntarily in the program. For mandatory and voluntary populations, the length of the enrollment period and all disenrollment opportunities available to the enrollee must also be specified;
(iv) The service area covered by each MCO, PIHP, PAHP, PCCM, or PCCM entity;
(v) Covered benefits including:
(A) Which benefits are provided by the MCO, PIHP, or PAHP; and
(B) Which, if any, benefits are provided directly by the State.
(C) For a counseling or referral service that the MCO, PIHP, or PAHP does not cover because of moral or religious objections, the State must provide information about where and how to obtain the service;
(vi) The provider directory and formulary information required in paragraphs (h) and (i) of this section;
(vii) Any cost-sharing that will be imposed by the MCO, PIHP, PAHP, PCCM, or PCCM entity consistent with those set forth in the State plan;
(viii) The requirements for each MCO, PIHP or PAHP to provide adequate access to covered services, including the network adequacy standards established in § 438.68;
(ix) The MCO, PIHP, PAHP, PCCM and PCCM entity's responsibilities for coordination of enrollee care; and
(x) To the extent available, quality and performance indicators for each MCO, PIHP, PAHP and PCCM entity, including enrollee satisfaction.
(f)
(2) The State must notify all enrollees of their right to disenroll consistent with the requirements of § 438.56 at least annually. Such notification must clearly explain the process for exercising this disenrollment right, as well as the alternatives available to the enrollee based on their specific circumstance. For States that choose to restrict disenrollment for periods of 90 days or more, States must send the notice no less than 60 calendar days before the start of each enrollment period.
(3) The MCO, PIHP, PAHP and, when appropriate, the PCCM entity must make available, upon request, any physician incentive plans in place as set forth in § 438.3(i).
(g)
(2) The content of the enrollee handbook must include information that enables the enrollee to understand how to effectively use the managed care program. This information must include at a minimum:
(i) Benefits provided by the MCO, PIHP, PAHP or PCCM entity.
(ii) How and where to access any benefits provided by the State, including any cost sharing, and how transportation is provided.
(A) In the case of a counseling or referral service that the MCO, PIHP, PAHP, or PCCM entity does not cover because of moral or religious objections, the MCO, PIHP, PAHP, or PCCM entity must inform enrollees that the service is not covered by the MCO, PIHP, PAHP, or PCCM entity.
(B) The MCO, PIHP, PAHP, or PCCM entity must inform enrollees how they can obtain information from the State about how to access the services described in paragraph (g)(2)(i)(A) of this section.
(iii) The amount, duration, and scope of benefits available under the contract in sufficient detail to ensure that enrollees understand the benefits to which they are entitled.
(iv) Procedures for obtaining benefits, including any requirements for service authorizations and/or referrals for specialty care and for other benefits not furnished by the enrollee's primary care provider.
(v) The extent to which, and how, after-hours and emergency coverage are provided, including:
(A) What constitutes an emergency medical condition and emergency services.
(B) The fact that prior authorization is not required for emergency services.
(C) The fact that, subject to the provisions of this section, the enrollee has a right to use any hospital or other setting for emergency care.
(vi) Any restrictions on the enrollee's freedom of choice among network providers.
(vii) The extent to which, and how, enrollees may obtain benefits, including family planning services and supplies from out-of-network providers. This includes an explanation that the MCO, PIHP, or PAHP cannot require an enrollee to obtain a referral before choosing a family planning provider.
(viii) Cost sharing, if any is imposed under the State plan.
(ix) Enrollee rights and responsibilities, including the elements specified in § 438.100.
(x) The process of selecting and changing the enrollee's primary care provider.
(xi) Grievance, appeal, and fair hearing procedures and timeframes, consistent with subpart F of this part, in a State-developed or State-approved description. Such information must include:
(A) The right to file grievances and appeals.
(B) The requirements and timeframes for filing a grievance or appeal.
(C) The availability of assistance in the filing process.
(D) The right to request a State fair hearing after the MCO, PIHP or PAHP has made a determination on an enrollee's appeal which is adverse to the enrollee.
(E) The fact that, when requested by the enrollee, benefits that the MCO, PIHP, or PAHP seeks to reduce or terminate will continue if the enrollee files an appeal or a request for State fair hearing within the timeframes specified for filing, and that the enrollee may,
(xii) How to exercise an advance directive, as set forth in § 438.3(j). For PAHPs, information must be provided only to the extent that the PAHP includes any of the providers described in § 489.102(a) of this chapter.
(xiii) How to access auxiliary aids and services, including additional information in in alternative formats or languages.
(xiv) The toll-free telephone number for member services, medical management, and any other unit providing services directly to enrollees.
(xv) Information on how to report suspected fraud or abuse;
(xvi) Any other content required by the State.
(3) Information required by this paragraph to be provided by a MCO, PIHP, PAHP or PCCM entity will be considered to be provided if the MCO, PIHP, PAHP or PCCM entity:
(i) Mails a printed copy of the information to the enrollee's mailing address;
(ii) Provides the information by email after obtaining the enrollee's agreement to receive the information by email;
(iii) Posts the information on the Web site of the MCO, PIHP, PAHP or PCCM entity and advises the enrollee in paper or electronic form that the information is available on the Internet and includes the applicable Internet address, provided that enrollees with disabilities who cannot access this information online are provided auxiliary aids and services upon request at no cost; or
(iv) Provides the information by any other method that can reasonably be expected to result in the enrollee receiving that information.
(4) The MCO, PIHP, PAHP, or PCCM entity must give each enrollee notice of any change that the State defines as significant in the information specified in this paragraph (g), at least 30 days before the intended effective date of the change.
(h)
(i) The provider's name as well as any group affiliation.
(ii) Street address(es).
(iii) Telephone number(s).
(iv) Web site URL, as appropriate.
(v) Specialty, as appropriate.
(vi) Whether the provider will accept new enrollees.
(vii) The provider's cultural and linguistic capabilities, including languages (including American Sign Language) offered by the provider or a skilled medical interpreter at the provider's office, and whether the provider has completed cultural competence training.
(viii) Whether the provider's office/facility has accommodations for people with physical disabilities, including offices, exam room(s) and equipment.
(2) The provider directory must include the information in paragraph (h)(1) of this section for each of the following provider types covered under the contract:
(i) Physicians, including specialists;
(ii) Hospitals;
(iii) Pharmacies;
(iv) Behavioral health providers; and
(v) LTSS providers, as appropriate.
(3) Information included in a paper provider directory must be updated at least monthly and electronic provider directories must be updated no later than 30 calendar days after the MCO, PIHP, PAHP or PCCM entity receives updated provider information.
(4) Provider directories must be made available on the MCO's, PIHP's, PAHP's, or, if applicable, PCCM entity's Web site in a machine readable file and format as specified by the Secretary.
(i)
(1) Which medications are covered (both generic and name brand).
(2) What tier each medication is on.
(3) Formulary drug lists must be made available on the MCO's, PIHP's, PAHP's, or, if applicable, PCCM entity's Web site in a machine readable file and format as specified by the Secretary.
(j)
(a)
(2) In all contracts with network providers, an MCO, PIHP, or PAHP must comply with the requirements specified in § 438.214.
(b)
(1) Require the MCO, PIHP, or PAHP to contract with providers beyond the number necessary to meet the needs of its enrollees;
(2) Preclude the MCO, PIHP, or PAHP from using different reimbursement amounts for different specialties or for different practitioners in the same specialty; or
(3) Preclude the MCO, PIHP, or PAHP from establishing measures that are designed to maintain quality of services and control costs and are consistent with its responsibilities to enrollees.
(a)
(i) Is a member of a Federally recognized Indian tribe;
(ii) Resides in an urban center and meets one or more of the four criteria:
(A) Is a member of a tribe, band, or other organized group of Indians, including those tribes, bands, or groups terminated since 1940 and those recognized now or in the future by the State in which they reside, or who is a descendant, in the first or second degree, of any such member;
(B) Is an Eskimo or Aleut or other Alaska Native;
(C) Is considered by the Secretary of the Interior to be an Indian for any purpose; or
(D) Is determined to be an Indian under regulations issued by the Secretary;
(iii) Is considered by the Secretary of the Interior to be an Indian for any purpose; or
(iv) Is considered by the Secretary of Health and Human Services to be an Indian for purposes of eligibility for Indian health care services, including as
(b)
(1) Require the MCO, PIHP, PAHP, or PCCM entity to demonstrate that there are sufficient IHCPs participating in the provider network of the MCO, PIHP, PAHP, or PCCM entity to ensure timely access to services available under the contract from such providers for Indian enrollees who are eligible to receive services.
(2) Require that IHCPs, whether participating or not, be paid for covered services provided to Indian enrollees who are eligible to receive services from such providers as follows:
(i) At a rate negotiated between the MCO, PIHP, PAHP, or PCCM entity, and the IHCP, or
(ii) In the absence of a negotiated rate, at a rate not less than the level and amount of payment that the MCO, PIHP, PAHP, or PCCM entity would make for the services to a participating provider which is not an IHCP; and
(iii) Make payment to all IHCPs in its network in a timely manner as required for payments to practitioners in individual or group practices under 42 CFR 447.45 and 447.46.
(3) Permit any Indian who is enrolled in a MCO, PIHP, PAHP, PCCM or PCCM entity that is not an IMCE and eligible to receive services from a IHCP primary care provider participating as a network provider, to choose that IHCP as his or her primary care provider, as long as that provider has capacity to provide the services.
(4) Permit Indian enrollees to obtain services covered under the contract between the State and the MCO, PIHP, PAHP, or PCCM entity from out-of-network IHCPs from whom the enrollee is otherwise eligible to receive such services.
(5) In a State where timely access to covered services cannot be ensured due to few or no IHCPs, an MCO, PIHP, PAHP and PCCM entity will be considered to have met the requirement in paragraph (b)(1) of this section if—
(i) Indian enrollees are permitted by the MCO, PIHP, PAHP, or PCCM entity to access out-of-State IHCPs; or
(ii) If this circumstance is deemed to be good cause for disenrollment from both the MCO, PIHP, PAHP, or PCCM entity and the State's managed care program in accordance with § 438.56(c).
(6) MCOs, PIHPs, PAHPs, and PCCM entities, to the extent the PCCM entity has a provider network, must permit an out-of-network IHCP to refer an Indian enrollee to a network provider.
(c)
(2) When an IHCP is not enrolled in Medicaid as a FQHC, regardless of whether it participates in the network of an MCO, PIHP, PAHP and PCCM entity or not, it has the right to receive its applicable encounter rate published annually in the
(3) When the amount a IHCP receives from a MCO, PIHP, PAHP, or PCCM entity is less than the amount required by paragraph (c)(2) of this section, the State must make a supplemental payment to the IHCP to make up the difference between the amount the MCO, PIHP, PAHP, or PCCM entity pays and the amount the IHCP would have received under FFS or the applicable encounter rate.
(d)
(a)
(1) As part of a demonstration project under section 1115(a) of the Act; or
(2) Under a waiver granted under section 1915(b) of the Act.
(b)
(1) The types of entities with which the State contracts.
(2) The payment method it uses (for example, whether FFS or capitation).
(3) Whether it contracts on a comprehensive risk basis.
(4) The process the State uses to involve the public in both design and initial implementation of the managed care program and the methods it uses to ensure ongoing public involvement once the State plan has been implemented.
(c)
(1) Section 1903(m) of the Act, for MCOs and MCO contracts.
(2) Section 1905(t) of the Act, for PCCMs and PCCM or PCCM entity contracts.
(3) Section 1932(a)(1)(A) of the Act, for the State's option to limit freedom of choice by requiring beneficiaries to receive their benefits through managed care entities.
(4) This part, for MCOs, PCCMs, and PCCM entities.
(5) Part 434 of this chapter, for all contracts.
(6) Section 438.4, for payments under any risk contracts, and § 447.362 of this chapter for payments under any nonrisk contracts.
(d)
(1) Beneficiaries who are also eligible for Medicare.
(2) Indians as defined in § 438.14(a), except as permitted under § 438.14(d).
(3) Children under 19 years of age who are:
(i) Eligible for SSI under Title XVI;
(ii) Eligible under section 1902(e)(3) of the Act;
(iii) In foster care or other out-of-home placement;
(iv) Receiving foster care or adoption assistance; or
(v) Receiving services through a family-centered, community-based, coordinated care system that receives grant funds under section 501(a)(1)(D) of Title V, and is defined by the State in terms of either program participation or special health care needs.
(a)
(1) Enroll in an MCO, PIHP, or PAHP, must give those beneficiaries a choice of at least two MCOs, PIHPs, or PAHPs.
(2) Enroll in a primary care case management system, must give those beneficiaries a choice from at least two primary care case managers employed or contracted with the State.
(3) Enroll in a PCCM entity, may limit a beneficiary to a single PCCM entity. Beneficiaries must be permitted to choose from at least two primary care case managers employed by or contracted with the PCCM entity.
(b)
(i) A State plan amendment under section 1932(a) of the Act.
(ii) A waiver under section 1115(a) of the Act.
(iii) A waiver under section 1915(b) of the Act.
(2) To comply with this paragraph (b), a State, must permit the beneficiary—
(i) To choose from at least two primary care providers; and
(ii) To obtain services from any other provider under any of the following circumstances:
(A) The service or type of provider (in terms of training, experience, and specialization) is not available within the MCO, PIHP, or PAHP network.
(B) The provider is not part of the network, but is the main source of a service to the beneficiary, provided that—
(C) The only plan or provider available to the beneficiary does not, because of moral or religious objections, provide the service the enrollee seeks.
(D) The beneficiary's primary care provider or other provider determines that the beneficiary needs related services that would subject the beneficiary to unnecessary risk if received separately (for example, a cesarean section and a tubal ligation) and not all of the related services are available within the network.
(E) The State determines that other circumstances warrant out-of-network treatment.
(3) As used in this paragraph (b), “rural area” is any county designated as “micro,” “rural,” or “County with Extreme Access Considerations (CEAC)” in the Medicare Advantage Health Services Delivery (HSD) Reference file for the applicable calendar year.
(c)
(1) The HIO is one of those described in section 1932(a)(3)(C) of the Act; and
(2) The beneficiary who enrolls in the HIO has a choice of at least two primary care providers within the entity.
(d)
(a)
(b)
(1) Voluntary managed care programs are those where one or more groups of beneficiaries as enumerated in section of 1905(a) of the Act have the option to either enroll in a MCO, PIHP, PAHP, PCCM or PCCM entity, or remain enrolled in FFS to receive Medicaid covered benefits.
(2) Mandatory managed care programs are those where one or more groups of beneficiaries as enumerated in section 1905(a) of the Act must enroll in a MCO, PIHP, PAHP, PCCM or PCCM entity to receive covered Medicaid benefits.
(c)
(i) Provides an enrollment choice period during which potential enrollees may make an active choice of delivery system and, if needed, choice of an MCO, PIHP, PAHP, PCCM or PCCM entity before enrollment is effectuated; or
(ii) Employs a passive enrollment process in which the State enrolls the potential enrollee into a MCO, PIHP, PAHP, PCCM or PCCM entity and simultaneously provides a period of time for the enrollee to make an active choice of delivery system and, if needed, to maintain enrollment in the MCO, PIHP, PAHP, PCCM or PCCM entity passively assigned or to select a different MCO, PIHP, PAHP, PCCM or PCCM entity.
(2) A State must provide potential enrollees the opportunity to actively elect to receive covered services through the managed care or FFS delivery system. If the potential enrollee elects to receive covered services through the managed care delivery system, the potential enrollee must then also select a MCO, PIHP, PAHP, PCCM, or PCCM entity.
(i) If the State does not use a passive enrollment process and the potential enrollee does not make an active choice during the period allowed by the state, then the potential enrollee will continue to receive covered services through the FFS delivery system.
(ii) If the State uses a passive enrollment process, the potential enrollee must select either to accept the MCO, PIHP, PAHP, PCCM, or PCCM entity selected for them by the State's passive enrollment process, select a different MCO, PIHP, PAHP, PCCM, or PCCM entity, or elect to receive covered services through the FFS delivery system. If the potential enrollee does not make an active choice during the time allowed by the state, the potential enrollee will remain enrolled with the MCO, PIHP, PAHP, PCCM, or PCCM entity selected by the passive enrollment process.
(3) The State must provide informational notices to each potential enrollee at the time the potential enrollee first becomes eligible to enroll in a managed care program and within a timeframe that enables the potential enrollee to use the information in choosing among available delivery system and/or managed care plan options. The notices must:
(i) Clearly explain (as relevant to the State's managed care program) the implications to the potential enrollee of: not making an active choice between managed care and FFS; selecting a different MCO, PIHP, PAHP, PCCM or PCCM entity; and accepting the MCO,
(ii) Identify the MCOs, PIHPs, PAHPs, PCCMs or PCCM entities available to the potential enrollee should they elect the managed care delivery system;
(iii) Provide clear instructions for how to make known to the State the enrollee's selection of the FFS delivery system or a MCO, PIHP, PAHP, PCCM or PCCM entity;
(iv) Provide a comprehensive explanation of the length of the enrollment period, the 90 day without cause disenrollment period, and all other disenrollment options as specified in § 438.56;
(v) Include the contact information for the beneficiary support system in § 438.71; and
(vi) Comply with the information requirements in § 438.10.
(4) The State's enrollment system must provide that beneficiaries already enrolled in an MCO, PIHP, PAHP, PCCM or PCCM entity are given priority to continue that enrollment if the MCO, PIHP, PAHP, PCCM or PCCM entity does not have the capacity to accept all those seeking enrollment under the program.
(5) If a State elects to use a passive enrollment process, the process must assign beneficiaries to a qualified MCO, PIHP, PAHP, PCCM or PCCM entity. To be a qualified MCO, PIHP, PAHP, PCCM or PCCM entity, it must:
(i) Not be subject to the intermediate sanction described in § 438.702(a)(4); and
(ii) Have capacity to enroll beneficiaries.
(6) A passive enrollment process must seek to preserve existing provider-beneficiary relationships and relationships with providers that have traditionally served Medicaid beneficiaries.
(i) An “existing provider-beneficiary relationship” is one in which the provider was a main source of Medicaid services for the beneficiary during the previous year. This may be established through State records of previous managed care enrollment or FFS experience, encounter data, or through contact with the beneficiary.
(ii) A provider is considered to have “traditionally served” Medicaid beneficiaries if it has experience in serving the Medicaid population.
(7) If the approach in paragraph (c)(6) of this section is not possible, the State must distribute the beneficiaries equitably among the MCOs, PIHPs, PAHPs, PCCMs and PCCM entities.
(i) The State may not arbitrarily exclude any MCO, PIHP, PAHP, PCCM, or PCCM entity from being considered.
(ii) The State may consider additional criteria to conduct the passive enrollment process, including the enrollment preferences of family members, previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, accessibility of provider offices for people with disabilities (when appropriate), and other reasonable criteria that support the objectives of the managed care program.
(8) If a passive enrollment process is used and the enrollee does not elect to be enrolled into the FFS delivery system, the State must send a notice to the enrollee:
(i) Confirming that the enrollee's time to elect to enroll in the FFS delivery system has ended and that the enrollee will remain enrolled in the managed care delivery system for the remainder of the enrollment period unless one of the disenrollment reasons specified in § 438.56 applies.
(ii) Clearly and fully explaining the enrollee's right, and process to follow, to disenroll from the passively assigned MCO, PIHP, PAHP, PCCM or PCCM entity and select a different MCO, PIHP, PAHP, PCCM or PCCM entity within 90 days from the effective date of the enrollment or for any reason specified in § 438.56(d)(2).
(iii) Within 5 calendar days of the end of the time allowed for making the delivery system selection.
(d)
(2) The State's enrollment system must implement enrollment in a MCO, PIHP, PAHP, PCCM, or PCCM entity as follows:
(i) If the State does not use a passive enrollment process and the potential enrollee does not make an active choice of a MCO, PIHP, PAHP, PCCM, or PCCM entity during the period allowed by the State, the potential enrollee will be enrolled into a MCO, PIHP, PAHP, PCCM, or PCCM entity selected by the State's default process.
(ii) If the State uses a passive enrollment process, the potential enrollee must either accept the MCO, PIHP, PAHP, PCCM, or PCCM entity selected by the State's passive enrollment process or select a different MCO, PIHP, PAHP, PCCM, or PCCM entity. If the potential enrollee does not make an active choice during the time allowed by the State, the MCO, PIHP, PAHP, PCCM, or PCCM entity selected by the passive enrollment process will remain effective.
(3) A State must provide informational notices to each potential enrollee at the time the potential enrollee first becomes eligible to enroll in a managed care program and within a timeframe that enables the potential enrollee to use the information in choosing among available managed care plans. The notices must:
(i) Include the MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities available to the potential enrollee;
(ii) Provide clear instructions for how to make known to the State the enrollee's selection of a MCO, PIHP, PAHP, PCCM, or PCCM entity;
(iii) Clearly explain the implications to the potential enrollee of not making an active choice of an MCO, PIHP, PAHP, PCCM or PCCM entity as well as the implications of making an active choice of an MCO, PIHP, PAHP, PCCM or PCCM entity;
(iv) Provide a comprehensive explanation of the length of the enrollment period, the 90 day without cause disenrollment period, and all other disenrollment options as specified in § 438.56;
(v) Include the contact information for the beneficiary support system in § 438.71; and
(vi) Comply with the information requirements in § 438.10.
(4)
(5)
(i) Not be subject to the intermediate sanction described in § 438.702(a)(4); and
(ii) Have capacity to enroll beneficiaries.
(6)
(i) Not be subject to the intermediate sanction described in § 438.702(a)(4); and
(ii) Have capacity to enroll beneficiaries.
(7) The passive and default enrollment processes must seek to preserve existing provider-beneficiary relationships and relationships with providers that have traditionally served Medicaid beneficiaries.
(i) An “existing provider-beneficiary relationship” is one in which the provider was a main source of Medicaid services for the beneficiary during the previous year. This may be established through State records of previous managed care enrollment or FFS experience, encounter data, or through contact with the beneficiary.
(ii) A provider is considered to have “traditionally served” Medicaid beneficiaries if it has experience in serving the Medicaid population.
(8) If the approach in paragraph (d)(7) of this section is not possible, the State must distribute the beneficiaries equitably among the MCOs, PIHPs, PAHPs, PCCMs and PCCM entities available to enroll them.
(i) The State may not arbitrarily exclude any MCO, PIHP, PAHP, PCCM or PCCM entity from being considered; and
(ii) The State may consider additional criteria to conduct the default enrollment process, including the enrollment preferences of family members, previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, accessibility of provider offices for people with disabilities (when appropriate), and other reasonable criteria related to a beneficiary's experience with the Medicaid program.
(a)
(b)
(1) Specify the reasons for which the MCO, PIHP, PAHP, PCCM, or PCCM entity may request disenrollment of an enrollee.
(2) Provide that the MCO, PIHP, PAHP, PCCM, or PCCM entity may not request disenrollment because of an adverse change in the enrollee's health status, or because of the enrollee's utilization of medical services, diminished mental capacity, or uncooperative or disruptive behavior resulting from his or her special needs (except when his or her continued enrollment in the MCO, PIHP, PAHP, PCCM or PCCM entity seriously impairs the entity's ability to furnish services to either this particular enrollee or other enrollees).
(3) Specify the methods by which the MCO, PIHP, PAHP, PCCM, or PCCM entity assures the agency that it does not request disenrollment for reasons other than those permitted under the contract.
(c)
(1) For cause, at any time.
(2) Without cause, at the following times:
(i) During the 90 days following the date of the beneficiary's initial enrollment into the MCO, PIHP, PAHP, PCCM, or PCCM entity, or during the 90 days following the date the State sends the beneficiary notice of that enrollment, whichever is later.
(ii) At least once every 12 months thereafter.
(iii) Upon automatic reenrollment under paragraph (g) of this section, if the temporary loss of Medicaid eligibility has caused the beneficiary to miss the annual disenrollment opportunity.
(iv) When the State imposes the intermediate sanction specified in § 438.702(a)(4).
(d)
(i) To the State (or its agent); or
(ii) To the MCO, PIHP, PAHP, PCCM, or PCCM entity, if the State permits MCOs, PIHP, PAHPs, PCCMs, and PCCM entities to process disenrollment requests.
(2)
(i) The enrollee moves out of the MCO's, PIHP's, PAHP's, PCCM's, or PCCM entity's service area.
(ii) The plan does not, because of moral or religious objections, cover the service the enrollee seeks.
(iii) The enrollee needs related services (for example, a cesarean section and a tubal ligation) to be performed at the same time; not all related services are available within the provider network; and the enrollee's primary care provider or another provider determines that receiving the services separately would subject the enrollee to unnecessary risk.
(iv) For enrollees that use MLTSS, the enrollee would have to change their residential, institutional, or employment supports provider based on that provider's change in status from an in-network to an out-of-network provider with the MCO, PIHP, or PAHP and, as a result, would experience a disruption in their residence or employment.
(v) Other reasons, including poor quality of care, lack of access to services covered under the contract, or lack of access to providers experienced in dealing with the enrollee's care needs.
(3)
(ii) If the MCO, PIHP, PAHP, PCCM, PCCM entity, or State agency (whichever is responsible) fails to make a disenrollment determination so that the beneficiary can be disenrolled within the timeframes specified in paragraph (e)(1) of this section, the disenrollment is considered approved.
(4)
(i) Reasons cited in the request.
(ii) Information provided by the MCO, PIHP, PAHP, PCCM, or PCCM entity at the agency's request.
(iii) Any of the reasons specified in paragraph (d)(2) of this section.
(5)
(ii) The grievance process, if used, must be completed in time to permit the disenrollment (if approved) to be effective in accordance with the timeframe specified in paragraph (e)(1) of this section.
(iii) If, as a result of the grievance process, the MCO, PIHP, PAHP, PCCM, or PCCM entity approves the disenrollment, the State agency is not required to make a determination in
(e)
(2) If the MCO, PIHP, PAHP, PCCM, PCCM entity, or the State agency (whichever is responsible) fails to make the determination within the timeframes specified in paragraph (e)(1) of this section, the disenrollment is considered approved for the effective date that would have been established had the State or MCO, PIHP, PAHP, PCCM, PCCM entity complied with paragraph (e)(1) of this section.
(f)
(1) Provide that enrollees and their representatives are given written notice of disenrollment rights at least 60 days before the start of each enrollment period. The notice must include an explanation of all of the enrollee's disenrollment rights as specified in this section.
(2) Ensure timely access to State fair hearing for any enrollee dissatisfied with a State agency determination that there is not good cause for disenrollment.
(g)
As a condition for contracting with MCOs, PIHPs, or PAHPs, a State must have in effect safeguards against conflict of interest on the part of State and local officers and employees and agents of the State who have responsibilities relating to the MCO, PIHP, or PAHP contracts or the enrollment processes specified in § 438.54(b). These safeguards must be at least as effective as the safeguards specified in section 27 of the Office of Federal Procurement Policy Act (41 U.S.C. 423).
The State agency must ensure that no payment is made to a network provider other than by the MCO, PIHP, or PAHP for services covered under the contract between the State and the MCO, PIHP, or PAHP, except when these payments are specifically required to be made by the State in Title XIX of the Act, in 42 CFR chapter IV, or when the State agency makes direct payments to network providers for graduate medical education costs approved under the State plan.
(a) The State agency must arrange for Medicaid services to be provided without delay to any Medicaid enrollee of an MCO, PIHP, PAHP, PCCM, or PCCM entity the contract of which is terminated and for any Medicaid enrollee who is disenrolled from an MCO, PIHP, PAHP, PCCM, or PCCM entity for any reason other than ineligibility for Medicaid.
(b) The State must have in effect a transition of care policy to ensure continued access to services during a transition from FFS to a MCO, PIHP, PAHP, PCCM or PCCM entity or transition from one MCO, PIHP, PAHP, PCCM or PCCM entity to another when an enrollee, in the absence of continued services, would suffer serious detriment to their health or be at risk of hospitalization or institutionalization.
(1) The transition of care policy must include the following:
(i) The enrollee has access to services consistent with the access they previously had, and is permitted to retain their current provider for a period of time if that provider is not in the MCO, PIHP or PAHP network.
(ii) The enrollee is referred to appropriate providers of services that are in the network.
(iii) The State, in the case of FFS, PCCM, or PCCM entity, or the MCO, PIHP or PAHP that was previously serving the enrollee, fully and timely complies with requests for historical utilization data from the new MCO, PIHP, PAHP, PCCM, or PCCM entity in compliance with Federal and State law.
(iv) Consistent with Federal and State law, the enrollee's new provider(s) are able to obtain copies of the enrollee's medical records, as appropriate.
(v) Any other necessary procedures as specified by the Secretary to ensure continued access to services to prevent serious detriment to the enrollee's health or reduce the risk of hospitalization or institutionalization.
(2) The State must require by contract that MCOs, PIHPs, and PAHPs implement a transition of care policy consistent with the requirements in paragraph (b)(1) of this section and at least meets the State defined transition of care policy.
(3) The State must make its transition of care policy publicly available and provide instructions to enrollees and potential enrollees on how to access continued services upon transition. At a minimum, the transition of care policy must be described in the quality strategy, under § 438.340, and explained to individuals in the materials to enrollees and potential enrollees, in accordance with § 438.10.
(c)
(a)
(b) The State's system must address all aspects of the managed care program, including the performance of each MCO, PIHP, PAHP, and PCCM entity (if applicable) in at least the following areas:
(1) Administration and management.
(2) Appeal and grievance systems.
(3) Claims management.
(4) Enrollee materials and customer services, including the activities of the beneficiary support system.
(5) Finance, including medical loss ratio reporting.
(6) Information systems, including encounter data reporting.
(7) Marketing.
(8) Medical management, including utilization management and case management.
(9) Program integrity.
(10) Provider network management, including provider directory standards.
(11) Availability and accessibility of services, including network adequacy standards.
(12) Quality improvement.
(13) Areas related to the delivery of LTSS not otherwise included in paragraphs (b)(1) through (12) of this section as applicable to the managed care program.
(14) All other provisions of the contract, as appropriate.
(c) The State must use data collected from its monitoring activities to improve the performance of its managed care program, including at a minimum:
(1) Enrollment and disenrollment trends in each MCO, PIHP, or PAHP.
(2) Member grievance and appeal logs.
(3) Provider complaint and appeal logs.
(4) Findings from the State's External Quality Review process.
(5) Results from any enrollee or provider satisfaction survey conducted by the State or MCO, PIHP, or PAHP.
(6) Performance on required quality measures.
(7) Medical management committee reports and minutes.
(8) The annual quality improvement plan for each MCO, PIHP, PAHP, or PCCM entity.
(9) Audited financial and encounter data submitted by each MCO, PIHP, or PAHP.
(10) The medical loss ratio summary reports required by § 438.8.
(11) Customer service performance data submitted by each MCO, PIHP, or PAHP and performance data submitted by the beneficiary support system.
(12) Any other data related to the provision of LTSS not otherwise included in paragraphs (c)(1) through (11) of this section as applicable to the managed care program.
(d)(1) The State must assess the readiness of each MCO, PIHP, PAHP or PCCM entity with which it contracts as follows:
(i) Prior to the State implementing a managed care program, whether the program is voluntary or mandatory.
(ii) When the specific MCO, PIHP, PAHP, or PCCM entity has not previously contracted with the State.
(iii) When any MCO, PIHP, PAHP, or PCCM entity currently contracting with the State will provide or arrange for the provision of covered benefits to new eligibility groups.
(2) The State must conduct a readiness review of each MCO, PIHP, PAHP, or PCCM entity with which it contracts as follows:
(i) Started at least 3 months prior to the effective date of the events described in paragraph (d)(1) of this section.
(ii) Completed in sufficient time to ensure smooth implementation of an event described in paragraph (d)(1) of this section.
(iii) Submitted to CMS for CMS to make a determination that the contract or contract amendment associated with an event described in paragraph (d)(1) of this section is approved under § 438.3(a).
(3) Readiness reviews described in paragraphs (d)(1)(i) and (ii) of this section must include both a desk review of documents and on-site reviews of each MCO, PIHP, PAHP, or PCCM entity. Readiness reviews described in paragraph (d)(1)(iii) of this section must include a desk review of documents and may, at the State's option, include an on-site review. On-site reviews must include interviews with MCO, PIHP, PAHP, or PCCM entity staff and leadership that manage key operational areas.
(4) A State's readiness review must assess the ability and capacity of the MCO, PIHP, PAHP, and PCCM entity (if applicable) to perform satisfactorily for the following areas:
(i) Operations/Administration, including—
(A) Administrative staffing and resources.
(B) Delegation and oversight of MCO, PIHP, PAHP or PCCM entity responsibilities.
(C) Enrollee and provider communications.
(D) Grievance and appeals.
(E) Member services and outreach.
(F) Provider Network Management.
(G) Program Integrity/Compliance.
(ii) Service delivery, including—
(A) Case management/care coordination/service planning.
(B) Quality improvement.
(C) Utilization review.
(iii) Financial management, including—
(A) Financial reporting and monitoring.
(B) Financial solvency.
(iv) Systems management, including—
(A) Claims management.
(B) Encounter data and enrollment information management.
(e)(1) The State must submit to CMS no later than 180 days after each contract year, a report on each managed care program administered by the State, regardless of the authority under which the program operates.
(i) The initial report will be due after the contract year following the release of CMS guidance on the content and form of the report.
(ii) For States that operate their managed care program under section 1115(a) of the Act authority, submission of an annual report that may be required by the Special Terms and Conditions of the section 1115(a) demonstration program will be deemed to satisfy the requirement of this paragraph (e)(1) provided that the report includes the information specified in paragraph (e)(2) of this section.
(2) The program report must provide information on and an assessment of the operation of the managed care program on, at a minimum, the following areas:
(i) Financial performance of each MCO, PIHP, and PAHP, including MLR experience.
(ii) Encounter data reporting by each MCO, PIHP, or PAHP.
(iii) Enrollment and service area expansion (if applicable) of each MCO, PIHP, PAHP, and PCCM entity.
(iv) Modifications to, and implementation of, MCO, PIHP, or PAHP benefits covered under the contract with the State.
(v) Grievance, appeals, and State fair hearings for the managed care program.
(vi) Availability and accessibility of covered services within the MCO, PIHP, or PAHP contracts, including network adequacy standards.
(vii) Evaluation of MCO, PIHP, or PAHP performance on quality measures, including as applicable, consumer report card, surveys, or other reasonable measures of performance.
(viii) Results of any sanctions or corrective action plans imposed by the State or other formal or informal intervention with a contracted MCO, PIHP, PAHP, or PCCM entity to improve performance.
(ix) Activities and performance of the beneficiary support system.
(x) Any other factors in the delivery of LTSS not otherwise addressed in (e)(2)(i)–(ix) of this section as applicable.
(3) The program report required in this section must be:
(i) Posted on the Web site required under § 438.10(c)(3).
(ii) Provided to the Medical Care Advisory Committee, required under § 431.12 of this chapter.
(iii) Provided to the stakeholder consultation group specified in § 438.70, to the extent that the managed care program includes LTSS.
(f)
(a)
(b)
(i) Primary care, adult and pediatric.
(ii) OB/GYN.
(iii) Behavioral health (mental health and substance use disorder), adult and pediatric.
(iv) Specialist, adult and pediatric.
(v) Hospital.
(vi) Pharmacy.
(vii) Pediatric dental.
(viii) Additional provider types when it promotes the objectives of the Medicaid program, as determined by CMS, for the provider type to be subject to time and distance access standards.
(2)
(i) Time and distance standards for LTSS provider types in which an enrollee must travel to the provider to receive services; and
(ii) Network adequacy standards other than time and distance standards for LTSS provider types that travel to the enrollee to deliver services.
(3)
(c)
(i) The anticipated Medicaid enrollment.
(ii) The expected utilization of services.
(iii) The characteristics and health care needs of specific Medicaid populations covered in the MCO, PIHP, and PAHP contract.
(iv) The numbers and types (in terms of training, experience, and specialization) of network providers required to furnish the contracted Medicaid services.
(v) The numbers of network providers who are not accepting new Medicaid patients.
(vi) The geographic location of network providers and Medicaid enrollees, considering distance, travel time, the means of transportation ordinarily used by Medicaid enrollees.
(vii) The ability of network providers to communicate with limited English proficient enrollees in their preferred language.
(viii) The ability of network providers to ensure physical access, reasonable accommodations, culturally competent communications, and accessible equipment for Medicaid enrollees with physical or mental disabilities.
(ix) The availability of triage lines or screening systems, as well as the use of telemedicine, e-visits, and/or other evolving and innovative technological solutions.
(2) States developing standards consistent with paragraph (b)(2) of this section must consider the following:
(i) All elements in paragraphs (c)(1)(i) through (ix) of this section.
(ii) Elements that would support an enrollee's choice of provider.
(iii) Strategies that would ensure the health and welfare of the enrollee and support community integration of the enrollee.
(iv) Other considerations that are in the best interest of the enrollees that need LTSS.
(d)
(i) Specified in the MCO, PIHP or PAHP contract.
(ii) Based, at a minimum, on the number of providers in that specialty practicing in the MCO, PIHP, or PAHP service area.
(2) States that grant an exception in accordance with paragraph (d)(1) of this section to a MCO, PIHP or PAHP must monitor enrollee access to that provider type on an ongoing basis and include the findings to CMS in the managed care program assessment report required under § 438.66.
(e)
The State must ensure the views of beneficiaries, individuals representing beneficiaries, providers, and other stakeholders are solicited and addressed during the design, implementation, and oversight of a State's managed LTSS program. The composition of the stakeholder group and frequency of meetings must be sufficient to ensure meaningful stakeholder engagement.
(a)
(b)
(i) Choice counseling for all beneficiaries.
(ii) Assistance for enrollees in understanding managed care.
(iii) Assistance as specified for enrollees who use, or express a desire to receive, LTSS in paragraph (d) of this section.
(2) The beneficiary support system must perform outreach to beneficiaries and/or authorized representatives and be accessible in multiple ways including phone, Internet, in-person, and via auxiliary aids and services when requested.
(c)
(2) If an individual or entity provides choice counseling on the State's behalf under a memorandum of agreement or contract, it is considered an enrollment broker as defined in § 438.810(a) and must meet the independence and freedom from conflict of interest standards in § 438.810(b)(1) and (2).
(3) An entity that receives non-Medicaid funding to represent beneficiaries at hearings may provide choice counseling on behalf of the State so long as the State requires firewalls to ensure that the requirements for the provision of choice counseling are met.
(d)
(1) An access point for complaints and concerns about MCO, PIHP, PAHP, PCCM, and PCCM entity enrollment, access to covered services, and other related matters.
(2) Education on enrollees' grievance and appeal rights within the MCO, PIHP or PAHP; the State fair hearing process; enrollee rights and responsibilities; and additional resources outside of the MCO, PIHP or PAHP.
(3) Assistance, upon request, in navigating the grievance and appeal process within the MCO, PIHP or PAHP, as well as appealing adverse benefit determinations by the MCO, PIHP, or PAHP to a State fair hearing. The system may not provide representation to the enrollee at a State fair hearing but may refer enrollees to sources of legal representation.
(4) Review and oversight of LTSS program data to provide guidance to the State Medicaid Agency on identification, remediation and resolution of systemic issues.
(a)
(2) The summary description must include, at a minimum, the amount of the numerator, the amount of the denominator, the MLR percentage achieved, the number of member months, and any remittances owed by each MCO, PIHP, or PAHP for that MLR reporting year.
(b)
(2) If a remittance is owed according to paragraph (b)(1) of this section, the State must submit a separate report describing the methodology used to determine the State and Federal share of the remittance with the report required in paragraph (a) of this section.
(a)
(1) Each MCO, PIHP, PAHP, PCCM and PCCM entity has written policies regarding the enrollee rights specified in this section; and
(2) Each MCO, PIHP, PAHP, PCCM and PCCM entity complies with any applicable Federal and State laws that pertain to enrollee rights, and ensures that its employees and contracted providers observe and protect those rights.
(b)
(2) An enrollee of an MCO, PIHP, PAHP, PCCM, or PCCM entity has the following rights: The right to—
(i) Receive information in accordance with § 438.10.
(ii) Be treated with respect and with due consideration for his or her dignity and privacy.
(iii) Receive information on available treatment options and alternatives, presented in a manner appropriate to the enrollee's condition and ability to understand. (The information requirements for services that are not covered under the contract because of moral or religious objections are set forth in § 438.10(g)(2)(ii)(A) and (B).)
(iv) Participate in decisions regarding his or her health care, including the right to refuse treatment.
(v) Be free from any form of restraint or seclusion used as a means of coercion, discipline, convenience or retaliation, as specified in other Federal regulations on the use of restraints and seclusion.
(vi) If the privacy rule, as set forth in 45 CFR parts 160 and 164 subparts A and E, applies, request and receive a copy of his or her medical records, and request that they be amended or corrected, as specified in 45 CFR 164.524 and 164.526.
(3) An enrollee of an MCO, PIHP, or PAHP (consistent with the scope of the PAHP's contracted services) has the right to be furnished health care services in accordance with §§ 438.206 through 438.210.
(c)
(d)
(a)
(i) The enrollee's health status, medical care, or treatment options, including any alternative treatment that may be self-administered.
(ii) Any information the enrollee needs to decide among all relevant treatment options.
(iii) The risks, benefits, and consequences of treatment or non-treatment.
(iv) The enrollee's right to participate in decisions regarding his or her health care, including the right to refuse treatment, and to express preferences about future treatment decisions.
(2) Subject to the information requirements of paragraph (b) of this section, an MCO, PIHP, or PAHP that would otherwise be required to provide, reimburse for, or provide coverage of, a counseling or referral service because of the requirement in paragraph (a)(1) of this section is not required to do so if the MCO, PIHP, or PAHP objects to the service on moral or religious grounds.
(b)
(A) To the State—
(
(
(B) Consistent with the provisions of § 438.10, to enrollees, within 90 days after adopting the policy for any particular service.
(ii) Although this timeframe would be sufficient to entitle the MCO, PIHP, or PAHP to the option provided in paragraph (a)(2) of this section, the overriding rule in § 438.10(g)(4) requires the State, its contracted representative, or MCO, PIHP, or PAHP to furnish the information at least 30 days before the effective date of the policy.
(2) As specified in § 438.10(g)(2)(ii)(A) and (B), the MCOs, PIHPs, and PAHPs must inform enrollees how they can obtain information from the State about how to access the service excluded under paragraph (a)(2) of this section.
(c)
(d)
(a)
(i) Are produced in any medium, by or on behalf of an MCO, PIHP, PAHP, PCCM, or PCCM entity; and
(ii) Can reasonably be interpreted as intended to market the MCO, PIHP, PAHP, PCCM, or PCCM entity to potential enrollees.
(b)
(1) Provide that the entity—
(i) Does not distribute any marketing materials without first obtaining State approval.
(ii) Distributes the materials to its entire service area as indicated in the contract.
(iii) Complies with the information requirements of § 438.10 to ensure that, before enrolling, the beneficiary receives, from the entity or the State, the accurate oral and written information he or she needs to make an informed decision on whether to enroll.
(iv) Does not seek to influence enrollment in conjunction with the sale or offering of any private insurance.
(v) Does not, directly or indirectly, engage in door-to-door, telephone, email, texting, or other cold-call marketing activities.
(2) Specify the methods by which the entity ensures the State agency that marketing, including plans and materials, is accurate and does not mislead, confuse, or defraud the beneficiaries or the State agency. Statements that will be considered inaccurate, false, or misleading include, but are not limited to, any assertion or statement (whether written or oral) that—
(i) The beneficiary must enroll in the MCO, PIHP, PAHP, PCCM or PCCM entity to obtain benefits or to not lose benefits; or
(ii) The MCO, PIHP, PAHP, PCCM or PCCM entity is endorsed by CMS, the Federal or State government, or similar entity.
(c)
Each MCO, PIHP, and PAHP must provide that its Medicaid enrollees are not held liable for any of the following:
(a) The MCO's, PIHP's, or PAHP's debts, in the event of the entity's insolvency.
(b) Covered services provided to the enrollee, for which—
(1) The State does not pay the MCO, PIHP, or PAHP; or
(2) The State, or the MCO, PIHP, or PAHP does not pay the individual or health care provider that furnished the services under a contractual, referral, or other arrangement.
(c) Payments for covered services furnished under a contract, referral, or other arrangement, to the extent that those payments are in excess of the amount that the enrollee would owe if the MCO, PIHP, or PAHP covered the services directly.
The contract must provide that any cost sharing imposed on Medicaid enrollees is in accordance with §§ 447.50 through 447.82 of this chapter.
(a)
(b)
(a)
(i) Placing the health of the individual (or, for a pregnant woman, the health of the woman or her unborn child) in serious jeopardy.
(ii) Serious impairment to bodily functions.
(iii) Serious dysfunction of any bodily organ or part.
(i) Furnished by a provider that is qualified to furnish these services under this Title.
(ii) Needed to evaluate or stabilize an emergency medical condition.
(b)
(1) The MCO, PIHP, or PAHP.
(2) The State, for managed care programs that contract with PCCMs or PCCM entities
(c)
(i) Must cover and pay for emergency services regardless of whether the provider that furnishes the services has a contract with the MCO, PIHP, PAHP, PCCM or PCCM entity; and
(ii) May not deny payment for treatment obtained under either of the following circumstances:
(A) An enrollee had an emergency medical condition, including cases in which the absence of immediate medical attention would not have had the outcomes specified in paragraphs (1), (2), and (3) of the definition of emergency medical condition in paragraph (a) of this section.
(B) A representative of the MCO, PIHP, PAHP, PCCM, or PCCM entity instructs the enrollee to seek emergency services.
(2) A PCCM or PCCM entity must allow enrollees to obtain emergency services outside the primary care case management system regardless of whether the case manager referred the enrollee to the provider that furnishes the services.
(d)
(i) Limit what constitutes an emergency medical condition with reference to paragraph (a) of this section, on the basis of lists of diagnoses or symptoms; and
(ii) Refuse to cover emergency services based on the emergency room provider, hospital, or fiscal agent not notifying the enrollee's primary care provider, MCO, PIHP, PAHP or applicable State entity of the enrollee's screening and treatment within 10 calendar days of presentation for emergency services.
(2) An enrollee who has an emergency medical condition may not be held liable for payment of subsequent screening and treatment needed to diagnose the specific condition or stabilize the patient.
(3) The attending emergency physician, or the provider actually treating the enrollee, is responsible for determining when the enrollee is sufficiently stabilized for transfer or discharge, and that determination is binding on the entities identified in paragraph (b) of this section as responsible for coverage and payment.
(e)
(f)
(a)
(2) Federally qualified HMOs, as defined in section 1310 of the Public Health Service Act, are exempt from this requirement.
(b)
(2)
(i) Does not provide both inpatient hospital services and physician services.
(ii) Is a public entity.
(iii) Is (or is controlled by) one or more Federally qualified health centers and meets the solvency standards established by the State for those centers.
(iv) Has its solvency guaranteed by the State.
(a)
(b)
(1) Maintains and monitors a network of appropriate providers that is supported by written agreements and is sufficient to provide adequate access to all services covered under the contract for all enrollees, including those with limited English proficiency or physical or mental disabilities.
(2) Provides female enrollees with direct access to a women's health specialist within the provider network for covered care necessary to provide women's routine and preventive health care services. This is in addition to the enrollee's designated source of primary care if that source is not a women's health specialist.
(3) Provides for a second opinion from a network provider, or arranges for the enrollee to obtain one outside the network, at no cost to the enrollee.
(4) If the provider network is unable to provide necessary services, covered under the contract, to a particular enrollee, the MCO, PIHP, or PAHP must adequately and timely cover these services out of network for the enrollee, for as long as the MCO, PIHP, or PAHP's provider network is unable to provide them.
(5) Requires out-of-network providers to coordinate with the MCO, PIHP, or PAHP for payment and ensures the cost to the enrollee is no greater than it would be if the services were furnished within the network.
(6) Demonstrates that its network providers are credentialed as required by § 438.214.
(7) Demonstrates that its network includes sufficient family planning providers to ensure timely access to covered services.
(c)
(1)
(i) Meet and require its network providers to meet State standards for timely access to care and services, taking into account the urgency of the need for services.
(ii) Ensure that the network providers offer hours of operation that are no less than the hours of operation offered to commercial enrollees or comparable to Medicaid FFS, if the provider serves only Medicaid enrollees.
(iii) Make services included in the contract available 24 hours a day, 7 days a week, when medically necessary.
(iv) Establish mechanisms to ensure compliance by network providers.
(v) Monitor network providers regularly to determine compliance.
(vi) Take corrective action if there is a failure to comply by a network provider.
(2)
(3)
(d)
(a)
(b)
(1) Offers an appropriate range of preventive, primary care, specialty services, and LTSS that is adequate for the anticipated number of enrollees for the service area.
(2) Maintains a network of providers that is sufficient in number, mix, and geographic distribution to meet the needs of the anticipated number of enrollees in the service area.
(c)
(1) At the time it enters into a contract with the State.
(2) On an annual basis.
(3) At any time there has been a significant change (as defined by the State) in the MCO's, PIHP's, or PAHP's operations that would affect the adequacy of capacity and services, including—
(i) Changes in MCO, PIHP, or PAHP services, benefits, geographic service area, composition of or payments to its provider network; or
(ii) Enrollment of a new population in the MCO, PIHP, or PAHP.
(d)
(e)
(f)
(a)
(2)
(3)
(ii) The State bases its determination on the needs of the population it requires the MCO to serve.
(b)
(1) Ensure that each enrollee has an ongoing source of care appropriate to his or her needs and a person or entity formally designated as primarily responsible for coordinating the services accessed by the enrollee. The enrollee must be provided information on how to contact their designated person or entity;
(2) Coordinate the services the MCO, PIHP, or PAHP furnishes to the enrollee:
(i) Between settings of care, including appropriate discharge planning for short term and long-term hospital and institutional stays;
(ii) With the services the enrollee receives from any other MCO, PIHP, or PAHP;
(iii) With the services the enrollee receives in FFS Medicaid; and
(iv) With the services the enrollee receives from community and social support providers.
(3) Provide that the MCO, PIHP or PAHP makes a best effort to conduct an initial screening of each enrollee's needs, within 90 days of the effective date of enrollment for all new enrollees, including subsequent attempts if the initial attempt to contact the enrollee is unsuccessful;
(4) Share with the State or other MCOs, PIHPs, and PAHPs serving the enrollee the results of any identification and assessment of that enrollee's needs to prevent duplication of those activities;
(5) Ensure that each provider furnishing services to enrollees maintains and shares, as appropriate, an enrollee health record in accordance with professional standards; and
(6) Ensure that in the process of coordinating care, each enrollee's privacy is protected in accordance with the privacy requirements in 45 CFR parts 160 and 164 subparts A and E, to the extent that they are applicable.
(c)
(i) Must be specified in the State's quality strategy under § 438.340.
(ii) May use State staff, the State's enrollment broker, or the State's MCOs, PIHPs and PAHPs.
(2)
(3)
(i) Developed by an individual meeting LTSS service coordination requirements with enrollee participation, and in consultation with any providers caring for the enrollee;
(ii) Developed by a person trained in person-centered planning using a person-centered process and plan as defined in § 441.301(c)(1) and (2) of this chapter for LTSS treatment or service plans;
(iii) Approved by the MCO, PIHP, or PAHP in a timely manner, if this approval is required by the MCO, PIHP, or PAHP;
(iv) In accordance with any applicable State quality assurance and utilization review standards; and
(v) Reviewed and revised upon reassessment of functional need, at least every 12 months, or when the enrollee's circumstances or needs change significantly, or at the request of the enrollee per § 441.301(c)(3) of this chapter.
(4)
(d)
(a)
(1) Identify, define, and specify the amount, duration, and scope of each service that the MCO, PIHP, or PAHP is required to offer.
(2) Require that the services identified in paragraph (a)(1) of this section be furnished in an amount, duration, and scope that is no less than the amount, duration, and scope for the same services furnished to beneficiaries under FFS Medicaid, as set forth in § 440.230 of this chapter, and for enrollees under the age of 21, as set forth in subpart B of part 440 of this chapter.
(3) Provide that the MCO, PIHP, or PAHP—
(i) Must ensure that the services are sufficient in amount, duration, or scope to reasonably achieve the purpose for which the services are furnished.
(ii) May not arbitrarily deny or reduce the amount, duration, or scope of a required service solely because of diagnosis, type of illness, or condition of the beneficiary.
(4) Permit an MCO, PIHP, or PAHP to place appropriate limits on a service—
(i) On the basis of criteria applied under the State plan, such as medical necessity; or
(ii) For the purpose of utilization control, provided that—
(A) The services furnished can reasonably achieve their purpose, as required in paragraph (a)(3)(i) of this section;
(B) The services supporting individuals with ongoing or chronic conditions or who require long-term services and supports are authorized in a manner that reflects the enrollee's ongoing need for such services and supports; and
(C) Family planning services are provided in a manner that protects and enables the enrollee's freedom to choose the method of family planning to be used consistent with § 441.20 of this chapter.
(5) Specify what constitutes “medically necessary services” in a manner that—
(i) Is no more restrictive than that used in the State Medicaid program, including quantitative and non-quantitative treatment limits, as indicated in State statutes and regulations, the State Plan, and other State policy and procedures; and
(ii) Addresses the extent to which the MCO, PIHP, or PAHP is responsible for covering services that address:
(A) The prevention, diagnosis, and treatment of an enrollee's disease, condition, and/or disorder that results in health impairments and/or disability.
(B) The ability for an enrollee to achieve age-appropriate growth and development.
(C) The ability for an enrollee to attain, maintain, or regain functional capacity.
(D) The opportunity for an enrollee receiving long-term services and supports to have access to the benefits of community living, to achieve person-centered goals, and live and work in the setting of their choice.
(b)
(1) That the MCO, PIHP, or PAHP and its subcontractors have in place, and follow, written policies and procedures.
(2) That the MCO, PIHP, or PAHP—
(i) Have in effect mechanisms to ensure consistent application of review criteria for authorization decisions.
(ii) Consult with the requesting provider for medical services when appropriate.
(iii) Authorize LTSS based on an enrollee's current needs assessment and consistent with the person-centered service plan.
(3) That any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be made by an individual who has appropriate expertise in addressing the enrollee's medical, behavioral health, or long-term services and supports needs.
(c)
(d)
(1)
(i) The enrollee, or the provider, requests extension; or
(ii) The MCO, PIHP, or PAHP justifies (to the State agency upon request) a need for additional information and how the extension is in the enrollee's interest.
(2)
(ii) The MCO, PIHP, or PAHP may extend the 72 hour time period by up to 14 calendar days if the enrollee requests an extension, or if the MCO, PIHP, or PAHP justifies (to the State agency upon request) a need for additional information and how the extension is in the enrollee's interest.
(3)
(e)
(f)
(a)
(b)
(2) Each MCO, PIHP, and PAHP must follow a documented process for credentialing and recredentialing of network providers.
(c)
(d)
(e)
The State must ensure, through its contracts, that (consistent with subpart F of part 431 of this chapter), for medical records and any other health and enrollment information that identifies a particular enrollee, each MCO, PIHP, and PAHP uses and discloses such individually identifiable health information in accordance with the privacy requirements in 45 CFR parts 160 and 164, subparts A and E, to the extent that these requirements are applicable.
(a) The State must ensure, through its contracts, that each MCO, PIHP, and PAHP has in effect a grievance and appeal system that meets the requirements of subpart F of this part.
(b) If the State delegates to the MCO, PIHP, or PAHP responsibility for notice of action under subpart E of part 431 of this chapter, the State must conduct random reviews of each delegated MCO, PIHP, or PAHP and its providers and subcontractors to ensure that they are notifying enrollees in a timely manner.
(a)
(b)
(1) Notwithstanding any relationship(s) that the MCO, PIHP, PAHP, or PCCM entity may have with any subcontractor, the MCO, PIHP, PAHP, or PCCM entity maintains ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its contract with the State; and
(2) All contracts or written arrangements between the MCO, PIHP, PAHP, or PCCM entity and any subcontractor must meet the requirements of paragraph (c) of this section.
(c) Each contract or written arrangement described in paragraph (b)(2) of this section must specify that:
(1) If any of the MCO's, PIHP's, PAHP's, or PCCM entity's activities or obligations under its contract with the State are delegated to a subcontractor—
(i) The delegated activities or obligations, and related reporting responsibilities, are specified in the contract or written agreement.
(ii) The subcontractor agrees to perform the delegated activities and reporting responsibilities specified in compliance with the MCO's, PIHP's, PAHP's, or PCCM entity's contract obligations.
(iii) The contract or written arrangement must either provide for revocation of the delegation of activities or obligations, or specify other remedies in instances where the State or the MCO, PIHP, PAHP, or PCCM entity determine that the subcontractor has not performed satisfactorily.
(2) The subcontractor agrees to comply with all applicable Medicaid laws, regulations, including applicable subregulatory guidance and contract provisions;
(3) The subcontractor agrees that—
(i) The State, CMS, the HHS Inspector General, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, records, contracts, computer or other electronic systems of the subcontractor, or of the subcontractor's contractor, that pertain to any aspect of services and activities performed, or determination of amounts payable under the MCO's, PIHP's, or PAHP's contract with the State.
(ii) The subcontractor will make available, for purposes of an audit, evaluation, or inspection under paragraph (c)(3)(i) of this section, its premises, physical facilities, equipment, books, records, contracts, computer or other electronic systems relating to its Medicaid enrollees.
(iii) The right to audit under paragraph (c)(3)(i) of this section will exist through 10 years from the final date of the contract period or from the date of completion of any audit, whichever is later.
(iv) If the State, CMS, or the HHS Inspector General determines that there is a reasonable possibility of fraud or similar risk, the State, CMS, or the HHS Inspector General may inspect, evaluate, and audit the subcontractor at any time.
(d)
(a)
(b)
(1) Are based on valid and reliable clinical evidence or a consensus of providers in the particular field.
(2) Consider the needs of the MCO's, PIHP's, or PAHP's enrollees.
(3) Are adopted in consultation with contracting health care professionals.
(4) Are reviewed and updated periodically as appropriate.
(c)
(d)
(a)
(b)
(1) Section 6504(a) of the Affordable Care Act, which requires that State claims processing and retrieval systems are able to collect data elements necessary to enable the mechanized claims processing and information retrieval systems in operation by the State to meet the requirements of section 1903(r)(1)(F) of the Act.
(2) Collect data on enrollee and provider characteristics as specified by the State, and on all services furnished to enrollees through an encounter data system or other methods as may be specified by the State.
(3) Ensure that data received from providers is accurate and complete by—
(i) Verifying the accuracy and timeliness of reported data, including data from network providers the MCO, PIHP, or PAHP is compensating on the basis of capitation payments.
(ii) Screening the data for completeness, logic, and consistency.
(iii) Collecting data from providers in standardized formats to the extent feasible and appropriate, including secure information exchanges and technologies utilized for State Medicaid quality improvement and care coordination efforts.
(4) Make all collected data available to the State and upon request to CMS.
(c)
(1) Collection and maintenance of sufficient enrollee encounter data to identify the provider who delivers any item(s) or service(s) to enrollees.
(2) Submission of enrollee encounter data to the State at a frequency and level of detail to be specified by CMS and the State, based on program administration, oversight, and program integrity needs.
(3) Submission of all enrollee encounter data that the State is required to report to CMS under § 438.818.
(4) Specifications for submitting encounter data to the State in standardized ASC X12N 837 and NCPDP formats, and the ASC X12N 835 format as appropriate.
(d)
(e)
(a)
(b)
(1) Specifications for a quality assessment and performance improvement program that States must require each contracting MCO, PIHP, and PAHP to implement and maintain.
(2) Requirements for the State review of the accreditation status of all contracting MCOs, PIHPs, and PAHPs.
(3) Specifications for a Medicaid managed care quality rating system for all States contracting with MCOs, PIHPs, and PAHPs.
(4) Specifications for a Medicaid managed care quality strategy that States contracting with MCOs, PIHPs, PAHPs, and PCCM entities (described in paragraph (c)(2) of this section) must implement to ensure the delivery of quality health care.
(5) Requirements for annual external quality reviews of each contracting MCO, PIHP, PAHP and PCCM entity (described in paragraph (c)(2) of this section) including—
(i) Criteria that States must use in selecting entities to perform the reviews.
(ii) Specifications for the activities related to external quality review.
(iii) Circumstances under which external quality review may use the results of Medicare quality reviews or private accreditation reviews.
(iv) Requirements for making the results of the reviews publicly available.
(c)
(2) The provisions of § 438.330(b)(2), (b)(3), (c), and (e), § 438.340, and § 438.350 apply to States contracting with PCCM entities whose contracts with the State provide for shared savings, incentive payments or other financial reward for the PCCM entity for improved quality outcomes.
(d)
(1) States must comply with § 438.330 and § 438.332 no later than the rating period for contracts beginning on or after July 1, 2017.
(2) States must comply with § 438.340, § 438.350, § 438.354, § 438.356, § 438.358, § 438.360, § 438.362, and § 438.364 no later than July 1, 2018.
As used in this subpart—
(1) A direct or indirect ownership or investment interest (including an option or nonvested interest) in any entity. This direct or indirect interest may be in the form of equity, debt, or other means, and includes any indirect ownership or investment interest no matter how many levels removed from a direct interest; or
(2) A compensation arrangement with an entity.
(1) Its structural and operational characteristics.
(2) The provision of services that are consistent with current professional, evidenced-based-knowledge.
(3) Interventions for performance improvement.
(a)
(2) After consulting with States and other stakeholders and providing public notice and opportunity to comment, CMS may specify performance measures and PIPs, which must be included in the standard measures identified and PIPs required by the State in accordance with paragraphs (c) and (d) of this section. A State may request an exemption from including the performance measures or PIPs established under paragraph (a)(2) of this section, by submitting a written request to CMS explaining the basis for such request.
(3) The State must require, through its contracts, that each PCCM entity described in § 438.310(c)(2) establish and implement an ongoing comprehensive quality assessment and performance improvement program for the services it furnishes to its enrollees which incorporates, at a minimum, paragraphs (b)(2) and (3) of this section and the performance measures identified by the State per paragraph (c) of this section.
(b)
(1) Performance improvement projects in accordance with paragraph (d) of this section.
(2) Collection and submission of performance measurement data in accordance with paragraph (c) of this section.
(3) Mechanisms to detect both underutilization and overutilization of services.
(4) Mechanisms to assess the quality and appropriateness of care furnished to enrollees with special health care needs, as defined by the State in the quality strategy under § 438.340.
(5) For MCOs, PIHPs, or PAHPs providing long-term services and supports:
(i) Mechanisms to assess the quality and appropriateness of care furnished to enrollees using long-term services and supports, including assessment of care between care settings and a comparison of services and supports received with those set forth in the enrollee's treatment/service plan, if applicable; and
(ii) Participate in efforts by the State to prevent, detect, and remediate critical incidents (consistent with assuring beneficiary health and welfare per §§ 441.302 and 441.730(a) of this chapter) that are based, at a minimum, on the requirements on the State for home and community-based waiver programs per § 441.302(h) of this chapter.
(c)
(1)(i) Identify standard performance measures, including those performance measures that may be specified by CMS under paragraph (a)(2) of this section, relating to the performance of MCOs, PIHPs, and PAHPs; and
(ii) In addition to the measures specified in paragraph (c)(1)(i) of this section, in the case of an MCO, PIHP, or PAHP providing long-term services and supports, identify standard performance measures relating to quality of life, rebalancing, and community integration activities for individuals receiving long-term services and supports.
(2) Require that each MCO, PIHP, and PAHP annually—
(i) Measure and report to the State on its performance, using the standard measures required by the State in paragraph (c)(1) of this section;
(ii) Submit to the State data, specified by the State, which enables the State to calculate the MCO's, PIHP's, or PAHP's performance using the standard measures identified by the State under paragraph (c)(1) of this section; or
(iii) Perform a combination of the activities described in paragraphs (c)(2)(i) and (ii) of this section.
(d)
(2) Each performance improvement project must be designed to achieve significant improvement, sustained over time, in health outcomes and enrollee satisfaction, and must include the following elements:
(i) Measurement of performance using objective quality indicators.
(ii) Implementation of interventions to achieve improvement in the access to and quality of care.
(iii) Evaluation of the effectiveness of the interventions based on the performance measures in paragraph (d)(2)(i) of this section.
(iv) Planning and initiation of activities for increasing or sustaining improvement.
(3) The State must require each MCO, PIHP, and PAHP to report the status and results of each project conducted per paragraph (d)(1) of this section to the State as requested, but not less than once per year.
(4) The State may permit an MCO, PIHP, or PAHP exclusively serving dual eligibles to substitute an MA Organization quality improvement project conducted under § 422.152(d) of this chapter for one or more of the performance improvement projects otherwise required under this section.
(e)
(i) The MCO's, PIHP's, PAHP's, and PCCM entity's performance on the measures on which it is required to report.
(ii) The outcomes and trended results of each MCO's, PIHP's, and PAHP's performance improvement projects.
(iii) The results of any efforts by the MCO, PIHP, or PAHP to support community integration for enrollees using long-term services and supports.
(2) The State may require that an MCO, PIHP, PAHP, or PCCM entity described in § 438.310(c)(2) develop a process to evaluate the impact and effectiveness of its own quality assessment and performance improvement program.
(a) The State must require, through its contracts, that each MCO, PIHP, and PAHP inform the State whether it has been accredited by a private independent accrediting entity.
(b) The State must require, through its contracts, that each MCO, PIHP, and PAHP that has received accreditation by a private independent accrediting entity must authorize the private independent accrediting entity to provide the State a copy of its most recent accreditation review, including:
(1) Accreditation status, survey type, and level (as applicable);
(2) Accreditation results, including recommended actions or improvements, corrective action plans, and summaries of findings; and
(3) Expiration date of the accreditation.
(c) The State must—
(1) Make the accreditation status for each contracted MCO, PIHP, and PAHP available on the Web site required under § 438.10(c)(3), including whether each MCO, PIHP, and PAHP has been accredited and, if applicable, the name of the accrediting entity, accreditation program, and accreditation level; and
(2) Update this information at least annually.
(a)
(1) Adopt the Medicaid managed care quality rating system developed by CMS in accordance with paragraph (b) of this section; or
(2) Adopt an alternative Medicaid managed care quality rating system in accordance with paragraph (c) of this section.
(3) Implement such Medicaid managed care quality rating system within 3 years of the date of a final notice published in the
(b)
(c)
(i) The ratings generated by the alternative Medicaid managed care quality rating system yield information regarding MCO, PIHP, and PAHP performance which is substantially comparable to that yielded by the Medicaid managed care quality rating system described in paragraph (b) of this section; and,
(ii) The state receive CMS approval prior to implementing an alternative quality rating system or modifications to an approved alternative Medicaid managed care quality rating system.
(2) Prior to submitting a request for, or modification of, an alternative Medicaid managed care quality rating system to CMS, the State must—
(i) Obtain input from the State's Medical Care Advisory Committee established under § 431.12 of this chapter; and
(ii) Provide an opportunity for public comment of at least 30 days on the proposed alternative Medicaid managed care quality rating system or modification.
(3) The State must document in the request to CMS the public comment process utilized by the State including discussion of the issues raised by the Medical Care Advisory Committee and the public. The request must document any policy revisions or modifications made in response to the comments and rationale for comments not accepted.
(d)
(e)
(a)
(b)
(1) The State-defined network adequacy and availability of services standards for MCOs, PIHPs, and PAHPs required by §§ 438.68 and 438.206 and examples of evidence-based clinical practice guidelines the State requires in accordance with § 438.236.
(2) The State's goals and objectives for continuous quality improvement which must be measurable and take into consideration the health status of all populations in the State served by the MCO, PIHP, and PAHP.
(3) A description of—
(i) The quality metrics and performance targets to be used in measuring the performance and improvement of each MCO, PIHP, and PAHP with which the State contracts, including but not limited to, the performance measures reported in accordance with § 438.330(c). The State must identify which quality measures
(ii) The performance improvement projects to be implemented in accordance with § 438.330(d), including a description of any interventions the State proposes to improve access, quality, or timeliness of care for beneficiaries enrolled in an MCO, PIHP, or PAHP.
(4) Arrangements for annual, external independent reviews, in accordance with § 438.350, of the quality outcomes and timeliness of, and access to, the services covered under each MCO, PIHP, PAHP, and PCCM entity (described in § 438.310(c)(2)) contract.
(5) A description of the State's transition of care policy required under § 438.62(b)(3).
(6) The State's plan to identify, evaluate, and reduce, to the extent practicable, health disparities based on age, race, ethnicity, sex, primary language, and disability status. States must identify this demographic information for each Medicaid enrollee and provide it to the MCO, PIHP or PAHP at the time of enrollment. For purposes of this paragraph (b)(6), “disability status” means whether the individual qualified for Medicaid on the basis of a disability.
(7) For MCOs, appropriate use of intermediate sanctions that, at a minimum, meet the requirements of subpart I of this part.
(8) A description of how the State will assess the performance and quality outcomes achieved by each PCCM entity described in § 438.310(c)(2).
(9) The mechanisms implemented by the State to comply with § 438.208(c)(1) (relating to the identification of persons who need long-term services and supports or persons with special health care needs).
(10) The information required under § 438.360(c) (relating to nonduplication of EQR activities); and
(11) The State's definition of a “significant change” for the purposes of paragraph (c)(3)(ii) of this section.
(c)
(1) Make the strategy available for public comment before submitting the strategy to CMS for review, including:
(i) Obtaining input from the Medical Care Advisory Committee (established by § 431.12 of this chapter), beneficiaries, and other stakeholders.
(ii) If the State enrolls Indians in the MCO, PIHP, or PAHP, consulting with Tribes in accordance with the State's Tribal consultation policy.
(2) Review and update the quality strategy as needed, but no less than once every 3 years.
(i) This review must include an evaluation of the effectiveness of the quality strategy conducted within the previous 3 years.
(ii) The State must make the results of the review available on the Web site required under § 438.10(c)(3).
(iii) Updates to the quality strategy must take into consideration the recommendations provided pursuant to § 438.364(a)(4).
(3) Submit to CMS the following:
(i) A copy of the initial strategy for CMS comment and feedback prior to adopting it in final.
(ii) A copy of the revised strategy whenever significant changes, as defined in the state's quality strategy per paragraph (b)(11) of this section, are made to the document, or whenever significant changes occur within the State's Medicaid program.
(d)
Each State that contracts with MCOs, PIHPs, or PAHPs, or with PCCM entities (described in § 438.310(c)(2)) must ensure that—
(a) Except as provided in § 438.362, a qualified EQRO performs an annual EQR for each such contracting MCO, PIHP, PAHP or PCCM entity (described in § 438.310(c)(2)).
(b) The EQRO has sufficient information to use in performing the review.
(c) The information used to carry out the review must be obtained from the EQR-related activities described in § 438.358 or, if applicable, from a Medicare or private accreditation review as described in § 438.360.
(d) For each EQR-related activity, the information gathered for use in the EQR must include the elements described in § 438.364(a)(1)(i) through (iv).
(e) The information provided to the EQRO in accordance with paragraph (b) of this section is obtained through methods consistent with the protocols established by the Secretary in accordance with § 438.352.
(f) The results of the reviews are made available as specified in § 438.364.
The Secretary, in coordination with the National Governor's Association, must develop protocols for the external quality reviews required under this subpart. Each protocol issued by the Secretary must specify—
(a) The data to be gathered;
(b) The sources of the data;
(c) The activities and steps to be followed in collecting the data to promote its accuracy, validity, and reliability;
(d) The proposed method or methods for validly analyzing and interpreting the data once obtained; and
(e) Instructions, guidelines, worksheets, and other documents or tools necessary for implementing the protocol.
(a)
(b)
(1) Staff with demonstrated experience and knowledge of—
(i) Medicaid beneficiaries, policies, data systems, and processes;
(ii) Managed care delivery systems, organizations, and financing;
(iii) Quality assessment and improvement methods; and
(iv) Research design and methodology, including statistical analysis.
(2) Sufficient physical, technological, and financial resources to conduct EQR or EQR-related activities.
(3) Other clinical and nonclinical skills necessary to carry out EQR or EQR-related activities and to oversee the work of any subcontractors.
(c)
(1) If a State agency, department, university, or other State entity:
(i) May not have Medicaid purchasing or managed care licensing authority; and
(ii) Must be governed by a Board or similar body the majority of whose members are not government employees.
(2) An EQRO may not:
(i) Review any MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)), or a competitor operating in the State, over which the EQRO exerts control or which exerts control over the EQRO (as used in this paragraph, “control” has the meaning given the term in 48 CFR 19.101) through—
(A) Stock ownership;
(B) Stock options and convertible debentures;
(C) Voting trusts;
(D) Common management, including interlocking management; and
(E) Contractual relationships.
(ii) Deliver any health care services to Medicaid beneficiaries;
(iii) Conduct, on the State's behalf, ongoing Medicaid managed care program operations related to oversight of the quality of MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) services, except for the related activities specified in § 438.358;
(iv) Review any MCO, PIHP, PAHP or PCCM entity (described in § 438.310(c)(2)) for which it is conducting or has conducted an accreditation review within the previous 3 years; or
(v) Have a present, or known future, direct or indirect financial relationship with an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) that it will review as an EQRO.
(a) The State—
(1) Must contract with one EQRO to conduct either EQR alone or EQR and other EQR-related activities.
(2) May contract with additional EQROs or other entities to conduct EQR-related activities as set forth in § 438.358.
(b) Each EQRO must meet the competence requirements as specified in § 438.354(b).
(c) Each EQRO is permitted to use subcontractors. The EQRO is accountable for, and must oversee, all subcontractor functions.
(d) Each EQRO and its subcontractors performing EQR or EQR-related activities must meet the requirements for independence, as specified in § 438.354(c).
(e) For each contract with an EQRO described in paragraph (a) of this section, the State must follow an open, competitive procurement process that is in accordance with State law and regulations. In addition, the State must comply with 45 CFR part 75 as it applies to State procurement of Medicaid services.
(a)
(2) The data obtained from the mandatory and optional EQR-related activities in this section must be used for the annual EQR in § 438.350 and must include, at a minimum, the elements in § 438.364(a)(i) through (iv).
(b)
(i) Validation of performance improvement projects required in accordance with § 438.330(b)(1) that were underway during the preceding 12 months.
(ii) Validation of MCO, PIHP, or PAHP performance measures required in accordance with § 438.330(b)(2) or MCO, PIHP, or PAHP performance measures calculated by the State during the preceding 12 months.
(iii) A review, conducted within the previous 3-year period, to determine the MCO's, PIHP's, or PAHP's compliance with the standards set forth in subpart D of this part and the quality assessment and performance improvement requirements described in § 438.330.
(iv) Validation of MCO, PIHP, or PAHP network adequacy during the preceding 12 months to comply with requirements set forth in § 438.68 and, if the State enrolls Indians in the MCO, PIHP, or PAHP, § 438.14(b)(1).
(2) For each PCCM entity (described in § 438.310(c)(2)), the EQR-related activities in paragraphs (b)(1)(ii) and (iii) of this section must be performed.
(c)
(1) Validation of encounter data reported by an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)).
(2) Administration or validation of consumer or provider surveys of quality of care.
(3) Calculation of performance measures in addition to those reported by an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) and validated by an EQRO in accordance with (b)(2) of this section.
(4) Conduct of performance improvement projects in addition to those conducted by an MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) and validated by an EQRO in accordance with (b)(1) of this section.
(5) Conduct of studies on quality that focus on a particular aspect of clinical or nonclinical services at a point in time.
(6) Assist with the quality rating of MCOs, PIHPs, and PAHPs consistent with § 438.334.
(d)
(a)
(1) The MCO, PIHP, or PAHP is in compliance with the applicable Medicare Advantage standards established by CMS, as determined by CMS or its contractor for Medicare, or has obtained accreditation from a private accrediting organization recognized by CMS as applying standards at least as stringent as Medicare under the procedures in § 422.158 of this chapter;
(2) The Medicare or private accreditation review standards are comparable to standards established through the EQR protocols (§ 438.352) for the EQR activities described in § 438.358(b)(1)(i) through (iii); and
(3) The MCO, PIHP, or PAHP provides to the State all the reports, findings, and other results of the Medicare or private accreditation review activities applicable to the standards for the EQR activities.
(b)
(c)
(a)
(1) The MCO has a current Medicare contract under part C of Title XVIII or under section 1876 of the Act, and a current Medicaid contract under section 1903(m) of the Act.
(2) The two contracts cover all or part of the same geographic area within the State.
(3) The Medicaid contract has been in effect for at least 2 consecutive years before the effective date of the exemption and during those 2 years the MCO has been subject to EQR under this part, and found to be performing acceptably for the quality, timeliness, and access to health care services it provides to Medicaid beneficiaries.
(b)
(1)
(i) All data, correspondence, information, and findings pertaining to the MCO's compliance with Medicare standards for access, quality assessment and performance improvement, health services, or delegation of these activities.
(ii) All measures of the MCO's performance.
(iii) The findings and results of all performance improvement projects pertaining to Medicare enrollees.
(2)
(A) To fulfill certain requirements for Medicare external review under subpart D of part 422 of this chapter.
(B) To deem compliance with Medicare requirements, as provided in § 422.156 of this chapter.
(ii) These findings must include, but need not be limited to, accreditation review results of evaluation of compliance with individual accreditation standards, noted deficiencies, corrective action plans, and summaries of unmet accreditation requirements.
(a)
(1) A description of the manner in which the data from all activities conducted in accordance with § 438.358 were aggregated and analyzed, and conclusions were drawn as to the quality, timeliness, and access to the care furnished by the MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)).
(2) For each EQR-related activity conducted in accordance with § 438.358:
(i) Objectives;
(ii) Technical methods of data collection and analysis;
(iii) Description of data obtained, including validated performance measurement data for each activity conducted in accordance with § 438.358(b)(1)(i) and (ii); and
(iv) Conclusions drawn from the data.
(3) An assessment of each MCO's, PIHP's, PAHP's, or PCCM entity's (described in § 438.310(c)(2)) strengths and weaknesses for the quality, timeliness, and access to health care services furnished to Medicaid beneficiaries.
(4) Recommendations for improving the quality of health care services furnished by each MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) including how the State can target goals and objectives in the quality strategy, under § 438.340, to better support improvement in the quality, timeliness, and access to health care services furnished to Medicaid beneficiaries.
(5) Methodologically appropriate, comparative information about all MCOs, PIHPs, PAHPs, and PCCM entities (described in § 438.310(c)(2)), consistent with guidance included in the EQR protocols issued in accordance with § 438.352(e).
(6) An assessment of the degree to which each MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)) has addressed effectively the recommendations for quality improvement made by the EQRO during the previous year's EQR.
(b)
(c)
(2) The State must—
(i) Post the most recent copy of the annual EQR technical report on the Web site required under § 438.10(c)(3) by April 30th of each year.
(ii) Provide printed or electronic copies of the information specified in paragraph (a) of this section, upon request, to interested parties such as participating health care providers, enrollees and potential enrollees of the MCO, PIHP, PAHP, or PCCM entity (described in § 438.310(c)(2)), beneficiary advocacy groups, and members of the general public.
(3) The State must make the information specified in paragraph (a) of this section available in alternative formats for persons with disabilities, when requested.
(d)
(a) FFP at the 75 percent rate is available in expenditures for EQR (including the production of EQR results) and the EQR-related activities set forth in § 438.358 performed on MCOs and conducted by EQROs and their subcontractors.
(b) FFP at the 50 percent rate is available in expenditures for EQR-related activities conducted by any entity that does not qualify as an EQRO, and for EQR (including the production of EQR results) and EQR-related activities performed by an EQRO on entities other than MCOs.
(c) Prior to claiming FFP at the 75 percent rate in accordance with paragraph (a) of this section, the State must submit each EQRO contract to CMS for review and approval.
(a)
(1) Section 1902(a)(3) of the Act requires that a State plan provide an opportunity for a fair hearing to any person whose claim for assistance is denied or not acted upon promptly.
(2) Section 1902(a)(4) of the Act requires that the State plan provide for
(3) Section 1932(b)(4) of the Act requires Medicaid managed care organizations to establish internal grievance procedures under which Medicaid enrollees, or providers acting on their behalf, may challenge the denial of coverage of, or payment for, medical assistance.
(b)
(1) The denial or limited authorization of a requested service, including determinations based on the type or level of service, requirements for medical necessity, appropriateness, setting, or effectiveness of a covered benefit.
(2) The reduction, suspension, or termination of a previously authorized service.
(3) The denial, in whole or in part, of payment for a service.
(4) The failure to provide services in a timely manner, as defined by the State.
(5) The failure of an MCO, PIHP, or PAHP to act within the timeframes provided in § 438.408(b)(1) and (2) regarding the standard resolution of grievances and appeals.
(6) For a resident of a rural area with only one MCO, the denial of an enrollee's request to exercise his or her right, under § 438.52(b)(2)(ii), to obtain services outside the network.
(7) The denial of an enrollee's request to dispute a financial liability, including cost sharing, copayments, premiums, deductibles, coinsurance, and other enrollee financial liabilities.
(c)
(a)
(b)
(c)
(A)
(B)
(
(
(
(
(ii) If State law permits and with the written consent of the enrollee, a provider or an authorized representative may request an appeal or file a grievance, or request a State fair hearing, on behalf of an enrollee. When the term “enrollee” is used throughout subpart F of this part, it includes providers and authorized representatives consistent with this paragraph, with the exception that providers cannot request continuation of benefits as specified in § 438.420(b)(5).
(2)
(ii)
(3)
(ii)
(a)
(b)
(1) The adverse benefit determination the MCO, PIHP, or PAHP has made or intends to make.
(2) The reasons for the adverse benefit determination, including the right of the enrollee to be provided upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the enrollee's adverse benefit determination. Such information includes medical necessity criteria, and any processes, strategies, or evidentiary standards used in setting coverage limits.
(3) The enrollee's right to request an appeal of the MCO's, PIHP's, or PAHP's adverse benefit determination, including information on exhausting the MCO's, PIHP's, or PAHP's one level of appeal described at § 438.402(b) and the right to request a State fair hearing consistent with § 438.402(c).
(4) The procedures for exercising the rights specified in this paragraph (b).
(5) The circumstances under which an appeal process can be expedited and how to request it.
(6) The enrollee's right to have benefits continue pending resolution of the appeal, how to request that benefits be continued, and the circumstances, consistent with state policy, under which the enrollee may be required to pay the costs of these services.
(c)
(1) For termination, suspension, or reduction of previously authorized Medicaid-covered services, within the timeframes specified in §§ 431.211, 431.213, and 431.214 of this chapter.
(2) For denial of payment, at the time of any action affecting the claim.
(3) For standard service authorization decisions that deny or limit services, within the timeframe specified in § 438.210(d)(1).
(4) If the MCO, PIHP, or PAHP meets the criteria set forth for extending the timeframe for standard service authorization decisions consistent with § 438.210(d)(1)(ii), it must—
(i) Give the enrollee written notice of the reason for the decision to extend the timeframe and inform the enrollee of the right to file a grievance if he or she disagrees with that decision; and
(ii) Issue and carry out its determination as expeditiously as the enrollee's health condition requires and no later than the date the extension expires.
(5) For service authorization decisions not reached within the timeframes specified in § 438.210(d) (which constitutes a denial and is thus an adverse benefit determination), on the date that the timeframes expire.
(6) For expedited service authorization decisions, within the timeframes specified in § 438.210(d)(2).
(a)
(b)
(1) Acknowledge receipt of each grievance and appeal.
(2) Ensure that the individuals who make decisions on grievances and appeals are individuals—
(i) Who were neither involved in any previous level of review or decision-making nor a subordinate of any such individual.
(ii) Who, if deciding any of the following, are individuals who have the appropriate clinical expertise, as determined by the State, in treating the enrollee's condition or disease.
(A) An appeal of a denial that is based on lack of medical necessity.
(B) A grievance regarding denial of expedited resolution of an appeal.
(C) A grievance or appeal that involves clinical issues.
(iii) Who take into account all comments, documents, records, and other information submitted by the enrollee or their representative without regard to whether such information was submitted or considered in the initial adverse benefit determination.
(3) Provide that oral inquiries seeking to appeal an adverse benefit determination are treated as appeals (to establish the earliest possible filing date for the appeal) and must be confirmed in writing, unless the enrollee or the provider requests expedited resolution.
(4) Provide the enrollee a reasonable opportunity, in person and in writing, to present evidence and testimony and make legal and factual arguments. The MCO, PIHP, or PAHP must inform the enrollee of the limited time available for this sufficiently in advance of the resolution timeframe for appeals as specified in § 438.408(b) and (c) in the case of expedited resolution.
(5) Provide the enrollee and his or her representative the enrollee's case file, including medical records, other documents and records, and any new or additional evidence considered, relied upon, or generated by the MCO, PIHP or PAHP (or at the direction of the MCO, PIHP or PAHP) in connection with the appeal of the adverse benefit determination. This information must be provided free of charge and sufficiently in advance of the resolution timeframe for appeals as specified in § 438.408(b) and (c).
(6) Include, as parties to the appeal—
(i) The enrollee and his or her representative; or
(ii) The legal representative of a deceased enrollee's estate.
(a)
(b)
(2)
(3)
(c)
(i) The enrollee requests the extension; or
(ii) The MCO, PIHP, or PAHP shows (to the satisfaction of the State agency, upon its request) that there is need for additional information and how the delay is in the enrollee's interest.
(2)
(i) Make reasonable efforts to give the enrollee prompt oral notice of the delay.
(ii) Within 2 calendar days give the enrollee written notice of the reason for the decision to extend the timeframe and inform the enrollee of the right to file a grievance if he or she disagrees with that decision.
(iii) Resolve the appeal as expeditiously as the enrollee's health condition requires and no later than the date the extension expires.
(3)
(d)
(2)
(ii) For notice of an expedited resolution, the MCO, PIHP, or PAHP must also make reasonable efforts to provide oral notice.
(e)
(1) The results of the resolution process and the date it was completed.
(2) For appeals not resolved wholly in favor of the enrollees—
(i) The right to request a State fair hearing, and how to do so.
(ii) The right to request and receive benefits while the hearing is pending, and how to make the request.
(iii) That the enrollee may, consistent with state policy, be held liable for the cost of those benefits if the hearing decision upholds the MCO's, PIHP's, or PAHP's adverse benefit determination.
(f)
(i)
(ii)
(A) The review must be at the enrollee's option and must not be required before or used as a deterrent to proceeding to the State fair hearing.
(B) The review must be independent of both the State and MCO, PIHP, or PAHP.
(C) The review must be offered without any cost to the enrollee.
(D) The review must not extend any of the timeframes specified in § 438.408 and must not disrupt the continuation of benefits in § 438.420.
(2)
(3)
(a)
(b)
(c)
(1) Transfer the appeal to the timeframe for standard resolution in accordance with § 438.408(b)(2).
(2) Follow the requirements in § 438.408(c)(2).
The MCO, PIHP, or PAHP must provide information specified in § 438.10(g)(2)(xi) about the grievance and appeal system to all providers and subcontractors at the time they enter into a contract.
(a) The State must require MCOs, PIHPs, and PAHPs to maintain records of grievances and appeals and must review the information as part of its ongoing monitoring procedures, as well as for updates and revisions to the State quality strategy.
(b) The record of each grievance or appeal must contain, at a minimum, all of the following information:
(1) A general description of the reason for the appeal or grievance.
(2) The date received.
(3) The date of each review or, if applicable, review meeting.
(4) Resolution at each level of the appeal or grievance, if applicable.
(5) Date of resolution at each level, if applicable.
(6) Name of the covered person for whom the appeal or grievance was filed.
(c) The record must be accurately maintained in a manner accessible to the state and available upon request to CMS.
(a)
(i) Within 10 calendar days of the MCO, PIHP, or PAHP sending the notice of adverse benefit determination.
(ii) The intended effective date of the MCO's, PIHP's, or PAHP's proposed adverse benefit determination.
(b)
(1) The enrollee files the request for an appeal timely in accordance with § 438.402(c)(1)(ii) and (c)(2)(ii);
(2) The appeal involves the termination, suspension, or reduction of previously authorized services;
(3) The services were ordered by an authorized provider;
(4) The period covered by the original authorization has not expired; and
(5) The enrollee timely files for continuation of benefits.
(c)
(1) The enrollee withdraws the appeal or request for state fair hearing.
(2) The enrollee fails to request a state fair hearing and continuation of benefits within 10 calendar days after the MCO, PIHP, or PAHP sends the notice of an adverse resolution to the enrollee's appeal under § 438.408(d)(2).
(3) A State fair hearing office issues a hearing decision adverse to the enrollee.
(d)
(a)
(b)
(a)
(1) Section 1128 of the Act provides for the exclusion of certain individuals and entities from participation in the Medicaid program.
(2) Section 1128J(d) of the Act requires that persons who have received an overpayment under Medicaid report and return the overpayment within 60 days after the date on which the overpayment was identified.
(3) Section 1902(a)(4) of the Act requires that the State plan provide for methods of administration that the Secretary finds necessary for the proper and efficient operation of the plan.
(4) Section 1902(a)(19) of the Act requires that the State plan provide the safeguards necessary to ensure that eligibility is determined and services are provided in a manner consistent with simplicity of administration and the best interests of the beneficiaries.
(5) Section 1902(a)(27) of the Act requires States to enroll persons or institutions that provide services under the State plan.
(6) Section 1902(a)(68) of the Act requires that any entity that receives or makes annual payments under the State plan of at least $5,000,000 must establish certain minimum written policies relating to the Federal False Claims Act.
(7) Section 1902(a)(77) of the Act requires that States comply with provider and supplier screening, oversight, and reporting requirements described in section 1902(kk)(1) of the Act.
(8) Section 1902(a)(80) of the Act prohibits payments for items or services provided under the State plan or under a waiver to any financial institution or entity located outside of the United States.
(9) Section 1902(kk)(7) of the Act requires States to enroll physicians or other professionals that order or refer services under the State plan.
(10) Section 1903(i) of the Act prohibits FFP for amounts expended by MCOs or PCCMs for providers excluded by Medicare, Medicaid, or CHIP, except for emergency services.
(11) Section 1903(m) of the Act establishes conditions for payments to the State for contracts with MCOs.
(12) Section 1932(d)(1) of the Act prohibits MCOs and PCCMs from knowingly having certain types of relationships with individuals and entities debarred under Federal regulations from participating in specified activities, or with affiliates of those individuals.
(b)
(c)
(1) States must comply with §§ 438.602(a), 438.602(c) through (h), 438.604, 438.606, 438.608(a), and 438.608(c) and (d), no later than the rating period for contracts starting on or after July 1, 2017.
(2) States must comply with § 438.602(b) and § 438.608(b) no later than the rating period for contracts beginning on or after July 1, 2018.
(a)
(b)
(2) MCOs, PIHPs, and PAHPs may execute network provider agreements pending the outcome of the process in paragraph (b)(1) of this section of up to 120 days, but must terminate a network provider immediately upon notification from the State that the network provider cannot be enrolled, or the expiration of one 120 day period without enrollment of the provider, and notify affected enrollees.
(c)
(d)
(e)
(f)
(g)
(1) The MCO, PIHP, PAHP, or PCCM entity contract.
(2) The data at § 438.604(a)(5).
(3) The name and title of individuals included in § 438.604(a)(6).
(4) The results of any audits under paragraph (e) of this section.
(h)
(i)
(a)
(1) Encounter data in the form and manner described in § 438.818.
(2) Data on the basis of which the State certifies the actuarial soundness of capitation rates to an MCO, PIHP or PAHP under § 438.3, including base data described in § 438.5(c) that is generated by the MCO, PIHP or PAHP.
(3) Data on the basis of which the State determines the compliance of the MCO, PIHP, or PAHP with the medical loss ratio requirement described in § 438.8.
(4) Data on the basis of which the State determines that the MCO, PIHP or PAHP has made adequate provision against the risk of insolvency as required under § 438.116.
(5) Documentation described in § 438.207(b) on which the State bases its certification that the MCO, PIHP or PAHP has complied with the State's requirements for availability and accessibility of services, including the adequacy of the provider network, as set forth in § 438.206.
(6) Information on ownership and control described in § 455.104 of this chapter from MCOs, PIHPs, PAHPs, PCCMs, PCCM entities, and subcontractors as governed by § 438.230.
(7) The annual report of overpayment recoveries as required in § 438.608(d)(3).
(b)
(a)
(b)
(c)
(a)
(1) A compliance program that includes, at a minimum, all of the following elements:
(i) Written policies, procedures, and standards of conduct that articulate the organization's commitment to comply with all applicable requirements and standards under the contract, and all applicable Federal and State requirements.
(ii) The designation of a Compliance Officer who is responsible for developing and implementing policies, procedures, and practices designed to ensure compliance with the requirements of the contract and who reports directly to the Chief Executive Officer and the board of directors.
(iii) The establishment of a Regulatory Compliance Committee on the Board of Directors and at the senior management level charged with overseeing the organization's compliance program and its compliance with the requirements under the contract.
(iv) A system for training and education for the Compliance Officer, the organization's senior management, and the organization's employees for the Federal and State standards and requirements under the contract.
(v) Effective lines of communication between the compliance officer and the organization's employees.
(vi) Enforcement of standards through well-publicized disciplinary guidelines.
(vii) Establishment and implementation of procedures and a system with dedicated staff for routine internal monitoring and auditing of compliance risks, prompt response to compliance issues as they are raised, investigation of potential compliance problems as identified in the course of self-evaluation and audits, correction of such problems promptly and thoroughly (or coordination of suspected criminal acts with law enforcement agencies) to reduce the potential for recurrence, and ongoing compliance with the requirements under the contract.
(2) Provision for prompt reporting of all overpayments identified or recovered, specifying the overpayments due to potential fraud, to the State.
(3) Provision for prompt notification to the State when it receives information about changes in an enrollee's circumstances that may affect the enrollee's eligibility including all of the following:
(i) Changes in the enrollee's residence;
(ii) The death of an enrollee.
(4) Provision for notification to the State when it receives information about a change in a network provider's circumstances that may affect the network provider's eligibility to participate in the managed care program, including the termination of the provider agreement with the MCO, PIHP or PAHP.
(5) Provision for a method to verify, by sampling or other methods, whether services that have been represented to have been delivered by network providers were received by enrollees and the application of such verification processes on a regular basis.
(6) In the case of MCOs, PIHPs, or PAHPs that make or receive annual payments under the contract of at least $5,000,000, provision for written policies for all employees of the entity, and of any contractor or agent, that provide detailed information about the
(7) Provision for the prompt referral of any potential fraud, waste, or abuse that the MCO, PIHP, or PAHP identifies to the State Medicaid program integrity unit or any potential fraud directly to the State Medicaid Fraud Control Unit.
(8) Provision for the MCO's, PIHP's, or PAHP's suspension of payments to a network provider for which the State determines there is a credible allegation of fraud in accordance with § 455.23 of this chapter.
(b)
(c)
(1) Provides written disclosure of any prohibited affiliation under § 438.610.
(2) Provides written disclosures of information on ownership and control required under § 455.104 of this chapter.
(3) Reports to the State within 60 calendar days when it has identified the capitation payments or other payments in excess of amounts specified in the contract.
(d)
(i) The retention policies for the treatment of recoveries of all overpayments from the MCO, PIHP, or PAHP to a provider, including specifically the retention policies for the treatment of recoveries of overpayments due to fraud, waste, or abuse.
(ii) The process, timeframes, and documentation required for reporting the recovery of all overpayments.
(iii) The process, timeframes, and documentation required for payment of recoveries of overpayments to the State in situations where the MCO, PIHP, or PAHP is not permitted to retain some or all of the recoveries of overpayments.
(iv) This provision does not apply to any amount of a recovery to be retained under False Claims Act cases or through other investigations.
(2) Each MCO, PIHP, or PAHP requires and has a mechanism for a network provider to report to the MCO, PIHP or PAHP when it has received an overpayment, to return the overpayment to the MCO, PIHP or PAHP within 60 calendar days after the date on which the overpayment was identified, and to notify the MCO, PIHP or PAHP in writing of the reason for the overpayment.
(3) Each MCO, PIHP, or P AHP must report annually to the State on their recoveries of overpayments.
(4) The State must use the results of the information and documentation collected in paragraph (d)(1) of this section and the report in paragraph (d)(3) of this section for setting actuarially sound capitation rates for each MCO, PIHP, or PAHP consistent with the requirements in § 438.4.
(a) An MCO, PIHP, PAHP, PCCM, or PCCM entity may not knowingly have a relationship of the type described in paragraph (c) of this section with the following:
(1) An individual or entity that is debarred, suspended, or otherwise excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in nonprocurement activities under regulations issued under Executive Order No. 12549 or under guidelines implementing Executive Order No. 12549.
(2) An individual or entity who is an affiliate, as defined in the Federal Acquisition Regulation at 48 CFR 2.101, of a person described in paragraph (a)(1) of this section.
(b) An MCO, PIHP, PAHP, PCCM, or PCCM entity may not have a relationship with an individual or entity that is excluded from participation in any Federal health care program under section 1128 or 1128A of the Act.
(c) The relationships described in paragraph (a) of this section, are as follows:
(1) A director, officer, or partner of the MCO, PIHP, PAHP, PCCM. or PCCM entity.
(2) A subcontractor of the MCO, PIHP, PAHP, PCCM, or PCCM entity, as governed by § 438.230.
(3) A person with beneficial ownership of 5 percent or more of the MCO's, PIHP's, PAHP's, PCCM's, or PCCM entity's equity.
(4) A network provider or person with an employment, consulting or other arrangement with the MCO, PIHP, PAHP, PCCM, or PCCM entity for the provision of items and services that are significant and material to the MCO's, PIHP's, PAHP's, PCCM's, or PCCM entity's obligations under its contract with the State.
(d) If a State finds that an MCO, PIHP, PAHP, PCCM, or PCCM entity is not in compliance with paragraphs (a) and (b) of this section, the State:
(1) Must notify the Secretary of the noncompliance.
(2) May continue an existing agreement with the MCO, PIHP, PAHP, PCCM, or PCCM entity unless the Secretary directs otherwise.
(3) May not renew or otherwise extend the duration of an existing agreement with the MCO, PIHP, PAHP, PCCM, or PCCM entity unless the Secretary provides to the State and to Congress a written statement describing compelling reasons that exist for renewing or extending the agreement despite the prohibited affiliations.
(4) Nothing in this section must be construed to limit or otherwise affect any remedies available to the U.S. under sections 1128, 1128A or 1128B of the Act.
(e)
(a) Each State that contracts with an MCO must, and each State that contracts with a PCCM or PCCM entity may, establish intermediate sanctions (which may include those specified in § 438.702) that it may impose if it makes any of the determinations specified in paragraphs (b) through (d) of this section. The State may base its determinations on findings from onsite surveys, enrollee or other complaints, financial status, or any other source.
(b) A State determines that an MCO acts or fails to act as follows:
(1) Fails substantially to provide medically necessary services that the MCO is required to provide, under law or under its contract with the State, to an enrollee covered under the contract.
(2) Imposes on enrollees premiums or charges that are in excess of the premiums or charges permitted under the Medicaid program.
(3) Acts to discriminate among enrollees on the basis of their health status or need for health care services. This includes termination of enrollment or refusal to reenroll a beneficiary, except as permitted under the Medicaid program, or any practice that would reasonably be expected to discourage enrollment by beneficiaries whose
(4) Misrepresents or falsifies information that it furnishes to CMS or to the State.
(5) Misrepresents or falsifies information that it furnishes to an enrollee, potential enrollee, or health care provider.
(6) Fails to comply with the requirements for physician incentive plans, as set forth (for Medicare) in §§ 422.208 and 422.210 of this chapter.
(c) A State determines that an MCO, PCCM or PCCM entity has distributed directly, or indirectly through any agent or independent contractor, marketing materials that have not been approved by the State or that contain false or materially misleading information.
(d) A State determines that—
(1) An MCO has violated any of the other requirements of sections 1903(m) or 1932 of the Act, or any implementing regulations.
(2) A PCCM or PCCM entity has violated any of the other applicable requirements of sections 1932 or 1905(t)(3) of the Act, or any implementing regulations.
(3) For any of the violations under paragraphs (d)(1) and (2) of this section, only the sanctions specified in § 438.702(a)(3), (4), and (5) may be imposed.
(a) The types of intermediate sanctions that a State may impose under this subpart include the following:
(1) Civil money penalties in the amounts specified in § 438.704.
(2) Appointment of temporary management for an MCO as provided in § 438.706.
(3) Granting enrollees the right to terminate enrollment without cause and notifying the affected enrollees of their right to disenroll.
(4) Suspension of all new enrollment, including default enrollment, after the date the Secretary or the State notifies the MCO of a determination of a violation of any requirement under sections 1903(m) or 1932 of the Act.
(5) Suspension of payment for beneficiaries enrolled after the effective date of the sanction and until CMS or the State is satisfied that the reason for imposition of the sanction no longer exists and is not likely to recur.
(b) State agencies retain authority to impose additional sanctions under State statutes or State regulations that address areas of noncompliance specified in § 438.700, as well as additional areas of noncompliance. Nothing in this subpart prevents State agencies from exercising that authority.
(a)
(b)
(2) The limit is $100,000 for each determination under § 438.700(b)(3) or (4).
(3) The limit is $15,000 for each beneficiary the State determines was not enrolled because of a discriminatory practice under § 438.700(b)(3). (This is subject to the overall limit of $100,000 under paragraph (b)(2) of this section).
(c)
(a)
(1) There is continued egregious behavior by the MCO, including but not limited to behavior that is described in § 438.700, or that is contrary to any requirements of sections 1903(m) and 1932 of the Act.
(2) There is substantial risk to enrollees' health.
(3) The sanction is necessary to ensure the health of the MCO's enrollees—
(i) While improvements are made to remedy violations under § 438.700.
(ii) Until there is an orderly termination or reorganization of the MCO.
(b)
(c)
(d)
A State has the authority to terminate an MCO, PCCM or PCCM entity contract and enroll that entity's enrollees in other MCOs, PCCMs or PCCM entities, or provide their Medicaid benefits through other options included in the State plan, if the State determines that the MCO, PCCM or PCCM entity has failed to do either of the following:
(a) Carry out the substantive terms of its contract.
(b) Meet applicable requirements in sections 1932, 1903(m), and 1905(t) of the Act.
(a)
(1) The basis and nature of the sanction.
(2) Any other appeal rights that the State elects to provide.
(b)
(2)
(i) Give the MCO, PCCM or PCCM entity written notice of its intent to terminate, the reason for termination, and the time and place of the hearing.
(ii) After the hearing, give the entity written notice of the decision affirming or reversing the proposed termination of the contract and, for an affirming decision, the effective date of termination.
(iii) For an affirming decision, give enrollees of the MCO, PCCM or PCCM entity notice of the termination and information, consistent with § 438.10, on their options for receiving Medicaid services following the effective date of termination.
After a State notifies an MCO, PCCM or PCCM entity that it intends to
(a) Give the entity's enrollees written notice of the State's intent to terminate the contract.
(b) Allow enrollees to disenroll immediately without cause.
(a) The State must give CMS written notice whenever it imposes or lifts a sanction for one of the violations listed in § 438.700.
(b) The notice must adhere to all of the following requirements:
(1) Be given no later than 30 days after the State imposes or lifts a sanction.
(2) Specify the affected MCO, the kind of sanction, and the reason for the State's decision to impose or lift a sanction.
(a) The State plan must include a plan to monitor for violations that involve the actions and failures to act specified in this part and to implement the provisions of this part.
(b) A contract with an MCO must provide that payments provided for under the contract will be denied for new enrollees when, and for so long as, payment for those enrollees is denied by CMS under § 438.730(e).
(a)
(b)
(2) When the State decides to recommend imposing the sanction described in paragraph (e) of this section, this recommendation becomes CMS' decision, for purposes of section 1903(m)(5)(B)(ii) of the Act, unless CMS rejects this recommendation within 15 days.
(c)
(1) Gives the MCO written notice of the nature and basis of the proposed sanction.
(2) Allows the MCO 15 days from the date it receives the notice to provide evidence that it has not acted or failed to act in the manner that is the basis for the recommended sanction.
(3) May extend the initial 15-day period for an additional 15 days if—
(i) The MCO submits a written request that includes a credible explanation of why it needs additional time.
(ii) The request is received by CMS before the end of the initial period.
(iii) CMS has not determined that the MCO's conduct poses a threat to an enrollee's health or safety.
(d)
(i) Conducts an informal reconsideration that includes review of the evidence by a State agency official who did not participate in the original recommendation.
(ii) Gives the MCO a concise written decision setting forth the factual and legal basis for the decision.
(iii) Forwards the decision to CMS.
(2) The State's decision under paragraph (d)(1)(ii) of this section becomes CMS' decision unless CMS reverses or modifies the decision within 15 days from date of receipt by CMS.
(3) If CMS reverses or modifies the State decision, the agency sends the MCO a copy of CMS' decision.
(e)
(i) If a CMS determination that an MCO has acted or failed to act, as described in paragraphs (b)(1) through (6) of § 438.700, is affirmed on review under paragraph (d) of this section.
(ii) If the CMS determination is not timely contested by the MCO under paragraph (c) of this section.
(2) Under § 438.726(b), CMS' denial of payment for new enrollees automatically results in a denial of agency payments to the MCO for the same enrollees. (A new enrollee is an enrollee that applies for enrollment after the effective date in paragraph (f)(1) of this section.)
(f)
(2) If the MCO seeks reconsideration, the following rules apply:
(i) Except as specified in paragraph (d)(2) of this section, the sanction is effective on the date specified in CMS' reconsideration notice.
(ii) If CMS, in consultation with the State, determines that the MCO's conduct poses a serious threat to an enrollee's health or safety, the sanction may be made effective earlier than the date of the agency's reconsideration decision under paragraph (d)(1)(ii) of this section.
(g)
(2) At the same time that the State sends notice to the MCO under paragraph (c)(1) of this section, CMS forwards a copy of the notice to the OIG.
(3) CMS conveys the determination described in paragraph (b) of this section to the OIG for consideration of possible imposition of civil money penalties under section 1903(m)(5)(A) of the Act and part 1003 of this title. In accordance with the provisions of part 1003, the OIG may impose civil money penalties on the MCO in addition to, or in place of, the sanctions that may be imposed under this section.
FFP is available in expenditures for payments under an MCO contract only for the periods during which the contract—
(a) Meets the requirements of this part; and
(b) Is in effect.
(a)
(1) CMS has confirmed that the contractor meets the definition of an MCO or is one of the entities described in paragraphs (b)(2) through (5) of § 438.3.
(2) The contract meets all the requirements of section 1903(m)(2)(A) of the Act, the applicable requirements of section 1932 of the Act, and the provisions of this part.
(b)
(1) For 1998, the threshold is $1,000,000.
(2) For subsequent years, the amount is increased by the percentage increase in the consumer price index for all urban consumers.
(c) FFP is not available in an MCO contract that does not have prior approval from CMS under paragraph (b) of this section.
(a)
(b)
(2) An entity that has a substantial contractual relationship as defined in § 431.55(h)(3) of this chapter, either directly or indirectly, with an individual convicted of certain crimes as described in section 1128(b)(8)(B) of the Act or an individual described in § 438.610(a) and (b).
(3) An entity that employs or contracts, directly or indirectly, for the furnishing of health care, utilization review, medical social work, or administrative services, with one of the following:
(i) Any individual or entity described in § 438.610(a) and (b).
(ii) Any individual or entity that would provide those services through an individual or entity described in § 438.610(a) and (b).
(a)
(b)
(1)
(i) Is an MCO, PIHP, PAHP, PCCM, PCCM entity or other health care provider in the State;
(ii) Is owned or controlled by an MCO, PIHP, PAHP, PCCM, PCCM entity or other health care provider in the State; or
(iii) Owns or controls an MCO, PIHP, PAHP, PCCM, PCCM entity, or other health care provider in the State.
(2)
(i) Has any direct or indirect financial interest in any entity or health care provider that furnishes services in the State in which the broker or subcontractor provides enrollment services;
(ii) Has been excluded from participation under Title XVIII or XIX of the Act;
(iii) Has been debarred by any Federal agency; or
(iv) Has been, or is now, subject to civil money penalties under the Act.
(3)
(a) Under a risk contract, the total amount the State agency pays for carrying out the contract provisions is a medical assistance cost.
(b) Under a nonrisk contract—
(1) The amount the State agency pays for the furnishing of medical services to eligible beneficiaries is a medical assistance cost; and
(2) The amount the State agency pays for the contractor's performance of other functions is an administrative cost.
State expenditures for the person or entity providing the services outlined in § 438.71(d) are considered necessary for the proper and efficient operation of the State plan and thus eligible for FFP only if all of the following conditions are met:
(a) Costs must be supported by an allocation methodology that appears in the State's approved Public Assistance Cost Allocation Plan in § 433.34 of this chapter.
(b) The costs do not duplicate payment for activities that are already being offered or should be provided by other entities or paid by other programs.
(c) The person or entity providing the services must meet the requirements in § 438.810(b)(1) and (2).
(d) The initial contract or MOA for services performed has been reviewed and approved by CMS.
(a) FFP is available for expenditures under an MCO, PIHP, or PAHP contract only if the State meets the following conditions for providing enrollee encounter data to CMS:
(1) Enrollee encounter data reports must comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) security and privacy standards and be submitted in the format required by the Medicaid Statistical Information System or format required by any successor system to the Medicaid Statistical Information System.
(2) States must ensure that enrollee encounter data is validated for accuracy and completeness as required under § 438.242 before submitting data to CMS. States must also validate that the data submitted to CMS is a complete and accurate representation of the information submitted to the State by the MCOs, PIHPs, and PAHPs.
(3) States must cooperate with CMS to fully comply with all encounter data reporting requirements of the Medicaid Statistical Information System or any successor system.
(b) CMS will assess a State's submission to determine if it complies with current criteria for accuracy and completeness.
(c) If, after being notified of compliance issues under paragraph (b) of this section the State is unable to make a data submission compliant, CMS will take appropriate steps to defer and/or disallow FFP on all or part of an MCO, PIHP, or PAHP contract in a manner based on the enrollee and specific service type of the noncompliant data. Any deferral and/or disallowance of FFP will be effectuated utilizing the processes specified in §§ 430.40 and 430.42 of this chapter.
Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
The State must have methods to promote access and delivery of services in a culturally competent manner to all beneficiaries, including those with limited English proficiency, diverse
Section 1102 of the Social Security Act (42 U.S.C. 1302).
The additions and revision read as follows:
(1) Outpatient hospital services.
(2) Rural health clinic services.
(3) Federally Qualified Health Center (FQHC) services.
(4) Other laboratory and X-ray services.
(5) Nursing facility (NF) services.
(6) Early and periodic screening, diagnostic, and treatment (EPSDT) services.
(7) Family planning services.
(8) Physician services.
(9) Home health services.
(1) A Federally qualified HMO that meets the requirements of subpart I of part 489 of this chapter; or
(2) Makes the services it provides to its CHIP enrollees as accessible (in terms of timeliness, amount, duration, and scope) as those services are to other CHIP beneficiaries within the area served by the entity and
(3) Meets the solvency standards of § 438.116 of this chapter.
(1) Provides services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.
(2) Does not provide or arrange for, and is not otherwise responsible for the provision of any inpatient hospital or institutional services for its enrollees.
(3) Does not have a comprehensive risk contract.
(1) Provides services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.
(2) Provides, arranges for, or otherwise has responsibility for the provision of any inpatient hospital or institutional services for its enrollees.
(3) Does not have a comprehensive risk contract.
(1) A PCCM contracts with the State to furnish case management services (which include the location, coordination and monitoring of primary health care services) to CHIP beneficiaries; or
(2) A PCCM entity contracts with the State to provide a defined set of functions to CHIP beneficiaries.
(1) Provision of intensive telephonic or face-to-face case management, including operation of a nurse triage advice line.
(2) Development of enrollee care plans.
(3) Execution of contracts with and/or oversight responsibilities for the activities of fee-for-service providers in the fee-for-service program.
(4) Provision of payments to fee-for-service providers on behalf of the State.
(5) Provision of enrollee outreach and education activities.
(6) Operation of a customer service call center.
(7) Review of provider claims, utilization and practice patterns to conduct provider profiling and/or practice improvement.
(8) Implementation of quality improvement activities including administering enrollee satisfaction surveys or collecting data necessary for performance measurement of providers.
(9) Coordination with behavioral health systems/providers.
(10) Coordination with long-term services and supports systems/providers.
(1) A physician assistant.
(2) A nurse practitioner.
(3) A certified nurse-midwife.
(1) Assumes risk for the cost of the services covered under the contract.
(2) Incurs loss if the cost of furnishing the services exceeds the payments under the contract.
(a)
(1) That the State plan is in substantial noncompliance with the requirements of Title XXI of the Act or the regulations in this part; or
(2) That the State is conducting its program in substantial noncompliance with either the State plan or the requirements of Title XXI of the Act or the regulations in this part. (Hearings are generally not called until a reasonable effort has been made to resolve the issues through conferences and discussions. These efforts may be continued even if a date and place have been set for the hearing.)
(3) For purposes of this paragraph (a), substantial non-compliance includes, but is not limited to, failure to comply with requirements that significantly affect federal or state oversight or state reporting.
(a) A State must submit to CMS a written assurance that Title XXI services will be provided in an effective and efficient manner. The State must submit the assurance—
(1) With the initial State plan; or
(2) For States with approved plans, with the first request to amend the approved plan.
(b) A State must provide for free and open competition, to the maximum extent practical, in the bidding of all procurement contracts for coverage or other services in accordance with the procurement requirements of 45 CFR part 75, as applicable.
(c) All contracts under this part must include provisions that define a sound and complete procurement contract, as required by 45 CFR part 75, as applicable.
(a)
(a)
(1) Section 2101(a) of the Act, which provides that the purpose of Title XXI is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner.
(2) Section 2103(f)(3) and 2107(e)(1)(M) of the Act, which apply certain provisions of Title XIX related to Medicaid managed care to CHIP.
(3) Sections 2107(b) and 2107(e)(2) of the Act, which relate to program integrity.
(b)
(c)
(a)
(b)
(c)
(d)
(e)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(2) Contracts with PCCMs must comply with the requirements of paragraph (o) of this section; § 457.1207; § 457.1240(b) (cross-referencing § 438.330(b)(3), (c), and (e) of this chapter); § 457.1240(e) (cross-referencing § 438.340 of this chapter); and § 457.1250(a) (cross-referencing § 438.350 of this chapter).
(o)
(p)
(q)
(a) A state must use payment rates based on public or private payment rates for comparable services for comparable populations, consistent with actuarially sound principles as defined at § 457.10. This requirement for using actuarially sound principles to develop payment rates does not prohibit a state from (implementing value-based purchasing models for provider reimbursement, such as pay for performance arrangements, bundled payments, or other service payment models intended to recognize value or outcomes over volume of services; such alternate payment models should be developed using actuarially sound principles to the extent applicable.
(b) A State may establish higher rates than permitted under paragraph (a) of this section if such rates are necessary to ensure sufficient provider participation or provider access or to enroll providers who demonstrate exceptional efficiency or quality in the provision of services.
(c) The rates must be designed to reasonably achieve a medical loss ratio standard, calculated in accordance with the provisions of § 438.8 of this chapter, that—
(1) Is equal to at least 85 percent for the rate year; and
(2) Provides for reasonable administrative costs.
(d) The State must provide to CMS, if requested, a description of the manner in which rates were developed in accordance with the requirements of paragraphs (a), (b), or (c) of this section.
(e) The state must comply with the requirements related to medical loss ratios in accordance with the terms of § 438.74 of this chapter, except that the description of the reports received from the MCOs PIHPs and PAHPs under to § 438.8(k) of this chapter will be submitted independently, and not with the actuarial certification described in § 438.7 of this chapter.
(f) The state must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the requirements § 438.8 of this chapter.
(a) For purposes of this section Non-Emergency Medical Transportation (NEMT) Prepaid Ambulatory Health Plan (PAHP) means an entity that provides only NEMT services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.
(b) The following requirements and options apply to NEMT PAHPs, NEMT PAHP contracts, and States in connection with NEMT PAHPs, to the same extent that they apply to PAHPs, PAHP contracts, and States in connection with PAHPs.
(1) All contract provisions in § 457.1201 except those set forth in § 457.1201(h) (related to physician incentive plans) § 457.1201(l) (related to mental health parity).
(2) The information requirements in § 457.1207.
(3) The provision against provider discrimination in § 457.1208.
(4) The State responsibility provisions in §§ 457.1212 and 457.1214, and § 438.62(a) of this chapter, as cross-referenced in § 457.1216.
(5) The provisions on enrollee rights and protections in §§ 457.1220, 457.1222, 457.1224, and 457.1226.
(6) The PAHP standards in § 438.206(b)(1) of this chapter, as cross-referenced by §§ 457.1230(a), 457.1230(d), and 457.1233(a), (b) and (d).
(7) An enrollee's right to a State review under subpart K of this part.
(8) Prohibitions against affiliations with individuals debarred or excluded by Federal agencies in § 438.610 of this chapter, as cross referenced by § 457.1285.
(9) Requirements relating to contracts involving Indians, Indian Health Care Providers, and Indian managed care entities in § 457.1209.
The State must provide, or ensure its contracted MCO, PAHP, PIHP, PCCM and PCCM entities provide, all enrollment notices, informational materials, and instructional materials related to enrollees and potential enrollees in accordance with the terms of § 438.10 of this chapter.
The state must ensure through its contracts that each MCO, PIHP, and PAHP follow the requirements related to the prohibition on provider discrimination in § 438.12 of this chapter.
The State must follow, and ensure through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows, the requirements related to Indians, IHCPs, and IMCEs in accordance with the terms of § 438.14 of this chapter.
(a)
(i) Assign beneficiaries to a qualified MCO, PIHP, PAHP, PCCM or PCCM entity. To be qualified, the MCO, PIHP, PAHP, PCCM or PCCM entity must:
(A) Not be subject to the intermediate sanction described in § 438.702(a)(4) of this chapter.
(B) Have capacity to enroll beneficiaries.
(ii) Maximize continuation of existing provider-beneficiary relationships. An “existing provider-beneficiary relationship” is one in which the provider was the main source of CHIP services for the beneficiary during the previous year. This may be established through State records of previous managed care enrollment or fee-for-service experience, encounter data, or through contact with the beneficiary.
(iii) If the approach in paragraph (a)(1)(ii) of this section is not possible, the State must distribute the beneficiaries equitably among the MCOs, PIHPs, PAHPs, PCCMs and PCCM entities. The State may not arbitrarily exclude any MCO, PIHP, PAHP, PCCM or PCCM entity from being considered.
(2) The State may consider additional reasonable criteria to conduct the default enrollment process, including the previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, accessibility of provider offices for people with disabilities (when appropriate), and other reasonable criteria that support the objectives of the managed care program.
(3) The State must send a confirmation of the enrollee's managed care enrollment to the enrollee within 5 calendar days of the date such enrollment is processed by the State. The confirmation must clearly explain the enrollee's right to disenroll within 90 days from the effective date of the enrollment.
(b)
(c)
(1) Include the MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities available to the potential enrollee;
(2) Explains how to select an MCO, PIHP, PAHP, PCCM, or PCCM entity;
(3) Explain the implications of making or not making an active choice of an MCO, PIHP, PAHP, PCCM or PCCM entity;
(4) Explains the length of the enrollment period as well as the disenrollment policies in § 457.1212; and
(5) Comply with the information requirements in § 457.1207 and accessibility standards established under § 457.340.
The State must comply with and ensure, through its contracts, that each MCO, PAHP, PIHP, PCCM and PCCM entity complies with the disenrollment requirements in accordance with the terms of § 438.56 of this chapter, except that references to fair hearings should be read to refer to reviews as described in subpart K of this part.
The State must have in effect safeguards against conflict of interest in accordance with the terms of § 438.58 of this chapter.
The State must follow the requirements related to continued services to enrollees in accordance with the terms of § 438.62 of this chapter.
The State must develop network adequacy standards in accordance with the terms of § 438.68 of this chapter, and, ensure through its contracts, that each MCO, PAHP, and PIHP meets such standards.
The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follow the enrollee rights requirements in accordance with the terms of § 438.100 of this chapter.
The State must ensure, through its contracts, that each MCO, PIHP, and PAHP protects communications between providers and enrollees in accordance with the terms of § 438.102 of this chapter.
The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows the requirements related to marketing activities in accordance with the terms of § 438.104 of this chapter, except § 438.104(c) of this chapter related to state agency review does not apply.
The State must ensure, through its contracts, that enrollees of MCOs, PIHPs, and PAHPs are not held liable for services or debts of the MCO, PIHP, or PAHPs in accordance with the terms of § 438.106 of this chapter.
The State must ensure that emergency services, as defined in § 457.10 of this chapter, are available and accessible to enrollees in accordance with the terms of § 438.114 of this chapter.
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(d)
(e)
(f)
(a) Each State that contracts with MCOs, PIHPs, or PAHPs must follow all applicable external quality review requirements as set forth in §§ 438.350, 438.352, 438.354, 438.356, 438.358, 438.360 (only with respect to nonduplication of EQR activities with private accreditation) and 438.364 of this chapter. In the case of a contract with a PCCM entity described in § 457.1240(f), § 438.350 of this chapter applies.
(b) A State may amend an existing EQRO contract to include the performance of EQR-related activities and/or EQR in accordance with paragraph (a) of this section.
The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the grievance and appeals requirements and procedures in accordance with the terms of subpart F of part 438 of this chapter, except that the terms of § 438.420 of this chapter do not apply and that references to fair hearings should be read to refer to reviews as described in subpart K of this part.
The State must comply, and ensure that its contracted MCOs comply, with the sanctions requirements in accordance with the terms of subpart I of part 438 of this chapter.
(a) The State must assure that any entity seeking to contract as an MCO, PAHP, or PIHP under a separate child health program has administrative and management arrangements or procedures designed to safeguard against fraud and abuse.
(b) * * *
(1) Enforce MCO, PAHP, and PIHP compliance with all applicable Federal and State statutes, regulations, and standards.
(2) Prohibit MCOs, PAHPs, and PIHPs from conducting any unsolicited personal contact with a potential enrollee by an employee or agent of the MCO, PAHP, or PIHP for the purpose of influencing the individual to enroll with the entity.
(3) Include a mechanism for MCOs, PAHPs, and PIHPs to report to the State, to CMS, or to the Office of Inspector General (OIG) as appropriate, information on violations of law by subcontractors, providers, or enrollees of an MCO, PAHP, or PIHP and other individuals.
(d) The State may inspect, evaluate, and audit MCOs, PIHPs, and PAHPs at any time, as necessary, in instances where the State determines that there is a reasonable possibility of fraudulent or abusive activity.
The state must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438, except that the terms of § 438.604(a)(2) of this chapter do not apply.
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of proposed rulemaking (NPRM).
This NPRM proposes a new Federal Motor Vehicle Safety Standard (FMVSS) No. 217a, “Anti-ejection glazing for bus portals,” to drive the installation of advanced glazing in high-occupancy buses (generally, over-the-road buses (of any weight) and non-over-the-road buses with a gross vehicle weight rating greater than 11,793 kilograms (26,000 pounds). The new standard would specify impactor testing of glazing material. In the tests, a 26 kilogram (57 pound) impactor would be propelled from inside a test vehicle toward the window glazing at 21.6 kilometers/hour (13.4 miles per hour). The impactor and impact speed would simulate the loading from an average size unrestrained adult male impacting a window on the opposite side of a large bus in a rollover. Performance requirements would apply to side and rear windows, and to glass panels and windows on the roof to mitigate partial and complete ejection of passengers from these windows and to ensure that emergency exits remain operable after a rollover crash. NHTSA also proposes to limit the protrusions of emergency exit latches into emergency exit openings of windows to ensure they do not unduly hinder emergency egress.
This NPRM is among the rulemakings issued pursuant to NHTSA's 2007 Approach to Motorcoach Safety and DOT's Departmental Motorcoach Safety Action Plan. In addition, to the extent warranted under the National Traffic and Motor Vehicle Safety Act, establishing advanced glazing standards for the side and rear portals of the subject buses would fulfill a statutory provision of the Motorcoach Enhanced Safety Act of 2012 (incorporated and passed as part of the Moving Ahead for Progress in the 21st Century Act).
Comments must be received on or before July 5, 2016.
You may submit comments to the docket number identified in the heading of this document by any of the following methods:
•
•
•
•
Regardless of how you submit your comments, please mention the docket number of this document.
You may also call the Docket at 202–366–9324.
For non-legal issues: Ms. Shashi Kuppa, Office of Crashworthiness Standards (telephone: 202–366–3827) (fax: 202–493–2990). For legal issues: Ms. Deirdre Fujita, Office of the Chief Counsel (telephone: 202–366–2992) (fax: 202–366–3820). The mailing address for these officials is: National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590.
One of the factors NHTSA considers in determining the priorities of our rulemaking projects is to ensure the protection of passengers in high-occupancy vehicles. In 2007, NHTSA published a comprehensive plan pertaining to improvements in motorcoach safety.
Work on NHTSA's safety plan is ongoing. In 2013, the agency published a final rule
Today's NPRM complements the 2014 rollover structural integrity NPRM to further minimize passenger and driver ejection from motorcoaches and other large buses. It also enhances emergency evacuation from the vehicle.
This advanced glazing NPRM also fulfills a statutory mandate on motorcoach safety set forth in the “Moving Ahead for Progress in the 21st Century Act” (MAP–21). On July 6, 2012, President Obama signed MAP–21, which incorporated the “Motorcoach Enhanced Safety Act of 2012” in subtitle G (sections 32701
This NPRM proposes new requirements, in an FMVSS No. 217a, to drive the installation of advanced glazing in portals
The glazing types currently used in the motorcoach industry for side windows are single-pane laminated glass, single-pane tempered (or “toughened”) glass, or a double-pane of either laminated or tempered glass or a combination of both. A single-pane laminated glass actually contains two thin glass layers held together by an interlayer, typically of polyvinyl butyral (PVB). The interlayer works to keep the outer layers of glass bonded together in the event they break or crack, and prevents the formation of large shards of sharp glass. Laminated glass may crack or splinter upon impact with the ground, but can still provide a means of keeping passengers within the occupant compartment of the bus if the glazing is retained within the window frame, the PVB interlayer is not excessively torn or punctured, and the window latch remains closed. We believe that laminated glass could meet the requirements proposed in this NPRM. We consider glass meeting the requirements to be “advanced glazing.”
Tempered glass is glass processed with controlled thermal or chemical treatments. These treatments increase the strength of the glass, and also create balanced internal stresses so that when the glass does break, it breaks or crumbles into smaller granular chunks instead of large jagged shards. Tempered glass is stronger than laminated glass, but with tempered glass, occupant loading to the window during the rollover event and the bus impact with the ground can potentially shatter tempered glass, causing the glazing to vacate the window frame and create an ejection portal.
NHTSA is proposing performance requirements that covered buses would have to meet by way of anti-ejection safety countermeasures to prevent partial and complete ejection of passengers. We would adopt a new FMVSS No. 217a that specifies impactor testing of glazing material. In the tests, a 26 kg (57 lb) impactor would be propelled from inside the test vehicle toward the window glazing at 21.6 kilometers per hour (km/h) (13.4 miles per hour (mph)). Each side and rear window and glass panel/window on the roof would be subject to any one of three impacts, as selected by NHTSA in a compliance test: (a) An impact near a latching mechanism of an intact window
The proposed performance requirements are as follows:
• In tests described in (a) and (b) in the previous paragraph, the window would have to prevent passage of a 102 millimeter (mm) (4 inch) diameter sphere during the impact, and after the test. The agency would assess the window during the impact by determining whether any part of the window passes a reference plane defined during a pre-test set up procedure. These requirements would ensure that glazing is securely bonded to window frames, no potential ejection portals are created due to breaking of
• In the test of (c) above, the maximum displacement of the impactor at the center of daylight opening would be limited to 175 mm (6.9 inches) for pre-broken glazing. This requirement in particular would drive the installation of advanced glazing. The requirement would also help ensure the advanced glazing reasonably retains occupants within the structural sidewall of the bus even when the glass surrounding the PVB interlayer is broken. It also ensures that no potential ejection portals are created during and after impact.
• Emergency exit latch protrusions may not extend more than one inch into the emergency exit opening of the window when the window is opened to the minimum emergency egress opening (allowing passage of an ellipsoid 500 mm (19.7 inches) wide by 300 mm (11.8 inches) high). This requirement would minimize the potential for the latch plate protrusions (or other projections) to hinder the emergency egress of passengers.
• Latches would have to be functional following the impact test to ensure that occupants can open the emergency exits to egress the vehicle after the crash.
The Motorcoach Enhanced Safety Act emphasizes anti-ejection safety countermeasures, particularly advanced glazing (§ 32703(b)(2)). With regard to advanced glazing standards, NHTSA's strategy has been first to seek improvements to the rollover structural integrity of motorcoaches (roof strength and crush resistance) and then to pursue measures that would drive use of advanced glazing. This ordered approach is based on findings from the Martec study that found the integrity of the bus structure has a profound impact on the effectiveness of glazing as an anti-ejection safety countermeasure. That is, in the absence of a threshold of requisite performance for bus structural integrity, a twisting motion of a bus in a rollover could simply pop out any advanced glazing used in the windows and negate the potential benefits of the glazing in mitigating occupant ejection.
To better ensure that the full benefits of anti-ejection countermeasures such as advanced glazing could be realized, we adopted a holistic approach. We first focused on improving bus structural integrity and the strength of side window mountings. The 2014 NPRM on large bus structural integrity proposed requirements that would increase the likelihood that bus glazing will be retained in their mountings in a rollover.
We have designed this NPRM in furtherance of NHTSA's goal to enhance the safety of all heavy buses used in intercity bus transportation, while attending to the Motorcoach Enhanced Safety Act's focus on over-the-road buses (motorcoaches). Since today's NPRM builds on the 2014 rollover structural integrity NPRM, we propose to apply today's advanced glazing proposal to the vehicles subject to the 2014 NPRM.
NHTSA estimates that this rulemaking would be cost beneficial.
The agency estimates an annual incremental material cost for all new buses covered by this proposed rule to be $0.19 million (see Table 1 below). The countermeasures would likely be advanced glazing and improved emergency exit latches, resulting in an average incremental material cost per bus of $87 for buses covered under today's proposed rule. We estimate the testing cost of $8,700 per bus model. We estimate there would be no weight increase due to the proposed requirements; in fact, there could be a weight reduction of approximately 10.5–15 kg (23–33 lb) per window (125.5–180 kg (276–396 lb) per bus) as glazing designs change from a double-glazed tempered/tempered configuration to a single-glazed laminated configuration. We estimate that the proposal would result in fuel saving of $2.18 million to $2.9 million. This exceeds the material costs of $0.19 million for the proposal.
Beyond the benefits attributable to the agency's final rules on seat belts and ESC and a potential final rule on rollover structural integrity that also may apply to the subject buses, we estimate that requiring new subject buses to meet the proposed performance criteria would save 1.54 lives and prevent 0.4 serious to critical injuries annually if 15 percent of occupants use seat belts, and save 0.33 lives and prevent 0.08 serious to critical injuries annually if 84 percent of occupants use seat belts. Thus, we estimate that this proposal would save 1.6 equivalent lives annually (undiscounted) if 15 percent of occupants use seat belts, and 0.34 equivalent lives annually (undiscounted) if 84 percent of occupants use seat belts (see Table 2, below).
Since the fuel savings from the proposed rule would be far greater than the material costs of this proposal, we did not estimate cost per equivalent lives saved. The estimated net cost/benefit impact ranges from a net benefit of $5.87 million to $17.52 million at the 3 percent discount rate and a net benefit of $4.37 million to $13.15 million at the 7 percent discount rate (see Table 3, below).
NHTSA has considered retrofit requirements and has made the following tentative conclusions. The agency does not believe it would be sensible to apply the requirements proposed today to buses that do not have sufficient structural integrity to retain the advanced glazing in a rollover. If the advanced glazing were to pop out in a rollover, the benefits of the glazing would not be achieved. Yet, Congress was particularly interested in a possible retrofit requirement for advanced glazing. Section 32703(e)(2)(A) of MAP–21 states that the Secretary may assess the feasibility, benefits, and costs with respect to the application of any requirement established under section 32703(b)(2), regarding advanced glazing, to motorcoaches manufactured before the date on which the requirement applies to new motorcoaches. Thus, NHTSA is requesting comments on the feasibility, benefits, and costs of any potential requirement to retrofit existing buses with advanced glazing.
NHTSA is proposing today's NPRM pursuant to and in accordance with its authority under the National Traffic and Motor Vehicle Safety Act and the relevant provisions of MAP–21.
Under 49 United States Code (U.S.C.) Chapter 301, Motor Vehicle Safety (49 U.S.C. 30101
On July 6, 2012, President Obama signed MAP–21, which incorporated the “Motorcoach Enhanced Safety Act of 2012” into subtitle G. Section 32703(b) of MAP–21 requires the Secretary to prescribe regulations that would address certain aspects of motorcoach crash performance within two years if the Secretary determines that the standards would meet the requirements and considerations of subsections (a) and (b) of section 30111 of the Vehicle Safety Act.
Section 32703(b)(2) of MAP–21 directs the Secretary to consider requiring advanced glazing standards for each motorcoach portal and to consider other portal improvements to prevent partial and complete ejection of motorcoach passengers, including children. Under section 32702, “portal” means any opening on the front, side, rear, or roof of a motorcoach that could, in the event of a crash involving the motorcoach, permit the partial or complete ejection of any occupant from the motorcoach, including a young child. Section 32703(b)(2) also states that in prescribing such standards, the Secretary shall consider the impact of such standards on the use of motorcoach portals as a means of emergency egress.
MAP–21 contains various other provisions that are relevant to this rulemaking. Section 32702 states that “motorcoach” has the meaning given to the term “over-the-road bus” in section 3038(a)(3) of the Transportation Equity Act for the 21st Century (TEA–21).
MAP–21 sets forth compliance dates. It directs the Secretary to apply any regulation prescribed in accordance with section 32703(b) (and several other subsections) to all motorcoaches manufactured more than 3 years after the date on which the regulation is published (section 32703(e)(1)). In addition, the Secretary may assess the feasibility, benefits, and costs of applying any requirement established under section 32703(b)(2) to “motorcoaches manufactured before the date on which the requirement applies to new motorcoaches” (retrofit) (section 32703(e)(2)).
Finally, MAP–21 also authorizes the Secretary to combine the required rulemaking actions as the Secretary deems appropriate (section 32706(b)).
In 2007, NHTSA undertook a comprehensive review of motorcoach safety issues and the course of action that the agency could pursue to address
The result was NHTSA's 2007 plan, “NHTSA's Approach to Motorcoach Safety,”
In 2009, DOT issued a Departmental “Motorcoach Safety Action Plan,” which outlined a Department-wide strategy to enhance motorcoach safety.
This NPRM addresses the following NTSB recommendations pertaining to window glazing and emergency exits.
NTSB initiated a special investigation reviewing 36 motorcoach crashes that were investigated from 1968 through 1997.
NTSB also found that glazing composition may mitigate injury during a rollover event. In one investigation of a 1988 crash,
“H–99–049: Expand your research on current advanced glazing to include its applicability to motorcoach occupant ejection prevention, and revise window glazing requirements for newly manufactured motorcoaches based on the results of this research.”
On August 5, 2010, a multi-vehicle accident occurred in Gray Summit, Missouri, involving a 2007 Volvo tractor, a 2007 GMC Sierra extended cab pickup truck, a 2003 Blue Bird 71-passenger bus (“lead school bus”), and a 2001 Blue Bird 72-passenger bus (“following school bus”). This multi-vehicle crash was investigated by NTSB in 2011.
The only emergency exits available for egress on the lead school bus were the rear two emergency exit windows. All but one of the occupants in the lead bus exited the bus through the left rear emergency exit window. The remaining entrapped passenger was extricated by emergency responders and placed on a backboard before being removed through the right rear emergency exit window.
Several passengers in the lead school bus, and a witness who assisted in the evacuation, stated in post-crash interviews that emergency egress was hindered by the design of the emergency exit window. Particularly, the 4 inch by 3 inch emergency release latch plate for the emergency exit window was elevated about 1 inch from the window base and snagged the clothing of several passengers as they were exiting through the window opening. In addition, because of the failure of the emergency exit window to independently remain in the open position, one individual had to hold the hinged emergency exit window open so that other individuals could exit the bus unimpeded.
NTSB made three safety recommendations, including the following:
“H–11–037: Modify Federal Motor Vehicle Safety Standard 217 or the corresponding laboratory test procedure to eliminate the potential for objects such as latch plates to protrude into the emergency exit window space even when that protrusion still allows the exit window to meet the opening size requirements.”
Section 32703(a) of MAP–21 directs the Secretary to require seat belts for each designated seating position in motorcoaches. NHTSA fulfilled this mandate in 2013, issuing a final rule amending FMVSS No. 208, “Occupant crash protection” to require lap/shoulder seat belts for each passenger seating position in: (a) All new OTRBs (except school buses and prison buses); and (b) in new buses other than OTRBs,
Section 32703(b)(1) of MAP–21 specifies that the Secretary is to establish improved roof and roof support standards that “substantially improve the resistance of motorcoach roofs to deformation and intrusion to prevent serious occupant injury in rollover crashes involving motorcoaches” if such standards meet the requirements and considerations of subsections (a) and (b) of section 30111 of the Vehicle Safety Act. In 2014, NHTSA published an NPRM proposing that OTRBs (except school buses) and buses other than OTRBs
NHTSA proposed performance requirements that each bus must meet when subjected to a dynamic rollover test. The bus is placed on a tilting platform that is 800 mm above a smooth and level concrete surface. One side of the platform is raised at a steady rate until the vehicle becomes unstable, rolls off the platform, and impacts the concrete surface below.
The proposed rollover structural integrity test is illustrated below in Figure 1.
The following are the main proposed performance requirements that buses would have to meet when subjected to the rollover structural integrity test:
(1) Intrusion into the “occupant survival space,” demarcated in the vehicle interior, by any part of the vehicle outside the survival space is prohibited;
(2) each anchorage of the seats and overhead luggage racks must not completely separate from its mounting structure;
(3) emergency exits must remain shut during the test and must be operable in the manner required under FMVSS No. 217 after the test; and,
(4) each side window glazing opposite the impacted side of the vehicle must remain attached to its mounting such that there is no opening that will allow the passage of a 102 mm (4 inch) diameter sphere.
Each year, the commercial bus industry transports millions of people between and in cities, for long and short distance tours, school field trips, commuting, and entertainment-related trips. According to a census published by the American Bus Association (ABA) in 2008, there were approximately 3,400 motorcoach
In an updated 2011 motorcoach census,
Carriers with a small fleet size (less than 10 motorcoaches) have older average motorcoach fleet age than carriers with a large fleet size (more than 50 motorcoaches). In 2007, the small carriers had an average motorcoach fleet age of 9 years, whereas the large carriers had an average fleet age of 6 years. In 2010, the small carrier's average fleet age increased to 10 years, whereas the large carrier's average fleet age remained the same at 6 years old.
NHTSA's Fatality Analysis Reporting System (FARS)
There were 59 OTRB and 26 large bus crashes. Among these 85 OTRB and large bus crashes, 40 were rollovers, 41 were frontal crashes, and 4 were side crashes. About 70 percent of the fatal bus crashes involved OTRBs among which 90 percent had a GVWR greater than 11,793 kg (26,000 lb).
The OTRB and large bus fatalities were broken down by separating the fatalities for drivers and passengers (Table 5). Passenger fatalities were significantly higher than driver fatalities, accounting for over 83 percent of the total fatalities, and were particularly prevalent in the OTRB category. Rollover events accounted for 79 percent of OTRB and large bus passenger fatalities (compared to 21 percent for driver fatalities).
With the focus on passenger fatalities only, the passenger fatalities were further broken down based on ejection
The agency is proposing the requirements in today's NPRM to improve rollover safety in high-capacity buses. The aforementioned data show that crashes involving rollovers and ejections present the greatest risk of death to the occupants of these buses. The majority of fatalities occur in rollovers, and nearly 60 percent of rollover passenger fatalities are associated with occupant ejection.
In nearly all the recent OTRB and large bus fatal rollover events, there was a significant amount of structural damage to the roof and side structure of the vehicles, as well as open window portals. Hence, NHTSA tentatively believes that the prevention of occupant ejection through portals is a critical part of mitigating the OTRB and large bus fatality and injury rate.
The test procedure and test device proposed in this NPRM were developed from the findings of several NHTSA research programs described in this section.
In 2003, NHTSA and Transport Canada entered into a joint program that focused on improving glazing and window retention on OTRBs to prevent occupant ejection. (“Motor Coach Glazing Retention Test Development for Occupant Impact During a Rollover,” August 2006.)
In the Martec study, the event chosen for simulation was a motorcoach rollover with a yaw speed of 30 km/h (18.6 mph) onto a flat surface, with an unrestrained occupant seated on the far side of the roll. Through these simulations, the Martec study determined that the impact velocity of an occupant striking the glazing was as much as 6.0 meters/second (m/s) (21.6 km/h or 13.4 mph). The analysis used a 50th percentile adult male side impact test dummy (US–SID) numerical model to determine peak loading and duration. The Martec simulations (involving a bus rolling over on its side) showed the impact area between the bus occupant and window glazing was primarily along the side of the dummy and that the largest load on the glazing was due to the torso impact. It was this impact that was used as the target load or load profile in the dynamic impact test device development.
The impact test device consisted of a guided piston secured to a platform structure along with an accumulator tank used for powering the guided piston (Figure 2). The mass of the impactor was 26 kg (57 lb), representing the effective mass measurements from the numerical analysis. A spring with the appropriate stiffness (258 N/m) was used to replicate compression of the thorax and a shoulder foam part from the SID was affixed to the impactor face to replicate the compression of the dummy's shoulder and the contact area between the dummy's shoulder and the glazing during impact (Figure 3).
In the Martec study, only limited testing was performed in a test fixture representing an OTRB side window structure. Only one glazing composition was tested. No testing was done to establish the motorcoach fleet performance. The study recommended that further testing be performed using other configurations (different glazing types such as laminated glass and polycarbonates and mechanical latching methods) common in the bus industry. The study concluded that more research was needed to establish baseline motorcoach fleet performance, determine the effect of motorcoach structural integrity on window retention and emergency egress, and identify potential improvements for window retention purposes.
NHTSA's follow-on test program, discussed below, was conducted to obtain data in these areas.
In 2011 and 2013, respectively, we completed a follow-on test program to the Martec study and a comprehensive test program of bus models and glazing designs to establish anti-ejection countermeasures and performance requirements.
The following is a summary of the different testing conducted and the test results relevant to this NPRM. Details of the testing and the results can be found in Duffy et al., “Motorcoach Side Glazing Retention Research,”
In the first stage of testing, VRTC used a section of a Motor Coach Industries (MCI) 1993 102D model motorcoach to conduct impact tests at the center of the window and near the latch. Different types of glazing material (laminated, tempered), double and single pane glazing, and different types of bonding of the glazing to the window frame were evaluated. The windows of the MCI 102D model were 1.5 m (59 inches) in length and 1 m (39.4 inches) in height and weighed between 25–29 kg (55–64 lb) for single glazed panes and 42–47 kg (92.5−103.5 lb) for double glazed panes.
The center of daylight opening impacts were conducted using the Martec Study Conditions (26 kg (57 lb) impactor at an impact velocity of 21.6 km/h (13.4 mph)). The near latch impacts were conducted using the 26 kg (57 lb) impactor at impact velocities ranging from 10.3 km/h (6.4 mph) to 21.6 km/h (13.4 mph). Near latch impacts were also conducted with twist introduced on the bus frame during the impact to evaluate the effect of torsion of the bus frame on latch opening.
The results of this first stage of testing are as follows:
• No windows tested opened in the center of daylight opening impacts under the Martec study conditions.
• Windows with tempered glass produced higher forces and lower displacement, than those with laminated glass.
• No windows with tempered glass broke in the center of daylight opening impacts. Single glazed laminated glass broke in the center of daylight opening impacts but the PVB layer did not tear.
• Polycarbonate windows produced lower resistance forces and higher displacement compared to laminated glass windows.
• Acrylic windows produced lower resistance forces compared to most other glazing compositions tested.
• Windows with greater PVB thickness produced reduced displacements.
• Under the Martec Study Conditions (26 kg (57 lb) impactor and 21.6 km/h (13.4 mph) impact speed), the latches released and the windows opened, regardless of the type of glazing material. The glazing material was not damaged in these impacts.
• At impact speeds (10.3 km/h (6.4 mph) to 15.8 km/h (9.8 mph)) that are lower than the Martec Study Conditions the latches near the impact opened, but the window did not open because the far side latch remained closed.
• Paired impact tests using the 26 kg (57 lb) impactor at speeds of 13.9 to 15.5 km/h (8.6 to 9.6 mph) with and without torsion of the bus frame, showed that torsion in the bus frame either had no effect on latch opening or made latch opening less likely. In 6 out of 11 pairs of comparison tests, the presence of torsion on the bus section did not affect whether the struck latch unlatched. In the 5 other tests, the presence of torsion made it harder to open the latch.
Next, VRTC expanded testing to windows of other coach series and those made by other manufacturers to establish fleet baseline performance. Market share analysis indicated that the fleet would be well represented by expanding the testing to an MCI E/J-series, a Prevost model H3–45, and a Van Hool model C2045. Van Hool and Prevost windows were double glazed tempered glass panes while the MCI E/J-Series windows were either single glazed laminate glass panes or double glazed glass panes with tempered glazing on the exterior and laminate glazing on the interior. The MCI E/J-Series and the Van Hool C2045 windows were 1.74 m (68.5 inches) in length and 1.1 m (43.3 inches) in height and the Prevost H3–45 model was 1.7 m (66.9 inches) in length and 1.2 m (47.2 inches) in height.
• Windows from all three manufacturers exhibited latch openings under the Martec Study Conditions.
• The threshold impact velocity for latch opening was higher for the MCI E/J-Series windows than the Van Hool and Prevost windows.
—Van Hool exhibited latch openings in the 9 to 10 km/h (5.6 to 6.2 mph) range.
—Prevost exhibited latch openings in the 11 to 12 km/h (6.9 to 7.5 mph) range.
—MCI E/J-series exhibited latch opening in the 18 to 21 km/h (11.2 to 13.1 mph) range.
• The MCI E/J-Series single laminate glazing window latches (primary and secondary) remained closed and the windows did not open.
• The Van Hool latches opened and produced window openings. The tempered glass panes remained intact.
• The Prevost latches opened and produced window openings. The tempered glass panes remained intact.
Since latches opened in all the near latch impacts on production windows and in two of the three center of daylight opening impacts of production windows in the phase 2 tests presented above, VRTC attempted to modify the latch systems using simple designs to see if the windows would remain closed during impact under the Martec Study Conditions.
The latching mechanism of the MCI E/J-Series production windows includes a lever that latches around a striker post that is press fit into a latch plate. Unlatching occurred in near-latch impacts by one of two modes: 1. The striker plate deformed and the striker post rotated in the direction of impact allowing the lever to slide over the striker post, and 2. the latch bar rotated upward during impact which opened the detent lever.
Center of daylight opening and near latch impacts under the Martec Study Conditions were conducted on the production windows with the countermeasure latches on the test frame. The results of this phase of testing are as follows:
• The MCI I/J-series countermeasure latch and glass remained intact in the near-latch impacts under the Martec Study Conditions.
• The Van Hool primary countermeasure latch opened, but the secondary latch did not under the near-latch Martec Study Conditions. Only a partial window opening occurred, as the tempered glass remained intact.
• The Prevost countermeasure latches opened in near-latch impacts under the Martec Study Conditions and the window opened.
• MCI E/J-series latches remained intact. The laminated inside pane broke.
• Van Hool latches remained intact. The tempered glass panes shattered.
• Prevost latches remained intact. The window bowed outward during the impact, but the tempered glass panes did not break.
As part of the test program, VRTC conducted impact tests under the Martec Study Conditions on pre-broken glazing to assess glazing strength in the event the window is broken in a rollover prior to occupant loading. The objective of these tests was to develop an objective test procedure for pre-breaking the glazing before the impact tests. Various methods of pre-breaking the glazing were evaluated. These methods included pummeling the glazing with a hammer and punching holes in the glazing in specific grid patterns using an unloaded electric staple gun. The hole punch patterns evaluated were a 75 mm (3 inch) diagonally offset pattern, a 50 mm (2 inch) diagonally offset pattern, and a 75 mm (3 inch) horizontally offset pattern. The MCI E/J-Series was chosen to conduct pre-broken glazing impacts since the MCI E/J-Series model included laminated glazing that would still offer resistance to impact when the glass was pre-broken. To evaluate the strength and retention capabilities of pre-broken glazing, it was important that the windows did not unlatch or open during the impact. Therefore, NHTSA used modified MCI E/J-Series countermeasure latches in these tests to ensure the windows did not unlatch.
After pre-breaking the glazing, the window was mounted on the test frame and the pre-broken glazing was impacted at the center of daylight opening in accordance with the Martec Study Conditions. Displacement of the impactor during the impact was measured. The results of the center of daylight opening impact tests under the Martec Study conditions on the MCI E/J-Series windows (double-glazed laminated and single-glazed laminated windows) with countermeasure latches for the different pre-breaking methods are as follows:
• The windows remained latched in all the tests and there was no tearing in the PVB layer.
• Average maximum displacement of the impactor in center of daylight opening impacts were:
—214 mm (8.4 inches) for fully pummeled pre-broken glazing.
—184 mm (7.2 inches) (86 percent of fully pummeled glazing) for 50 mm (2 inch) diagonally offset breakage pattern.
—175 mm (6.9 inches) (82 percent of fully pummeled) for 75 mm (3 inch) diagonally offset breakage pattern.
—151 mm (5.9 inches) (71 percent of fully pummeled) for 75 mm (3 inch) horizontally offset breakage pattern.
• The 50 (2 inch) and 75 mm (3 inch) breakage pattern methods are more objective than the fully pummeled method.
• There was little difference in maximum impactor displacements between the 50 (2 inch) and 75 mm (3 inch) diagonally offset pattern methods.
—The 75 mm (3 inch) horizontally offset pattern method produced less maximum impactor displacement than the diagonally offset methods.
• Use of an electric staple gun (without the staples) to pre-break the glass panes was practical, allowed for single person operation, and did not produce tears in the PVB layer.
NHTSA also tested single-glazed laminated windows with a thicker PVB interlayer to evaluate the impactor displacement as a function of the PVB interlayer thickness. The PVB thickness chosen for this test series was 1.52 mm (0.06 inches) (versus the 0.76 mm (0.03 inches) standard thickness). Center of the daylight opening impact tests under the Martec Study Conditions to pre-broken glazing (all four breaking methods: Fully pummeled, 75 mm (3 inch) diagonally offset pattern, 50 mm (2 inch) diagonally offset pattern, 75 mm (3 inch) horizontally offset pattern) were conducted. The impacts did not produce any tearing in the PVB layer and the windows remained latched in
VRTC also tested fixed windows from the MCI E/J–series to assess their performance under the Martec Study Conditions. The fixed windows were attached to the E/J–series test frame in accordance with manufacturer's recommendations. Tests were conducted on unbroken single-glazed and unbroken and pre-broken double-glazed windows. Impacts were conducted near the primary locking mechanism (retaining clip) that locks the window to the frame and at the center of daylight opening.
• For tests conducted on unbroken glazing near the primary locking mechanism (retaining clip), the retaining clip bent backwards. The secondary clip bent but did not release, resulting in the window only partially opening.
• For tests conducted at the center of the daylight opening on unbroken glazing, the retaining clip bent, but the window opening result depended on the type of glazing impacted.
—The single-glazed window fully opened.
—The double-glazed window did not open.
• For tests conducted at the center of the daylight opening on pre-broken double-glazed windows, there was no damage to the retaining clips, and the windows did not open.
In support of the agency's proposal to improve the rollover structural integrity of motorcoaches and other large buses, among other things NHTSA evaluated ECE R.66
In the ECE R.66 full vehicle test, the vehicle is placed on a tilting platform that is 800 mm (31.5 inches) above a smooth and level concrete surface. One side of the tilting platform along the length of the vehicle is raised at a steady rate of not more than 5 degrees/second until the vehicle becomes unstable, rolls off the platform, and impacts the concrete surface below. The vehicle typically strikes the hard surface near the intersection between the sidewall and the roof. The encroachment of structures into a designated “occupant survival space” (defined by use of a survival space template) during and after the rollover structural integrity test is assessed.
NHTSA evaluated several different models of OTRBs. Two older models were selected because they were representative of the range of roof characteristics (such as design, material, pillars, shape, etc.) of large bus roofs in the U.S. fleet. The vehicles selected were two 12.2 meters (m) (40 feet) (ft) long model year (MY) 1992 MCI model MC–12, and two 12.2 m (40 ft) long MY 1991 Prevost model (Prevost) LeMirage buses. The most discernible difference between the MCI and Prevost models was that the Prevost had smaller side windows and more roof support pillars.
NHTSA also tested a MY 2000 MCI bus, Model 102–EL3, that was 13.7 m (45 ft) in length. The agency tested this model because it was representative of many buses newer than the MCI and Prevost models. Newer buses are 13.7 m (45 ft) in length instead of 12.2 m (40 ft). The newer buses also tend to have larger windows than the earlier models.
A detail report of the test program of the older buses is available in the docket.
In our research, high speed video cameras were used and transfer media were applied to each survival space template to determine if any portion of the vehicle interior had entered the occupant survival space during the rollover test. In addition, two Hybrid III (HIII) 50th percentile adult male anthropomorphic test devices (ATDs) (test dummies) were placed in the vehicle, on the opposite side of the impacted side of the bus, to measure injury potential and seat anchorage performance. One of the ATDs was belted and the other was unbelted. For the purposes of this advanced glazing NPRM, NHTSA reviewed the results from the evaluation to understand better the dummy occupant interaction with the windows during an elevated one-quarter turn roll event.
The following summarizes the findings of the ECE R.66-based tests that are especially relevant to today's NPRM.
The Prevost bus was equipped with ten laminated windows on each side of the bus. The windows were 815 mm (32 in) in width and 1,040 mm (41 in) in height. Four of the left windows and three of the right windows were designated emergency exit windows. The emergency exit windows were hinged at the top and latched at the bottom.
Upon impact with the ground (left side of the bus), contact between the front survival space template and the left side window was made. The glass panes of the laminated glazing showed cracking and splintering. All of the glazings on the impact side (left) were retained in the windows. Three of the four left side emergency exit windows unlatched and lost retention during the impact but were held in the closed position by contact with the ground. The remaining left side emergency exit window remained latched during the impact with the ground.
High speed film from the test indicated that the side windows located on the far side of the impact (right) underwent a substantial amount of flexion during the impact with the ground but remained intact. The flexion along with the inertia of the latching bar mechanism for this particular Prevost bus caused all three of the right side emergency exit windows to unlatch and open slightly. However, they were closed by gravity following the impact when the Prevost bus came to its final resting position. The two roof emergency exits also opened during the impact.
The left pelvis of the unrestrained ATD seated far-side of the impact interacted with the inboard armrest prior to the bus impacting the ground. After the bus made contact with the ground, the top of the dummy's head made contact with the left window and the ATD came to rest straddling the third and fourth left windows from the front of the bus.
The MCI bus was equipped with seven laminated windows on each side. All of the windows were designated emergency exit windows with the exception of the right rearmost window. The windows were 1,310 mm (52 in) in width and 685 mm (27 in) in height. The emergency exit windows were hinged at the top and latched at the bottom.
Upon impact with the ground (left side of the bus), contact between the front survival space template and the left side window was made. The glass panes of the laminated glazing showed cracking and splintering. All of the glazings on the bus were fully retained in the windows.
None of the emergency exit windows unlatched or opened during or after the ground impact. The roof emergency exits opened during the impact and a gap was visible between the roof panel and the emergency exit frame after the test.
The left pelvis of the unrestrained ATD interacted with the inboard armrest during the bus impact with the ground. The top and back of the ATD head struck the left window as the bus impacted the ground, and the dummy came to rest on its head over the window.
The 2000 MCI 102–EL3 bus was equipped with seven laminated glass windows on each side. The front windows were fixed windows and the remaining windows were emergency exit windows. The majority of the windows were 1,564 mm (62 in) in width and 894 mm (35 in) in height, which is substantially larger than the previous two older buses (a 55 percent increase in window area compared to the 1992 MCI model). The larger front windows were 1,564 mm (62 in) in width with a maximum of 1,257 mm (50 in) in height, and the smaller rear windows were 1,042 mm (41 in) in width and 894 mm (35 in) in height.
During the left-side impact with the ground, five of the seven right side glazings (toward the front of the bus) cracked and broke, and the window glazings fell into the occupant compartment during the test. The glazing from one of the right side front windows was retained by an overhead TV monitor and prevented the window pane from separating from its mounting gasket and falling into the bus. We believe that the glazing fell into the bus in this test, and not in the previous tests, because glazings on this bus are significantly larger, and presumably heavier, than the glazings used on the two older buses tested. The glazing in the last window near the rear cracked and broke but the window was retained and did not fall into the passenger compartment, possibly because the window was shorter in width than the other windows.
The emergency exit window release handles for four of the right side windows rotated approximately 90 degrees; however, all emergency exit windows on both sides remained latched during the test. Both of the roof emergency exits opened during the test.
All seven of the left side (impacted side of the bus) glazings remained fully retained in the windows after the rollover test.
The unrestrained dummy's head first struck the luggage rack above the left side seats, and then the dummy's head hit the glazing of the third window from the front (left side of the bus). The dummy's left and right knees hit the seat back of the left side seats before hitting the center of the window. Its final resting position was on top of this window. The glazing remained intact and retained in the window.
In the 2013 seat belt final rule,
NHTSA is proposing performance requirements that the subject buses would have to meet by way of anti-ejection safety countermeasures. We are proposing to issue an FMVSS No. 217a to specify an impactor test of glazing material used in side and rear windows.
The proposed performance requirements are as follows:
• In tests described in (a) and (b) in the above paragraph, the window would have to prevent passage of a 102 mm (4 inch) diameter sphere during the impact, and after the test. The agency would assess the window during the impact by determining whether any part of the window passes a reference plane defined during a pre-test set up procedure. These requirements would ensure that glazing is securely bonded to window frames, no potential ejection portals are created due to breaking of glass, and windows remain closed when impacted.
• In the test of (c) above, the maximum displacement of the impactor at the center of the daylight opening would be limited to 175 mm (6.9 inches) for pre-broken glazing. This requirement in particular would drive the installation of advanced glazing. The requirement would also help ensure the advanced glazing reasonably retains occupants within the structural sidewall of the bus even when the glass surrounding the PVB interlayer is broken and ensures that no potential ejection portals are created during and after impact.
• Emergency exit latch protrusions may not extend more than one inch into the emergency exit opening of the window when the window is opened to the minimum emergency egress opening (allowing passage of an ellipsoid 500 mm (19.7 inches) wide by 300 mm (11.8 inches) high). This requirement would minimize the potential for the latch plate protrusions (or other projections) to hinder the emergency egress of passengers.
• Latches would have to remain functional following the impact test to ensure that occupants can open the emergency exits to egress the vehicle after a crash.
Current regulations and industry standards for large buses do not adequately address window retention or ejection mitigation through glazing under dynamic occupant loading in rollovers.
Thus, the requirements proposed in today's NPRM would fill a gap currently existing in NHTSA's motorcoach and large bus safety regulations. NHTSA recently issued a seat belt requirement
This NPRM is based on a number of research studies.
NHTSA formulated this NPRM based on findings from the Martec study. Through computer simulation using the ECE R.66 rollover test, the Martec study established the forces that motorcoach occupants exert on the side window during rollover events, and the impact forces applied to the roof of the motorcoach. The Martec study also established the basis for the dynamic test procedure proposed today to test glazing materials and bonding techniques.
NHTSA also designed this NPRM based on the findings of our 2011 and 2013 follow-on testing of real-world motorcoach windows. The later study examined the exact failure mechanism(s) for side windows in a rollover event. We used the dynamic impactor device developed in the Martec study, along with its prescribed impact speed 21.6 km/h (13.4 mph) and impactor mass 26 kg (57 lb), to evaluate modern bus windows that were representative of the fleet population. We obtained data about fleet baseline performance and the performance of various bonding methods and glazing materials, such as laminated glass and polycarbonates, tested on test frames representing side passenger window frames of actual motorcoaches.
We also found in our 2013 testing that latch mechanisms on emergency windows routinely failed when the glazing near them was struck with the impactor. Failure of the latch caused the exit to open, posing an unreasonable risk of ejection in a rollover. These results indicated there is a safety need for a test that assesses the ability of the latches to remain closed when subjected to impactor loading. We were also able to modify some of the latch systems with simple designs, enabling the latch to stay closed when struck. This showed the practicability of meeting an ejection mitigation requirement when glazing is struck near the latch.
NHTSA also based this NPRM on the findings from NHTSA's large bus structural integrity research program.
Additionally, the structural integrity test program showed that bus design can influence glazing retention. In the test of the 2000 MCI bus, during the left-side impact with the ground five of the seven glazings on the right side of the bus cracked and broke, and the window glazings fell into the occupant compartment during the test. We believe that the glazing fell into the bus in this test, and not in the previous tests of the 1991 Prevost and the 1992 MCI, because glazings on the 2000 MCI bus were significantly larger, and presumably heavier, than the glazings used on the two older buses tested. The bonding technique was not strong enough to support the heavier glazings. The glazing in the last window near the rear of the 2000 MCI bus cracked and broke but the window was retained and did not fall into the passenger compartment, possibly because the window was shorter in width than the other windows.
NHTSA's structural integrity testing showed good performance by laminated glazing. The 1991 Prevost bus was equipped with ten laminated windows on each side of the bus. In the ECE R.66 test, upon impact with the ground (left side of the bus), the glass panes of the laminated glazing on the left side showed cracking and splintering but were retained in the windows. The 1992 MCI bus was equipped with seven laminated windows on each side. Upon impact with the ground (left side of the bus), the glass panes of the laminated glazing on the left side showed cracking and splintering. All of the glazings on the bus were fully retained in the windows.
Studies show that bus glazings are exposed to multiple and chaotic impacts in a rollover. In the Martec study, the simulation showed glazing struck by the unbelted passenger occupant before the bus was completely on its side. In NHTSA's structural integrity tests, the unrestrained ATD was basically freefalling from the seat as the bus tipped over, and did not contact the side windows until after the bus had already impacted and made contact with the ground surface. In the test of the 1992 MCI bus, the top and back of the restrained ATD head struck the third window from the front of the bus on the left side as the bus impacted the ground. The window glazing cracked and splintered as the laminated glazing hit the ground. The test dummy came to rest on its head over this window which remained intact after the test.
Because glazings are subject to multiple, unpredictable impacts from occupant and/or ground contact in a rollover, NHTSA has tentatively determined that the dynamic impact test proposed today should include a test set-up specification and method that involves pre-breaking the glazing prior to the impactor test. Pre-breaking the glazing mimics a real-world condition, as the side window glazing is often broken when the bus contacts the ground. With advanced glazing, the procedure would likely result in the outside glass breaking without deforming the laminate. With tempered (non-advanced) glazing, the procedure would likely result in the glazing shattering into fragments. As a result, to meet a final rule resulting from this NPRM, buses covered by the rule would likely use laminated glazing, and not tempered glazing, to meet the requirements proposed today.
NHTSA proposes to use the impact test device developed in the Martec study,
The proposed impactor design is as outlined in Figure 3, representing the torso of the SID. The mass of the impactor is 26 kg (57 lb), representing the effective mass measurements from the numerical analysis of the Martec study. A spring with the appropriate stiffness (258 N/m) was used to replicate compression of the thorax. The impactor face is a rectangle measuring 177 mm x 212 mm (7 inch x 8.3 inch) with rounded corners. A shoulder foam part from the SID is affixed to the impactor face to replicate the compression of the foam located beneath the dummy's chest jacket (Figure 3).
The impact speed in these proposed tests simulates the loading from an average size adult male impacting a window on the opposite side of a large bus in a rollover. In the Martec study, computer modeling of a bus rollover predicted the loads on the bus windows from a mid-size adult male occupant. The Martec study found that the impact velocity of the occupant striking the glazing with his head, followed closely by his shoulder/torso, could be as high as 6.0 m/s (21.6 km/h or 13.4 mph). We propose to use this impact speed of 21.6 km/h (13.4 mph) for each of the proposed dynamic impact tests.
The Motorcoach Enhanced Safety Act directs the agency to consider requiring advanced glazing standards for “each motorcoach portal” (section 32703(b)(2)). The Act defines “portal” as “any opening on the front, side, rear, or roof of a motorcoach that could, in the event of a crash involving the motorcoach, permit the partial or complete ejection of any occupant from the motorcoach, including a young child” (section 32702(9)).
We have considered requiring advanced glazing standards for each motorcoach portal in accordance with the Act, and have decided, based on accident data, to apply this NPRM to the bus side and rear windows and to glass panels/windows on the roof. We are not applying the proposed requirements to the front windshield, or to emergency exit doors, service doors, or roof hatches. Accident data of real world rollover incidents indicate that passenger ejections are not occurring from the front windshield or emergency or service doors. We are aware of only one incident of a real world rollover crash involving a front windshield ejection, and that was a non-fatality.
To the extent emergency roof exits are opening during the impact with the ground, NHTSA's rulemaking on large bus rollover structural integrity will address that ejection risk. NHTSA has proposed in that rulemaking to require emergency exits to remain shut during the rollover test, and to be operable in the manner required under FMVSS No. 217 after the test. Those proposed requirements would ensure that roof hatches do not open during a quarter-turn rollover, at minimum, from the inertial loading of its own weight.
We have applied the proposed advanced glazing requirements to the portals we believe pose a valid risk of ejection. We estimate that side bus windows account for about 80 percent of portals (potential ejection routes) on buses, which presents a high exposure risk to potential ejection. Given this exposure, this NPRM will focus advanced glazing and other ejection mitigation efforts on the bus side and rear windows (emergency and non-emergency exits). In addition, we have recently become aware of some motorcoaches equipped with glass roofs or glass panel ceilings to provide an enhanced view for bus passengers. These glass panels/windows on roofs can become ejection portals if advanced glazing is not used. Therefore, we propose to apply this NPRM to roof glass panels/windows as well, assuming they are of a minimum size.
We also propose to apply this NPRM to rear windows. We recognize that OTRBs typically have the bus engine in the rear, and therefore usually have no window on the rear of the bus. However, nothing precludes bus designs from having windows in the rear of the bus that could be potential ejection portals. However, to be subject to the proposed requirements, the windows would have to be a minimum size.
A minimum size criterion would thus apply to side and rear windows, and to roof glass panels/windows. The criterion would address limitations of testing with the impactor. The window would be tested if it is large enough to fit the impactor face plus a 25 mm (1 inch) border around the impactor face plate edge without contact with the window frame. The dimensions of the dynamic impactor we propose to use are 177 mm by 212 mm (7 inches by 8.3 inches). Using the 8.3 inches dimension of the dynamic impactor, the proposed dynamic test procedure would be applicable to a side window whose minimum dimension measured through the center of its area is (280 mm) (11 inches) or greater. (The rationale for the 280 mm (11 inches) is provided below in the next paragraph.) The 25 mm (1 inch) clearance is needed to make sure we are testing the strength of the glazing and bonding in retaining the impactor and that of the latches withstanding the impact, and not the strength of the window frame. If the impactor were to strike the window frame structure, the impactor could be partially restrained by the window frame structure and the performance of the glazing and bonding would not be fully assessed.
The proposed exclusion is consistent with FMVSS No. 217, which currently excludes from S5.1's window retention requirements “a window whose minimum surface dimension measured through the center of its area is less than 8 inches” (S5.1.2). FMVSS No. 217 uses a head form with a 76 mm (3 inch) spherical radius (152 mm (6 inch) diameter) to apply the quasi-static force application (S5.1). We are proposing that the new dynamic test be applicable only to bus windows with a proportional minimum surface dimension. That is, using the wider 212 mm (8.3 inch) dimension of the dynamic impactor, the proposed dynamic test procedure would be
This NPRM proposes a procedure for testing glazing in each side and rear window opening and roof glass panels/windows. To describe precisely where the impactor would be targeted on the glazing, we would first define how the “daylight opening” (window opening) would be determined. For side windows, the “daylight opening” would be the locus of all points where a horizontal line, perpendicular to the vehicle longitudinal centerline, is tangent to the periphery of the opening. For rear windows, the “daylight opening” would be the locus of all points where a horizontal line, parallel to the vehicle longitudinal centerline, is tangent to the periphery of the opening. For roof glass panels/windows, the “daylight opening” would be the locus of all point where a vertical line is tangent to the periphery of the opening. The periphery would include surfaces 100 mm (3.94 inches) inboard of the inside surface of the window glazing and 25 mm (0.98 inches) outboard of the outside surface of the window glazing. The periphery would exclude any flexible gasket material or weather stripping, grab handles, and any part of a seat.
This definition of daylight opening would be similar to the definition of “side daylight opening” in FMVSS No. 226, “Ejection mitigation.” As explained in the FMVSS No. 226 rulemaking, flexible gasket material, weather stripping and the like are excluded from the “daylight opening” definition because the flexible material is unlikely to impede occupant ejection through the opening.
Grab handles would be excluded from the definition for the same reasons explained in the FMVSS No. 226 rulemaking.
We note that there currently is a definition of the term “daylight opening” in FMVSS No. 217 (S4). The term is defined as: “the maximum unobstructed opening of an emergency exit when viewed from a direction perpendicular to the plane of the opening.” The term was inadvertently added to the standard by a May 9, 1995 final rule (60 FR 24562); the term is not used in any other part of the regulatory text. We propose to delete the term in S4.
NHTSA is proposing a breaking specification and method that involves punching holes in the glazing, to simulate the damage the glazing could experience in a rollover prior to impact by an occupant.
NHTSA studied various methods to break the glazing prior to the impact tests, including impacts with a hammer (pummeled), using an automatic center punch, and an unloaded electric staple gun.
In NHTSA's study, the Martec study impact tests were performed on broken glazing with the impactor striking the window at the center of the daylight opening, as measured on the interior window frame. Not surprisingly, the results showed that more glass breakage (maximum breakage was achieved in the pummeled test) yields more peak impactor displacement. However, the 75 and 50 mm (3 and 2 inch) diagonally offset matrix hole punching methods were found to be more controllable and objective than the pummeling method, while also creating extensive breakage patterns. Thus, NHTSA decided to incorporate the hole punching method rather than the pummeling method in the proposed test procedure.
Results also indicated that there does not appear to be a significant difference in displacement of the impactor between the 75 and 50 mm (3 and 2 inch) diagonally offset patterns. Yet, the 75 mm (3 inch) diagonally offset grid pattern has 53 percent fewer punch holes compared to the 50 mm (2 inch) diagonally offset grid pattern,
The first step in the test procedure would be to mark the glazing surface on the occupant interior glass in a horizontal and vertical grid of points separated by 75 mm (3 inches), with the first point coincident with the geometric center of the daylight opening. Next, the grid on the opposite side of the glazing would be marked. For most glazing, the grid on the opposite side of the glazing would be staggered to avoid tearing the PVB interlayer. For laminates, “the opposite side of the glazing” means the opposing glass ply directly opposite of the PVB interlayer. “Staggered” means that the 75 mm (3 inch) offset pattern has a 75 mm × 75 mm (3 inch × 3 inch) pattern on the occupant interior glass and the same pattern, offset by 37.5 mm (1.5 inch) horizontally and vertically, on the outside exterior glass surface.
For windows that are a single-pane unit, we would use the grid pattern on the occupant space interior surface and
For double-glazed windows, we would use a grid pattern on the occupant space side of the interior pane and on the outside of the exterior pane. For double-glazed windows that consist of one pane of tempered glass, that pane would be broken and removed, and the remaining glass pane (that is not of tempered glass) would be pre-broken on both sides (occupant interior and outside exterior) with the grid and staggered grid patterns, respectively. For double-glazed windows that do not consist of any tempered glass pane, it would not be practical to apply the 75 mm (3 inch) pre-break pattern to the insulated surface (inside the air gap) of the individual glass panes. In these cases in which neither pane is tempered glass, both the occupant space side of the interior pane and the outside of the exterior pane would be broken in the grid pattern, but the patterns would not be offset (one side would not use the staggered pattern) due to a lack of need. That is, for those windows there would be little likelihood of tearing the PVB interlayer even when the patterns are not offset.
The agency envisions breaking the defined grid points using an unloaded electric staple gun, since the device worked well for that purpose in our developmental testing. The staple gun we use would apply 12.7 mm (0.5 inch) line load (with a thickness of 1.3 mm (0.05 inches)) (the size of a standard staple) on the glazing with a force in the range of 3,500 Newtons (N) (787 lb) to 5,000 N (1,124 lb) when the front nose opening of the staple gun is held normal to the glazing. These staple gun specifications are designed so as to break the glass with a single punch without producing tears in the PVB interlayer. Holes would be punched in the glazing starting with the inside surface of the glazing, and starting with the forward-most, lowest hole in the pattern. We would continue punching holes 75 mm (3 inches) apart, moving rearward on the bus. When the end of a row is reached, we would move to the most forward hole in the next higher row, 75 mm (3 inches) from the punched row. After completing the holes on the inside surface, we would repeat the process on the outside surface.
When punching a hole, we would place a 100 mm (4 inch) by 100 mm (4 inch) piece of plywood on the opposite side of the glazing as a reaction surface against the punch. If a particular window were constructed such that the inner laminated material is penetrated or damaged, the procedure would not be halted or invalidated. The impactor test would be conducted at the conclusion of the glazing breakage procedure. If punching a hole causes the glazing to disintegrate, as would occur when testing tempered glazing, the procedure would be halted for that item of glazing and the impactor test would be conducted on what glazing, if any, remains. If there is no glazing remaining after the hole-punching procedure, there would be a failure to comply since the window would not be able to restrain the impactor or prevent passage of the 102 mm (4 inch) diameter sphere.
NHTSA proposes to specify performance requirements for windows comprised of unbroken and broken glazing when the glazing is subjected to impactor testing. The impactor would be propelled along a horizontal plane for side and rear windows and would be propelled along a vertical plane for roof glass panels/windows.
The amendments proposed by this NPRM would require buses to meet performance requirements during and after the impactor test. Each unbroken window would be subject to either of the following two impacts, as selected by NHTSA in a compliance test: (a) An impact near a latching mechanism,
We are proposing that windows (a) prevent passage of a 102 mm (4 inch) diameter sphere during the impact, and (b) be sturdy enough such that there are no openings after the test that allow the passage of the sphere when a force of no more than 22 N (5 lb) is applied with the sphere at any vector in a direction from the interior to the exterior of the vehicle. The requirement described in (b) is a simple one based on a longstanding requirement currently in S5.1 of FMVSS No. 217. The compliance test for S5.1 of Standard No. 217 involves a compliance technician probing the window with the sphere. NHTSA would assess compliance with the requirement in (b) above using the same basic procedure.
However, the requirement in (a) is more challenging. Because it is impractical to probe for openings with the 102 mm (4 inch) sphere
In NHTSA's impactor test of glazing near a latching mechanism and in the impactor test of glazing at the center of daylight opening, an “ejection reference plane” would be determined prior to the test. The plane would be based on the passage of a 102 mm (4 inch) diameter sphere through a potential ejection portal of the window. We would require that no part of the window (excluding glazing shards) may pass this “ejection reference plane” during the dynamic impact test. If any part of the window frame passes the plane, there would be a failure to comply.
For side windows, the “ejection reference plane” is a vertical plane parallel to the longitudinal vertical center plane of the bus passing through a point located at a lateral distance of 102 mm (4 inches) from the lateral most point on the glazing and surrounding frame, with the window in the closed position.
For rear windows, the “ejection reference plane” is a vertical plane perpendicular to the longitudinal vertical center plane of the bus passing through a point located at a longitudinal distance of 102 mm (4 inches) from the rear most point on the glazing and surrounding frame, with the window in the closed position.
For roof glass panels/windows, the “ejection reference plane” is a horizontal plane passing through a point located at a vertical distance of 102 mm (4 inches) from the highest point on the glazing and surrounding frame, with the window/panel in the closed position.
The proposed performance requirements are built on preventing passage of a 102 mm (4 inch) diameter sphere. The principle underlying the 102 mm (4 inch) displacement limit is to prevent gaps or openings to form in advanced glazing through which occupants (“including children,” states MAP–21 at § 32703(b)(2)) can be partially or totally ejected. A 100 mm (3.94 inch) performance limit is used in several regulations relating to occupant retention. FMVSS No. 217 already requires manufacturers to ensure that each piece of glazing and each piece of window frame be retained by its surrounding structure in a manner that prevents the formation of any opening large enough to admit the passage of a 102 mm (4 inch) diameter sphere under a specified force. The 102 mm (4 inch) value is also used in FMVSS No. 206, “Door locks and door retention components” (49 CFR 571.206). In FMVSS No. 206, the door is loaded with 18,000 N (4,047 lb) and the space between the interior of the door and the exterior of the door frame must be less than 100 mm (3.94 inches).
In addition, the 102 mm (4 inch) limit is used in FMVSS No. 226, “Ejection mitigation” (49 CFR 571.226). It was noteworthy to NHTSA when developing the NPRM proposing the standard that a value of approximately 100 mm is used by the International Code Council (ICC) in developing building codes used to construct residential and commercial buildings. The ICC 2006 International Building Code and 2006 International Residential Code require guards to be placed around areas such as open-sided walking areas, stairs, ramps, balconies and landings. The guards must not allow passage of a sphere 102 mm (4 inches) in diameter up to a height of 864 mm (34 inches). NHTSA noted that the ICC explains in the Commentary accompanying the Codes that the 102 mm (4 inch) spacing was chosen after considering information showing that the 102 mm (4 inch) opening will prevent nearly all children 1 year in age or older from falling through the guard. That information helped NHTSA decide on a 100 mm (3.94 inch) limit for the displacement of the head form impactor used in FMVSS No. 226.
NHTSA requests comment on the linear displacement limit of 100 mm (3.94 inch) as an appropriate value.
Under this NPRM, each window would have to meet performance requirements during and after an impact while pre-broken prior to the test. The impact would be at the center of the daylight opening of the window. The maximum displacement of the impactor would be limited to 175 mm (6.89 inches). The 75 mm (3 inch) diagonally offset pattern would be used to pre-break the glazing with an unloaded electric staple gun.
This proposed test is to better simulate a real-world test condition. As explained above in this preamble, the proposed dynamic test simulates the loading of an unrestrained far-side 50th percentile adult male passenger falling onto and loading the roll-side window. The roll-side glazing may not always be intact prior to this occupant loading. For instance, the glazing could break or shatter from objects interior or exterior to the bus, torsion or deformation of the bus structure, or even from the roll-side seated passenger loading prior to the far-side occupant loading. This proposed test would evaluate the strength and retention capabilities of pre-broken glazing (particularly the plastic interlayer of laminated glass) to ensure that there is enough strength left in the glazing to withstand the loading of the occupant and to retain the occupant within the bus. In addition, the window would be prohibited from having any opening after the test that would allow passage of the 102 mm (4 inch) diameter sphere.
NHTSA requests comments on the proposed 175 mm (6.9 inch) impactor displacement value. The proposed 175 mm (6.9 inch) limit was chosen in the interest of practicability, potential costs, and safety need. The 175 mm (6.9 inch) value is the average displacement from the two tests of single-glazed laminated windows (standard thickness PVB laminates 0.76 mm (0.03 inch) layer), that were pre-broken using the 75 mm (3 inch) diagonally offset grid. However, the MCI E/J-series was the only bus model tested at VRTC that offered production windows with a laminated glass configuration. Therefore, the proposed requirement is based solely on the MCI E/J windows that were tested. We seek comments on whether 175 mm (6.9 inch) maximum impactor displacement is an appropriate value for other bus window designs and window dimensions.
Comments are also requested on the practicability, costs and benefits of a lower impactor displacement limit, such as 146 mm (5.75 inches). One hundred forty-six (146) mm (5.75 inches) is the average displacement of the impactor in the center of daylight opening impacts under the Martec Study Conditions of pre-broken (using the 75 mm (3 inch) diagonally offset pattern) MCI E/J-Series glazing with the thicker 1.52 (0.06 inches). We observe that a 100 percent increase in the PVB interlayer thickness only resulted in a 14 percent reduction of average impactor displacement.
Other requirements are also proposed for emergency exit latches and other related release mechanisms.
NHTSA proposes to amend FMVSS No. 217 to specify that emergency exit latches and other related release mechanisms not protrude more than 25 mm (1 inch) into the opening of an emergency exit when the window is opened as described in S5.4.1 of the standard (when the window is opened to the minimum emergency egress opening (allowing passage of an ellipsoid 500 mm (19.7 inches) wide by 300 mm (11.8 inches) high)).
This requirement would respond to Recommendation No. H–11–37 of the NTSB,
We seek comment on what an appropriate maximum latch protrusion might be. The MCI E/J and Van Hool latches (both production and countermeasure designs) met the proposed 25 mm (1 inch) height protrusion limit, while the Prevost latch (both production and countermeasure design) did not.
The maximum latch plate protrusion requirement would be applicable to the buses to which the impactor tests would apply.
However, NHTSA is also proposing to extend the maximum latch plate protrusion requirement to other buses as well. NTSB recommendation H–11–37 was issued as a result of a school bus crash. Thus, NHTSA is proposing to extend the proposed requirement to school buses also. In addition, since this proposal of limiting the size of emergency exit latch plate protrusions is intended to mitigate hindrance from the window latches during emergency egress, we request comment on the merits of requiring all buses to which FMVSS No. 217 applies to meet the requirement. Such a requirement could enhance emergency egress from all buses.
The NPRM proposes to require that latches be functional in accordance to the emergency egress requirements of FMVSS No. 217 following the impact tests. This requirement is intended to increase the likelihood that, after a rollover event, all emergency exits are operable to enable bus occupants to egress out of the bus. Requiring emergency windows to remain operable after the impact test would increase the likelihood that these windows are operable in real world rollover events where occupants may load the window before the bus comes to rest. A similar requirement was also proposed in the August 6, 2014 NPRM for FMVSS No. 227, “Bus rollover structural integrity,” where the emergency exits are required to remain shut during the bus rollover test and be operable in the manner required under FMVSS No. 217 after the test.
NHTSA proposes to apply the proposed dynamic impact test requirements to generally the same group of vehicles that would be covered by the structural integrity NPRM.
The buses that would be covered would be (a) new OTRBs (regardless of GVWR), pursuant to the Motorcoach Enhanced Safety Act of MAP–21, and (b) all new buses other than OTRBs, with a GVWR greater than 11,793 kg (26,000 lb).
Our proposed applicability of this NPRM also reflects a holistic approach toward adopting anti-ejection safety countermeasures for unbelted passengers. NHTSA's strategy has been first to seek improvements to the rollover structural integrity of motorcoaches (roof strength and crush resistance) and then to pursue measures that would drive use of advanced glazing. This ordered approach is based on findings from the Martec study that the integrity of the bus structure has a profound impact on the effectiveness of the glazing. That is, in the absence of a threshold of requisite performance for bus structural integrity, a twisting motion of a bus in a rollover could simply pop out any advanced glazing used in the windows and negate the potential benefits of the glazing.
Thus, to better ensure that the full benefits of anti-ejection countermeasures such as advanced glazing would be realized, we first focused on improving bus structural integrity and the strength of side window mountings by way of the large bus structural integrity NPRM. Improvements to the bus structure would increase the likelihood that bus glazing will be retained in their mountings in a rollover. Next in our strategy is issuance of today's NPRM, which has performance requirements that would increase use of advanced glazing that prevent partial or complete ejection of motorcoach passengers and further ensure the integrity of glazing mounting. Since today's NPRM builds on the 2014 rollover structural integrity NPRM, we propose to apply today's dynamic impact test to the vehicles subject to the 2014 NPRM.
However, prison buses were among the buses to which NHTSA proposed applying the structural integrity requirements. We have tentatively determined that an advanced glazing standard would not be appropriate for prison buses since these buses typically have bars over the windows. The bars would impede the impactor. FMVSS No. 217 currently does not apply to “buses manufactured for the purpose of transporting persons under physical restraint” (S3).
Further, note that today's NPRM proposes requirements limiting how far emergency exit latches may protrude into the exit space. We propose applying the requirement to the buses to which NHTSA proposed would be subject to the 2014 rollover structural integrity NPRM, and also to school buses. In addition, we are considering applying the proposed maximum emergency exit latch protrusion requirements to all buses governed under FMVSS No. 217. We believe that vehicles would not need to have their roofs and side structure improved to meet the latch protrusion requirements. Comments are requested on this issue.
The Secretary of Transportation has authority to promulgate safety standards for “commercial motor vehicles and equipment subsequent to initial manufacture.”
The agency has designed our approach toward adopting anti-ejection safety countermeasures for unbelted passengers to first force improvements to the rollover structural integrity of motorcoaches (roof strength and crush resistance) and then to pursue measures that would drive use of advanced glazing. This ordered approach is based on findings from the Martec study that the integrity of the bus structure has a profound impact on the effectiveness of the glazing. That is, in the absence of a threshold of requisite performance for bus structural integrity, a twisting motion of a bus in a rollover could simply pop out any advanced glazing used in the windows and negate the potential benefits of the glazing. Thus, NHTSA has tentatively decided that it would not be sensible to apply the requirements proposed today to buses that do not have sufficient structural integrity to retain the advanced glazing in a rollover.
In the proposal for improved structural integrity of motorcoaches and other large buses, NHTSA sought comment on the retrofitting issue, while tentatively concluding that requiring retrofitting of existing buses appears impracticable. The agency discussed its tentative determination that, based on NHTSA's testing of the MY 1991 Prevost and the MY 1992 MCI buses, it appears that major structural changes to the vehicle's entire sidewall and roof structure would be needed for some existing buses to meet the proposed requirements. We discussed concerns that such extensive modifications may not be possible on all existing vehicles that would be covered by the proposed rollover structural integrity rule. In addition, we stated that the structural changes that would be entailed—assuming they could be done—would likely have significant cost impacts, and possibly have a substantial impact on a significant number of small entities (
If NHTSA decides not to require buses to be retrofitted to meet rollover structural integrity requirements, then a retrofit requirement for advanced glazing appears unwarranted. Without measures to prevent the glazing from popping out in a rollover, the anti-ejection benefits may not be achieved. Yet, Congress was particularly interested in a possible retrofit requirement for advanced glazing and we would like to learn more about the issue. We request comments on the feasibility, benefits, and costs of any potential requirement to retrofit existing buses with advanced glazing.
Thus, the agency seeks information on the technical and economic feasibility of a potential retrofit requirement. Which requirements in today's proposal could be appropriately applied to used buses? Is the agency's view reasonable that the benefits of advanced glazing might not be achieved if the bus's structure were not also upgraded to ensure the glazing stays in place in a rollover? What potential test procedures could the agency utilize to objectively measure compliance? Would it be reasonable to assess compliance with a retrofit requirement by means of only visually inspecting the vehicle? What lead time and phase-in issues should the agency consider for a potential retrofit requirement? What would the potential costs be?
If the proposed changes in this NPRM were made final, NHTSA is proposing a compliance date of three years after publication of a final rule. MAP–21 (in section 32703(e)) directs the agency to apply regulations prescribed in accordance with section 32703(b) “to all motorcoaches manufactured more than 3 years after the date on which the regulation is published as a final rule.” Based on the VRTC research, we believe that some manufacturers would need to redesign their emergency exit latch systems or adopt a design that would meet the proposed requirements. Also, manufacturers would also have to transition from double-glazed tempered/tempered windows to one that has at least one layer of laminated glass or advanced glazing that can meet all the proposed requirements. We have tentatively determined that a 3-year lead time after publication of a final rule is appropriate as some design, testing, and development will be necessary to certify compliance to the new requirements.
The rollover structural integrity NPRM has proposed a compliance date of 3 years after publication of a final rule.
We also propose that, to enable manufacturers to certify to the new requirements as early as possible, optional early compliance with the standard would be permitted.
MAP–21 directs that any regulation prescribed under section 32703(b), which includes this NPRM, to take into account potential impacts on seating capacity, on the size/weight of motorcoaches, and to be based on the best available science.
NHTSA does not believe that the requirements proposed in today's NPRM would result in a loss of seating capacity. We estimate that the material and design changes resulting from this rulemaking would be a transition, for some side windows, from a double-glazed tempered/tempered configuration to a single-glazed laminated configuration, and relatively simple changes to latch designs that would enable latches to stay closed when subjected to a nearby impact. Design changes would also be made to latches so that they do not protrude more than 25 mm (1 inch) into the opening of an emergency exit when the window is open. We do not expect these material and design changes to result in a loss of seating capacity. The agency requests comment on this issue.
There could be potential impacts from this rulemaking on the weight of motorcoaches, but we believe there would be a potential weight decrease (and thus a potential cost savings due to decreased fuel consumption). As discussed in the next section, the transition from a double-glazed tempered/tempered configuration to a single-glazed laminated configuration could save an estimated 23–33 pounds per window (276–396 pounds per bus), thereby increasing the overall fuel economy during the lifetime of these buses. In the accompanying PRE, we have attempted to quantify and account for this potential cost savings in our cost-benefit analysis of the rule. Comments are requested on this issue.
NHTSA has considered the best available science in developing today's NPRM. We discuss in the section on “Research,”
Ejections are a large part of the safety problem in crashes of motorcoaches and other large buses, particularly in rollovers. To mitigate ejections, NHTSA has adopted a final rule to require passenger seat belts, and has proposed today's NPRM on advanced glazing to reduce full ejections of unbelted passengers and partial ejections of belted and unbelted occupants. Consistent with MAP–21, the agency has taken a holistic approach toward adopting anti-ejection safety countermeasures for unbelted passengers, by first seeking improvements to the rollover structural integrity of motorcoaches (roof strength and crush resistance) and then pursuing measures that would drive use of advanced glazing, while making sure to avoid duplicative benefits, costs and countermeasures. NHTSA tentatively believes that the proposed structural integrity test (based on ECE R.66) can be used not only to evaluate the structural integrity of a large bus in maintaining the occupant compartment but also to evaluate the strength of its structural integrity in supporting side window glazing retention. Thus, the agency has fashioned the two rulemakings to complement each other to achieve portal improvements in preventing partial and complete ejection of motorcoach passengers.
NHTSA believes it avoided the duplication of benefits, costs, and countermeasures of other potential NHTSA rules being considered pursuant to MAP–21.
Our seat belt requirement mitigates the risk of ejection of passengers on motorcoaches and other large buses, but seat belt usage rates by occupants of these vehicles are uncertain. In addition, even if occupants are belted, there are risks associated with partial ejections. Advanced glazing in window openings and improved mountings would mitigate the risk of ejection of occupants who may not be restrained at the time of the crash, and would help protect against partial ejections of both restrained and unrestrained occupants. Today's NPRM proposes requirements that would result in portal improvements by way of advanced glazing, consistent with the goals of the Motorcoach Safety Enhancement Act of MAP–21.
A detailed discussion of the benefits and costs estimates may be found in the PRE for this NPRM.
Figure 4 below shows the annual fatal target population in OTRB and certain large bus rollovers and estimated lives saved from various bus rulemakings. The overall fatal target population in OTRB and certain large bus rollovers is 14.7 fatalities annually. ESC equipment on the subject buses reduces the chance of a rollover, and is estimated to prevent 1.47 fatalities annually. The resulting overall fatal target population in the subject OTRBs and other buses, with ESC, is 13.23 fatalities annually.
In the 2013 seat belt final rule and the structural integrity NPRM, NHTSA estimated that seat belt use rates would range from 15 percent to 84 percent and that the effectiveness of seat belts in rollover crashes is 77 percent. Therefore, the seat belt final rule would save 1.45 lives at 15 percent belt use rate and 8.1 lives at 84 percent belt use rate and thereby reducing the fatal target population in the subject buses to 11.78 and 5.13 fatalities annually, respectively. For the 15 percent seat belt use rate, the fatal population is broken down to 0.78 restrained occupant fatalities and 11.0 unrestrained occupant fatalities. Likewise, for the 84 percent seat belt use rate, the fatal population is broken down to 2.77 restrained occupant fatalities and 2.36 unrestrained occupant fatalities. Each restrained and unrestrained population is further broken down to subpopulations of ejected and non-ejected fatalities (see Figure 4).
The agency estimates in the rollover structural integrity PRE a 71 percent effectiveness of ejection mitigation in preventing fatalities. The rollover structural integrity PRE further estimates that, since the enhanced rollover structural integrity test procedure does not include a condition simulating occupant loading, NHTSA would estimate a midpoint effectiveness of 35 percent for unbelted ejected fatalities. That is, that effectiveness would result from just the windows being retained in their surrounding structures due to the rollover structural integrity requirements. Due to today's proposed requirements, advanced glazing and secure bonding techniques would be used that withstand occupant loading. Accordingly, we estimate that the remainder of the overall 71 percent effectiveness for the ejected fatal population is accounted for with today's NPRM (36 percent effectiveness). Based on the various rollover tests on buses performed by the agency, we determined that advanced glazing is effective in one and two quarter turn rollovers. Evaluating the various bus rollover crashes that have occurred in the real world, we estimated that 58 percent of large bus rollover crashes are one and two quarter turns. Therefore, the overall effectiveness of advanced glazing for all large bus rollover crashes is approximately 21 percent (58 percent of 36 percent effectiveness).
The target population (unrestrained ejected occupants in rollover crashes) estimated for this proposal, after discounting the benefits from the other initiatives applicable to the same group of buses (ESC, seat belts, rollover structural integrity) is 7.37 fatalities at the 15 percent seat belt use rate and 1.58 fatalities at the 84 percent seat belt use rate.
Applying a 21 percent effectiveness of enhanced window retention, we estimate this proposal to save 1.54(= 7.37 × 0.209) lives annually at the 15 percent seat belt use rate and 0.33 (= 1.58 × 0.209) lives annually at the 84 percent seat belt use rate.
Assuming that the proposed glazing and window retention requirements are only effective in one and two quarter turn bus rollover events in preventing serious and critical injuries to bus passengers, we estimated that 0.4 and 0.08 serious to critical injuries would be prevented for a 15 percent and 84 percent belt use rate, respectively. Therefore the equivalent lives saved by the proposed requirements are 1.6 for 15 percent belt use rate and 0.34 for 84 percent belt use rate.
We believe that our benefits estimate is conservative. We did not consider benefits that could result in crash modes other than rollovers, although advanced glazing could be beneficial in those crashes as well. In addition, potential benefits could also accrue from the requirement that would limit how far emergency exit latch protrusions may extend into the emergency exit opening of the window when the window is opened for emergency egress. Comments are requested on how NHTSA could estimate or account for these potential benefits.
We estimated the cost of this rulemaking by comparing the cost of glazing made from tempered glass (which would not meet the proposed advanced glazing requirements) to glazing comprised of laminated glass (which would meet the proposed requirements). We estimate that a fully framed and assembled double-glazed tempered/tempered window (approximately 25 square feet) costs $340. We estimate that a fully framed and assembled single-glazed laminated window (approximately 25 square feet) costs $353.75. Thus, the incremental cost of choosing a single-glazed laminated window over a double-glazed tempered/tempered window is $13.75 per window ($0.55 per square foot).
Our cost estimate for this rulemaking also includes changes that would have to be made to window latch systems. NHTSA found
We estimate that there are 2,200 new over-the-road and subject large buses manufactured annually. Assuming an OTRB or large bus has 6 large windows on each side and that all of them are emergency exits with latch mechanisms similar to that of the MCI E/J-series, the total incremental cost of redesigning the bus (from a double-glazed tempered/tempered window to a single-glazed laminated window) to meet the proposed requirements is $165.60(= $13.75 × 12 + $0.05 × 12).
On the other hand, we believe that there are a substantial number of buses that already meet the proposed advanced glazing requirements. We estimated that 47.7 percent of large buses covered by this proposal are already equipped with laminate glazing. Assuming that 47.7 percent of the 2,200 new buses covered by the proposal are MCI designs that already use laminated glazing, the buses would only need the necessary latch countermeasures to meet the proposed requirements. The remaining 60 percent of the new annual covered bus production would have to incur the incremental cost of having to convert to a single-glazed laminated configuration, at a minimum, as well as provide latch countermeasures, in order to meet the proposed requirements of this rulemaking. Assuming these factors, the total annual incremental cost for new buses covered under this proposal is estimated to be $191,169 (= 2,200 × 0.477 × $0.60 + 2,200 × 0.523 × $165.60).
We note that there could be cost savings resulting from this rulemaking due to weight implications. The transition from a double-glazed tempered/tempered configuration to a single-glazed laminated configuration could save an estimated 23–33 pounds per window (276–396 pounds per bus), thereby increasing the overall fuel economy during the lifetime of these buses. We estimate that the fuel savings ($2.18 million to $2.9 million) exceed the material costs of $0.19 million for the proposal. Comments are requested on this issue.
The proposed test is estimated to cost $8,700 per bus model, including the cost of the replacement windows and labor.
The benefits and costs of this proposed rule are summarized in the following tables 7, 8, and 9.
The Value of a Statistical Life (VSL) is $9.2M in 2013 dollars. The estimated net benefit for this rule is $5.87 million to $17.52 million (with a 3 percent discount rate) and $4.37 million to $13.15 million (with a 7 percent discount rate).
This rulemaking document was not reviewed by the Office of Management and Budget under E.O. 12866. It is not considered to be significant under E.O. 12866 or the Department's Regulatory Policies and Procedures (44 FR 11034; February 26, 1979). NHTSA has prepared a PRE for this NPRM.
This NPRM proposes to adopt a standard that would drive the installation of advanced glazing in the subject buses. NHTSA would adopt an impactor test of glazing material. In the tests, a 26 kg (57 lb) impactor would be propelled from inside a test vehicle toward the window glazing. The impactor and impact speed in these proposed tests simulate the loading from an average size adult male impacting a window on the opposite side of a large bus in a rollover. Performance requirements would apply to side and rear windows and glass panels on roof that ensure that glazing is securely bonded to window frames, that advanced glazing retains occupants within the structural sidewall of the bus even when damaged, and that emergency exit latches remain closed when impacted. NHTSA also proposes to limit how far emergency exit latch protrusions may extend into the emergency exit opening of the window when the window is opened for emergency egress.
Beyond the benefits attributable to the rule on seat belts and ESC for this same group of vehicles and a possible rule on bus structural integrity, we estimate that requiring new large buses of these types to meet the proposed performance criteria would save 1.54 lives annually at a 15 percent seat belt use rate and 0.33 lives annually at a 84 percent seat belt use rate. The total annual incremental material cost for new buses covered under this proposal is estimated to be approximately $0.19 million (for the entire new fleet) and fuel savings due to reduced weight of single glazed laminate over double glazed tempered window configuration is $2.18 million to $2.9 million. The estimated net benefit for this rule is $5.87 million to $17.52 million with a 3 percent discount rate and $4.37 million to
The policy statement in section 1 of Executive Order 13609 provides, in part:
As mentioned in the body of this preamble, the agency has developed this NPRM by building on the changes to motorcoach structure that manufacturers would implement in response to the agency's August 6, 2014 structural integrity NPRM (79 FR 46090). NHTSA based that NPRM on the ECE R.66 complete vehicle rollover test. By designing NHTSA's approach to anti-ejection safety countermeasures to incorporate ECE R.66, NHTSA would reduce unnecessary differences in regulatory requirements between the U.S. and its trading partners. A bus that meets ECE R.66 would have the bus structure needed to ensure that glazing is retained in bus portals in a rollover, and today's NPRM would ensure that windows are only made of advanced glazing.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601
NHTSA has considered the effects of this rulemaking action under the Regulatory Flexibility Act. According to 13 CFR 121.201, the Small Business Administration's size standards regulations used to define small business concerns, manufacturers of the vehicles covered by this proposed rule would fall under North American Industry Classification System (NAICS) No. 336111,
The agency does not believe that this proposed rule would have a significant economic impact on those small entities. First, the agency estimates that the incremental costs to each vehicle that currently does not comply with the proposed requirements would be approximately $165 per unit to meet the proposed rule. This incremental cost would not constitute a significant impact given that the average cost of the vehicles covered by this proposed rule ranges from $200,000 to $400,000. Further, these incremental costs, which are very small compared to the overall cost of the vehicle, can ultimately be passed on to the purchaser and user.
In addition, the agency believes that certifying compliance with the proposed rule would not have a significant impact on the manufacturers. Small manufacturers have various options available that they may use in certifying compliance with the proposed standard. Manufacturers are not required to use NHTSA's test as the basis for their certification. While the agency's test defined in the proposed regulatory test would be an objective test capable of determining which vehicles meet the minimum requirements, manufacturers can use other methods in certifying the compliance of their own vehicles.
For instance, a manufacturer could obtain advanced glazing windows from a glazing supplier and test the glazing on body sections of the vehicle. NHTSA used this approach in its motorcoach side glazing retention research program. The manufacturer could “section” the vehicle or otherwise obtain a body section representative of the vehicle, or test the glazing on test frames. It could base its certification on these tests, without testing a full vehicle.
Unlike NHTSA, manufacturers certifying compliance of their own vehicles have more detailed information regarding their own vehicles and can use reasonable engineering analyses to determine whether their vehicles will comply with the proposed requirements. We believe that a small manufacturer would be closely familiar with its own vehicle design and would be able to utilize modeling and relevant analyses on a vehicle-by-vehicle basis to reasonably predict whether its design will meet the requirements of today's proposed rule.
We also note that the product cycle of the covered buses is significantly longer than other vehicle types. With a longer product cycle, we believe that the costs of certification for manufacturers would be further reduced as the costs of conducting compliance testing and the relevant analyses could be spread over a significantly longer period of time.
Finally, we note that the requirements in today's proposed rule may affect the operators of the buses that are the subject of today's NPRM—some of which may be small businesses—but only indirectly as purchasers of these vehicles. As mentioned above, we anticipate that the impact on these businesses will not be significant because the expected price increase of the vehicles (those that do not comply with the proposed requirements) used by these businesses is small ($165 for each vehicle valued between $200,000 and $400,000). Further, we anticipate that fuel costs for these businesses may decrease due to today's proposed amendments.
For the aforementioned reasons, I hereby certify that if made final, this proposed rule would not have a significant economic impact on a substantial number of small entities.
With regard to a retrofit requirement applying to a population of on-road vehicles, the agency has tentatively determined that requiring retrofitting of existing vehicles would not be practical. Comments are requested on this issue. An estimated 78.8 percent of the 3,137 motorcoach carriers (according to the
Furthermore, we believe that it would not make sense to require retrofitting of windows with advanced glazing if the underlying structure of the buses were not reinforced to prevent the glazing from popping out in a rollover. It may not be structurally viable for many of these used large buses to be retrofitted. In the August 6, 2014 structural integrity NPRM, NHTSA tentatively decided not to include retrofit requirements but requested comments on the issue. In today's NPRM, we also seek comment as to whether the advanced glazing requirements should be applied to used buses.
NHTSA has examined today's proposed rule pursuant to Executive Order 13132 (64 FR 43255; Aug. 10, 1999) and concluded that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The agency has concluded that the proposed rule does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The proposed rule does not have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
NHTSA rules can have preemptive effect in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision: When a motor vehicle safety standard is in effect under this chapter, a State or a political subdivision of a State may prescribe or continue in effect a standard applicable to the same aspect of performance of a motor vehicle or motor vehicle equipment only if the standard is identical to the standard prescribed under this chapter. 49 U.S.C. 30103(b)(1). It is this statutory command by Congress that preempts any non-identical State legislative and administrative law address the same aspect of performance.
The express preemption provision described above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e) Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved. However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of State common law tort causes of action by virtue of NHTSA's rules—even if not expressly preempted.
This second way that NHTSA rules can preempt is dependent upon the existence of an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer—notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted. See
Pursuant to Executive Order 13132, NHTSA has considered whether this proposed rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the likelihood that preemption will be an issue in any subsequent tort litigation.
To this end, the agency has examined the nature (
NHTSA has analyzed this NPRM for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action would not have any significant impact on the quality of the human environment.
Under the procedures established by the Paperwork Reduction Act of 1995, a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. This rulemaking would not establish any new information collection requirements.
Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104–113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” Voluntary consensus standards are technical standards (
NHTSA is not aware of any voluntary standards that exist regarding advanced glazing as an anti-ejection safety countermeasure for large buses. However, this NPRM proposes to adopt a performance test that is based on the test procedures developed in the joint NHTSA and Transport Canada research program (the Martec study). NHTSA's consideration of this procedure accords with the principles of NTTAA, in that NHTSA is considering an existing procedure and has not had to expend additional agency resources studying the same safety need addressed by the Martec study.
With respect to the review of the promulgation of a new regulation,
Pursuant to this Order, NHTSA notes as follows. The issue of preemption is discussed above in connection with E.O. 13132. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.
The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $135 million annually (adjusted for inflation to 2009 dollars with base year of 1995). This NPRM would not result in expenditures by State, local or tribal governments, in the aggregate, or by the private sector in excess of $135 million annually.
Executive Order 12866 and E.O. 13563 require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:
• Have we organized the material to suit the public's needs?
• Are the requirements in the rule clearly stated?
• Does the rule contain technical language or jargon that isn't clear?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?
• Would more (but shorter) sections be better?
• Could we improve clarity by adding tables, lists, or diagrams?
• What else could we do to make the rule easier to understand?
If you have any responses to these questions, please include them in your comments on this proposal.
The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the docket number of this document in your comments.
Your comments must not be more than 15 pages long. (49 CFR 553.21). We established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments.
Comments may also be submitted to the docket electronically by logging onto the Docket Management System Web site at
Please note that pursuant to the Data Quality Act, in order for substantive data to be relied upon and used by the agency, it must meet the information quality standards set forth in the OMB and DOT Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB's guidelines may be accessed at
If you wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.
If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given above under
We will consider all comments received before the close of business on the comment closing date indicated above under
You may read the comments received by the docket at the address given above under
Please note that even after the comment closing date, we will continue to file relevant information in the docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically check the Docket for new material. You can arrange with the docket to be notified when others file comments in the docket. See
Imports, Motor vehicles, Motor vehicle safety.
In consideration of the foregoing, NHTSA proposes to amend 49 CFR part 571 as follows:
49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegation of authority at 49 CFR 1.95.
S5.4.1 * * * The emergency exit latches, or other related release mechanisms, shall not protrude more than 25 millimeters into the opening of the emergency exit when the window is in the open position as described in this paragraph.
S5.4.2.2
S1.
S2.
S3.
(a) Subject to S3(b) of this section, this standard applies to:
(1) Over-the-road buses, and
(2) Buses, other than over-the-road buses, that have a gross vehicle weight rating (GVWR) greater than 11,793 kilograms.
(b) This standard does not apply to school buses, transit buses, prison buses, and perimeter-seating buses.
S4.
S5
S5.1
(a) When the ejection impactor described in S8 of this section contacts the target location specified in S6.1.1 of this section of each side, rear, or roof daylight opening of a vehicle at 21.6 km/h, no portion of the window (excluding glazing shards) may pass the ejection reference plane defined under the procedures of S6 of this section.
(b) Each piece of window glazing and each surrounding window frame shall be retained by its surrounding structure in a manner that prevents the formation of any opening large enough to admit the passage of a 102 millimeter diameter sphere when a force of no more than 22 Newtons is applied with the sphere at any vector in a direction from the interior to the exterior of the vehicle.
S5.2
(a) When the ejection impactor described in S8 of this section contacts the target location specified in S6.1.2 of this section of each side, rear, or roof daylight opening of a vehicle at 21.6 kilometers per hour, no portion of the window (excluding glazing shards) may pass the ejection reference plane defined under the procedures of S6 of this section.
(b) Each piece of window glazing and each surrounding window frame shall be retained by its surrounding structure in a manner that prevents the formation of any opening large enough to admit the passage of a 102 millimeter diameter sphere under a force, including the weight of the sphere, of up to 22 Newtons.
S5.3
(a) When the ejection impactor described in S8 of this section contacts the target location specified in S6.1.3 of this section of each side, rear, or roof daylight opening of a vehicle at 21.6 kilometers per hour, no portion of the impactor may displace more than 175 mm past where the surface of the glazing had been in an unbroken condition.
(b) Each piece of window glazing and each surrounding window frame shall be retained by its surrounding structure in a manner that prevents the formation of any opening large enough to admit the passage of a 102 millimeter diameter sphere when a force of no more than 22 Newtons is applied with the sphere at any vector in a direction from the interior to the exterior of the vehicle.
S5.4 After the impact described in S5.1, S5.2, and S5.3 of this section, each emergency exit provided in accordance with Standard No. 217 (§ 571.217) shall be capable of releasing and opening according to the requirements specified in that standard.
S6.
S6.1
S6.1.1
S6.1.2
S6.1.3
S6.2
S6.2.1
(a) If the window is a single-pane unit, then both the occupant space interior and outside exterior surfaces of the glass pane are marked with the 75 millimeter grid pre-break pattern. The patterns are offset diagonally from one another (the points on one surface of the glass pane are offset 35 millimeters horizontally and 35 millimeters vertically from the points on the contralateral surface of the glass pane).
(b) If the window is an insulated-unit or double-glazed window, then both the occupant space side of the interior pane and the outside of the exterior pane are marked with the 75 millimeter grid pre-break pattern.
(1) If one of the glass panes is constructed of tempered or toughened glass, the insulated surface of the remaining glass pane (within the air gap) are marked with the 75 millimeter grid pre-break pattern. The patterns are offset diagonally from its contralateral surface.
(2) If neither pane is tempered glass, then both the occupant space side of the interior pane and the outside of the exterior pane are marked with the 75 millimeter grid pre-break pattern. The patterns are not diagonally offset from one another. The insulated surfaces of the glass panes (within the air gap) are not pre-broken.
S6.2.2
(a) Start with the inside surface of the window and forward-most, lowest mark made as specified in S6.2.1 of this section. Use an electric staple gun without any staples to make a hole in the glazing. The staple gun applies a line load of about 12 to 14 millimeters on the glazing.
(b) Use a 100 ± 10 millimeters × 100 ± 10 millimeters piece of rigid material as a reaction surface on the opposite side of the glazing to prevent to the extent possible the window surface from deforming by more than 10 millimeters when pressure is being applied by the staple gun.
(c) Continue making holes by moving rearward in the grid until the end of a row is reached. Then move to the forward-most mark on the next higher row and make a hole. Continue in this pattern until all the holes on the inside surface of the glazing are made.
(d) Repeat the process on the outside surface of the window.
(e) If punching a hole causes the glazing to disintegrate, halt the breakage procedure and proceed with the next step in the compliance test.
S6.3
(a) For side windows, the “ejection reference plane” is a vertical plane parallel to the longitudinal vertical center plane of the bus passing through a point located at a lateral distance of 102 millimeter from the lateral most point on the glazing and surrounding frame, with the window in the closed position.
(b) For rear windows, the “ejection reference plane” is a vertical plane perpendicular to the longitudinal vertical center plane of the bus passing through a point located at a longitudinal distance of 102 millimeter from the rear most point on the glazing and surrounding frame, with the window in the closed position.
(c) For roof glass panels/windows, the “ejection reference plane” is a horizontal plane passing through a point located at a vertical distance of 102 millimeter from the highest point on the glazing and surrounding frame, with the window/panel in the closed position.
S7.
(a) During testing, the ambient temperature is between 18 degrees C. and 29 degrees C., at any relative humidity between 10 percent and 70 percent.
S8.
Fish and Wildlife Service, Interior.
Proposed rule.
We, the U.S. Fish and Wildlife Service, propose revisions to the eagle nonpurposeful take permit regulations and eagle nest take regulations that we promulgated in 2009. Proposed revisions include the following: Changes to permit issuance criteria and duration; definitions; compensatory mitigation standards; criteria for eagle nest removal permits; permit application requirements; and fees. The revisions are intended to add clarity to the eagle permit regulations, improve their implementation, and increase compliance, while providing strong protection for eagles.
You may submit comments on the proposed rule until July 5, 2016. The Environmental Protection Agency will soon publish a notice in the
(1)
(2)
• Desk Officer for the Department of the Interior at OMB–OIRA at (202) 295–5806 (fax) or
• Service Information Collection Clearance Officer; Division of Policy, Performance, and Management Programs; U.S. Fish and Wildlife Service, MS: BPHC; 5275 Leesburg Pike; Falls Church, VA 22041–3803 (mail); or
See Public Comments under
Eliza Savage, 703–358–2329 or
The U.S. Fish and Wildlife Service proposes revisions to our regulations regarding the issuance of permits for certain activities involving eagles. We promulgated regulations covering authorization of nonpurposeful (incidental) take of eagles and take of eagle nests in 2009. Revisions to these permit regulations are needed to create a permitting framework that is more conducive to consistent administration by the Service and public compliance. Our goal is also to enhance protection of eagles throughout their ranges through implementation of avoidance and minimization of, and compensatory mitigation for, adverse impacts from otherwise lawful activities. The regulations are primarily codified in part 22 of title 50 of the Code of Federal Regulations.
The Service proposes a modified definition of the Eagle Act's “Preservation Standard,” which requires that permitted take be compatible with the preservation of eagles. We also propose to remove the distinction between standard and programmatic permits, codify standardized mitigation requirements that comport with the Service's draft mitigation policy, and extend the maximum permit duration for eagle incidental take permits (50 CFR 22.26). These proposed regulations also present a number of additional revisions to the eagle incidental take and eagle nest take regulations at 50 CFR 22.27, as well as revisions to the permit fee schedule at 50 CFR 13.11; new and revised definitions in 50 CFR 22.3; revisions to 50 CFR 22.25 (permits for golden eagle nest take for resource development and recovery operations) for consistency with the § 22.27 nest take permits; and two provisions that apply to all eagle permit types (50 CFR 22.4 and 22.11).
The Bald and Golden Eagle Protection Act (Eagle Act or BGEPA) (16 U.S.C. 668–668d) prohibits take of bald eagles and golden eagles except pursuant to Federal regulations. The Eagle Act allows the Secretary of the Interior to issue regulations to authorize the “taking” of eagles for various purposes, including the protection of “other interests in any particular locality” (16 U.S.C. 668a). In 2009, the Service promulgated regulations at 50 CFR part 22 that established two new permit types for take of eagles and eagle nests (50 FR 46836, September 11, 2009) (Eagle Permit Rule). One permit authorizes, under limited circumstances, the take (removal, relocation, or destruction) of eagle nests (50 CFR 22.27). The other permit type authorizes nonpurposeful take (disturbance, injury, or killing) of eagles (50 CFR 22.26) where the take is incidental to an otherwise lawful activity. These regulations currently provide for standard permits, which authorize individual instances of take that cannot practicably be avoided, and programmatic permits, which authorize recurring take that is unavoidable even after implementation of advanced conservation practices.
The Eagle Act requires the Service to determine that any take of eagles the Service authorizes is “compatible with the preservation of bald eagles or golden eagles.” We refer to this clause as the Eagle Act preservation standard. The preservation standard underpins the Service's management objectives for eagles. In the preamble to the final 2009 regulations for eagle nonpurposeful take permits, and in the final environmental assessment (FEA) of the regulations, the Service defined the preservation standard to mean “consistent with the goal of maintaining stable or increasing breeding populations” (74 FR 46838, September 11, 2009).
On April 13, 2012, the Service initiated two additional rulemakings: (1) A proposed rule to extend the maximum permit tenure for programmatic eagle nonpurposeful take permit regulations from 5 to 30 years, among other changes (“Duration Rule”) (77 FR 22267), and (2) an advance notice of proposed rulemaking (ANPR) soliciting input on all aspects of those eagle nonpurposeful take regulations (77 FR 22278).
The ANPR highlighted three main issues for public comment: Our overall eagle population management objectives; compensatory mitigation required under permits; and the nonpurposeful take programmatic permit issuance criteria. As a next step, the Service issued a notice of intent to prepare an environmental assessment (EA) or environmental impact statement (EIS) pursuant to the National Environmental Policy Act (NEPA) (42 U.S.C. 4321
The Duration Rule was finalized on December 9, 2013 (78 FR 73704). However, it was the subject of a legal challenge, and on August 11, 2015, the U.S. District Court for the Northern District of California vacated the provisions that extended the maximum programmatic permit tenure to 30 years.
The Service has prepared a draft programmatic environmental impact statement (DPEIS) to analyze eagle management objectives and these proposed revisions to the 2009 eagle permit regulations. The draft DPEIS is available on the Service's Web site at:
Bald eagle populations have continued to increase throughout the United States, increasing the potential need for permits for activities that may disturb, injure, or kill bald eagles. There has also been significant expansion within many sectors of the U.S. energy industry, particularly wind energy operations, and much more interest in permitting new long-term operations than was anticipated when the 2009 regulations were promulgated. At the same time, golden eagle populations are potentially declining, heightening the challenge of permitting incidental take of this species for otherwise lawful activities. The 2009 permit regulations do not provide an optimal framework for authorizing incidental take under these circumstances. There is a general perception that the current permitting framework does not provide enough flexibility to issue eagle take permits in a timely manner. Indeed, few programmatic permits have been issued to date. When projects go forward without permit authorization, the opportunity to obtain benefits to eagles in the form of required conservation measures is lost and project operators put themselves at risk of violating the law.
Under the current management approach, established with the 2009 eagle permit regulations and FEA, permitted take of bald eagles is capped at 5 percent of estimated annual productivity (
In the FEA for the 2009 regulations and in the preamble to those regulations, the Service adopted a policy of not issuing take permits for golden eagles east of the 100th meridian. At the time, the Service determined there were not sufficient data to ensure that golden eagle populations were stable or increasing such that permitting take would not result in a decline in breeding pairs in this region. However, after further analysis, the Service has determined that some take can be permitted with implementation of offsetting mitigation. Rather than providing an increased level of protection for golden eagles, this policy has meant that activities that take golden eagles in the east continue to proliferate without implementation of conservation measures and mitigation to address impacts to golden eagles that would be required as the result of the permitting process.
Since 2009, Service and U.S. Geological Survey (USGS) scientists have undertaken considerable research and monitoring to improve the Service's ability to track compliance with eagle management objectives and reduce uncertainty. Of particular significance, the Service has updated population estimates for both species of eagle and quantified uncertainty in those estimates. For the bald eagle, the Service now estimates substantially higher populations than was estimated in 2009, and allowable take limits will likely increase considerably across most of the country as a result (see further discussion below under Status of Eagle Populations).
For golden eagles, recent research indicates that the population in the coterminous western United States might be declining towards a lower equilibrium size. Additionally, the Service now has a much better understanding of the seasonal, annual, and age-related movement patterns of golden eagles. These data will be incorporated into an updated management framework.
In implementing the 2009 permit regulations, the Service has identified several provisions that could be improved for the benefit of both eagles and people, including the regulated community. One issue that has hampered efficient permit administration (of both eagle nonpurposeful take permits and eagle nest take permits) is the difficulty inherent in applying the standard that take must be reduced to the point where it is unavoidable, which the current regulations require for programmatic permits. Additionally, a lack of specificity in the regulations as to when compensatory mitigation is required can lead to inconsistencies in what is required of permittees.
The 5-year maximum duration for programmatic permits appears to be a primary factor discouraging many project proponents from seeking eagle take permits. Many activities that incidentally take eagles due to ongoing operations have lifetimes that far exceed 5 years. We need to issue permits that align better, both in duration and the scale of conservation measures, with the longer term duration of industrial activities, such as electricity distribution and energy production. Extending the maximum permit duration is consistent with other Federal permitting for development and infrastructure projects.
The Service undertook the 2012 ANPR, 2014 notice of intent and scoping meetings, and the DPEIS to improve the Service's permitting and conservation framework for eagles by addressing the problems noted above, among other issues. Moreover, since 2009, when the permits first became available, new developments, changing circumstances, and new information must be analyzed and incorporated into the Service's management objectives for eagles.
The purpose of scoping is to provide interested agencies, stakeholder organizations, Native American tribes, and the public an opportunity to provide comments regarding potentially significant environmental issues and the scope of the environmental analysis, including alternatives, and help to inform the eagle management program and the Service decision to prepare either an EA or an EIS. Service staff implementing the 2009 eagle permit regulations identified a number of priority issues for evaluation during this scoping process, including the following: Eagle population management objectives; programmatic permit conditions; compensatory mitigation; and criteria for nest removal permits.
Five public scoping meetings were held in Sacramento, Minneapolis, Albuquerque, Denver, and Washington, DC, between July 22, 2014, and August 7, 2014. Representatives from the Service were available to answer participants' questions and listen to their ideas and concerns. Approximately 213 people attended the meetings, and all were encouraged to submit written comments.
The Service also set up a Web site,
We received a total of 536 comments during the public comment period. Upon removal of duplicates, there were a total of 517 unique comments, of which many included additional attachments (
The Service is proposing to modify current management objectives for eagles established with the 2009 eagle permit regulations and FEA of the regulatory permitting system under the Eagle Act. Management objectives direct strategic management and monitoring actions and, ultimately, determine what level of permitted eagle take can be allowed. The Service recently completed a status report on bald and golden eagles: “Bald and Golden Eagles: Status, trends, and estimation of sustainable take rates in the United States” (“Status Report”) (USFWS, 2016). The Status Report is available at:
The Service has estimated the population size for the bald eagle in the coterminous United States using a population model in conjunction with estimates of the number of occupied nesting territories in 2009. That population size estimate is 72,434, and when combined with a previous estimate of population size for Alaska (70,544) is 143,000. We derive our conservative estimate for the population size by using the 20th quantile of the population size estimate distribution (the 20th quantile is the point on the probability distribution where there is only a 20% chance of the estimate being lower than the true population size). The 20th quantile represented 126,000 bald eagles for the United States in 2009. This number represents an increase from our population size estimate for the coterminous United States in 2007 (the year data were gathered to support delisting under the Endangered Species Act), which was 69,000. We attribute the difference to improved monitoring and estimation efforts, as well as increases in bald eagle numbers. Both the population model and Breeding Bird Survey (BBS) estimates indicate bald eagle populations are continuing to increase throughout the coterminous United States.
We estimated future bald eagle populations using a conservative assumption that the number of suitable bald eagle nesting territories will not increase above the 2009 estimate. Given limitations of the data on Alaskan eagles and evidence from the BBS that bald eagle populations are growing more slowly there, we did not model projections for Alaska and assumed that Alaska's bald eagle population will remain stable (though demographic rates suggested continued growth is possible). With these constraints, our model forecasts that the number of bald eagles in the coterminous United States outside the Southwest will continue to increase until populations reach an equilibrium at about 228,000 (20th quantile = 197,000) individuals. The model predicts that bald eagles in the Southwest will also continue to increase from the 2009 population estimate of 650 until reaching an equilibrium at about 1,800 (20th quantile = 1,400) individuals. Again, these numbers are based on assumptions that underlying demographic rates and other environmental factors remain unchanged, and the predictions do not take into account forecasted changes in climate nor how such changes may affect bald eagle population vital rates and population size. These projections also assume food and other factors will not become limiting.
We estimated the total population size for the golden eagle in the coterminous United States and Alaska was 39,000 (20th quantile = 34,000) in 2009 and 40,000 (20th quantile = 34,000) in 2014. However, although the golden eagle population trend estimate based on current surveys was stable, an estimate from a population model similar to that used for the bald eagle suggested the population in the western United States might be declining towards a lower equilibrium size of about 26,000 individuals.
Using unbiased cause-of-mortality data for a sample of 386 satellite-tagged golden eagles in the period 1997–2013, the Service estimated contemporary age-specific survival rates with and without current levels of anthropogenic mortality. Anthropogenic factors were responsible for about 56% of satellite-tagged golden eagle mortality, with the highest rates of anthropogenic mortality
For much more detailed information about the current population status and trends, see the Status Report available at:
The Eagle Act requires that any authorized take of eagles be “compatible with the preservation” of bald eagles and golden eagles. We defined this preservation standard in the preamble to the 2009 regulations to mean “consistent with the goal of maintaining stable or increasing breeding populations.” The Service now proposes to modify that standard and incorporate it into the regulations to mean “consistent with the goals of maintaining stable or increasing breeding populations in all eagle management units and persistence of local populations throughout the geographic range of both species.” The timeframe the Service used for modeling and assessing eagle population demographics is over the next 100 years (at least eight generations) for both eagle species relative to the 2009 baseline. This objective is consistent with Presidential, Department of the Interior, and Fish and Wildlife Service mitigation policies that aim to achieve a net benefit, or at a minimum, no net loss, of natural resources. (See the Service's mitigation policy (501 FW 2), Secretary's Order 3330, entitled “Improving Mitigation Policies and Practices of the Department of the Interior” (October 31, 2013), the Departmental Manual Chapter on Implementing Mitigation at the Landscape-scale (600 DM 6 (October 23, 2015)), and the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment (November 3, 2015)).
The Service considered adoption of a purely qualitative preservation standard such as “to not meaningfully impair the bald or golden eagle's continued existence.” However, a qualitative approach alone contains no standards for assessment, which could lead to inconsistent implementation between Service regions. Inconsistent implementation across Regions is a bigger concern with eagles than for many ESA-listed species because the range of both bald and golden eagles extends throughout the continental United States. Additional drawbacks to adopting a qualitative approach are that it is less compatible with formal adaptive management and does not provide a mechanism to assess cumulative impacts. Also, considerable quantitative information is available on eagle populations unlike many ESA-listed species, and to ignore these data or to independently reassess them for each permit is inconsistent with the Service's commitment to use the best available information and practice the best science. For these reasons, the Service has elected not to adopt a qualitative preservation standard.
We propose to largely retain the quantitative approach we have used since 2009 because it is explicit, allows less room for interpretation, and can be consistently implemented across the country and across the types of activities that require permits. Our proposed approach, including the underlying population model, is consistent with other wildlife management programs, including the North American Waterfowl Management Plan and management of marine mammals under the Marine Mammal Protection Act.
Our proposed modified preservation standard—“consistent with the goals of maintaining stable or increasing breeding populations in all eagle management units, and persistence of local populations throughout the geographic range of both species”—seeks to ensure the persistence of bald and golden eagle populations over the long term with sufficient distribution to be resilient and adaptable to environmental conditions, stressors, and likely future altered environments. To implement that objective in a consistent, analytical, scientifically supportable manner, these key terms mean: “Population” means eagle management unit (EMU); “persist” means stable with 2009 as the baseline; “long-term” means 100 years; and “sufficient distribution” means avoiding the extirpation of local area populations (LAPs) by limiting Service-authorized take rates to less than or equal to 5% of each LAP (see discussion below). We have estimated that an EMU population that meets these criteria has an approximately 50% (in the liberal DPEIS alternatives) or 80% (in the conservative DPEIS alternatives) likelihood of being “resilient and adaptable to environmental conditions and stressors and likely future environments” under the take rates analyzed, and assuming other conditions remain as they were over the time period the biological data used in the models were gathered.
The above criteria are used to populate national-, EMU-, and LAP-scale population models that allow the Service to determine take limits that are compatible with the preservation of eagles in this rule and associated DPEIS. In defining the eagle preservation standard in this way, and analyzing the effects of take within those take limits in the DPEIS, the analytical burden for each permit decision is greatly reduced, allowing the Service to make informed permitting decisions at an expedited rate.
The regulation revisions we are proposing are based on the amended definition of the preservation standard and the adoption of a relatively conservative approach to estimating population values and sustainable take rates based on the best available data and the Service's level of risk tolerance in the face of uncertainty. This relatively conservative approach is described below, and also in much more detail, along with alternative approaches and the scientific and technical information that underpins their analyses in the Status Report and the draft DPEIS.
We estimate there are about 143,000 bald eagles in the United States (including Alaska), and that populations continue to increase. Given their continued population growth above the 2009 baseline, there is considerable capacity to sustain take of bald eagles. Under our proposed management approach, the annual take limit would be 4,200 bald eagles nationwide. This compares to a take limit of 1,103 established in 2009.
We estimate golden eagles currently number about 40,000 individuals in the United States (including Alaska), and populations have been relatively stable around that size since the mid-1960s. We estimate the carrying capacity of golden eagles nationwide to be 73,000. We also have data indicating that population size is limited by high levels of anthropogenic mortality (
We are considering realigning EMUs to better reflect regional populations and migration patterns of both species. The Service and its partner agencies manage for migratory birds based on specific migratory route paths within North America (Atlantic, Mississippi, Central, and Pacific). Based on those route paths, State and Federal agencies developed the four administrative flyways that administer migratory bird resources. Both bald and golden eagles move over great distances seasonally and across years. There is a well-described annual seasonal migration of both species of eagles from northern regions southward in winter. An annual northward migration of bald eagles from southern regions is well-documented, and a similar northward migration of golden eagles that winter in southern regions has been recently discovered. The adoption of the administrative flyways as EMUs would better address geographic patterns of risk given the seasonal movement patterns of both species.
We propose to use the flyways as the EMUs for both species—with some modifications. Banding data recovery records indicate that banded eagles of both species were recovered more frequently in the same flyway EMU than in the same 2009 EMU. Given the relatively small size of the eastern golden eagle population and uncertainty about the distribution of that population across the two eastern flyways, we are proposing to combine the Mississippi and Atlantic Flyways into one management unit for golden eagles. For bald eagles, data indicate the Pacific Flyway should be split into three management units: Alaska, Pacific flyway north of 40 degrees N latitude to the Canadian border, and Pacific flyway south of 40 degrees N latitude to the Mexican border. See the draft DPEIS for maps of the current and proposed EMUs.
To monitor eagle populations in the future and assess whether different take thresholds are appropriate, our plan, assuming we have sufficient appropriated funding, is to conduct surveys on a 6-year rotation: One set of paired summer–winter golden eagle surveys in the first and second and fourth and fifth years of each assessment period, and to conduct bald eagle surveys in years three and six.
Because the flyway management scale is larger than the EMUs currently in use, EMU take limits would also increase (for bald eagles; golden eagle take limits would be zero in all management units, unless offset), with the result that adoption of the flyways as EMUs could be less protective of eagle populations at more local scales. These proposed regulations include two provisions designed to increase protection of eagles at more local scales. First, as noted earlier, we propose to modify the preservation standard of the Eagle Act to include the goal of maintaining the persistence of local populations throughout the geographic range of both species. Also, we are proposing to codify this new definition in the regulations at 50 CFR 22.3. The definition would read: “Compatible with the preservation of the bald eagle or the golden eagle” means “consistent with the goals of maintaining stable or increasing breeding populations in all eagle management units, and persistence of local populations throughout the geographic range of both species.”
In addition to codifying that modified definition for the preservation standard, these proposed regulations would also enhance protection of eagles at the local scale by incorporating a local area population (LAP) cumulative effects analysis into the permit issuance criteria. Currently, the LAP analysis is contained in a guidance document (Appendix F of the Eagle Conservation Plan Guidance, Module 1—Land-based Wind Energy (ECPG) (USFWS, 2013).
The LAP analysis involves compiling information on permitted anthropogenic mortality of eagles within a specified distance (derived from each eagle species' natal dispersal distance) of the permitted activities' boundary. If permitted eagle take exceeds 1% of the estimated population size of either species within the LAP area, additional take is of concern. If take exceeds 5% of the estimated population size within the LAP area, additional take is considered inadvisable unless the permitted activity will actually result in a lowering of take levels (
The numerical size of the LAP is derived by expanding estimated eagle density at the eagle management unit scale, as set in the 2009 Final Environmental Assessment on the Eagle Take Rule, by the size of the LAP area. We acknowledge that this approach is somewhat simplistic for at least two reasons. First, as described previously, the eagle density estimates come from nesting or late-summer population surveys and do not account for seasonal influxes of eagles that occur through migration and dispersal. Second, this approach assumes that eagle density is uniform across the EMU, which is not the case. In most cases the first simplification leads to an underestimate of true density, particularly in core wintering areas during the non-breeding months, and as such serves as an added buffer against overharvest of local nesting eagles. Assuming uniform density leads to greater relative protection of areas with higher than average eagle density within an EMU, and less relative protection in areas of lower density. Ideally, over time and with better information on resource selection and factors accounting for variation in density, as well as improved knowledge of seasonal changes in eagle density and population-specific movement patterns, the LAP analysis can be improved to more realistically account for the true LAP impacted by projects under consideration. For now, however, LAP take thresholds allow the Service to authorize limited take of eagles while favoring eagle conservation in the face of the uncertainty.
Since publication of the ECPG, the Service has updated natal dispersal distances (the linear distance between a bird's location of origin and its first breeding or potential breeding location) for both eagle species that are used to calculate LAPs. Those distances are currently 86 miles for bald eagles or 109 miles for golden eagles. These could change if additional data indicate the need for adjustment. The LAP cumulative effects analysis is described in more detail in the Status Report.
Currently the LAP cumulative effects analysis is used as guidance. Under these proposed regulations, the LAP analysis would be required as part of our review of each permit application. In order to issue a permit we must find that cumulative authorized take does not exceed 5% of the LAP, or we must demonstrate why allowing take to exceed that limit is still compatible with the preservation of eagles. One situation where we may issue a permit that would result in authorized take above 5% of the LAP is if a project is already in operation and the permit conditions would result in a reduction of take or compensatory mitigation that offsets
Incorporation of the LAP 5% limit on authorized take into the regulations would facilitate individual permit decisions; instead of needing to evaluate under an independent NEPA analysis each project in the context of other authorized take within the LAP, along with the level of unauthorized take—which is difficult or impossible to precisely determine—we will have already analyzed the effects of authorizing take of up to 5% of the LAP in the draft DPEIS for these proposed regulations, along with a qualitative analysis of unauthorized take, and determined that it is compatible with the preservation of eagles.
The primary aim of requiring this LAP analysis is to prevent significant declines in, or extirpation of, local nesting populations. However, there is also increasing evidence of a strong tendency in both species of eagle to return to non-breeding areas (wintering areas, migration routes, and staging areas) (McIntyre et al. 2008, Mojica et al. 2008). The LAP take limits also provide protection from permitting cumulatively high levels of take of these eagles that winter or migrate through the LAP area.
The take authorized within the LAP take limits is in addition to an average background rate of anthropogenic mortality (ongoing human-caused eagle mortality, most of which is not currently permitted.) For golden eagles, background anthropogenic mortality is about 10% (see the Status Report). Thus, total anthropogenic mortality for a LAP experiencing the maximum permitted take rate of 5% averages about 15%. We do not have similar mortality information for bald eagles. While we do not know exactly what level of unauthorized anthropogenic take of bald eagles is occurring, we are reasonably certain that the take we authorize for bald eagles would also be over and above a level of preexisting ongoing unpermitted take. The level of ongoing unauthorized take of bald eagles may be similar to that of golden eagles; however, bald eagles have a maximum potential growth rate about twice that of golden eagles and thus are more resilient to take. As part of the LAP analysis for both species, Service biologists would consider any available information on unpermitted take occurring within the LAP area; evidence of excessive unpermitted take would be taken into consideration in evaluating whether to issue the permit.
The Service considered developing specific eagle population size goals (other than the 2009 baseline) for each EMU and then using those targets to inform permit decisions within the EMUs. However, that approach is not feasible at this time given the technical and logistical complexities of working with State agencies and tribes to set population objectives at this scale within the timeframe of this action and the lack of fine-scale information on eagle populations that would be necessary.
The Service proposes to change the name of what we have been calling “nonpurposeful take permits” to “incidental take permits.” Incidental take is what § 22.26 permits authorize. We originally called them “nonpurposeful take” permits in order to avoid confusion with incidental take permits issued under the ESA for threatened and endangered species. However, we believe the term “nonpurposeful” has also caused confusion because it is not a commonly used word. We now see advantage in using the term “incidental” because the meaning of that term is better understood. Moreover, now that this permit system is relatively well established, the potential for confusion with the ESA incidental take permit system is much reduced. The change in nomenclature does not in any way affect the circumstances and manner in which these permits will be issued.
We propose to reduce the types of incidental take permits we can issue under § 22.26 from two to one. There would no longer be separate categories for standard and programmatic permits. Having two separate categories has sometimes led to confusion. It is not always possible to distinguish between what should be authorized under a programmatic versus a standard permit. Also, the term “programmatic” in the sense we have been using it is sometimes misunderstood because it differs from how “programmatic” has been typically used in the regulatory arena. “Programmatic” in the more traditional sense means “following or relating to a plan or program.” While we anticipate sometimes issuing permits to cover the effects of multiple activities within a given program (such as a military installation), our experience so far is that the more complex requests for permits we have had to date have been for single, long-term activities that have the potential to periodically take one or more eagles over the life of the project. To reduce confusion, we are proposing to eliminate the distinction between standard and programmatic permits. All § 22.26 permits would be simply “eagle incidental take permits” or just “incidental take permits.”
Under the current (2009) regulations, the Service issues programmatic permits predicated on implementation of advanced conservation practices (ACPs) developed in coordination with the Service. ACPs are defined as scientifically supportable measures approved by the Service that represent the best available techniques to reduce eagle disturbance and ongoing mortalities to a level where remaining take is unavoidable (50 CFR 22.3).
In contrast, applicants for standard permits under the current regulations must reduce potential take to a level where it is “
We propose to revise the definition of “practicable” by adopting the definition from the Service's proposed mitigation policy (see 81 FR 12379, March 8, 2016), slightly modified for specific application to eagle permits. The new definition would read: “available and capable of being done after taking into consideration existing technology, logistics, and cost in light of a mitigation measure's beneficial value to eagles and the activity's overall purpose, scope, and scale.” This proposed revised definition captures the essential elements of the current definition, while promoting a consistent approach to how the Service applies compensatory mitigation requirements.
Because the concept of ACPs is based on reducing take to the point where it is unavoidable—versus “practicably unavoidable”—and applied to the category of programmatic permits, these proposed regulations remove the requirement for ACPs. As discussed above, all permittees would be required to avoid and minimize impacts to eagles to the maximum degree practicable. Although the ACP requirement would be removed, the Service would require potential permittees to implement all practicable best management practices and other measures and practices that are reasonably likely to reduce eagle take. Permit applicants that cannot reduce or compensate for take to levels that are compatible with eagle
We believe the 5-year maximum permit term for permits is unnecessarily burdensome for entities engaged in long-term actions that have the potential to incidentally take bald or golden eagles over the lifetime of the activity. It has had the unintended effect of discouraging proponents of long-term activities from applying for permits, despite the risk of violating the statute. With longer-term permits, the Service has the ability to build more effective adaptive management measures into the permit conditions. This approach would provide a degree of certainty to project proponents because they would have a greater understanding of what measures may be required to remain compliant with the terms and conditions of their permits in the future. This increased level of certainty allows companies to plan accordingly by allocating resources so they are available if needed to implement additional conservation measures to benefit eagles and maintain their permit coverage.
Although killing, injuring, and other forms of take of eagles are illegal without a permit, the Service cannot require any entity to apply for an eagle take permit (except under legal settlement agreements). Some project proponents build and operate without eagle take permits even in areas where they are likely to take eagles. When such building occurs, the opportunity to achieve avoidance, minimization, and other mitigation measures is lost. The Service believes that permitting long-term activities that are likely to incidentally take eagles, including working with project proponents to minimize the impacts and secure compensatory mitigation, is far better for eagle conservation than having companies avoid the permitting process altogether because they perceive the process as overly onerous.
Under these proposed regulations, the Service would evaluate each long-term permit at no more than 5-year intervals. These evaluations would reassess fatality rates, effectiveness of measures to reduce take, the appropriate level of compensatory mitigation, and eagle population status. Additional commitments with regard to conservation measures may be required of long-term permittees based on the 5-year permit evaluations. In 2013, when the maximum term of programmatic permits was extended from 5 to 30 years (a change subsequently vacated by court order in 2015), language was included in the regulations limiting additional conservation measures that could be required of the permittee to those contemplated at the time the permit was issued. However, that language was based on the requirement that all programmatic permittees would be required to implement advanced conservation practices that reduce take to the point where it is unavoidable. Under this proposed rule, long-term permittees would be subject to the same criterion as holders of standard permits: They would be required to undertake all
To recoup the cost of processing longer-term permits, which are generally complex due to the need to develop robust adaptive management measures, we propose to assess a $36,000 permit application processing fee for eagle incidental take permits of 5 years duration or longer. The permit processing fee for 5-year programmatic permit applications is $36,000 currently. A commercial applicant for an incidental take permit of a duration less than 5 years would pay a $2,500 permit application processing fee, an increase from the current fee of $1,000 for programmatic permits and $500 for standard permits. The higher fee better reflects the costs of processing those permits. The amendment fee for those permits would increase from $150 to $500. The incidental take permit application processing fee for homeowners would remain $500 and the amendment fee for those permits would also remain unchanged at $150. The proposed higher fees for commercial entities would recover a larger portion of the actual cost to the Service, including technical assistance provided to the potential applicant by the Service prior to receiving the actual permit application package. Commercial entities have the opportunity to recoup the costs of doing business by passing those costs on to their customers. For homeowner permits, the fees would remain the same, even though Federal agencies are directed to recoup the full costs of processing permits. The reality is that many of the homeowners who justifiably need eagle permits would not be able to pay the actual full cost to the Service of providing technical assistance to the homeowner and processing their permit applications.
We propose to assess a $15,000 user fee called an Administration Fee every 5 years for long-term permits. This fee would cover the cost to the Service of conducting the 5-year evaluation and developing any appropriate modifications to the permit.
The Service has developed data standards, including protocols for pre-construction eagle surveys and a fatality prediction model for wind energy generation facilities. We propose to require that wind energy generation facility permittees use these models and protocols, which are contained in the Eagle Conservation Plan Guidance Module 1—Land-based Wind Energy (USFWS, 2013) (“ECPG”), available at:
The requirement to conduct surveys, fatality predictions, and monitoring using Service-approved ECPG protocols for wind energy generation facilities, and potentially for other industries in the future, will result in more efficient permitting decisions by the Service. Submission of inadequate data, or data gathered using methods the Service cannot verify to be sound, has resulted in significant extra work and time from our staff to assess wind energy project impacts.
We recognize that the model recommended in the ECPG for predicting fatalities is considered by some to be overly simplistic in its current form. However, the use of standard protocols is an essential component of the Service's adaptive management process for the eagle permit program, which employs feedback loops between the initial survey data, the fatality prediction model, and the post-construction fatality estimates. Data from the latter process can be used to formally improve the fatality prediction model, thereby increasing the performance and complexity of the model as well as the Service's ability to accurately predict project impacts. If the Service's protocols are not followed, combining data from multiple projects is difficult if
While we have not officially issued fatality prediction models or pre-application monitoring protocols for other activities, or finalized post-permitting monitoring protocols for any single activity, the Service has enough information about eagle behaviors and movements to recommend and approve monitoring protocols for activities other than wind energy generation on a project-specific basis during the technical assistance process. We encourage project proponents to coordinate with the Service as early as possible in the project planning process to ensure they are aware of any protocols we have recommended and that they use them appropriately. Our goal is to establish additional formalized monitoring protocols for industries other than wind energy in the future.
Most permittees will be required to monitor for purposes of assessing whether and how much take occurs under the permit. Reported take would be based on performance of permit conditions establishing surveying and monitoring protocols. For permits for disturbance, such monitoring is likely to consist of regular visits to the proximity of the nest site or other important eagle-use area where disturbance is likely to occur to observe whether eagles are using the area. We expect that most long-term permits would authorize lethal take rather than disturbance. Holders of permits that authorize eagle mortalities would be required to use approaches to searching for injured and killed eagles and for estimating total take that use statistically rigorous, unbiased, estimators. Permittees would be required to document and report all eagles that are found, the methodologies employed to search for them (including whether or not they were detected as part of a formal survey methodology), and the methods used to estimate what the observed carcasses actually represent (the probability of detection). “Observed take” as used in these regulations refers to the amount of take that is arrived at based on adherence to these protocols.
The Service defines “mitigation” to sequentially include: Avoidance, minimization, rectification, reduction over time, and compensation for negative impacts. The 2009 regulations lack specificity with regard to when compensatory mitigation will be required, and the preamble discussion of compensatory mitigation was somewhat inconsistent. In reference to nonpurposeful take permits, the preamble to the 2009 regulations contained the following language: “Additional compensatory mitigation will be required only (1) for programmatic take and other multiple take authorizations; (2) for disturbance associated with the permanent loss of a breeding territory or important traditional communal roost site; or (3) as necessary to offset impacts to the local area population. Because permitted take limits are population-based, the Service has already determined before issuing each individual take permit that the population can withstand that level of take. Therefore, compensatory mitigation for one-time, individual take permits will not typically be necessary for the preservation of eagles” (74 FR 46844, September 11, 2009). Regarding the § 22.27 nest take permits, we indicated in the preamble that we would require compensatory mitigation for all permits except those issued for safety emergencies (74 FR 46845, September 11, 2009).
The Service also addressed compensatory mitigation in the 2009 FEA, which contained the following language: “For most individual take permits resulting in short-term disturbance, the Service will not require compensatory mitigation. The population-based permitting the Service will propose is based on the level of take that a population can withstand. Therefore, compensatory mitigation for individual permits is not necessary for the preservation of eagles. However, the Service will advocate compensatory mitigation in the cases of nest removal, disturbance or [take resulting in mortality] that will likely incur take over several seasons, result in permanent abandonment of more than a single breeding territory, have large-scale impacts, occur at multiple locations, or otherwise contribute to cumulative negative effects” (USFWS, 2009).
Because the 2009 regulations did not incorporate specific compensatory mitigation provisions, the Service has required compensatory mitigation on a case-by-case basis somewhat inconsistently, particularly for bald eagles, which has at times resulted in differing treatment of, and uncertainty for, permit applicants. Accordingly, this proposed rule includes standardized requirements for compensatory mitigation. In addition to the mitigation requirements set out in this rule, the Service will implement these regulations in a manner consistent with Service, Departmental, and Presidential mitigation policies.
Since 2009, take limits for golden eagles have been set at zero throughout the United States. Accordingly, all permits for golden eagle take would exceed the take limits, and so must incorporate compensatory mitigation in order to authorize that take. A permittee would have to compensate for authorized take within the same EMU (except that we would allow for compensatory mitigation of take of Alaskan golden eagles throughout the migration and wintering range in the interior western United States and northern Mexico).
The best available information indicates that ongoing levels of human-caused mortality of golden eagles likely exceed sustainable take rates, potentially significantly. As a result, compensatory mitigation for any authorized take of golden eagles that exceeds take thresholds would be designed to ensure that take is offset at a greater than one-to-one ratio to achieve a net benefit to golden eagles to achieve an outcome consistent with the preservation of golden eagles as the result of the permit. Based on the uncertainty in the effectiveness of a particular compensatory mitigation practice, we are likely to require further adjustments to mitigation ratios to provide a buffer in the event that the planned mitigation is less effective than anticipated.
Under the various mitigation policies that govern Service permitting actions, compensatory mitigation must be in accordance with the management goal for the protected resource or species. For take that is within EMU take limits, compensatory mitigation is generally not needed because we can permit that take and still achieve our management goal. Cumulative authorized take exceeding 5% of the LAP would also generally require compensatory mitigation to ensure our eagle preservation standard is being met. An exception would be when the EMU take limit is not exceeded (
We may also require compensatory mitigation when there is an unusually
Under these proposed regulations, the LAP analysis would be the formalized approach to documenting whether compensatory mitigation may be necessary to maintain the persistence of local eagle populations. However, there are other factors, particularly long-term and cumulatively, that could also create the need for compensatory mitigation to better protect or enhance populations. For example climatic changes can have direct and indirect effects on species abundance and distribution, and may exacerbate the effects of other stressors, such as habitat fragmentation and diseases. The conservation of habitats within ecologically functioning landscapes is essential to sustaining the long-term persistence of populations. To ensure the Service has the tools to address such circumstances, this proposed rule would allow the Service to require compensatory mitigation “if otherwise necessary to maintain the persistence of local eagle populations throughout their geographic range.”
The Service will encourage the use of in-lieu fee programs, mitigation and/or conservation banks, and other established mitigation programs and projects. We intend to facilitate the establishment of an in-lieu fee program to allow permit applicants to contribute to a compensatory mitigation fund as an alternative to developing individual mitigation measures for each project. All compensatory mitigation must comply with principles and standards set forth in Service and Departmental policy. Per these principles and standards, compensatory mitigation is considered after all appropriate and practicable avoidance and minimization measures are applied and must achieve the following: Be sited to address broader ecological contexts; adhere to a mitigation planning goal; use best available science to ensure effectiveness; be additional to any existing or foreseeably expected conservation efforts; be durable and persist for at least the time-frame of the impacts; incorporate adaptive management; and account for uncertainty and risk. In approving compensatory mitigation mechanisms and actions, the Service will ensure the application of equivalent ecological, procedural, and administrative standards for all compensatory mitigation mechanisms. The Service prefers that compensatory mitigation is conducted prior to when the impacts of the action occur. Conservation banking can provide a source of advance credits.
Predictions about the effectiveness of compensatory mitigation measures have varying degrees of uncertainty. Under the current framework, the Service has required a relatively high degree of confidence in the effectiveness of very few compensatory mitigation options. We will consider compensatory mitigation measures and programs that face more risk and uncertainty provided mitigation accounting systems factor in risk and adjust metrics, mitigation ratios, and the amount of required mitigation to account for uncertainty.
Where compensatory mitigation will be required, the applicant must commit to the funding and method that will be used prior to or upon permit issuance. For long-term permits, permittees would be required to provide offsetting mitigation to compensate for predicted take over 5 years. If no observed take has occurred in the first 5 years, the permittee need not pay for any additional mitigation. If reliable reported data demonstrates that a given permit holder/project is causing fewer impacts to eagles than originally permitted (
We are proposing a change to the prioritization criteria that govern the order in which the Service will prioritize authorization of take if EMU take limits are approached. The priority after safety emergencies for Native American take for religious purposes that depends on take of wild eagles (and as such cannot be met with eagle parts and/or feathers from another source, such as the National Eagle Repository) will be amended slightly to apply to any increased need in take for religious purposes. In such cases, that take would not be part of the current baseline. Historical tribal take for religious use requiring take of eagles from the wild that has been ongoing, but not authorized, does not usually need to be prioritized because it is part of the baseline. Thus, any authorization of such previously unauthorized take would not affect EMU take limits. We also propose to delete the reference to rites and ceremonies because traditional take for religious and cultural purposes may not be limited to, or properly characterized as being part of, specific rites and ceremonies.
We propose changing the prioritization order by removing the priority for renewal of programmatic permits, since the regulations would no longer contain a separate category for programmatic permits.
The definition of “low-risk” projects that was established in the duration rule, which was subsequently vacated by the August 2015 district court decision
However, despite seeking input from the public and considerable staff effort, we were unable to develop a definition of “low-risk” that could be applied throughout the United States while achieving the desired goals for such a category. The Service considered basing the low-risk category on (1) a flat number of eagles predicted to be taken, (2) a percentage of the local area population (LAP), (3) a hybrid of those two, and (4) the geographic and physical features of the area where the project will be located. Each of these approaches produced conflicting results due to the significant discrepancies that exist between eagle population densities and resilience, habitat variability, and project scales. Accordingly, we are not proposing a revised definition for low-
Under the current § 22.27 eagle nest take regulations, the Service can issue permits for removal, relocation, or destruction of eagle nests where (1) necessary to alleviate a safety emergency to people or eagles, (2) necessary to ensure public health and safety, (3) the nest prevents the use of a human-engineered structure, or (4) the activity or mitigation for the activity will provide a net benefit to eagles. Only inactive nests may be taken except in the case of safety emergencies. Inactive nests are defined by the continuous absence of any adult, egg, or dependent young at the nest for at least 10 consecutive days leading up to the time of take.
As with § 22.26 incidental take permits, we propose to eliminate the distinction between programmatic and standard permits for § 22.27 nest take permits. The permit fee for removal or destruction of a single nest will remain at $500. A commercial applicant for a nest take permit for a single nest would pay a $2,500 permit application processing fee, an increase from the current fee of $500 for standard permits and $1,000 for programmatic permits. The amendment fee for those permits would also increase from $150 to $500. For permits to take multiple nests, the fee would be 5,000 versus 1,000 for programmatic permits currently. For homeowners, the nest take permit application processing fee and amendment fee would not change.
We are also proposing a number of relatively minor revisions to the nest take permit regulations at 50 CFR 22.27 and several revisions to definitions in 50 CFR 22.3 that apply to nest take permits. First, we propose to change terminology referencing the status of nests to better comport with applicable terms used in scientific literature. Nests that are not currently being used for reproductive purposes would be defined as “alternate nests,” while nests that are being used would be “in-use nests.” Some commenters suggested the latter be called “occupied nests,” but we believe that term would cause confusion because nests are in use for breeding purposes prior to being physically “occupied” by nestlings or an incubating adult. Under our proposed definition, an “in-use nest” means “a bald or golden eagle nest characterized by the presence of one or more eggs, dependent young, or adult eagles on the nest in the past 10 days during the breeding season.” This definition includes the period when adults are displaying courtship behaviors and are building or adding to the nest in preparation for egg-laying. We would define “alternate nest” as “one of potentially several nests within a nesting territory that is not an in-use nest at the current time.” When there is no in-use nest, all nests in the territory are “alternate nests.”
We propose to revise the definition of “eagle nest” from “any readily identifiable structure built, maintained, or used by bald eagles or golden eagles for the purpose of reproduction” to “any assemblage of materials built, maintained, or used by bald eagles or golden eagles for the purpose of reproduction.” The words “readily identifiable” did nothing to clarify when a structure was or was not a nest since a structure might appear to be just a pile of sticks to one person, or an osprey nest to a second person, but clearly an eagle nest to someone familiar with eagle nests. The confusion caused by the words “readily identifiable” sometimes put in jeopardy nests in the early stages of being built, or nests that are used from year to year but are substantially damaged during the non-breeding season by wind or weather.
We propose changes to enable the Service to issue a permit to remove an in-use nest to prevent a rapidly developing safety emergency that otherwise would be likely to result in bodily harm to humans or eagles while the nest is still in use for breeding purposes, instead of waiting until the emergency is exigent. Without this clarification, the Service has been faced with having to wait until the fully developed state of emergency had arrived, and the delay has sometimes been to the detriment of the eagles because, while the safety emergency developed, the breeding pair had the opportunity to lay eggs.
Current regulations provide that the Service can issue a nest take permit for an inactive (proposed “alternate”) nest that is built on a human-engineered structure and creates a functional hazard that renders the structure inoperable for its intended use. We propose to change this provision to also allow for removal of an in-use nest prior to egg-laying to prevent the foreseeable functional hazard from coming to fruition. The proposed regulatory language would allow nest removal at an earlier stage that may allow for the eagles to re-nest elsewhere while also preventing the nesting eagles from rendering the human-made structure inoperable.
We also propose to remove the requirement that suitable nesting habitat be available in the area nesting population to accommodate displaced eagles for non-emergency nest take. The provision has been problematic because, in many healthy populations of bald eagles, suitable nest sites are all occupied. As part of the permit application review process, the regulations would retain consideration of whether alternate nest sites are available to the displaced eagles, but an affirmative finding would not be a requirement for issuing a permit.
Also, we propose to change the scope of consideration to the “nesting territory,” not the “area nesting population,” which is defined in current regulations as “the number of pairs of golden eagles known to have a resting [sic] attempt during the preceding 12 months within a 10-mile radius of a golden eagle nest.” That definition was codified in 1982 when a new permit was established for removal or destruction of nests for resource development and recovery operations. In addition to the typo (
Under the current regulations, if a nest containing viable eggs or nestlings must be removed, we require transfer of the nestlings or eggs to a permitted rehabilitator or placement in a foster nest. However, there are circumstances when such placement is simply not possible; for example, in Alaska the closest permitted rehabilitator may be a day's drive or more away. Nests with viable eggs or nestlings can be removed only in safety emergencies, and the requirement has sometimes meant that the Service could not legally issue a permit necessary to alleviate the safety emergency. To address this problem, we propose to retain the requirement that nestlings and viable eggs be transported to a foster nest or permitted rehabilitator, but add a provision allowing the Service to waive the requirement if such transfer is not feasible or humane. The Service will determine the disposition of the nestlings or eggs in that scenario. Euthanasia may sometimes be the most humane option.
As with the prioritization criteria in § 22.26, these regulations would amend the prioritization criteria for nest take permits to remove any priority for allocation of take to renewal of programmatic permits because that permit category will be removed. Also, the prioritization for Native American religious take would be amended in the same manner as for § 22.26 incidental take permits (see earlier discussion).
These proposed regulations adopt mitigation standards for taking eagles nests under § 22.27 that are similar to those we are proposing for § 22.26. The exception is that permits issued under paragraph (a)(1)(iv) must apply appropriate and practicable compensatory mitigation measures as specified in your permit to provide a net benefit to eagles if the permitted activity itself does not provide a net benefit to eagles. Permits issued under paragraph (a)(1)(iv) are not limited to situations involving a safety or health issue or an obstruction to a manmade structure; they can be issued to take alternate (currently called “inactive”) nests for any reason as long as there will be a net benefit to eagles scaled to the effects of the nest removal. If the activity itself has a net benefit, compensatory mitigation would not be required. For example, a nest might be flooded during a riparian restoration project undertaken to provide improved habitat for eagles. Where the activity itself does not benefit eagles, the net benefit must be through compensatory mitigation.
Several commenters suggested we eliminate the requirement for a “net benefit” for permits issued under paragraph (a)(1)(iv). In general, we believe the requirement to provide a net benefit is appropriate, particularly now that we will promote the use of conservation banks, in-lieu fee programs, and other third-party arrangements to carry out the necessary measures to benefit eagles. These types of programs can leverage relatively small amounts of funding to provide significant benefits on the ground. Also, many nests for which permits are sought for removal are lower quality nests, not having been used in some time and degraded, or alternate nests just being built. In those cases, the amount of compensatory mitigation may be relatively low. Additionally, in populations with high eagle density, the biological value of a single nest to eagle populations tends to be lower. Data shows that productivity in highly saturated eagle populations decreases due to nests being built in less than ideal locations in relation to food sources and/or increased competition and fighting among nesting pairs. In such situations, the required net benefit would reflect that lower biological value.
We also propose minor revisions to the permit application processing fee table in 50 CFR 13.11. We would remove the column for Administration Fees because those fees are applied only for eagle incidental take permits and not for any other type of Service permit listed in the table. The requirement for administration fees would be incorporated into § 22.26. The table would also include the updated fees we are proposing for incidental take permit for commercial entities, long-term incidental take permits, nest take permits for commercial entities, and nest take permits for multiple nests.
The Service would revise § 22.11(c) to replace “[Y]ou must obtain a permit under part 21 of this subchapter for any activity that also involves migratory birds other than bald and golden eagles, and a permit under part 17 of this subchapter for any activity that also involves threatened or endangered species other than the bald eagle” with “[A] permit under this part authorizes take, possession, and/or transport only under the Bald and Golden Eagle Protection Act and does not provide authorization under the Migratory Bird Treaty Act or the Endangered Species Act for the take, possession, and/or transport of migratory birds or endangered or threatened species other than bald or golden eagles.” The original language was promulgated prior to the bald eagle being removed from the ESA List of Endangered and Threatened Wildlife as part of a final rule authorizing transport of eagle parts. The original intent of § 22.11(c), as explained in the final rule published in the
We are proposing several revisions to the regulations for permits for take of inactive golden eagle nests for resource development and recovery operations. The current regulations were codified in 50 CFR 22.25 in 1983. We propose to amend them to use terminology that is consistent with the § 22.27 eagle nest take permit regulations. Our intent in this rulemaking is to limit revisions to § 22.25 to those necessary for consistency with § 22.27, plus a few additional minor revisions, as explained below.
The proposed revisions include changing “inactive nest” to “alternate nest” and removing references to the “area nesting population.” As with § 22.27 nest take permits (discussed above), the relevant area of consideration is the nesting territory. Rather than needing to evaluate whether there is suitable nesting habitat available within the area nesting population, the Service will consider whether alternate nests are available within the nesting territory. It may be
We propose to add the phrase “and compatible with the preservation of golden eagles” to paragraph (b)(4) of the § 22.25 permit regulations. The introductory language for this permit regulation already specifies that the taking must be compatible with the preservation of golden eagles, but we believe it is important to clarify in paragraph (b)(4) that mitigation can be used to provide that compatibility. A final minor proposed revision is the addition of “and monitoring” to paragraph (b)(4). We do, as a matter of course, require monitoring as a condition of these permits, so it makes sense to clarify in the regulation that we may do that.
Finally, we are proposing to replace the word “feasible” with “practicable” in reference to the mitigation that will be required, consistent with § 22.26, § 22.27, and agency mitigation policy.
With regard to using a categorical exclusion for projects that pose a low risk to eagles, we investigated the possibility of developing a new categorical exclusion for such projects. However, we were unable to define low risk in a manner that was workable nationwide (see above discussion of the “low-risk category”).
At the individual project level, we invite consultation with tribes in the vicinity of projects requesting permits, as well as tribes with historical ties to the area who have advised us of their interest in consulting with the Service.
We have attempted to research the extent of one form of historical take via the DPEIS on this action: Take for Native American religious use. More information about this type of take would allow the Service to better determine that the take can be considered baseline when we issue eagle take permits to tribes.
The Service cannot require any entity to apply for an eagle take permit (except under legal settlement agreements), with the result that some project proponents build and operate without eagle take permits in areas where eagles are likely to be taken. The 5-year permit duration limit has exacerbated this situation for projects with lifetimes much longer than 5 years. When proponents choose to build projects without seeking permits because they perceive the application burdens are too great, the opportunity to achieve mitigation and conservation measures is lost. The Service believes that permitting long-term activities that are likely to incidentally take eagles, including working with project proponents to minimize the impacts, and securing compensatory mitigation, is preferable to forgoing that opportunity because companies perceive the permit process as being more onerous than it should be. Enforcement becomes the other option when entities take eagles without permits, and the Service is actively engaged in numerous investigations focused on incidental take of eagles. However, regulatory compliance is vastly preferred over resorting to enforcement.
If the maximum permit tenure is extended to 30 years, the Service will evaluate each permit at no more than 5-year intervals. These evaluations will reassess fatality rates, effectiveness of measures to reduce take, the appropriate level of compensatory mitigation, and eagle population status. Additional commitments with regard to conservation measures may be required of long-term permittees at the 5-year permit evaluations. In 2013, when the maximum term of programmatic permits was extended from 5 to 30 years (struck down in 2015), language was included in the regulations limiting additional conservation measures that could be required of the permittee to those contemplated at the time the permit was issued. However, that language was based on the requirement that all permittees would be required to implement advanced conservation practices that reduce take to the point where it is unavoidable. As part of the Management Common to All Action Alternatives, long-term permittees would be subject to the same criterion as holders of standard permits have been under the current regulations: They would be required to undertake all practicable measures to reduce take and would no longer be required to implement ACPs to reduce take to the point where any remaining take is unavoidable. To ensure eagles are adequately protected, based on the results of the 5-year evaluations, the Service may require long-term permittees to undertake additional conservation measures that are practicable and reasonably likely to reduce risk to eagles based on the best scientific information available.
With regard to the suggestion that maximum permit tenure should be longer than 30 years, we disagree at this time because 30 years should cover the duration of most projects that are likely to need incidental take permits and is a reasonable period in which to adaptively manage permitted activities without requiring a new permit. Permit renewal will be an available option for permitted projects that operate for longer than 30 years.
The Service does not have the resources to conduct pre-construction surveys and must rely on permit applicants to provide these data. The Service does carefully review the pre-construction survey data for accuracy and works with applicants to resolve any discrepancies before accepting the data as reliable and accurate. Use of Service-approved or recommended protocols would facilitate our review and allow us to better identify data gaps and other insufficiencies.
The example in the ECPG that calculates 20 hours of sampling required per turbine is specific to a project with 40 2.5–MW turbines with a 100-m rotor diameter where the objective is to validate a Category 3 classification. For assessing risk of a potential Category 2 project, the ECPG recommends a minimum of 1 hour of observation per 800-meter survey plot per month, but at least 2 hours of observation per survey plot is warranted for a season for which Stage 1 evidence is ambiguous or suggests high use. The ECPG also recommends sampling at least 30% of the total footprint of the project hazardous area and that surveys should be conducted for at least 2 years prior to project construction.
The per-turbine effort for this minimum level of sampling will depend on turbine configuration and spacing. To accurately predict risk to eagles, sampling must provide data that are representative of eagle use at the site during all times of day across seasons and years. The benefit of additional data in terms of predicting risk will depend in part on the variability of eagle use at the site. The Service advises potential permit applicants to coordinate closely with the Service regarding the appropriate sampling effort, as sampling considerations are complex and depend in part on case‐specific objectives.
We also do not agree that compensatory mitigation should be required only for certain types of industries, or only for take that results from a commercial or industrial activity. Whether an entity is commercial does not, by itself, affect the degree of impacts to eagles. To the degree that industrial permits entail greater detrimental effects to eagles than a typical homeowner permit, those permittees will be required to contribute additional compensatory mitigation.
• An ammunition exchange in locations where eagles are impacted by lead;
• Funding for identification and carcass removal programs that would remove carcasses from areas where eagles collide with vehicles or trains;
• Habitat enhancement funding or purchasing mitigation lands through commercial habitat banks;
• Funding for appropriate research efforts;
• Reduction of unintentional poisoning;
• Implementation of a reward system to reduce poaching;
• Reduction of mortality from vehicle collisions and road kill-collisions through road kill-carcass removal efforts;
• Shifting to use of nontoxic ammunition via hunter education and voluntary lead abatement;
• Reduction of stock tank drowning;
• Implementation of a whistleblower rewards system to reduce poaching;
• A reduction of the impacts of secondary trapping;
• Funding of rehabilitation centers;
• Chelation to reduce lead levels in eagles;
• Funding of livestock depredation compensation programs to encourage landowners to protect eagles;
• Improved management of public recreational activities that reduce eagle productivity;
• Prey management programs;
• Habitat preservation;
• Habitat restoration;
• Reduction of unintentional poisoning;
• Captive-breeding programs;
• Utility line marking to prevent collisions;
• Nest discourager/excluder installation;
• Contributions to eagle management programs.
• Active Nest—this definition would serve to clarify the types of breeding behavior or evidence needed to prevent the take of a nest during a particular breeding season.
• Active Territory—this definition would supplement the existing definition for area nesting population and relate to one breeding pair making a nesting attempt within an established breeding territory.
• Inactive Territory or Historical Territory—this definition would aid in dealing with a scenario where nest structures are observed but no evidence
• Alternate Nest—this definition would apply to a documented nest used by a breeding pair within the same territory in which an applicant has applied for a nest removal permit.
• Nest condition—this definition would describe the qualitative evaluation of nest conditions used to determine the likelihood of repeat nesting at this site.
• Nonviable Nesting Structure or Historical Nest Site—this definition would define a structure that has not been used for a period of time or has been damaged from environmental conditions.
• Existing Disturbance Regime—this definition is to provide a qualitative evaluation of the baseline conditions for which a new disturbance is proposed. For example, if an existing operation is ongoing and eagles chose to nest nearby, this circumstance needs to be considered when evaluating “take” or the risk for potential “take.”
Nest abandonment is a term used in our definition of what constitutes disturbance under the Eagle Act at 50 CFR 22.3. It is not relevant to determining the status of nests in a nesting territory and is a different concept entirely. In the definition of “disturb,” a nest is considered abandoned if eagles had been using it, or would have used it, during the current breeding season, but did not raise young there due to interference or perceived interference. If a proponent's action causes nest abandonment, then the proponent has disturbed an eagle under the definition and is liable for take. In the definition of “disturb,” nest abandonment does not refer to the long-term status of the nest.
We still see utility in redefining “low-risk” to include projects with a slightly higher probability of taking eagles, but which cumulatively will still be compatible with eagle management objectives. However, we were not able to develop a definition of “low-risk” that could be applied throughout the United States while achieving the desired goals for such a category. The Service considered a variety of criteria and/or metrics for the low-risk category, but each approach resulted in significant discrepancies because of on-the-ground differences in eagle population densities and resilience, habitat variability, and project scales. Therefore, we are not including a revised definition of low-risk projects into these proposed regulations.
Although the proposed regulations changes do not include a category for low-risk, we agree that streamlining the process for projects that clearly demonstrate a likelihood of take being relatively low based on siting and/or project design is a worthwhile goal. We plan to continue our efforts to identify and establish a category of low-risk projects that, without having to conduct required pre-application surveys, could qualify for eagle take permits. We welcome comments on defining low-risk activities and potential criteria for developing an authorization process that minimizes costs of compliance and the demand for agency resources for projects that will result in no more than minimal adverse effects on eagles for our consideration in the future. Comments should focus on (1) metrics that would be necessary to establish a category of low-risk projects, (2) informational requirements, if any, for the application and (3) appropriate terms and conditions to qualify for a nationwide eagle take permit.
• Similar to existing activities that eagles in the area are accustomed to;
• Of limited duration, occurring no more than several days at a time;
• Implementing various minimization measures to reduce impacts to eagles; and
• Not going to have a project noise level above 92 decibels.
• Proximity and view shed of proposed disturbance in relation to nesting habitat;
• Landscape-level migration patterns;
• Quality of potential foraging habitat;
• Project activities that have a potential interaction with eagles or eagle habitats;
• Timing of projects (short-term/long-term, within or outside of breeding season); and
• Specific operational practices (applicant-committed protection measures).
We request comments or information from other concerned governmental agencies, Native American tribes, the scientific community, industry, and other interested parties concerning this proposed rule. We also welcome comments on defining low-risk activities and potential criteria for developing a general permit to minimize the costs of compliance for the public and the demand for agency resources for projects that will result in no more than minimal individual and cumulative adverse effects on eagles for our consideration in the future. While comments related to low-risk or general permits would be outside the scope of this rulemaking action, we would keep them for consideration if we decide to pursue further rulemaking in the future. You may submit your comments and supporting materials by one of the methods listed in
Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection at
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that this proposed rule is significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this proposed rule in a manner consistent with these requirements.
Under the Regulatory Flexibility Act (5 U.S.C. 601
SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide the statement of the factual basis for certifying that a rule would not have a significant economic impact on a substantial number of small entities. We have examined this proposed rule's potential effects on small entities as required by the Regulatory Flexibility Act and determined that this action would not have a significant economic impact on a substantial number of small entities.
In the first 6 years (FY 2010 through FY 2015) since the eagle permit regulations at 50 CFR 22.26 and 50 CFR 22.27 were published, the Service has received 626 permit applications for the two permit types and issued approximately 490 permits, including renewals. Of those, we estimate 410 permits were issued to small businesses. Over those 6 years, the annual number of applications received (including for renewals) increased from 50 per year in FY 2010 to 140 per year in FY 2015.
We received a total of 34 programmatic permit applications and have issued one programmatic permit thus far. We anticipate a greater volume of applications for permits for long-term activities in the future, although we expect the number to increase gradually for a period of years and perhaps eventually reach an average of 30 or fewer per year. Utility-scale wind energy facilities and electric transmission companies are likely to be the most frequent long-term permit applicants, because of the known risk to eagles from collisions with wind turbines and electric power lines. Although smaller wind energy facilities could seek permits, we anticipate that most of the applications for wind energy
Under these proposed regulations, an applicant for a long-term permit would pay a $15,000 Administration Fee (an increase from the current fee of $2,600) every 5 years to cover the cost of the 5-year permit evaluations. The initial permit application fee of $36,000 for a long-term permit will remain the same. We do not believe the increased Administration Fee would impose a significant economic impact on these small entities.
A commercial applicant for an incidental take permit of a duration less than 5 years would pay a $2,500 permit application processing fee, an increase from the current fee of $1,000 for programmatic permits and $500 for standard permits. The amendment fee for those permits would increase from $150 to $500. A commercial applicant for a nest take permit for a single nest would pay a $2,500 permit application processing fee, an increase from the current fee of $500 for standard permits. The amendment fee for those permits would also increase from $150 to $500. An applicant for a nest take permit for multiple nests would pay a $5,000 permit application processing fee, an increase from the current fee of $1,000 for programmatic permits. None of these fee increases are significant for commercial entities and all are necessary to recoup as much of the Service's costs in providing these services to these entities. The amendment fee for those permits would remain the same as the current programmatic nest take amendment fee ($500).
Based on trends in the numbers of permit applications under the current regulations, we project there would be fewer than 100 small entities subject to the proposed fee increases annually, including renewal and amendments, which will not result in a significant impact on a substantial number of small entities. We request comments and information from industry and any other interested parties regarding probable economic impacts of this proposal.
Additional practicable mitigation measures that may be required under the terms and conditions of permits issued with a term of longer than 5 years could result in some additional costs to the permittee, but those costs should be offset by the reduction in uncertainty for the permittee achieved by securing a 30-year permit rather than a 5-year permit. Consequently, we certify that because this proposed rule would not have a significant economic effect on a substantial number of small entities, an initial regulatory flexibility analysis is not required.
We are also proposing minor revisions to the eagle nest take permit regulations at 50 CFR 22.27, but none of the proposed changes are expected to have a significant economic effect on a substantial number of small entities.
This proposed rule is not a major rule under SBREFA (5 U.S.C. 804(2)) because:
a. This proposed rule would not have an annual effect on the economy of $100 million or more.
b. This proposed rule would not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions.
c. This proposed rule would not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
a. This proposed rule would not “significantly or uniquely” affect small governments. A small government agency plan is not required. The proposed regulations changes would not affect small government activities in any significant way.
b. This proposed rule would not produce a Federal mandate of $100 million or greater in any year. It is not a “significant regulatory action” under the Unfunded Mandates Reform Act.
In accordance with E.O. 12630, the rule would not have significant takings implications. This proposed rule does not contain any provisions that could constitute taking of private property. Therefore, a takings implication assessment is not required.
This proposed rule would not have sufficient Federalism effects to warrant preparation of a Federalism assessment under E.O. 13132. It would not interfere with the States' abilities to manage themselves or their funds. No significant economic impacts are expected to result from the proposed regulations change.
In accordance with E.O. 12988, the Office of the Solicitor has determined that the proposed rule would not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.
This proposed rule contains a collection of information that we have submitted to the Office of Management and Budget (OMB) for review and approval under the PRA (44 U.S.C. 3501
This proposed rule does not revise the number of responses or total annual burden hours associated with eagle permits. However, we believe the approved estimates for the number of annual responses are high. We will adjust our estimates when we renew OMB Control No. 1018–0022.
This proposed rule would:
(1) Establish an administration fee of $15,000 that each permittee will pay every 5 years to cover the cost of the 5-year permit evaluations. We will not collect this fee until the permittee has had a permit for at least 5 years. We expect that we will not impose this fee until at least 2022.
(2) Change the application fees associated with some permits.
(3) Require annual reports. This requirement is approved under OMB Control Number 1018–0022. There are no fees associated with annual reports.
(4) Establish a new reporting requirement and a new administration fee for permits of over 5 years.
We are seeking OMB approval for changes in burden and nonhour cost burden associated with the proposed rule. We are requesting that OMB assign a new control number for the revised burden. When we publish the final rule, we will incorporate the new nonhour cost burden into OMB Control Number 1018–0022 and discontinue the new number. An agency may not conduct or sponsor and you are not required to respond to a collection of information
As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies to comment on any aspect of this information collection, including:
(1) Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on respondents.
If you wish to comment on the information collection requirements of this proposed rule, send your comments directly to OMB (see detailed instructions under the heading Comments on the Information Collection Aspects of this Proposal in the
We have prepared a draft programmatic environmental impact statement (DPEIS) under the requirements of the NEPA of 1969 (42 U.S.C. 4321
In addition, the Environmental Protection Agency (EPA) is publishing a notice of availability in the
The EPA is charged under section 309 of the Clean Air Act to review all Federal agencies' environmental impact statements (EISs) and to comment on the adequacy and the acceptability of the environmental impacts of proposed actions in the EISs. EPA also serves as the repository (EIS database) for EISs prepared by Federal agencies. The Environmental Impact Statement (EIS) Database provides information about EISs prepared by Federal agencies, as well as EPA's comments concerning the EISs. You may search for EPA comments on EISs, along with EISs themselves, at
Section 7 of the Endangered Species Act (ESA) of 1973, as amended (16 U.S.C. 1531
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and 512 DM 2, we have evaluated potential effects on federally recognized Indian tribes and have determined that this proposed rule would not interfere with tribes' abilities to manage themselves, their funds, or tribal lands. In September of 2013, we sent a letter to all federally recognized tribes inviting them to consult about possible changes to the eagle take permit regulations. The letter notified Tribes of the Service's intent to amend the regulations and sought feedback about their interest in consultation on the amendment. After sending these letters and receiving responses from several Tribes, FWS conducted webinars, group meetings, and meetings with individual Tribes. The FWS will continue to respond to all Tribal requests for consultation on this effort.
Several tribes that value eagles as part of their cultural heritage objected to the 2013 rule that extended maximum permit duration for programmatic permits based on a concern that the regulations would not adequately protect eagles. Those tribes may perceive further negative effects from similar provisions proposed in this rulemaking. However, eagles would be sufficiently protected under this proposal because only those applicants who commit to adaptive management measures to ensure the preservation of eagles will receive permits with terms longer than 5 years and those permits will be reviewed at 5-year intervals and amended if necessary.
E.O. 13211 addresses regulations that significantly affect energy supply, distribution, and use. E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule, if finalized as proposed, would likely be used by numerous energy generation projects seeking compliance with the Eagle Act. However, the rule is not a significant regulatory action under E.O. 13211, and no Statement of Energy Effects is required.
These proposed regulations incorporate by reference two appendices of the Service's Eagle Conservation Plan Guidance, Module 1—Land-based Wind Energy (ECPG) (USFWS, 2013). The guidance went through two periods of public notice and comment during its development and, separately, was twice peer-reviewed by independent third-parties. The ECPG is available in the Service's Web site at:
Administrative practice and procedure, Exports, Fish, Imports, Plants, Reporting and recordkeeping requirements, Transportation, Wildlife.
Birds, Exports, Imports, Migratory birds, Reporting and recordkeeping requirements, Transportation, Wildlife.
For the reasons described in the preamble, we propose to amend subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 668a, 704, 712, 742j–l, 1374(g), 1382, 1538(d), 1539, 1540(f), 3374, 4901–4916; 18 U.S.C. 42; 19 U.S.C. 1202; 31 U.S.C. 9701.
(d) * * *
(4) * * *
16 U.S.C. 668–668d; 703–712; 1531–1544.
The additions and revisions read as follows:
(c) A permit under this part only authorizes take, possession, and/or transport under the Bald and Golden Eagle Protection Act and does not provide authorization under the Migratory Bird Treaty Act or the Endangered Species Act for the take, possession, and/or transport of migratory birds or endangered or threatened species other than bald or golden eagles.
The revisions read as follows:
The Director may, upon receipt of an application and in accordance with the issuance criteria of this section, issue a permit authorizing any person to take alternate golden eagle nests during a resource development or recovery operation if the taking is compatible with the preservation of golden eagles. * * *
(a) * * *
(4)
(ii) A description of the monitoring that was done to verify that eagles are not attending the nest for breeding purposes, and any additional available documentation used in identifying which nests within the territory were in-use nests in current and past breeding seasons.
(b) * * *
(1) Only alternate golden eagle nests may be taken;
(4) The permittee must comply with any mitigation and monitoring measures determined by the Director to be practicable and compatible with the resource development or recovery operation; and
(c) * * *
(3) Whether suitable golden eagle nesting and foraging habitat unaffected by the resource development or recovery operation is available to accommodate any golden eagles displaced by the resource development or recovery operation; and
(4) Whether practicable mitigation measures compatible with the resource development or recovery operation are available to encourage golden eagles to reoccupy the resource development or recovery site. Mitigation measures may include, but are not limited to, reclaiming disturbed land to enhance golden eagle nesting and foraging habitat, relocating in suitable habitat any golden eagle nest taken, or establishing one or more nest sites.
The revisions and additions read as follows:
(a)
(c) * * *
(1) You must comply with all avoidance, minimization, or other mitigation measures specified in the terms of your permit to mitigate for the detrimental effects on eagles, including indirect effects, of the permitted take.
(i) Compensatory mitigation scaled to project impacts will be required for any permit authorizing take that would exceed the authorized take limits. Compensatory mitigation for this purpose must ensure the preservation of the affected eagle species by reducing another ongoing form of mortality by an amount equal to or greater than the unavoidable mortality, or increasing carrying capacity to allow the eagle population to grow by an equal or greater amount.
(ii) Compensatory mitigation may also be required in the following circumstances:
(A) When cumulative authorized take, including the proposed take, would exceed 5 percent of the local area population; or
(B) When available data indicate that cumulative unauthorized mortality would exceed 10 percent of the local area population.
(iii) All required compensatory mitigation must:
(A) Be determined based on application of all practicable avoidance and minimization measures;
(B) Be sited within the same eagle management unit where the permitted take will occur unless the Service has reliable data showing that the population affected by the take includes individuals that are reasonably likely to use another EMU during part of their seasonal migration;
(C) Use the best available science in formulating and monitoring the long-term effectiveness of mitigation measures;
(D) Be additional to any existing or foreseeably expected conservation and mitigation efforts planned for the future;
(E) Be durable and, at a minimum, maintain its intended purpose for as
(F) Account for uncertainty and risk of failure with regard to the amount of compensatory mitigation required.
(iv) Compensatory mitigation may include conservation banking, in-lieu fee programs, and other third-party mitigation projects or arrangements. Permittee-responsible mitigation may be approved provided the permittee submits verifiable documentation sufficient to demonstrate that the standards set forth in paragraph (c)(1)(iii) of this section have been met and the alternative means of compensatory mitigation will offset the permitted take to the degree that is compatible with the preservation of eagles.
(2)
(ii) The frequency and duration of required monitoring will depend on the form and magnitude of the anticipated take and the objectives of associated avoidance, minimization, or other mitigation measures, not to exceed what is reasonable to meet the primary purpose of the monitoring, which is to provide data needed by the Service regarding the impacts of the activity on eagles for purposes of adaptive management. You must coordinate with the Service to develop project-specific monitoring protocols. If the Service has officially issued or endorsed, through rulemaking procedures, monitoring protocols for the activity that will take eagles, you must follow them, unless the Service waives this requirement.
(3) You must submit an annual report summarizing the information you obtained through monitoring to the Service every year that your permit is valid and for up to 3 years after completion of the activity or termination of the permit, as specified in your permit. The Service will make eagle mortality information from annual reports available to the public.
(7)
(ii)
(A) Whether adaptive management conditions specified in the permit pursuant to paragraph (c)(7)(i) of this section have been reached that would indicate that modifications to avoidance, minimization, or other mitigation measures or monitoring protocols as described in the permit should be implemented; and
(B) Whether, after negotiation with the permittee, to make additional changes to a permit, including any of the following:
(
(
(
(
(
(
(
(C) In consultation with the permittee, compensatory mitigation for future years for the project, taking into account the observed levels of take based on approved protocols for monitoring, searching, and estimating total take, and also accounting for changes in operations or permit conditions pursuant to paragraphs (c)(7)(ii)(A) and (B) of this section.
(iii)
(d) * * *
(2) Your application must consist of a completed application Form 3–200–71 and all required attachments. Send applications to the Regional Director of the Region in which the take would occur—Attention: Migratory Bird Permit Office. You can find the current addresses for the Regional Directors in § 2.2 of subchapter A of this chapter.
(3) Applicants must coordinate with the Service to develop project-specific monitoring and survey protocols, take probability models, and any other applicable data quality standards, and include in your application all the data thereby obtained.
(i) If the Service has officially issued or endorsed, through rulemaking procedures, survey, modeling, or other data quality standards for the activity that will take eagles, you must follow them and include in your application all the data thereby obtained, unless the Service waives this requirement for your application. Applicants seeking an eagle take permit for a wind-energy generation facility must follow the data quality standards in Appendices C, and D of the Eagle Conservation Plan Guidance, Module 1—Land-based Wind Energy, available at
(ii) Application of the Service-endorsed data quality standards of paragraph (d)(3)(i) of this section may not be needed if:
(A) The Service has data of sufficient quality to predict the likely risk to eagles;
(B) Expediting the permit process will benefit eagles; or
(C) The Service determines the risk to eagles from the activity is low enough relative to the status of the eagle population based on:
(e) * * *
(1) Whether take is likely to occur based on the magnitude and nature of the impacts of the activity.
(3) Whether the cumulative authorized take, including the proposed take, would exceed 5 percent of the local area population.
(4) Any available data indicating that unauthorized take may exceed 10 percent of the local area population.
(5) Whether the applicant has proposed all avoidance and minimization measures to reduce the take to the maximum degree practicable relative to the magnitude of the impacts to eagles.
(6) Whether the applicant has proposed all appropriate and practicable compensatory mitigation measures to compensate for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied.
(7) * * *
(i) Safety emergencies;
(ii) Increased need for traditionally practiced Native American tribal religious use that requires eagles be taken from the wild;
(iii) Non-emergency activities necessary to ensure public health and safety; and
(iv) Other interests.
(8) For projects that are already operational and have taken eagles without a permit, whether such past unpermitted eagle take has been resolved or is in the process of resolution with the Office of Law Enforcement through settlement or other appropriate means.
(f) * * *
(2) The take will not result in cumulative authorized take that exceeds 5 percent of the local area population, or the Service can determine that permitting take over 5 percent of that local area population is compatible with the preservation of the bald eagle or the golden eagle.
(3) The taking is necessary to protect a legitimate interest in a particular locality.
(4) The taking is associated with, but not the purpose of, the activity.
(5) The applicant has applied all appropriate and practicable avoidance and minimization measures to reduce impacts to eagles.
(6) The applicant has applied all appropriate and practicable compensatory mitigation measures, when required, pursuant to paragraph (c) of this section, to compensate for remaining unavoidable impacts after all appropriate and practicable avoidance and minimization measures have been applied.
(7) Issuance of the permit will not preclude issuance of another permit necessary to protect an interest of higher priority as set forth in paragraph (e)(7) of this section.
(8) Issuance of the permit will not interfere with an ongoing civil or criminal action concerning unpermitted past eagle take at the project.
(h)
The revisions and addition read as follows:
(a) * * *
(1) * * *
(i) An in-use or alternate nest where necessary to alleviate an existing safety emergency, or to prevent a rapidly developing safety emergency that is otherwise likely to result in bodily harm to humans or eagles while the nest is still in use by eagles for breeding purposes;
(ii) An alternate nest when the removal is necessary to ensure public health and safety;
(iii) An alternate nest, or an in-use nest prior to egg-laying, that is built on a human-engineered structure and creates, or is likely to create, a functional hazard that renders the structure inoperable for its intended use; or
(iv) An alternate nest, provided the take is necessary to protect an interest in a particular locality and the activity necessitating the take or the mitigation for the take will, with reasonable certainty, provide a net benefit benefit to eagles.
(3) A permit may be issued under this section to cover multiple nest takes over a period of up to 5 years, provided the permittee complies with comprehensive measures developed in coordination with the Service to minimize the need to remove nests and specified as conditions of the permit.
(b) * * *
(1) The permit does not authorize take of in-use nests except:
(i) For safety emergencies as provided under paragraph (a)(1)(i) of this section; or
(ii) Prior to egg-laying if the in-use nest is built on a human-engineered structure and meets the provisions set forth in paragraph (a)(1)(iii) of this section.
(2) When an in-use nest must be removed under this permit, any take of nestlings or eggs must be conducted by a Service-approved, qualified agent. All nestlings and viable eggs must be immediately transported to foster/recipient nests or a rehabilitation facility permitted to care for eagles, as directed by the Service, unless the Service waives this requirement.
(7) You must comply with all avoidance, minimization, or other mitigation measures specified in the terms of your permit to mitigate for the detrimental effects on eagles, including indirect effects, of the permitted take.
(8) Compensatory mitigation scaled to project impacts will be required for any permit authorizing take that would exceed the authorized take limits. Compensatory mitigation may also be required in the following circumstances:
(i) When cumulative authorized take, including the proposed take, would exceed 5 percent of the local area population;
(ii) When available data indicates that cumulative unauthorized mortality would exceed 10 percent of the local area population;
(iii) If otherwise necessary to maintain the persistence of local eagle populations throughout their geographic range; or
(iv) If the permitted activity does not provide a net benefit to eagles, you must apply appropriate and practicable compensatory mitigation measures as specified in your permit to provide a net benefit to eagles scaled to the effects of the nest removal.
(e) * * *
(1) The direct and indirect effects of the take and required mitigation, together with the cumulative effects of other permitted take and additional factors affecting eagle populations, are compatible with the preservation of the bald eagle or the golden eagle.
(2) For alternate nests:
(ii) The nest is built on a human-engineered structure and creates, or is likely to create, a functional hazard that renders the structure inoperable for its intended use; or
(iii) The take is necessary to protect a legitimate interest in a particular locality, and the activity necessitating the take or the mitigation for the take will, with reasonable certainty, provide a net benefit to eagles.
(3) For in-use nests prior to egg-laying, the nest is built on a human-engineered structure and creates, or is likely to create, a functional hazard that
(4) For in-use nests, the take is necessary to alleviate an existing safety emergency, or to prevent a rapidly developing safety emergency that is otherwise likely to result in bodily harm to humans or eagles while the nest is still in use by eagles for breeding purposes.
(5) There is no practicable alternative to nest removal that would protect the interest to be served.
(6) Issuing the permit will not preclude the Service from authorizing another take necessary to protect an interest of higher priority, according to the following prioritization order:
(i) Safety emergencies;
(ii) Increased need for traditionally practiced Native American tribal religious use that requires eagles be taken from the wild;
(iii) Non-emergency activities necessary to ensure public health and safety;
(iv) Resource development or recovery operations (under § 22.25, for golden eagle nests only); and
(v) Other interests.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the Department of Commerce (the Department) and the International Trade Commission (ITC), the Department is issuing countervailing duty orders on certain polyethylene terephthalate (PET) resin from India and the People's Republic of China (PRC). Also, as explained in this notice, the Department is amending its final affirmative determination with respect to PET Resin from the PRC to correct rates assigned to Xingyu New Material Co., Ltd. (Xingyu) and all-other producers/exporters from the PRC.
Effective May 6, 2016.
Yasmin Bordas at (202) 482–3813 or John Corrigan at (202) 482–7438 (India); Yasmin Bordas or Emily Maloof at (202) 482–5649 (PRC), AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On March 14, 2016, the Department published its final determinations in the countervailing duty investigations of PET resin from India and the PRC.
On March 14, 2016, the Department received a timely allegation from DAK Americas, LLC, M&G Chemicals, and Nan Ya Plastics Corporation, America (Petitioners), that the Department made ministerial errors in the final determination in the CVD investigation of PET resin from the PRC.
On April 28, 2016, the ITC notified the Department of its final determinations pursuant to sections 705(b)(1)(A)(i) and 705(d) of the Tariff Act of 1930, as amended (Act), that an industry in the United States is materially injured by reason of subsidized imports of PET resin from India and the PRC, and its determination that critical circumstances do not exist with respect to imports of subject merchandise from India
The merchandise covered by these orders is polyethylene terephthalate (PET) resin having an intrinsic viscosity of at least 0.70, but not more than 0.88, deciliters per gram. The scope includes blends of virgin PET resin and recycled PET resin containing 50 percent or more virgin PET resin content by weight, provided such blends meet the intrinsic viscosity requirements above. The scope includes all PET resin meeting the above specifications regardless of additives introduced in the manufacturing process.
The merchandise subject to these orders is properly classified under subheading 3907.60.00.30 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of these orders is dispositive.
As discussed above, after analyzing the comments received, we determined, in accordance with section 705(e) of the Act and 19 CFR 351.224(e), that we made ministerial errors in certain calculations for the PRC
In accordance with sections 705(b)(1)(A)(i) and 705(d) of the Act, the ITC has notified the Department of its final determinations that the industry in the United States producing PET resin is materially injured by reason of subsidized imports of PET resin from India and the PRC, and that critical circumstances do not exist with respect to imports of subject merchandise from India that are subject to the Department's affirmative critical circumstances finding, in part. Therefore, in accordance with section 705(c)(2) of the Act, we are publishing these countervailing duty orders.
As a result of the ITC's final determinations, in accordance with section 706(a) of the Act, the Department will direct U.S. Customs and Border Protection (CBP) to assess, upon further instruction by the Department, countervailing duties on unliquidated entries of PET resin from India and the PRC entered, or withdrawn from warehouse, for consumption on or after August 14, 2015, the date on which the Department published its preliminary countervailing duty determinations in the
In accordance with section 706 of the Act, the Department will direct CBP to reinstitute the suspension of liquidation of PET resin from India and the PRC, effective the date of publication of the ITC's notice of final determinations in the
With regard to the ITC's negative critical circumstances determination on imports of PET resin from India, we will instruct CBP to lift suspension and to refund any cash deposits made to secure the payment of estimated countervailing duties with respect to entries of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after May 16, 2015 (
This notice constitutes the countervailing duty orders with respect to PET resin from India and the PRC pursuant to section 706(a) of the Act. Interested parties may contact the Department's Central Records Unit, Room B8024 of the main Commerce Building, for copies of an updated list of countervailing duty orders currently in effect.
These orders are issued and published in accordance with section 706(a) of the Act and 19 CFR 351.211(b).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the Department of Commerce (the “Department”) and the International Trade Commission (the “ITC”), the Department is issuing antidumping duty orders on certain polyethylene terephthalate (“PET”) resin from Canada, the People's Republic of China (“PRC”), India, and the Sultanate of Oman (“Oman”). In addition, as a result of a ministerial error, the Department is amending its final determination of sales at less-than-fair-value (“LTFV”) with regard to PET resin from Oman.
Effective May 6, 2016.
Karine Gziryan at (202) 482–4081 (Canada), Steve Bezirganian at (202) 482–1131 (PRC), Fred Baker at (202) 482–2924 (India), or Jonathan Hill at (202) 482–3518 (Oman), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
In accordance with sections 735(d) and 777(i)(1) of the Tariff Act of 1930, as amended (the “Act”), and 19 CFR 351.210(c), on March 14, 2016, the Department published its affirmative final determinations in the LTFV investigations of certain PET resin from Canada, the PRC, India, and Oman.
On April 28, 2016, the ITC notified the Department of its affirmative determination that an industry in the United States is materially injured within the meaning of section 735(b)(1)(A)(i) of the Act, by reason of the LTFV imports of certain PET resin from Canada, India, the PRC, and Oman and its determination that critical circumstances do not exist with respect to imports of subject merchandise from India
The merchandise covered by these orders is PET resin having an intrinsic viscosity of at least 0.70, but not more than 0.88, deciliters per gram. The scope includes blends of virgin PET resin and recycled PET resin containing 50 percent or more virgin PET resin content by weight, provided such blends meet the intrinsic viscosity requirements above. The scope includes all PET resin meeting the above specifications regardless of additives introduced in the manufacturing process. The merchandise subject to these orders is properly classified under subheading 3907.60.00.30 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the merchandise covered by these orders is dispositive.
On March 14, 2016, OCTAL submitted an allegation claiming that the Department made a ministerial error because its comparison market program failed to recognize the gross unit prices for all home market sales transactions invoiced in United States Dollars (“USD”).
The Department reviewed the record and agrees that the error referenced in OCTAL's allegation constitutes a ministerial error within the meaning of 19 CFR 351.224(f).
As stated above, on April 28, 2016, in accordance with section 735(d) of the Act, the ITC notified the Department of its final determinations in these investigations, in which it found that an industry in the United States is materially injured by reason of imports of certain PET resin from Canada, the PRC, India, and Oman and that critical circumstances do not exist with respect to imports of subject merchandise from India that are subject to the Department's affirmative critical circumstances finding.
Therefore, in accordance with section 736(a)(1) of the Act, the Department will direct U.S. Customs and Border Protection (“CBP”) to assess, upon further instruction by the Department, antidumping duties equal to the amount by which the NV of the merchandise exceeds the export price (or constructed export price) of the merchandise, for all relevant entries of certain PET resin from Canada, the PRC, India, and Oman. Antidumping duties will be assessed on unliquidated entries of certain PET resin from Canada, the PRC, India, and Oman entered, or withdrawn from warehouse, for consumption on or after October 15, 2015, the date of publication of the preliminary determinations,
In accordance with section 735(c)(1)(B) of the Act, the Department will instruct CBP to continue to suspend liquidation on all relevant entries of certain PET resin from Canada, the PRC, India, and Oman. These instructions suspending liquidation will remain in effect until further notice.
The Department will also instruct CBP to require cash deposits equal to the amounts as indicated below, which are adjusted for certain countervailable subsidies, where appropriate, as described below. Accordingly, effective on the date of publication of the ITC's final affirmative injury determinations, CBP will require, at the same time as importers would normally deposit estimated duties on this subject merchandise, a cash deposit equal to the cash deposit rates listed below.
Section 733(d) of the Act states that instructions issued pursuant to an affirmative preliminary determination may not remain in effect for more than four months, except where exporters representing a significant proportion of exports of the subject merchandise request the Department to extend that four-month period to no more than six months. At the request of exporters that account for a significant proportion of certain PET resin from Canada, the PRC, India, and Oman, the Department extended the four-month period to six months in each case.
Therefore, in accordance with section 733(d) of the Act and our practice, the Department will instruct CBP to terminate the suspension of liquidation and to liquidate, without regard to antidumping duties, unliquidated entries of certain PET resin from Canada, the PRC, India, and Oman entered, or withdrawn from warehouse, for consumption after April 11, 2016, the date on which the provisional measures expired, until and through the day preceding the date of publication of the ITC's final injury determinations in the
With regard to the ITC's negative critical circumstances determination on imports of subject merchandise from India, the Department will instruct CBP to lift suspension and to refund any cash deposits made to secure the payment of estimated antidumping duties with respect to entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after July 17, 2015 (
The weighted-average antidumping duty margin percentages and cash deposit rates are as follows:
This notice constitutes the antidumping duty orders with respect to certain PET resin from Canada, the PRC, India, and Oman pursuant to section 736(a) of the Act. Interested parties can find a list of antidumping duty orders currently in effect at
These orders are published in accordance with section 736(a) of the Act and 19 CFR 351.211(b).